03
Feb
09

On-Air: What’s wrong with protectionism ?

welderThere’s a “Buy American ” clause in the economic recovery package now (ATOW) before congress.

Only U.S iron, steel and manufactured goods would be used in projects funded by the bill.

“That’s protectionism” goes the cry.

Columnists line up to speak against it.  “Horrible ideas” says this writer. “Protectionism protects nobody” is the view here.

The EU isn’t impressed either : “We’ll take you to the World Trade Organisation” they warn, and there are dark warnings of a “new economic iron curtain” being drawn.

But what’s so wrong with protectionism ? If my job , my livelihood was being protected by this kind of measure i’d be quite happy.

And wasn’t it the much-vaunted “free market” that got the world into this mess in the first place ?

Or is the clamour against globalisation (and “foreigners” doing “our” jobs) simply a product of hard times and not economic clear-thinking ?

Here’s a word from the Financial Times article i linked to above :

“Those who have seemed to profit most conspicuously from open global markets have brought down the house on the rest of us.The anti-protectionism case must be made all the more determinedly for that – and nowhere stronger than in Europe. …… The single market has subsequently enriched the lives of Europeans in every dimension.”

Do you think protectionism is wrong ?

 

 

 

 

 


138 Responses to “On-Air: What’s wrong with protectionism ?”


  1. February 3, 2009 at 14:07

    We are in a recession because we have a scares resource i.e. credit. Free and fair markets allow for the efficient use of that credit to produce growth and to get out of the recession. Even if the dollars go abroad, they are not destroyed and will be recycled into the US system at the most efficient point.

    Protectionism protects inefficiencies in the system and waste that credit.

  2. 2 Ramesh
    February 3, 2009 at 14:15

    Definitely wrong. It increases the cost of production and makes the manufacturers uncompetitive in industries like automobiles.

  3. February 3, 2009 at 14:19

    It’s just normal that Obama should satisfy and protect the interests of the American people before that of the wider world. Remember those who voted him into office?
    He who pays the piper, dictates the tune…

  4. 4 Michel Norman
    February 3, 2009 at 14:33

    When the dust has settled, the real problem for the west will be clearly seen to be the massive exporting of manufacturing jobs to China, service call center jobs to India and the importing of cheaper foreign labor to fill menial positions. Whilst this was possibly good for the white collars, it was a disaster for the blue collar workers, with the result that many of them lost their jobs, could no longer pay their mortgages and the result was the sub-prime crisis which was the catalyst for the collapse of this unsustainable state of affairs.

    If we accept the arguement that this crisis is a crisis caused by lack of confidence, how much confidence can any worker have if they live in fear of Wall Street/ London finding a cheaper source of labor in some distant corner of the world?

  5. 5 Kelsie
    February 3, 2009 at 14:33

    There are a couple of issues I would raise about American protectionism on a mostly-personal level…

    1. Mr Obama promised to inaugurate a renewed era of American global leadership, pledging to treat allies–particularly Britain and Canada–with a reinvigorated respect. Supporting this colossal economic slap-to-the-face–especially with regard to Ottawa, where politics have been on a knife’s edge since late November–is, by definition, a default on that promise.

    2. The United States cannot, all by itself, lift its own economy out of recession and the present malaise without the assistance and cooperation of the global community–it simply is not that powerful. It casts a decisively negative pallor over any attempts to cooperate when Washington begins to sacrifice the good of the world’s economies as a whole for its own gain (and, perhaps, inroads into the über-patriot voting base).

    The debate over employment and the potential “unofficial strikes” in Lincolnshire is similar in some respects, although it is almost universally agreed that Mr Brown’s pledge of “British jobs for British workers” was a remarkably foolish gaffe. Like the American Congress, UK companies must be mindful of the heavily-globalised nature of the economy–nothing is to be gained by erecting siege works and paper walls…

  6. 6 Kevin in Mountain View, Ca
    February 3, 2009 at 14:41

    I can understand people’s plight with the idea of the US government trying to add restrictions on free trade, but seriously, this is a stimulus package and it’s meant to stimulate our economy. If private companies get their raw materials abroad because it’s cheaper or higher quality, they should do that and the government should let them. The fact of the matter is, a company serves private investors and has no other metrics for success than profits and and perhaps ethics (hopefully both). The US federal government is bound to serve a constituency and that constituency benefits if that money helps US companies and creates more jobs for Americans. This isn’t the end of free trade or even a sign of instability of free trade, but merely a government in a desperate time trying to justify a huge deficit to its people and trying to maximize the effectiveness of its expenditures.

  7. 7 Chad From Virginia
    February 3, 2009 at 14:42

    I would not suggest that protectionism is not; it simply is not the best policy for sustained economic growth in a globalized society.

    There is a reasonable concern about the deteriorating manufacturing capacity in the United States, but the protectionism doesn’t do anything but increase prices at this point.

    I only advocate for protectionism to shore up infant industries. You need to allow your budding steel industry to survive in the midst of strong competition so you help it along by setting up tariffs so it can compete. Hopefully this is a temporary measure and you get rid of it as soon as possible.

    Any other form of protectionism only works to increase prices. So while you may be able to retain employment with protectionist policies, your purchasing power is diminished. Also instead of seeking out your comparative advantage and developing a sustainable alternative industry, you continue to fight and compete in a market that you cannot truly compete in. Worst of all, because you’re falsely being propped up, you’re not likely to innovate in order to better compete with your global competition, which makes you a weaker firm in the long run.

    For instance, the presence of the foreign automakers has demonstrated to the Big Three that they need to produce a better product if they want to retain their market share and so they’re now hustling to do that. Would they have made the same changes if they didn’t have Honda and Toyota snapping up all their market share?

  8. February 3, 2009 at 14:45

    Rebecca, I don’t think there is anything wrong with protectionism. It is all about Self-Preservation. As the law of nature says, self-preservation comes first. For us in Africa, our governments are very mean to us. That is why they dont even allocate bill for special projects meant to improve the lives of their citizens and for certain developments. They will prefer to enrich themselves or to pour in foreign expertriates to the detriment of the masses.

    Let the USA keep it up. Self-preservation is the first law of nature.

    Mohammed Kondawa, Monrovia Liberia

  9. February 3, 2009 at 14:51

    Nothing is wrong with protectionism. It protects countries from the scheming and manipulations of international financiers, who want to create a one-world government and one-world currency both of which they would control.

  10. February 3, 2009 at 15:00

    Protectionism kills quality and marketability pure and simple. Let’s say a country like Russia makes their own auto. In order to encourage their own industry they put large tariffs to discourage outsiders from exporting Honda, Toyota, and Fords into Russia.

    For a while Russians buy Vulga cars. They are always breaking down, get horrible gas mileage, and in all manners and ways prove to be a horrible idea.

    Sooner or later the Russian People will pay the tariffs and somehow manage to get a Honda. It is one thing to be patriotic, but quite another to be totally stupid, and forced to buy an inferior product due to the mentality of buy Russian First.

    Hense Protectionism is in fact bad for where ever it is attempted.

    troop…….Oregon Coast

  11. February 3, 2009 at 15:01

    Unless we find better energy sources, it is greener to buy local. The nature of the global economy should not be used as an excuse to bust unions and sidestep workplace protections. We need healthy protection strategies for the unique products coming from small farms. The US forced anti-protections measures on the EU in the early days and now get to be on the receiving end of the ire. World economics as an extreme capitalist sport is a disaster.

  12. 12 Roy, Washington DC
    February 3, 2009 at 15:15

    Protectionism nullifies the benefits afforded by a free market. It promotes mediocrity, drives prices up, and stifles product improvement by diverting money away from where it can be best used. Plus, as we’re seeing with the EU threatening to go to the WTO, it doesn’t make for good foreign relations. There may be short term gains from it, but in the long term, it does more harm than good.

  13. 13 Steve in Boston
    February 3, 2009 at 15:18

    Is protectionism wrong? Let me put it this way: if my family and I are starving to death, is it wrong for me to work to feed my family rather than your family?

    The fact of the matter is, the whole world is not my family, and the less I have, the less you are likely to get from me. If you subscribe to the theory of evolution, that is exactly how we as human beings came to be what we are today–through survival of the fittest. Everybody, brace yourself for evolution!

    Enough of philosophy and biology. Obama was elected with heavy support from trade unions. He’s not about to export jobs when unemployment is shooting towards 10%. No way, no how, uh uh.

