More NAFTA Nonsense

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President Trump’s irrational and infantile war on America’s NAFTA geopolitical allies and trading partners is heating up. Two recent articles illustrate this slow-motion train wreck.

First is a report on how vulnerable our agricultural sector is to Mexican tariff retaliation. The report is about how frightened American farmers are these days. Besides losing sales to China — what with its recent retaliatory tariffs on our export crops (especially soybeans) — the farmers are facing a major hit from South of the Border.

An economic fool — such as Trump — notices the grossly visible part of the economic picture, but overlooks other vital parts.

Looking at the percentages of crop products shipped abroad, the article notes that Mexico buys 7.0% of our soybean products, 14.4% of our beef exports, 27.2% of our fresh fruit exports, 27.9% of our corn exports, 36.3% of our pork exports; and a whopping 45.6% of our milk powder exports. Mexico has just started its round of retaliatory tariffs, hitting US exported cheese and pork. Iowa farmers, who account for a lot of America’s pork production, are already seeing prices decline as the foreign demand falls. In Missouri, ranchers are beginning to cut back the size of these herds, in anticipation of price drops.

Last year, America exported $138 billion in agricultural products abroad, and we had a $21 billion trade surplus. All of this brings up Frédéric Bastiat’s point about the seen and the unseen. An economic fool — such as Trump — notices the grossly visible part of the economic picture, but overlooks other vital parts. He sees the number of steelworker jobs decline, so he enacts tariffs that destroy jobs in other parts of the economy, of which he is stupidly oblivious — currently, in such companies as Archer Daniels Midland, Cargill, Pilgrims’ Pride, Sanderson Farms, and Tyson Foods. He also doesn’t see job losses in the American manufacturing companies that use steel, such as our automakers and industrial pipe makers.

Trump is not uniquely ignorant of economics. After all, Obama waged trade wars early on (and stopped when he saw the results). Even George Bush — generally quite solid on free trade — stupidly put a tariff on steel imports. But Trump is more of a protectionist than Obama and Bush combined — by far. And as another article notes, he has a narcissistic hair-trigger temper that leads him to freely insult allies, often by means of infantile tweets.

Trump’s asinine behavior has done something Trudeau’s incompetence has hitherto failed to do: unite all the Canadian people behind the man.

The article reports that after Canada’s PM Trudeau’s comments at the end of the recent G-7 meeting that Canada would not be pushed around by the US, Trump tweeted that Trudeau is “very dishonest and weak,” and was lying. Now, let’s stipulate that Trudeau is simply a putz. But the point is, he is a putz who is the freely elected head of the government of one of our closest allies, one whose territory forms a security shield for us, is our biggest trading partner, and has fought alongside us in all our modern wars. In short, he may be a putz, but he is our putz!

Trump’s asinine behavior has done something Trudeau’s incompetence has hitherto failed to do: unite all political parties and the Canadian people behind the man. Yes, it turns out that even the legendarily polite Canadians have had just about enough of Trump’s arrogance. And they have come to despise not only Trump but also such truculent advisors as Larry Kudlow (who whined that Trudeau “stabbed us in the back”) and Peter Navarro (who said “there’s a special place in hell” for the Putz Minister).

Actually, if Navarro had any intellectual honesty — a trait he conspicuously lacks — he would have said that there is a special place in hell for the unprincipled Kudlow. Kudlow, to his credit, spent many years advocating free markets, the benefits of widespread immigration, and (especially) the need for free trade. But the chance of working with the populist potentate Trump turned him into Trump’s trick — Stormy Kudlow, so to say — and now he publicly bashes free trade and immigration. A preacher I once heard told his parish that the Devil needs no new temptations to corrupt men; money, sex, and power still work demonically well. Like the so-styled Reverend Billy Graham, who was seduced by the power of the corrupt Nixon, Kudlow the self-styled reborn Christian has fallen for the power of the corrupt Trump. The world hasn’t seen such a tragedy since Dr. Faustus.

The most recent Pew survey shows that Canadian sentiment toward the U.S. has hit a 30-year low — only around two in five Canadians still respect us. Precisely who has stabbed whom in the back, Dr. Kudlow?




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The Perils of Mexico-Bashing

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As I have noted before, in a number of ways President Trump resembles President Obama. Both hate free trade, oppose immigration (Obama covertly, Trump ostentatiously), favor unions over consumers, and so on. Trump’s mania against free trade is on display in its most virulent form in his war on NAFTA.

