“I’m concerned about protectionism, isolationism.”
Those were the first words President Bush spoke as he sat down Wednesday at an editorial board meeting at The Wall Street Journal.
Reading his remarks calls forth only sadness. For neither the president nor his acolytes at the Journal appear to have learned anything from the disasters their ideas have visited upon the party and country.
Can Bush not see that the isolation of America is a result of the war he launched on a nation that, no matter how odious its regime, did not threaten us? Can he not see clearly now the idiocy of the Journal’s 10-year crusade for a “MacArthur Regency” in Baghdad? Has this president learned nothing? And, if not, what does that portend for Iran?
As for protectionism, does Bush not see the link between the rise of economic nationalism in America, the rout of his party in November and the humongous trade deficits he has been running up?
When the trade figures for 2006 come in, it will be revealed that the United States ran the greatest trade deficit in history, close to $800 billion, near 7 percent of GDP. And the greatest trade deficit with any one country will be recorded — a trade deficit with China of nearly $230 billion.
Because China fixes its currency 40 percent below where it would float in a free market, Beijing is siphoning factories, technologies and jobs out of our country at a prodigious rate. For two decades, China’s annual growth has been consistent at 9-10 percent. Beijing has accumulated $1 trillion in hard currency reserves, most of it in dollar-denominated instruments.
A good slice of that trade surplus, and of the billions Beijing collects in annual interest on that share of our national debt it holds, is used to finance the greatest military buildup in Asia since Japan in the 1930s. Our “strategic partner” just sent us a message in the clear. Using a land-based ballistic missile, Beijing blasted a satellite out of the sky, 500 miles above the earth.
Does President Bush not understand the correlation between his trade policy, our sinking dollar and the loss of 3 million manufacturing jobs on his watch? Economic patriotism is on the march because economic globalism is failing America.
We are being skinned alive by our trading partners. While we have eliminated tariffs, they impose value-added taxes of up to 20 percent on U.S. goods entering the country and rebate the VAT on goods they export to the United States. This system operates like a 40 percent tariff on U.S. goods. That is why we are running record trade deficits with Canada, the European Union, Japan and Free Asia.
Bush has now begun his campaign for renewal of “fast track” authority, which expires in July. Under fast track, Congress agrees to give up its constitutional right to amend trade treaties.
But to give Bush a blank check to negotiate trade treaties after his record trade deficits makes as much sense as giving him a blank check to launch another war. Some adult has got to grab the steering wheel here.
In closing, the president delivered a little disquisition on history to the editors. Reading it, one has the sinking feeling of that professor of Civil War history who, at semester’s end, was asked by one of his students, “Sir, why were all the major Civil War battles fought in national parks?”
Said Bush: “Sometimes, nativism, isolationism and protectionism all run hand in hand. We’ve got to be careful about that in the United States. The 1920s was a period of high tariff, high tax, no immigration. And the lesson of the 20s ought to be a reminder of what is possible for future presidents.”
What is President Bush talking about?
Under Harding-Coolidge and Treasury Secretary Andrew Mellon, tariffs were indeed doubled to 38 percent, but imports were only 4 percent of GDP and most imports came in duty-free. And Wilson’s wartime income tax rates were not raised, but slashed from Wilson’s 72 percent to 25 percent.
When Harding took office, the unemployment rate was 12 percent. When Coolidge went home, it was 3 percent and America was producing 42 percent of the world’s manufactures. Between 1922 and 1927, the economy grew at 7 percent a year, the largest peacetime growth ever. They were not called The Roaring Twenties for nothing, Mr. Bush.
As for “nativism,” the immigration law of 1924 simply cut back immigration to 160,000 a year, and declared that the racial and ethnic profile of America was fine and should not be altered. Sam Gompers agreed. A. Philip Randolph wanted immigration stopped.
Thanks to that law, by the 1950s, almost all immigrants and their children had been fully assimilated and Americanized. What was wrong with that, Mr. President? Or do you and your Journal acolytes simply not like the country you grew up in?
Ronald Reagan, who loved Cal Cooldige, went to Eureka College. Bush, who thinks the Republican Era of the 1920s a disaster, was educated at Yale and Harvard. Maybe that’s the problem.