Former AB Member Jim Bacchus looks at the auto bailout and notes:
The U.S. is not the only country contemplating auto and other subsidies as a way of confronting the global recession. The Europeans are drafting an auto subsidies plan now. Canada and China are considering assisting their automakers. If the U.S. leads the way, others may soon follow with more subsidies--for autos and other distressed industries.
During the Great Depression, a tariff war led to a suppression of demand, a contraction of world trade and prolonged and deepened global economic agony. World trade is already shrinking. Will it shrink more if we start a subsidy war?