NAFTA was a truly bipartisan accomplishment. Conceived and promulgated by President Reagan, the free trade agreement (FTA) between Canada, Mexico, and the United States was negotiated under Bush the Elder, approved by a large, bipartisan vote in the Senate, and ratified by Bill Clinton. And it has seen trade blossom: as of last year, US trade exports to Mexico and Canada were four times what our trade exports are to China.

But even in the primaries, Trump singled out this one FTA for a torrent of abuse, accusing both Canada and Mexico of cheating, because we have a balance of trade deficit with each. Along the way, Trump’s heavy-handed and accusatory style has helped drive Canadian and Mexican opinion of him — and the rest of us, since we elected the bird — to new lows.

NAFTA has seen trade blossom: as of last year, US trade exports to Mexico and Canada were four times what our trade exports are to China.

The renegotiations have dragged on, mainly because America keeps trying to impose onerous restrictions on its neighbors. This is another trait shared by Obama and Trump: disdain for our own allies. Love Russia, hate Canada and Mexico — how daffy can you get?

A recent Wall Street Journal article reports the latest on the NAFTA fight. The chief American negotiator, Robert Lighthizer, is introducing new absurd demands. He now wants to require that at least 40% of the content of all cars crossing the American border must come from workers earning at least $16 per hour. This is at least double the existing wages of auto-assembly workers, and four times that of Mexican auto-parts workers! Cars that don’t meet that criterion will be heavily tariffed at the border.

Trump’s intention is crystal clear: pay off his union supporters by forcing Mexico to surrender its comparative advantage (lower cost labor). This is his populist-autarkist idea of “fair trade”: make the other party do things as stupidly as you do, rather than doing things smarter yourself. Add to this his demands for a periodic renewal vote on staying in the agreement, and you have a one in-your-face-F-off-and-die populist ultimatum.

Trump’s intention is crystal clear: pay off his union supporters by forcing Mexico to surrender its comparative advantage.

This ultra-protectionist ploy is arousing opposition, both here and (more ominously) in Mexico. Free-trade Republicans — what pathetically few of them are left — are not amused. In a piece he wrote for the WSJ, Sen. Pat Toomey (R-PA) expressed annoyance with the Trumpian tactics. Trump has told the Senate — in true bossman style — which had lawfully ratified the NAFTA agreement during Clinton’s term in office — either to ratify a new, eviscerated NAFTA or see him unilaterally withdraw the US from it. Toomey says that if this ultimatum is put to him, he will vote against it and oppose in federal court the cancelation of the treaty.

Recently, Trump withdrew the US from the Iran deal negotiated by the feckless Obama. That’s constitutional, because that deal was explicitly not put forward as a treaty. But NAFTA was, and as Toomey rightly observes, the Constitution delegates the framing of trade policy expressly to Congress. The rare prior cases of a president unilaterally withdrawing from a ratified treaty never concerned a commercial treaty. I would observe that the Declaration of Independence should be consulted. I refer to the parts in which the king is accused of “cutting off our trade with all parts of the world,” not to mention “obstructing the laws for the naturalization of foreigners” and “refusing to pass others to encourage their migrations hither.”

Trump and his foolish followers clearly want to stick it to the Mexicans, and have done so since his first campaign appearances.

Holding out an olive branch, the estimable Toomey suggests that Trump focus on correcting obvious problems, such as ending Canada’s tariffs on cheese, and solidifying Mexico’s recent moves to open up its energy sector to US fracking investment. Add to that correcting a (relatively minor) sin, the current Mexican practice of putting low caps on duty-free sales of American stuff, and you pretty much have perfected the agreement; and have done so quickly, without arousing countervailing populist rage.

But Trump and his foolish followers clearly want to stick it to the Mexicans, and have done so since his first campaign appearances. The countervailing rage is rising in Mexico, where the frontrunner for the next presidential election is a populist leftist — one Andres Manuel López Obrador (AMLO), close friend of Britain’s leftist Jeremy Corbyn.

Mexico is clearly being driven to its own populist extreme — AMLO now leads by 18%, much better than he has registered before. A radicalized Mexico could easily allow Russia to set up naval bases in its waters, and allow Chinese troops to move in to help “train” Mexican troops. The Russians have shown every desire to extend their world influence, and Mexico would be an even better vehicle for that than Cuba. As to the Chinese, their recent building of bases in the South China sea, their behavior on the Indian border, their rush to build a blue-water navy, and their clearly strategically planned moves to increase their influence in Latin America all indicate a long-term game plan that is anything but tame.

