Yglesias, a couple of weeks ago, on national identification of companies:
If we put a tariff on every foreign car of $1000, every reputable pundit would yell Smoot-Hawley (except for Congresswoman Bachmann, who would yell Hoot-Smalley) and decry this action as Hoover-style Depression-inducing.
Let us, however, give $1000 per car to an auto company that happens to house its executives in and around the Detroit area, and that's called principled support of a major American industry. I really don't get the distinction.
Update: for a somewhat economisty view of this which makes sense, see Claus Vistesen by way of Edward Hugh.
He [Tyler Cowen] points out that not only do Toyota and Honda manufacture cars in the United States, but these are publicly traded firms. Americans can—and do—own shares in both firms, and could own more if we wanted to. Conversely, an “American” company like Apple actually does very little production in the United States. Nestle is “Swiss” but it’s a giant multinational corporation and Switzerland is a small country so the vast majority of its operations are elsewhere.So let's follow the logic a little further and ask ourselves why we use taxpayer money to prop up one set of multinationals at the expense of another set, and why the economic talking heads don't leap to calling that what it is...protectionism.
If we put a tariff on every foreign car of $1000, every reputable pundit would yell Smoot-Hawley (except for Congresswoman Bachmann, who would yell Hoot-Smalley) and decry this action as Hoover-style Depression-inducing.
Let us, however, give $1000 per car to an auto company that happens to house its executives in and around the Detroit area, and that's called principled support of a major American industry. I really don't get the distinction.
Update: for a somewhat economisty view of this which makes sense, see Claus Vistesen by way of Edward Hugh.
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So let's follow the logic a little further and ask ourselves why we use taxpayer money to prop up one set of multinationals at the expense of another set, and why the economic talking heads don't leap to calling that what it is...protectionism.
Here, let me see if I can help you out a bit. "Protectionism" is when smaller manufacturers, or workers, solicit for, say, "buy American" policies that are, as a matter of fact, perfectly legal under existing WTO rules, but which interfere with the interests of entities that have the means to throw around a lot of money at lobbyists. "Protectionism" is alchemically transmogrified into "competitiveness" after a purifying passage through K Street. Note, though, that anything that is genuinely in the national, rather than some MNCs interest, can ever be thus transmogrified.
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