While no doubt we are living through one of the tough economic times – probably the most difficult we can remember in the recent time. But are the policies that promotes protectionism the way out of the current economic mess?
Here are some of the discussions happening at our policy makers circle:-
- Protectionism as part of the latest stimulus bill may spark trade war
- Microsoft layoffs add more fuel to H1-B fire
- Stimulus bill barring H1-B hiring
- EU warns Obama on protectionism in stimulus bill
Seems like Europe is not far behind…it is all about protecting that we care most – our own first.
This is not an easy question. Even in my family, my wife and I usually end up on the opposite side (and kids somewhere in the middle) of this discussion. She is more conservative in her thoughts than probably I am.
Let’s look at the other side of the discussion. Our world now is so inter-related that it is hard to untangle countries to shore up just by itself. Can you fix economy of one country at a time? Look at how the global market now work in tandem. This is a chart of DOW (New York), FTSE (London), Hangseng (Hongkong) and Nikkei (Tokyo) during the peak of market crash in Sept/Oct 2008.
In some regard, we are part of one big system with our own uniqueness and differences – knitted together. It is one BIG market that goes up and down together.
Current global recession is about choices that will determine how America and the world shapes up in the decades to come. Will we remain on the path of open economy, free trade; global competition; etc. or we start to see the rise of nationalism and protective policies. Will we fight or flight? It is about the choices we will make.
Thomas Friedman recently penned his opinion in New York Times discussing the same. I like how he captured the spirit of America.
“Dear America, please remember how you got to be the wealthiest country in history. It wasn’t through protectionism, or state-owned banks or fearing free trade. No, the formula was very simple: build this really flexible, really open economy, tolerate creative destruction so dead capital is quickly redeployed to better ideas and companies, pour into it the most diverse, smart and energetic immigrants from every corner of the world and then stir and repeat, stir and repeat, stir and repeat, stir and repeat.“
I say – let’s go stir and repeat…