Among the issues most commonly discussed are individuality, the rights of the individual, the limits of legitimate government, morality, history, economics, government policy, science, business, education, health care, energy, and man-made global warming evaluations. My posts are aimed at thinking, intelligent individuals, whose comments are very welcome.

"No matter how vast your knowledge or how modest, it is your own mind that has to acquire it." Ayn Rand

12 March 2010

Obama's Plan to Increase Exports

Today's Washington Post had a front page article on Obama's plan to double American exports in the next 5 years as a way to increase the number of American jobs.  This central planning scheme consists of two efforts:
  • Try to restart some free trade agreements stalled by the Democrat Congress by their insistence that other countries maintain policies favorable to labor unions and the environment.
  • Provide $2 billion of government funds to provide financing of the sales of American goods abroad.
Now, free trade is a great idea.  Basically, two parties will make a trade on a basis which is viewed as favorable to each party.  Everyone, both the American and the Indian, Chinese, Brazilian, Chilean, Canadian, Pole, Norwegian, or Italian with whom he is trading benefits.  This simple reality is much too often lost in schemes to protect jobs in non-competitive companies and industries.  Of course, sometimes the non-competitive company or industry is made non-competitive by government policies.  Such policies in the U.S. include:
  • Sharing the dishonors for the highest corporate taxes in the world with Japan, while such taxes in many, many other countries are less than half what they are in the U.S.
  • Policies which provide many means for labor unions to intimidate employees into selecting them as their labor negotiators and promoting labor union leaders into effective company managers.  Particularly strong and disturbing cases of these policies are the current situations at GM and Chrysler.
  • Energy policies which drive up the cost of energy, such as mandates to use more expensive alternative fuels and restrictions on exploration and drilling in government-owned land and offshore.  Taxes on energy use are another foolishly expensive policy.
  • Causing delays and added expense in the construction of new energy plants and refineries with ridiculous environmental regulatory and litigation delays.
  • Raising questions about the cost of future CO2 emissions penalties, making it impossible for many companies to expand or modernize present facilities in the U.S.
  • Attempts to continue pursuing a health care insurance plan which will raise the cost of health care insurance premiums, which is a significant business expense.
  • The U.S. Postal Service monopoly increases mailing costs.
  • Excessive safety regulation and expenses tied to those regulations.
  • Excessive accounting regulations and tax record keeping obligations.
  • Regulations requiring companies to hire women and certain favored minority groups.
  • Foolish antitrust policies and the equivalent of class-warfare they cause between American companies.
  • Subsidies or special interest tax considerations which favor some companies and industries over others without allowing the free market to decide which are the stronger companies and industries.
This list could go on and on.  But, the point here is that instead of trying to persuade other countries to shoot themselves in the foot as we have done in our free trade agreement negotiations, we should allow American companies to become more productive.  This is what you do when you want to promote American jobs effectively, not just create a photo opportunity in which you pretend you give a damn about American jobs, while doing nothing substantive.

The second Obama effort to provide government funds to finance company exports, is clearly symptomatic of the perverse Washington central planning disease in which it is imagined a few elite central planners can pick the winners better than the free marketplace can.  This pretense of knowledge, as Friedrich Hayek put it, has always soon been revealed in market chaos and distortions which the free market would not long allow.  Such programs as this government financing money through the Export-Import Bank just favor certain large companies with a great deal of influence in Washington.  They are a redistribution of income from individuals, small businesses, and companies who concentrate on providing a great product or services while trying to ignore Washington as much as possible to the Washington-savvy influence-peddling companies.  They are a bad idea, but they are loved by those who lust for power.  The companies that want this money know that their PACs must provide certain key politicians with money for their re-election campaigns.

Obama has no clue on how to create jobs and it would appear he has no interest in learning what he might actually do as President not to create jobs, but to allow companies and the private sector to create jobs.  The private sector is very good at creating jobs without government central planning interference.  Your job Obama is simply to get the hell out of the way!

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