A lot of good a wall would do then.




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Profound and Destructive

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President Trump’s destructiveness requires few words here. Consider how world stock and currency markets have been shaken by the resignation on March 6 of Gary Cohn, regarded until then as Trump’s chief economic adviser. Although not a trained economist, Cohn apparently had some sound instincts derived from years of financial experience. His departure apparently and ominously leaves more influence, or echo, to Peter Navarro — look him up with Google.

This latest example of destructiveness follows the one touched off by Trump’s March 2 tweet bewailing America’s loss of “many billions of dollars on trade with virtually every country it does business with” and heralding trade wars as “good, and easy to win.”

Trump views international trade as a game, a zero-sum game in which one player’s gain is another’s loss.

I’ll spend more words on how profound Trump’s ignorance is. He considers a country’s excess of imports over exports a measure of loss. This measure applies even to trade with each foreign country separately. He counts China and Mexico among the worst offenders, deserving punishment. He does not understand the multilateral aspect of beneficial trade.

Nor does he understand how we gain in buying goods cheap from abroad. What difference does it make if steel and aluminum are cheap because of low foreign prices or because they grow cheaply on bushes at home? Money cost is a measure of opportunity cost, which means the loss of other goods when resources go instead to make the particular good in question. Opportunity cost reflects scarcity. Scarcity applies even to prosperous America, where we could enjoy still higher standards of living if food, clothing, shelter, entertainment, and other goods and services came costlessly and miraculously from heaven. Scarcity and how gains from domestic and foreign trade alleviate it are fundamentals of economics. The principle of comparative advantage goes far in explaining how.

The profundity of Trump’s ignorance goes beyond economics, extending even to the behavior of a decent human being.

Without understanding the academic presentation of the “absorption approach to the balance of payments,” everyone should be able to grasp its central idea, which is sheer arithmetic. If we as a country use more output for consumption and real investment than we produce, then the difference must come from somewhere — from abroad in the form of more imports than exports. A big item in this excess absorption, alias national undersaving, is government deficits. Yet Trump and Congress are complacent about increasing the deficit and debt by taxing less and spending more.

All too many politicians say that they are in favor of free trade if it is “fair trade” played on a “level playing field.” These slogans express Trump’s view of international trade as a game, a zero-sum game in which one player’s gain is another’s loss.

Trump does not understand how the price system coordinates economic activity, making most government planning about jobs and industries unnecessary and harmful.

The profundity of Trump’s ignorance goes beyond economics. It extends to diplomacy in domestic and foreign relations and even to the behavior of a decent human being. Yet his destructive economic ignorance remains prominent.




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Imitating Obama?

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I confess that I am no fan of Trump. Actually, that dramatically understates it. I regard him as a dangerous populist ignoramus whose crudity of character makes him unfit for office. When he won the nomination, I sent the Republican National Committee a letter of resignation from the party to which I had belonged for four decades, and re-registered Libertarian. (I did this despite my impression that Gary Johnson was either a hopeless dope or congenitally loopy.)

It was for me, in short, a completely miserable election.

My only hope was that Trump, once in office, would at least pretend to be presidential, and would drop his nativist and protectionist stances, having decisively won the populist vote. And I admit I was cheered when he appointed a good judge to the Supreme Court, talked about repealing and replacing Obamacare, and also talked about lowering at least corporate taxes. He has so far been unable to deliver.

Nativists fear even legal immigrants, not seeing how beneficial they are to the economy.

But unfortunately he has pursued his nativist and protectionist agendas. On the nativist agenda, he killed DACA — setting up the deportation of upwards of a million young people brought here involuntarily, and raised with scant knowledge of the countries of their births. Not only did he refuse to increase the H-1B visa and other programs that legally allow in college-trained STEM and medical professionals, but he has actually proposed cutting all legal immigration by half. He continues demanding that a wall be built on the border with Mexico, even though illegal immigration from Mexico has been steadily dropping for a decade — indeed, for the last few years, more Mexican immigrants have returned home than have come north. (That’s because Mexico has a good growth rate, and is now in the top ten manufacturing countries on earth). Nativists fear even legal immigrants, not seeing how beneficial they are to the economy. For example, immigrants and immigrants alone are the reason we don’t face the same demographic implosion that the European countries and Japan face, and immigrants are disproportionately likely to open new businesses.

