Smoot Hawley Creature Stalks the Planet.
Spoke Sunday 15 with Bernard Simon, Financial Times, at Toronto re the Chrysler and GM crisis talks with UAW over health care for pensioners and concessions that the car companies need to continue viability. The Canadian government is alarmed and pro-active re the fragile condition of GM and Chrysler. More cars are manufactured in Canada than in Michigan, all car companies not just the two in trouble, and any severe change at GM or Chrysler will be blow to the Canadian workforce. In the course of the conversation, Simon Constable and I asked Bernard Simon about the "Buy America" mandate in the stimulus bill about to be signed by President Obama. Bernard Simon reported that it is a major concern to Canada PM Stephen Harper at Ottawa (right) and will be a focus in conversation this Thursday when President Obama makes his first trip to Canada. We can be sure that the steel dispute will be a loud debate on Canadian TV and American cable coverage of the President's visit. So
far the Administration is unconvincing that it can manage the mandate in the bill that the President will sign tomorrow. Bernard Simon then told us that he had already heard "Buy Canada" talk in Ottawa. Aha! Simon Constable and I jumped on this seemingly rhetorical detail, because it is evidence that in conversations not for TV that Canada is rehearsing the retaliation for the stimulus bill. Canada is the number 1 trading partner with the US. America sells more steel to Canada than Canada sells to the US. And yet the House bil, written secretly by Nancy Pelosi, included the "Buy America" mandate, and Congressman Jim Oberstar was adamant that it must survive the conference. It did. Now the game becomes "Buy Canada."
Where Else?
Spoke also Sunday 15 to Mary Kissel, Wall Street Journal, in Tokyo, re the sad state of the Japan economy, the crushing collapse of the GDP, worst since 1974-75, and we asked after the protectionism creature in Japan and East Asia. Mary Kissel rejoined, "They can't fight
back. They need to export and export to America. If Japan or China retaliates, it's economy will sink." The sinking is well underway. However Simon Constable and I accepted Mary Kissel's measurement for now. For now. (We also shuddered at the prospect that China devalues the yuan to keep jobs, because that would be a global trade war nuke.) Also we noted that we are hearing too many anecdotes of protectionist rhetoric to pretend that it is not a problem. Russia PM Putin mentioned "Buy Russia" about combine harvesters; France President Sarkozy mentioned "Buy France" about cars and car parts. Egypt has raised tariffs on sugar imports. The EU has raised tariffs against imported China manufactured screws. The Smoot Hawley creature is restless. Everyone is watching. Rebecca Christie, Bloomberg, told us Sunday 15, as she was just back from the meeting, that all of the G-7 ministers conveyed their alarm about the stimulus bill mandate to the new Treasury Secretary Geithner. And while the public statements were unruffled, the private statements were that the new US administration has erred and best correct. Tim Geithner (below) was not consoling, instead continuing to speak in generalities, platitudes, goals, his customary term paper summary style. Mention that we heard nothing comforting fro any of the professionals on Sunday 15 that the Geithner style is effective to the markets or to the allies. One whispered remark to us about Geithner and foreign officials was "They think he's a grad student."
Pretty picture of the library of Parliament. How many gaffes will Mr. Obama make? Will the press note it?
*In the scope of things, what's a few trillion here and a few trillion there?*
The Milky Way spiral galaxy is app. 100,000 light years in diameter and app. 1,000 light years thick.
Light speed= 186,000 miles per second
Light travels app. 6 trillion miles per year
Except for the Sun, Centauri is the nearest star to Earth and is 4.2 light years away.
*"And I shall show wonders in heaven above, and signs in the earth beneath..."*
*In the scope of things, what's a few words here and a few words there?*
An Afghanistan appeal court has upheld 20-year jail terms for two men who published a translation of the Koran.
The prosecution said the translation contained mistakes and called for the defendants to be executed.
The men were convicted of modifying the Muslim holy book into Persian while not including the original Arabic text.
*"Peace be unto you"*
Yes, we up in Canada, we were all up in arms when we heard "Buy America."
Canada seems to be a bizarro world lately; I dont recognize my country anymore.
Canada supportd NAFTA which has been systemically eroding Canada's rights by having Corporations telling the Canadian government what it can and cannot do.
The softwood lumber dispute has cripped the west coast of Canada. Even though the American lumber companies have lost their NAFTA cases everytime, Canada's lumber industry continues to disappear.
A friend's mine brother lumber yard has had to sell his equipment to Germany since it is collecting dust in northern Victoria Island.
Our politicans have been using World Trade Organizations and the IMF agreements has a way to bind the US to NAFTA agreements. Instead of talking about reworking NAFTA to "fair trade," Canadian politicans continue to screw Canadians with WTO, IMF and NAFTA agreements. Once again, Canadians never voted to join any of these World Organizations.
The “Buy American” protectionist provision in the stimulus package is at this point only a bumper sticker slogan. It means nothing. How is it possible to protect one’s markets if there are no markets to protect? Americans simply are not buying. And neither is anybody else – for the moment, at least. Suspicions are already running high that America is about to abandon the capitalist model altogether. Everyone else is just sitting around, holding their breath and waiting for the new administration to make its positions clear. The idea of ‘protectionism’ is a remnant of a pre-election mentality that assumes continued robust American consumerism. Those days, many suspect, are already gone.
Only last spring, while vacationing in one of the plush Bay of Bengal resorts just outside of Mahabalipuram, I would still see the gray-grizzled, thick-necked American industrialists, sitting at the head of dark-stained imitation hardwood tables in sumptuous, western-styled conference rooms, flanked by eager young Indian entrepreneurs hoping to glean some insight into the holy grail of American capitalism. Little did the Indians know then that their gurus’ days were numbered; that they were about to be castrated publicly by their own nation’s congressional committees and offered up as sacrificial blood to a post-modern vision in which their dinosaur services would no longer be required.
Asia will have to look elsewhere for inspiration. Increasingly, if capitalism is to survive, Asia will have to take up the reigns and create its own consumer societies. America will have moved on and will no longer agree to function as a catchall for foreign-produced widgets as it deliberately shrinks its sphere of old-style economic influence to Jim Jones (People’s Temple) compound proportions and isolates itself from (outside) corrupting influences while conducting its post-capitalist social experiments in cult (of) personality worship.
Kool-Aid, anyone?
Kool Aid? I like the Purple flavor.
British Columbia and VanBC are spending massive loonies on Next Year's Winter Olympiad. Already a known fact Whistler has great skiing and Vancouver has great night life. May not see economic return for many many years. Hopefully not a repeat of the Montreal Olympiad.
If POTUS BHO stays on script (and Teleprompter) he should do well. Jokes about how lovely Chicago and Ottawa are this time of year, and the snowbirds in California, Arizona, and Florida, will set the right tone.