Party Political Animal

Posts Tagged ‘Obama’

So Hillary has had it. Obama is the de facto Democratic nominee. And what a depressing spectacle the whole thing has been – and I’m not talking about the mutual slagging-off contest. I’m talking the policy – such as it was.

At the first electoral test, the Iowa caucuses, both candidates came out strongly in support of government subsidies for corn-based biofuels. The US subsidises fuel made from maize by 51 cents a US gallon – that’s about 7p a litre – and Iowa is a major corn growing state.

But in North Carolina this week they began talking about “reviewing” and “re-tooling” the policy. Funny that, until you realise that North Carolina is a livestock state and a major importer of corn to feed all those hogs, cows and steers. The biofuels programme has contributed to the massive increase in corn prices and dairy, pig and beef producers are hurting.

The issue is complex. Biofuels reduce dependence on fossil fuels. But they also take land, water and energy to produce – especially in temperate climates like the US and Europe. That has helped to push up world food prices by around 20% according to recent reports.

There is an answer: Brazil has been producing biofuels for decades and a third of vehicle fuel used in Brazil is sugar-based alcohol. For it’s not just the Brazilian chicas who are hot – the tropical Brazilian sun converts more efficiently into plant energy than it’s pallid equivalent in North America or Europe. The Brazilians have also been perfecting distilling and production techniques so they are by far the most efficient producers.

But can they sell to the US or Europe? No. The freedom-loving Americans are more interested in protecting their corn farmers – clobbering stock farmers and consumers in the process. Europe also has a tariff of between 10 and 20 euro cents a litre, which disadvantages imports, but is not quite as bad as free-trading America which subsidises biofuel exports as well, distorting international as well as domestic markets. 

Of course we should all be importing biofuels from Brazil. But neither Obama nor Hillary has made the other obvious point – that Americans should consume less fuel. Indeed, Hillary has been trucking around the primary states in gas-swigging SUVs to show America’s white trash how like them she really us.

Only candidate is against the biofuel subsidies. John McCain. 
    
Phillip Oppenheim

If you want to see how far removed both Hillary Clinton and Barak Obama are from what Obama nebulously terms the “new politics”, take a look at their collective line on the North American Free Trade Agreement – NAFTA.

Negotiated by Mr Clinton in 1993, NAFTA remains one of the few enduring legacies of the charming and occasionally raunchy, but ultimately insubstantial Clinton years.

Of course if you believe that politicians and bureaucrats know better than the aggregate of millions of individual decisions which make up the free market, you will not support free trade. And there are many arguments against NAFTA, such as the poorer NAFTA countries such as Mexico do not “protect” their workers. But then if everyone had to have exactly the same labour and other regulations to be able to trade, the global economy would grind to a halt.

Hillary knows that.  In her memoirs, she trumpeted her husband’s “successes on NAFTA.” Only last year, her lead Wall Street fundraiser told reporters that Clinton remains “committed” to NAFTA’s “free” trade structure.

And Obama, scion of the “new politics” is playing the same game by vaguely promising to reform NAFTA – while quietly assuring business leaders he will do no such thing. For Obama knows that reforming NAFTA is neither possible nor desirable.

Both are pandering to people’s belief that their problems are down to someone else – preferably Mexicans, Canadians and Colombians who won’t be voting in these elections – rather than their own fault for guzzling too much food, gas and other goodies allied with poor education, which is one of the structural problems of the US economy.
 
It’s an easy sell. Americans are both insular and illiterate on economic matters. A NBC/Wall Street Journal poll found that even Republican voters believe by 2 to 1 that free trade is bad for the U.S. economy. In January, Fortune magazine found 68 percent believes other countries “are benefiting the most from free trade, not the U.S.”

In fact, it’s not only poorer Latin American countries which have benefited massively from the US’s belated opening to freer trade with its neighbours. But of course the US has done very well too, with a huge increase in employment since 1993 and no sign of the much predicted “giant sucking sound” as jobs and investment head south of the Rio Grande.

Clinton and Obama on NAFTA – new politics, or same old, same old? You decide.
Oh, I nearly forgot – only one candidate is brave enough to stick up for the benefits of NAFTA and free-trade: John McCain – he deserves election on those grounds alone.

Phillip Oppenheim