In The News

Global Crisis Spurs Long-Needed Change in China

David Dollar February 20, 2009
As the global economy sinks deeper into recession, political leaders look to any country with hefty surpluses and a strong manufacturing sector, such as China, to restore growth. But China’s economy is lagging, too, and World Bank economist David Dollar points out that a decline in imports, particularly parts and materials, as well as declines in steel and electricity sectors signal no quick end...

Union in Crisis

Jonathan Fenby February 16, 2009
Europeans shrugged about a credit crisis in 2008, chalking it up to a lavish American lifestyle, dependent on debt, and assumed they were immune. But national economies are tightly connected, particularly those of the European Union, and crisis spread quickly. Compounding the financial crisis is seething anger over closed factories, long unemployment lines, banks that lost rather than protected...

Britain Must Not Go Wobbly on the Free Market

Emma Marcegaglia February 10, 2009
When jobs are hard to come by, communities naturally try to support local businesses. Domestic workers demand job protection, without stopping to calculate how many might work for foreign firms. Any defensive posture comes at a grave cost, as foreign employers retaliate, abruptly halting efficient trade and hiring. Unfortunately, even the nations that have benefited so much from free trade, such...

Obama Risks Flap on “Buy American”

Neil King Jr. February 9, 2009
Anyone who has read recent reports on the global economic crisis should understand that protectionism is dangerous and that protectionist legislation prolonged the Great Depression during the 1930s. Despite modern agreements that regulate open trade, some US workers and politicians can’t help but be tempted to direct public spending to domestic firms and workers. In preparing a multibillion...

Is Protectionism Unavoidable?

Jeffrey E. Garten February 6, 2009
The warnings on protectionism are dire. Economists and historians repeatedly remind us about the danger of sliding into protectionism embodied in the notorious Smoot-Hawley Tariff Act of 1930. By raising import tariffs on thousands of goods, inviting retaliation, causing collapse of international trade, the act transformed a US recession into a Great Depression. Deepening anxiety about vanishing...

Made in America

Nayan Chanda February 6, 2009
As jobs vanish by the hundreds of thousands, the desire to intervene from politicians is only natural, an attempt to restore economic order and prevent social unrest. In capitals throughout Europe, workers protest and vow to remove politicians who fail to provide immediate economic relief. The US is no different, as the president and Congress race to save jobs with a stimulus package now valued...

China Expanding African Arms Sales

Andrei Chang February 6, 2009
All over the continent, African nations stock up on a wide range of Chinese-made military weapons, vehicles and aircraft in exchange for oil, mineral and fishing rights – and other nations are closely monitoring the sales. “Analysts from the African military industry believe that China has fitted Russian Krasnopol semi-active laser-guided gun launch projectiles on its 155-mm howitzers,” reports...