Sign up now!
Click here to receive free updates on headline news from John T. Reed

View Cart

 Bookmark and Share

Featured Products

Succeeding
1 year Subscription to Real Estate Investor's Monthly
Distressed Real Estate Times
How to Get Started in Real Estate
How to Buy Real Estate for at Least 20% Below Market Value

Checkout
How to Order

Copyright by John T. Reed — Sign up here for free email updates

One of the best things President Clinton did was NAFTA. It increased the prosperity of Mexico, Canada, and the U.S. by removing trade barriers between the three countries. Clinton did it over the protests of the unions even though they are traditional allies of the Democrat party.

To win in the primaries, Obama said he would renegotiate NAFTA. That means reneging. The only moral way to renegotiate a contract or treaty is to offer additional concessions to get the additional concessions you are asking from the other side. Obama was not going to offer any additional concessions. His position, mirroring what union members wanted, was that the NAFTA agreement should not have been agreed to in the first place. He just wanted the U.S. to renege, which is illegal, immoral, and would hurt the U.S. in many ways for years to come simply by establishing us as a country that does not keep its word.

In the recently passed $410 billion earmarks bill, the Teamster’s Union’s supporters in Congress slipped in a provision that would keep 98 Mexican trucks from operating in the U.S. The U.S. had already agreed to let those trucks operate in the U.S.

As I said in my article about the “Buy American” provisions in Obama’s “stimulus” law, protectionist laws like reneging on letting 98 Mexican trucks into the U.S. invariably cause the country in question to retaliate with restrictions on the exports of the country that starts the protectionist war.

Sure enough, Mexico has now slapped tariffs on 90 U.S. exports to Mexico. That will force layoffs and reduced income for the Americans who make their living from exporting those products to Mexico. No doubt, the number of Americans who will be hurt by those 90 tariffs far exceeds however many teamsters who are helped by banning 98 Mexican trucks.

The U.S. export products that will be adversely affected by the new Mexican tariffs had a value of $2.4 billion in 2007 and came from 40 different U.S. states.

Economists generally believe that the Great Depression of the 1930s was made far worse by the adoption of the Smoot-Hawley Tariffs by the Hoover administration and by its retention and extension under the Roosevelt Administration. Today, international trade is far more important to all economies including the U.S.’s than in the 1930s. A trade war now, which appears to have already begun between many countries, will dramatically worsen the world economic crisis.

During the campaign, Obama repeatedly denounced Republicans letting special interests have their way and thereby hurting Americans in general. He said that would end when he became president.

He lied.

It’s still the same, only now it’s Democrat special interests like the teamsters that are having their way to the detriment of the nation and the world. And not only are things not different, no “change we can believe in,” Obama is worse than other Democrats like Clinton who resisted these protectionist pressures.

Barack Obama has sold out the American people and their prosperity to suck up to some sleazy political supporters of his, namely, the Teamsters union. Many believe all the damage done by Obama will be reversed within months after Republicans regain power. That is true of some aspects of the Obama policies like new tax rates, but it does not apply to things like this. It will probably take decades for future U.S. political leaders to undo the damage this will cause, decades during which the American people who made their living from trade with Mexico will suffer. Mexico is, or at least was, the second biggest market for U.S. exports after Canada.

Obama says he wants a recovery ASAP. But in many ways, he is making a recovery illegal. This is an example of that. U.S. exports to Mexico cannot recover because of new U.S. and Mexican laws signed by, and triggered by, Obama signing the $410 billion earmarks bill. Recovery of U.S. export levels to Mexico will not happen because it is now illegal. Furthermore, it will never happen until the laws are changed, which is less likely now that the Mexicans and the rest of the world know that the U.S. cannot be trusted to comply with the treaties it makes and ratifies.

The Americans laid off or who have their income reduced by this should send a sarcastic thanks for nothing to the Democrats who voted for it and the president who signed it.

I appreciate informed, well-thought-out constructive criticism and suggestions. If there are any errors or omissions in my facts or logic, please tell me about them. If you are correct, I will fix the item in question. If you wish, I will give you credit. Where appropriate, I will apologize for the error. To date, I have been surprised at how few such corrections I have had to make.