Through The Fly's Eyes: Protectionism
As CNBC hosted a presidential debate targeting the business audience, the issue of protectionism, or the economic policy of restraining trade between nations, was raised in a number of ways: Why do we have trade deficits? Why do both heads of a household need to work versus one? Why do people have to work so many more hours to live at the same standard of living as their parents? Why is the U.S. dollar weak? This is a debate that will only intensify as the Republicans and Democrats pick their candidates to face-off against each other.
Utilizing protectionism as the political hot button for a presidential campaign always carries the risk of unintended consequences. A candidate could actually convince the American people that protectionism could work, as the merits of globalization can often be hard to communicate and are often only understood after having experienced the economic limitations of protected borders.
The irony of CNBC's debate is that it was hosted in Michigan. This is the U.S. state which has stuck most closely to strong unionization and attempts to limit competition, and has also registered some of the weakest economic growth in the U.S. since the shift from a manufacturing to a service economy began some twenty-five years ago.
Senator John McCain brought up the Smoot Hawley Tariff Act which led to the Great Depression and World War II during the debate. Closed borders equal closed minds which translates into some bad economic times. The temptation of protectionism is one that must be avoided.