Ask Money

Why are critics crying protectionism?

Chris Farrell Feb 19, 2009
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Ask Money

Why are critics crying protectionism?

Chris Farrell Feb 19, 2009
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TEXT OF INTERVIEW

Steve Chiotakis: President Obama today makes the first foreign trip of his administration — to Canada, America’s biggest trading partner. He’ll talk trade with Prime Minister Stephen Harper. And we’re almost certain to hear today about that “Buy America” provision in the economic stimulus package that was signed by Mr. Obama this week.

Let’s bring in economics correspondent Chris Ferrell. Chris, There are a lot of critics saying the U.S. is turning its back on free trade. Do they have a valid argument?

Chris Farrell: You know, I have to tell you, Steve — a little bit of my, my reaction, my sense of this, is the op-ed pages and the airwaves are sort of full of the sound: Protectionists are coming! Protectionists are coming! And it’s gonna be the 1930’s all over again. And it reminds me of this movie: The Russians are coming! The Russians are coming!

Woman: The Russians have landed.

Man: This whole danged island’s under attack — by Russians!

1966, height of the Cold War, and a Russian sub ends up in a New England village. And you can imagine there’s all kinds of misunderstandings and fear.

Man: I’ll tell you what we do: We shoot ’em, that’s what we do!

Of course, you know, the bottom line message is that everyone in the end got to know each other:

Norman: For God’s sake, why is it we can’t learn to live together?

Man: You’re right, Norman!

And they got along.

Well, you know, it’s good to be saying we don’t like protectionism. But you know, it’s a lot of exaggeration going on here and it kind of troubles me.

Chiotakis: But in this debate, this free trade debate, there are losers. What do we say to the losers, the people who lose their jobs in free trade?

Farrell: Well what I want to do, what I want to do, is economists, you want to write about free trade and against protectionism, here’s the deal: You get to write a paragraph that says you know what, free trade is good. But the rest of the article is filled with what do you do for the losers? What do you do for the worker that is out of a job? And by the way, a lot of workers are out of jobs. So let’s devote our brainpower toward the people who are suffering from free trade, because you know what, take a look at this Buy American provision and the fiscal stimulus package — it’s got so many loopholes it makes Swiss cheese look like a hyperbole. I mean come on — Americans embrace freer trade, we basically do. Congress basically embraces free trade. The president basically embraces free trade. Stop writing about protectionism and start writing about how do you get people back to work.

Chiotakis: Economics correspondent Chris Farrell joining us. Chris, thank you.

Farrell: Thanks a lot.

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