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Wednesday, 11 February 2009
Protectionist measures can push US deeper into recession: Expert
Nobel Economics Prize winner and trade theorist Paul Krugman once said that if there were an economist’s creed, it would surely contain the affirmation: ‘I believe in free trade.’
Protectionist measures can push US deeper into recession: Expert
By Ananya Roy 10 February 2009
Nobel Economics Prize winner and trade theorist Paul Krugman once said that if there were an economist’s creed, it would surely contain the affirmation: ‘I believe in free trade.’
Mr. Joel M. Stern, the visiting chairman and chief executive of New York-based international management consultancy Stern Stewart, agrees.
He was speaking yesterday at a talk on The Impact Of The New Obama Administration’s Policies On Global Trade And Recession, organised by the Singapore Management University.
He said United States President Barack Obama was advocating protectionist trade policies that ‘are more for protecting labour unions’, and could lead the US ‘to suffer a worse depression’. He added: ‘If Obama draws on his economic knowledge, he will continue to maintain free trade.’
He also cautioned against some of the US President’s policies asking for increased government intervention, more regulation and a plan to end tax breaks for American companies that would send jobs overseas.
Mr. Stern said these could affect real economic growth, unemployment, interest rates and inflation - all for the worse - and push the US deeper into recession.
‘Take services outsourcing,’ he said. ‘During the Clinton administration, which advocated outsourcing, the unemployment rate was 4 per cent.’ According to the US Bureau of Labour Statistics, the figure is now 7.6 per cent as of last month.
Mr. Stern warned that if the Obama administration engaged in increased restrictions on free trade, it could backfire with other countries taking the same stance against the US.
American investor and financial commentator Jim Rogers spoke at the conference and evaluated the effect of the global economic downturn on Singapore’s economy. He said ‘Singapore has huge reserves that it can draw upon, and would be the last man standing’ in the case of a worse crisis.
‘Singapore has to be buffeted by what’s happening in the world,’ he said. ‘It has one of the best ports, but if people do not ship, there will be an adverse effect.’
Singapore has to use its reserves wisely, develop sectors such as education and make itself more competitive to survive the turmoil.
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Protectionist measures can push US deeper into recession: Expert
By Ananya Roy
10 February 2009
Nobel Economics Prize winner and trade theorist Paul Krugman once said that if there were an economist’s creed, it would surely contain the affirmation: ‘I believe in free trade.’
Mr. Joel M. Stern, the visiting chairman and chief executive of New York-based international management consultancy Stern Stewart, agrees.
He was speaking yesterday at a talk on The Impact Of The New Obama Administration’s Policies On Global Trade And Recession, organised by the Singapore Management University.
He said United States President Barack Obama was advocating protectionist trade policies that ‘are more for protecting labour unions’, and could lead the US ‘to suffer a worse depression’. He added: ‘If Obama draws on his economic knowledge, he will continue to maintain free trade.’
He also cautioned against some of the US President’s policies asking for increased government intervention, more regulation and a plan to end tax breaks for American companies that would send jobs overseas.
Mr. Stern said these could affect real economic growth, unemployment, interest rates and inflation - all for the worse - and push the US deeper into recession.
‘Take services outsourcing,’ he said. ‘During the Clinton administration, which advocated outsourcing, the unemployment rate was 4 per cent.’ According to the US Bureau of Labour Statistics, the figure is now 7.6 per cent as of last month.
Mr. Stern warned that if the Obama administration engaged in increased restrictions on free trade, it could backfire with other countries taking the same stance against the US.
American investor and financial commentator Jim Rogers spoke at the conference and evaluated the effect of the global economic downturn on Singapore’s economy. He said ‘Singapore has huge reserves that it can draw upon, and would be the last man standing’ in the case of a worse crisis.
‘Singapore has to be buffeted by what’s happening in the world,’ he said. ‘It has one of the best ports, but if people do not ship, there will be an adverse effect.’
Singapore has to use its reserves wisely, develop sectors such as education and make itself more competitive to survive the turmoil.
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