Bruce Bartlett, a reliably conservative columnist whose commentary on economic matters appears regularly on the editorial page of the Indianapolis Star, recently delivered a scathing analysis of what passes for trade policy in the Bush Administration. After accusing the administration of ?incredibly poor judgment in trade policy ever since taking office,? Bartlett pointed out that the steel tariffs imposed by Bush have backfired badly, by costing jobs in industries that use steel. Bush?s agricultural subsidies, said Bartlett, ?doomed a multilateral trade agreement.?
Bruce Bartlett, a reliably conservative columnist whose commentary on economic matters appears regularly on the editorial page of the Indianapolis Star, recently delivered a scathing analysis of what passes for trade policy in the Bush Administration. After accusing the administration of “incredibly poor judgment in trade policy ever since taking office,” Bartlett pointed out that the steel tariffs imposed by Bush have backfired badly, by costing jobs in industries that use steel. Bush’s agricultural subsidies, said Bartlett, “doomed a multilateral trade agreement.”
“From the point of view of trade,” he concluded, “it is the worst administration since Herbert Hoover helped bring on the Great Depression by signing the Smoot-Hawley tariff in 1930.”
Bartlett’s examples of counterproductive—sometimes downright nutty—policies barely scratched the surface. Handing out huge subsidies to (mostly corporate) farmers has actually damaged markets for American farm goods. Case in point: American farmers export more soybeans than any other country. Soybeans sales are a big help with our trade imbalance, and an important profit generator for American farms. When Bush decided to subsidize agriculture in violation of free trade principles, he invited retaliation by the nations that import our soybeans, among others. Suddenly, Argentina—with millions of acres available to devote to soybean crops and a desire to increase its share of the market—has become an attractive trading partner for buyers looking to punish our anti-trade, anti-free-market policies. After the subsidies are long gone, the structural shift in the soybean market will likely remain. Increased competition from other countries will mean fewer sales of American goods abroad and higher prices for American consumers at home, all paid for courtesy of 190 billion of our tax dollars.
It isn’t just trade policy that defies logic, of course. The Administration is lobbying hard for an energy bill that has few incentives for conservation, but lots of incentives for increased consumption, including—incredibly—a tax credit for businesses that purchase gas-guzzling SUV’s.
These are mystifying policies for a Republican administration largely staffed with Washington old hands. The GOP used to be the party of fiscal prudence and the free market. Whatever the President’s own grasp of governance issues, those around him cannot be unaware of the long-term damage being done. What could possibly be the motivations for these decisions?
According to the Guardian, a comprehensive survey of postwar contracts for Afghanistan and Iraq was undertaken by the Centre for Public Integrity. The Centre tracked more than 70 US firms and contractors involved in reconstruction, exposing their connections to figures in the administration, Congress and the Pentagon. According to the report, more than half of the companies—and nearly every one of the top 10 contractors—had close ties to Washington’s political establishment or to the Pentagon. As the Guardian quoted the editor of the report, “It is a disturbing view of the way business is done in Washington, especially under the Bush administration. At the very least it shows that this administration does not pay particularly close attention to ethics."
Politics and political cronyism weren’t invented by Karl Rove, George W. Bush and Dick Cheney, but few administrations have so cynically and visibly put political considerations above the good of the nation. Subsidies to farmers may not make sense if you are trying to ensure the long-term well-being of American agriculture and the economy, but they make perfect sense if you are pandering to the farm vote. Steel tariffs may cost many Americans their jobs, but those jobs aren’t concentrated in the industrial states Bush needs to win in 2004, and the steelworkers are. So what if they violate treaties to which we are party? So what if we need to lift them to avoid sanctions? The politics still plays. Tax incentives for SUV’s may further impede energy independence and increase air pollution, but they are a great way to pay off all those energy industry contributors.
Welcome to the Bush White House, where America’s future is for sale.