Bears, Bulls, Chickens and Pigs: wOw’s Wall Street Weekly with Liz Peek (Week of 9/14) 

Editor’s Note: Liz Peek is a financial columnist and the author of wOw’s SHEconomics.

Good news! At long last, there actually is a chicken in every pot. In fact, there are so many chickens in U.S. pots that producers are dying to ship some to China. Unfortunately, that prospect suddenly became a bit dicey earlier this week, thanks to an emerging trade battle that President Obama has initiated with Beijing. Standing tall with his friends in Big Labor, the president slapped a 35% tariff on tires imported from China, which immediately provoked a retaliatory move to "investigate" whether U.S.-produced chicken (and auto parts) are being unfairly dumped in that country.

The jury is still out on whether the president’s move will spur an all-out trade war (or buy necessary health-care votes in Congress from tire-producing states). More important, perhaps, is whether the move is symptomatic of an anti-trade bias that, in conjunction with other policies unfavorable to business, will stall our recovery. Taking its cue from labor unions, the administration has not initiated any new trade talks with our allies. Moreover, it has not pushed forward pending agreements with South Korea, an especially important friend to the U.S. in Asia, or with Panama or Colombia. That is not a good sign.

The one thing that almost all economists agree upon is that the Depression was prolonged by protectionism and higher taxes. Here we are, throwing up trade barriers, putting harmful "Buy American" provisions in the stimulus package, prohibiting Mexican trucks from using our highways, including punitive tariffs in the cap-and-trade bill and generally undermining our trading partners. The World trade Organization reported just this week that the U.S. had created 15 "potentially protectionist" measures between April and August. We are not alone; other countries have been erecting trade barriers as well.

Make no mistake – such measures have already hurt American workers. Canadian municipalities have responded by passing "do not buy American" resolutions that have blocked imports, while it has been reported that the spending of stimulus money has been slowed by the complicated provisions.

At the same time, of course, the president is proposing to raise taxes on a good segment of our taxpayers as well as on corporations large and small. One of the principal concerns about the stalled health-care bill is the impact it would have on small (and large) businesses. The other day, Andy Puzder, CEO of CKE Restaurants, said on CNBC that if the health-care bill is passed, the company will be forced to fund the 8% payroll tax by shelving its expansion program. As he said, the "only place we could get that money from if it doesn’t come from higher prices is the money we’re using now to build new restaurants and to create new jobs." In his view, the fee would "quell one of the few industries that are adding jobs."

You have to wonder: Other than hiking government spending, what is this administration doing to boost business, which ultimately will determine job growth? Certainly, government incentives to buy cars and homes have helped stabilize two of our hardest-hit industries. These measures, though, are meant to be temporary (though currently the administration is considering extending the home-buyer incentive). Eventually, federal assists will disappear.

Meanwhile, people out of work continue to struggle. Though new unemployment claims have drifted lower, the numbers suggest a poky recovery. Continuing claims are still rising (to 6.23 million from 6.1 million in the most recent week), which is not positive. Going forward, job creation will depend on corporate profit growth and increased investment. Though the trends are in the right direction, there remains considerable uncertainty about the pace and sustainability of an upturn.