2/4/2010
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The Obama administration's roadmap to economic health is seriously flawed and will lead the nation to the brink of economic disaster. The new budget provides money in selected areas to stimulate economic growth. But Obama's policies completely miss the big picture of mercantilist and protectionist economies in East Asia and Europe. Government seed monies for, say, green manufacturing or light rail are no answer to sustained foreign government policies and across-the-board subsidies to build entire industries. Unemployment will not drop significantly nor real wages rise substantially until macro issues like foreign VAT export rebates, direct and indirect subsidies, tariff and non-tariff barriers, and currency manipulation, inter alia, are addressed directly -- and either dismantled quickly or countered at the U.S. border.
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Kevin L. Kearns and Alan Tonelson, 2/4/2010
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USBIC's Kearns: "If President Obama really wants to create more U.S. jobs by tackling China's trade cheating, he'll demand that Congress's Democratic leadership immediately pass the strong currency-manipulation bill he endorsed as a Presidential candidate. Further delay will only make clear to all – including the Chinese – that Obama is all bark and no bite."
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2/3/2010
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All the king's rhetoric and all the king's men can't put the economy back together again -- without radically changing our abyssmal trade policies of the last 17 years. This includes a major revamping of the way we do business with China and other mercantilist states. Contrary to the president's recent assertions in Ohio, we are not too "interconnected" to use tariffs as one of the prime tools. In point of fact, we are not interconnected in any useful sense, but we are overly dependent in a dangerous way. Appropriate use of tariffs and other border adjustable levies will end our overdependence on foreign-made goods and return manufacturing, and with it job and wealth-creation, to the American economy.
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More Opinion
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2/1/2010
Because official Washington, most especially the Obama administration, cannot think in terms of industrial policy -- as do all our major trading partners -- they are left to tinker with tax policy to try to create jobs. The "bold" Obama tax credits to small business for new hires, pay increases, additional hours, or moving part-time workers to full time are esssentially meaningless. Businesses need orders from customers first; THEN they hire the workers needed to help them fill those orders. Obama and cmopany have it backwards. With East Asian, and to a certain extent European, mercantilism supplanting domestic American manufacturing, the orders and customers are not going to be there for domestic manufacturers -- unless and until Obama and his economic team get rid of the so-called free trade policies that have devastated American manufacturing. Domestic manufacturing is a major jobs multiplier and the source of 70 percent of all US R&D. How about Obama policies that stop offshoring, bring factories and R&D centers back home, and counter the effect of imports not by trying to match them with exports (this 17-year-old experiment has failed) but by replacing them with domestic production?
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1/28/2010
It is ironic that successive free-trade administrations, including the Obama administration, do not apparently believe in free trade in currency. Thus China, Japan, and other mercantilist East Asian nations get off scott free while they manipulate their currencies to American producers' and workers' disadvantage.
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Alan Tonelson, 1/6/2010
Team Obama appears to be handicapped by a complete ignorance about the differences in national economic structures and priorities, which impede mutually beneficial trade between the United States and its chief foreign competitors (especially in Asia), and by a naively legalistic view on eliminating foreign trade barriers and enforcing agreements. Can you imagine a better formula for trade policy disaster?
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Alan Tonelson, 12/28/2009
The policy debate over government’s role as business shareholder has been far too narrow. The overriding objective should not be re-privatizing as soon as the emergency is thought to have passed, or even recouping the taxpayers’ investment, as desirable as these goals appear or actually are. The overriding objective should be transforming enterprises owned by the government and industries it now dominates, either through ownership or aid, from sources of weakness and vulnerability in the economy to sources of enduring strength. More specifically, this goal requires the government’s policies for these sectors to focus on significantly increasing the share of the U.S. economy represented by its genuinely productive, wealth-creating sectors – first and foremost, manufacturing.
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Kevin L. Kearns and Alan Tonelson, 12/28/2009
USBIC's Tonelson: "[A]n actual manufacturing revival is a goal that is not only distant but receding. And the prospects for one will remain bleak as long as so many new advocates, including President Obama, keep shying away from the bold policy departures that are needed – especially in America's international trade policies."
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12/14/2009
Obam's mini-summit with Wall Street's leading bankers is another show trial. Obama looks tough, the bankers sound contrite -- but not behind closed doors, where they will argue that their banks will lose their best talent if the bonuses aren't big. Let's call their hand. Who's going to hire these jokers if they all depart en masse? And if they do, good ridance! Maybe we'll get a new set of bankers, people with some human decency who understand that the first job of the banks is to facilitate wealth creation by lending to companies willing to put up factories here. The current crowd drives factories to China and erroneously belileves that derivatives create wealth, when they just transfer it into the hands of the various malefactors who create the derivatives. Wealth and job creation is done in manufacturing, resource extraction, and agriculture -- with their transformative, value-adding properties -- not by hawking too-clever-by-half, ultimatley worthless pieces of paper.
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Kevin L. Kearns and Alan Tonelson, 12/4/2009
The U.S. Business and Industry Council today issued a letter to all U.S. Senators stating its opposition to S.AMDT. 2793, the Dorgan Drug Importation amendment. The Council warned that the amendment would harm the health and safety of Americans, handicap a leading U.S. industry, inhibit domestic R&D, and cost U.S. jobs – in exchange for minimal savings, which in any case would go to middlemen and not American consumers.
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11/30/2009
The Fed and the administration don't have much ammo left to fight the coming double and deeper dip -- courtesy of their failure to understand the prime cause of the Great Recession: global trade imbalances and their impact on the US industrial base. They have squandered the "Hope and Change" platform on which President Obama ran, as well as much of his personal popularity. Why is a "jobs summit" necessary at all this week? The answer is that they blew it -- and they still don't understand wealth and job creation. Wall Street and multinationals still control the nation's economic agenda, and spend-and-tax liberals the political agenda.
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Alan Tonelson, 11/26/2009
Consider Obama's November 23 contention that Asian countries “want our [export] products,” and that American sales to the region are subpar “partly because we just haven't been as aggressive as we need to be.” These remarks rank among the most egregiously inaccurate, manipulative, misleading, and downright whacky statements ever to come out of any recent free trade-loving White House.
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11/23/2009
Infusions of freashly printed stimulus dollars were responsible for much of the growth in the third quarter US GDP. However, the trade deficit, now rising again, took its usual toll, clipping a half percent of off GDP growth. In addition, increased costs for business in the form of health care mandates and potential cap-and-trade CO2 emissions costs, will likely cause fewer factories to open in the United States with China being the preferred locale because of US government-imposed burdens. That means that high unemployment is here to stay.
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