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WSJ Editors advise the President to advocate for free trade, as presidents have done for the past 80 years, and to veto the protectionist tendencies of Congress.
…Following America’s lead, countries that were once largely closed economically—especially China and India—have in turn opened up to foreign goods and services. The result has been an explosion in world trade, especially since the 1980s, as the nearby chart makes clear. This boom has coincided with rising incomes in countries connected by trade and the free flow of capital, especially in the developing world but also in America. While some U.S. jobs have vanished, new industries have emerged, and the U.S. has maintained its lead in manufacturing productivity.
This 80-year history of free-trade progress is now under threat from the global recession and Mr. Obama’s abdication of U.S. leadership. Labor’s antitrade views now dominate in the Democratic Congress and liberal think tanks. As ominous, protectionism is increasingly justified by Democratic economists on political grounds.
…The reality is that without the U.S. leading by example, the world trading order is likely to deteriorate into every country for itself. This is especially dangerous amid a global recession in which world merchandise trade volume fell by roughly 33% from the second quarter of 2008 to June 2009. Reviving trade flows is crucial to restoring global growth. …
Simon Parry, in the Daily Mail, UK, tells us about the ghost fleet taking shape in the Far East. He reports on shipping and shipbuilding; markets hit hard by the recession, that have not yet seen the bottom. Regarding shipping:
‘This is the time of year when everyone is doing all the Christmas stuff,’ he points out.
‘A couple of years ago those ships would have been steaming back and forth, going at full speed. But now you’ve got something like 12 per cent of the world’s container ships doing nothing.’
…But the slump is industry-wide. The cost of sending a 40ft steel container of merchandise from China to the UK has fallen from £850 plus fuel charges last year to £180 this year. The cost of chartering an entire bulk freighter suitable for carrying raw materials has plunged even further, from close to £185,000 ($300,000) last summer to an incredible £6,100 ($10,000) earlier this year.
…Some experts believe the ratio of container ships sitting idle could rise to 25 per cent within two years in an extraordinary downturn that shipping giant Maersk has called a ‘crisis of historic dimensions’. Last month the company reported its first half-year loss in its 105-year history.
Martin Stopford, managing director of Clarksons, London’s biggest ship broker, says container shipping has been hit particularly hard: ‘In 2006 and 2007 trade was growing at 11 per cent. In 2008 it slowed down by 4.7 per cent. This year we think it might go down by as much as eight per cent. If it costs £7,000 a day to put the ship to sea and if you only get £6,000 a day, than you have got a decision to make. …
And looking at shipbuilding:
…But shipbuilding is a horrendously hard market to plan. There is a three-year lag between the placing of an order and the delivery of a ship. With contracts signed, down-payments made and work under way, stopping work on a new ship is the economic equivalent of trying to change direction in an ocean liner travelling at full speed towards an iceberg.
Thus the labours of today’s Korean shipbuilders merely represent the completion of contracts ordered in the fat years of 2006 and 2007. Those ships will now sail out into a global economy that no longer wants them.
Maersk announced last week that it was renegotiating terms and prices with Asian shipyards for 39 ordered tankers and gas carriers. One of the company’s executives, Kristian Morch, said the shipping industry was in uncharted waters.
As he told the global shipping newspaper Lloyd’s List only last week: ‘You have a contraction of oil demand, you have a falling world economy and you have a contraction of financing capabilities – and at the same time as a lot of new ships are being delivered.’ …
In The Wall Street Journal, Bret Stephens updates us on the foreign policy issues surrounding Iran’s nuclear weapons development.
…At July’s G-8 summit in Italy, Iran was given a September deadline to start negotiations over its nuclear programs. Last week, Iran gave its answer: No.
Instead, what Tehran offered was a five-page document that was the diplomatic equivalent of a giant kiss-off. It begins by lamenting the “ungodly ways of thinking prevailing in global relations” and proceeds to offer comprehensive talks on a variety of subjects: democracy, human rights, disarmament, terrorism, “respect for the rights of nations,” and other areas where Iran is a paragon. Conspicuously absent from the document is any mention of Iran’s nuclear program, now at the so-called breakout point, which both Mahmoud Ahmadinejad and his boss Ali Khamenei insist is not up for discussion.
What’s an American president to do in the face of this nonstarter of a document? What else, but pretend it isn’t a nonstarter. Talks begin Oct. 1.
All this only helps persuade Israel’s skittish leadership that when President Obama calls a nuclear-armed Iran “unacceptable,” he means it approximately in the same way a parent does when fecklessly reprimanding his misbehaving teenager. …
…In sum, the conclusion among Israelis is that the Obama administration won’t lift a finger to stop Iran, much less will the “international community.” So Israel has pursued a different strategy, in effect seeking to goad the U.S. into stopping, or at least delaying, an Israeli attack by imposing stiff sanctions and perhaps even launching military strikes of its own. …
Thomas Sowell brings up an interesting line of discussion in the health care debate.
