The South African government has just announced plans for a new rescue package for its ailing apparel industry, which is to include direct subsidies, raising import tariffs by as much as 45%, seeking WTO permission to impose additional anti-dumping duties, directing state-owned financial institutions to free up credit to manufacturers, an aggressive “Buy South African” policy for government procurement, and a range of cash and fiscal incentives to producers and exporters.  It is a huge mistake. [click to continue…]



Once upon a time there was something called the “Washington Consensus,” a set of economic policy prescriptions championed by the World Bank and the IMF and endorsed by all of the large industrialized countries. The main pillars of the consensus included:

  • Fiscal discipline;
  • Reducing government spending on subsidies for businesses, farmers, and consumers in favor of increased spending on things like education, health care, and infrastructure;
  • Tax reform – broadening the tax base and lowering tax rates;
  • A market-based approach to interest and foreign exchange rates;
  • Liberalizing trade by getting rid of licensing requirements and lowering import duties;
  • Liberalization of inward foreign direct investment;
  • Privatization of state enterprises;
  • Getting rid of regulations that impede market entry or restrict competition, except those that protect the environment and public health and safety ; and,
  • Reinforcing property rights. [click to continue…]


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For most of my professional life I have been pretty much a single issue voter. I’m not talking about abortion or gay marriage, but trade. I’m in favor of it. That has normally caused me to vote Republican, though I was reasonably happy with Clinton as President, mainly because of his solidly pro-trade stance and his vigorous promotion of NAFTA and AGOA (the Africa Growth and Opportunity Act). As much as I disliked Bush 43, I thought he was sounder on trade than Gore or Kerry.

This time it was different. [click to continue…]