Smoot-Hawley for our times
Trade barriers toughen with global slump
WASHINGTON - Only a few weeks after world leaders vowed at a Washington summit to reject trade protectionism and adhere to free-market principles as they combat the global financial crisis, a host of nations are already breaking that promise.
Moving to shield battered domestic manufacturers from foreign imports, Indonesia is slapping restrictions on at least 500 products this month, demanding special licenses and new fees on imports. Russia is hiking tariffs on imported cars, poultry and pork. France is launching a state fund to protect French companies from foreign takeovers. Officials in Argentina and Brazil are seeking to raise tariffs on products from imported wine and textiles to leather goods and peaches, according to the World Trade Organization.
The list of countries making access to their markets harder potentially includes the United States, where critics are calling the White House's $17.4 billion bailout of the U.S. auto industry an unfair government subsidy that would put foreign competitors at a disadvantage.
Comments (10)
Pat
Darn it, Mr. Tucker. You beat me to it. Hahaha.
But on a more serious note, this is hardly surprising. I was wondering when they were going to bring the protectionism out. My first impression was that it seems to be business as usual. After all, they were considering those measures when food prices were rising. I expect as things are worsening, they (read, governments) will bring out the big guns. And it will be ugly.
Published: December 22, 2008 9:47 AM
Matt R.
I guess history does repeat itself. Yikes!
Published: December 22, 2008 11:45 AM
J Cortez
Why is the public policy response to harsh economic downturns almost always the same?
It's like a textbook. If I were to publish such a book, I would call it, "How to make things worse."
Published: December 22, 2008 11:59 AM
David Spellman
It is amazing how many people in power are looking at this situation and divining that it truly is an historic occasion just like 1932--and saying that they are going to implement precisely the same program of action that FDR pursued!
Only this time they are promising to do an even better job. They are going to correct all the shortcomings of FDR and do what they think he should have done. That promises to create a depression that will dwarf the 30's and engulf the world in the greatest misery since the Black Plague!
And given that so many people feel that the Second World War was what really ended the Depression, we in fact do hear the distant drum beat of war beginning even now as the planners cast about for an opponent. I am betting my money on a war with China to cancel our enormous debt, but Russia and a conglomeration of Muslim opponents could be brought in to the fray.
History does repeat itself--especially when the people in charge are determined to repeat it!
Published: December 22, 2008 3:57 PM
Mechanized
It makes one wonder if individuals warning those against the current economic crisis aren't simply spinning ones wheels, for it appears humanity will tragically never learn from history regardless of the evidence.
Published: December 22, 2008 4:47 PM
chris
i love how the article starts off saying leaders in Washington toke a vow to stick to free market principals.
since when has anyone in Washington ever stuck to free market principals?
Published: December 22, 2008 5:28 PM
Pat
I guess people have forgotten to realize that we don't have something called the gold standard unlike say during the 1920s-1930s. And that is one difference I shall speak of. Any other difference is not worth mentioning.
Published: December 22, 2008 6:30 PM
Christopher Hightower
By the devaluation of our currency our government and the fed are helping to place protectionist tariffs on our products, as well. As the dollar goes down in value, the world's products go up in prices compared to the dollar, all the while our products go down in price compared to foreign markets. Therefore, our products would be more affordable for the world if they weren't "taxing" them. This in turns forces us, the American consumer, to buy at home; because the worlds products are becoming increasingly costly, due to loss of our purchasing power.
Published: December 22, 2008 7:52 PM
prettyskin
A Hoover implementation, Smoot-Hawley tariffs. This send unemployment into double digits. FDR made a bigger mess of an already big mess, bigger government.
Arianna Huffington, The Huffington Post, is selling to her advertisers the notion that anyone who continues to make the case that markets do best when left alone should be laughed off the political stage. She called it "discredited ideology." And, what is her basic premise? Clueless.
Obama has thus so far awaken the dead folks of Clinton era to help him with his clueless socialist plans. Is this the best we the people get from Ivy league graduates? The facts are clear on Ivy league grads who became president and their Ivy league cronies to serve in their cabinets. See if you can list them all.
Published: December 23, 2008 9:58 AM
Alex
People who argue against economic laws are like folks trying to argue against gravity.
People say they don't believe in the economic laws governing free markets (even though we haven't been close to one for 100 years) because they don't like the results. That's the same as someone choosing to not believe in gravity because they occasionally don't like the results, i.e. when the fall.
All the other times, we like the results of gravity. So it is the same with economic laws.
Published: December 23, 2008 12:12 PM