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A Protectionist President?

Given the caliber of President Obama's economic team, I have remained somewhat hopeful the Administration would avoid the protectionist impulse within the Democratic Party. So I was dismayed to read about the apparent decision to impose tariffs on Chinese tires. Particularly troubling, as the WSJ reports in an editorial today, is that the Administration has chosen to utilize a rarely (if ever) used provision of trade law, Section 421, setting a bad precedent and encouraging other industries to seek equivalent "relief." President Bush was far-from perfect on trade policy (one of many disappointments), but he rejected all four of the Section 421 petitions he received. I hope this latest decision is an aberration, but I am not optimistic.

Glenn W. Bowen (mail):
Smoot-Hawley...
9.12.2009 9:02am
PersonFromPorlock:
When an official position makes no sense, the sensible presumption is that it's a product of corruption. So who profits here, and who did they 'contribute' to?
9.12.2009 9:12am
Cody:
You know, sometimes it seems like on any policy area where Bush was worse than Clinton, you can reliably assume that Obama will be worse than Bush.

I know it's a cliche, but really, it's true: This was not the change I was hoping for...
9.12.2009 9:28am
Albert Connelly:
I think this is finding support for your own biases. I don't much like this either, but "protectionist president" is unfair, as you can find plenty of these examples from other presidents. Say Bush 1 or 2 was protectionist too or it has no meaning. Bush II for one had those steel trade restrictions.
9.12.2009 9:28am
pgepps (www):
Albert seems to have used his mental Ctrl-V before reading the post. Or the comments. I don't see anyone here saying Bush was particularly good on the matter.

And only someone who's spent too long thinking that "watching the news" means "being informed" would think that accusing Bush would clear Obama. It doesn't work that way except in the world of headline-pimping.
9.12.2009 9:36am
Ricardo (mail):
A very bad decision. The op-ed is quite right that imported tires are crucial for low-income Americans -- replacing the tires on one's car represents a major expense that one cannot necessarily plan in advance for.

Obama does have very good economic advisers (at least one of whom leaked during the campaign the idea that Obama's protectionist noises were for show). Unfortunately, he doesn't have to follow their advice, especially when it comes to snapping up short-term political gain.
9.12.2009 9:50am
Brett Bellmore:
Sometimes the corruption simply consists of lying about one's aims. A lot about the Obama administration makes sense if you simply assume he doesn't really care whether we have a healthy economy, so much as that the economy be entirely subject to political control.
9.12.2009 9:55am
Jonathan H. Adler (mail) (www):
Mr. Connelly --

President Bush was not a particularly free trade president, and I was quite critical of him for this at the time.

See, for instance here, here, and here.

JHA
9.12.2009 10:17am
Scape:
Blah. The line has gotten old, but like Cody said... not the change I was hoping for.

And this is being exceedingly nitpicky, but I think Bush may have considered and rejected seven, not four, section 421 petitions?
9.12.2009 10:30am
PatHMV (mail) (www):
The President's got to buy off a lot of votes to shove health care reform down our throats. The liberal wing of his party is angry over his inactivity on Don't Ask Don't Tell and his occasional attempt to signal that maybe he'd dump the government option. A spot of protectionism for a favored union can help shore up part of one flank, in order to help him complete his take-over of health care.
9.12.2009 10:54am
MCM (mail):
Sometimes the corruption simply consists of lying about one's aims. A lot about the Obama administration makes sense if you simply assume he doesn't really care whether we have a healthy economy, so much as that the economy be entirely subject to political control.


