We need protection from these morons

Much of the coverage of the US primary season has focused on the personal attacks that the candidates are pleased to launch on each other: Obama may be a Muslim, McCain had an affair with a younger woman, that kind of thing. There hasn't been much coverage of the substantive issues. This may be just as well, however, because the standard of the discussion on key policy areas has been abysmally low.

This week, for instance, Hillary Clinton has pounced on a report that Barack Obama has told the Canadian Government that his rhetoric on trade protection and the NAFTA agreement is just playing to the crowds, and that he won't be tearing up the free trade deal if he becomes President. See, says Hillary -- he's not a real protectionist like me.

Protectionism goes with US elections like flatulence with burritos. When the US went wildly isolationist and protectionist in the 1930s, it managed to turn the Great Crash into the Great Depression. But the Democrats, in particular, can never resist the temptation, especially in the run-up to a Primary in a rust belt state like Ohio.

The plain truth is that the US economy has only ever prospered through taking in resources from the rest of the world. Back in the 19th century it was people and capital; for most of the 20th it was people and oil. And now? Well, with George Bush pursuing expensive and unpopular foreign adventures while trying not to deprive the US public of their bread and circuses, what the US needs is someone who will supply it with lots of cheap goods without worrying too much about getting paid on time. Step forward, China, Korea and India! As the great Warren Buffett said this week, if you can persuade foreign countries to send you $250 billion of stuff every year in exchange for bits of paper, that's a pretty good gig, and you should be careful not to rock the boat.

The US economy is all about consumption: it accounts for over 70% of GDP, more than 10 percentage points higher than in the rest of the developed world. Capital formation? Exports? Savings? Fuhgeddaboudit!! Any swing back into protectionism risks turning the credit crisis (entirely caused, lest we forget, by the idiotic and irresponsible monetary policies of the Greenspan era) into a rerun of the great depression. Let's hope that Obama and Clinton are both playing games: that he really is a fake protectionist, and that she's only pretending to be a real one.