Magical unicorn fairyland – redux

Those fears that the US Stimulus Bill will spark a global trade war remain, despite the re-assuring words of Paul Krugman.. Several reports note more warnings from the EU and elsewhere, whilst a detailed SF Chronicle report notes, “The administration is reviewing that provision” – Irish Eagle also has a couple of posts on this too. Here it’s a welcome change to see that a local politician appears to get it – “If we learned anything from the outcomes and policy mistakes of the 1930s it is that beggar my neighbour policies of economic protectionism and nationalism are ultimately self defeating and leave us all worse off.” And no it isn’t Mr Wilson. Meanwhile Obama’s flexibility on the short-comings of his nominees has been raising eyebrows.. and has prompted a New York Times editorial calling for Tom Daschle to “step aside”. But the New York Times is also re-assuring readers that it’s evidence that “Mr. Obama has proved willing to compromise.”

Mr. Obama is running into crosscurrents that bedeviled his predecessors. Jimmy Carter promised a new day in Washington after Watergate but still found top associates caught up in scandal. Bill Clinton promised “the most ethical administration in history” and then endured the most independent counsel investigations in history. Mr. Bush vowed a new era of responsibility only to be accused of selling out to energy and military industries.

Change it is then.. Update It seems that Tom Daschle listens to the New York Times.. if no-one else.. That’s the second “top nominee” to withdraw today.

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  • Dave

    Reg is too influenced by the BBC. Chemical experiments repeat, history, contrary to myth, never repeats. Markets, unlike molecules, learn and alter their behaviour based on past outcomes, so simple analogies, historical citations of tariffs wars of from the 30s, and pejorative terms for dissenters doesn’t add up to a convincing argument. Keynesianism is making a big comeback. Interventionist politicians and the socialists who pollute the BBC love it. Obama loves it. It’s hip, it’s cool, and it’s here. Keynesianism is the twin of protectionism, and that’s making a big comeback too. There is no point, of course, in mortgaging your country to finance a fiscal stimulus package if all you do is stimulate the economies of others country: that gives other countries the benefit of the borrowed money but leaves the borrowing country with the debt. So Keynesianism brings protectionism. We need a ruthless return to ‘beggar thy neighbour’ policies. Obama will be forced into it, and the world will be better for it. Besides, globalisation has led us all into this mess, whereas sovereign borders and sovereign law would have acted as a natural firewall. When your unbridled dream of a single-government world has created this mess, you shouldn’t be too surprised if folks begin to question the wisdom and agendas of those who proffer it.

  • David Cather

    If the twin perils of protectionism and over-regulation aren’t resisited by national governments then there WILL be a prolonged slump.

  • OC

    I’m paraphrasing some Nietzsche I once read: “Before a man discusses economics, he must feed his family.”

    I like to call it one of the Paradoxes of Efficiancy – That which is most economically efficient isn’t always socially desirable.

    Is society better off with a little less economic effiency if it brings maximum employment?

    This is the philosophy behind the spinning wheel on India’s flag. Was Ghandi a fool?

  • fair_deal

    “Much has been made of the phrase ‘British jobs for British workers’ implying that local people should have priority for jobs over those from other EU countries or those legitimately in the UK workforce. This is not possible…”

    This statement is not entirely correct.

    Local labour clauses are permissible in particular circumstances under EU and GB law. The position in NI law has never been clarified. The Joseph Rowntree Trust have produced a guide to how such clauses can be implemented.

  • 6cp

    So, is this ‘change we can believe in’?

    – Nominating a string of tax cheats for high positions in government

    – Breaking ‘No Lobbyists’ promise – 17 so far (Feb 2)

    – Daschle – a symbol of Obama’s hypocrisy

    – Post-partisan politics dead on arrival

    Expanding Clinton/Bush rendition programme

    – Ha! Trying to enter the White House by a window. At least Bush knew to try to go through a door, even though it was locked!

    Naïveté and sheer foolishness in Iran policy

    – Lowering the standing and office of President by attacking political commentators (Rush)

    – Looking more like Jumma Carter every day.

    Mocking people who are overweight

    – Pushing through a mind-boggling number of dollars ‘stimulus’ against the wishes of both Dems and Reps.

    – Sticking it to non-Americans with ‘Buy American’ (quote – ‘Canada and other U.S. trade partners have warned that that’s precisely the type of protectionist tit-for-tat that turned the stock market crashes of 1929 into the Great Depression.’)

    – Well, I suppose there is real change in this one: Bush exported life and hope to millions suffering from malaria and AIDS. Obama exporting death dollars to stimulate the overseas abortion industry.

    You can take the man out of Chicago, but…

  • Pete Baker

    Update It seems that Tom Daschle listens to the New York Times.. if no-one else.. Apparently that’s the second “top nominee” to withdraw today.

  • Greenflag

    Is there anybody in Washington who actually does pays their taxes ? Following Timothy Geithner ‘s admission of ‘regret ‘ we now have Daschele’s withdrawal . It seems that the only cross party cooperation that goes on in the houses of Congress is the ‘joint’ effort to screw as much out of the American middle class as they can while they hold on to their seats !

    Anyway Daschle is probably too old for the job of work that needs to be done in reforming the American Unhealth Care system

  • kensei

    There is actually an interesting bit of discussion kicking about the economics blogsphere regarding protectionism. I had hoped that if people were going to address the topic they’d seek it out. Turns out I was living in “Magical Unicorn Fairyland”.

    Nick Rowe responded to Krugman’s argument and there was a little back and forth. There is also a decent argument in Rowe’s comments, which runs:

    That’s a great argument, but again, the stimulus package is not protectionism! Nobody is raising tariffs! The government is simply choosing where it purchases (a tiny proportion of goods) from selectively, which is the right of any consumer in the market. The populace is free to spend their paycheck on goods from whatever country they want.

    There is also some other discussion vis China here:

    The main concern seems less that this is particularly nasty, but that where it could lead is scary.

  • 6cp

    Is there anybody in Washington who actually does pays their taxes ?

    It’s a pretty clear that very few Democrats do! They seem to have a special gift for cheating in all sorts of ways. There is a solid foundation being laid for the OCC – Obama’s Culture of Corruption. We ain’t seen nothin yet!

  • Well at least now that Jan 20 has passed the IRS can launch an audit of the entire Dem hierarchy without being accused of being political 🙂

    Watch that deficit shrink!

  • Pete Baker


    “The main concern seems less that this is particularly nasty, but that where it could lead is scary.”

    Which is where I began..

    “Those fears that the US Stimulus Bill will spark a global trade war remain..”

    Glad you could join us.

  • kensei


    Point being Pete, it is not a good place to start particularly when combined with the tirseome cynicism towards the Obama adminstration. The articles led there via discussion of the dangers and merits and was actually grown up discussion rather than teen angst sarcasm. And I don’t think we’re at “global trade war” yet. That’d be hyperbole, and it does the place little favours. More “possible retaliation”. But then, you never seemed to grasp the importance fo presentation.

    Anyhoo, Stephanie Flanders covers should related material in her blog post: