I'm not going to embed the video interview from TechTicker, but here's the relevant part of the report:
[...] if the US ever wants to dig itself out of its economic hole, says Alan Tonelson, a fellow at the United States Business and Industry Council and author of “The Race to the Bottom,” we need to fix our enormous trade deficit with China and other countries. And the way to fix it, says Tonelson, is to put high tariffs on all goods imported from China, thus increasing the price-competitiveness of those produced domestically.No, no, no and NO! You cannot make a country richer by making all of its population poorer. That seems obvious to me, but not to a fellow at the US Business and Industry Council...
He knows the consequences, but prefers to ignore them and imagine it will all end well and differently than last time they tried... A real solution would be for to get rid of the Fed or — more doable — to just fire Bernanke and put someone in charge who understands that when people have spent it all and borrowed their way into a crisis, they need to save. In order to save, you need to stop messing around with interest rates, stop keeping them at an artificially low level, and let them rise to their market level. With interest rates higher, people will be incentivized to save, and they will save, because they need to pay their debt.
Tonelson acknowledges that putting big tariffs on China imports would increase prices for US consumers and that this would hurt the economy in the short-term. But he says there's no way we're going to get out of our current economic plight without pain--and no way we'll ever get back to full strength unless we fix the trade deficit.
Tonelson also plays down fears that erecting tariffs would clobber the economy, the way the Smoot-Hawley Act is thought to have contributed to the Great Depression back in the 1930s. In fact, says Tonelson, Smoot-Hawley did not have anywhere near the impact that most people think. The Depression, in Tonelson's view, was the result of the extreme imbalances that developed in the 1920s, which were similar to those that our own economy developed over the past couple of decades.To Tonelson's benefits, everybody knows that France was the cause of the US Great Depression and that the Gold Standard turned a recession into a profound and global depression.