    By the way, how about Britain uses some bailout money to hire the unemployed to shovel snow? I can personally attest that it’s good exercise. How’s that global warming so far?

  14. 14 ZINGMAN PONZING
    February 3, 2009 at 15:21

    Nothing is wrong with protectionism! Instincts of survival is in every setting that wants to survive especially in hard times. Protectionism only need to observe limits and to be fair and non-coveteous.

  15. February 3, 2009 at 15:23

    “Protectionism” is a marketing term. IT is used by those who leach off the American economy. You can threaten going to the WTO if you are a consumer nation. It might have an impact. But nobody “out consumes” the US. That is the reason we are in this mess. Protectionism is also a blatant display of economic ignorance. It is equivalent to scorning people for not maxing out their credit cards instead of just spending the cash they have on hand.

    @ Ramesh,
    Your statement displays the misunderstandings of the depth of how economics works. People do not care if they have to pay for hire manufacturing costs as long as they have a decent wage to pay them. Buying something that can be produced locally from half way around the world means somebody in the local economy is not working. Remove all concepts of currency and think about paying for things in “labor hours” and you will see the US is not far off from anybody else.

    The world is in this mess because the US didn’t employ “protectionism” concepts. For anybody who has traveled by air, they will tell you. “In case of an emergency, please put your oxygen mask on first before helping others. This is to ensure that you do not pass out while trying to help them.”

  16. February 3, 2009 at 15:27

    EU is good for three million jobs, according to London. Why should 200 men put those jobs at risk?

  17. 17 David Ancel (Oregon)
    February 3, 2009 at 15:28

    I think I’ve pointed this out in previous posts, but…

    Hard times naturally foster xenophobia and nationalism. The pattern has been oft-repeated throughout history. (eg 1930’s Germany) But Comparative advantage is valid. A group of people have a resource or talent that is demanded, and can provide that resource/talent better than other groups. (BTW Comparative advantage can trump xenophobia/nationalism as with the USA/Saudi relationship post 9/11.)

    The problem is, protectionism costs the consumer more. And while you may keep your job, there is no guarantee that pay will keep up with higher prices. In fact there is good reason to expect that it (ie protectionism)will NOT result in a net higher (or even static) standard of living. Because, businesses/corporation will continue to seek an advantage domestically–probably at your expense.

    The real answer is the opposite of protectionism/xenophobia. People worldwide must coalesce around the idea that living wages are a cost of doing business and demand that economic justice not be reduced to advantage. The power to do this can only derive from unity and solidarity. Once ALL workers are paid a fair wage, outsourcing/insourcing will stop–all other factors being equal.

  18. February 3, 2009 at 15:29

    Protectionism? Why not? It might introduce a bit of diversify, innovation and quality in products. Personally I am fed up with just about everything being made in China.
    Even the organic apple juice in my local supermarket is imported from China.
    It’s not as if we can’t grow apples in Europe.
    It might also encourage producers to stop outsourcing vital production jobs and closing down ‘local’ factories.
    It might also be a way of ending the quite appalling working conditions in the ‘sweat shop’ countries that flood our shelves with unrealistically cheap products.
    Perhaps ‘selective protectionism’ might be worth a try.

  19. 19 ZINGMAN PONZING
    February 3, 2009 at 15:38

    Nothing is wrong with protectionism! Instincts of survival is in every setting that wants to survive especially in hard times. Protectionism only need to observe limits and to be fair and non-coveteous.

  20. 20 Steve
    February 3, 2009 at 15:39

    There was an uproar last year about some fueling tanker contract for the airforce going to airbus over boeing. There was a lot of money involved with that one as well.

  21. 21 Donnamarie in Switzerland
    February 3, 2009 at 15:40

    Protectionism isn’t good, but neither is unfettered Globalism. It’s ridiculous to import Italian and Portuguese workers into Britain when there are British workers who can do the jobs, for example.

    The stimulus package before the U.S. Congress is intended to stimulate the American economy using American taxpayers’ money; this is not the same thing as imposing import tariffs and quotas or paying subsidies. I think the American taxpayer has a right to direct his tax dollars to American goods that are used as part of this specific Congressional bill.

    Let’s be very careful of the facts and details before we brand things “Protectionist,” and before we brand Protectionism as a bad thing.

  22. 22 Peter
    February 3, 2009 at 15:50

    Its ok , if we want to shut our self out from the rest of the world. Its good ,the US will buy oil at a higher price because they don’s buy from others.

  23. February 3, 2009 at 15:50

    I am not in favour of protectionism but neither about how free market liberalization has ruined the world (as if it wasn´t bad enough already). Globalization should have brought economic growth and stability for developed and, specially, developing countries. Pair with it should have meant social development and the reduction of poverty. However, it has been the opposite. There are more poor people in the world, even in developed nations, including the U.S. For sure it didn´t work, so I understand why people cry for protectionism.

  24. 24 Steve
    February 3, 2009 at 15:54

    Also, if we are trying to say economic protectionism is a bad thing, while we say globalism is a good thing, then how do we reconcile that with cultural protectionism, where say in countries like France they mandate how much of what is on TV or the radio has to be of French content, same with Quebec, in order to limit the influence of the english language, despite ignoring the fact that 50% of english vocabulary comes from French due to that little invasion in 1066.

  25. February 3, 2009 at 16:02

    I do not understand how people can say that “protectionism costs more”. If I work for a steel mill making $20 an hour. A loaf of bread at the market cost me $2. That equals a 1/10th hour cost for bread. Now if I loose my job because everybody is buying foreign steel, I am then making $0 per hour. bread is now exponential. This not only cost me money, but the store owner and bread maker that are no longer making money off of my bread purchase also hurt. Often to offset these cost, The manufacturer and store owner will have to buy cheaper and lower quality goods produced over seas to re-coupe the lost income. And the spiral down continues.

    Economics impacts an economy like a rock in a pond. Labor is a national resource, much like oil. If we declare that we want to be “energy independent” people cheer us on. The same people cheer the idea of digging for more oil. But if we say we want to be “labor independent”. All the sudden people start crying “foul”.

  26. 26 John inGermany
    February 3, 2009 at 16:14

    Nothing, and it should have been the way before Globalisation.

    Woops what a statement, it may even provoke an answer.

    John in Germany.

  27. 27 Roberto
    February 3, 2009 at 16:25

    RE “” But what’s so wrong with protectionism ? “”
    ——————————————————————————————————————————–

    ————– Protectionism just a bone tossed out by politicians to the unwashed electorate that votes them into office.

    It’s global corporate fraud that is being protected. WHYS misreported the amount Wall Street paid out in bonuses to sell low quality adulterated triple grade A securities to investors. It was 20 BILLION this year alone, not 20 million as reported.

    Currently the money flowing in cascades into 3rd world development. The most fraud can be committed in countries of lax regulations that already has 6 of the ten wealthiest billionaires.

    3rd world Billionaires sprouting like mushrooms after a spring rain they are.

  28. February 3, 2009 at 16:34

    One more point i might have made on the “local jobs” post, but would like to have it stated again in hopes that it gets brought up.

    Why is it reprehensible to hire 8 yr olds to work 14 hour days 7 days a week in a factory that spills and billows polution, and they sent toxic chemical painted toys to our children, and where the owners send money to our enemies. If that factory existed here in the us there would be large protest in both Washington and in front of the factory. People would get arrested for child abuse, and the product would be boycotted.

    Yet wecan go down to a local Wal-Mart and buy the stuff up like it is candy with out batting an eye?

  29. 29 Bert
    February 3, 2009 at 16:37

    Protectionism is the opposite of free trade. Unless it is used only in the short term, to get over the hump, it will work to increase the difference between developed and developing economies.

    Globalization is, in fact, the great equalizer. Of course, globalization will tend to throttle back the developed economies while it infuses cash into the developing ones. How else would it work? And isn’t this what the “progressives” (so called) have always wanted? Isn’t this better in the long run than charities called foreign aid?

    For that matter, exactly the same happens with immigrant labor. Billions of dollars flow out of the US economy every year. I think they reported yesterday, $25B go to Mexico annually this way.

    The only amazing aspect of all of this is how suddenly the more negative side-effects of globalization have made themselves felt.