It certainly makes it easier to demonize someone if you assert they're not acting in good faith.
9.12.2009 11:10am
DiverDan (mail):
Yes, I'm disappointed, but what can you expect from a President who has already demonstrated that he is an economic illiterate? See Health Care Reform, for example - He has promised to: (a) Reduce Costs, while (b) Expanding Coverage. Does anyone else here see that as a basic contradiction of the law of supply and demand? Yes, it can be done, but only if either (1) Supply increases enough to more than offset any increase in demand occasioned by the expansion of health care coverage, or (2) price increases which would otherwise result from the increase in demand are restricted by Government Fiat, thus eliminating any incentives for health care suppliers to enter the market. This foolishness all started with Bill Clinton's pronouncement that "Health Care is a Right!" Well, No Bill, it isn't - it is an economic good - there is potentially unlimited demand and a finite supply, with significant barriers to entry on the supply side (i.e., educational costs and licensing requirements for health care professionals, huge up-front R&D costs and FDA regulatory restrictions for pharmaceuticals and medical equipment, large capital costs for technologically advanced diagnostic equipment, etc., etc.). Moreover, health insurance is not "the answer", it is a significant part of the problem in skewing demand - when a consumer is covered by health insurance, especially insurance paid for by the employer, there is no cost disincentive to overuse the product, visiting your doctor for every case of the sniffles and demanding the newest (and hence most expensive) drugs even when they provide no significant benefit over cheaper drugs that have come off patent.

Yes, protectionism is bad - bad for the consumer, bad for the Country - but in the overall scheme of things, it is far from the worst of Obama's economic sins.
9.12.2009 11:18am
PatHMV (mail) (www):
MCM, your complaint would have more credibility if not for the fact that President Obama's entire speech on health care consisted of little more than asserting that his political opponents were not acting in good faith.
9.12.2009 11:20am
huskerfan:
I'm curious if people think copywright and patents are protectionist, since they also raise the price of things as well? I never here people take issues with those as well.
9.12.2009 11:20am
John Thacker (mail):
It certainly makes it easier to demonize someone if you assert they're not acting in good faith.


Yes, that's one of the problems with Obama's repeated speeches on health care. He keeps insisting that his opponents haven't presented plans, which is untrue.

Strangely enough, some people found it easy to demonize John Mackey of Whole Foods for making health care reform suggestions. without particularly arguing about good faith or not.
9.12.2009 11:44am
common sense (www):
Huskerfan,
I think you can find a principled difference in that patents raise the cost for everyone. If I patent widget A, American manufacturers pay the increase in price at the same rate as manufacturers in China. This isn't even true, as a pirated version is probably available in China, so it may be that foreign markets pay less--at least as a result of the patent. Tariffs, on the other hand, increase the price on goods from China while keeping down--or reducing, in the case of subsidies--the price of American made goods. I'm not sure where I fall on patents as a theoretical matter, but if implemented correctly, IP protection isn't protectionism in the classic sense.
9.12.2009 11:55am
Scott Lincicome (mail) (www):
If you're interested, I blogged on this awful decision last night, providing a detailed analysis (read: dismantling) of the White House and USTR announcements.

-Scott Lincicome
9.12.2009 12:00pm
huskerfan:
Common Sense,
I don't understand the difference in the classic sense. I see both tariffs, copyright and patents as protectionist. I guess I'm also curious why people are more concerned about tariffs than the others. I don't see the principle.
9.12.2009 12:01pm
Glenn W. Bowen (mail):

Sometimes the corruption simply consists of lying about one's aims. A lot about the Obama administration makes sense if you simply assume he doesn't really care whether we have a healthy economy, so much as that the economy be entirely subject to political control.



It certainly makes it easier to demonize someone if you assert they're not acting in good faith.


I assert he isn't, on the plane that the agenda is much larger than each specific act/inaction.

It's about (his) government control, ultimately.
9.12.2009 12:11pm
Federal Dog:
What do you imagine the immediate result would be if people who invest time, labor, money, and other resources in order to develop new, better products were not allowed a patent or copyright -- for at least some time -- that would allow them to recuperate their investment and profit from their work?
9.12.2009 12:12pm
common sense (www):
Huskerfan,
Patents raise prices on all goods that use the technology equally, no matter where it is built. Tariffs only impact foreign-made goods. Patents result in an equal playing field, and tariffs protect domestic industry. The effect on the poor may well be the same, but the effect on factories is decidedly different. Think about the comparison to a tax on gasoline--everyone pays the same tax for a gallon of gas--compared to the tariff discussed here, where you only pay the tax if you buy tires from a foreign country. It increases incentives to buy American made tires.
9.12.2009 12:12pm
Tom952 (mail):
Trade restrictions complement the administration's pro-union stance. If they can go out in public and praise America's trade unions as Obama did this week only months after the unionized portion of the American automobile industry requred billions in subsidies to survive, then they will see no problem in restricting competition to help the same group.
9.12.2009 12:17pm
John Thacker (mail):
I think this is finding support for your own biases. I don't much like this either, but "protectionist president" is unfair, as you can find plenty of these examples from other presidents. Say Bush 1 or 2 was protectionist too or it has no meaning. Bush II for one had those steel trade restrictions.


