In the 1950s and early 1960s teenagers played a game of chicken on America's highways. They drove their cars head-on at each other and the first to swerve was branded a "chicken."
World leaders back then played their own game of cars and chicken, and the chicken droppings are still with us.
Ford builds the Transit Connect passenger van in Turkey and
ships it to America where it morphs into a delivery van. (AP photo)
The January issue of the libertarian Reason Magazine offered one of those little tidbits of ironic unintended consequences for which government is infamous.
Back in the early 1960s, West Germans were eating a lot of imported American chicken. This apparently threatened Germany's poultry producers so their politicians slapped an import tax on the foreign fowl.
What this did, as ever, was to punish large numbers of their own chicken chomping citizens for the benefit of a relatively small number of politically connected roaster raisers.
But never mind. America struck back. President Lyndon Johnson imposed an onerous 25 percent tax on imported delivery vans and trucks, thereby punishing Volkswagen's autoworkers while ostensibly protecting America's unionized autoworkers at the expense of hundreds of thousands of American large and small business owners who use delivery vehicles in their daily operations.
Eventually, of course, foreign automakers set up shop in America itself, mostly in union-weak southern right-to-work states, which not only rendered the LBJ tax moot but provided jobs for American workers and lower-priced delivery vehicles for customers.
So everyone benefited after all, except for the United Auto Workers union in America and other autoworkers around the world who have seen their potential jobs move to America.
But Ford Motor Company, that one American automaker that didn't go begging to Washington for a share of taxpayer bailout spoils, has found an innovative way around the LBJ tax.
They build passenger vans in Turkey where lower wages and regulations help keep the manufacturing costs down. Then the vans are shipped by the boatload, literally, up the Chesapeake to Baltimore. Since these are passenger vans they pay a low 2.5 percent import tax, not the 25 percent tax for delivery vans.
Why did the Ford chicken cross the Atlantic? To
get to the other side of the tariff. (Wikimedia
Commons)
But then a work crew descends on the passenger vans and removes the rear seats and windows. The brand-new never-used seats are shredded, the fabric and foam ending up as landfill cover while the steel gets recycled.
According to the Reason article, "It takes about five minutes per vehicle to turn the passenger vans back into the delivery vans they were always intended to be."
What puzzles libertarians who understand what free markets are really all about is why almost everyone vilifies "capitalism" and big greedy companies for "exporting jobs overseas" and other evils. Corporations don't have the power to impose 25 percent import duties on anything. That's the power of government. So why don't people vilify government?
In a free society, small constitutionally restrained governments would have kept their chicken lickin' fingers out of the business of business. Today, Germans would be eating cheap chicken, America's unionized autoworkers would likely still be building delivery vehicles in the US, and hundreds of thousands of local florists and dry cleaners and bakeries and independent bread delivery route contractors would be driving affordable American-made vans.
But LBJ, champion of the working class, won his game of chicken while one of the Democrat's biggest supporters, the UAW, lost.
That's gotta stick in their craw.
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