Monday, February 2, 2009

Is Obama replaying the Smoot Harley Bill?

http://blogs.ft.com/maverecon/2009/02/yes-we-can-have-a-global-depression-if-we-really-contintue-to-work-at-it/

There is little doubt that if the Buy American provisions of the Economic Stimulus Package were to become law, this would amount to an economic declaration of war on the rest of the world.


I guess we are going to war...


We can go down in history as the generation that created the Great Depression of the Noughties. Just keep on beating the protectionist drums. Keep on the footdragging that prevents effective qualitative and quantitative monetary policy easing in the Eurozone and the UK. And go ahead with unsustainable fiscal stimuli in the US, the UK and elsewhere that will spook markets, push up long-term interest rates and raise the spectre of sovereign default by countries not belonging to the group of usual suspects. Yes we can! I hope we won’t.

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