Saturday, July 4, 2009

China is right; Obama is wrong

Once again, China is preaching capitalism and Obama is preaching big government protectionism. Yao Jin of the Ministry of Commerce said yesterday: "China has consistently advocated that the international community face climate change together, but some developed countries have advocated using carbon tariffs against imports. This violates basic WTO rules. It only pretends to protect the environment, but really it protects trade. To put out carbon tariff policies during the economic crisis and ahead of the annual climate change conference is not timely. It doesn't strengthen faith in the international community's cooperation against the crisis."

Which country is the larger emitter of greenhouses gas: China or the US? The answer: China. Without coming to some kind of understanding with China, what difference does it make what the US does? China is making its position pretty crystal clear. Obama and the Congress have their head in the sand (or somewhere).

In 1930, Herbert Hoover got the Congress to pass the highest tariff walls in history, known infamously as the Smoot-Hawley Tariff. Many argue that the S-H Tariff is what turned a mild hiccup in the stock market into the Great Depression. Obama seems to think that Hoover was on the right track. Obama says that he "has doubts" about the trade restrictions in his "Cap and Trade" legislation. But, as has done time and time again, Obama will speak against something and then sign it into law. That way he ends up on both sides of every issue.

Obama had similar doubts about the trade-restrictive "Buy American" provisions in the stimulus bill that he signed into law in February. Look for Obama to continue to say he supports free trade as he pushes the country toward higher and higher tariff walls and trade restrictions. Our imports and exports are collapsing partly due to the economy and partly due to Obama and his cohorts in the Congress. Obama and his union allies won't be satisfied until we no longer have trade relations with anyone (except Iran and Venezuela).