You're correct that one action doesn't make someone protectionist, but that same reasoning means that we can make distinctions on a sliding scale. Clinton imposed Canadian lumber restrictions. Would we have to say he "was protectionist too or it has no meaning?" Or can we say that some free trade actions can compensate for other protectionist actions?

I don't want to entirely defend GWB, but the steel tariffs expired. The Administration browbeat CAFTA, and signed free trade agreements with South Korea, Colombia, and several other nations. GWB also rejected all the Section 421 complaints that came before him.

GWB, over congressional opposition, started a pilot program to allow Mexican trucks to operate as promised under NAFTA. Reports found that Mexican trucks, contrary to the scare claims, were safer and cleaner than US trucks. When the new Administration took office, Congress tried to kill the problem. The Administration let it.

The Administration has refused to take a strong stand on "Buy American" as well.

The Administration allowed punitive tariffs on steel pipe just recently.

But those earlier actions all could be blamed on Congress combined with a weak Presidency that, while not necessarily protectionist, didn't make free trade a priority. Section 421, by contrast, is both seen as the direct order of the President, and as something that has never been used before.
9.12.2009 12:23pm
Tim Nuccio (mail) (www):

Smoot-Hawley...



Precisely what I was thinking!
9.12.2009 12:26pm
John Thacker (mail):
GWB was certainly not perfect on free trade. He signed one terrible agricultural pork bill, and vetoed the second, which Obama supported.

None of this should be a surprise, though. If someone really thought that free trade was their absolute top issue, then McCain was obviously the better candidate. McCain's consistent record on free trade is exceptionally good for anyone in the Senate.
9.12.2009 12:27pm
frankcross (mail):
Context. Don't be drama queens. Given the nature of the recession, the surprising fact is that we have not been more protectionist. This looks bad but it's not that significant. What's significant is that there has not been anything like Smoot-Hawley.
9.12.2009 12:29pm
ArthurKirkland:
If Section 412 constitutes American law, an argument it should not be enforced as a matter of reflex seems strange.

I do not understand the issues associated with a tire tariff, and have not seen anything approximating a reasoned argument for or against imposing them. I do not know how common tariffs are or have been. (The United States prohibits, as I understand it, importation of certain pharmaceutical products; that seems to make a tariff seem tame.)

If this tariff decision is so bad, one would expect it to be based on strongly reasoned argument. Until the better arguments -- for and against -- emerge, it seems difficult to reach a reliable conclusion.
9.12.2009 12:37pm
Joseph Slater (mail):
There really ought to be a name for this type of political post (see also a recent post by David Bernstein) in which people who were bitterly opposed to a candidate during his candidacy now say "gee, he's even worse than I thought he would be!"
9.12.2009 12:38pm
SuperSkeptic:
What do you imagine the immediate result would be if people who invest time, labor, money, and other resources in order to develop new, better products were not allowed a patent or copyright -- for at least some time -- that would allow them to recuperate their investment and profit from their work?

I guess your point to huskerfan is that there would be a decrease in those investors (on the margin) who would undertake such investments because they could not recoup/profit. But, is there not the same thing going on, but with larger margins by the very fact that there is a cut off of "some time?"

I'm not sure where I fall on patents as a theoretical matter, but if implemented correctly, IP protection isn't protectionism in the classic sense.

I understand the difference in the classical sense. But, I think Huskerfan might be on to something as evidenced by the fact that you hesitate on the theoretical nature of the principled distinction.

The "foreign penalty" v. "diffusion to all americans" distinction is hardly sufficient, I think, as a theoretical matter to satisfy myself or huskerfan.

