Posted on 02/01/2009 3:12:01 AM PST by TigerLikesRooster
In Davos, protectionism is a dirty word
The beggar-thy-neighbour phase has begun in earnest. "Buy American" legislation has advanced from a barely credible threat to imminent reality on Capitol Hill in just weeks.
By Ambrose Evans-Pritchard Last Updated: 11:31PM GMT 31 Jan 2009
The House has voted for a bill that prohibits the use of foreign steel in most infrastructure projects funded by Barack Obama's $820bn (£563bn) rescue package. The Senate is drawing up plans to widen that to all manufactured goods.
This is what happens when a country loses half a million jobs a month, and when the state becomes spender-of-last-resort. Taxpayers are tribal. They do not want precious stimulus to feed the foreigner.
Even so, this Dutch auction has the disorderly feel of the Smoot-Hawley Tariff debacle in 1930, though this time the collapse of commerce – if allowed to happen – will have very different consequences for the global balance of power.
Mr Obama can veto the law, should he wish to pick a fight with Capitol Hill from day one. The world watches and waits in horror, especially in Davos.
"Everybody here is talking about protectionism. There's not a prime minister present not talking about protectionism," said Peter Sutherland, former (GATT) trade chief and now chair of BP.
Days earlier, US Treasury chief Tim Geithner called China a "currency manipulator" – meaning that Beijing holds down the yuan to boost exports. The term is turbo-charged. It implies mandatory trade sanctions under US law.
(Excerpt) Read more at telegraph.co.uk ...
And almost everyone's taking a hit. That's why the experts call them "recessions."
For a long time factories supplied steady, well-paying work for a lot of people. Those days are pretty much over.
For a long time mid-level management provided steady, well-paying work for a lot of people. Those days are coming to an end.
What replaces those jobs is anyone’s guess.
> All of those have taken a major hit during the current recession.
Every one takes a major hit during a recession.
> And when is a “handy man” a six figure income.
A handy man that charges $55 per hour can make over $100,000. A handy man that becomes a general contractor can make significantly more than $100,000. Can every handy man charge $55 per hour or become a general contractor? No. But in a free society every handy man has that opportunity.
> C’mon, you just threw that in there to fill out the list, didn’t ya?
Actually, I could make the list much larger. Since you appear to be so fond of manufacturing lets talk about car, aircraft and military sectors. All of these will be harmed by an increased price on steel caused by protectionism.
> For a long time factories supplied steady, well-paying work for a lot of people. Those days are pretty much over.
That is definitely a true statement. You could make the same statement about agriculture.
The days of manufacturing are pretty much over no matter what you do. After labor costs in Asia go up to make large scale manufacturing there impractical, automation will take over.
I’ve never seen a handy man who charged $55 an hour. Frankly, a handy man who drove up in a Mercedes would scare me.
I recognize that a significant portion of America’s manufacturing base is gone and ain’t coming back.
As for “protectionism,” I don’t believe that’s what we’re talking about when we view recent events. I think we’re talking about the first stage of negotiations.
> I’ve never seen a handy man who charged $55 an hour. Frankly, a handy man who drove up in a Mercedes would scare me.
They don’t drive up in a Mercedes; they use vans just like every one else. It probably depends where you live. Sadly, in Hawaii $55 per hour is not terribly unusual.
> As for “protectionism,” I don’t believe that’s what we’re talking about when we view recent events. I think we’re talking about the first stage of negotiations.
Sorry, I am just reacting to the “stimulus” bill that, in addition to funding every pet Democratic cause, introduces “buy American” requirement on steel. Some how, I don’t think Obama will make friends with our allies as he starts a trade war.
There’s already a trade war going on, and we’re losing.
Cheap technical assistance is beamed in via satellite and high speed lines from Indian call centers.
The Chinese ignore our copyrights and flood the market with overly cheap stuff.
And clothing is made everywhere, but here.
> There’s already a trade war going on, and we’re losing.
I think your meaning of “trade war” is not the one commonly utilized. Further, I think your meaning of “losing” can be fairly described as Orwellian - we have benefited disproportionately from globalization.
> Cheap technical assistance is beamed in via satellite and high speed lines from Indian call centers.
> The Chinese ignore our copyrights and flood the market with overly cheap stuff.
> And clothing is made everywhere, but here.
We already established that US unemployment rate was less than 5% with all these imports (that by the way also raise the living standard of the American people). Why are you repeating a failed argument?
Putin has to be offed.
You’re right on that — I did not use the standard definition of “trade war.” What’s been happening has been more subtle.
I don’t know that we’ve benefited. If we trade good paying jobs for cheap goods, that’s not a benefit. Neither is it a benefit to trade very high end exports for manufacturing infrastructure.
I never believed the less than 5% unemployment. During the Clinton administration they started playing around with how unemployment is measured. Things like the birth/death model did not do anything to help the accuracy. The U-6 number seems to be more accurate.
> I don’t know that we’ve benefited. If we trade good paying jobs for cheap goods, that’s not a benefit.
How do you know what kind of jobs were created? Checking GDP, GNP, per capita stats all contradict your statement.
> I never believed the less than 5% unemployment.
Do you have any evidence to support these statements? Without data to back-up these assertions they are meaningless.
check out the U-6 numbers for the past couple of years. BLS keeps them on line. easily googled. The current number is something like 13%! However, read the definition of what the U-6 includes.
p.s.
Today looks like it’s going to be an extremely interesting day on Wall Street —
> check out the U-6 numbers for the past couple of years. BLS keeps them on line. easily googled.
No, I am not going to do your research for you. If you have the numbers, please post them with explanations.
I am sorry, but what does it explain? We have unemployment statistics for the past 3 months. We know what they are - they are up because of the recession. It also shows that there are long-term unemployed (a small percentage) and there are people working part time.
I am at the loss what point you are trying to make.
I’m not trying to convince you of anything. I think you should make your bets according to your own best judgment.
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