No We Can’t!

Senator Hillary Clinton recently has taken to scolding Senator Barack Obama for being all talk and no action.

Swap Obama’s speech for his position paper, however, and you’ll see he does offer specifics—lots of them. On top of $210 billion in new government spending, Obama promises to shackle U.S. businesses with heavy regulation. If he becomes president, he’ll do more than bring change: he’ll force Americans into an economic straitjacket.

To “rebuild the middle class,” Obama will resuscitate labor unions with the Employee Free Choice Act. It would allow a union to represent employees without holding a secret-ballot election. Once the union garnered a majority of employees’ signatures on authorization cards, it would automatically become their bargaining agent. Sounds like a free choice—until a Teamster is staring you in the face with a pen in hand.

Stronger unions would force companies to pay more, but that money has to come from somewhere. Cut profit, and shareholders take the hit. Raise prices, and consumers foot the bill. Cut costs, and companies may be forced to fire the very workers that unions are supposed to protect.

The United Auto Workers union, for example, has crippled Detroit automakers with high labor costs. Now, workers are feeling the pain. Chrysler LLC plans to lay off 12,000 workers this year after cutting 13,000 jobs last year. Americans are wary of unions for good reason.

After shooing workers into Big Labor’s arms, Obama will shame businesses with the Patriot Employer Act. It offers a one percent tax credit to companies, but under a heap of conditions, including a pension plan that matches five percent of worker contributions for every employee and payment of 60 percent of each worker’s healthcare premiums.

Worst of all, businesses’ foreign divisions will have to pay the U.S. corporate tax rate, instead of their host countries’ rates. At 35 percent, our corporate tax rate is the second highest in the developed world, so companies would suffer a tax increase. And no, they don’t deserve one. In 2005, the National Bureau of Economic Research found that when U.S. companies take on more foreign workers, they tend to hire more American workers as well.

Everyone benefits from the lower prices that result from companies moving overseas. Globalization doesn’t hit only the U.S. either. This year, some 10,000 Chinese factories are expected to relocate to cheaper spots like Indonesia and Vietnam. We won’t complain when laptop prices drop.

Still, Obama hopes to revise the North American Free Trade Agreement, his most perplexing proposal yet. He wants to impose labor and environmental standards on Canadian and Mexican companies, so U.S. companies face “fair” competition.

Such standards, however, impede competition. The free market allows companies that provide better goods at cheaper prices to make greater profits. If foreign competitors slap arbitrary standards on them that raise their costs, then competition stumbles, prices rise, and Americans suffer the fallout.

It’ll also be curious to see how Obama tries to strong-arm our two largest export markets into blunting their competitive edge, especially after he’s pledged to meet some of the world’s worst dictators without preconditions.

Obama isn’t all talk; his policy positions fill reams of paper. If he takes the oath of office in January, he’ll drown U.S. businesses in regulations and they’ll be less competitive in the world economy. Sure, he’s inspiring. But our troubled economy can’t afford the left-wing policies beneath the veneer.

Senator Obama claims to be a fresh face in the political arena, but rip away the glamour and the glitz, and you’ll find he’s nothing more than a big-government liberal.



Brian J. Bolduc ‘10, a Crimson editorial editor, is an economics concentrator in Winthrop House.