On Trump’s protectionist agenda, after killing the Trans-Pacific Partnership Agreement, Trump has set his sights on killing NAFTA. Several recent Wall Street Journal articles report on the administration’s attempt to renegotiate this deal, signed back in 1994. Trump’s curious hatred of Mexico and Canada is as bizarre as his love of Russia. In this he imitates Obama, who bashed NAFTA in his primary fight with America’s Sweetheart Hillary Clinton. At the time, most commentators assumed that this was just “Bubba bait” — that is, demagogic talk aimed at arousing nativism and protectionism by telling the economically illiterate that Evil Foreigners have “stolen” American jobs, jobs that usually have been automated away.

But to many people’s amazement, Obama — Trump’s match in protectionism — started trade wars with both Mexico and Canada shortly after assuming office. He stopped only when those countries fought back and kicked our economic behinds. For example, Obama violated NAFTA to “save” 200 trucking jobs (at the behest of one of his supporters, the Teamsters Union), but when Mexico retaliated with stiff tariffs against our farmers, 25,000 American jobs disappeared, whereupon Obama cancelled his policy with limited publicity.

After killing the Trans-Pacific Partnership Agreement, Trump has set his sights on killing NAFTA.

To his credit — and as readers of this estimable journal know, I was a consistent critic of Obama’s regime — Obama slowly but surely came to understand why more than 90% of economists favor free trade. Obama eventually approved of the three free-trade agreements left to him by George Bush, and late in his second term negotiated the TPP. Who knows, perhaps Obama finally read that Econ 101 text that he was too negligent to read as an undergrad.

But Trump is even more of a populist fool. He immediately killed the TPP, and has now targeted NAFTA. He is apparently surprised that both Mexico and Canada are fighting back. A bully is always amazed when the smaller boy he chooses to pick on hauls off and smacks him.

The Wall Street Journal reports just how close to a collapse of the NAFTA talks we are. We have seen record highs in the stock market, but this would almost surely change quickly should the talks collapse. One economic consulting firm, the Colorado-based ImpactECON, has put the net job losses at 125,000 for Canada, 256,000 for the US, and a whopping 961,000 for Mexico over the next three to five years.

Trump is apparently surprised that both Mexico and Canada are fighting back.

For those populists who will cheer the disproportionate job losses to Mexico, well, they may want to ask themselves whether their protectionism trumps their nativism here. That is, if we move to destroy nearly a million Mexican jobs, where oh where will all those newly unemployed Mexicans go to avoid starvation? Trump had better be prepared to build his wall quickly.

If NAFTA does get repealed, tariffs would undoubtedly result. At a minimum, the three member states would revert to their average tariffs rates: 3.5% for the US; 4.2% for Canada; and 7.5% for Mexico. But there is good reason to think that the tariffs will be much higher. Both Canada and Mexico will be furious at seeing the US dump the deal and will likely raise tariffs enormously. Moreover, the collapse of NAFTA and the Mexican job market will be the result. The American Automobile Policy Council estimates that the rise of the price of domestic auto parts from the tariffs will cost 50,000 US jobs. Another economic thinktank, Boston Consulting Group, gives the same estimate.

The ImpactECON study says the small gains in US employment in production of machinery and chemical industries will be swamped by losses in the agricultural, auto, and apparel industries.

Mexico could simply embargo products from the US — it just ordered its first shipment of wheat from Argentina, no doubt in anticipation of the looming trade war.

This last is a nice point — a point that Frédéric Bastiat would have underscored. What average Americans — including Trump — expect to see after NAFTA is some US manufacturing jobs disappearing while trade flourishes between us and our natural neighbors. They assume the trade will cause the job losses, which is debatable. But worse, they don’t see the gain in jobs in farming and other industries.

Under NAFTA, our agricultural exports to Mexico and Canada have risen fourfold, hitting $38 billion last year. If NAFTA is junked, the Mexicans could revert to their pre-NAFTA tariff levels of 75% on US chicken and corn syrup, 45% on turkey, potatoes, and dairy products, and 15% on wheat. You see, protectionism works both ways: Mexico pre-NAFTA was trying to protect its farmers from competition from American farmers. In fact, Mexico could simply embargo these products from the US — it just ordered its first shipment of wheat from Argentina (30,000 tons), no doubt in anticipation of the looming trade war.

