A little protectionism could go a long way toward solving economic crisis…

September 13, 2009

I’m always repeating myself, but I will say it again: capital (or business) knows no patriotism.

I’m glad that President Obama has decided to slap a hefty tariff on cheap Chinese tires that have flooded our market.

But wouldn’t you know it? U.S. tire companies don’t like that. That’s because they are the ones who manufacture those cheap tires – in China. They are the ones who closed down factories in the U.S. putting millions of workers out of work.

I was at the library yesterday and read a Wall Street Journal editorial decrying the tariff as unwise protectionism. Apparently the Journal cares not whether people have jobs in this country.

Yes, I know the old argument that protectionism is what led to or exacerbated conditions that created the Great Depression. And strangely enough Al Gore, usually identified as a lefty and no friend of business (even though he makes money or made money from hedge funds and even a mine he owns, I believe), used that anti-protectionism argument against the pretend populist Ross Perot all those years ago. You know, that supposed business guru who decried big government but made his fortune by securing contracts from big government. But anyway, apparently the Journal is in agreement with Gore on the protectionism thing.

Hey I like economical tires just as well as anyone else. But I like safe tires too. Do you want your loved ones, not to mention yourself, flying down the freeway on unsafe tires?

Protectionism would not be good if it only served to protect producers of inferior domestic products when better quality could be secured from outside our borders. But the key is to have safety and quality standards and enforce them.

Also, world trade is a fact of life and a good thing. The U.S. would not want to put up a wall against all imports, if for no other reason than it would then suffer retaliation with barriers against its exports.

But at the same time, U.S. industry cannot be expected to be able to compete with low wage and even slave labor abroad.

The key is to have reasonable protection and for our own industry in a team effort between workers and management be competitive on the domestic and world markets. Where we can’t beat the competition on price, surely we can beat it on quality.

And as far as I can see it, incentives in law that encourage American-based companies to produce products outside the U.S. borders and then import them into the domestic market should be ended.

As complex as our economic problems are, how can one argue that increased domestic employment would not almost instantly solve the major part of our economic crisis?

P.s.

Still not mobile with the blog yet and I have to go back out on the road — but thanks for any comments and stay tuned and as our California governor would say — I’ll be back!

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