I'm left with opposition to patents and copyright by default, it seems, with the burden on you to show a principled theoretical distinction. Federal dog's policy is, seemingly sufficient from a practical or policy matter (for most) but not theoretically (which is what matters).
9.12.2009 12:46pm
common sense (www):
Skeptic,
Imagine a world without copyright. As soon as I publish a book, someone else may as well. The price will rapidly decrease to the cost of publishing the book. I will have little to no time to recoup the expense of writing the book. The reason I want to stay theoretical is because I think the copyright term has grown so long that it overcompensates. I still think it is better than a tariff on all foreign books, which still fails to compensate our author--other American publishers will drive the price down--while greatly reducing our access to foreign works.
There is a strong theoretical reason to switch to rewards instead of patents. It is more efficient, and I apologize for not having a link handy. The problem with the theory is that it assumes that government will make the proper choice when setting up the reward--the government doesn't set up a particular company as a winner, but it may set up a technology that is inferior as the one to receive the reward. I think you could work around it, but I'm not sure. If someone could work around it, I would not support patents.
So my hesitancy is not with IP protection compared to tariffs--it is IP protection in the general sense.
I think a tighter analogy is IP protection with regulator compliance. Compliance raises costs on everyone. The question becomes whether the benefits exceed the costs. The same with patents and copyrights--it is entirely possible to take a good system and change it so it is bad. On tariffs, I fall the other way. I see very little reason to implement them even in the theoretical sense.
Because the analogy between IP protection and tariffs is weak--even in a practical sense, they affect very different audiences, it would be helpful if you could expand on their connection. If you just dislike government play in the market at all, I'm not sure I disagree with you, but I don't think the discussion is helpful in this narrow context. Assume for this discussion that the government is going to get involved in some manner, even if only some sort of tax to fund itself, and then explain how what I see as a pretty broad difference between IP protection and tariffs goes away.
9.12.2009 1:01pm
Oren:

replacing the tires on one's car represents a major expense that one cannot necessarily plan in advance for.

Sure you can -- every month set aside 4 * $(new_tire_cost) * ( 40k / #(number_of_miles_driven)). Since most tires last 50k miles, you will almost certainly have saved enough.

Most consumers might lack the willpower to do so (and easy credit makes it hardly worth it), but it's absolutely doable.

Prof. A,

While I agree in principle with the WSJ editorial and your position, it strikes me that there is no analysis of whether the petition meets the criteria in Section 201. I understand that the statute vests discretion in the President, but 19USC2252 et seq also explain the criteria that are to be used while making the decision.

Specifically, the "serious injury" prong seems to have been met by the petitioners, making the case for using the President's negative discretion somewhat less strong.
9.12.2009 1:18pm
SuperSkeptic:
CS,

No, I think we're on the same page - So my hesitancy is not with IP protection compared to tariffs--it is IP protection in the general sense. - and that the government is going to get involved in some manner I agree that a switch to an IP regulatory scheme would likely be worse (although if you can find the link for a reward scheme, i'd be interested to hear it out).

My point is this, in the abstract/theoretical about your position v. mine/huskerfan(?)

you:
Tariff - theory = bad. Policy = bad.
IP - theory = hesitant Policy = good.

me:
Tariff - theory = bad Policy = bad.
IP - theory = Can't see it at all Policy = probably good.

Not to compare the two directly, but there seems to be a parallel in theory, and it seems to be huskerfans point that if you can theoretical oppose tariff, why not IP? After all, the tariff as a policy choice seems good to some, hence the article, in that it protects american industry. Nobody here seems to question that the IP policy is good, or at least the best we can come up with. The problem remains, why are we okay with the IP theory???

It seems like an inconsistent theoretical position. You even hesitate to justify it theoretically; I go further and cannot rationalize it at all theoretically.

Of course, if we continue to assume government involvement, all theoretical problems just go away and we can just argue about policy outcomes, I guess. Because most of us cannot "imagine a world without copyright" is not a sufficient theoretical justification for its continuing existence. So, my question boils down to, I think: what is your theoretical justification for it?
9.12.2009 2:07pm
Monty:
IP Laws are beleived to encourage innovation by rewarding the innovator. The innovation is the value we get in exchange for the higher prices IP laws create. You can argue about the underlying premise, but thats why IP laws can be acceptable.

