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  • Big Labor Wins, And Americans Lose ... Again

    As if President Barack Obama’s decision to undermine the rule of law and give the United Auto Workers their own taxpayer bought auto company wasn’t bad enough, now President Obama has again chosen to punish the American people by choosing narrow big labor interest over free market principles.

    This time the issue is trade and as we noted this weekend, President Obama has chosen to apply heavy tariffs to passenger car and light truck replacement tires made in China. University of California at Berkeley economics professor Brad DeLong notes that the International Trade Commission (ITC) forecasts an increase of $3.50 per tire and that big labor says the tariffs will save 10,000 jobs and writes:

    Let’s see… 250 million cars in America… need 4 tires per car… need new tires every 2.5 years. 400 million tires a year… $1.4 billion dollars a year… 10,000 worker jobs saved… $140,000 dollars per worker-job per year.

    Looks like we could (a) let the Chinese sell us tires, (b) tax each tire by $2.50, (c) pay each tire worker who loses his or her job $100K a year, and we come out ahead: American households have more money to spend on other things, China has more jobs to help what is still a very poor country grow, and tire workers have higher incomes and more leisure as well.

    But, you say, it would be stupid to impose a $2 a tire tax and use the money to pay each laid-off tire worker $100K a year.

    That’s the point: when the policy you are adopting is worse for everybody than a policy you agree is stupid, the policy you are adopting is best characterized as really stupid.

    And this analysis does not even include the chances Obama’s decision will start a trade war with China, who filed a complaint with the World Trade Organization today and is threatening tariffs on U.S. poultry and car parts exports. Remember, it was a trade war that really kicked off the Great Depression.

    Posted in Economics [slideshow_deploy]

    27 Responses to Big Labor Wins, And Americans Lose ... Again

    1. Nutmeg Conservative, says:

      This is classic Obama. Reward the union thugs that funded his campaign and be damn the rest of America or the actual employees of these tire companies that will lose their jobs! Does he really think this is helpful to our economy?? Probably not–so slick it is scary! Someone should remind him on the military China has as well!

      Nutmeg State Conservative

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    3. Daver Ft. Worth says:

      At least we understand now when this president is willing to engage foreign interests in a confrontation.

      The answer:

      When it's most ill-advised, with an adversary we can't afford to fight, and over an issue that any Sophmore economics student would advise him against.

      Sounds like another par for this administration!

      Did I mention, for the first time in my adult life I am no longer proud to be a citizen of this government?

    4. ebk, Pa. says:

      Why are we constantly bad mouthing the "Unions"? If you want to bad mouth union management, fine, but there are a lot of the rank and file or in simpler English, the workers who are as much dissatified as we are. Being retired from Bethlehem Steel, and being able to collect a pension, at times I feel insulted by the so called conservatives. They are consertative on moral issues, which I agree with, but when it comes to protecting and "conserving" our resources, its like if we can make a buck go for it and we will worry about the consequences later. Also remember when we were a strong industrial nation and more unionized, we had more people with health care, and good health care. What happened? Our government almost forced these industries over seas with all the taxes imposed on them, and the same government wonders, What Happened and Why Did They Leave? Again it all boils down to greed, from Wall Street to those Ruining or excuse me running our business into the ground just so they can make more money. The same thing happened at Bethlehem Steel.Some of those on the Board Of Directors made it a point to let the Rank and File know they would sooner close the business then see the workers benefit from their labors. Same is true today, management is in just for themselves. No person is worth some of the salaries being paid today!

    5. Mike Day, Bordentown says:

      As a conservative, I oppose free trade. American jobs go overseas, lost tax revenues from displaced workers are being paid in many cases to oppressive regimes. American corporates with the choice between paying a chinese worker $2000 per year or an American worker $50000 is going to choose China. Trade deficeits that are making us vulnerable to the demands of China & other countries. Free Trade is a failure for America just as it was for Britain during WW1 when the island nation was almost starved into submission by German U-boats because they become to rely on foreign goods rather than their own domestic agricultural & manufacturing base. America is becoming another Britain. Free Trade the poison pill.

    6. Keith somewhere in t says:

      To the naysayers on this bog I say-at least give the President his due–he is consistent. Woe are we–he is consistently wrong.

    7. Lloyd Scallan - New says:

      People, stop and look back at what unions have done to America. Sure, many years ago, unions were

      a help in getting wage increases and better working conditions. But, that "help" came with a huge price tag. The auto industry, the steel industry, the seafarers, etc, have all been put out of business because of outragious demands. Unions have become nothing but political allies of

      the socialist that are taking over this country.

      Now they are demanding to stop secret ballots when

      workers decide whether or not allow union represnetation, so that anyone that votes against the unions, will be "persuaded" how to vote. Unions are part of this entire system that is known as "The Apollo Alliance" that is part of

      the George Soros plot to distroy our American way of life.

    8. rich weirton, wv says:

      ebk from pa says that no person is worth the salaries they get today. He is so right, but he apparently doesn't see the damage that unions have done to everyone , including himself.

      You can gripe about our jobs going overseas, but why are they?

