Tuesday, February 03, 2009

Protectionism = Economic Crack Cocaine

WASHINGTON (Reuters) -- Dallas Federal Reserve President Richard Fisher warned on Monday against "Buy America" provisions in a proposed fiscal stimulus law and said it could lead to devastating trade protectionism.

"Let me just be blunt. Protectionism is the crack cocaine of economics. It may provide a high. It's addictive and it leads to economic death," Fisher told C-Span television in an interview for its "Washington Journal" program.

President Barack Obama seeks a $825 billion stimulus plan to end the country's yearlong recession. U.S. lawmakers are debating rules that will insist that public money is spent on U.S-made products, although the White House has already said it will review any Buy America provisions.

"We just cannot afford to go down that path and I hope our senators, Democrats and Republicans, will be very sensible on that front," said Fisher, who is not a voting member of the Fed's policy-setting committee this year.

"Our job is to maintain price stability while we engender the growth and employment of the United States ... It is a very difficult balancing act, but it can only be done if it is buttressed by sensible fiscal policy," Fisher said.

HT: Dennis Gartman


At 2/03/2009 7:00 AM, Anonymous Anonymous said...

Can Protectionism be achieved without abrogating all those free-trade treaties that the USA signed?

At 2/04/2009 4:52 AM, Blogger sethstorm said...

I don't see those free-traders wanting to sell something the protectionists want.

This is what you get when you slam down significant parts of our nation for about 30 years.


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