SOTU and protectionism.

No comments on Obama’s speech from last night I’m afraid, partly because I didn’t watch it but also because of a lack of time to summarise what I’ve read about what was said. A brief quote from Yglesias though, attacking Obama’s crude, populist protectionism-pandering:

One idea for putting Americans back to work would be to raise the gasoline tax and use the proceeds to buy manufactured goods that we then dump into the middle of the Atlantic Ocean. This would, I promise you, work perfectly well. The previously unemployed folks with the new factory jobs would thank us for our trouble. But it would be a curiously prosperity-destroying way of bolstering the economy. When Obama brags that “over 1,000 Americans are working today because we stopped a surge in Chinese tires,” he’s implementing a small-scale version of a similar idea. Blocking an influx of cheap Chinese tires does, indeed, preserve jobs for tire-makers. But tire-buyers pay higher prices and presumably curtail their purchases of some other goods or services in exchange. Meanwhile, Chinese tire-makers have lost jobs and are now less likely to buy American soybeans or DVDs of our movies.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s