16 Mar Protectionism is scaring me
In last week’s issue of Time Magazine, Joe Klein responded to the present disastrous direction the protectionists are trying to lead the global economy in. While accurately acknowledging it has traditionally been the Republicans who have been the larger protectors of economic freedom, he also accurately pointed out that Bill Clinton was, ironically, a wonderful free trader! Mr. Klein’s article demonstrated in its background the depressing reality that the current protectionist climate is as non-partisan as it gets, and for a religious free trader like me who also is proud as can be to be a Republican, that truly breaks my heart.
But in the midst of this current climate, when folks among the worst on all of Capitol Hill (Charles Schumer) partner with a Bible Belt “conservative” (Lindsay Graham) to actually suggest taxing all Chinese imports a 27% fee; when the evil of the evil (Hilary Clinton, Harry Reid) walk arm-in-arm when some of the most reliable names in Washington (Bill Young, Dennis Hastert) on this idiotic blocking of the port deal; when even professing conservative columnists around the country join those as asinine as Paul Krugman, for pete’s sake, in crying about the “evil outsourcing of jobs”; in the midst of all this, look at what Joe Klein actually dared to suggest as the alternative solution:
“But there may be—dare I say it?—a third way available, a path between market worship and protectionism. Stiglitz and other moderate Democratic intellectuals believe that the heart of “economic security” as a political strategy should be a drastically revised social safety net for American workers. By offering universal health insurance and government-subsidized pension reform, Washington would relieve U.S. companies of those two burdens. Also helpful would be wage insurance, which would soften the blow for laid-off workers forced to take lower-paying jobs, and a turbo-charged government effort to promote new industries (like alternative fuels) to provide high-paying jobs. These ideas would cost money and demand higher taxes, which horrifies the economic-freedom crowd.”
If this does not scare the “bleep” out of those of you who realize how (a) Stupid, and (b) Immoral, protectionism is (in thought and practice), I do not know what will. This issue is so toxic, and the implications so real, that one of the “premier” editorialists in the nation is actually suggesting that the solution may be in universal health care, government subsidies, tax-paid wage insurance, and “turbo-charged government efforts”. Ouch!
I plead with those free market thinkers on the Hill to wake up. We need these anti-market, anti-trade dinosaurs to be robbed of any influence or power. The ramifications are huge. A more exhaustive treatise on the real life situations happening right now regarding this very issue (the assault on the oil companies, the tax of a “windfall profit” tax, the stifling of trade with other nations, the threatening of nations who generously peg their currency to our greenback, the demonization of companies who lower labor costs by utilizing overseas talent, etc.). For now, I will just simply say that the problems are real, they are not talked about enough, and this is one of the very few issues in our nation that I actually believe represent bipartisan dimentia.
Indeed, I will conclude with the words a far superior weekly news magazine:
“The idea that it is somehow in the French national interest that a utility should not become owned by an Italian firm, or in the American interest that ports should be kept out of Arab hands, is one to gladden the heart of Karl Marx. His view was that ownership, and hence the power to exploit, was all; hence socialist governments’ fateful desire to nationalize the ‘commanding heights’ of their economies. Does Britain suffer because French firms (e.g. EDF and Suez) already own large British electricity and water utilities? No: they are subject to exactly the same regulations and labor laws as any other utilities. Would the management of six American ports give DP World control over security there? No: as with any port or airport, it is controlled by the government. The laws of the land and the reach of state and federal agencies are unaffected.
What is affected, however, is the ability of governments and of individual politicians to use patronage at favored firms to help their friends, to get favors in return, to support special interests such as trade unions, and, in broad political terms, to paint themselves as patriots. Consumers are not helped, living standards do not rise, the nation as a whole is not better off. But the political elite may well be.”
– The Economist