Democrats Block Exports and Destroy Jobs

Why do Democrats hate private employment so?

American manufacturers are - finally! - adding jobs.  American workers have become so expensive that they're investing in equipment instead of creating as many jobs as we'd like, but it's something.

Some time ago, Mr. Obama noticed the benefits of exporting, particularly the export of manufactured goods.  Both the German and Italian economies have benefited from larger export volume than other countries enjoy.  It's no wonder that Mr. Obama promised to double exports from $1 trillion to $2 trillion over the next five years - doubling exports would create a huge number of jobs and manufacturing jobs generally pay better than non-manufacturing jobs.

Unfortunately, as the New York Times points out, there are a few nasty realities that might get in the way:

The trouble, trade experts say, is that meeting that goal would require the president to engage in a fight to the death with the liberal wing of his own party, persuade China to allow its currency to appreciate 40 percent, get global economic growth to outperform the salad days from 2003 to 2007, and lower taxes for American companies that do business abroad.  [emphasis added]

Mr. Obama has been working on these obstacles.  He's been berating the Chinese about the exchange rate between American and Chinese money, but the Chinese can't let their currency appreciate much without losing exports and Chinese jobs.  Why should they lose their jobs to create jobs for Americans?

He's been lecturing other countries on how to repair their economies so that global economic growth can resume.  Politicians in other countries don't really need Mr. Obama telling them to get their economies moving again - most of them understand that bad economies mean they won't get re-elected.  Given that he can't fix his own economy, why should they listen to him?  Mr. Obama doesn't have much chance of getting global economic growth back to 2003 levels any time soon.

It's pretty certain that Mr. Obama won't want to lower taxes on companies that do business overseas.  He's been griping that American companies won't send their profits back to America and he's been talking about taxing away overseas profits whether they're sent home or not.

That leaves the Times' second option, getting in a fight to the death with his liberal supporters.  He could push trade agreements with South Korea, Panama, and Columbia, which would create American jobs but which his base strongly opposes.

His unionized supporters from big manufacturing states argue that free-trade agreements would let in a flood of cheap imports and destroy American jobs.  Is doubling exports just another Presidential pie-crust promise?  Much sound and fury signifying nothing?

Not Just Any Trade Pact

Unlike most trade pacts which reduce import taxes in both directions, these particular agreements reduce import taxes that Korean, Columbia, and Panama levy on imports from America.  For historical reasons, goods from these three countries may now be imported into America with low tariffs or no tariffs at all; the trade pacts in question would reduce taxes on American goods going the other way.  This would reduce selling prices in these countries and increase American exports by an estimated $15 billion per year.

Sounds like a no-brainer, right?  It is, but as the Times points out, the liberal wing of the Democratic party is opposed.  The excuse given for not allowing American goods into Columbia tax-free was that the Colombian government hadn't been energetic enough in keeping Colombian terrorists from murdering union officials.  The fact that these agreements, which have been stalled for four years, would benefit American exporters without increasing imports hasn't lessened liberal opposition.

Another Boondoggle

Some 50 years ago, the government created the Trade Adjustment Assistance Program which spends money helping American workers whose jobs are threatened by imported goods.  The TAA legislation expired last February during the battle of the budget.

Instead of passing these pending trade agreements, liberals are saying they'll block them unless TAA is renewed.  Democrats see TAA as increasingly important as jobs move overseas; Republicans see it as an ineffective waste of money which is just another sop to the unions.

The Wall Street Journal's study of federal job-related programs seems to support the Republican view:

... many of the participants in the two largest programs, the Comprehensive Employment and Training Act (1974-1982) and the Job Training Partnership Act (1983-1997), earned less later in life than those who never received government training.

The government has always been radically incompetent at imparting job skills or good work habits. Unfortunately, as long as politicians can profit from handing out jobs and paychecks, the waste and character damage will continue.

The fact that TAA hasn't been effective and the fact that these agreements will create American jobs matter not a whit - that's why the Times said Mr. Obama would have to go to war with his party to increase American exports.

The problem is that other nations are in the process of making agreements that will cut taxes on their exports.  These three countries demanded the right to tax imports from Europe and America while their economies were growing.  Now that their economies have matured, the governments are willing to drop taxes on imports through these agreements - but we're refusing to take "Yes" for an answer.

If the Europeans get agreements in place and we don't, European goods will cost a lot less than the equivalent American goods.  That will give them a competitive advantage which will last until we get our act together.

Time is running out - Congress and the Senate will soon break for recess.  When legislation starts up in the fall, the next election will be close enough that nobody will want to vote for anything the slightest bit controversial, which trade agreements always are since the media never bothers to explain their substance.

Historical precedent says we won't be able to do it.  Of the 202 bilateral trade agreements registered with the World Trade Organization, the US - the world's largest economy - is party to a whopping 11.  We believe that Mr. Obama's talk of increasing exports is another of his many pie-crust promises, much sound signifying nothing.

If he'd put a little fury into it, he might actually be able to create jobs by increasing exports.  His talk about encouraging businesses to create jobs is so much hot air - when it comes to the heavy lifting of actually doing something about the economy, Mr. Obama is conspicuous by his absence.

We trust that our voters will understand why Mr. Obama was unable to fix the economy next time they're in the voting booth.

Will Offensicht is a staff writer for and an internationally published author by a different name.  Read other articles by Will Offensicht or other articles on Foreign Affairs.
Reader Comments

"He could push trade agreements with South Korea, Panama, and Columbia, which would create American jobs but which his base strongly opposes."

I doubt Obama understands this option or that his advisers are discussing it.

Nothing new here from the Democrats. The advantage for conservatives is that we can see the liberals in power for what they are. Bill Clinton was willing to hide his true beliefs to the extent it was necessary to keep his polls numbers up. Obama and his ilk are true believers. That's a good thing for Republicans.

June 17, 2011 1:54 PM
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