Protectionist tarrifs help protect domestic industry. Strong domestic industry is the value we get in exchange for the higher prices protectionist laws create. BUT, that only holds true as long as foriegn nations don't retaliate. If they impose a retaliatory tariff on an American export, that industry is hurt. Now we have one industry helped, one hurt as much as the first was helped, and higher prices all around.

The potential retaliation is the difference between IP and Trade protectionism.
9.12.2009 2:52pm
SuperSkeptic:
The innovation is the value we get in exchange for the higher prices IP laws create.

Not just that, IP laws also suppress knowledge. It's not just about prices. Consider, if knowledge expands exponentially, the effect of the slowing of that rate of expansion of the aggregate knowledge in humanity.
9.12.2009 2:57pm
Mark Buehner:

Protectionist tariffs help protect domestic industry. Strong domestic industry is the value we get in exchange for the higher prices protectionist laws create.


Don't confuse protected with strong. What tariffs do is allow domestic companies to be less competitive. That means higher prices for consumers (always), but it can also mean lower quality, worse customer service, etc.

Its a sop to a very small number of people in the tire business at the expense of consumers, which is pretty much everyone (since we all rely on tires either directly or indirectly). And thats _before_ we even start talking about the repercussions the Chinese are sure to impose in the inevitable retribution, however that will look.
9.12.2009 3:12pm
common sense (www):
Actually, I'd say that, as the policies are implemented right now:
Tariff= bad in both theory and practice
IP=good in theory, all except trademark is bad in practice.
We can still have a theoretical argument when we assume some sort of government intervention. I think the theoretical differences between IP and tariffs are massive= patents charge every manufacturer the same amount, tariffs charge foreign manufacturers more. That discrimination is the difference, and it is huge, especially if a foreign government retaliates, which they will.
9.12.2009 3:29pm
Tom B (www):
I think the problem with not rejecting the tariff is that it is another straw on the proverbial camel's back. Eventually one of Obama's many sins, i.e., Buy American, debt explosion, protectionism, will cause our economic allies to break.

Monty is mostly correct. However, tariffs are designed to protect inefficient domestic industries - only rarely do protectionist policies create "strong" domestic industry (see Krugman's work). Protectionism results in higher prices to U.S. consumers. It also results in a misallocation of resources. For example, the U.S. invests in creating sugar farms when in another country those farms could be created and operated for less while producing more sugar. Instead the U.S. should invest that money in something else. If you support protectionism, I assume you support green energy. That sugar farm money could be invested in trying to make some crappy green energy project like wind turbines more efficient.

IP laws encourage the creation of knowledge. They restrict its widespread use for a period, but that restriction is to encourage investment up front. Sans IP laws, much knowledge would never be created/discovered. So without patent protection, companies would be even less likely to invest in better ways to make wind turbines.

So, yeah, IP laws and protectionism have little in common.
9.12.2009 3:38pm
SuperSkeptic:
so, your theoretical IP justification is a sort of equal protection variant, that wholly domestically - patents charge every manufacturer the same amount?
9.12.2009 3:45pm
common sense (www):
Skeptic- that's roughly right. Except it is requiring government policies to act on everyone equally, instead of using gov't power to force private companies to treat everyone equally.

I also think IP laws have a net positive effect, whereas tariffs do not. Tom has already explained it as well as I think I would be able.
9.12.2009 3:48pm
Glenn W. Bowen (mail):

What's significant is that there has not been anything like Smoot-Hawley


Right, and if there ever is, it'll probably be over a foreign product like tires or something, ya know?
9.12.2009 3:50pm
Monty:
The criticism of my use of "Strong" is well placed, it was a poor choice of words. A tarrif promotes keeping a US based industry profitable when due to competative pressures or inefficiency it would otherwise be less profitable or not be at all. Describing that as strong was inapt.
9.12.2009 4:17pm
Bruce Hayden (mail):
Not just that, IP laws also suppress knowledge. It's not just about prices. Consider, if knowledge expands exponentially, the effect of the slowing of that rate of expansion of the aggregate knowledge in humanity.
Except that part of the justification for both copyright and patents is to disclose the knowledge - in trade for the monopoly, of course.
9.12.2009 4:35pm
SuperSkeptic:
So, just to run with this a little bit further...

