Posted on 06/16/2009 11:21:05 PM PDT by FromLori
Eek:
In an edict released jointly by nine government departments, Beijing said government procurement must use only Chinese products or services unless they were not available within the country or could not be bought on reasonable commercial or legal terms.
Well, I can't say I'm surprised. After all, we did pretty much the same thing with our stimulus bill.
Of course this reminds me of a pair of gentlemen by the names of Smoot and Hawley.
For 50 points does anyone remember them and what they were best known for?
And for the other 50, what was the ultimate outcome of those policies and why might that be undesirable now?
What Hath Barry Wrought?
Its not necessarily Barry’s doing, it smells more like Chinese protectionism in the Chinese government’s efforts to get the Chinese people to move towards internal consumerism.
This one, we can lay at the Obama administration’s feet.
This is a direct response to the “stimulus” bill passed on Obama’s watch that had a “Buy American” clause in it.
Then came Timmy using the words “currency manipulation” in public (which while true, are loaded words and are like waving a red flag in front of a bull). Then we had the Fed doing a big whackin’ load of QE.
The PRC has been trying to make their position known now for a couple of months - they view QE with some alarm.
So now they have pulled out a big stick to whack over our heads.
Can you imagine what the chinese would say if the US announced the same policy?
“China has issued a ‘Buy Chinese’ order as part of its £400bn government stimulus package in a move that could fuel tensions between Beijing and Washington over claims of trade protectionism...”
We did though it was dropped later on.
“The edict, issued from the highest level of China’s government, comes less than six months after China described the short-lived ‘Buy American’ clauses in the US stimulus package as “protectionist poison” that would undermine the world economic recovery.”
Link in above post.
China’s had protectionist policies for a long time.
This from another “FR” poster...
There is no universal agreement about the effect of the tariff. According to the U.S. Statistical Abstract, the effective tariff rate was 13.5% in 1929 and 19.8% in 1933 with 63% of all imports being duty-free. From 1821 through 1900 the United States averaged 29.7% effective tariff rates and peaked in 1830 at 57.3% with only 8% of all imports being duty-free, dwarfing the Smoot-Hawley rate. In addition, imports in 1929 were only 4.2% of the United States’ GNP and exports were only 5.0%. Smoot-Hawley’s effect on the entire U.S. economy may have been small, compared to the monetary policy of the Federal Reserve System. By 1937 the effective tariff rate was reduced to 15.6% when the reaction of 1937-1938 occurred, demonstrating no statistical correlation between this economic downturn and tariff levels. Senator Robert L. Owen testified at the hearings on HR 7230, the bill to make the Federal Reserve banks a national property, that; “In 1937, when the Federal Reserve Board called upon the banks to raise their reserves to twice what they had been before, there was a contraction of credit of two billion dollars.- org.whodat
“Smoot-Hawley” was bad because America was a net creditor and net exporter, thus suffering more than others with it
Since America is not exactly a net creditor/exporter now, a new Smoot-Hawley would hurt the most the main net creditors/exporters in the World.
It’s an effort to keep the masses employed and not rioting in the streets.
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