  30. 30 gary
    February 3, 2009 at 16:52

    Protectionism is as harmful as globalism. They name the extremes of healthy international interaction. Put another way, retention of essential skills (all of them; not just the glamorous ones) is just as essential to the health of a society as is importation of new skills, ideas and people.
    g

  31. 31 Bert
    February 3, 2009 at 16:53

    If those in developed nations don’t like to see companies doing business overseas pollute the environment or employ child labor, then I suppose those companies can be made to respect certain minimum standards in their overseas plants.

    But to imply that typical third world practices should be cause enough to push developed economies into isolationism seems totally contrary to the progressive agenda, to me. There’s a glaring logical disconnect here.

  32. February 3, 2009 at 17:03

    US corporations have thrived by selling their goods abroad. Look Pepsi, Coke, Microsoft, Apple. How would you like it if other countries say, hey no Pepsi here buy only local Cola.

    Americans cant have it both ways. Globalise when it suits them and Protect themselves when they r in the dumps.

  33. 33 Ramesh
    February 3, 2009 at 17:06

    @Dwight
    I was actually referring to cases like GM Vs Toyota. Because of protectionism and bailout money rules, GM would be required to buy raw materials at higher cost where as Toyota can buy from anywhere. That definitely puts GM in a disadvantage. It is simple common sense. No deep knowledge of economics is required!!

  34. February 3, 2009 at 17:08

    When it comes to a situation like it is today, nothing!!. Considering nearly 80% of goods sold in stores and shops are made in China and the rate of exchange highly benefits China, so that many home industries have moved to China to manufacture because of the very low costs in producing goods, then it is high time something was done about it.

  35. February 3, 2009 at 17:11

    @Bert,

    The problem is that if you force these countries to conform to minimum standards, that would be labeled “protectionism”. It is also an impossible pipe dream that the US could have such access to places like China and India to enforce such standards. If we forced other countries to conform to our moral standards (wage, environmental, safety, child labor laws, and human rights) they wouldn’t be able to compete with the US. That is the point. Ever stop to think why it is worth shipping 3 tons of steel 12,000 miles around the world? how is it possible to do that and compete with somebody who buys and manufactures locally? Labor would have equalized itself years ago if that was the only thing holding us back.

    If you don’t believe a 3 rd world country had that kind of push, then what would happen if a US company was painting its toys with lead based paint, spiking it baby formula with toxins, and poisoning the pets of the country? We didn’t even miss a beat when China did that. I think imports sped up actually.

  36. 36 Steve
    February 3, 2009 at 17:12

    @ Mumbai

    Pepsi and coke are made locally, by local bottlers. It isn’t made in the US and then shipped to foreign countries. Apple is made in China. Even the American beers you get in Europe are made locally in Europe, whereas when I get a Heineken here, it was made in the Netherlands.

  37. 37 Kelsie
    February 3, 2009 at 17:12

    @Gary:
    Well put.

  38. 38 Matt from Oregon
    February 3, 2009 at 17:17

    It is AMERICANS who have to pay for this stimulus bill, therefore AMERICAN companies should be the primary beneficiaries.

  39. 39 Mark
    February 3, 2009 at 17:22

    I think that other countries in the E.C does the same.

  40. 40 David In Oregon
    February 3, 2009 at 17:30

    Buy American what, exactly…?..we’ve allowed so much of our major manufacturing capacity to be taken up by other countries that we can barely darn our own socks.

    We long for the 1950s & ’60s when we could rely on Africa or South America for cheap resources provided by slave-wage labor, which we could then pay ourselves a living wage to turn into spiffy products to sell to ourselves and subsequently toss in a landfill. Our crops were planted and harvested by an economically invisible serf class which appeared each season to do the work and was then driven back into the shadows before it could impose on our social services.

    It was fun while it lasted, but it could not be sustained. The Third World basket of cheap labor & natural resources no longer exists, and the American economy continues to try to understand it’s health in terms of “growth” when growth is not infinitely sustainable in a finite environment.

  41. 41 Bert
    February 3, 2009 at 17:31

    I agree, Dwight, that forcing our own standards on imported goods also works to equalize everything. And that is, in fact, what we do. Do you really think that our regs on lead content in toys DO NOT APPLY to imported products? Not true. They do apply.

    Of course, eventually, labor and manufacturing costs will rise in those economies, as they have done in Japan since WWII for instance, and those economies will be on an even plane with those in developed countries.

    Isn’t that the whole point of globalization? To reach that goal?

    My puzzlement comes when those who tout themselves as being “progressive” fail to support this sequence of events. How is the developing world ever going to get out of grinding poverty if the developed nations close their doors? And how can those developing economies grow without simultaneously putting the brakes on the developed ones?

    I realize that this isn’t completely a zero-sum game. I’m suggesting that in the short term, it will appear close to zero sum.

  42. February 3, 2009 at 17:34

    I find it utterly insulting that the governments of Canada and the UK are protesting a ‘buy American’ policy inside of American policy! This is fiscal protectionism and I suspect that my government would have no problem with similar policy inside of Canadian or British stimulus packages. This policy will directly benefit the struggling American manufacturing sector and in turn will help the rest of the world later. America is widely considered the ‘global power’ and with that comes certain responsibilities. Does it not make sense for America to get back on her feet? If America does not recover from this world crisis then is it fair too say that the rest of the world will perhaps suffer longer? The first and foremost responsibility of a government is to protect it’s citizens and as such American policy should first and foremost protect Americans which is what this bill seeks to do. I think that the governments of Canada and the UK should follow suit and help their own citizens instead of protesting legit American policy.

  43. February 3, 2009 at 17:36

    Ramesh,

    Common sense only works in economics if you apply it to the outer most layer of the onion. However, forcing steel to be bought from inside the economy from where the came from does a few things. 1) it employs tax paying citizens. 2) It reduces the profitability of the foreign companies, making them weaker. 3) It inspires local wealth circulation that will increase the development of small business and improve the tax base.

    Now the company that Toyota is getting money from is going to be loosing revenue and will be forced to increase its costs in order to recoup the lost revenue.

    People who are unemployed can’t buy anything and can’t pay taxes. To me that is common sense.

  44. 44 vijay
    February 3, 2009 at 17:41

    What’s wrong with protectionism?

    Recession or no recession the EU and the USA have subsidies and protectionist policies on agriculture ,they dump cheap commodities(wheat ,rice and cotton etc..) on to the world market which causes real hardship to third world farmers .

    Agriculture is not a major contributer to GDP in developed countries but does play a major role in the economy of developing nations( eg. India ,60% of the workforce are employed in agriculture)

  45. 45 Des Currie
    February 3, 2009 at 17:45

    It is not ecofriendly.
    Des Currie

  46. 46 Tony from Singapura
    February 3, 2009 at 17:51

    There is no such thing as 100% free & open market – there will always be some degree of protectionism through various legislation and administrative policy.

    An example.. In the USA, professionals from outside USA are remunerated at the same level as US citizens of similar skill/qualification.

    This is in contrast to SE Asia countries where foreign workers tend to be paid what they are prepared to work for and usually this is less than what the locals expect for the same job. Effectivly there is less competition

    So even though the world has been moving towards globalization and free markets, that concept is just a goal that will never ever bee fully reached.

    Therefor my point would be that perhaps some backtracking of protection levels is necessary for the short term while countries adjust to the new economic regime. Its amatter of balance.

  47. 47 Alan
    February 3, 2009 at 17:54

    The free market is a myth. ALL countries have protected there own select areas of trade with tariffs and other barriers, the oil market is openly manipulated by OPEC. There is no reason the US should not protect it’s markets.

  48. 48 jade
    February 3, 2009 at 17:56

    people who travel abroad like to buy things where they are cheaper. same thing here. the major goal of a business is still to make profit. how to cut labor cost so that the goods are cheap enough for consumers? to put in another way, how to cut the living cost so that people can live with lower labor wages?

    seems that there are many, many additional costs added to each product. how much do basic, essential things really cost for an average human being?

    e.g., always amased by the high health care costs. what goes into the bill? malpractise-insurance, drugs?

  49. 49 Tom D Ford
    February 3, 2009 at 17:57

    “Do you think protectionism is wrong ?”

    The WTO is protectionist of businesses and is anti-workers rights, so the real question is:

    “Do you think protectionism is wrong for workers but right for businesses?

