Economist urges: Avoid protectionism

In tough economic times, the tendency is to take care of yourself, even at the expense of others.

That's a shame, says a leading economist, because the more we work together both locally and globally, the more likely we all are to flourish.

"The recession, unfortunately, always sows distrust and encourages us to look out for our own interests a little more zealously than we otherwise would. And that includes a willingness at times to hurt our fellow Americans to help ourselves — and even more tempting is to hurt foreigners," says Russell Roberts, economics professor at George Mason University and research fellow at Stanford's Hoover Institution. A self-described "glass-half-full" guy, he's one of the national trade policy experts who will be featured at Zions Bank's International Trade and Business Conference May 20.

Roberts warns that protectionism backfires, hurting rather than helping America. Erecting barriers to foreign competition encourages other countries not to trade with the United States, he says.

"We ought not to fool ourselves it's good for America," Roberts says of efforts to encourage Americans to only buy American-made products, including cars. It's the same kind of "unhealthy spiral" that occurred in the 1930s with the Smoot-Hawley Tariff Act, which some say caused the Great Depression, or at least made it worse.

"Trade in goods, services and people all make the world a more interesting place, and it's important we keep that in mind, because the political pressure to turn inward and isolate ourselves from the rest of the world is exploited by people to advance their self-interest at the expense of the rest of the nation as a whole," he says.

Roberts is also troubled by "the relentless excusing of bad behavior by executives and individuals and the bailouts, which to me undermine the profit-and-loss system that sustains our standard of living. The profit is to encourage risk-taking, the loss is to encourage prudence. If you let (someone) keep the profits but not bear the losses, you get reckless risk-taking, which means you throw away a lot of money," he said.

Propping up assets artificially with bailout money rewards "bad mistakes, and I think that's an incredible tragedy that's going to encourage bad behavior in the future," Roberts says.