Obama risks trade war to help union allies
Has President Barack Obama thrown Big Labor under the bus? It sure might seem that way after watching his performance yesterday before two union audiences, G.M. workers in Lordstown, Ohio, and an AFL-CIO convention in Pittsburgh.
Both speeches were fiery, pro-union stem winders. Yet the president barely mentioned the top item on Big Labor’s 2009 political agenda, the Employee Free Choice Act. The legislation would require a company to recognize a union without a secret-ballot election once organizers submitted union cards signed by a majority of its workers. Unions believe it would increase unionization, which is probably a pretty good bet given how hard Corporate America is fighting the bill.
But the card check bill has struggled mightily on Capitol Hill and could clearly use a boost from the White House. Still, the president didn’t speak its name in Lordstown and devoted just a single sentence in Pittsburgh. Is that any way to treat the folks who poured tens of millions of dollars into Democratic campaigns last year?
Maybe not, but you didn’t hear any booing. Heck, there probably wasn’t even a slight grumble given the myriad ways Obama has already helped his union allies. His stimulus package helped prevent layoffs of many government union workers, while key provisions serve to prop up union wages on infrastructure projects. His restructuring of the American auto industry left the United Auto Workers with a majority stake of Chrysler and a fifth of General Motors for the price of relatively minor pay and benefit concessions. And his healthcare reform looks to bolster underfunded union retiree benefit plans, while avoiding taxes that would hit pricey union insurance packages.
Then, of course, there is Obama’s decision to impose a 35 percent tariff on imported tires from China, much applauded by Big Labor. As the AFL-CIO put it, “The trade decision was the president’s first down payment on his promise to more effectively enforce trade laws.”
Not only does the move directly hurt U.S. consumers, but it will certainly encourage more domestic industries, such as steel and apparel, to look to Washington for help. Even more dangerous than copycat protectionism: by blaming China for economic woes here at home, Obama risks rekindling anti-China efforts in Congress, such as pushing China to allow a renewed and rapid escalation in its currency. That is how you could get a full-blown trade war.
Hard truth: When it came time for Obama to choose between his political allies on one hand and America’s economic allies (and consumers) on the other, he chose the former this time.
And who knows, a slightly watered down card-check bill might still get passed by year end and signed by the president. In retrospect, Obama should have dumped his own Pittsburgh speech for that of Labor Secretary Hilda Solis who told the gathering that she “was proud and humbled to be your humble servant.”
Now that’s more like it.