  50. 50 Upal Chatterji
    February 3, 2009 at 18:01

    Protectionism is a natural human tendency of withdrawal, a defence mechanism, a self instinct of an animal when attacked or under threat. This is a very primeval instinct. We tend to build walls and seclude ourselves and hope that the outside forces pass us by. We then open our doors when the coast is clear. This is not only stupid and jingoistic but also a narrow minded mindset pandering to our small mind. The Creator has not created us to to build walls. If we SHARE what we have, there is ample to go around, The very country which with 5% of the world’s population hogs 50% of the world’s natural resources has through their GREED got the entire world into a MESS and then wants to close their doors and ‘ not be apologetic for their lifestyle’? Did this country not enjoy the fruits of cheap good made in countries with minimum labour wages one tenth of its norm?And wage war to locate non existent weapons of mass destruction in a country with rich Oil reserves? This is a lesson for the so called ‘developed’ countries to look beyond their selfish interests and think honestly global. It is one world and we are one family, let us not create divisions, least of all now, in these difficult times

  51. 51 Justin from Iowa
    February 3, 2009 at 18:03

    If the US doesn’t seek to protect some of its jobs and industries, and the US economy goes under because of that, its going to take you all with it (you all being everyone else in the world). That’s not saying the US needs to completely isolate itself from the world, but it does need to become at least somewhat more self sufficient.

    More isolationist economic policies would probably coincide with more isolationist foreign policy choices as well, which is what most of the world seems to want.

  52. 52 Tom D Ford
    February 3, 2009 at 18:06

    The WTO has taken away the rights of citizens to make their own decisions about how to run their own nations.

    The WTO is a de Facto World Government run by un-elected wealthy and powerful people who impose their own rules on people without giving people their human rights.

  53. February 3, 2009 at 18:06

    My comment would be way too long for here so you can read it on my blog here

    I see where he is going with the idea. But what I find so odd is that the EU is showing that they need the US market – if that is the case then why didn’t the EU, and others, forcefully, invest in the very market that they wish to have access to?

    Obama and his team are not saying that the American market is closed, just those sections where American tax payer money is going – as I said on my blog – to keep US dollars in the US which leads to US jobs which then leads to US workers with the money to spend and use on other good brought in from overseas countries.

    Smacks of hypocrisy from the EU to me. The EU wants a slice of the stimulus pie by selling goods to the US that the US tax payers is being asked to fork out for.

    The EU, and the rest of the world, should be investing in their own manufacturing communities ready for the up-turn – not criticising the US for building schools and roads using American workers, factories and materials.

  54. 54 Tom D Ford
    February 3, 2009 at 18:09

    The “Free Market” is not free for workers, it is only free for Global Businesses to trample on workers human rights.

  55. 55 Brad
    February 3, 2009 at 18:10

    The globalists trumpet the benefits of free trade to all and that it will increase the standard of living of the undeveloped countries and mean a fall in proces for goods and services in the Western countries. The Western worlds’ standard of living for the general populace is built on a certain level of profit by companies which enables them tpo pay higher wages than in undeveloped places. By reducing that standard of living that profit can be redirected into other pockets. Free Trade does not mean bringing the third world up to Western standards rather it means the drop of Western standards to meet the production costs of cheap labour in the undeveloped world. I for one do not want to lower my standard of living to that of a Chinese or other ‘sweat shop’

  56. 56 Rene C. Moya
    February 3, 2009 at 18:14

    I think the issue here is more to do with the signal it sends to the outside world, more than the singular impact of the provisions in the House Bill.

    There is a genuine economic, and perhaps socioeconomic, case for protectionist policies.

    But that clashes with a larger political conundrum: how do individual, rich nations ratchet up their protectionist policies without eliciting similar responses in other countries?

    There is very little wiggle room. The European Union and Canada rightly express scepticism here because it may yet herald a slew of protectionist policies that–in aggregate–benefit no one. What would stop US trade partners from responding, with disastrous consequences?

    There’s also a subtext we’re all missing. The United States has already pulled a lot of stunts with steel before. About 6 years ago, the European Union took the US to the WTO over tariffs placed on foreign steel. The EU won and slapped sanctions upon US products in response. President Bush eventually–rightly–backed down.

    That was during the best of times…imagine what could happen in these politically charged times?

  57. February 3, 2009 at 18:14

    Globally, you can say, “rich countries should keep at a minimum protectionism.” In the local economy we call that “welfare”.

  58. 58 Chad From Virginia
    February 3, 2009 at 18:16

    The free market is not to blame for the recession. As much as I love World Have Your Say, it seems as though there is a strong push to find a scapegoat for the global recession. There is no single party to hold responsible for this crisis. Consumers, bankers, regulators and businesspeople all have a role in the breakdown we’re dealing with now. If you’re so desperate to find a culprit, look to the left and to the right. Then look in the mirror.

  59. February 3, 2009 at 18:16

    Every country around the world expects the US to come in and bail them out any time they have a problem. The US can’t do this if they have no economic growth. Does the world really want to have to become self-sufficient and stop asking for help?

  60. 60 Steve
    February 3, 2009 at 18:17

    We don’t have the money either, this stimulus money is going ot be borrowed, and our grandchildren will have to pay it off.

  61. 61 Bert
    February 3, 2009 at 18:17

    As a long time skeptic of Globalization and the “Theoretical Goals” of betterment that it promises, I knew that this question would only arise when big countries are concerned. The Bank Bailout in theory is already against the whole Trade “Rules . So, What’s New? Does Canada and The Europeans expect the tax-payers of the U.S.A. to spend “their” tax dollars to rebuild their economy by Bypassing US producers and import materials from overseas? Just to comply with some RULE ?
    Get Real Guys!!
    The whole system need to change.

    Motto: My survival before yours!

  62. 62 Tom D Ford
    February 3, 2009 at 18:23

    We’re hearing Conservative Revisionist History now, about the Great Depression.

    They revise history to fit their Conservative Ideology instead of revising their Ideology to fit the facts of history.

    Let’s remind ourselves that Conservatism caused the Great Depression and also the Re-Depression that we are in now.

  63. 63 JohnJay
    February 3, 2009 at 18:23

    Protectionism is not the real issue – the permanent lack of jobs that pay a living wage is the real issue.

    Remember the ‘jobless’ recovery? The well off got richer and the rest got more ‘service sector’, low pay jobs. Are seatshop jobs really the best we can hope for poor in devleoping countries?

    Many corporations are really anti-market entreprises that are only concerned with profit for the very few stakeholders and upper managment – hence we will continue to see massive layoffs as they continue to put profits before people.

    See: The End of Work by Jeremy Rifkin

  64. 64 jade
    February 3, 2009 at 18:24

    the western standard of living is part of the “buy now, earn & pay later” lifestyle. what went wrong with the subprime disaster? many don’t learn personal financial management until they are in debt.

  65. 65 Bert
    February 3, 2009 at 18:25

    Protectionism must be left as an option, especiallly for poor countries and extreme circumstances like what we are seeing now.
    W.T.O rules never catered for this

  66. 66 Tom D Ford
    February 3, 2009 at 18:26

    Evan Alan Greenspan has admitted that the Free Market caused our current Re-Depression.

  67. 67 Maccus Germanis
    February 3, 2009 at 18:26

    A hand full of figures are offered in this article. More importantly, it maps logically the unintended consequences of “protected” wages.
    http://online.wsj.com/article/SB123353276749137485.html

    Protectionism is an artificial rigidity to an otherwise fluid market. It only makes the inevitable fall, such as we’ve recently seen from “protected” and guaranteed access to debt.

  68. 68 vijay
    February 3, 2009 at 18:27

    whats-wrong-with-protectionism

    Due to restrictive and protectionist economic policies India stagnated for 43 years after independence (their share of world trade declined by 75%)

    India only started to progress once there was partial economic deregulation in 1991.

    GATT and the WTO will insure that people around the world will reap the benefits of Free Trade ,more choice of goods and services at a better price ,economic democracy.

    As GW Bush put it free markets,free trade ,free people

  69. 69 Chad From Virginia
    February 3, 2009 at 18:29

    This notion that establishing protectionism in America raises wages elsewhere is false. What would truly happen is that the demand for those goods whose prices are artificially inflated would substantially decrease, there would be no increase in domestic wages, despite the relative increase in demand for domestically produced goods so your real income decreases. Meanwhile, those in developing economies see that factory shut down because demand for that good has fallen through the floor. Suddenly theres no more lifting of all boats.

  70. 70 vijay
    February 3, 2009 at 18:31

    If you want to see what “British Jobs for British People “means look at the example of English cricket over the last thirty years ,the game has stagnated ,whereas English football ,by opening up to foreign players and owners has grown and is now the number one football league in the world.

