Smoot-Hawley tariffs worked so well in the 1930s, Democrats want to try them again now
Bloomberg has this news:
Congressional leaders, trying to quell a dispute over “Buy American” provisions in the stimulus package, are crafting a version that would apply only when they don’t violate trade rules, according to industry officials and a congressional aide. . . .
The House Ways and Means Committee’s Democratic staff and aides to Senate Majority Leader Harry Reid, a Nevada Democrat, are working out the language, said a lobbyist who was briefed on the measure. The people familiar with the talks declined to be identified because the talks are confidential. Ways and Means spokesman Matthew Beck didn’t have an immediate comment, and Reid spokesman Jim Manley didn’t return a telephone message.
Steel companies, such as U.S. Steel Corp. and Nucor Corp., and labor unions are pushing language in the stimulus plan to mandate that projects use American-made iron, steel and other manufactured goods in building projects such as roads, bridges and tunnels. . . .
“We’ve always said this doesn’t violate our trade laws,” said Robert Baugh, executive director of the Industrial Union Council at the AFL-CIO. “If they need to restate it, fine.”
Caterpillar, Microsoft
Some opponents of the Buy American plan, including Caterpillar Inc., Microsoft Corp. and the U.S. Chamber of Commerce, have said that even a version that doesn’t violate trade rules might spur protectionist measures around the world. . . .
Labels: protectionism
posted by John Lott at 11:12 PM
13 Comments:
The definition of insanity is doing the same thing over and over again and expecting different results...
Harry Reid, the House Majority leader who doesn't know the difference between "voluntary compliance" and "forced compliance", is heading up the team that is "working out the language".
This does not fill me with confidence. :-(
Wow, it just never stops on this blog. Microsoft is in trouble for laying off workers right now and replacing them with HB1 visa workers, paying them half the salary of the last workers. So we should take their word for it? You conservatives should try getting on the other side of this issue. Free market proponents are literally being run out of office in other parts of the world right now. The Buy American clause was one of the only good things about this Bill. At a time of record job loss screaming about free trade agreements is really turning a deaf ear to what the people really want. But what's new that's why the Right holds no branch of Government anymore. Don't you see know matter what fear tactics or misinformation is spread the Republican party will never sell the people again on Free Trade. You cannot ship jobs out and replace them with lower paying ones, all while the cost of living spikes. That is why we are here today. Let's see if you publish this comment. Honest debate on policies that have not worked and people are supposed to keep doing the SAME failed policies for ideology? It's like there is just a broken record from the right. Offering nothing new after a huge and overwhelming defeat? Good luck with that.
A couple of years ago, a US paper manufacturer launched a protest against Asian paper mills that were selling below cost in the US market. An investigation by the Commerce Dept. indicated that a couple of the Asian nations named were "dumping" paper on US markets, and could afford to do it because they were state-sponsored industries. Commerce slapped a tariff on paper imports from those nations.
The larger paper industry lodged a protest against that. They do business overseas, and regarded the tariff as 1) a bar to free trade; and 2) an invitation for retaliatory taxes on US goods sold overseas.
The printing industry and print buyers also complained -- they had lost a source of cheap paper.
After only a couple months, the tariff was repealed.
Protectionism never works. At best, it might extend the demise of companies and industries that are collapsing anyway under the weight of bad management and/or poor labor policies. It only prolongs the agony and forces consumers to buy probably poor quality products at unfair prices.
If you can buy goods of comparable quality from overseas sources, it's good to do so. It saves US consumers money that is better spent elsewhere and/or invested in stronger companies with a longer future. I'd hate to see the government supporting thousands of buggy-whip manufacturers and blacksmiths.
Please keep telling yourself it is perfectly ok and actually patriotic to have no manufacturing base in this country. It's not it actually is a national security threat. And no other country would even consider using non-citizens or international companies for their own infrastructure projects. Heard stories lately about all the difficulties in American businesses setting up shop in China or Japan? It is extremely difficult now because all these countries have supposed protectionism policies in place. We are being taken advantage of and the European Union screaming about the Buy American provision should be the proof we bolster everyone else's economy at the expense of our own economy and our fellow citizens. And we need both of these parties to quit selling out this country because they are running out of things and companies to export.
'the man with no name' is either out of his mind or knows zero about economics and history. Free trade has made society tremendously wealthier just because we let the entire world specialize in making goods and services. Thus instead of transacting with 300 million, we transact with more than ten times that. Could we survive without free trade? Of course. But first the standard of living would drop sharply. Second, the adjustment of capital--labor and machinery--to the lower standard of living would be tremendous. The current unemployment rate would look like peanuts, probably for many years. For democrats to be even considering this language in this 'stimulus bill' is extremely irresponsible, to put it mildly. I guess history teaches absolutely nothing to some people. Call them 'savages'.