IP laws encourage the creation of knowledge. They restrict its widespread use for a period, but that restriction is to encourage investment up front. Sans IP laws, much knowledge would never be created/discovered. So without patent protection, companies would be even less likely to invest in better ways to make wind turbines.

So, yeah, IP laws and protectionism have little in common.


On the contrary, it seems like, if you analogize the patent holder to the domestic protective tariff beneficiary and those excluded by the monopoly the foreigner, IP laws are a sort of protective tariff on knowledge.

While we can argue about whether there would be less knowledge created without them due to reluctant capital or whether there would be an exponential increase in knowledge which would outpace that reluctance (i.e. whether IP laws have a net positive effect, whereas tariffs do not.), this seems to me to be a speculative justification based on the outcome of the policy, not an a priori theoretical justification, which is what im driving after...

All I seem to be getting is, "tariff's don't work well, IP laws do" and that's no principle. Free trade needs to be free trade, no?

(and i'll leave it at that, unless someone else wants to jump in. . .)
9.12.2009 5:25pm
ShelbyC:

A tarrif promotes keeping a US based industry profitable when due to competative pressures or inefficiency it would otherwise be less profitable or not be at all.


Correct. It's a transfer of wealth from the consumer to the business.
9.12.2009 5:35pm
Elmer:
A managed exchange rate, and subsidized land, capital, and operations are remarkably effective at maintaining inefficient enterprises. Are countries using these methods morally superior to those that use tariffs? Suppose a country stays on the path of light, allowing other countries to run huge trade surpluses, without descending to retaliation, until the good country is running trade deficits greater than 5% of GDP. Will the inevitable economic effects of that deficit be counteracted by the feeling that they are doing the right thing?
9.12.2009 8:25pm
theobromophile (www):
I don't understand the difference in the classic sense. I see both tariffs, copyright and patents as protectionist. I guess I'm also curious why people are more concerned about tariffs than the others. I don't see the principle.

Since it's not blindingly obvious, here goes: imagine trying to get Merck or Glaxo-Smith-Kline to spend $1 billion in developing a new drug or medical device without patent protection.

People would have that thing reverse-engineered in a nanosecond, then would sell it at the same price as the developer, without having to pay the costs. IP protection prevents free-riding.

That should be obvious, so I'm honestly stunned at the idea that people actually think otherwise. Anyone who has ever used human ingenuity to produce something of value knows this.
9.12.2009 10:57pm
Art Eclectic (mail):
Ricardo "The op-ed is quite right that imported tires are crucial for low-income Americans -- replacing the tires on one's car represents a major expense that one cannot necessarily plan in advance for."

Allow me to introduce you to low-income Americans. They don't buy new tires. They buy used tires that still have some life in them, usually the ones discarded by the middle class who DO buy new tires.
9.12.2009 11:39pm
Jim Miller (mail) (www):
Professor Adler says that President Bush was "far-from perfect" on trade policy.

That reminds me of a conversation I didn't have with John Quiggin of Crooked Timber a few years ago. Quiggin said, though not in those words, said that Bush was far from perfect in his stance against slavery.

So I asked Quiggin which world leader had done more than Bush to fight against slavery. He never replied. Understandably, since we all know what the answer to that question is.

Professor Adler is smart enough to figure out what my parallel question to him would be. I hope he will take a minute or two to answer it, even though I haven't stated it directly.

On the whole, Bush was more pro free trade in his policies than was wise politically. But he still got much grief from people like Adler for being imperfect. Now that we have a president who does not back free trade as Bush did, Adler (and others like him) may discover some of Bush's virtues. (Even if he was "far-from perfect".)

(Incidentally, it is distressing to see that some libertarians care more about free trade than about free people. I am for both, but I think the latter is far more important.)
9.13.2009 12:04am
Stu (mail):

Yes, I'm disappointed, but what can you expect from a President who has already demonstrated that he is an economic illiterate?

It's Congress as well - read Waxman-Markey. Any country not imposing carbon taxes akin to those in that bill, if it ever becomes law, will see its products hit with tariffs at the US border. EPA's consultants (of which I am one) are busily calculating projected tariffs on an industry-by-industry basis to determine what will need to be done to protect all energy intensive industries. We're not talking selective protectionism here. See the analyses at http://www.epa.gov/climatechange/economics/

I can't imagine such pervasive protectionism passing without another round of tea parties. I mean pervasive. It cannot be good.

