Protectionism

Statist Policy and the Great Depression

It’s difficult to promote good economic policy when some policy makers have a deeply flawed grasp of history.

This is why I’ve tried to educate people, for instance, that government intervention bears the blame for the 2008 financial crisis, not capitalism or deregulation.

Going back in time, I’ve also explained the truth about “sweatshops” and “robber barons.”

But one of the biggest challenges is correcting the mythology that capitalism caused the Great Depression and that government pulled the economy out of its tailspin.

To help correct the record, I’ve shared a superb video from the Center for Freedom and Prosperity that discusses the failed statist policies of both Hoover and Roosevelt.

Now, to augment that analysis, we have a video from Learn Liberty. Narrated by Professor Stephen Davies, it punctures several of the myths about government policy in the 1930s.

Professors Davies is right on the mark in every case.

Romney’s Economic Advisers Pretend to Support Free Trade

Written by Simon Lester, Trade Policy Analyst for the Herbert A. Stiefel Center for Trade Policy Studies at the Cato Institute. Posted with permission from Cato @ Liberty.

Governor Romney’s economic advisers (Glenn Hubbard, Greg Mankiw, John Taylor, Kevin Hassett) have a short post about his economic plan.  In it, they sort of talk about trade issues:

Advancing international trade is another part of the plan. A recent study by the International Trade Commission concluded that reducing intellectual property violations [in] China could produce about 2 million jobs in the United States.  While that is, of course, an estimate, Governor Romney has made reducing barriers to trade with China []  a primary focus of his trade opening policy, and this advancement of trade clearly would be a large net positive for the successful idea-intensive firms that drive economic growth.

What’s important to note here is that these prominent, well-respected economists are not talking about free trade, despite their best efforts to make it seem like they are.  Free trade means reducing protectionism, both at home and abroad.  That means removing protectionist barriers to imports and exports, resulting in specialization of production and greater efficiency, among other things.  But that’s not what they are saying here.  Instead, they want to “advance” international trade by increasing exports to China, mainly through forcing China to strengthen intellectual property laws and enforcement.

VIDEO: Free Trade vs. Protectionism

Welcome, Instapundit readers!

The folks over at Learn Liberty bring a new lesson from George Mason University economist Donald J. Boudreaux (who blogs at Cafe Hayek) on free trade and protectionism as matters of policy, and their impacts on wealth creation:

Protectionism today comes in the form of Buy American restrictions (which were reinforced in the so-called stimulus bill), whose proponents argue that forcing manufacturers to produce goods using inputs created by American firms, or that the government buy/contract goods and services solely from American firms through its procurement process, will help preserve and create jobs at home.

Oh Jeez, Not This Again

Just when you thought he and his toupee were gone:

Donald Trump’s decision to drop out of the 2012 presidential race may be as ephemeral as NFL quarterback Brett Favre’s decision to throw in the towel in 2008.

Like Mr. Favre, who was back on the gridiron playing for a different team just months after his teary farewell from football three years ago, Mr. Trump also appears to be considering suiting up to get back in the game – only this time as an independent.

“It was not an easy decision for me [to drop out of the Republican primary race in May], but I think that it will be an easy decision [to return to the campaign] if the Republicans choose the wrong candidate and if the economy is bad. I think it will be a really easy decision for me to make,” Trump told the Monitor in an interview in Panama City, shortly after inaugurating the Trump Ocean Club, the first Trump hotel and tower outside the United States.

If “The Donald” feels the time is right to get back in the race, look for him to make the announcement on the next season of his reality TV show The Apprentice – his primetime soapbox.

Protectionist Tries Redefining Free Trade

Knowing there is no legitimate case for protectionism, its proponents are now attempting to define free trade as something that it is not. Writing for Salon, David Sirota says:

Trade policy, as I’ve previously noted, often has nothing to do with what we conventionally define as “trade” — that is, it has nothing to do with the exchange of goods and services, and everything to do with using state power to solidify corporations’ supremacy over individual citizens. In that sense, the modern era’s ongoing debates over “free trade” are a corporate public relations coup — by tricking the public and the media into believing we’re debating one thing (commerce) when we’re debating something entirely different (power), the “free trade” brand casts those who raise questions about these pacts as know-nothing Luddites (who could be against commerce, right?).

Oddly, Sirota offers no further support for his claim that free trade uses “state power to slidify coporations’ suppremacy over individual citizens” nor does he even clarify precisely what it is he means. It appears as though he is content to level that charge and move on to a different subject:

…In creating direct unprotected competition between Americans and foreign workers who have no labor, wage or human rights protections, the most celebrated trade pacts of the last two decades have — quite predictably — resulted in widespread layoffs and the hollowing out of America’s middle class job base.

