Yay! Today, 15 Nov 2008, with only a few weeks of his tenure as US President left to go, he still can’t stop saying one thing and doing the other.
This would be all fine and dandy but let’s cast our minds back to 2001, just after he got in first time….
- Bush Turns Protectionist for Steel Companies – 7 June 2001
- Bush’s Protectionist Tab – 21 May 2002
And now cast our minds back to when he got in for his second term in 2004….
- CBI chief chides Bush over US protectionism – 5 Nov 2004
These few are just a selection of articles on the now carefully forgotten mantra of “protecting US jobs” etc. They contain a plethora of protectionist tariffs that the Bush administration has erected over the years. I myself got some experience of this as the EU has a counter tariff for cloth and other imports from the US, even now, as we speak.
Now it’s all “must have free trade” while at the same time propping up private enterprise companies (banks etc) to the tune of “we must protect the economy”.
The Big Question: Why is General Motors in such trouble, and can it be saved?
Coupled with this double-speak, the latest news from the USA that’s just dawning on folk (but has been carefully muffled by the concept that it’s all the fault of the credit crunch ), is that since this key year above, 2004, General Motors (GM) has frittered away $73 billion! They’ve never made a profit since 2004!!!
Now how can this be the fault of the credit crunch? That didn’t start until last year.. 😕
The newsgroups and blogs are filling up with commentary that it’s all the fault of unionised labour that the GM, Ford etc cars are un-competetive. Er… no! Their prices are close to Japanese & European, on a marque type comparison. 🙂
The trouble is that they don’t make good, small, mass-production vehicles. And, like all good shop-keepers will tell you;
If it isn’t in the shop, you can’t sell it! 😯
This is the key to the US car industry’s problems. They don’t make what people want to buy! I’ve mentioned it several times on my pages over the past year.
The US worker is like any other – they just want a job. The US creativity, when unleashed, is fantastic. The problem is purely from senior management, content in their bubble world with no real financial worries, unlike the rest of us. Their stasis and stagnation in the face of a world of rapid change beggars belief!
- Q. Why didn’t the stock and shareholders sack them?
- A. Because most shares are owned by the big banks and financial institutions that have caused the credit crunch – that’s why!
- Q. Why aren’t the banks etc penalised and their senior managers purged if they are so crap?
- A. Because we need firm, experienced hands at the tiller…
You couldn’t make it up, could you!
Anyway, you believe Bush if you want to. It could be, that for the first time, as he has nothing to lose now, (especially a presidency or respect ), that he is actually speaking as he feels things should go. If so, it’s good. If not, his words are just like confetti now, if they weren’t already.
This article by Prof. Jonathan C. Carlson has some good reading on the benefits of free trade, especially from the viewpoint of “emerging economies” as they are now called. These are Carlson’s key points below, about the positive impact of international trade for developing nations:
- Removal of trade barriers lowers prices, raising the real value of the incomes of the poor.
- Removal of trade barriers abroad opens markets and increases prices at which exporters can sell goods.
- Foreign investment brings new jobs.
- Foreign investment brings new technology and new capital to improve productivity.
- Foreign investment also breaks the monopoly of local capitalists, who otherwise can utilize their monopoly position to exploit the poor.
- Investment and trade liberalization, by opening markets and raising productivity, contribute positively to economic growth and increase the demand for labor by firms that are expanding to export, firms that are newly investing and local firms that supply inputs to the new and expanded companies.
Against these must be weighed the not inconsequential potential for environmental and social degradation that occurs in regions of low levels of law provision and enforcement. I’m thinking that a particularly good example of this is the poisonous metal leachings from computer recycling run by “slave” ganger bosses in Nigeria and elsewhere. Things like this are serious. The (often onerous) laws we have in the West are the result of eliminating centuries of such exploitation.
After all, there’s no point in having the economic benefit of a job if you’re dead from Arsenic poisoning by the time you’re 25!
The challenge obviously, is to have the economic benefits world-wide of free trade without the degradation of peoples and resources. This is something that the West has spectacularly failed to do so far. Large parts of China are metal and plastic cesspits. Poisons are in common foodstuffs.
Action is clearly needed on all these things. Free trade, while good, is not enough.
While reading recently about the famous Bretton-Woods agreement that started the World Bank & IMF, I found out that the UK representative, JM Keynes had proposed one world reserve currency, which he called bancor. This was rejected, the dollar became supreme, then came off gold, then all financial restraints were removed and now we have the Credit Crunch!
How different it could have all been with one, united, currency!