      If it costs $100 to make a widget in a union shop, as opposed to $60.00 in a non-union shop, it doesn't take much brain power to figure out which widget will be selling cheaper, therefor causing loses of even more union jobs…

      Outrageous union salaries and benefits have caused millions of union job losses, yet the union members keep wanting even more..no end to greed.

      Simple economics 101…..

    9. Linda Carlsbad, CA says:

      You have to be kidding me, these are the same people that say they are going to save money on our Health Care! My kids have more common sense! This is a very scary time in the history of the United States, when our President is clueless on economics, or is he!

    10. Michelle somewhere i says:

      Chinese tires are crappy. They will kill more people than the tainted food that we have gotten from China. We should have Consumer Protection — the idiot I'm riding beside on the Interstate at 80 MPH has tires that can fly apart at any minute. That is a problem.

    11. JK, Virginia says:

      Your right ebk, and Union Workers are not a fault, and our country’s inability to compete with oppressive overseas nations is due to poor management and bad tax policy, which unfortunately is still being made today. Union workers like yourself have earned our respect and needn’t feel insulted when ill informed conservatives criticize Union workers.

      I do not extend that respect to Union Management, Corporate Executives, Government Officials, or Politicians, who at one time or another have sold us all out for their own personal gain. They are still doing it and that will continue ad infinitum.

      The solution is to vote the bastards out when you have a chance by being loyal to yourself and our nation, and not to any ideology be it liberal or conservative.


    12. Garry, Phoenix says:

      OK, I am 65 with no hope of retirement due to not working for a union. Have never had health insurance, always paid as I went. Still not able to get health insurance. Medicare looks awful good right now. Last quote for insurance was for over $1700/mo, totally out of the question. Since I have to drive to work and use tires the fact that the tire costs $3.50 less is a real benefit. The retiree certainly should welcome lower prices on his retirement income. Of course what would I know about that since I am so freakin' broke? And, I don't like being taxed to pay for someone else's damn insurance!! Our representatives in government have never had to work for a living so spending the never ending money of the working people is a natural thing for them..

    13. mike ,fresno,ca says:

      How much more does Obama owe the Unions that American citizens are going to be forced to pay.The buy out of GM wasn't about saving the auto industry it was about saving the auto unions.This issue with China and tires has nothing to do with the cost of tires.The unions have forced the manufacturing process out of our country and now Obama is helping the unions ruin another business and the American people will foot the bill.

    14. Johnny, Santa Fe, TX says:

      How does the world compete with slave labor, child labor, no eviromental laws, currency manipulation, etc., ect.. Sell out your neighbors, friends and children for what…$10.00 every 2 years. Go on and wrap yourselves in the American Flag you bought at Walmart made in China. Wow Such Honor, such loyalty, so Patriotic.

    15. Dennis A. Social Cir says:

      He owes the big unions, they are his bread and butter and will do all that is necessary to keep them in power. This may well result in the destruction of this country and all that we believe in. The American people need to keep their heads in the sand, and just pretend that a problem does not exist, when they wake up it will be to late to start over. We all will be speaking Chinese, or Spanish, who ever has the money to buy America, oh I forgot, America has already been sold by the "chosen one". His rule began on 01/20/09. It is a crynig shame that we have been decieved so badly by such a total socialist or soon to be dictator.

    16. Mike Day, Bordentown says:

      To Johnny in Santa Fe, YOU ARE ABSOLUTELY RIGHT.

      The world can't compete & that's my point. America was the world's breadbasket and the world's marketplace. Not any more. Thanks to free trade. Americans have surrendered their sovereignty for cheap goods. For a few dollars more, I'd rather see my neighbor working in a tire or shoe factory, than some poor political prisoner, in God knows where, working to support some brutal regime. We've sown to the wind and we reap the whirlwind.

    17. John Roane Sarasota says:

      If you workers are so tired of Union Management the rank and file can vote them out or vote to drop the union. They haven't done either so they must be happy.

      No one is a slave in this country, unless you are a US Citizen paying income taxes.

    18. Jim - Utah says:

      RE: Gary – Phoenix — Let me get this straight, you are complaining that you are broke and cannot think about retiring because you are non-union? Give me a break, I am also 65 and have never thought about relying on anyone else for my retirement. Pick yourself up, look in the mirror and see who's to blame for this picture!

    19. Lynn B. DeSpain says:

      We all need to take a pause and look back in our own history to the time prior to Unions. The time of Child Labor. The time of men and women working under terrible conditions with basically no safety items in place, working twelve, fourteen and sixteen hour days, six and sometimes seven days a week.

      A time before Anti-Trust Laws were made. These were the times when the very few were rich and the majority were the very poor and there were no middle class!

      Unions of themselves are not a bad thing. They help Labor and Management to come to agreements by opening the books and allowing 'Fair Profits for the owners and "Fair Wage and Benefits" for the Labor.

      The issues with Unions began when governmental bodies actually forced Employees, including teaches, to form Unions.

      Now the only truly strong unions left are the Government/Teachers unions. This is a result of allowing millions of Illegal Aliens to come into this Nation and work in industries other than Agriculture, and destroying all the other unions. This is a result of allowing foreign auto makers to come into this Nation and building cars and trucks without organized labor.

