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What else could be done to blunt the protectionist appeal? One essential is a quick resolution of the international monetary crisis through upward revaluation of major foreign currencies and probably a formal devaluation of the dollar. More realistic currency values would tend to lower the world price of U.S.-made goods; as a necessary part of any monetary deal, the Administration should promise unequivocally to remove the 10% import surcharge. That solution would not mollify protectionists, but it would please some of their reluctant allies who are properly concerned about the startling deterioration in the U.S. trade balance. The Administration also could expand training assistance to workers who lose their jobs because of imports. Peterson promises proposals to do that too, but he had better hurry; businessmen and labor leaders have heard such promises before and no longer believe them. Though Congress in 1962 authorized aid to those workers and businesses injured by imports, only a measly $20 million for such assistance is included in the fiscal 1972 budget.
Above all, the Administration must make its Phase II program work, because the U.S. economy is unlikely to revive strongly and become more competitive until inflation is controlled. That will not happen until the Pay Board and Price Commission demonstrate the courage to break the wage-price spiral by turning down excessive union and company demands. An economic environment of inflation that sucks in imports, and an unemployment rate that stirs deep fears about jobs, is the ideal breeding ground for protectionists, who may only be emboldened by Nixon's piecemeal appeasement of their desires.
Whatever the state of the economy, the case for free trade is as compelling as ever. Protectionism cheats consumers out of money that they could save by purchasing inexpensive imports. (A Nixon Administration task force once estimated that quotas on oil imports alone cost the U.S. consumer $5 billion a year.) Limiting imports also restricts the consumer's freedom of choice. If something like the Hartke-Burke bill had been in effect during the days when Detroit insisted on making nothing but gas-guzzling dinosaurs, many motorists who wanted economical transportation would have been denied the option of buying Volkswagens. By shielding inefficient industries from the kind of competition that forces them to improve, protectionism works against the best use of a nation's resources. Beyond all that, protectionism, modern as it may seem in its new guise, is incompatible with the deeper reality of a world in which nations have an increasing need to get along with each other economically as well as politically.