Monday, March 23, 2009
Recession and Protectionism
Whenever national economies slow down there are calls for reducing foreign competition in order to protect domestic jobs. The current global recession is no different. Many economists were concerned with the "But American" feature of the stimulus plan, although it was watered down somewhat. For the rest of the world, when the long-term proponent of free trade backs away from it, it is easier for them to back away also. An article in today's New York Times outlines some of the countries that are increasing protection for domestic industries. Does anyone remember the Smoot-Hawley Tariff Act?