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Buy American
Author: BobR    Date: 02/04/2009 13:03:22

I've noted before that when I was growing up, the unions would have commercials exhorting us to "look for the union label". That was back in the good old days when clothes were actually made in the U.S., and the workers in the factories were frequently unionized. After Reagan essentially broke the backs of the unions, and imports were becoming popular, the call was to "buy American". After 9/11, Bush asked us to just "buy buy buy".

Of course - for most Americans, "buy buy buy" means "charge charge charge". As a result (in addition to the housing bubble), the amount of money lent out by banks began to exceed their ability to cover the loans. Thus, the banking industry imploded and we are left teetering on the precipice of another depression. The latest "are you kidding?" bit of news is that California is broke and has halted all payments. This is serious stuff.

Just like the last depression, the president is proposing we spend money on jobs, so that the pay these workers receive gets circulated back into the economy, hopefully revving it back up. I already covered in a previous blog how the Republicans want to use tax cuts for their magical trickle-down theories, so I won't go over that again. This time, the controversy is over Buy American.

The bill has some references to buying American-made products for infrastructure projects. One would normally assume that the Republicans are insisting on this language. One would be wrong. Oddly enough, along with our trading partners, the Republicans want that language taken out:
The US Senate should strip a "Buy American" clause from President Barack Obama's economic stimulus plan, the chamber's top Republican said Monday amid anger at the restriction from US allies.

"I don't think we ought to use a measure that is supposed to be timely, temporary, and targeted to set off trade wars when the entire world is experiencing a downturn in the economy," said Senator Mitch McConnell.
[...]
The House of Representatives last week voted to require that public works projects funded by its 819-billion-dollar stimulus bill to use only US iron and steel. The Senate version extends that restriction to all manufactured goods.

Even stranger? Obama agrees with them:
President Barack Obama said on Tuesday he did not want to send a protectionist message on world trade and would look at altering "Buy American" language in an economic stimulus bill coming out of Congress.

"I think it would be a mistake ... at a time when worldwide trade is declining for us to start sending a message that somehow we're just looking after ourselves and not concerned with world trade," Obama said on the Fox television network.

His comments came as the U.S. Senate was debating a nearly $900 billion economic stimulus plan that allows only U.S.-made iron, steel and manufactured goods to be used in public works projects funded by the bill.

While I understand the concern that protectionism helped create and extend the Great Depression, perhaps we need to tell our trading partners that we just want to reduce our trade defecit, which is averaging about $60 Million/Month. Simply reducing our trade deficit to zero would put $720M/Year back into our economy.

While I can understand that private companies shouldn't be forced to buy American only, the U.S. Government should at least try to buy American whenever possible. It is, after all, our economy we're trying to stimulate with our tax dollars (and the tax dollars we're borrowing from our children and grandchildren to pay for this). It's become increasingly hard for Americans to find products made in the U.S.; it's not too much to ask our government to buy American when it can. After all - aren't we trying to create jobs here in America?

 

90 comments (Latest Comment: 02/05/2009 03:25:48 by Random)
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