    Unless the whole system of county cricket is revamped to include a lot more foreign players(ie the best players in the world)it will be marginalised by the IPL and ICL in India.

  71. February 3, 2009 at 18:34

    Protectionism is an artificial rigidity to an otherwise fluid market.

    What fluid market?

    If the market had been truly fluid all the banks who brought this about would now be history!

    The real protectionism we are seeing is the protection of banks and banking interests – they should have been allowed to fail and a new banking system set up from the ashes.

    What must happen now is those who brought about this failure should be made to pay the taxation on it – that is the investers and stock holders should be taxed at 100% of profit until the bail-outs are paid back, in full with the interest set at 6%.

  72. February 3, 2009 at 18:34

    No country can exist for any significant length of time with either a trade surplus or deficit. Either way presents a shift of resources either in or out of the country which by definition has a finite boundary. This includes “knowledge based” economies, which imply that one group of people is consistently smarter than another. Some trade is needed both for efficiency and movement of raw materials to where they are needed.

    Given the potential for disruption in supply and the variable costs of transportation, ALL countries should maintain at least a baseline level of production of all needed goods within their native countries, ESPECIALLY for food products. We all prosper when we are ALL as self sufficient as possible.

    Please note that this philosophy will also help keep rich countries from foisting off their dirtiest jobs on other countries.

  73. 73 Chad From Virginia
    February 3, 2009 at 18:37

    If you consider the nature of the crisis, raising the prices of goods artificially with tariffs will only exacerbate the problems of consumer confidence that are contributing to the crisis. People will buy fewer goods and continue to buy fewer goods, especially as their incomes remain stagnant.

  74. February 3, 2009 at 18:38

    The debate so far on the blog is maddeningly simplistic!

    When it’s not outright xenophobia, it’s outright dumb.

    We KNOW there is a problem with the US, and that problem is America’s inability to compete with outside manufacturers.

    This is no one’s fault but America’s, and it’s foolish to prevent better-quality products from reaching American consumers as a result.

    The problem has been the government’s piss-poor attempts to keep America competitive. The US could have done so by encouraging investment in manufacturing, or by pouring money into R&D in those sectors, or by better education/TARGETED education.

    The free-marketers on the RIGHT failed to keep up because they were ideologically wedded to unimpeded markets at all costs. And damn the socioeconomic chaos that would result from the failure of entire industries. Why should they pay to re-educate the population?

    International trade IN AND OF ITSELF is not the problem; it’s the lack of standards and accountability, and a merciless indifference to displaced workers in the United States.

  75. 75 AZ
    February 3, 2009 at 18:40

    Hi,

    In UK some products do not say where they are manufactured.

    I was looking for Cable – wiring recently. It didn’t say where it was manufactured. I asked the store and they weren’t able to say. All it had was complies with British Standard Number !

    So even if we want to buy British. It would be difficult.

    Some products say made in Europe !

    Some products may be assembled in UK . Whereas majority of parts contained in it may be from abroad.

    Thanks

  76. 76 Nathan J Smith from Denver
    February 3, 2009 at 18:41

    If The U.S creates jobs for its people, it will strengthen the U.S economy which would allow the U.S consumer to by more foreign goods.

  77. 77 Vtan
    February 3, 2009 at 18:42

    OMG! I didn’t know that there was such a clause in the bailout package. I always had Obama in a pedestal – that is until now!

    Some one please explain to the white house that USA is not going to win this game of global economy with its door shut and not participating in the game at all. Any country which is not participating cannot win!! Is that too hard to understand???

  78. February 3, 2009 at 18:42

    The problem has been the government’s piss-poor attempts to keep America competitive. The US could have done so by encouraging investment in manufacturing, or by pouring money into R&D in those sectors, or by better education/TARGETED education.

    Perfect 1.

    The free-marketers on the RIGHT failed to keep up because they were ideologically wedded to unimpeded markets at all costs. And damn the socioeconomic chaos that would result from the failure of entire industries. Why should they pay to re-educate the population?

    International trade IN AND OF ITSELF is not the problem; it’s the lack of standards and accountability, and a merciless indifference to displaced workers in the United States.

    Almost perfect 2 – you should have included all industiral nations not just the US.

  79. February 3, 2009 at 18:46

    So, should the US taxes pay for the countries of the EU’s national health care policies when we don’t have one ourselves? ultimately that is what happen when we use stimulus tax money over to European industries that pay their local economies taxes.

  80. 80 Chad From Virginia
    February 3, 2009 at 18:47

    Think about this for a moment: ALL the economies in the world are sagging right now. Shouldn’t we be considering a more inclusive collaborative approach to determining a strategy for rebounding? We’re sinking together so perhaps we also float together…

  81. 81 kate
    February 3, 2009 at 18:51

    To my mind, protectionism is setting rules that effect the trade of an entire commodity. Setting rules for specific contracts would not qualify unless it was an across the board change.

  82. 82 Art from Michigan
    February 3, 2009 at 18:53

    Come on, guys lets move on from this. There’s no discussion, everyone’s known free trade works since Adam Smith. The “buy American” provision is pure populist ignorance. Why should we be bailing out more companies that can’t compete?

  83. February 3, 2009 at 18:54

    I’ve just texted the following:

    The issue has become muddled. Protectionism is bad insofar as inferior, (alas) US-made steel is protected against better-quality European, Canadian and Japanese steel.

    The commentators keep banging on about China–but China isn’t the issue! Is it any wonder the EU and Canada have been the most vocal opponents of the provisions?

    Again, not to go on ad nauseum: protectionism of any product produced by FIRST WORLD nations (Japan, the EU, Canada) is not only detrimental economically, but also unwise from the consumer’s point of view. These economies produce top-quality products with top-quality standards for their workers and their industries. If America cannot compete against those economies, then that is America’s problem.

    That says nothing about third world countries; that is an altogether-different debate.

    And I agree: the understandable, primeval desire to protect one’s self from trouble is what is at the heart of protectionism. It does NOT, however, make it a reasonable response when (a) global trade hasn’t ‘attacked’ America, (b) the present crisis has largely been America’s fault to begin with, and (c) the potential for protectionism to get out of hand would be disastrous to ALL economies. Some Americans say this would help get America sorted out just fine, before it could ‘rejoin’ the global economy. But: come again? This will only exacerbate problems for all, and that means the US would suffer as a result.

  84. 84 Maccus Germanis
    February 3, 2009 at 18:54

    What qualifies as domestic sourced? Will the representatives from the American rust-belt be content to see the jobs go to non-union employees of a German steel company that operates in the US? Or is this a union rescue device?

  85. 85 oscar carballo
    February 3, 2009 at 18:56

    Nowadays, there are many trade agreements, which appeared mainly in the 90’s, times of economic boom. They would have never been made in harsh times. Now it’s a dilemma, and if the U.S. does change its economics policies in foreign trade, there would be plenty of reactions and arguments against the trade agreements in several countries, considering that there have been always some rejections to globalisation, which governments had decided to ignore because of compromises and fear of economic sanctions for cancelling those agreements. Not even changes have been easily established, because they thinks that those trade agreements should continue with the same text that they were written, though conditions have changed.

  86. 86 Maccus Germanis
    February 3, 2009 at 18:57

    If the market had been truly fluid all the banks who brought this about would now be history!

    Indeed. The bailouts are reprehensible.

  87. 87 AZ
    February 3, 2009 at 18:57

    Hi,

    Most of the British manufacturing has been decimated, so if there are no products in Britain what is one to do.

    Worst still , the pound has been devalued steeply, so most of the products that we buy from abroad will be more expensive.

    As for local produce. Large amount of food products come from abroad.

    In the long term perhaps the products could be manufactured in UK. The only problem is high cost of commodities coming from abroad due to devaluation.. High overhead costs. High property prices – rents. High Energy bills. Higher wages. So what will be the final selling price of products.

    Thanks

  88. 88 David Ancel (Oregon)
    February 3, 2009 at 18:57

    I think the definition of ‘protectionism’ needs to be more clearly defined. The BBC in its opening blurb defined protectionism more in anti-foreign trade anti-foreign worker terms. On the other hand, protectionism more properly defined as regulation of foreign trade is perfectly valid. In the last eight years, we have had the most open market in the world, as the steel magnate pointed out. Unrestricted free trade IE pure capitalism is as bad an idea as pure communism. The reason China has done so well is that it has had a highly regulated capitalist economy, and had as its primary trading partner for the last eight years, a virtually unregulated free-trade partner. It was called predatory pricing by the steel guy, but in reality China has made a concerted effort to regulate trade in its own self interest–which is a lesson the US might do well to emulate.

