My Worlds are Colliding

Do you remember the Seinfeld episode when a hysterical George Costanza exclaimed “George’s worlds are colliding!!” I had such a moment today while reading the LA Times (I know, I know, but sometimes I need to get my blood percolating) editorials about the “Trade Wars.”

In the first editorial about scapegoating China, the Times noted that the “notorious” trade deficit with China ($14 billion in Feb.’05) is largely due to US companies making products in China and shipping them back home for sale to the insatiable American consumer. In this win-win-win enterprise, US consumers benefit from lower prices, US companies (and their employees and shareholders) benefit from higher profits and Chinese workers make a living. The transaction gives the Chinese a vested interest in the health of the American economy. That’s the way free trade is supposed to work.

The second piece is about the new Boeing 787 “Dreamliner.” Early reviews are uplifting and orders are flowing in, including a $1B order from Korean Air Lines. Just last year, the European Airbus, generously subsidized by EU governments, passed Boeing as the world’s largest producer of passenger planes. Airbus also made headlines for its introduction of the A380, the world’s largest passenger plane (also subsidized by $3.8B of government money). Now, with the more efficient Dreamliner on the scene, Airbus is in a panic and lobbying for another government handout for development of an A350 to compete with Boeing. That’s not the way free enterprise is supposed to work.

Finally, the Times reports that Democratic Senator Kent Conrad (North Dakota) argued in hearings on the Central America Free Trade Agreement (CAFTA) that the treaty would “devastate” the US sugar industry. The Times counters that US tariffs on foreign sugar have led to sugar prices in America 100% greater than the world market, thus hurting US consumers and workers in sugar using industries.

I’m just amazed, finding myself agreeing with the Los Angeles Times on all three cases. Worlds are definitely colliding, George.