USA knows well that protectionism is detrimental to its future. In fact USA has been the most open county and has become what it is because of its open policy.
From time to time, however, some politicians start talking about protectionism. Current fiscal crisis is just one more example of this politics. Thomas Friedman has a nice timely op-ed piece on that in NYT.
Bad signal. In an age when attracting the first-round intellectual draft choices from around the world is the most important competitive advantage a knowledge economy can have, why would we add barriers against such brainpower â€” anywhere? Thatâ€™s called â€œOld Europe.â€ Thatâ€™s spelled: S-T-U-P-I-D.
â€œIf you do this, it will be one of the best things for India and one of the worst for Americans, [because] Indians will be forced to innovate at home,â€ said Subhash B. Dhar, a member of the executive council that runs Infosys, the well-known Indian technology company that sends Indian workers to the U.S. to support a wide range of firms. â€œWe protected our jobs for many years and look where it got us. Do you know that for an Indian company, it is still easier to do business with a company in the U.S. than it is to do business today with another Indian state?â€
Each Indian state tries to protect its little economy with its own rules. America should not be trying to copy that. â€œYour attitude,â€ said Dhar, should be â€œ â€˜whoever can make us competitive and dominant, letâ€™s bring them in.â€™ â€
State level protectionism openly, and caste level protectionism in private businesses, is what hurts India and similar countries. USA is suppose to be above thses things and as a shining example to the world. Currently, however, my concern is that we should not hurt our long-term, and even short-term, future by adopting poor choices that we know are really bad for us.