Krugman Worries About Protectionism

Economists can explain until they are blue in the face why limiting exports from developing countries would be a bad idea — why keeping our markets open to new producers is in America's interest both economically and diplomatically. But theoretical arguments for free trade will count for little if the real-world experience of jobs lost to Chinese competition can't be offset by a credible promise that new jobs will be created to replace them.

History seems to be repeating itself: a similar rush to blame foreigners for U.S. problems happened during Bush I's jobless recovery (which looked like a hiring boom compared with recent experience). Remember the president's literally nauseating trip to Japan in the company of auto executives? But if the early 1990's flirtation with protectionism had the feeling of farce, today's employment stagnation — and the protectionist talk now emanating from both parties — has the makings of tragedy. If we don't get some real job creation soon, the politics of jobs may become dangerously self-destructive.