Battleangel

Alan Greenspan, Federal Reserve chairman, and John Snow, Treasury secretary, on Thursday warned Congress against erecting barriers to trade with China, saying this would do nothing to help US manufacturers but would hurt US consumers.

Imposing a tariff on Chinese imports would simply mean that the US imported the same goods from other low-cost economies in Asia and elsewhere, Mr Greenspan said. “Few, if any, American jobs would be protected,” he told the Senate finance committee.

But, he said, tariffs would raise the overall cost of goods for US households and risked setting off protectionist reactions abroad.

“I cannot overstate my firm belief that resorting to isolationist trade policies would be ineffective, disruptive to markets and damaging to America’s special role as the world’s leading advocate for open markets and fair trade,” he said.

Mr Greenspan said the focus on the US’s bilateral trade deficit with China was wrong-headed. “Some observers mistakenly believe that a marked increase in the exchange value of the Chinese renminbi relative to the US dollar would significantly increase manufacturing activity and jobs in the United States,” he said.

Senators cited complaints from US manufacturers about the currency peg, as well as concern about China’s poor enforcement of intellectual property rights.

Source: Business Standard

Intellectual property has become such a fad. And like protectionism, it’s a fantasy that will provide little to actually solve the issue at hand. I of course am rooting for the US to blow this simple equation and put themselves in an even worse situation than they’re in now.

Again, the bottom line for free trade versus protectionism is this: Rich = free trade, poor = protectionism. That is how it has been and how it must be. Of course, nations quickly forget, or falsify, their origins as they grow fat and wealthy. Kicking away the ladder as List so eloquently put it.

Here is an example of how some conservative John Doe Americans respond to this. It’s mostly “the Commies will get us” and those sort of things. Very constructive indeed.