Record-high government spending, a hostile tax environment for individuals and corporations, takeovers of large sections of the economy (mortgages, automakers, healthcare), and protectionistic policies are a recipe for disaster. Unfortunately they also are the Obama administration’s economic agenda.
The tempting path of protectionism
Smoot-Hawley ended up burying American exports
The Obama administration is playing with fire when it tries to bully other countries like Mexico and China to satisfy protectionist interest groups in the United States.
It might be worth recalling how the Tariff Act of 1930 – still the statutory basis of U.S. trade policy – increased costs for consumers and businesses, devastated trade and plunged the Western world deeper into the depression that was already under way. Focused exclusively on domestic politics, President Hoover and members of Congress triggered an international catastrophe.
The article describes the effect on other countries. The effects today would be equally disastrous.