The Mexicans, by the way, are especially angry. All major candidates for the upcoming presidential election there are opposed to what Trump is doing, but the one who is poised to make the most gains is the ultra-leftist Lopez Obrador. If Mexicans, in their righteous indignation, elect him, we could have a Cuba right on our border. For instance, Mexico could retaliate by cutting a free trade agreement with China, and allowing the Chinese to set up naval and army bases on its soil — which it is completely free to do under international law.

Talk about a “game-changer”: for the first time in US history, we would face a military threat from one of its long borders.

Even the author of the 2011 report by the leftist thinktank Economic Policy Institute, Robert Scott, has changed his mind. The report purported to show that NAFTA cost 700,000 US jobs, and was widely cited by protectionists of all political stripes. Scott now says that if NAFTA is abandoned, manufacturers will just “move” jobs to Asia.

The real “culprit” behind manufacturing job loss is not international trade; it is automation and creative destruction.

The NAFTA talks are approaching crisis phase, because the US is making unreasonable demands. For example, the US negotiator Robert Lighthizer wants a “sunset clause” requiring the agreement to be renewed every five years, and a watering down of the provision for arbitrating disputes.

Of course, the joke in all this is that the US was losing manufacturing jobs long before NAFTA. As early as 1974 sociologist Daniel Bell discussed the shift from industrial work to high-tech and service sectors in his book The Coming of Post-Industrial Economy, and the term “rust belt” was coined in 1982, more than a decade before NAFTA came into being. In fact, over the last decade all of the top ten manufacturing countries in the world lost manufacturing jobs. The real “culprit” is not international trade; it is automation and creative destruction. We don’t hand-bolt wheels on cars anymore, not because the Mexicans do it, but because robotic arms do. And we don’t make buggy whips anymore, not because the Chinese make them cheaper, but because we don’t have buggies.

The failure of many American workers to adjust to the shift from low-knowledge to high-tech factories results primarily from the pathetically poor average education they receive. I mean, you can’t read the instructions manual for the new computer-aided machinery if you can’t read to begin with. While other countries are reacting to the evolution of the industrial economy by building new colleges and trade schools, cranking out engineers, doctors, scientists and skilled workers, we struggle with risible high school and college dropout rates, a proliferation of humanities and social science majors, and vanishing trade schools.

We don’t make buggy whips anymore, not because the Chinese make them cheaper, but because we don’t have buggies.

All of this could be cured if we did what supposedly socialist Sweden did over a quarter century ago: immediately adopt a universal voucher program — that is, require all public schools in America to adopt perfectly pro-rata voucher systems within one year. But this would arouse the teachers’ unions like nothing else. They will protect the cushy jobs of mediocre and even positively bad teachers, forcing parents to keep their kids in failing schools.

Rising protectionism and fear of trade don’t just run the risk of depression and trade wars — which in turn run the risk of military war. They also distract us from the real cause of long-term blue-collar unemployment: a horribly broken educational system.




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On Dogs, Cats, and Carnal Knowledge

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Reading the Drudge Report just after the House of Representatives defeated a bill that would have given President Obama fast track authority (or “TPA,” for “trade-promotion authority”) to conclude free trade agreements, I remembered a line from the first Ghostbusters movie. The busters (Ray, Egon, Winston, and Peter) are explaining to the mayor that his city is headed for “a disaster of biblical proportions.” When the rather obtuse man asks what they mean by “biblical,” Ray says, “Real wrath of God type stuff.” Egon adds, “Forty years of darkness!” Winston chimes in with “the dead rising from the grave!” Whereupon the ever-arch Peter adds loudly, “Human sacrifice . . . dogs and cats living together . . . mass hysteria!”

What happened on June 12 was that a bill to grant Obama the same power (fast track authority) that almost every other president since World War II has been given went down to defeat in a procedural vote, primarily because Democratic members followed their leader Nancy Pelosi (D-CA) in opposing it. The maneuver was to join Republicans who oppose spending more money on work retraining programs — which are usually just boondoggles that don’t retrain anybody — in voting down a package deal that included the TPA and also increased retraining funds that had earlier passed the Senate.

Talk about a dog and a cat being intimate: arch-conservative Drudge lavishing affection upon arch-leftist Pelosi, the neosocialist harpy from Hell.

