Posts tagged with: protectionism

bannon-capitalismSoon after winning the election, President-elect Donald Trump created waves of controversy by naming Steve Bannon, his former campaign CEO, as chief strategist and Senior Counselor in the new administration.

Yet while Bannon’s harsh and opportunistic brand of political combat and questionable role as a catalyst for the alt-right are well-documented and rightly critiqued, his personal worldview is a bit more blurry. Much has been written of Bannon’s self-described “Leninist” political sensibilities and his quest to tear down the GOP establishment, but at the level of more detailed political philosophy (or theology), what does the man actually believe?

Offering a robust answer to that question, BuzzFeed recently unearthed a transcript from an extensive Skype interview Bannon gave to a conference held inside the Vatican in 2014. Though the topics range from ISIL to Russia to the racial tensions within the conservative movement, Bannon spends the bulk of his initial remarks on the intersection of economics and Christianity, offering what’s perhaps the most detailed insight to Bannon’s own thinking that I’ve found.

Given the growing mystery of the man and his newfound position of influence in the next administration, it’s well worth reviewing his views on the matter. (more…)

clinton-trumpImagine if Donald Trump made a campaign promise that he would lower the pay of every American, but would ensure that the poorest 10 percent have their pay lowered the most. Would you vote for him then? Or imagine if Hillary Clinton said she would increase inflation substantially to make the economy more “fair” for everyone. Would she win your support?

Neither candidate has made such a claim—at least not directly. The American people would immediate reject such harmful economic policies, and politicians know they’d be rejected for making such inane promises.

In reality, though, both Clinton and Trump (as well as the candidates for the Green Party, Constitution Party, and the American Solidarity Part) have promised to implement policies that would have the same effect as increasing inflation or reducing pay, for all have proposed a means of lowering purchasing power.
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free tradeWhile the Democratic and Republican parties disagree on just about every other issue, there is one area where they seem to have common ground.  That is the issue of trade and, unfortunately, neither of the two major political party’s platform takes a liberal position on the issue.  Director of Research at the Acton Institute, Samuel Gregg, recently highlighted in an article for The Stream how the two parties have taken positions against free trade and how ultimately this will hurt the American economy.  Gregg starts his article by explaining how the alternative to free trade is protectionism which will lead directly to cronyism:

Protectionism also encourages unhealthy relationships between politicians and businesses. The latter have an incentive to lobby for favors rather than improve their performance in the marketplace. And politicians expect something in return for passing legislation that favors particular industries and businesses. In this sense, protectionism feeds a major problem already harming American politics and the economy: crony capitalism.

Gregg goes on to explain both party’s platform on the issue of trade, starting with how the growing skeptic ism of free trade in America has infiltrated the Republican platform.  This is really not surprising when considering how closely Donald Trump’s nationalistic rhetoric aligns with the ideas of protectionism.  Gregg says: (more…)

Untitled1Throughout our debates over foreign policy, trade policy, immigration policy, and otherwise, the 2016 election has seen increasing concentrations and divides between nationalism and globalism, each blind in its own way.

Those who promote a (supposedly) “America first” agenda, ignore the impacts to our neighbors across the globe, each created in the image of God and deserving of the same rights and freedoms we enjoy. Meanwhile, the globalists ignore the benefits of local community and national sovereignty, promoting inclusion to the detriment of distinction.

This needn’t be an “either-or” divide, and for the Christian in particular, the choice is particularly ill-suited to our basic theological vision. (more…)

Photo courtesy of Wikimedia

In a recent interview with MercatorNet, Samuel Gregg explains why the integration of markets is not in itself a bad thing.  Gregg starts out by explaining why Brexit does not contradict economic globalization, but why it is actually beneficial to the global economy.  Hey says:

But Brexit is also quite compatible with economic globalization. Economic globalization is rendering trade blocs such as the EU increasingly irrelevant. Britain now can choose to trade freely with whoever it wants, instead of waiting for every single member of the EU to agree.

The interview continues to talk about Gregg’s 2013 book Becoming Europe: Economic Decline, Culture, and How America Can Avoid a European Future and what exactly is America trying to avoid by not becoming Europe.  He explains: (more…)

Photo courtesy of Wikimedia.

Photo courtesy of Wikimedia.

What is the biggest economic problem that the U.S. is currently facing? Depends who you ask.  Some social justice warriors would tell you that capitalism is ruining our economy, yet many who have studied and understand economics would argue the opposite. Capitalism is not to blame, but rather cronyism and protectionist policies are the ones wreaking havoc on the economy.

In a previous post, I discussed how occupational licensing as a form of cronyism is trapping people in poverty. However, cronyism is a much bigger problem than just occupational licensing. The U.S. struggles with other forms of cronyism too, such as protectionism through quotas, tariffs, and corporate welfare.

Quotas and tariffs make it extremely difficult for international firms to sell their product in the U.S., thus protecting U.S. firms from international competitors.  Corporate welfare is government support of a private business usually through direct money transfers (subsidies) or tax breaks, often protecting big firms from the competition of smaller firms.

This form of cronyism typically occurs for two reasons:  First, in an attempt to create new domestic jobs or prevent jobs from being sent overseas and second, because politicians promise “goodies” to corporations and individuals that help them get elected. (more…)

John Calhoun (1782 - 1850)

John Calhoun (1782 – 1850)

Proponents of protectionism often ground their support in a quasi-nationalism; trade should be restricted for the benefit of the nation. Economically, the argument holds little weight. The benefits of more trade, like more and cheaper goods, outweigh the costs, like some temporary unemployment that results from the closing of a factory that couldn’t compete with foreign companies.

Some protectionists may accept this, and still urge tariffs, quotas, and other restrictions. They argue that a nation can still benefit, even with economic disadvantages. Sure, consumers might pay in higher prices if there’s a tariff on steel, but think of all the jobs! The consequences of protectionism, however, are not simply economic. Rather than developing national and political unity, tariffs often lead to national discord.

Take the United States in the early nineteenth century. Its still developing economy was primarily agricultural, with a growing commercial and manufacturing sector. Many early American politicians advocated a tariff in order to protect, foster, and develop American manufacturing.

Ignoring the economic flaws of such a plan, the policy sowed the seeds for national disunion, culminating in the United States Civil War. How?

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