The Washington Post had a front page article decrying the growth of protectionism today, but somehow managed to overlook the huge subsidies to the U.S. financial industry recently given by Congress and the Fed. The $700 billion in below market loans are a huge subsidy to the U.S. financial industry in the same way that government loans at below market rates would be a subsidy to the U.S. auto or steel industry. In addition, the government is granting guarantees of bank and money market deposits at no cost to the financial institutions who are benefiting. These massive subsidies both help to sustain a bloated and inefficient financial sector in the United States and drain funds away from countries that don't provide subsidies of similar value to their own financial sector. (Most developing countries lack the ability to provide similar subsidies.) Any article reporting on growing protectionism should have prominently mentioned the bank bailout since it is the most blatant example on the world stage at the moment. In addition to overlooking the bank bailout, the article also used the term "free trade" to describe the recent trade agenda of selective protectionism in which workers without college degrees are subjected to foreign competition, while the most highly educated professionals remain largely protected.
--Dean Baker
