The Trouble With Subsidies

摘要

I'm certainly not going to defend those aigbonuses. But the trouble with populist outrage is that it bubbles over, sweeping from one justifiable issue across to many others. Waves of populism are now working their way through the American government on several fronts. The area I'm most worried about is trade, where populism leads to protectionism. The scandal of the moment, the bailout bonuses, will pass; in a year or two (one hopes) the U.S. government will no longer own banks and insurance companies. But protectionism and trade wars, once started, are hard to reverse.This might sound alarmist. Free traders like myself are often accused of overstating the dangers to free trade. But in a report released last week, the World Bank has gathered some disturbing facts. Since the financial crisis began, countries around the world have proposed or implemented 78 trade measures. Of these, 66 turn out to be new restrictions on trade. For example, Russia raised tariffs on used autos; China has banned outright various European goods (Irish pork, Italian brandy, British sauces and some Belgian chocolates, if you're wondering). India has banned Chinese toys.