Jim D wrote: It's interesting that a foreign-trade&finance expert like PK never mentions that a lot of the steel industry's problems recently have been due to the steep appreciation of the dollar (relative to its biggest trading partners) since 1995. ______ Yet this raises the question: if the high dollar has cost jobs, should protectionism be adopted? I wonder whether Jim agrees with Krugman's criticism of protectionism?
As Eisner pointed out, protectionism on behalf of US based textiles or steel may limit the supply of dollars abroad and raise the value of the dollar, which could say tip the balance in favor of Airbus over Boeing. The high dollar may be a problem but I think Krugman is correct that tariffs and indiscriminate usage of import surge and anti dumping clauses are not a good response to it. I also think Krugman is correct that trade nationalism, strong among the left, put that rather unlovely dude in office, but then Doug and Max already know I warned long ago that not vociferously and analytically critiquing the post Seattle trade nationalism was a huge political mistake. It's too bad leftists don't fight trade nationalism--are we to defend our capitalists against others as they all jostle in deciding whose excess capacity is to be eliminated? I have recalled a book by Michael Billig, Banal Nationalism; I think it will make for very good reading. rb
