Skip to comments.In Davos, protectionism is a dirty word (Putin for a global putsch to topple the dollar)
Posted on 02/01/2009 3:12:01 AM PST by TigerLikesRooster
In Davos, protectionism is a dirty word
The beggar-thy-neighbour phase has begun in earnest. "Buy American" legislation has advanced from a barely credible threat to imminent reality on Capitol Hill in just weeks.
By Ambrose Evans-Pritchard Last Updated: 11:31PM GMT 31 Jan 2009
The House has voted for a bill that prohibits the use of foreign steel in most infrastructure projects funded by Barack Obama's $820bn (£563bn) rescue package. The Senate is drawing up plans to widen that to all manufactured goods.
This is what happens when a country loses half a million jobs a month, and when the state becomes spender-of-last-resort. Taxpayers are tribal. They do not want precious stimulus to feed the foreigner.
Even so, this Dutch auction has the disorderly feel of the Smoot-Hawley Tariff debacle in 1930, though this time the collapse of commerce if allowed to happen will have very different consequences for the global balance of power.
Mr Obama can veto the law, should he wish to pick a fight with Capitol Hill from day one. The world watches and waits in horror, especially in Davos.
"Everybody here is talking about protectionism. There's not a prime minister present not talking about protectionism," said Peter Sutherland, former (GATT) trade chief and now chair of BP.
Days earlier, US Treasury chief Tim Geithner called China a "currency manipulator" meaning that Beijing holds down the yuan to boost exports. The term is turbo-charged. It implies mandatory trade sanctions under US law.
(Excerpt) Read more at telegraph.co.uk ...
Anyway they would fall fast to the bottom and serves as a cushion for America following after them.
don’t be complacent. our enemies are not dumb.
Another wacky article getting all worked up about us only buying US steel for the stimulus package. We run a huge trade deficit so this is good move. Invoking Smoot Hawley is childish
“They may not be dumb, but they have their own tunnel vision just like Wall St. folks or globalists.”
I would disagree. I think George Foreman though that before the rumble in the jungle. then pow, your enemy comes out punching & your plan goes to ...
don’t be complacent.
The result is not so much as monolithic opposition taking on U.S. but world fractured into several pieces, and no clear dominant power. They are all at once taking on their enemies as well as domestic political turmoil. It would be quite fluid and chaotic situation for long time.
> Another wacky article getting all worked up about us only buying US steel for the stimulus package. We run a huge trade deficit so this is good move. Invoking Smoot Hawley is childish
Why would it be a good move to overpay for steel? Why would it be a good move to get other countries to put similar restrictions on American goods? Capitalism and trade have been the biggest generators of wealth. This bill aims to kill both. Good move indeed - if your aim is to bankrupt the United States.
One American industry after another has been fleeing the U.S. for cheap labor.
We’ve been exporting jobs much more efficiently than products.
I see nothing wrong with going back to the negotiating table with some countries as it concerns trade.
Some good old Reagan “protectionism” would be a good thing. We can call it self preservationism.
Whatever recovery from the Bush years that Obama preached about, and the Europeans were all giddy about....is going down the drain. When he visits countries like India, France, etc...they won’t be standing to have a parade...but more likely to have a demonstration against him.
In essence, a typical rationalization of their past behavior at work.:-)
But that's just me.
All Federally funded road projects require contractors to purchase US steel now. It’s been that way forever. I wouldn’t be surprised if USACE projects are the same.
Besides, how much steel is used in STD prevention education, tobacco use suppression, etc.
> Weve been exporting jobs much more efficiently than products.
Actually, just prior to this recession our unemployment rate was under 5%. How can you claim that we have been losing jobs? Are you claiming that without trade our unemployment would have been lower? Do you have any evidence to support that claim? Free trade has been disproportionally good for our country (probably because we have been most committed to free trade). Why would you want to kill the proverbial goose?
A lot of those jobs were bubble-related and not in manufacturing. Mortgage brokers and real estate agents do not make for a strong economy.
> When he visits countries like India, France, etc...they wont be standing to have a parade...but more likely to have a demonstration against him.
Already starting. I hope Obama is no longer maintaining any illusions that he can get more NATO forces into Afghanistan or that any country will volunteer to house Guantanamo inmates.
I know the odds of defeating this “stimulus” bill are slim, but if Republicans can pull it off it will place the new administration on the defensive for the next two years.
> A lot of those jobs were bubble-related and not in manufacturing. Mortgage brokers and real estate agents do not make for a strong economy.
“Not in manufacturing” = “bubble-related”? What does that mean? A biotechnology engineer is “not in manufacturing”. Is that not a good job? How about computer or communications engineer? Researcher? Personally, I would rather be a mortgage broker than work in a steel plant. At least I would like to have that choice.