Adam Smith-
I DO know my history. This country's prosperity and wealth was built on it's manufacturing prowess, which was the envy of the world. Fast forward to the signing of NAFTA and the great export of jobs and manufacturing base of this country and here we are today. Teetering on what some are calling "The Greater Depression". Already the rest of the world's media is referring to this as the American Depression. Donald Trump is even calling it a Depression now. So please spare me the condescending attitude. Lowered standard of living already happened, guess you didn't notice. The way they calculate the unemployment rate changed so comparing present data to past recessions is dubious at best. Given the same standards of calculations until 1994 the UE rate would stand now at 17.5%. There are plenty of studies confirming the drastic reduction of wages for the American worker in this country since we have been a part of the global free market economy. When you have a consumer based economy with people having less spending power, yet all business is charging more for it's goods and services that is where you run into problems. It has taken awhile but we are here now, a complete impasse. If you want to call me a savage for trying to put this countries best long term interests first that's fine. I can say you ignore hard evidence contradicting most of your statements. What does that make you a fool?
To 'the man with no name'. Blaming the blog itself does nothing to solve the problem.
"Free market proponents are literally being run out of office in other parts of the world right now." Ok, so if this be what is occuring, why not posit the truth of it? Bring forth facts that can be verified to support your viewpoint.
Yes, free markets are being ran out of other countries right now. As they have been for years. Be so kind as to know why, and you may discover that governments do so simply to control. Not to expand personal rights, wealth, or thinking. After all, to do the aforementioned, would be to threaten their own existence.
Also, I must note that you, Dear Sir, come here in fear. I say fear because you lack the intestinal fortitude to display your true name. Do you truly lack the guts to stand behind your statement?
"Don't you see know matter what fear tactics or misinformation is spread the Republican party will never sell the people again on Free Trade."
It is you Sir, that spreads disinformation. The above quote is proof of that. Free trade sells itself, when it is free of the shackles that liberals such as yourself bind it with.
Last, but not least, it is the administration of JFK that passed the law that makes it possible for U.S. companies to move production overseas profitable.
Reality Check:
I normally don't agree with protectionism, but it did work with Harley Davidson in the 1980's, although the company had to make a lot changes as well, and they seem to be doing ok now. The problem with protectionism is that you end up with inferior products due to lack of competition. Look at Detroit. THe problem is free trade hasn't been 360˚ for the United States.
Martin G. Schalz -
I did not blame the blog. I expressed my opinion. And I get sick of the word protectionism because IMHO it's misleading.
"Free market proponents are literally being run out of office in other parts of the world right now." Ok, so if this be what is occuring, why not posit the truth of it? Bring forth facts that can be verified to support your viewpoint.
Read about Iceland or Argentina? Difference in those countries is the population understands what those policies are all about and unlike you claim actually they do not sell themselves. In fact it is the opposite.
You also claim that I am a liberal when I am not. My family are diehard GOP and my grandfather even served in my state's legislature. But myself, I have had to leave the party, largely based on this issue. But you are debating theories when there is a full blown crisis at hand.
Free Trade has not worked to our advantage and it has gotten so bad that they now classify fast food jobs as manufacturing. I am an American first and I see my friends and neighbors in dire straits right now. And like I stated previously, the "Buy American" provisions were one of the only parts of the Bill I liked. People need some help and passing tax breaks for new home purchases when people cannot stay in the homes they are in now is useless and insulting. The stimulus should mandate rate drops for consumers on existing homes to say 3 or 4% and credit card rates to 10%. Pass infrastructure and fund states for unemployment and medicaid and be done with it.
That would do more than all this useless spending. And it would work. So I am no partisan and under no illusion that either party is any different on Free Trade. I also don't have to give my name. If you know movies you should know the reference. Hint: it's a Republican. J. Lott's Blog is on Fox New's site, so I read it, that doesn't mean I can't express disagreement in a civil manner. I understand economics and still disagree with Free Trade. Guess I am a populist. Pat Buchanan and Lou Dobbs also disagree with Free Trade are they liberals now too? Grow up sir, it's not a partisan issue.
"Wow, it just never stops on this blog. Microsoft is in trouble for laying off workers right now and replacing them with HB1 visa workers, paying them half the salary of the last workers. So we should take their word for it? You conservatives should try getting on the other side of this issue."
Did I miss something in the above quote? The following quote is mine.
"To 'the man with no name'. Blaming the blog itself does nothing to solve the problem."
I submit that interpretation can be a personal thing, but I simply use your words to uphold my argument.
"You also claim that I am a liberal when I am not. My family are diehard GOP and my grandfather even served in my state's legislature. But myself, I have had to leave the party, largely based on this issue. But you are debating theories when there is a full blown crisis at hand."
Your quote Sir. Not mine.
"You conservatives should try getting on the other side of this issue."
Ok, so you left the party, but yet you are not a liberal, and you state that we 'conservatives should try getting on the other side of this issue'?
"Read about Iceland or Argentina? Difference in those countries is the population understands what those policies are all about and unlike you claim actually they do not sell themselves. In fact it is the opposite."
