Protectionism here we come! The end of Globalisation?

Money Matters...
Post Reply
User avatar
Enigma
Keeper of the Calm
Posts: 827
Joined: Fri Nov 03, 2006 2:27 am
Location: OZ!

Protectionism here we come! The end of Globalisation?

Post by Enigma » Mon Feb 16, 2009 7:23 am

Protectionism On The Rise

In the wake of a worldwide recession that is strengthening,
Europe Turns To Protectionism .

Statistics released Thursday by the European Union's Eurostat agency reveal that production plummeted across Europe at the end of 2008. The figures announced were far worse than analysts had anticipated. Industrial production declined across Europe by 2.6 percent in December compared to the previous month. On a year-to-year basis, European production has slumped 12 percent. The European Central Bank (ECB) also issued a warning that the recession gripping Europe will not be short-lived. Rather, it will be a "long-lasting and clear downturn," the ECB said.

The response of the individual European nations to the growing crisis has been to embrace a raft of protectionist measures. Italian Premier Silvio Berlusconi recently warned appliance maker Indesit SpA not to transfer production and jobs to Poland, and in Britain, trade unions and politicians are demanding "British jobs for British workers."

On Wednesday, the acting EU Council president, Czech Prime Minister Mirek Topolanek, appeared before the press in Brussels and warned of a "protectionist race" in Europe, while acknowledging that national economies in the European Union were being hit hard by the international crisis and losing ground with unanticipated speed.

Last Wednesday, the French automaker Peugeot announced it was shedding at least 11,000 jobs, and one day later, Renault announced its own plans to cut its workforce by 9,000. These job cuts have been agreed to by the French government and trade unions and are bound up with the announcement by French President Nicolas Sarkozy that he plans to subsidise domestic automakers with the sum of €6 billion.

Sarkozy declared that, in his opinion, it was irresponsible "to continue to manufacture French cars in the Czech Republic." He demanded a halt to the transfer of production to other countries. "If we give financial aid to the automotive industry," he said, "we do not want them to set up a factory in the Czech Republic again." He also urged the carmakers to support French industries involved in supplying parts and services to French auto companies.

Czech Prime Minister Topolanek reacted sharply to this openly protectionist policy and called for a special European summit to block it and similar policies.

The conflict between Berlin and Paris runs deep. In his role as EU Council president last year, Sarkozy repeatedly raised the demand for an "economic administration" for the eurozone. He made it quite clear that he regarded himself as best suited to head such an administration.

Backed by the country's business federations, the Merkel government is seeking to exploit the crisis to strengthen Germany's dominant role in Europe. Berlin is vehemently opposed to taking any responsibility for Europe's "weak states"—i.e., those countries that have thus far failed to implement drastic social and welfare cuts.

In view of increasing tensions, the EU presidency and the European Commission have announced plans for no fewer than three separate summits in the coming three months. Behind this summit frenzy are fears of a possible break-up of the European Union and an escalation of working class resistance to mass unemployment and growing poverty.

US Protectionism and Hillary's Asian Mission

Please consider Clinton to Find China's Economic Troubles Curb Its Leadership .

When Hillary Clinton arrives in East Asia next week on her first trip as secretary of state, she will discover there are limits to what the U.S. can expect of China, the region's rising power.

With policies under review and top advisers not yet in place, the greatest value of Clinton's seven-day trip to Japan, Indonesia, South Korea and China will be symbolic.

As the world is dragged into a recession driven by a credit crisis in the U.S., policy makers point to China's new clout: an economy now bigger than Germany's and the largest foreign holder of U.S. Treasury bills, with $682 billion.

The two economies are interdependent as never before: China is the U.S.'s second-largest trading partner, buying $71.5 billion in U.S. exports last year as the U.S. took $337.8 billion in Chinese imports.

Following on the Bush administration's policy, the Obama team wants China to allow its currency to appreciate or float freely and to avoid protectionism.

Treasury Secretary Timothy Geithner said this week that the U.S. will look at the broad global picture in the coming months and judge “carefully” whether China is manipulating its currency. Geithner upset China by saying it is “manipulating” the yuan in a written answer last month to the Senate Finance Committee. Officials said Geithner merely repeated comments Obama made as a candidate and wasn't stating official policy.

“The Chinese are in no position to help anyone,” says Derek Scissors, Asia economics fellow at the Heritage Foundation in Washington. The most they can be expected to do is to avoid protectionism and export promotion, keep their currency stable, and stimulate demand through expanded consumer lending, he says.

US Pot Calls Chinese Kettle Black

Geithner put his foot in his big mouth in more ways than one. Someone better give him a lesson in diplomacy along with the lesson he needs in economics. Giethner is easily the worst of Obama's cabinet picks.

China is no more manipulating the Renminbi than the US is the dollar. What else do you call micromanaging interest rates, guaranteeing bank debt, engaging is currency swaps with Swiss Banks, and giving trillions of dollars to banks? Everyone of those things impacts the dollar. Moreover, there is no talk from this administration about Japan's open threat to intervene in the Yen, or the Russian intervention in the Rouble.

I am not in favor of any of this of course, I am just pointing out the US pot is calling the Chinese kettle black. And when it comes to free trade, the US and the EU are among the world's biggest hypocrites.

Moreover, Obama and Geithner better be careful of what they ask. China has already lost 20 million jobs, and it may easily lose 50 million more. Currencies of export based economies like Australia and Canada have been smashed. If China floated the Renminbi like we are asking, it could easily follow, and indeed I expect it would.

This is the worst possible time for protectionist policies. That means you can expect to see more of them, especially from free trade hypocrites in the US, UK, and EU.

http://www.marketoracle.co.uk/Article8895.html
Belief gets in the way of learning.

