Obama Drinks Friedman’s Kool-Aid – 7/16/09
In a July 16th Op Ed piece, Thom Hartman rails against President Obama’s apparent embrace of Friedman-style free trade which Clinton and both Bush’s championed.
Our economy has gone into the toilet over the past 30 years, and President Obama and his advisors think “free trade” is the solution. Like Bill Clinton and both George Bush’s, he’s so enamored of it he’s even recommending it to poor African nations.
Yet “free trade” is a guaranteed ticket to the poorhouse for any nation, and the evidence is overwhelming. The concept was introduced, in fact, by Henry VII, as something that England should encourage other countries to do while it maintained protectionism; a process known as the 1485 Tudor Plan that led to the rapid industrialization of England and the deeper impoverishment of its trading “partners.”
With no evident irony or understanding of how South Korea went about becoming a modern economic powerhouse, on Friday, July 10, 2009, President Obama lectured the countries of Africa from Ghana, where he was visiting.
Hartman goes on to walk the reader through South Korea’s economic ascension built on central government controlled industry development and strong protectionist tariffs. He then talks through examples of successful protectionist strategies employed by Japan for Toyota and our own early history of protectionist polices. He ends with this warning:
If President Obama and our Congress don’t soon learn the lessons Alexander Hamilton taught us in 1791, which he learned from Henry VII and were borrowed by Japan, South Korea, and China, we’ll continue to see American industry slowly die. And with it will go the American middle class.
Discussion questions: So who is right? Hartman, Friedman, neither, both? Where do we go from here?
The part that Hartman and Friedman both miss is that today’s interconnected world is far more complex than either the example of Korea or Japan or even the early US seem to demonstrate. This is not a time to debate protectionism or free trade. A third, new model is needed that recognizes the need to protect fledgling industries early in their development and allows for the reality of a necessarily interconnected financial and resource world economy.
One reason that Clinton’s push to true free trade failed (so far) for the US manufacturing industry was the failure of labor to participate in the dialogue to create a new labor/industry paradigm and the failure of leadership by politicians and key industry leaders to do the same. Clinton moved forward without fully appreciating the difficulty in moving embedded interest groups to a new thought paradigm. Holding onto past practices has so far held us back.
One of these African countries just may be the one that shows us the path to economic prosperity in a world that has moved on from both Friedman’s and Hartman’s prescriptions.
Mike Osorio, your Dare to be Contagious! ™ strategist
What do you think? Please add your comments and add to the discussion!
Go to the full article at OpEdNews.com: Obama Drinks Friedman’s Kool-Aid
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