Tuesday, September 15, 2009

Obama's Folly

In an earlier posting, I shared my concern that President Obama might give in to the tendency of Democrats towards protectionism. (December 25, 2008) That fear is growing. Last week, the Chinese government took the first step towards impressing tariffs of American exports of automotive products and chicken meat. This move was an apparent and immediate retaliation for Obama’s decision to levy tariffs on tires imported from China.

This may should like dull stuff, but it can set in motion a trade war with far reaching effects. Consider what the combined actions of two governments can cause. China exports $1.3 Billion worth of tires into this country. The announced U.S. tariffs can reach as much as 35% of the price, which means that if China could maintain its level of exports with the tariff, American consumers would be required to pay almost $2 Billion for the same tires as before. The $40 tire would become a $60 tire. Arguably American union shop plants would get the business without being required to be competitive. You and I will thus be paying a higher price for tires in order to subsidize a plant in Akron in an attempt to preserve jobs for some loyal Democratic voters and their employers.

Actually the above scenario is not how the real world works. China would lose its edge as a low cost competitor. Other tire makers - some domestic and some foreign - could raise their prices at least to the level of the newly crowned low cost competitor, but the higher prices would apply to all tires, allowing for a smaller increase but covering a much greater volume of tire sales.

Nevertheless, the principal is the same. All of us are called upon to pay a higher price for the product in order to subsidize an inefficient industry. China is now retaliating by increasing the tariff on $899 billion worth of automotive products and $378 billion in chicken products. (This type of measured response is typical in tariff trade wars.) These tariffs will result in increasing prices for them in China, allowing other suppliers to take our market share. The resulting reduction in exports of the automotive and chicken products will penalize American firms and jeopardize jobs in the affected industries.

I wonder if workers in the automotive industry understand that they are facing further job loss because of tariffs set up for the benefit of rubber workers. When tire prices go up, will they understand that their loss of purchasing power is not the product of greedy wall street bankers but of the stroke of the pen of a politician who seems to be more concerned about the next Ohio primary than the general good?

Nice move Barack!

Wednesday, September 2, 2009

Travel - Choosing a Destination

We were concluding an eleven day horse trip in the Bob Marshall Wilderness, Montana, under the leadership of Jack Hooker. Monty was telling Karen, Jacks wife, that she hoped we would come back again. Karen said that people like us do not come back, but move on to see other things. She understood us well. We have moved on to other places.

The patterns of our travel have been to go in ever widening circles. It is just as well to visit the closer destinations before wandering off too far. We recently discovered that we had overlooked one of the most interesting places in Alabama - Tuskegee. I bet that most of you have not been there either. It is one of the most interesting campuses in America. The campus is dominated by structures made by the students themselves, which produces and impressive but simple landscape. Its chapel designed by Paul Rudolph, John A. Welch and Louis Frey is probably the finest contemporary building in Alabama and contains the only nationally regarded stain glass window in the state. Booker T. Washington’s home, the Museum with fascinating movies of the lives of Washington and George Washington Carver, and the airport where the Tuskegee airman were trained could all deserve at least a star or two by Michelin Guide standards. Why go to a village in Italy, if you have not seen Tuskegee?

There is as much to see in this country as any where in the world. Some of my favorites are New York, Williamsburg, Glacier National Park, and Chicago, and anywhere you can find Frank Lloyd Wright architecture.

The same principal of ever widening circles applies to foreign travel. There is no reason to seek out the exotic until after you have seen the well traveled spots abroad including, Alaska and a Hawaii, which are considered foreign lands by The Traveler’s Century Club.

There is no reason to go to remote corners of the unusual places until you have visited the obvious ones. I still believe that the best destinations are the great cities of Europe - London, Paris, Rome (by way of Venice and Florence), Madrid, Athens, Berlin. Moreover all of those cities surround a treasure trove of other great destinations. These cities are popular spots for a reason. They are unusually rich in culture and our own heritage. Once you have been exposed to our own country and Europe, it is time to venture further and explore the many places throughout the world that are worthy of your time and treasure.

The following is a list of some of my favorites. In Africa the Serengeti, Lake Victoria, Capetown, and many other superb Safari locations dominate the south while Egypt and Morocco are most prominent in the North. Asia includes China, India, Japan, and all of Southeast Asia. My favorites in South America are Peru, Iguazu Falls, Chile and Argentina. In Eastern Europe there are Moscow and St. Petersburg, Russia, Poland, Czech Republic and Hungary. Travel in the Middle East has been inhibited by the conflagrations there, but Israel is a must. Leaders among the remaining parts of the world are Australia, New Zealand, Antarctica, and Spitsbergen, Norway.

There are many places we have not visited that probably should be on the list, including the Philippines, Mongolia, Bhutan, Korea, Nepal and the Galapagos Islands. Maybe we can make a dent in that list before it gets even longer.

Meanwhile, let me suggest a very special trip for you. In next year between May and September, the tiny town of Oberammergau, Germany will perform its marvelous Passion Play, for the forty first time. This is a world class event that comes along once a decade and should be seen during a lifetime. The play fills out one day leaving time to Switzerland or Austria nearby, to Italy in the south, Berlin in the east or maybe Paris in the west. You will not regret it.