The New Protectionists

carpro · Feb 25, 2006

http://www.opinionjournal.com/weekend/hottopic/?id=110008015

Ports of Gall
The new protectionists use national security as their cover.

Saturday, February 25, 2006 12:01 a.m. EST

EXCERPT

"I also believe that winning the war on terror will not happen by military strength alone. This is fundamentally about America's values and leadership. . . . The idea of winning hearts and minds has been derided by some. But I don't think that we can overlook its singular importance. . ."--Senator Hillary Rodham Clinton, February 25, 2004
In Mrs. Clinton's "hearts and minds" crusade, this will not go down as a good week. A United Arab Emirates government allied with America, that provides a Persian Gulf base for U.S. military operations, and that was the first Middle Eastern country to join the U.S. Container Security Initiative, has been rewarded with Congressional demagoguery that a company it owns can't be trusted to manage commercial operations in U.S. ports. With Mrs. Clinton herself leading the jeers.

And why? For no other reason than that it would be an Arab-owned company. If it is "foreign" ownership that's alarming, the same politicians would also be denouncing the Chinese, Singaporean and British companies that already manage some U.S. port operations. So the message that all Arabs need not apply comes through loud and clear.

By the way, to make this argument does not mean we are accusing critics of racism. We are accusing them of error, not to rule out stupidity. These columns have long supported profiling young Middle Eastern-looking men in airport screening, for example, as a way of reducing the odds of another 9/11. But Mrs. Clinton was absolutely correct to note back in 2004 that to win the war on terror we need Arab and Muslim allies. And trashing friends who are engaging in legitimate commercial transactions is not a good way to keep those allies.

SNIP

And, lo, the New York Sun reported this week that "nearly every politician who has been at the forefront of the opposition to the Dubai deal is on the receiving end of some Longshoreman largesse" in the form of campaign contributions. They include New York Representatives Peter King (R), Jerry Nadler (D) and Vito Fossella (R) and Senators Clinton, Robert Menendez (D., N.J.), Chuck Schumer (D., N.Y.), Chris Dodd (D., Conn.) and Barbara Boxer (D., Calif.).

KenH · Feb 25, 2006

Protectionism brought us the Great Depression in the 1930s. Protectionism is bad for America and bad for the world. It should be rejected.

billwald · Feb 25, 2006

The protectionists are worrying about the wrong stuff. We already have open borders.

poncho · Feb 25, 2006

How did protectionism bring about the Great Depression Ken?

KenH · Feb 25, 2006

"For 140 years, culminating in the disastrous experience of the Smoot-Hawley Act of 1930, Congress exercised its power to directly manage trade policy. Members routinely traded votes for higher tariffs on products of interest to their particular constituencies. A representative in Florida, for example, might vote for tariffs on wheat in exchange for tariffs on oranges.

This behavior reached its peak with Smoot-Hawley, where Congress set tariffs for over 20,000 items at the highest levels in U.S. history. That massive increase in protectionism helped turn a cyclical recession into the Great Depression, spelling financial ruin for millions. Congress had proved incapable of resisting parochial appeals in favor of the national economic interest."

- Source

"The roots of current U.S. trade policies can be traced back to the Trade Agreements Act of 1934. The purpose of this act, passed by the U.S. Congress, was to increase United States exports to foreign countries. There was a need for such an act for two reasons. First, the Smoot-Hawley Tariff Act of 1930 raised duties on imports to 53
percent in 1931 and 59 percent in 1932. This action provoked other countries to retaliate against the U.S., shrinking world trade. Second,
the ensuing worldwide contraction in economic activity in the early 1930s caused world trade to decline even further, Between 1929 and 1933, world trade shrank 25 percent."

- Source

poncho · Feb 25, 2006

Hey thanks for the links Ken. Here's a different take.

1. The events leading to the Great Depression are all related to British economic warfare against the rest of the world, which mainly took the form of the attempt to restore a London- centered world monetary system incorporating the gold standard. The efforts of the British oligarchy in this regard were carried out by a clique of international central bankers dominated by Lord Montagu Norman of the Bank of England, assisted by his tools Benjamin Strong of the New York Federal Reserve Bank and Hjalmar Schacht of the German Reichsbank. This British-controlled gold standard proved to be a straightjacket for world economic development, somewhat along the lines of the deflationary Maastricht "convergence criteria" of the late 1990's.

2. The New York stock exchange speculation of the Coolidge-Hoover era was not a spontaneous phenomenon, but was rather deliberately encouraged by Norman and Strong under the pretext of relieving pressure on the overvalued British pound sterling after its gold convertibility had been restored in 1925. In practice, the pro-speculation policies of the US Federal Reserve were promoted by Montagu Norman and his satellites for the express purpose of fomenting a Bubble Economy in the United States, just as later central bankers fostered a Bubble Economy in Japan after 1986. When this Wall Street Bubble had reached gargantuan proportions in the autumn of 1929, Montagu Norman sharply cut the British bank rate, repatriating British hot money, and pulling the rug out from under the Wall Street speculators, thus deliberately and consciously imploding the US markets. This caused a violent depression in the United States and some other countries, with the collapse of financial markets and the contraction of production and employment. In 1929, Norman engineered a collapse by puncturing the bubble.

3. This depression was rendered far more severe and, most importantly, permanent, by the British default on gold payment in September, 1931. This British default, including all details of its timing and modalities, and also the subsequent British gambit of competitive devaluations, were deliberate measures of economic warfare on the part of the Bank of England. British actions amounted to the deliberate destruction of the pound sterling system, which was the only world monetary system in existence at that time. The collapse of world trade became irreversible. With deliberate prompting from the British, currency blocs emerged, with the clear implication that currency blocs like the German Reichsmark and the Japanese yen would soon have to go to war to obtain the oil and other natural resources that orderly world trade could no longer provide. In 1931, Norman engineered a disintegration by detonating the gold backing of the pound sterling.

4. In the United States, the deliberate British default of September 1931 led, given the do-nothing Hoover Administration policies, directly to the banking crisis of 1932-33, which closed down or severely restricted virtually every bank in the country by the morning of Franklin D. Roosevelt's inauguration. If Roosevelt had not broken decisively with Hoover's impotent refusal to fight the depression, constitutional government might have collapsed. As it was, FDR was able to roll back the disintegration, but economic depression and mass unemployment were not overcome until 1940 and the passage of Lend-Lease.
Click to expand...

SOURCE

And, lo, the New York Sun reported this week that "nearly every politician who has been at the forefront of the opposition to the Dubai deal is on the receiving end of some Longshoreman largesse" in the form of campaign contributions. They include New York Representatives Peter King (R), Jerry Nadler (D) and Vito Fossella (R) and Senators Clinton, Robert Menendez (D., N.J.), Chuck Schumer (D., N.Y.), Chris Dodd (D., Conn.) and Barbara Boxer (D., Calif.).
Click to expand...

So, once again it would appear that it all comes down to arguing over the control of money and power and not the protection of the people public assets and infrastructure.

Surprise surprise.

[ February 25, 2006, 08:05 PM: Message edited by: poncho ]

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