Two week's ago in my Friday letter, Thoughts From the Frontline, I wrote about the Dubai ports situation, Smoot-Hawley, globalization and protectionism. Today we look at two commentaries by Stephen Roach, Chief Economist of Morgan Stanley. The first was from Monday, March 13 and the follow up was on Friday, March 17.
Roach explores the newest data on trade flows and weighs in with his view of protectionism. Back in the 1930s politicians were trying to protect manufacturing jobs, but now they are reacting to the loss of white-collar jobs brought on by the internet and globalization. The developed world fears a decrease in living standards and the developing world hopes to increase theirs, but protectionism may bring about the worst outcome for both and that is why this was picked for this week's Outside the Box.
John Mauldin, Editor
Outside the Box
Perils of a New Globalization
On the surface, the global economy seems to be off to a great start in early 2006. The Great American Growth Machine has revved up again after a Katrina- and energy-related sputter in the final period of 2005. Japan is back, and even Europe is stirring. For China, India, and the rest of the developing world, vigor generally remains the name of the game.…