The most popular book making the rounds of the halls of our government in Washington, DC, is "Creating a Depression for Dummies." Congress has been very effectively following the advice for the past year, and I think that President Obama must have recently read the chapter on "How to Create a Trade War and Piss-off Your Largest Creditor."
On Friday, September 11, Obama solidified a few thousand union votes by placing a very large tariff on automobile tires imported from China. The balance to these union votes,which he already had anyway, is that he threw a boulder down the slippery slope that will lead to an all-out trade war, shades of the Smoot-Hawley Tariff enacted by Herbert Hoover in 1928. Did Obama actually think that China would accept this tariff without retaliation? Not only are we now heading into a major trade war, but China just happens to buy more of our government bonds than any other country. With trillion dollar federal deficits projected for several years, now who will buy our debt? I don't think China will be too interested after Obama's less than friendly gesture.
After successfully following all the advice in "Creating a Depression for Dummies," the next best seller for our eager politicians will be " Prolonging a Depression for Dummies." It should be a best seller!
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Jun 9, 2009
Mar 25, 2010 01:45 PM UTC
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In one of his first major decisions on trade policy, President Obama opted Friday to impose a tariff on tires from China, a move that fulfills his campaign promise to "crack down" on imports that unfairly undermine American workers but risks angering the nation's second-largest trading partner. http://www.washingtonpost.com/wp-dyn/content...11/AR2009091103957.html