Protectionism

Today in the news, Fortune Magazine says that one of their recent surveys suggests that nearly 80% of Americans want protectionism. I hope that is not the case. Probably one of the greatest contributors to the great depression in the 1930s was protectionism. If the FED simply cut interest rates immediately by 75 basis points, I believe that enough improvement in economic activity would take place to offset the current recessionary tendancies. Granted this would begin raising 10 year Treasury rates towards 5.5%, and this would probably strengthen the dollar, which might dampen an improvement in the trade deficit. But the increased economic activity both here and abroad should offset the recessionary pressures. I believe that comparative advantage still makes everyone better off. The rest of the world will probably grow faster than us, because the rest of the world is still playing catch-up to the great economic successes that we have enjoyed.