Congress is dominated by economic illiterates. Or rather, damn the torpedoes, full speed ahead.
9.13.2009 12:14am
theobromophile (www):
Allow me to introduce you to low-income Americans. They don't buy new tires. They buy used tires that still have some life in them, usually the ones discarded by the middle class who DO buy new tires.

Not true. You can get $30 tires at National Tire &Battery and a few other places. Granted, they don't last very long, but they will get the job done.

Of course, this all depends on how you define "poor," but my guess is that the lower-middle-class car owner will probably go for the new and cheap tires.

Now, to dispute everyone's premise: one need not be "poor" in order to find the cost of tires to be tough to take. People who do more than the average 12,000 miles of driving a year (long commutes, drive instead of fly, etc) will need to replace their tires every few years - and that's without factoring in snow tires and flats. $300 or $400 for a quality set is not something to sneeze at. Students, new parents, and a host of other people who are not "poor" in the sense you mean would welcome some relief in the tire-purchasing department.
9.13.2009 12:15am
Ursus Maritimus:
Smoot-Hawley made FDR president-for-life, so from his standpoint it was excellent policy.
9.13.2009 2:44am
Mark Buehner:

Will the inevitable economic effects of that deficit be counteracted by the feeling that they are doing the right thing?

Define the 'inevitable economic effects'.
9.13.2009 4:08am
John Quiggin (mail):
@Jim Miller

I don't recall this exchange, Jim - can you point to it?

I'm also a bit surprised as I don't recall ever holding or expressing any strong views regarding Bush and slavery. I'm not really aware of what Bush (or other current world leaders) have or haven't done to combat the continuing problem of slavery.

Perhaps you meant the term in a metaphorical sense, referring to liberty in general. If so, I can only attribute my putative non-response to flabbergastedness. There can be few world leaders in living memory who have done the cause of liberty as much damage as Bush and Cheney.
9.13.2009 6:34am
ChrisTS (mail):
Joseph Slater:

There really ought to be a name for this type of political post (see also a recent post by David Bernstein) in which people who were bitterly opposed to a candidate during his candidacy now say "gee, he's even worse than I thought he would be!"



Hysterical self-affirmation?
9.13.2009 12:15pm
ChrisTS (mail):
Out of curiosity, do/can we call the many supports the U.S. gives to agriculture 'protectionist'?

This seems to be a non-partisan issue, but AFAIK no Congress or President has managed to put a stop to it.
9.13.2009 12:17pm
Elmer:

Define the 'inevitable economic effects'.


A 5% trade deficit and sub-5% growth means continually rising net debt obligations to the rest of the world.
9.13.2009 12:22pm
gab:
When the Chinese let the yuan float freely, then maybe they'll have a leg to stand on as far as criticizing our trade policies. But only then.
9.13.2009 1:46pm
SG:
do/can we call the many supports the U.S. gives to agriculture 'protectionist'?

yes/yes
9.13.2009 4:47pm
ChrisTS (mail):
SG: Thanks; very succinct.

A more nuanced question: does 'protectionism' cover both price internal supports and tariffs on imports, or just tariffs?
9.13.2009 6:00pm
SG:
A more nuanced question: does 'protectionism' cover both price internal supports and tariffs on imports, or just tariffs?

According to wikipedia (I know, I know...but it's an easy link to find), subsidies (both direct and export) are considered forms of protectionism.
9.13.2009 9:55pm
ChrisTS (mail):
SG:

Well, thanks for doing the easy work. :-)

I guess I am puzzled that I do not so often hear cries of 'protectionism!' when the mode of delivery is price supports.
9.14.2009 7:32pm
Opher Banarie (mail) (www):
"...I have remained somewhat hopeful the Administration would avoid the protectionist impulse within the Democratic Party."

What Democratic Party impulses has this Administration avoided? None that I can see.

* More government involvement in economy - check
* More government regulation - check
* Higher taxes - check
* Appeals to environmentalism without cause - check
* Greater access to government services for illegal immigrants - check
* More power to labor unions - check
* etc, etc, etc
9.14.2009 7:54pm

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