      The example given and the dollar amount given does not include the tire dealers, nor the tire transporters nor the warehousers of those american made tires.

      Union bashing is a slight of hand trick to take our focus off the real issues that we as a Nation of Free Citizens must deal with; a runaway Congress and President who care nothing about the Constitutional limitations set forth as limits to their powers. The uncounted Trillions spent on the care and feeding of Illegals in this Nation. The Billion spent on useless studies condoned by our elected officials that when completed, sit in warehouses and accomplish nothing. The millions wasted in time by Legislatures on whether a a member should apologize to them for a member speaking out against the President. Many more millions wasted in creating non-American Holidays and discussing the creation of non-American Holidays. The hundreds of millions wasted in creating school books for our children in grade school to taught that we, in this Nation, have two Thanksgivings, one for the Pilgrims and one for Mexico!

      The terrible, terrible waste of money in not utilizing our own resources such as oil and natural gas, and refining them here, and building more refineries!

      The idiocy of adding alcohol to gasoline to reduce CO2, resulting in less milage and more fuel consumption, with the hidden risk of reducing our own Nation's food supply, and not remembering the Irish Potato Famine, where the English demanded that the Irish grow only one type of potato, and a blight hit and destroyed them all! Now we on a vast scale grow only one type of corn, for fuel! Risky? History says so.

      So stop blaming Unions, and each other, and just get down to fixing the problem. The problem lies in our Nations Capital, and we can fix it by replacing its members, one politician at a time!


    20. Jerry from Chicago says:

      Just how "free" is free trade? When every manufacturing job has been outsouced to countries outside of America, how are the American workers who lost those jobs supposed to survive? They won't be paying taxes. They won't be able to pay their mortgages, put food on the table, gas in thei cars, or buy clothes for their kids. Are they supposed to become complete wards of the federal government? What will it cost the rest of us who may have a job to support these people? How many people in the U.S. will have the means to buy the goods and services American business wants to sell them?

      We as a country must be able to provide a place of work for our citizens who need work and want to work. Our citizens need to be able to earn a living wage. A family of four needs to earn $55,000 to $60,000 a year to live very modestly.

      We must refuse to export jobs to countries that buy nothing from us. We must refuse to buy things from countries that buy nothing from us. We need to have an equitable balance of trade. This government must stop borrowing money from China (or any other country) to finance its debt. How can we negotiate fair balances of trade with countries to whom we owe so much money? The answer is, we can't. This country must stop spending money it doesn't have and has to borrow.

      Serious choices need to be made and each will have consequences. It may be time to stop paying for the defense of Western Europe and Southeast Asia, called for in our NATO and SEATO Treaties. We have been doing this since the end of WWII and these treaties need to be renegotiated. Other nations have an unfair trade advantage over the U.S. and its the U.S.'s own fault. A large percentage of tax dollars goes towards defense spending, not just for our country, but for Western Europe, Southeast Asia, Canada, Mexico, Central and South America. These countries also tax their citizens, but instead of devoting a lion's share of their budget to defense spending they use that money to subsidize their country's businesses. We can't afford to do this any longer. It's time to renegotiate. If all these countries want the U.S. to defend them then they have to come up with huge sums money payable to Uncle Sam (no checks please). Maybe when these countries have to start paying for their oen defense, they won't have a lot of cash left to subsidize their businesses, making them more competitive than ours.

    21. Bruno somewhere in t says:

      At one time unions served a good purpose in improving working conditions, wages, benefits, . However, they have screwed themselves because of their greed and unrealistic demands. Look what they did to the auto, steel, shipping, cruiseliner, garment and other industries in America. Unions are the political allies of

      the socialist/fascist/marxist regime currently in power in this country. The card-check crap currently under consideration to stop secret ballots in deciding union representation is nothing more than a scheme to harass, force and intimidate workers into joining a union. I applaud the recent decertification of the union shop at the Boeing facility in Charleston. More union shops should follow the same path. As far as Chinese tires are concerned, they are garbage anyway like everything else coming out of that country. Their quality reminds me of the days when one had to cope with stuff "Made in Occupied Japan".

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    24. dave from Boyertown says:

      I agree with Mike from Bordentown NJ and I consider myself a Pat Buchannon Conservative. Free trade especially with China has caused not only job losses but a loss of tax revenue and added to our national debt. China now owns at least a trillion dollars of our debt which is not good for our economy or our national security. Imagine if we let China drive all our tire manufacturers out of business and China then cuts off their exports to us and then threatens to invade our country.

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    26. Robert says:

      Okay, maybe I missed something, but: If you are going to have free trade, then it has to be done with certain rules in place to insure a level playing field. My understanding is that when China joined the World Trade Organization and when the USA established trade agreements with China; that China agreed to abide by these rules. They haven't. Now, I understand that tariffs are problematic, but what other recourse do we have to get China to play by the rules.

      Also, I agree that there will be a cost increase on some tires – in the short term. But it is a very competetive market, and in the long term, those prices should come down. I think it is a worthwile price to pay to keep some jobs in the US.

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