…There was a time, within living memory, when most Americans did not have health insurance — and it was not the end of the world, as so many in politics and the media seem to be depicting it today.
As someone who lived through that era, and who spent decades without medical insurance, I find it hard to be panicked and stampeded into bigger and worse problems because some people do not have medical insurance, including many who could afford it if they chose to.
What did we do, back during the years when most Americans had no medical insurance? I did what most people did. I depended on a “single payer” — myself. When I didn’t have the money, I paid off my medical bills in installments.
The birth of my first child was not covered by medical insurance. I paid off the bill, month by month, until the time finally came when I could tell my wife that the baby was now ours, free and clear.
In a country where everything imaginable is bought and paid for on credit, why is it suddenly a national crisis if some people cannot pay cash up front for medical treatment? …
John Fund reports that Acorn may finally be reaping what it has sown.
On Monday, the U.S. Senate voted 83-7 to strip Acorn, the premier community organizing group on the left, of more than $1.6 million in federal housing money meant to assist low-income people obtain loans and prepare tax forms. This dramatic step followed last Friday’s decision by the U.S. Census Bureau to sever its ties with the organization, one of several community groups it was partnering with to conduct the nation’s head count.
Both of these actions came after secretly recorded videos involving employees in Acorn’s Brooklyn, N.Y., Washington, D.C., Baltimore, Md. and San Bernardino, Calif. offices were televised on Fox News. The videos were recorded by two independent filmmakers who posed as a prostitute and a pimp and said they were planning to import underage women from El Salvador for the sex trade. They asked for and received advice on getting a housing loan and evading federal taxes.
In response, Acorn has so far fired four of the employees seen on the videos. But it claimed the videos were “doctored” and accused critics of a smear campaign and “racist coverage” of the incidents.
Such rhetoric in the past has deflected scrutiny of Acorn tactics, such as street demonstrations and boycotts against banks to force lower credit standards for home loans, which a congressional report found contributed to the subprime loan mess. But now Acorn may be finally running off the rails.
Last week, 11 of its workers were accused by Florida prosecutors of falsifying information on 888 voter registration forms. Last month, Acorn’s former Las Vegas, Nev., field director, Christopher Edwards, agreed to testify against the group in a case in which Las Vegas election officials say 48% of the voter registration forms the group turned in were “clearly fraudulent.” Acorn itself is charged with 13 counts of illegally using a quota system to compensate workers in an effort to boost the number of registrations. (Acorn has denied wrongdoing in all of these cases.) …
David Harsanyi dishes out sarcasm to the liberal media and liberal politicians who cry racism.
C’mon, everyone knows the hullabaloo surrounding President Barack Obama is bigotry in action. The administration’s policy initiatives couldn’t possibly provoke any authentic anger or protest. …
…”Surrounded by middle-aged white guys — a sepia snapshot of the days when such pols ran Washington like their own men’s club — Joe Wilson yelled ‘You lie!’ at a president who didn’t,” declared Maureen Dowd in her Saturday New York Times column. “But, fair or not, what I heard was an unspoken word in the air: You lie, boy! ”
Of course, it’s fair. If inserting a racial epithet into a quote is wrong, I don’t wanna know what’s right. It is, moreover, common knowledge that middle-aged white men are bigots. If there’s a problem with Dowd’s premise, it’s that Wilson likely lacks the intellect to string together more than two words per sentence. He is from South Carolina, after all. …
George Will comments that the Obamacare campaign fiasco has been good for Republicans.
…On the 233rd day of his presidency, Barack Obama grabbed the country’s lapels for the 263rd time—that was, as of last Wednesday, the count of his speeches, press conferences, town halls, interviews, and other public remarks. His speech to Congress was the 122nd time he had publicly discussed health care. Just 14 hours would pass before the 123rd, on Thursday morning. His incessant talking cannot combat what it has caused: An increasing number of Americans do not believe that he believes what he says. …
…He deplores “scare tactics” but says that unless he gets his way, people will die. He praises temperate discourse but says many of his opponents are liars. He says Medicare is an exemplary program that validates government’s prowess at running health systems. But he also says Medicare is unsustainable and going broke, and that he will pay for much of his reforms by eliminating the hundreds of billions of dollars of waste and fraud in this paragon of a program, and in Medicaid. He says Congress will cut Medicare (it will not) by $500 billion—without affecting benefits. …
…McConnell notes, however, that never in his 25 Senate years have Republicans polled close to Democrats when the question is: Which party do you trust most to deal with health care? Until now. Last week’s polling: Democratic Party, 41; Republican Party, 39—a statistical dead heat. …
Speculating on Maine’s Sen. Snowe’s reasons for nixing the Baucus plan, a Corner Post by Mark Hemingway perfectly illustrates the trail of bad regulations that have created the health care mess.
The Maine Heritage Policy Center, which has tracked the plan closely, points out that largely because of these insurance rules, a healthy male in Maine who is 30 and single pays a monthly premium of $762 in the individual market; next door in New Hampshire he pays $222 a month. The Granite State doesn’t have community rating and guaranteed issue.