is dangerous to the U.S. workforce and that the federal government must do all in its
power to protect and preserve American jobs.
This same rationale was applied at the
end of the 1920s and eventually led to the passage of the Smoot-Hawley Act in 1930, the
most protectionist piece of legislation in modern U.S. history and an act which raised the
average tariff on a dutiable import to almost 60 percent. Could all of the problems
outlined in this section, many of which are attributable to difficulties within the United
States itself, foment a new bout of parochialism and a proliferation of protectionist
legislation, and would not the number one victim of such growing insularity be the
largest and most vulnerable trading partner of the United States, Canada?
(4) The other side of the coin: There is always the possibility that the litany of
complaints listed above are over exaggerated and that there has been a failure to see the
forest through the trees. The United States has managed to muddle through crises in the
past and perhaps will be able to do the same in spite of its current shortcomings,
including its growing dependency on foreign cash to fuel the government’s deficits and
foreign energy to keep the private sector functioning.
U.S. strengths are legendary and the American propensity for innovation and
entrepreneurialism should never be underestimated. The U.S. GDP topped 12 trillion
dollars at the end of 2005 and just the growth in its GDP from 1994 through 2004, 4.66
trillion dollars, was greater than the entire GDP of any other nation on earth (Japan
ranked as the world’s second largest national economy in 2004 at 4.62 trillion dollars).
The huge and diverse American economy was also able to generate a net increase of 27
million new jobs between 1987 and the beginning of 2005.
Although lamenting America’s massive governmental and external deficits, Fred
Bergsten points out that the United States still enjoys (a) a sharp growth in productivity,
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Convention