Hope and Fear

In his first inaugural address, Franklin Roosevelt said "the only thing we have to fear is fear itself", which is interesting because fear itself elected Roosevelt, fear kept him in office and fear gave him the political clout he needed to enact his political agenda.

Fear for the environment (the dust bowl), fear for the economy (the depression) and ultimately, fear of foreigners (WWII) were key elements of Roosevelt's popularity.

Historians almost unanimously credit Roosevelt's New Deal with resolving the Great Depression. Economists are less generous. The numbers by themselves support the economists' view, but, at the very least, Roosevelt did with the New Deal what any competent physician would do, which is to treat the symptoms until they can find a cure for the disease.

Although the catchphrase of the Barack Obama campaign was "hope", since his election, all of his speeches featured fear prominently, falling just short of the old action hero line "follow me if you want to live!"

I favor big chunks of Obama's recovery plan, but his rhetoric is beginning to bother me. Certainly he faces an uphill political battle on a lot of it, but one of the "changes" he promised us was more sincerity, honesty and responsibility in leadership and trying to energize his legislative agenda by frightening the public won't cut it.

So Mr. President, what we want is more hope and less fear.

Protecting Steel from Foreigners

Last week I made an argument that there were some circumstances where protectionism might be logical and needed. Apparently the president agrees, because it's part of his economic stimulus package, particularly in regards to steel.

Almost immediately, representatives from the EU began calling for the removal of any protectionist elements from the bill, particularly with regards to steel. European steel isn't the problem. European steelmakers operate on a fairly level playing field with US steelmakers because Europe requires their factories to meet standards similar to those in the US with regards to pollution, product and worker safety. The problem is Asian countries who don't have these safeguards and can produce steel much cheaper because they don't.

There's a diplomatic problem though, with singling out Asia or particular Asian countries from the stimulus bill, which is probably why they chose to word it so that it covers all foreign-produced steel. The other possible problem is that I suspect this aspect of the bill comes from the United Steelworkers Union and invoking protectionism for the sake of unions can be problematic.

It may also be that we have WTO, EU and other treaties that prevent this element of Obama's stimulus package. If that happens, then we have the choice of either passing them as is and trying to change the treaties after the fact, or we can remove the provision until such time that we can secure changes in these treaties, or we can just pass it as is and let the chips fall where they may with regards to any trade treaties.

I can't recommend the third option, but I can't rule it out either. The answer here has to be a policy of not entering into international trade agreements with countries who use a lax legal environment with regards to pollution, worker and product safety to cut costs and make their products cheaper than ours. If we can get the EU to agree with us on this, then the move would have even more clout. Moves like this might even make agreements like the Kyoto document redundant and unnecessary.