The June 15, 1909 NYT prints an editorial focusing on how protectionism, specifically the tariff, harms the "little guy":

It does not seem right that we should make the wage earner bear the expense of the Government by paying him larger wages and then taking it away from him in the shape of taxation on what he wears. Surely clothing is a necessity.

This quotation is from a statement in the current number of The Clothier and Furnisher of Mr. Max Silberberg, a manufacturer of clothing in Cincinnati...

It is not merely in the high prices of clothing, the fruit of the high tariff, that the workingman suffers. It is still more in the wretched quality of the stuff that is palmed off upon him. On this point the same authority says:

As a manufacturer of clothing for a period of almost fifty years, I can truthfully state that I have never handled cloth of so inferior a quality for the prices as I do now. The masses, consisting of laborers, mechanics, and farmers, the real users of ready-made clothing, are receiving practically no value for their money. The qualities and colorings are so poor that in many instances the colorings fade and cockle, and in the manufacture of garments give positively no satisfaction to the wearer.

It will be said that the clothing manufacturers have no foreign competition and cannot have the same interest as the makers of cloths in a protective tax on such competition. But they are a very important element in American industry, employ a very great number of workers, and deal very largely in a prime necessary of life for all workers. They are a good authority as to the way the tariff affects wage earners, and such testimony as above shows that the effect is shamefully oppressive.

The argument that the tariff reduces quality is generally under-appreciated. For example, while the U.S. automobile industry has any number of problems, it is undeniable that the quality of the automobiles for sale in the United States has dramatically improved after the U.S. auto market opened to foreign competition. This improvement in quality has occurred despite a number of attempts to limit imports (through quotas, tariffs, local content requirements, etc).

The editorial focuses on the downside of protectionism in the final sentences:

The whole tariff structure is built up on the pretext that it is for the good of the wage earners, and when it robs and cheats these it surely ought to be reformed. If President Taft makes a simple calculation as to the number of American citizens hurt by Mr. Aldrich's tariff scheme, it ought to aid him greatly in dealing with it when it reaches him.

The word "scheme" is a great word for economic policy, the tariff being only one of thousands of schemes hatched by governments around the world on a regular basis. I like the word "scheme" because generally the policies are concocted by a very few individuals working in concert with politicians who enact policy with little concern for the unintended consequences.

My perception is that the word is today reserved for those private citizens who fleece their fellows, e.g. Bernard Madoff. Yet, a Google Search of the word "scheme" in the news section yields the following headlines, which makes me feel a little better. Here is a sampling:

South Africa Probes Alleged $1.2 Billion Ponzi Scheme - Wall Street Journal

UK Govt: 60000 Orders So Far Under Car Scrappage Scheme - Wall Street Journal

China's subsidised rural appliances scheme booms - Forbes

On Ponzi Schemes and Stimulus Fraud - Seeking Alpha

2 men indicted in foreclosure scheme in Vegas - San Jose Mercury News

Ex-officers convicted in drug theft scheme - Chicago Tribune

Report over low pension schemes - The Press Association

EU Approves Slovenia's Financial Guarantee Scheme - Wall Street Journal

EU approves Finnish scheme to boost economy -EastDay.com

Emissions scheme set for defeat, say Greens - The Age

Only forty percent of the stories on the first page of Google search use "scheme" in the context of private individuals. The remainder are used in describing government programs.

Perception is not necessarily reality.

Posted by Craig Depken at 11:40 AM in Economics