Tuesday 3 February 2009

Lessons of history

The “great depression” was made worse because of protectionism. This is well know. The “Smoot-Hawley Act” is a watchword for the perils of protectionism, a foolish act by short sighted Congressmen. And yet... Democratic Representatives have inserted similar terms into the Obama stimulus programme. So far, the President has not said he will veto these terms*. If enacted as is, much of the good of the programme will be restricted. Why do people not remember the lessons of history?

We see similar short sighted actions by Labour unions in the UK, complaining about foreign workers. Fortunately so far all three parties have correctly pointed out the benefits of the free movement of labour in Europe. But as the Government’s poll ratings continue to be bad I wonder if they will hold the line?

* Although about an hour after writing this he started a round of interviews to say that he did not like the Buy American clauses. I'm sure there was no connection: he was trying to get his Presidency back on track after his picks for Cabinet started fading away. It's good he has accepted protectionism is unhelpful. It will be interesting to see if he can continue to command the high ground, and the debate, now that the first flush of euphoria is over, he has admitted mistakes in Cabinet selection and the Republicans are being stupidly unco-operative. I hope so.

1 comment:

Troy said...

I think you will be disappointed. So much about this new period in American politics reminds me of Britain, Blair and New Labour in 1997.