Is the Obama’s America a Free and Fair America?

The problem I have with what US President Barack Obama is doing with the “free market” US, is that he is making it impossible to actually be a free and fair market. By “investing” in 60% of GM and 70% of Chrysler, it allows for the government to incentivize the purchase of these vehicles over others.

Take for example the scenario in which a CEO wants to buy 100 new cars for a corporate fleet, and he is looking at Ford as his choice, the US government, in order to ensure that their investments succeed, can offer tax rebates and incentives on the GM and Chrysler lines that would not be available to Ford - the only US automaker that stands on its own.

I bring this up because over the weekend I read a story in the financial times about how protectionist ideologies are beginning to take hold in much of the world. The article focused specifically on Canada, and as Forex online traders know, the Canadian economy lives and dies by the price of commodities.

In response to a strong “Buy American” campaign south of the Canadian border, the Canadians are implementing their own buy Canadian campaign - from everything from Manitoban Wheat to Edmonton Oil. Canada, which has a small stake in GM and Chrysler, is being left out of the loop when it comes to the car sales. There is talk of plant closings and supplier chain closings associated with the bankruptcies of these two carmakers, and the first plants to close will seemingly be the ones in Canada – adding more Canadians to the unemployment rosters while sparing the US of these cuts.

Is this fair? No. And it goes back to my original thought – is the Obama’s America a free and fair America? The signs on the wall are clear, the answer is no. It’s one thing to meet and greet your counterparts from other countries and smile and say the right things like protectionist measures won’t work – yet, it’s completely another thing to put that ideology into practice during the worst economic downturn since the great depression.

Obama’s America is no different from that of the Smoot-Hawley America of the 1930’s - where some senators implemented measures designed to keep Americans working at the expense of their trading partners. This policy was the reason why the depression lasted so long. And if this is the case now, as I believe it is – we are in for a long and painful road ahead.

Forex online traders need not worry though, because unlike stocks – there is always one currency going up when another is falling.