Some Not For the Buy American Provisions in Proposed Stimulus

In economics/money, Industry, U.S government on February 4, 2009 by Editor Z

Came across this through something Andrew Sullivan linked to; Obama is evidently less than enthusiastic about the Buy America provisions, that would give preference to American companies in infrastructure projects such as steel and iron in the building of bridges and other projects in the proposed stimulus bill, and limit the amount of these materials coming in from abroad for these tax payer funded projects.

Many Foreign countries, corporate elements, and the U.S Chamber of Commerce, as well as such Senators as Senate Minority leader Sen. Mitch McConell(R-KY) have spoken out against the measure. It appears Obama has now joined the chorus.

CHARLES GIBSON: A couple of quick questions. There are “Buy America” provisions in this bill. A lot of people think that could set up a trade war, cost American jobs. You want them out?

PRESIDENT OBAMA: I want provisions that are going to be a violation of World Trade Organization agreements or in other ways signal protectionism. I think that would be a mistake right now. That is a potential source of trade wars that we can’t afford at a time when trade is sinking all across the globe.

CHARLES GIBSON: What’s in there now? Do you think that does that? Do you want it out?

PRESIDENT OBAMA: I think we need to make sure that any provisions that are in there are not going to trigger a trade war.

Now I am no economist and that is why I rarely talk about the economy or economics in real specific terms. Now I can see the worry of many that the U.S and the world for that matter could slide into economic isolation. We are an increasingly interconnected world. But given the fact that hardly anything is made in America anymore, don’t you think just a little resurrection of our nascent manufacturing sector would be a good thing, in moderation of course? We have a massive trade deficit right now as well as a dismal performance in U.S manufacturing.And like all that talk of us becoming energy independent, wouldn’t it be beneficial if America had a manufacturing base again? The type of manufacturing base that helped us weather many storms including winning two World Wars?

Now such legislation wouldn’t overnight likely bring back the American manufacturing industry that has corroded over the past two decades, but it could be a start. After all in many cases American flags, the banner we cherish and don in times of pride and peril is in many cases not even made in the land it is meant to symbolize.

Besides those who are consistent advocates of unconditional free trade and outsourcing seem to think that you either have to be totally for unconditional Free Trade or you have to be for protectionism. That seems to be a false dichotomy. After all many other countries have a thriving manufacturing base yet continue to do business with other countries and abide by their trade agreements. Why can’t we? From where many stand just a bit of tamed economic nationalism might not be such a bad thing.



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