    If our priority is to raise wages around the world, in order to level the playing field, that can be achieved with tariffs. The wild card is that China owns a huge part of our debt, so that it may no longer even be possible to take a hard line on tariffs in that respect.

  89. February 3, 2009 at 18:57

    Shouldn’t we be considering a more inclusive collaborative approach to determining a strategy for rebounding?

    Sure – and the easiest way is to re-finance the toxic mortgages to turn them into non-toxic mortgages.

    How?

    The US current interest rate is 0% – re-finance those mortgages at a fixed rate for 5 years at 4%. In the re-finance package the payments should be comprised of 1/3 capital payment and 2/3rd’s interest payment with an endowment policy taken out to cover both capital payment and interest payments when the mortgage is final – say 20 years.

    Once you have the housing market under control you can start to loan mortgages, apply credit because the loans are being paid back rather than defaulted on. This means you have a fluid cash flow and not billions of dollars stuck in foreclosed housing that cannot be sold for love nor money.

    It won’t be profitable for the banks, but it will mean that cash can begin to flow again.

  90. 90 Jeevandra Siavarajah
    February 3, 2009 at 18:58

    Haven’t we learned anything from the Great Depression, one of the worst yet memorable moment for world economy and has been a textbook case for why protectionism doesn’t work. The Great Depression was aggravated by the protectionism. Frantic attempts to shore up the economies of individual nations through protectionist policies, such as the 1930 U.S. Smoot-Hawley Tariff Act and retaliatory tariffs in other countries, exacerbated the collapse in global trade. Protectionism only protects weak industry which would only in the long run be more detrimental for the country and world economy.

  91. 91 AZ
    February 3, 2009 at 18:59

    ===============================

    Hi,

    Most of the British manufacturing has been decimated, so if there are no products in Britain what is one to do.

    Worst still , the pound has been devalued steeply, so most of the products that we buy from abroad will be more expensive.

    As for local produce. Large amount of food products come from abroad.

    In the long term perhaps the products could be manufactured in UK. The only problem is high cost of commodities coming from abroad due to devaluation.. High overhead costs. High property prices – rents. High Energy bills. Higher wages. So what will be the final selling price of products.

    Thanks

    Kind regards

    **************************************************888888888

  92. February 3, 2009 at 19:01

    There is nothing wrong with protectionism, beside that’s what China, India and so many other countries have been doing for so long.

    US should consider looking at their house before helping out any other countries.

  93. 93 Michelle from Jamaica
    February 3, 2009 at 19:02

    The question on the American people’s mind is “can we afford protectionism?’. with limited competion comes high prices. Not sure if this is the best way to go.

  94. 94 Ajibade
    February 3, 2009 at 19:03

    it’s not right, there ain’t no competition in it.

  95. 95 Robert
    February 3, 2009 at 19:07

    Wouldn’t any other country regard protectionism as fair game when their economy and people are facing a crisis? I’d be hard-pressed to think that China wouldn’t protect themselves at the drop of a hat.

    A related word about the N.A.F.T.A.. This has been devastating to millions of Americans. I say we export the politicians, the lobbyists and the companies they lobbied for who voted that self serving idea in. The money we can save from that act would save us billions!

    Nearly all of corporate America and our elected officials nauseate me.

  96. February 3, 2009 at 19:09

    Vjay,

    outrageose home prices, energy prices, and educational cost. Families that need two people working to survive. Credit card debt, car loans, and student loans are all requirements to make it in the US as a result of “free trade”. All of these things rob Americans of their “freedom”. How is promting such irresponsible pollicies helping to ensure “free people”. Ask the million plus people who lost their jobs last month if they feel, “free”. Thanks GW.

  97. 97 John in Ontario, California
    February 3, 2009 at 19:14

    I believe that we have spread ourselves out too much and now have become very dependent on different geographic areas and the specialty products they provide. Shipping produce and gains from other country’s to California, who can produce its own, is a waste of gas. but when you say “Grow it here”, your told your a “protectionist”. Self self sufficiency is not protectionism. and having to moves goods form all over the world to get then to the consumer is sustainable. I believe more then half of the goods consumed should be local and not dependent on shipping (gas & political) and in the States, at least where I shop 90% of all the goods are not produced in the States.

    Americas economic future is in trouble, but that is because of short sited people trying to be all global… they didn’t keep any thing here at home… now we can not open factory’s to employ people, cause they were shut down and sold for scrap 30 years ago.

    In the states we need to have an economic shift, and it will probably take years, but that is what we are in the beginning stages of… Globalism was a good idea, but it was not approached correctly and business and governments here did not protect us. Now it need to be scaled back to a sustainable give and take between all countries.

  98. 98 lasco
    February 3, 2009 at 19:17

    Every one agrees that free trade is good for the global economy but yet no one think about the global economy when their job is at risk. Basic instinct will call for greater protection of local jobs and industries. In Africa we have been calling for greater protection of our industries because they are nascent and not capable of handling competition. Today in the US they are calling for protection to ensure that the impact of a stimulus will be felt here in America. In the UK there are strikes because an Italian firm which won a contract is not hiring any british worker to carry out the job in the UK. All these examples point toward one common element: Finding a middle ground.
    You can not go all the way to free trade and you can not totally shut yourself down, finding the balance is the key and those who think because a leader has taken the position that free trade is good for the economy will always push for free trade is really not sensible the complexity of life on this planet.

  99. February 3, 2009 at 19:20

    Protectionism will mean the end of many economic agreements between different countries as it will mean the end of many economic blocs like the EU, G8 and ASEAN.

    What is needed is economic restructuring that can allow national economies to grow and to expand beyond the borders. The biggest losers of protectionism will be the emerging economies, like those of India and China, whose success largely depend on exports.

    It’s no good news for anyone that the world economy should shrink as it will put backward many poor and developing countries as it will lead a fall in the living standard of the citizens of developed country. There should be mechanism to revive the national economy without jeopardizing the existing international trade agreements.

  100. 100 rayy
    February 3, 2009 at 19:25

    Well you can call it what you want, but if American taxpayers are footing the bill for this stimulus package, why shouldn’t we use American-made steel? Is it only “protectionism” because we are talking about the US? Why aren’t the subsidies for Airbus considered protectionism?

    I agree that TARIFFS would be wrong and counterproductive. But when you are talking about a huge government spending program, why shouldn’t they be able to use American steel? Politically, it would be really tough to sell the idea of buying Chinese.

  101. February 3, 2009 at 19:27

    @ Rene C. Moya,

    First, as far as steel go, there was regulation that had to be imposed against Japan in the late 80’s and early 90’s to keep them from “dumping junk steel”. Inferior quality steel that could be sold at a huge price reduction.

    Again, it is easy to say that we compete with developed countries at equal wage footing, but it is a blinded approach to economics to think so. In countries where healthcare, educational, and even some energy cost are supplemented by the government where the US worker has to provide for those expenses using his own labor hours, an imbalance in exists.

    The amount of labor hours required to produce a product is a constant and required. The amount of labor hours needed for quality assurance and R&D is not. Often to compete with the lowered labor costs of external economies, the US local economy producers must reduce quality assurance, R&D, or both to remain price competitive. Then everybody says, “look the US product is inferior.” This is a no win situation for the US.

  102. 102 Jonathan (sunny San Francisco)
    February 3, 2009 at 19:49

    Protectionism impoverishes everyone; it did when Adam Smith explained it all more than 200 years ago, and it does now.

  103. 103 Ramesh
    February 3, 2009 at 19:57

    Dwight
    My point is Toyota is not taking the bailout money and would not be needed to buy local materials. Where as GM is getting bailout money and would be required to be less flexible in seeking low cost materials that are not necessarily of low quality. Already GM has problems like low labor productivity, inefficient cars etc. If you add material costs as another problem, GM can not be any more competitive in the market. If GM can improve its all round efficiency by buying foreign materials, outsourcing etc., that would do good for it stay competitive. May be some jobs may be lost in the short term, but for long term survival, that would be the right approach. Remember, America was never a protectionist country and the current crisis is not because it doesn’t have protectionism in place. Under the current circumstances, survival is crucial for companies like GM than creating a few more jobs for local people.

