As if President Barack Obama’s decision to undermine the rule of law and give the United Auto Workers their own taxpayer bought auto company wasn’t bad enough, now President Obama has again chosen to punish the American people by choosing narrow big labor interest over free market principles.

This time the issue is trade and as we noted this weekend, President Obama has chosen to apply heavy tariffs to passenger car and light truck replacement tires made in China. University of California at Berkeley economics professor Brad DeLong notes that the International Trade Commission (ITC) forecasts an increase of $3.50 per tire and that big labor says the tariffs will save 10,000 jobs and writes:

Let’s see… 250 million cars in America… need 4 tires per car… need new tires every 2.5 years. 400 million tires a year… $1.4 billion dollars a year… 10,000 worker jobs saved… $140,000 dollars per worker-job per year.

Looks like we could (a) let the Chinese sell us tires, (b) tax each tire by $2.50, (c) pay each tire worker who loses his or her job $100K a year, and we come out ahead: American households have more money to spend on other things, China has more jobs to help what is still a very poor country grow, and tire workers have higher incomes and more leisure as well.

But, you say, it would be stupid to impose a $2 a tire tax and use the money to pay each laid-off tire worker $100K a year.

That’s the point: when the policy you are adopting is worse for everybody than a policy you agree is stupid, the policy you are adopting is best characterized as really stupid.

And this analysis does not even include the chances Obama’s decision will start a trade war with China, who filed a complaint with the World Trade Organization today and is threatening tariffs on U.S. poultry and car parts exports. Remember, it was a trade war that really kicked off the Great Depression.