Friday, May 29, 2009

Obama's Plan A Is Not Working

by Howard Richman, Raymond Richman, and Jesse Richman - May 29th, 2009 - American Thinker

Under the Clinton and Bush administrations, the United States and the WTO permitted the creation of massive imbalances in the global economy. A range of developing countries, not just China, lent tremendous amounts of money in exchange for IOUs from Americans. Instead of exchanging goods for goods in world markets, Americans exchanged debt for goods. When American consumers could no longer take on more debt, the global economy began collapsing. Obama's plan amounts to doubling down on U.S. indebtedness by dramatically expanding borrowing by the government.

Detroit is going bankrupt because American made products have been excluded from growing world markets. In 2008, China and India broke off the Doha Round of renegotiation of the WTO rules so that they could maintain their 25% tariffs on American vehicles on top of their hidden duties imposed by value-added taxes and currency manipulations. American companies have learned that investments in American production do not pay off.

I despise George W. Bush's lack of understanding of business and his borderline communist expansion of government and its bureaucratic dominance of our people. Therefore I have a problem with the author blaming Obama alone for this problem. He backs the same stupid plan that Bush embraced (which got us here) but that does not make him solely responsible for our current economic troubles as the title implies.

It is true however that the Obama solution is even worse raving lunacy than Bush's plan.

America faces huge tariffs on anything manufactured here in our nation and Bush tolerated that. Yet so does Obama. Anyone who cannot figure out that our export of jobs is tied to that is an idiot. Smoot-Hawley precipitated retaliation from foreign governments and collapsed world trade during the depression. The only difference this time is that huge tariffs against American production have been allowed to stand with no retaliation. For that you can blame Clinton, Bush and Obama.

The Warren Buffett solution supported in this article only has one problem. It is not politically possible when large corporations are multinational and opposed to a fair trade policy. Corporate owners know that it would be unacceptable to the leaders of foreign nations who hate America. Nothing that does not contribute to the weakening of America will be politically acceptable. America as a scapegoat is far more important than economic growth to most of the world's leaders. That is the reality that causes Obama to look like a weak idiot in his dealings with the world leaders. His expectations of rational responses ignores this attitude.


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