Friday, May 15, 2009
President Obama, meet Senator Smoot
If there is a consensus among economic historians on any subject at any moment in history, it is that Herbert Hoover made a catastrophic mistake in signing the now infamous Smoot-Hawley Tariff Act at the beginning of the Great Depression.
Well, President Obama did the same thing, only more deceptively, and our trading partners -- which during the campaign were the famous "traditional allies" that George W. Bush had supposedly disrespected -- are pissed.
Ordered by Congress to "buy American" when spending money from the $787 billion stimulus package, the town of Peru, Ind., stunned its Canadian supplier by rejecting sewage pumps made outside of Toronto. After a Navy official spotted Canadian pipe fittings in a construction project at Camp Pendleton, Calif., they were hauled out of the ground and replaced with American versions. In recent weeks, other Canadian manufacturers doing business with U.S. state and local governments say they have been besieged with requests to sign affidavits pledging that they will only supply materials made in the USA.
Outrage spread in Canada, with the Toronto Star last week bemoaning "a plague of protectionist measures in the U.S." and Canadian companies openly fretting about having to shift jobs to the United States to meet made-in-the-USA requirements. This week, the Canadians fired back. A number of Ontario towns, with a collective population of nearly 500,000, retaliated with measures effectively barring U.S. companies from their municipal contracts -- the first shot in a larger campaign that could shut U.S. companies out of billions of dollars worth of Canadian projects.
This is not your father's trade war, a tit-for-tat over champagne or cheese. With countries worldwide desperately trying to keep and create jobs in the midst of a global recession, the spat between the United States and its normally friendly northern neighbor underscores what is emerging as the biggest threat to open commerce during the economic crisis.
Whatever the causes of the economic crisis and however easy it is to blame the Bush administration for various policy responses thereto, the shadow trade war, which is destroying wealth by the hour, is entirely the responsibility of the Democrats. The odds are very high that even liberal historians will one day draw a straight line from Smoot and Hoover to Barack Obama's protectionist stimulus package and wonder how we could make such an obvious and famous error twice within a century.
7 Comments:
By 
, at
Fri May 15, 09:09:00 AM:
If one were to make a list of all the worst ideas ever concocted for governing the country, is there anything the Obama administration has missed? Are the Romers and Larry Lindsaey even coming to work anymore?
By , at
Fri May 15, 09:33:00 AM:
Obama-Axelrod are radical leftists ... and they have a Plan. They want to create the conditions for a radically different America ... and so far they're succeeding.
By 
Dawnfire82, at
Fri May 15, 09:42:00 AM:
My occasional snarkiness aside, I'm not much of a conspiracy monger. Most actual, real world conspiracies are pretty limited in scope and not all that interesting in retrospect, and the rest fail.
But we're reaching critical mass here, the point where you look and say, "They can't be this dumb. That *have* to be doing this on purpose."
By Christopher Chambers, at
Fri May 15, 09:42:00 AM:
Hmmm...the so-called "populist" wing of the GOP's rightwing (ok...that's rendundant...of the rightwing then), so eloquently voiced by Huckabee during the primaries in 08, seem to like this. Of course, the talking points are to quell the murmurs...
By TigerHawk, at
Fri May 15, 09:57:00 AM:
Well, Senator Smoot was a Republican, too. Every party has its fools.
By Dawnfire82, at
Fri May 15, 04:07:00 PM:
"Every party has its fools."
Including Huckabee, IMO.
By , at
Fri May 15, 06:09:00 PM:
Conspiracy? Did you listen to Obama's speech a day or two ago? He was very explicit in condemning individual initiative and striving for success. He said that working for government had higher moral value than working for the private sector.
