Sunday, February 08, 2009

democratic protectionism, step 2

feb 9th, 2009

that would be the 'american content' part of the stimulus plans. for instance, only american steel and american cement to be bought, whatever the comparative merits, because "that will save american jobs". yeah, right. herbert hoover and fdr did this sort of thing, and ended up prolonging the great depression, at least that's what the WSJ claims :-) of course, i do agree one has to take the WSJ with a pinch of salt.

whatever happened to the 'free trade' mantra that the americans have been bleating about all along? oh, i see, free trade is good when americans have the competitive advantage, but otherwise it is bad. of course, this is what they have been doing with agricultural products forever, subsidizing it to the tune of many billions, driving farmers elsewhere to suicide by undercutting them. (and of course, the whole high-fructose corn syrup surplus leading to the diabetes epidemic among the poor, but that's a story for another time).

the trouble with protectionism is of course that it induces retaliation from others. the net result could be a freeze-up of trade. and we have seen how a freeze-up of liquidity in banking has been disastrous. americans retreating behind 'fortress america' is not good for the world at large. or for the americans themselves. how on earth will they get their iphones if they erect trade barriers against asian manufactured goods? that's a trivial example, but any increased income americans get from protectionism will be dissipated on increased prices for inefficiently produced goods made in america. so the american consumer will be no better off, and the whole 'beggar-thy-neighbor' syndrome leaves everyone else worse off too. i wonder what jagdish bhagwati, the brilliant spokesperson for free trade, has to say about all this. i am sure he is appalled. amartya rothschild (born sen) is probably applauding as he likes anything leftist.

obama's honeymoon has been really short, eh? what with the daschle debacle (so much for 'change' -- it's always been all these power-broker rich people who keep nannies and drivers and omit to pay taxes, or employ illegal aliens) and a q khan being released, and the kyrgyz kicking the americans out, and the fabled bipartisan consensus falling by the wayside, all in all, not a very smooth transition. i guess the magic wand is not working, and the dreadful bank problems are still there. i guess obama has been desperately kissing the frog and it refuses to turn into a princess!

where's truti, our resident obamista? protectionism ki jai, or what?