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Raging Trade War

Published 09/26/09 Craig Harrington with Eamonn Fingleton - Print Article
E-mail - editor@economyincisis.org


Editor's note: This series originally ran in June. The following is the second interview in a six part series with economist Eamonn Fingleton. Tune in daily this week to watch all six groundbreaking interviews.

Much has been said and written about the seemingly contradictory ideas of “free trade” and “protectionism” since the modest economic downturn sped into a full-blown collapse.  One of the most important points to take away is the misconception that the world is unilaterally accepting of “free trade” and open markets, and that any “protectionist” strategies provoke economic retribution.   

      

As Fingleton points out, building protections into your economy cannot instigate a trade war if the war is already raging.  More importantly, building protections into the American economy does not change the fact that the United States is still the largest consumer market in the world.  Many in government, on both sides of the political aisle, have said that we must avoid a trade war.  What they should be doing is combating the one we are already engaged in and buffering American consumers from economic hostilities abroad. 

Click here for Part 1 in this series.

Download the full interview on iTunes.

Eamonn Fingleton is the author of In the Jaws of the Dragon: America’s Fate in the Coming Era of Chinese Hegemony. A former editor for the Financial Times and Forbes, he has written on East Asian and global issues for the The Atlantic Magazine, The New York Times, The Washington Post, and The Harvard Business Review.

Click here to contact your Representative in Congress.

Unless the above article is already copyrighted, this article is licensed under a Creative Commons Attribution-No Derivative Works 3.0 United States License, EIC grants permission to use this article in whole or in part provided attribution is given, preferably in the form of a link back to EconomyInCrisis.org.

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Article Comments From Readers

guest says "Wall Street Regulation" on 09/26/09
Here is an area that needs some type of regulation. As an IT consultant, I worked for a company for a short time to do data management design. In that process I found irregularities that can be explained as computer issues. But I saw there is more to it than meets the eye. In other words they were cooking the books. Unless you are a heavy duty computer expert, it is difficult to catch it after the fact. The accounting was clean but the information that went in was cooked prior to going in. If someone catches it, they can blame on the contractors who designed it.

Well no body caught it and I am sure they continued on the practice. But you can hide so much when the economy went down the cliff. So, their stock that was selling at $30 in 2002 is now $1.00. How much money do you think the shareholders lost on a 200 million outstanding shares?

This is what is going on. No real transparency!

guest says "Change Trade Laws" on 06/30/09
No need for more taxpayer bailouts and economic stimulus spending, if politicians would do the following: First, repeal all sales taxes and replace the lost revenue with an import tax/tariff on imported labor and manufactured goods. Second, repeal all local tax incentives that shift business costs to taxpayers and that create poverty wage jobs; or change these incentives to pay a living wage, minimum wage of $14/hour (parent with one child). Third, re-regulate banks and financial corporations. Fourth, enact a windfall profits tax on oil and gas companies; but, rebate this money through tax incentives for drilling and building refineries (including ethanol ones in other countries) as well as eliminating the $.54/gallon import tax on sugar cane ethanol. This strategy will slow these companies from using excess profits to enrich executives and to buy company stock. Fifth, increase taxes on fuel guzzling vehicles, wealthy individuals and corporations (eliminating corporate welfare and tax loopholes) to pay for the Wall Street bailout, the Iraq war and to pump more oil in Iraq for export. These strategies will lower the $11 TRILLION taxpayer debt leading to a stronger dollar that will reduce inflation and increase the number of good paying jobs with benefits for American citizens.

biguru says "He is correct" on 06/30/09
Fingleton is correct, the countries with trade surplus with us will not start a trade war as they have more to lose. We should throttle the trade now substantially towards trade surplus with an aim to balance it in two years. That would provide massive high quality jobs here which will actually benefit our trading partners.

Before we do that, we need to implement the Universal Healthcare now - otherwise when jobs come back, no one will do that. Same for other regulations. As the planes are dropping from sky like flies, we need more international regulation not less.