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What is our exit strategy from the quagmire of this unilateral war?

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The world is angry with our policies

Look, even the National Review wants us out of this unilateral war that is making the whole world hate us!

Canada and Mexico, our top two export markets, are embroiled in trade feuds with the U.S., both triggered by American protectionism. As a global leader and a decent hemispheric neighbor — especially during these economic doldrums — the United States immediately should rejoin Canada and Mexico on the road to free trade.

…Obama’s $410 billion omnibus spending plan defunded a pilot program in which about 100 Mexican trucks were allowed to drive goods into the U.S. beyond a 25-mile frontier zone. American trucks were given equal access to Mexican destinations. (Removing goods from one country’s trucks and reloading them onto the other’s for onward travel has boosted transit costs anew. These eventually increase price tags.)

Mexico correctly argues that the North American Free Trade Agreement, which President Clinton signed in 1995, opened U.S. roads to Mexican trucks. However, Washington kept dragging its feet. In 2002, Congress imposed 22 safety regulations on Mexican (but not Canadian) trucks, and it was only in 2007 that the Bush administration started the pilot program. In exasperation at the cancellation of this initiative, Mexico has raised tariffs on 90 American exports worth $2.4 billion, including grapes and toilet paper. This reportedly will kill 40,000 American jobs. Mexico’s backlash against U.S. protectionism interrupted its unilateral reduction of average industrial tariffs from 10.4 percent in 2008 to a projected 4.2 percent in 2013.

Even worse, June 1 brought word that Canacar — an association of 4,500 Mexican trucking companies — had filed a grievance with the U.S. State Department seeking $6 billion in damages because of the pilot program’s termination and the resulting brick wall that arose in front of big rigs at the border.

“We want reciprocity,” Canacar attorney Pedro Ojeda told the Wall Street Journal. “The U.S. has notoriously not kept its commitments.”

I mean trade war, of course.

The world is angry with America

Andrew Roth writes:

China has now retaliated with a “Buy China” provision in their own stimulus bill. Canada has complained and all Secretary of State Hillary Clinton has done in response is pledge “cooperation.” No, we don’t need pledges. We need to revoke “Buy American.” We need to kill it.

Here is a list of countries that are angry with Obama’s short-sighted protectionism.  He wants to isolate America from the rest of the world by refusing to sign trade deals with them.

Canada ($600B) passes resolution to counter “Buy American” policy.

The European Union ($639B) calls it the “worst possible signal.”

Japan ($204B) warns the United States, and Australia ($32B) threatens retalitory measures.

After slamming the “Buy American” policy, India ($43B) raised tariffs.

Singapore ($43B) is concerned with “Buy American.”

The president of Brazil ($62B), a former labor activist, criticizes Buy American and has threaten to challenge the U.S. at the WTO.

France‘s ($72B) Nicholas Sarkozy wants a “Buy France” provision for french auto companies.

Big Labor opposes free trade, and Big Labor helped to get Obama elected.

So now we get a trade war.

News

Who has the better economy? Canada or the USA?

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Hans Bader at the Competitive Enterprise Institute reports:

1.2 million Americans have lost their jobs since the $800 billion stimulus package was signed into law.

The stimulus package has directly destroyed tens of thousands of jobs. A provision in the stimulus package that blocked 97 Mexican truckers from U.S. roads “caused Mexico to retaliate with tariffs on 90 goods affecting $2.4 billion in U.S. trade,” destroying 40,000 American jobs.

It also ignited a trade war with Canada. In response to vague “buy American” provisions in the stimulus package, “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.”

Yet, Obama had the audacity to claim that only passing the stimulus package would save us from “irreversible decline” and economic ““disaster”.

Obama’s policies echo those of Herbert Hoover, who helped spawn the Great Depression through his protectionism and tax increases.

Remember how Democrats used to complain about Bush and his “tax cuts for the rich”? Yeah, it’s strange how only people who pay taxes (59% of the public) can actually get tax cuts, isn’t it. But Obama has an even better idea: “tax hikes for the poor”.

The Washington Post reports on Obama’s new car tax: (H/T Heritage Foundation, Michelle Malkin, Stop the ACLU, Gateway Pundit)

A senior administration official said the new standards would raise the cost of an average car by $1,300, $600 of which could be attributed to the rules being announced today.

This is not to mention the electricity tax (cap and trade), the cigarette tax, taxing employee health care plans, and the rising cost of living caused by protectionism.

On the other hand, let’s take a look at Canada in relation to the United States, courtesy of the Cato Institute. (H/T Heritage Foundation)

The Cato Institute writes:

Spending: Spending by all levels of the Canadian government peaked at 53 percent of the country’s GDP in the early 1990s, then plunged to 40 percent in 2008. U.S. government spending has risen, reaching 39 percent of GDP in 2008. And with the stimulus package, that number is likely to jump even higher.

Government spending as % of GDP
Government spending as % of GDP

Debt: The Canadian government cut its debt from 71 percent of GDP in 1995 to 32 percent in 2008. Under President Obama’s budget plan, U.S. federal public debt will jump from 41 percent of GDP in 2008 to more than 60 percent next year.

Federal debt as % of GDP
Federal debt as % of GDP

Deficits: Canada has balanced its budget every year since 1998 — not by raising taxes, but by cutting spending. The United States balanced its budget for four years in the late 1990s, but now deficits are so large that it’s difficult to imagine that ever happening again.

Surplus / Deficit as % of GDP
Surplus / Deficit as % of GDP

Corporate Taxes: Canada has cut the corporate tax rate from 28 percent to just 15 percent, and most provinces have trimmed corporate taxes as well. The U.S. federalstate rate stands at about 40 percent, and the Obama administration is planning to increase corporate taxes.

Corporate tax rates
Corporate tax rates

It’s important to note that the Liberal party in Canada is socially progressive, but moderate on fiscal issues. Of course, now that the Conservatives have been running things, it’s gotten even better. It would be great if they could win a majority. The biggest problem in Canada right now is the fascist Human Rights Commissions, but there are candidates from the Conservative Party who intend to abolish the HRCs in BC and Ontario.

News

Is Obama saving or creating jobs?

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KSDK reports that Obama’s cuts in defense spending will cost St. Louis 30,000 jobs. (H/T Gateway Pundit)

Excerpt:

Thousands of jobs could be in jeopardy at St. Louis’ second largest employer: Boeing.

The aerospace company announced the government’s planned defense budget cutbacks will slow production of two locally-built planes and eliminate the jobs of the employees who make them. Michael Moran has helped build hundreds, if not thousands, of C-17 cargo planes.

…The bottom line is Boeing needs to get through to President Obama, Congress and Secretary Gates. If not, they stand to lose more than 5,000 jobs at Boeing in St. Louis, and 30,000 total local jobs, including suppliers.

Boeing executives are reaching out to anyone who will listen. They’re trying to get Congress to put the planes back in the budget.

The video is here.

And remember the protectionist regulations Obama included in his Porkulus bill? Recently, we talked about how the “Buy American” provisions of the stimulus bill caused American companies to stop buying anything from Canada for their projects. Well guess what? The Canadians were not amused.

Here’s the story from the left-wing Washington Post. (H/T Ace of Spades)

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.

And it’s going to cost American jobs:

The new buy American provisions, the company said, are being so broadly interpreted that Duferco Farrell is on the verge of shutting down. Part of an increasingly global supply chain that seeks efficiencies by spreading production among multiple nations, it manufactures coils at its Pennsylvania plant using imported steel slabs that are generally not sold commercially in the United States. The partially foreign production process means the company’s coils do not fit the current definition of made in the USA — a designation that the stimulus law requires for thousands of public works projects across the nation.

In recent weeks, its largest client — a steel pipemaker located one mile down the road — notified Duferco Farrell that it would be canceling orders. Instead, the client is buying from companies with 100 percent U.S. production to meet the new stimulus regulations. Duferco has had to furlough 80 percent of its workforce.

“You need to tell me how inhibiting business between two companies located one mile apart is going to save American jobs,” said Bob Miller, Duferco Farrell’s executive vice president. “I’ve got 600 United Steel Workers out there who are going to lose their jobs because of this. And you tell me this is good for America?”

Losing your job sucks, and there’s going to be a lot more of it until people shut off their televisions and pick up some books on economics, like the Federalist Papers or The Road to Serfdom. Learn a little about what made our country not like North Korea. Our prosperity wasn’t an accident, it was the result of a set of decisions made by men who believed in God, human rights and free enterprise.

UPDATE: The Competitive Enterprise Institute has more on the trade war with Canada.