I asked for facts, not rhetoric. As for Argentina, here's a heads up for ya...
'Kirchners Make a Grab for Private Pensions to Bail Out Argentina
Thursday, November 06, 2008 | FoxNews.com
By James M. Roberts
Halloween arrived early in Argentina this year — in the form of a trick, alas and not a treat.
On Oct. 21, Argentina’s government, led by Peronist President Cristina Fernández de Kirchner and her predecessor, Néstor Kirchner, announced their intention to expropriate $30 billion held by Argentine citizens in private pension funds (similar to 401(k) retirement savings accounts). The Kirchners need the money to refinance old bad debts so that they can borrow yet more money to keep the country afloat. The announcement rocked investor confidence in Argentina and sent the Buenos Aires stock market plunging.'
Source:http://www.foxnews.com/story/0,2933,448385,00.html
I am quite sure that the population of Argentina understands many things now, do they not?
If in fact, things are so very bad here in the U.S., what is to stop the current administration from doing what the Argentinian government has done to their citizens?
Someone has to foot the bill for this insanity, and I can assure you that it will not be those who got us in this mess in the first place. It will be us, the taxpayers.
Once again I implore you to use facts, not rhetoric. Your posts are rather haphazard, and mine are rather truncated due to lack of time. However, I do my best to address issues with facts, and not unsupported opinion. Posting here takes very little time. It is the verification process of the facts that consume most of my time, and that limits the time I have to respond to folks such as yourself.
Martin G. Schalz-
What's the difference between Argentina's Govt. doing that and Wall St. doing it in this country? And if the banks believed in these Free Market principles they would have never come to the Govt. for a bailout in the first place. They got bailed out the Free Market no longer exists in this country. That is just a simple fact. Now to rebuild it with the exact same policies that got us here in a decade truly is the definition of insanity.
And I always hear how it fosters competition and better products. Are those the poisoned toys, baby formula and dog food from China? Or the the tainted food imported from Mexico that is literally killing people in this country? And I am not talking about the current peanut contamination. These are called facts, which you simply ignore in your attempt to sound so enlightened and defend these very lop-sided Trade Agreements. You are not fooling anybody, except yourself sir.
To the man with no name: It is Governments that foul up free markets. Not the free markets themselves. Free markets are self correcting, if left alone long enough to do so.
Fact: The Carter and Clinton administrations pushed affirmative action loans for housing. This too occured with the Democrats controlling both houses under the Bush administration.
ACORN filed many a suit against banks in order to force banks to make loans to those who did not qualify, nor were able to afford such loans. These are known as affirmative action lons. Fast forward to ARM's.
ARM loans enabled those without means to initially afford loans for houses they could not pay for. Please note I said initialy.
Demand for homes goes up. Home prices go up. Interest rates go up, and now these folks, whom the Government so kindly bent the rules for, can no longer afford payments. Loan default time now. Housing market gets flooded with repo homes, prices drop, and now folks find themselves owing more than what the house is worth. This problem feeds upon itself. More loan defaults.
In reaction to loan defaults, and dropping house prices, the credit market reacted violently, by cutting credit to all but those with perfect credit.
Folks cannot get car loans. No car loans, no car sales. No car sales, no work for the Big Three. No work for the Big Three, no work for suppliers. No suppliers, no logistical work for shipping companies. Etc, etc, etc.
Is the above very simplified? Yes. Is it false? No. The truth of the matter is that when Government intervenes in basic matters, things go from bad to worse.
I do understand the basic concept of greed, and how it affects business and government. In the above case, the two go hand in hand.
Barney Frank. Now there's a man whom has caused much damage, and yet gets away with it? Was he not a 'boyfriend' of the head of Fannie Mae? I have heard of butt kissing, in order to further one's own agenda, but you, and others of your ilk refuse to acknowledge such wrongdoings, and shift blame onto others. After all, the truth has a nasty habit of destroying falsehoods and the twisted viewpoints of folks like Liberals. Which is why they work so hard to conceal truth. Lies, propagnda, scapegoats, brainwashing, and webscrubbing are just a few of the tools used to destroy the truth.
If ever corrupt politicians are to gain control, they must do so at the expense of those whom they wish to govern. Lying about causes that they themselves created, and then say that they need more power to correct the problem, will be our downfall if we do not rise up and stop them.
Power can only be given. It cannot be taken. They know this, and they ask the weak to give up their power, and they do so. While those who refuse to surrender, are ridiculed by weak fools such as yourself, 'the man with no name'.
I do not hide, I do not run away.
I do not speak my mind here in order to sound enlightned.
I do not fool anyone, much less myself, and theirin lies my power. For I need not rely on lies and deceit to further myself. I love my Country, and despise weak fools who wish to destroy it. After all, it is the weak, who unable to control themselves and their urges, that are out to destroy the strong who stand in the way of their total domination of this, Our Country.
Patriots and Pinheads. Where, praytell, do you stand?
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