  104. 104 Jean-Louis
    February 3, 2009 at 20:34

    Hello,

    I personally think thats it’s normal to council people to buy in their own country to give work to they neighbour. But it mustn’t be imposed. It’s an opportunity to reduce pollution by long travel of materials and to help small structure who have often a better quality of product who are in danger to dissapear.

    Kind regards

  105. 105 Eamonn
    February 3, 2009 at 20:38

    Will the US government be able to protect its industries forever? Eventually international competition will be brought to bear on what were sheltered US companies. Because they will have been so shielded they’ll be uncompetitive and will then have a harder landing. The government continuously propping up such companies will only add to public debt until until finally they can’t afford to do so anymore. What’s happening at the moment in the world economy is a reality check for those who’ve been living beyond their means. If anyone is serious about sharing the world’s wealth more equitably then this is the opportunity to make it happen: those who have all the wealth and power should let go and adjust their lifestyles and salary expectations so those less well off can have something too. No bank or business should be too important to fail: perhaps they may learn from their mistakes if they have to endure the consequences of them.

  106. 106 Jim Newman
    February 3, 2009 at 21:11

    Hello again
    A nation must produce the things that it needs. If it produces a surplus then it can sell this surplus on the world market or exchange for things that it desires but does not produce. If a nation produces things solely for the world market without taking into account it’s own needs or even neglecting it’s own needs then this nation lays itself open to corruption and becomes a banana republic.
    In my opinion all the nations of the world have become banana republics and hav’nt a clue what has happened. Whether the nations are protectionist or not is irrelevant.
    Jim

  107. 107 cecilia ellis
    February 3, 2009 at 21:20

    President Obama’s present stimulus package contains directives re steel and ore which must be made in the U.S. If this type of “protectionism” is limited to the stimulus package, then it may not have impact long-term. But Canadians are nervous as, in the way of any long-term ideas of maintaining a protectionist agenda in the States, lies the North American Free Trade Agreement the terms of which will be ignored or trashed in the wake of such an attitude. We are rightly worried.

    In itself, I imagine protectionism can only harm the country that promotes it vs the idea of free trade.

  108. 108 Peter Hilden
    February 3, 2009 at 21:55

    Protectionism would be a disaster for countries which depend heavily on exports, such as Germany, where I live. As other contributors have pointed out it would reduce competition within the protected country resulting in higher prices and lower quality. But a free market can only function between roughly equal partners. How can the US, the EU or other developed countries compete fairly with countries such as China, in which labour protection laws are not enforced, where the environment is polluted with impunity in the quest for profit, and intellectual property is copied on a massive scale?

    Protectionism? Yes, against countries that abuse their work forces and their natural resources, and free trade between those countries/groupings such as the US, EU, Canada, Australia, New Zealand, etc. which espouse and put into practice basic human rights, labour protection laws, the protection of intellectual property rights and the environment. This market would be large enough to ensure competition and the maintenance of quality and would give back people living in these countries their livelihood.

  109. 109 Cajetan Iwunze (UK)
    February 3, 2009 at 21:56

    Protectionism is a disease that destroys the fabric of any economy. It is like a house built on sand which has no strong foundation. Let us not forget that protectionism is an economic act that is false and artificial which will eventually cave in and collapse. If we looked at history, in the early 1970s when Britain was being strangled by protectionists, the Labour government spent billions of pounds to keep people working, doing what they were not qualified to do. At the end, all we got was inefficiency and spiral debt. It is okay for Democrats to walk down the route of protectionism because they are new brand of communism. Still, it is too dangerous a road to walk on. There is only one economic paradigm and that is free market. The reason why it will withstand the test of time is because it is not manmade but an invisible force that will make use all better of.

  110. February 3, 2009 at 22:06

    It is to late for protectionism now. We should have done it in the 1970s.

  111. 111 ibiok in houston
    February 3, 2009 at 23:33

    well its nothing new and should not be a problem. America used to be self sufficient till they moved all the jobs abroad.i wonder why the office of the president has not been outsourced too.well there has to be some level of compromise on all sides,i.e both the government and the companies have to come to a meeting point so that those jobs could be brought back home to boost the economy.the government should resist the greedy urge to task them too much.

  112. 112 oscar
    February 3, 2009 at 23:48

    Proteccion for smaller businesses so they can expand and employ more people, yes. For large businesses, such as steelmaking: not necessarily so.
    The heavily subsidised US agribusiness, through the vehicle of the NAFTA fre-trade agreement, has been flooding Mexico for years with cheap staple foods, such as maize, displacing the local producers from the internal market, and causing many Mexican agricultors to abandon their farms and join the illegal inmigration into the US, crossing on foot the unforgiving Sonoran desert in the hope to earn enough here, doing menial jobs, to support their families and avoid direst poverty.
    One should be very thoughtful of possible unintended consecuences, and distrust pro-free trade “solutions” based on the idea that: (1) unfettered, globalized trade and production are unstopable historical currents, and (2) that they are invariably great boons to Mankind, while that protectionism is fundamentally a very bad thing.

  113. 113 Michael dS
    February 3, 2009 at 23:54

    Just heard a Ghanian and a Brit on the World Service arguing the case for buying locally. The Brit in particular cited data on the adverse balance of payments of the UK and stated how imports had to be reduced.

    To the Brit, I would like to ask if he thought it would be helpful if the Ghanian bought British? To the Ghanian, similarly, would it help Ghana if the British bough Ghanian?

    Looking at just imports is just looking at one side of the coin. Increasing exports helps too and that won’t happen if everyone thinks and buys “local”.

  114. 114 T Appleyard (New Zealand)
    February 4, 2009 at 00:16

    I was taught in ‘politics 101’ that in return for the right to govern, governments had the duty of protecting the lives, liberties and property of their citizens – if that means protecting peoples homes and jobs then so be it.

  115. 115 John Wolfe, Moab, Utah
    February 4, 2009 at 01:54

    In regards to protectionism I think there are two facts that bare mentioning:

    1) all countries must protect their own citizens and their own economic interests first and formost — their government has a legal obligation to do so;

    2)only after a country gets its individual (economic)house in order will it be once again able to extend favourable trade to those less capable.

    note please: I cannot lend you a dollar untill I have a surplus of dollars.

  116. 116 Pauline Green
    February 4, 2009 at 01:59

    Buy American, I heard a member of the Spainish govenment telling the Spainish to buy spainish. Why do EU want to take jobs from the US Work force? Like there are doing to the British work force? I don’t heard Americans begging for some of the stimulus package in the EU counties do you?

  117. February 4, 2009 at 02:49

    The market should remain free. If I want a new car and Japan builds a better, cheaper vehicle than American then I should be able to buy the one of my choice. It’s up to American manufacturers to stay competitive.

    Rick

  118. February 4, 2009 at 05:01

    Either you believe in a free economy or you do not. Making rules like buy American only distorts the economy and really helps no one. The problem we have was caused by greedy bankers and businessmen not by honest firms who happen to be located in other places in the world. You should buy American if it is the best quality at the best price. If Americans, and I am one, wish to live higher on the hog than the rest of the world then they need to figure out how to earn that position not get it through loop holes and special rules.

  119. 119 Duncan
    February 4, 2009 at 07:32

    I agree with Donnamarie from Switzerland, unfettered globalization is wrong – it is a question of degree. There should be a competitive level playing field; China and India have grown economically by exporting to the west goods that are made cheaply under working conditions that we no longer tolerate. Is that a good thing? As for protecting jobs at home, I have worked outside my home country (England) most of my life – however, I have always understood that if a local peson can do the job they will be given preference. No problem with that!

  120. 120 DavidC
    February 4, 2009 at 07:44

    Just heard a programme on the BBC World Service about this. The guy from http://www.buybritish.com says he buys British but the website is hosted in the US. He should host it in the UK. Hypocrite.

  121. 121 jfleming
    February 4, 2009 at 10:18

    Buy British – slogan in the food shop, tractor symbol indicates it was grown here or raised here. Is this protectionist or loyalty? I see no objection to Obama requiring steel to be manufactured in Arkansas. Petty issues about cheese imports to New York hide a more important issue. Nothing wrong with anti-globalism

  122. 122 steve
    February 4, 2009 at 12:32

    @ DavidC

    When I visited Australia in 2003, I would go to grocery stores, and there was this local brand that advertised it was local, and that you should buy it instead of Kraft, since Kraft is American. I can’t imagine seeing product marketing like that in the US, on the label.

