Protectionism shows its ugly face

I hate protectionism! It never seems to do any good to anyone, but the unions love it and the voters seem to love it too. I find it incredibly short-sighted to “buy British” to keep British workers going in industries that are clearly not competitive. Why not teach these people new skills instead or revamp the businesses so they can get on by themselves in the world. In Denmark protectionism has always been favoured to help the farmers and the ship yards. In the end they had to give up protecting the ship yards because it became ridiculous to keep pouring money into it when ships were built much cheaper in other parts of the world and giving people there jobs, who did not have access to any kinds of benefits or to learning new skills. Unfortunately the same thing cannot be said about the farmers, who are still being massively subsidised by EU.

I Buy British when it’s fruit, meat and vegetables of good quality, because I believe that the shorter distance these foodstuffs have covered on their way from the good earth and onto my dinner table, the better for the planet. It’s certainly not to protect British farmers. If they can’t produce something of quality at a fair price I’m not going to buy it, not if he’s my neighbour!

Anyway, that’s what all the talk has been about in Davos today – read this summary of the protectionism discussions in Washington Post.

From the homepage Buy British
From the homepage Buy British

On an entirely different and quite silly (but cute) note, here’s something a friend sent me today. Be patient while the page loads, it takes a little while. And then move your mouse around. And, not least, try holding it still. I’m glad that yet another mystery of “how things work” has now revealed itself!

Share

Sunshine promotes optimism

Here, where I am, the sun peaks out now and then and there’s that smell, you know, of earth outside. And I found a few snowdrops, just outside our front door!

Snowdrops in January.
Snowdrops in January.

In Davos the sun has also been out and one of my favourite BBC reporters, their financial guy Robert Peston has interviewed Richard Branson. Branson is virtually brimming with optimism! I couldn’t embed this video, but just click here.The clip is 5 minutes long.

This article (also BBC) describes one of the “secret” meetings in Davos, where some of the economists who’ve been predicting this crisis for quite a while were gathered. The interesting bit of course was to hear if they had any predictions as to the length and gravity of the crisis. Nothing super-soothing, but they did agree that the crisis will not deepen into a depression like the one in the 30ties with unemployment rates around 25%. They attribute this to the governmental packages, which I wrote about yesterday.

These economists (Crunch Cassandras, as the BBC so charmingly has named them) who turned out to have well functioning crystal balls are quite interesting. One of them has written a book, which I’ve had on my Amazon wishlist for quite a while. Now I’ve moved it up in the world – into my shopping basket… Nassim Taleb is his name, the book is called The Black Swan. His homepage is highly unusual and well worth a visit.

Nouriel Roubini, an economics professor at New York University, has been preaching gloom for years and has suffered ridicule among his peers. One might say that this year’s Davos is his vindication. The last of the three is a controversial historian, Niall Ferguson. I don’t quite know what to make of him…

Well, enough economy, cake baking next. It’s Friday is it not?

Share

If it looks like a bank and quacks like a bank…

we’ve got to capitalize it as a bank,” Lord Turner said.

This is MY money...
This is MY money...

It’s a quote from this article on CNBC, which briefly explains the ideas behind the bank rescue packages both here in the UK and in the US. The heart of the matter is the so-called Bad Bank (just Google it if you want to have it explained). I kind’a like that term ;-)

Here’s a few video-clips from Davos, the World Economic Forum. One of them is with Rupert Murdoch, who not surprisingly is against the rescue package. I don’t know if he explains the alternatives later on in his speech (apart from a quick little war (another one?) to get the wheels spinning), but I’m still looking through blog-posts, news articles, video clips etc. to find a viable alternative.

Here’s a syndication of comments to the package, divided into YES, it will work & NO, it won’t work. I’ve read through the first four of the Nos, but apart from BIGGER TAX CUTS, there are no alternative solutions in sight. Am I looking in the wrong places? Please direct me to somewhere, where I can read in clear an understandable language, what would be a good and viable alternative to the stimulus packages, which are now under way on both sides of the Atlantic.

Here’s the British Conservative Party’s idea of an economic rescue package. Tax breaks seem to be the answer here as well!

Here, in the Financial Times, Martin Wolf explains why the packages should be bigger and how a lot of other measures must also be taken into use, if the US is to overcome its financial woes. The article is quite a mouthful – i stumbled over the word deleverage several times…

If you hear speeches from Davos, you’ll also hear “the Swedish model” mentioned. It is explained here and here, where Tyler Cowen raises doubts as to whether it could work in the US and also whether it’s as good as they say.

Here’s cable news directly from Davos, if you want to delve into the speeches. And as you could expect, the New York Times Davos blog is excellent. That’s also where I found a reference to this clip. I think it more or less speaks for itself…

(It’s Michael Dell who asks the question)

Share