Could the US use a little protectionism?

[Lasher]

Though it's a dirty word in many circles, a little protectionism might be good for the US.

December 15, 2009

Would a touch of protectionism do the United States some good?

Protectionism is generally taboo among policymakers and economists. “Being called a protectionist is only slightly better than being called a criminal,” states Dean Baker, codirector of the Center for Economic and Policy Research, a liberal Washington think tank.

It is safe today, though, to take a tough line on trade disputes and, indirectly, do more to protect American interests because the financial crisis has blunted the international program for lowering trade barriers.

“Last year’s experience has made people much more wary,” says Robert Weissman, president of Public Citizen. The nonprofit consumer advocacy group worries that World Trade Organization (WTO) deals will effectively block reregulation of the nation’s financial industry.

“People don’t believe the promises of free trade have been met,” says Andy Gussert, national director of Citizens Trade Campaign, a major coalition of environmental, labor, consumer, family farm, religious, and other civil society groups. It aims to block Bush-era trade deals negotiated with Colombia, South Korea, and Panama, and to seek renegotiation of such important trade deals as NAFTA (involving Canada, the US, and Mexico) and CAFTA (Central America and the US).

http://www.csmonitor.com/Commentary/David-R.-Francis/2009/1215/Could-the-US-use-a-little-protectionism

[abelenkpe]

1. yes nt.

[parts]

2. no.

bad idea.

[Jim Sagle]

5. Rahm, is that you?

[safeinOhio]

3. Join the army

that will be in the Trade War. Patriotic thing to do.

[Mnpaul]

4. Protectionism as a bad word

is just propaganda from the DLC types. If it weren't for protectionism, Toyota would still be making knitting looms. We need to protect American jobs. Screw Wall St.

[Dr.Phool]

6. No

We need a lot of protectionism.

Bring back the millions of jobs that have been offshored.

[Lasher]

7. Ha ha, best answer.

The article compares our relationship with China, and it is apparent that they have protections for their economy that we do not. Particularly with the massive deficits that have occurred, it makes no sense to have a trading relationship where there is not a level playing field. Call me a protectionist if you want, but I believe there are some things that are worth protecting.

Lasher

[SlipperySlope]

8. We are in a completely different situation than last time.

The Smoot–Hawley Tariff Act of 1930 is generally seen as setting off a wave of retaliatory tariffs by our trade partners, and as deepening the great depression in the United States. So the "conventional wisdom" was that it was a bad move on our behalf in 1930.

Does that mean it would be a bad move today? Not necessarily.

Tariffs are harmful to exporting nations (and those who depend on exporting nations) because they reduce the demand for exporting products in favor of domestically produced products. In the 1920s the United States had an export-driven economy. So a trade war that reduced markets for exported goods worldwide was devastating to United States exporters.

Things are different today. We are net importers. So theoretically, an increase in the prices of goods we import would reduce the demand for those goods and increase the demand for US produced goods. After some initial disruption things would theoretically stabilize with a net of more US workers employed in manufacturing jobs.

One big problem; I wrote above that tariffs are harmful to "exporting nations (and those who depend on exporting nations)". Today the United States depends on one exporting nation in particular - China. If we stopped buying as many Chinese goods, they would likely stop buying United States government debt. And without China continuing to prop up our government spending, we would either have to reduce government spending dramatically, face higher interest rates, or just print the money. None of those three choices is very appealing right now to the powers that be.

[Lasher]

10. If China stopped buying our debt, that could be a good thing.

This would a a more likely way to halt our deficit spending than any other scenario that comes to mind. The problem is, just where do we cut our spending? If I had my way it would all come out of defense spending and tax cuts of the past 30 years.

[SlipperySlope]

14. I don't think it is feasible...

Nothing would make the government stop the excess spending short of a popular uprising. If China stopped buying our new debt, the Federal Reserve would buy it instead.

[Lasher]

15. I won't argue with that, Slippery.

Sometimes truth sucks.

Lasher

[existentialist]

9. "fair trade" as opposed to "free trade" may be more persuasive

The difference, as set forth by Sen. Sherrod Brown and others, is that a tariff (among other means) becomes a fair tactic to compete with

1) prison labor,

2) child labor,

3) other exploitive labor practices generally,

4) production methods which harm the environment,

5) other production which offends sensibilities enough to support legislation to combat it.

[TexasObserver]

11. Recommend

a little protectionism might be good for the US

[blue97keet]

12. If we keep shoveling billions out the door (trade deficit) then

the only way to artificially prop up the economy is loose credit, preditory lending, deficit spending, and bailout after bailout. It is like trying to create water out of thin air and dump it into a leaky plumbing system, and there is no way out of the debt hole.
Also, doesn't the WTO block everything that could possibly make systemic safety sense, like food safety for instance as well as financial reregulation? The WTO is a world menace.

[Lasher]

13. You know, I just don't get it.

Here we are being flushed down a toilet, that's plain to see. But the status quo is supposed to be our path to salvation? More of the 'free' trade bullshit that has directly led to our demise?

Talk me down. Hold my hand. Breathe in, breathe out.