Fast track authority is the power Congress can (and almost always does) give any president to negotiate free trade agreements (FTAs) in confidence and without congressional meddling. If any FTA is concluded, it of course becomes law only if the Senate votes in favor of it. Naturally, the Senate can only vote the submitted FTA up or down — it cannot amend it, since amending it is renegotiating it, which the other side of the agreement would not accept. Without such power, you have 435 members of Congress playing president, making it impossible to get any treaty — free trade or otherwise — negotiated.

Despite Obama’s last-minute personal intervention, in which he tried to convince his own party members in the House to support his plan, or perhaps because of his intervention, the bill went down by a vote of 302–126. As one unnamed Democratic congressman put it, “She screwed this president.”

But a number of Republicans opposed the measure, too. Here we get to the dogs and cats getting it on together.

After the vote, Matt Drudge ran a large banner on his website. It screamed, “Brave Pelosi Says No!” Talk about a dog and a cat being intimate: arch-conservative Drudge lavishing affection upon arch-leftist Pelosi, the neosocialist harpy from Hell.

I won’t rehearse all the arguments about why free trade is economically beneficial. I have done so at length in these pages (“The Case for Free Trade,” Liberty, December 2010, pp. 33–41). And the case was made again, succinctly and well, in a recent piece by Larry Kudlow, Art Laffer, and Steve Moore. To economists, 90% of whom favor free trade, it is obvious that free trade is on balance economically good for countries engaging in it. Why is it that when 85% of climate scientists agree on anthropogenic global warming, it becomes “settled science,” but when 90% of economists agree that free trade increases wealth (the theory of comparative advantage), the matter is never considered settled?

The reason for Obama’s defeat is threefold.

First to be mentioned is the decline in free trade sentiment among Democrats. Coming out of the Great Depression and the devastating war it helped to spawn, Democrats agreed with Republicans that the protectionism associated with the Smoot-Hawley tariffs was and is economically counterproductive and geopolitically dangerous — for, as Frédéric Bastiat observed a century and a half ago, when goods cannot cross borders, soldiers will. That is why fast track authority has been given to all but one president since the end of the second world war.

While Obama is a piss-poor negotiator, any free trade agreement he negotiates will likely err on the side of suffocating regulations for both sides.

But the Democrat party has moved ever more toward the extreme left — progressive liberalism, as Solzhenitsyn observed, ever evolving into socialism — and fewer and fewer Democrats are willing to support free trade. Really, Bill Clinton was the last president to push for it, when he signed NAFTA into law. One of the most important of the core Democrat constituencies, Big Labor, loathes free trade. In this most recent vote, for example, when Pelosi and her myrmidons went against fast track for the president of their own party, Big Labor Daddy Richard Trumka (King of the AFL-CIO) praised her mightily, proclaiming that “she stood up against corporate interests.”

Second, despite the best efforts of House Speaker Boehner and Senate Majority Leader McConnell’s to give Obama fast track authority, a portion of the Republican Party opposed the measure. The biggest reason is their distrust of Obama. That’s why websites such as Breitbart.com and the Drudge Report were bashing the bill mightily.

Now, as any more-than-casual reader of these pages knows, I have been unwavering in my opposition to and contempt for the Obama Regime. To put this simply, I regard Obama as the worst president in modern history. (When I said this not long back, one reader chastised me for not characterizing Obama as the worst president in all history, but I confess that my weakness on the history of 19th-century presidents restrains me from agreeing.) President Obama will have done more to harm this country in both domestic and foreign policy than any other modern president, and if we are lucky enough to elect a decent Republican president in 2016, he or she will have to spend most of a first administration reversing the damage.

But as the old saw has it, even a broken clock is right twice a day. More to the point, while Obama is a piss-poor negotiator, in fact really pathetic at it, any FTA he negotiates will likely err on the side of trying to saddle the other side with what he favors for our side too: suffocating regulations. While that is economically deleterious, I doubt that it will result in a net disadvantage to us. Moreover, any final agreement he negotiates must still be approved by Congress, so any grossly unequal deal — say, one that increases Japan’s access to our markets but protects its agricultural industry — can quite easily be voted down, forcing him back to the table.

A good leader has to be a good teacher, too, and explain the ways in which certain ideas are true and certain other ideas are false.

