Saturday, April 26, 2008

Anyone but Obama

I've always thought that you can tell the quality of an American politician by their attitude to trade. In the States it is so easy, but so unimpressive, for a politician of any ideological stripe to make a populist appeal to protectionist instincts. American protectionism can cause so much harm to both their own prosperity and the world economy but it offers easy wins for a politician willing to pander to the protectionists.

Lawson's excellent article in the Independent yesterday sets out just how dismal Obama has been on this issue:

"Obama is one of three Congressional sponsors of "The Patriot Employer Act", which seeks to give preferential tax status to American companies that choose not to invest overseas. His anti-globalisation rhetoric goes far beyond criticism of free-trade deals such as Nafta. Obama told voters in New Hampshire:"I would stop the import of all toys from China". China supplies 80 per cent of the toys sold in the US, so that's one heck of a pile of embargoed fluffy bunnies."

The risks of the current down turn being turned into something far worse by a return to protectionism couldn't be clearer. A trade war with China could cause untold impoverishment and even be strategically dangerous. His hostility to Nafta would undermine the international drive for new free trade agreements that would do great things for poor and rich countries alike.

Any politician who argues for and sponsors this kind of protectionism is either a dishonest hack or an autarkic socialist. Hopefully Obama is the former - it seems quite plausible - but that would still make President Obama an alarming prospect. As Lawson says:

"The trouble is that Barack Obama has now promised Americans that he will legislate in an attempt to prevent their jobs being lost to foreign competition. If he does not do so as President, they will feel betrayed. If he does so, it will be an even bigger betrayal."

This is an area where McCain has been excellent and taken real political risks. Notably, when he refused to pander to the Iowa corn lobby. I think on those grounds alone we, in the British centre right, should wish him well. Particularly if he is against an opponent who, on this issue and others, promotes truly disastrous policies.

Cross-posted from CentreRight.Com.


Dave Cole said...

For what it's worth, I agree that the rise of protectionism in the US is worrying. It seems to be going hand-in-hand with a cousin of unilateralism - isolationism - and the turning of a cold shoulder to the outside world.

I am going to have to pick you up on something here.

" can tell the quality of an American politician by their attitude to trade"

Does that include George W Bush for introducing or raising tariffs on steel, textiles, lumber and catfish?

The catfish example is interesting. Vietnam started to open its economy up. Soon, catfish started doing well and was making up on the order of half of all imports of the fish to the US, where it was used for relatively low-grade products (such as fast food fishburgers and the like). In response to pressure from domestic producers, the Bush administration introduced tougher and tougher restrictions and eventually introduced tariffs because Vietnam was not a wholly market economy. I'm sure you can fill in the gaps about hypocrisy, not taking an opportunity to promote free markets in a communist country and so on.

First cast out the beam out of thine own eye; and then shalt thou see clearly to cast out the mote out of thy brother's eye (Matthew 7:5)


Matthew Sinclair said...

That absolutely includes George W. Bush who has been a complete tool on trade at times.

Anonymous said...

Then again, McCain has said that George Bush has done a good job of managing the US economy and he will follow in the same footsteps.

Hardly encouraging.

Meg said...

I don't remember having seen any posts about the London election here... what do you think of Boris Johnson being elected?