Trade wars of the future

A tip of the hat to Don Boudreaux at Cafe Hayek.

http://www.washingtonpost.com/wp-dyn/content/article/2009/06/29/AR2009062902307.html

As the US economy weakens, the unemployment rate rises and congress places more tax burdens on US businesses, there will be pressure to protect workers from imported goods. Plus the unions are going to demand protection from Obama, since they helped him get elected -- just saving GM is not near enough.

The rationalization for protection will most likely be an emotional appeal like all the big item changes are -- save the sick and poor, save the American worker who has given his/her greatest efforts to this country, save the planet for our children -- always remember the children!

I can see this emotional appeal being marketed in the media with personal stories of tragedy, of families thrown from their homes because jobs were lost, of individuals with hard hats and sad faces standing next to an empty factory, stories of executives escaping with millions who are now traveling the world and living it up. Nationalism will likely come into play -- the American way of life, traditional jobs victimized by globalization, foreign countries paying pennies for slave labor.

If the government goes this route and starts a trade war, we could be in for a long, hard depression. The present situation begs for economic freedom, lower taxes on business, less strangling regulation and global free trade, not war. I know that hardly anyone anymore believes that a strong economy, unburdened by taxes on businesses, capital gains and income, will create enough economic activity so that government revenue will increase rather than decrease, but it sure beats starting a trade war by circling the wagons. It's the difference of allowing the people of this country to go and make things happen and government trying to enforce safety even if it means stagnation and economic decline -- the difference between dynamic and static.

Comments

[Jay Chambers]

You know, with all the bullshit appeals to this and that victim group (or potential victim group), you have to wonder how long it's going to last in political competition to people whose lives have really been destroyed by Bush-Obama Big Government policies over (just to start...) the last 12 months alone.

That type of "for the children" idiocy worked when everyone was living the high life and people could happily and innocently vote in another $150 million school referendum every third year so the local teaching faculty could all get new catalacs, but now that total (U6) unemployment is 17% and climbing in this county, fewer people are buying the "woe is X group" when they can't get a job but hear every month that government wages and employment are spiking, all at the expense of their own well-being.

[Mike Farmer]

I'm hoping people are getting very, very sick of it. -- thanks.