[img]http://i149.photobucket.com/albums/s62/enigmachaos/calmbnecromonger.png[/img]

User avatar
MzSnowleopard
Calm Chaos Official Cat Herder
Posts: 3045
Joined: Wed Jul 04, 2007 7:48 am
Location: Outta My Frakkin Mind
Contact:

Post by MzSnowleopard » Mon Feb 16, 2009 7:45 am

It seems to me that we should have seen this road coming up a long time ago... So, I'm not asking 'why?' I'm asking 'why not?'
He who trims himself to suit everyone soon whittles himself away. - Raymond Hull
Stats / Web Site / Blog
Image

User avatar
Knightmare
Keeper of the Calm
Posts: 4933
Joined: Fri Nov 03, 2006 1:27 am
Contact:

Post by Knightmare » Tue Feb 17, 2009 5:03 am

The two economies are interdependent as never before: China is the U.S.'s second-largest trading partner, buying $71.5 billion in U.S. exports last year as the U.S. took $337.8 billion in Chinese imports.
Gee...and we all WONDER why there is an imbalance???
Looking for the Calm amid all this Chaos[/b]
Image
Air Cold, the blade stops;
from silent stone,
Death is preordained

Image

User avatar
MzSnowleopard
Calm Chaos Official Cat Herder
Posts: 3045
Joined: Wed Jul 04, 2007 7:48 am
Location: Outta My Frakkin Mind
Contact:

Post by MzSnowleopard » Tue Feb 17, 2009 5:08 am

gee ya think?

and aren't these the people who brought us yin-yang and fen-shuei? however it's spelled
He who trims himself to suit everyone soon whittles himself away. - Raymond Hull
Stats / Web Site / Blog
Image

User avatar
Enigma
Keeper of the Calm
Posts: 827
Joined: Fri Nov 03, 2006 2:27 am
Location: OZ!

Post by Enigma » Tue Feb 17, 2009 10:21 am

Back to basics.

But don't expect to get paid $30 / hour to assemble barbie dolls.

Wages and salaries would have to take a hit, else prices will sky rocket!

Is that inflationary?
Belief gets in the way of learning.

[img]http://i149.photobucket.com/albums/s62/enigmachaos/calmbnecromonger.png[/img]

User avatar
Knightmare
Keeper of the Calm
Posts: 4933
Joined: Fri Nov 03, 2006 1:27 am
Contact:

Post by Knightmare » Wed Feb 18, 2009 4:45 am

Dude. Even a 10 dollar an hour job is MUCH better than what a lot of people have these days.

There are SO many people completely out of work, that ANY jobs at this point are better than none.

What we have been doing ( globalization ) hasn't been working at all. Something has to give so that this country doesn't completely collapse.

I don't know if protectionism is a good idea or not.

I work in an industry that has NEVER been " protected '.
Looking for the Calm amid all this Chaos[/b]
Image
Air Cold, the blade stops;
from silent stone,
Death is preordained

Image

User avatar
MzSnowleopard
Calm Chaos Official Cat Herder
Posts: 3045
Joined: Wed Jul 04, 2007 7:48 am
Location: Outta My Frakkin Mind
Contact:

Post by MzSnowleopard » Wed Feb 18, 2009 4:54 am

maybe we should just scrap the books and start over?
He who trims himself to suit everyone soon whittles himself away. - Raymond Hull
Stats / Web Site / Blog
Image

User avatar
Dark Angel
Calm Chaos Militia Commander
Posts: 2607
Joined: Mon May 28, 2007 11:43 pm
Location: California, USA

Post by Dark Angel » Wed Feb 18, 2009 8:38 am

MzSnowleopard wrote:maybe we should just scrap the books and start over?
I believe "they" are in the process of that. However counter to your statement you just can't scrap it all at once, but you can scrap it on pieces. Scraping it all at once would be completely catastrophic.
[img]http://web.mac.com/jkellyphotography/CC_Signature/Media/flash-eyes.gif[/img][img]http://web.me.com/jkellyphotography/Site_2/Blank_13_files/big.2077123.jpg[/img]

"As I walk throught the valley of the shadow of death I have no fear,
because I'm the meanest M***** F***** in the whole valley."
-Gen. George S. Patton

User avatar
Enigma
Keeper of the Calm
Posts: 827
Joined: Fri Nov 03, 2006 2:27 am
Location: OZ!

Post by Enigma » Wed Feb 18, 2009 10:35 am

Something has to give... it will probably come down to standard of living and having a job vs. no job

There are also a lot of cases where 'locals' are not willing to do certain kinds of work (perhaps things have been 'too good' for 'too long') which is why jobs have gone offshore in many countries.

This will likely change.
Belief gets in the way of learning.

[img]http://i149.photobucket.com/albums/s62/enigmachaos/calmbnecromonger.png[/img]

User avatar
MzSnowleopard
Calm Chaos Official Cat Herder
Posts: 3045
Joined: Wed Jul 04, 2007 7:48 am
Location: Outta My Frakkin Mind
Contact:

Post by MzSnowleopard » Wed Feb 18, 2009 6:01 pm

Dark Angel wrote:
MzSnowleopard wrote:maybe we should just scrap the books and start over?
I believe "they" are in the process of that. However counter to your statement you just can't scrap it all at once, but you can scrap it on pieces. Scraping it all at once would be completely catastrophic.
That wasn't a statement- it was a question :smt002
And I wasn't being entirely serious-completely wiping the books is not as easy as hitting delete on the keyboard.

That being said- certainly could use a good 'cleaning out'
He who trims himself to suit everyone soon whittles himself away. - Raymond Hull
Stats / Web Site / Blog
Image

Post Reply

Return to “World Finance”