The third, and in my view the most important, reason for Obama’s loss is Obama himself. Let’s put aside the personality issue, which is that Obama is a patently arrogant, distant, snarky, intellectually mediocre narcissist who doesn’t work or play well with anyone except complete stooges. This doesn’t help him, but it isn’t the biggest problem about his free trade initiative. That problem is his history.

Obama has never gone on a tour, selling the need for a trade agreement with Asia and answering the obvious populist arguments against free trade. In this, ironically, he is like George Bush — who, while he negotiated and signed into law more FTAs than any other president, didn’t explain them, argue their importance, or refute the economically ignorant but passionately tribal populist objections to them. Obama doesn’t explain, you see; he merely shows contempt for differing opinions and expects everyone just to see his colossal greatness.

Worse, his history is one of buying the same populist claptrap arguments against free trade that he is being met with now. He bashed Hillary because her hubby signed NAFTA, which, he claimed (parroting the Trumka types), cost jobs; though this was obviously false, as must have been manifest even to an intellectual lightweight such as himself. When in office, he quickly started trade wars against both Mexico and Canada, wars that ceased only when those neighbors fought back and kicked his ass. He stalled the three FTAs left over from the Bush era, only signing them late into his second term, in the face of the worst economic recovery in American history. Now this guy — out of the blue — advocates free trade?

The average American, like the average person anywhere else on this planet, basically has his scientific and moral views set by history. The physics that the average person believes, for example, holds that objects are completely solid, and that they fall at different speeds; that space is completely empty and infinite in all directions, and that it has but three dimensions. Tradition doesn’t make such ideas true. The economics that the average person believes maintains that while labor deserves to be compensated, the lending of money doesn’t; that it is better if all people do all things for themselves, rather than dividing up the tasks among many people, possibly people in different countries; that saving rather than spending hurts jobs, but protecting home industries promotes jobs; and many other things. Tradition doesn’t make these notions true, either.

In short, a good leader has to be a good teacher, too, and explain the ways in which certain ideas are true and certain other ideas are false. But Obama can’t teach anyone about fallacious ideas. Indeed, he often simply accepts them himself — unless he was just lying (something he does with amazing frequency and ease) when he campaigned against Hillary. Either way, he’s not able to teach the public why hunter-gatherer myths are wrong.

Maybe the Republicans can save him from the anti-free-trade crowd, but it is unclear that they can. If not, the biggest loser will be the American public. But I believe in the precept that people get the government they deserve.

em




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When Pigs Fly

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There is an old adage in which I find considerable wisdom: “When a pig flies, you don’t criticize it for not staying up very long.” I take the meaning of this saying to be that when someone who has a habit of making poor choices finally makes a moderately good one, you ought to praise the success, even if you feel he could have done more.

Well, a pig has flown. President Obama, who for his first two years ran the most anti-free-trade administration since the days of the Smoot-Hawley tariff, has managed to salvage a free-trade agreement (FTA) with South Korea, after stalling it for two years and being snubbed in Asia when he tried to strongarm a new deal. He managed a minor renegotiation, getting some relief from Korea’s environmental regulations on our cars and a slowing of our phase-out of tariffs on the Koreans’ trucks. He did this, however, at the cost of keeping Korea’s tariffs on our cars in place for five more years, and of an extra two years of Korean tariffs on American pork products. Hardly worth the wait on a deal that was already well negotiated in 2007.

But the good news is that Obama will finally let the deal proceed, and that 95% of all US and South Korean tariffs will be eliminated within five years. The deal also opens up greater trade in services, allowing (for example) more Korean banks in America and more American banks in Korea. That’s all good.

Now that Speaker Pelosi is finally history, chances are good that Speaker Boehner (“Blubbering Boehner” to his chums) will get the FTA with Korea through the House — and also the FTAs with Colombia and Panama, which have been languishing on the sidelines since Bush left office. It would be helpful if the pig could stay aloft long enough to help get these deals past Congress. So far, Obama hasn’t bothered to do that. He has shown a touching deference to the unions that oppose them, and that gave so much to his presidential campaign.

Yet it seems to be dawning on the exceptionally obtuse Obama that it may be far more useful to his 2012 reelection (gag!) campaign to have lower unemployment than to have higher union contributions poured into his campaign coffers. Perhaps the pig isn’t just flying; perhaps he has had an epiphany.

If for that we are hardly ecstatic, we can at least be satisfied.




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