09/16/09 Baltimore, Maryland
The recent U.S. versus China protectionism scuffle entered a new level of silliness today. If you recall, earlier this week, the Obama administration attempted to boost U.S. manufacturing by slapping a 35% tariff on Chinese tires. China fired back with a formal WTO complaint, plus rumors of doing the same to American chicken and auto part exports.
Heh, well today, American poultry experts have returned fire with the help of The New York Times: “We have these jumbo, juicy paws the Chinese really love,” said the NYT expert, “so I don’t think that they are going to cut us off.”
That’s right, the U.S. contends that the Chinese appetite for overgrown U.S. chicken feet is so insatiable that it will squash the trade dispute. They can conduct a legendary Olympic Games, build nuclear bombs and space shuttles, but NO WAY they can match our chicken feet.
Really… how could anyone live without?
“Besides from being just ridiculous,” notes Chris Mayer. “I find stories like this very worrisome. History gives us some chilling lessons.
”I think most people tend to take globalization for granted. In other words, most people think that the world is getting smaller and more connected all the time. This is really not true when you look at the longer historical picture. It ebbs and flows.
“For instance, a pretty good, if dense, book on the history of world trade titled Power & Plenty makes one thing very clear. ‘If anything,’ the authors note, ‘history suggests that globalization is a fragile and easily reversible process.’
“Where it gets chilling is during the Great Depression: ‘When the system was hit… the result was wholesale protectionism, and a renewed disintegration of international commodity markets.’
“The authors go on to show how the collapse in trade led to all kinds of bad things. It created mass unemployment in places such as Germany, which was a big factor in Hitler’s rise to power. In Italy, the Depression contributed to Mussolini’s rise to power. The rise of tariffs and trade disputes also fanned imperialistic flames in Japan as it sought to gain self-sufficiency through conquest. All of this contributed to the outbreak of World War II.
“In any event, many people call what we are going through today the Great Recession — the worst global slump since the 1930s. And I wonder if the playbook will follow the path of the 1930s. It seems as if it might.”
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“In Italy, the Depression contributed to Mussolini’s rise to power”
What? Who’s the idiot who wrote that? Mussolini became Prime Minister in October… 1922 !
It’s amazing the amount of stupidities that can be found on the internet.
Your ad-hominim attack reflects poorly upon you. I don’t know much about Mussolini, so your correction is welcome, but your behavior in doing so is offensive.
Some economist will argue that it was globalization that led the global depression in the 30’s. Protectionism came after. We have seen a resurgence of globalization during the last 25 years and like the late 1920’s, and early 30’s it has one again self-destructed, the fall-out being financial meltdown, huge debt, high unemployment and mega bankruptcies. Can protectionism be any more harmful then the disaster that globalism left in it’s wake?
Bloomer,
An excellent question. I’ve always taken it on faith that “protectionism = bad”…but these days I am pretty much questioning everything I hear.
Perhaps one of the DR contributors could write an article about how protectionism is destructive, maybe toss out a book title or two for my reading list?
Economic problems will always be a contributing factor in who rises to power in any country. However, the lust for power and conquest is always the number one factor for people like Hitler, etal in wanting to obtain power. No theory is perfect. Globalization is bad for some while good for others and the same goes for protectionism. Obviously, whomever benefits from either one will always argue their way is better. Answer this question for yourselves. Is it better for you if baseball gloves are made in China, or in the U.S.? The gloves made in China are not cheaper, nor are they better made. They just fall apart more quickly which causes the consumer to purchase more of them if their children continue to play baseball. This I know from experience. I have two gloves made in the U.S. that are 25 and 34 years old and still kicking. I also have two made in China and are only 3 years old and falling apart. Labor is cheaper in China and most of the products are crap, which increases profits. I’m not against profit, but I am against phony arguments made in defense of anything. Globalization, nor protectionism is always good for the consumer. More often than not, it is simply good for corporations, financial interests and we cannot forget the pols.