the real issue in international trade--it's not protectionism

Maybe it was just the sound-byte the media picked, but British PM Gordon Brown was off-target when he warned against protectionism. Europeans like to castigate Americans for (American) protectionism, but they often like to practice Eruopen protectionism.

In the present international crisis, the real issue is unequal Keynesianism. There needs to be a coordinated and vigorous expansion by every country.

Here's a good explanation from Ezra Klein

Following on the Gordon Brown post, a reader e-mails a link to the Brooking Institution's comparison of various international stimuli. They warn:

In an integrated world economy, the effectiveness of stimulus is contingent on how coordinated it is across countries. If the sizes of the stimulus packages (relative to domestic GDP) are very different across countries or if the effects of some countries’ stimulus packages are backloaded, then there could be “leakage” of stimulus from countries that act early and forcefully...large frontloaded stimulus packages that are coordinated internationally could not only be more effective directly but also boost consumer and corporate confidence.[...]

In 2010, the U.S. accounts for over 60 percent of planned stimulus. China and Germany are the next largest contributors with China contributing 15 percent of G-20 stimulus and Germany contributing 11 percent. The U.S. stimulus package amounts to 2.9 percent of 2008 GDP, China’s 2.3 percent, and Germany’s 2.0 percent....Some countries like China and the U.S. have responded forcefully, with impressive packages. But the execution, both in terms of size and speed, leaves much to be desired in some of the G-20 countries.

In other words; We're doing a lot. China is doing a lot. Everyone else isn't. In practice, that means that they will reap some of the rewards of our stimulus spending in the form of increased demand for their exports, but we won't reap many rewards from their stimulus spending. And overall, the global economy will be slower than it needs to be, which means national economies will be slower than they need to be (if Caterpillar's international sales sag, they'll cut U.S. jobs).

Also, that picture atop this post? The one that doesn't look like anything? Click on it. It's an an awesome table comparing G-20 stimulus packages.