Meleah

Excellent article from the Washington Post http://www.washingtonpost.com/wp-dyn/content/article/2009/02/16/AR2009021601099.html

—- “To this day the phrase ‘Smoot-Hawley’ remains a watchword for the perils of protectionism. With equal solemnity, government officials everywhere are echoing that sentiment. Last weekend, the finance ministers of the Group of Seven again swore fealty to the official anti-tariff mantra, announcing that they remain “committed to avoiding protectionist measures, which would only exacerbate the downturn.” Whatever the finance ministers might say, all of these measures are, of course, extremely popular, and political parties of all stripes have capitalized on them wherever possible. The U.S. Congress put its nonsensical “Buy American . . . as long as no trade laws are broken” clause into the stimulus bill, thus guaranteeing that every infrastructure investment will be accompanied by a flood of extra paperwork. A Spanish minister has called on his nation to “Buy Spanish.” In England the most popular strike slogan is “British jobs for British workers.” Expect more than one political leader, on more than one continent, to rise to power in the next few years riding a wave of protectionist sentiment. But this should surprise no one; after all, Smoot-Hawley was popular, too. At the time of its passage, more than 1,000 economists of all ideologies signed a petition against it. Since then, historians have reckoned that it reinforced the global slump: Between 1929 and 1934, world trade declined by 66 percent. Still, the politicians of the 1930s knew which way the popular winds were blowing — and those of the present know, too.