Jam5000000amWed, 02 May 2007 08:40:49 +000007 21, 2007
Free trade’s new apostle
Ben Bernanke succeeded Alan Greenspan as the chairman of the Federal Reserve. Unlike other politicians, Bernanke is pushing policies to stay away from protectionism. He shares many economists’ point of view, that is trade barriers will only weigh down the economies of the world. It may appear advantageous to those producers in the disadvantaged industries who are urging for barriers in the short run to subsidize their lost incomes, but it is extremely harmful to the global economy in the long run. Instead of employing protectionist policies, the government should look toward monetary and fiscal policies to boost the economy. Monetary policy deals with government spending and taxes by the government, while fiscal policy deals with the money supply and interest rates. Together, such policies will be much more effective in improving the U.S. economy and relations abroad than implementing restrictive barriers that impedes free trade.
I think it is a good thing that someone with such statue and influence is speaking about the opposition and negative effectives of protectionism. Though Bernanke is not the only player involved, he probably has an influential voice in the matter, as he is serving as the chairman of the United States Federal Reserve. Bernanke’s suggests, “competition from imports keeps prices down in the United States, and exports can support the economy when its financial markets and currency are sliding.” In the end, FREE TRADE IS GOOD.
