I was listening to a podcast over the weekend about the dangers of to the international trade system from the global economic downturn. These concerns are becoming common. One academic thinks that many of these bailouts that we are talking out are in violation of international treaties and could spark a trade war:
I think [Obama] has to really use his rhetorical powers at some stage to try and say that openness is at stake, and openness which is really — it’s not just trade, which Carla was correctly focusing on — trade — we have Buy America; bailouts which are — you know, if they are sectoral subsidies, which there are, and they are even more sectoral in the sense that they are Detroit and within that probably just two firms — those are clearly actionable under the SCM agreement, so I don’t see how it’s going to be proven to be the ability of — (inaudible).
Moe Lane
Steve Maley
Dan McLaughlin
Neil Stevens
Daniel Horowitz
We shouldn't be constrained or beholden to entangling alliances!
wesley Sunday, March 22nd at 3:04PM EST (link)If our leaders determine Keynesian stimulus is best for our economy at this, why does it matter what the international community thinks?
We need to act in our own self interest and not be beholden to entangling alliances!
For me, that’s a basic conservative principle.
Because protectionism doesn't work
Danielle Davis (ocleverone) (Diary) Sunday, March 22nd at 4:03PM EST (link)The protectionism reaction to the Great Depression was counter productive and resulted in the prolonged delay of economic recovery for the U.S.
The implications to American exports would be significant as other countries rachet up their responses to our protectionism. As the barriers get higher, the cost of American goods going into foreign markets get higher and the less likely consumers will either have the money or the inclination to buy American produced goods. If goods are bought, American producers end up with excessive inventories and a slow down in capital in hand. No money, no money for workers or production or expansion.
In the 1930s we were an agrigarian society and the protectionism of the Smoot-Hawley Act impacted us just as the voluntary export restraints of the 1980s impacted not only our car manufacturing but steel exporting as well.
If we go into protectionist mode, so will the rest of the world, prolonging an economic crisis. Unfortunately, in this case, our economy has gone on to a global scale.
Tariffs will raise, restrictions will happen and the American producer (and consumer) will be the one that pays the piper.
To me, “consensus” seems to be the process of abandoning all beliefs, principles, values and policies. So it is something in which no one believes and to which no one objects … There are still people in my party who believe in “consensus” politics. I regard them as Quislings, as traitors … I mean it. — Margaret Thatcher