Our Government Declares (Economic) War On Japan?

General Motors announced this week that anybody that owns a Toyota vehicle will receive a $1,000 “incentive” to trade said vehicle in for a GM product.

Editor’s Note:  Ford has since matched the $1000 offer.

“We decided to make this offer after receiving many e-mails and calls from our dealers, who have been approached by Toyota customers asking for help,” GM said in a statement. The offers will run through the end of February.

The supposed e-mails and calls mentioned are in relation to the recent widespread recall on many Toyota products due to a faulty gas pedal that has led to at least one death. Toyota is working feverishly to find a fix but has yet to do so which has stopped production and sales of their most popular models including the Camry and Corolla.(as of this writing, a fix has been announced)

If this were General Motors declaring “war” on Toyota at their most vulnerable I would say go for it. I’m all about free markets and the best product usually succeeds. Hence Toyota outsells most if not all GM car models. But that is not what is happening here.

General Motors is now majority-owned by the Federal Government and Barack Obama is essentially the C.E.O. To believe that GM “CEO” Edward Whitacre Jr. didn’t get a thumbs up from President Obama on this is far beyond naive, it borders on gullible.

Bush = Hoover 2.0, Part 2 - “Hoover’s Socialism”

But not because of the reasons you may believe
Part I - “The False Claims” - Can be found HERE

Labor Market Intervention

Within a month of the peak of the stock market in September 1929, President Hoover began a campaign of coordination between industry and government that is still seen today. He was under the belief that falling wages would exacerbate the coming recession and that they must be held steady in order to preserve purchasing power.

Let the free market work: Waning industries that beg the government for protection from competition deserve to fail

James Patterson novels

James Patterson sounds like a prime example of capitalism. He’s one of the wealthiest authors alive, frequently finding himself on the Forbes list of wealthiest authors.  He makes serious bank each year, in part because he puts out more books than anyone with any kind of sense could put out.

His secret is his “co-authors.” Patterson outlines the story while other writers, who are lesser known, do the physical writing. He makes millions without actually having to craft a word. He’s upfront about the process, so it can hardly be called fraud. Instead, it’s just a matter of marketing.

Unfortunately, Patterson seems to be a big fan of state intervention in business. At least, it’s easy to see where one can get that impression after Patterson’s comments at Book Expo America last week.

You see, Patterson’s publisher, Hatchette, is in an ongoing dispute with online retailer super-giant Amazon:

Here we go again: Congress is trying to pick winners and losers in the marketplace

Sheldon Adelson

The bill introduced by one of the least popular Republican lawmakers, Sen. Lindsey Graham (R-SC), and Rep. Jason Chaffetz (R-UT), known as the Restoration of America’s Wire Act, has been hit by a series of different sources that have been standing in opposition to the protectionist bill that would favor casinos over online gambling industry, putting the government yet again in the role of picking winners and losers.

A coalition of conservative groups has fired off a letter to congressional leaders in opposition to the Restoration of America’s Wire Act, which would ban online gambling, calling the measure “a broad overreach by the federal government over matters traditionally reserved for the states.”

The legislation, S. 2159 and H.R. 4301, is backed by Sheldon Adelson, a major donor to Republicans such as Sen. Graham himself. The bill is also backed by a coalition he started that included what The Washington Post reported as an army of lawyers and lobbyists to make sure that the bill passes in both chambers.

When leaders of a certain industry come together with lawmakers, it means that the very existence of competitors could soon enough pose a risk. While making poorly constructed arguments in an attempt to win over some hearts and minds, Adelson could never make the moral or financial case to support the ban on online gambling.

Today in Liberty: NAACP praises Rand Paul, GOP winning the Twitter war

“There is an ongoing national discussion about marijuana sentencing reform, and I want to make sure the Republicans are leading the charge. It’s an issue that can unite members of our community, regardless of party, race or gender.”Matthew Hurtt

— NAACP leader praises Rand Paul: The Kentucky Republican’s message on civil rights has won praise from the NAACP, a group not usually sympathetic to Republicans. “It is such a pervasive issue in our community,” NAACP President and CEO Lorraine Miller told NPR, “and, quite honestly, if we can get the ear of someone like Rand Paul, that helps us in trying to find solutions that make sense.” Paul has pushed issues like mandatory minimum reform, school choice, and restoring felon voting rights in various speeches around the country. The NAACP has contacted Paul about speaking to the organization.


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