Saturday, November 11, 2006

More on Lou Dobbs Democrats

I see via Cafe Hayek that Harold Meyerson of the Washington Post have written more about the protectionist leanings of the new Congress. Meyerson writes approvingly about this, but he documents nevertheless interestingly that nearly every Democrat who beat Republicans did so by arguing for "fair trade" (euphenism for protectionism) and attacking their Republicans opponents for being too free trade oriented. Protectionist sentiment thus appears to have been another factor, besides opposition to the Iraq war behind the Democratic victory. The exit polls that I've studied didn't ask about trade, but the fact that the Democrats campaigned on this and won, indicates that it was a contributing factor.

Given the fact that we're talking about 27 House congressmen and 6 senators, the protectionist shift is significant. Given this shift and given the likely downturn in the economy, we can really forget about liberalization here, the question is now to what extent increased trade barriers can be stopped. Of course, as the Smoot-Hawley tariff bill in 1930 showed, trade barriers will not provide any relief in economic downturns. It will in fact just aggravate the problems further. But we certainly can't expect politicians to refrain from a policy just because it is destructive.


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