Michael Barone: Are We Duplicating The Mistakes Of The 1930s?

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Investors Business Daily:

Battening down the hatches. That's what America and much of the rest of the world seem to be doing today, in an eerie re-enactment, though to much less of a degree, of what America and the world did in the 1930s.

 

The result then wasn't very pretty.

 

The result now is unknown.

 

One way the hatches are being battened down is that the volume of world trade has been declining, and not just temporarily, in response to the financial crisis of fall 2008.

 

Consider something that most people don't think much about: international trade.

 

Listening to the political dialogue this year, one might suppose that increased trade only drains jobs from advanced countries like the U.S. But in a broader perspective, greater trade produces greater productivity and growth.

 

"International shipments broaden the pool of customers for a given product," writes the Wall Street Journal's William Mauldin, "and enhance competition and specialization, cutting prices for consumers."

 

Go to Wal-Mart or a competitor and you will see the effect. Clothing and food prices have tended to decline over the past 40 years. Consumers may take it for granted, but they may come to miss it if trade flows stagnate.