Murdoch has warned that if Barack Obama gets elected and takes the protectionist stance of his liberal bedfellows, the global economy could suffer. As it is the dollar is weakening in the Asian markets and destroying profit margins. If new tariffs are introduced it could create a chain reaction of retaliatory measures by the Chinese.
Global media tycoon Rupert Murdoch has warned that a win by Democratic hopeful Barack Obama in next week’s US election could worsen the world financial crisis, a report said Saturday.In an interview with The Weekend Australian, owned by Murdoch’s News Corporation, the newsman said if the Democrats implemented protectionist policies it would be “a real setback for globalisation”.
Murdoch said he did not know whether an Obama administration would deliver on all the Democrats’ stated policies, saying “presidents don’t often behave exactly as the campaign might have suggested.”
But he warned that an increase in protectionism in the US as suggested by some Democrats in Congress, would risk retaliation from China and could threaten world trade.
“For the past three or four years, some Democrats have been threatening to do things like put on extra tariffs (against Chinese imports) if they don’t change their currency,” Murdoch said.
“If it happened, it could set off retaliatory action which would certainly damage the world economy seriously.”
The Australian-born mogul, who controls media interests around the world, also criticised Obama’s proposed tax policies which include granting rebates to most US workers.
“Forty percent (of the US population) don’t pay taxes, so how can he give them a tax cut?” he said.
“But you can give them a welfare cheque which he has promised — a grant of 500 dollars — which will disappear very fast. It’s not going to turn the economy around at all.”
Murdoch, who is in Australia to deliver a series of lectures, rejected the suggestion that the ousting of a Republican administration in the US would be a circuit breaker which automatically boosted financial markets.
“To some extent it is beyond the power of politicians,” he said of the current crisis.
“You are going to find that the politicians are very limited in what they can do: they can make it worse but they can’t stop it.”
Murdoch said Australian Prime Minister Kevin Rudd had been “sure-footed” in handling the crisis, deflecting criticism that the centre-left Labor leader had been too quick to offer a blanket guarantee on bank deposits.
But Murdoch said all politicians should be careful not to worsen the situation by “alarming people more than they should be alarmed”.