  123. 123 Ricardo
    February 4, 2009 at 13:22

    Protectionism is meant to protect the nation that is resorting to that means. As long as there are more domestic buyers than foreign buyers of ones goods – fine. Having made this evaluation, isn´t protectionism a means of self defense for an economy under attack? It may be shortsighted in the long run, but effective in the short term. If you argue that every country has a right to self defense regardless of the costs to others ( here we are speaking merely of economic casualties in contrast to precious human lives), then one cannot condemn such a measure without being a hypocrite.

  124. February 4, 2009 at 13:24

    Ramesh,

    You are buying into the “chicken over the egg” rational. The fact is that GM and the like have had to cut R&D and Quality assurance levels and demand more out of their labor force to compete with low wage, safety, and environmental cost. Not to mention high healthcare and pension costs. Here in the state it is no secret that what is hurting the US auto and steel industries is that as much as 40% of their payroll goes to people who have retired and are no longer productive. There are so many levels at which the playing field is not fair because the base of the operation is located external to the US local economy. If anything your case is for more “protectionism” saying that further policies should made to make it more competitive for Toyota. I agree.

    There is a great myth that has been propagated about the productivity of the American auto worker. There isn’t one shred of evidence to substantiate it. As a matter of fact, the US worker in general works more days, has less sick and vacations days, and works more hours in a week then any of it counterparts. You can be more productive if you don’t mind loosing a worker every now and then.

  125. February 4, 2009 at 13:33

    A future question I would love to see WHYS address is yet another of “definition”. What constitutes “protectionism”. Is offering national healthcare, School and college subsidies, energy cost subsidies, or any other government sponsored program that helps a family of one economy get a need that has to be paid for out of the salary of the family of another economy, “protectionism”? Often the argument is made that the US worker demands too high of wages from its employers and that is why they can’t compete. I contest that even at their high wages, they still don’t get as much as many of the developed economies. The instant a country offers these needs to its citizens and the employer doesn’t have to compensate for them, that should get labeled “protectionism”.

  126. February 4, 2009 at 13:37

    Protectionism is another word for government interference in the free market. America might as well practice protectionism by doing the work of undocumented workers and those who workd abroad. I buy a product because I like it and is useful.

  127. 127 kpelly hezekiah
    February 4, 2009 at 15:11

    yesterday, it was ‘buy british goods. today its america steel for america construction. I hope my continent africa is watching and listening with keen interest especially our political and economic leaders. Let the music play on.

  128. 128 ~Dennis Junior~
    February 5, 2009 at 04:46

    I think that protectionism policies are not a very good thing in the long-term…Because countries that are not able to free-trade, will file complaints with the International Agencies e.g. World Trade Organisation regarding this issue..And, the arbitration will occurred and consequences are going to be tougher..Than not have protectionism tendencies on the goods….

    ~Dennis Junior~

  129. 129 William
    February 5, 2009 at 07:46

    Indeed what is wrong with protectionism in the long term? Nothing. However in the short term it would send the world’s businesses into a terminal tail spin. Bought in incrementally, we might be able to create a society where the only imports needed are those that cannot be home grown. To my mind that would be Utopia. If some countries are then by default slower in growing and developing, well that would be the natural order of things.

  130. 130 William Flynn
    February 5, 2009 at 07:54

    Amazing! Everyone blames the Global moguls for the current crisis, yet baulk at the obvious answer. Governments and businesses spend millions convincing their own people to buy locally produced goods to support the local market, yet the only real answer is Protectionism.

  131. 131 steve
    February 5, 2009 at 12:54

    Let’s not ignore certain things. An example of protectionism not being used was when the US military decided to replace the Colt 1911 hangun with the Beretta 9mm. Even though the guns are to be built in the US, under license, it’s still an Italian corporation, an inferior weapon (9mm vs. 45 caliber), the profits will be going to an Italian company versus an American one. so you can complain about US using US steel for the spending bill, but many US contracts are with foreign corporations even though they had US alternatives they could have picked.

    Many police forces use the Glock or some form of H&K weapons, neither of which are US made. So we wear when Protectionism is potentially used, but never really when it isn’t.

  132. February 5, 2009 at 13:07

    Hello, 1)this is American Tax Payer money, not Corporation Money? 2)Since when American give a…to those North Canadians? 3)USA Chambers of Commerce should drops its USA name to United Nation Chambers of Commerce? 4)You watch C-SPAN on telly. That was then, and here is now. You can’t compare the Past Great Depression to what is happening now. 5)Trade Wars already begun, after all who’s follow those WTO rules anymore. 6)Changing those “WORDS” Buy American 1ST don’t means a things, there are always way to go about it. 7) You watch the Commons on Telly “British Jobs for British Workers” Mr Brown said 1 thing to Mr Wen and said another things to her own people 8)Workers Unions are Democrats Party strong allied. Obama know that. Well, this is what American are saying these days

  133. 133 Eric
    February 6, 2009 at 10:01

    I am afraid there is nothing much left to protect in Ruined Britain.
    Our Politicians have sold us all out to this EU.
    We are being decimated and impoverished.
    We were promised a referendum..
    We were lied to..

  134. 134 Don Lax Detroit, MICH
    February 7, 2009 at 08:09

    Just as biological Darwinism is an intellectually unrobust notion so is the social Darwinism to which it inevitably gives rise. “Competition” is lauded as the magic mantra, the buzzword which is supposed to explain all. It indeed does so quite admirably in terms of suiting the interests of the multi-national exploiters who slop their jowls at the trough as the working classes foolishly buy into their explanation of why they should have to race to the bottom. The
    Maquilladores manufacturing facilities which were plopped down right across the Mexican border are a good example of that. Maybe those people can eak out an existence living in flimsy tin huts in slum labor camps which sprang up like so many permanent refugee enclaves right in the shadow of the smokestacks but mid-westerner Americans who have to live in zero degree weather would probably prefer to be able to afford somewhat better insulated and therefore more expensive housing so they won’t freeze to death.

  135. 135 Emile Barre
    February 7, 2009 at 12:37

    Protectionism is an admission of multilateral trading failure. It is also self-defeating and leads to trade wars which themselves, as history proves, lead to even worse things. The current crisis is global and the solution can only be global cooperation and not based on ‘beggar my neighbour’.

  136. 136 Guinnis
    September 28, 2009 at 05:27

    There is nothing wrong with Protectionism, the US economy has suffered greatly at the cost of free trade. Both blue collar and low end white collar jobs have left the country in mass with nothing returned but cheap products. The US economy is going down the toilet at the expense of unfair trade practices of India and China. The low cost of living and sub par working standards create an environment where US workers cannot compete. For example a factory worker loses their job paying $20 plus an hour to an overseas worker. They cant find another job because factory work is largely gone in this country so they work at Wallmart and take a job paying $10 an hour, their purchasing power has greatly decreased. To maintain a similar lifestyle that person must now buy cheaper foreign made products. By buying those products they are continuing the cycle causing the next worker to lose their high paying factory job. yes factory jobs are relatively low skill but they are the bread and butter of the middle class worker in most of the country.

    Help protect your neighbors job buy American made products. Hopefully they will do they same and help protect yours.

    • 137 Eamonn
      September 28, 2009 at 14:00

      It’s all a vicious cycle… wages are lower in the developing world because we’ve got more of the world’s wealth. Are we willing to share some of our piece of the pie (where our piece is almost the whole thing)? Does life have to be one big smash-and-grab where everyone takes as much as they can get for themselves. Something has failed and the solution is not to prop that something up. As well as being an opportunity to develop greener policies for the future, this failure of the world’s economy should be where we start to hand the wealth over slowly in an agreed, orderly fashion. Otherwise how are these things resolved?

  137. 138 Cajetan Iwunze
    September 28, 2009 at 09:00

    It is too late for that now. If we really want to protect our jobs and the economy, we would not have fold our hands, closed our eyes and export the technology of mass destruction to criminal governments because of our greed for cheap labour. Our greediness has left us and our future generation in the hand mad governments. We can only talk tough against free market and floating the idea of protectionism for short term gain but indirectly, aiding Iran to destroy Israel. I think Britain, America and the rest of the G8 are not doing anything to protect their citizens from the doom that is to come. If we really want to resonate the spirit of protectionism then military action must be taken against Iran to ensure the freedom of the free citizen of the globe.


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