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Dallas Federal Reserve President Richard Fisher cautioned Monday that protectionist tendencies are dangerous, calling them the `crack cocaine` of economics.

Speaking on C-Span, Fisher addressed a proposed congressional fiscal stimulus law that would offer `Buy America` provisions in an effort to encourage the purchase of domestic goods. However, such provisions are dangerous, Fisher warned.
`Protectionism is the crack cocaine of economics … (it) leads to economic death,` he said.

`We just cannot afford to go down that path,` Fisher added.

The Dallas Fed President just concluded his term as a voting member of the Federal Open Market Committee. Known as one of the most ardent inflation hawks in the nation`s policymaking body, Fisher added in his comments that failure to remove added liquidity from the system in a timely manner could result in serious price inflation.

The Federal Reserve needs to be cautious that their excessive lending and record low interest rates, set at a target range between zero and 0.25 percent, Fisher said, warning that an inflation problem could be `baked` into the country`s economic outlook.
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