A Firm Stand, Not A Cave-In

It's always amazing to see the bald-faced capacity of the right to spew the intellectual fatuousness that whenever a president's decision aligns with the interests of unions and workers, he's caving in to political pressure, but when it aligns with the interests of corporations, it's always enlightened policy-making.

George Will travels that road again today in a column [1] in The Washington Post denouncing President Obama's decision to impose a tariff on the Chinese tire industry. He argues that by responding to an International Trade Commission finding that China was violating World Trade Organization agreements, Obama was not only contradicting his free-trade campaign promises but that, get this, more poor people would die in car accidents because they would not be able to replace their worn tires with cheap Chinese imports.

Fortunately, a number of factually well-armed people have already weighed in though the comments section of that column; unlike most newspaper comment threads, the one following Will's column contains some important gems. Several commenters noted that Chinese tires have a marketplace advantage mainly because of industrial subsidies from the Chinese government and currency manipulation. This is not, as Will would have readers believe, a consequence of consumer choice in an equal playing field. China engages in forceful, unapologetic protectionism. The ITC, looking at the facts, recommended an even higher tariff than the 35 percent in the first year that President Obama has proposed. Will, a Second Amendment freak, wants the U.S. to come to this particular fight unarmed.

The kind of arguments columnists like Will made today, and the similar arguments by economists who should know better, are precisely why economist Jeff Madrick, at a news conference [2] yesterday sponsored by the Institute for America's Future, said he was "discouraged by the economics profession." The China tire decision has evoked the specter of the trade war sparked by the Depression-era Smoot-Hawley Act, when in fact, Madrick said, "we're not anywhere close to that kind of episode."

Ohio Sen. Sherrod Brown, who was at the same news conference, laid out the "indisputable facts" about China's three-fold ramp-up of low-cost tire production in a four-year period and the 5,000 American jobs that were lost as a result. More importantly, he pointed out that when countries agree to a set of rules, there has to be consequences when those rules are violated—not just on principle but for the proper functioning of international commerce.

"President Obama's decision is an example of responsible trade," Brown said. "When you don't enforce the rules, markets can't find equilibrium."

Brown's message to Obama and world leaders converging at the G-20 summit at Pittsburgh is to "not confuse legitimate government actions with protectionism." There is a debate that must happen at the G-20, as Robert Borosage points out today [3], about how the leading economic powers should work together to produce more jobs in their countries. And it is in fact about time for the United States to look out for the interests of labor, for the prosperity of workers able to get solid jobs in a revitalized manufacturing sector is central to getting the nation's economy back on track.