Alan Tonelson is a Research Fellow at the U.S. Business & Industry Educational Foundation and the author of The Race to the Bottom: Why a Worldwide Worker Surplus and Uncontrolled Free Trade are Sinking American Living Standards (Westview Press).

It’s a free country and so President Obama has every right to feel squeamish about the carbon tariff provision added to the big climate change bill passed by the House on Friday.  But the arguments he has made against this measure are wildly out of bounds.  Standing out in particular are three he advanced in his interview with several reporters June 28.  They reveal that, however green he may be in his views on global warming and the environment, he’s even greener in a more important sense – painfully short of the economics-related experience and knowledge needed to see the present clearly and thus set a viable course for the future.

First, Obama offered a thoroughly fatuous explanation for why “European industries are looking at an even more ambitious approach than we are” – “[t]hey obviously have confidence that they can compete internationally under a regime that controls carbons.”  It’s a clever taunt, but one that totally ignores huge and crucial differences between the U.S. and European energy pictures (like the continent’s relative paucity of domestic fuel sources) and in geography (distances in Europe are generally much less than in the United States, thus reducing fuel use and transportation costs).  

Relatively cheap and secure sources of traditional fuels have always given American manufacturers a major competitive edge by enabling our country’s greater scale to be spanned affordably.  An understandable determination to reduce or eliminate this edge explains the attitudes of European businesses much more convincingly than whatever altruistic green consciousness they may have.  This explanation, moreover, becomes all the more persuasive upon realizing that the Europeans have made virtually no progress towards achieving the goals that have so impressed Obama.  It sounds like they’re hoping that the White House can impose maximal burdens on American business before they even begin keeping their own existing commitments.

Second, it requires hopeless naivete or brazen deceitfulness for Obama to claim that, “the Chinese are starting to move in the direction of recognizing that the future requires them to take a clean energy approach” – let alone that, “In fact, in some ways they're already ahead of us -- on fuel efficiency standards, for example, they've moved beyond where we've moved on this.”  
After all, we’re talking about a government that has flatly rejected the idea of adopting ceilings on its greenhouse gas emissions  – even though the Obama climate change bill seeks a major cut in America’s, and other high income countries have endorsed such goals for themselves.  Further, and even more obviously, China’s fundamentally lawless political system is terrific at fooling foreign governments (and its own people) by passing any number of noble-sounding rules and regulations and then flouting them in practice.  

Just as loony is Obama’s related idea that the climate change bill will give the United States the moral authority “to go to the Chinese and the Indians” and “leverage even greater gains internationally.  Earth to the president:   The United States is already doing an impressive job in controlling greenhouse gas emissions.   This progress has done nothing to soften third world obstinacy.  

Third, only the triumph of hope (or is it cynicism?) over experience could account for Obama’s position that although he is “very mindful of wanting to make sure that there's a level playing field internationally.  I think there may be other ways of doing it than with a tariff approach.”  American presidents have long made exactly the same points about the practically innumerable ways that foreign governments have rigged international trade markets, and the results have been miserable.  

The reason: Our trade partners (rightly) view these barriers and other mercantilist practices as keys to their prosperity, and they have no intention of abolishing them voluntarily, no matter how charismatic American leaders consider themselves.  Nor do these countries seem especially interested these days in any American advice about structuring their own economies and societies.  And given how much time Obama has spent in office apologizing for his country’s sins and shortcomings, what else could be expected?  

Further, for a president who’s constantly berating opponents for being “behind the times” and for “fighting the last war” and for “looking backwards,” he’s remarkably stuck in the conventional wisdom that the bottom line for every conceivable piece of American public policy must be avoiding tariffs.  That’s about as realistic supporting law and order and justice but opposing punishment of in any form.  

Indeed, Obama’s eloquent obtuseness came into full view near the end of an interview with an anecdote aiming to portray his climate change strategy as a quintessential example of the can-do spirit so largely responsible for our national greatness.  It’s worth quoting him in full:

“I had a lunch with a handful of corporate CEOs and they were talking about the '90s -- actually the '80s and the '90s, and they said back in the '80s everybody was sure that Japan was going to take over -- remember, they bought Rockefeller Center and we had these huge trade deficits, and everybody was certain that the American era was over. And what the best companies did was not shy away from this new challenge, but they embraced it and they said, how are we going to become more efficient, how are we going to cut our costs, how are we going to get more bang for the buck? In other words, how are we going to compete?

“And what these CEOs all told me is that if we as a nation can make the same transition, take the same approach on the energy sector, on health care, on education -- and frankly, on government, because government is not as efficient as it needs to be -- but if we had that same mind set, then as a nation we're going to be able to compete effectively.”

But did those trade deficits ever vanish?  Did these companies create a solid, durable foundation for a new American competitiveness?  Of course not.  Far too many “became more efficient” and “cut their costs” and “got more bang for the buck” by lobbying Washington like mad for outsourcing-focused trade policies.  And with the complicity of both major political parties plus the Greenspan Fed, they sent so much in the way of jobs and output offshore to cheap labor, regulation-light countries like China that they gutted the  productive core of the U.S. economy, and left the country with only one way to maintain even the illusion of prosperity – reckless borrowing fueled by equally reckless asset bubble inflation.  Candidate Obama at times appeared to understand this connection.   President Obama has apparently forgotten it.

“Long term, “Obama said on Sunday, “I look at America's history and that tells me that we don't shy away from the future.”  It’s the president’s job to help guide the nation into this future.  But genuine confidence in Obama’s navigational skills won’t be warranted until he starts displaying even the slightest clue about where the American and the world economies have been.

Author’s note: This column is dedicated to the memory of Alice K. Kearns in deep appreciation for the invaluable living legacy she has left this country.

---