[FOUNTAIN]Protectionism again on the rise in the U.S.

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[FOUNTAIN]Protectionism again on the rise in the U.S.

“To the Honorable Members of the Chamber of Deputies: Gentlemen, we are suffering from the ruinous competition of a rival who apparently works under conditions so far superior to our own for the production of light. This rival is the sun. We ask you to be so good as to pass a law requiring the closing of all openings, holes, chinks, and fissures through which the light of the sun is wont to enter houses. First, if you shut off as much as possible all access to natural light, and thereby create a need for artificial light, what industry in France will not ultimately be encouraged? We shall see an increase in cleared fields, meat, wool, leather, and especially manure, the basis of all agricultural wealth. Make your choice, but be logical; for as long as you ban, as you do, foreign coal, iron, wheat, and textiles, how inconsistent it would be to admit the light of the sun, whose price is zero all day long!”
In 1844, French economist Claude Frederic Bastiat satirized economic safeguards with “Petition des marchands de chandelles,” a petition from the candle makers.
In the 1980s, Japanese carmakers had to reduce their exports to the United States after being pressured by the U.S. Congress for having dominated the U.S. automobile market. Consequently, the U.S. market suffered from a shortage of supply and the prices of automobiles rose. American carmakers were able to sell their models at higher prices, but the American consumers had to bear the burden. In “From Here to Economy: A Short Cut to Economic Literacy,” written by Todd G. Buchholz, Robert W. Crandall, a senior fellow in economic studies at the Brookings Institute, sarcastically said that the U.S. government had put the American consumers on a big plate and served them to the Big Three carmakers in Detroit.
Facing protectionism, many economic principles lose their persuasive power. When economic safeguards are combined with questions about jobs, things get worse. Gregory Mankiw, a Harvard professor who now heads the White House Council of Economic Advisors, is under fire after a remark supporting the concept of outsourcing. Other economists agree that relocating call centers and other operations abroad is a good thing for the American economy in the long run. As a trading partner, we have to pay attention to the growing protectionist furor in the United States.

by Lee Se-jung

The writer is a deputy business news editor of the JoongAng Ilbo.
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