< meta name="DC.Date.Valid.End" content="20050825"> Amendment Nine: Protecting the Weeds from the Worms

Sunday, November 26, 2006

Protecting the Weeds from the Worms

An old neighbor of mine used to make so much fun of all the people who invested heavily in fertilizers, chemicals, and weekly garden treatments... A bit of a cottage industry in south western Connecticut. This guy had one of the best gardens in all of Westport, and so it was hard to argue with any gardening advice he gave. One bit of advice he often repeated was: "no need to protect the weeds from the worms."

I'm struck how apt a description this is to today's economic environment. Democrats are likely to push through some sort of protectionist styled legislation within their first few months. And when you see that folks like Jim Webb won on this type of FDR like populist economic protectionism in a state that should be as red as home side during an Indiana Hoosier basketball game, you can't really argue that they should tread cautiously here. America certainly seems ready to give protectionism, or "fair trade" a chance.

But the problem I see is that both China and the US are experiencing slowdowns right now and these slowdowns are likely to last through year end. Considering these two countries account for almost 2/3 of the entire global GDP increase over the last five years, it seems such an event ought to be taken seriously. But I don't get the impression it is.

Instead, I see the liquidity folks getting excited over just a few blips in either the housing or retail sectors... blips that for the most part are brief detours in a long downhill slide. The American consumer is spent, and that should be obvious by their recent historic reversal of Republican electoral successes.

If you add into the mix a little protectionism here and there, the wheels are going to fall off the bus on export demand, and there goes China's economy along with it.

In theory, I support many of the "fair trade" arguments out there today. But the problem is, all we might be getting out of them right now is some protection for our weeds from our worms. I think it might be time to roll our sleeves up and do some of the dirty work thats long overdue.