‘Buy American’ in second stimulus bill sparks free trade debate

January 29, 2009 by · Leave a Comment
Filed under: Policy News 

Free trade is a farce, when you move productive jobs to another country and you do not replace them in your country with another productive job then you are actually lowering your standard of living at the expense of your own people.  I wonder why these multi-national corporations are complaining from having the stimulus money spent on American made goods?  Because they outsource higher paying jobs to other countries to make finished goods for the more mature markets and that added savings they receive goes to increase their profits.  They put profits even in this crisis over what would be good for the country for which they operate out of.  

If we decide we want to help emerging market countries, we should be focused on building up their productive capabilities so they can create a robust middle class that will have the ability to purchase goods from more mature markets at prices that fair, not free.  It seems we would rather have a race to the bottom and let our living standard plummet then to try and increase others standards so we can trade on a more even footing.   Are we heading to a two-class system in America of the “haves” and “have nots“?

News:

The stimulus bill passed by the House last night contains a controversial provision that would mostly bar foreign steel and iron from the infrastructure projects laid out by the $819 billion economic package.

A Senate version, yet to be acted upon, goes further, requiring, with few exceptions, that all stimulus-funded projects use only American-made equipment and goods.

Proponents of expanding the “Buy American” provisions enacted during the Great Depression, including steel and iron manufacturers and labor unions, argue that it is the only way to ensure that the stimulus creates jobs at home and not overseas.

Opponents, including some of the biggest blue-chip names in American industry, say it amounts to a declaration of war against free trade. That, they say, could spark retaliation from abroad against U.S. companies and exacerbate the global financial crisis.

The provisions also confront President Obama with his first test on trade policy. He must weigh the potential consequences of U.S. protectionism against the appealing slogan of “Buy American” and the jobs argument.

The administration has not addressed the issue publicly, and sources close to the issue said it appears that a response is still being formulated.

“We’re reviewing the Buy American plan proposal, and we are committed to a plan that will save or create at least 3 million jobs including jobs in manufacturing,” White House spokeswoman Jen Psaki said.

The proposals are meant to regenerate heavy manufacturing jobs in the United States by forcing government contractors to use domestic materials and equipment, even if they are more expensive. Yet U.S. industrial giants including Caterpillar, General Electric and the domestic aerospace industry are emerging as strong opponents.

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