It’s nice to see how so many highly positioned people in the American government are so clueless about how the modern world and its interconnected economies operate that they can start a storm in a tea cup. Senator Byron Dorgan D-ND and Rep Peter Visclosky D-IN both have sparked off an international debate that could well lead to a series of counterproductive nationalistic measures with their “Buy American” clause in the now $900 billion (and growing) US stimulus package. This has a real potential to slowing down global recovery and sending our current trading partners into stalled wheel spinning situation and possibly worse. President Obama is beginning to pull out the John Kerry style answers and flip flopping on the issue by endorsing it, remaining silent, and now weakly opposing it.
Senator Dorgan backtracked in USA Today and tried to explain himself more clearly, little good that did as the EU, Canada, Brazil, China, India, and others have all began to line up countermeasures and their own punishments against American if the already passed House bill passes the Senate and Obama signs it as is, and they all are strongly warning against it. Well Mr. Dorgan, I hope you are proud of yourself because the perception in the world is you are instituting protectionism policy and we all know perception is reality in the real world and not fantasy lefty bazaaro world where most liberal politicians live (exhibit 1 and 2, Pelosi and Reid). Their strong reactions all state clearly that these measures will not be taken lightly or sitting down but will be answered with action, so even if they are not intended to do such, thanks for the party Mr. Senator because you got it going on now!
Let’s look at what we can about the facts first. The passage in question is stated by its author as specifying that "if American tax dollars are used for construction or infrastructure work then domestically produced and manufactured goods need to be considered and used when all possible”, paraphrased of course. If you want to see how effective this is talk to the tax payers in San Francisco who funded a massive bridge repair and used similar policies and were fleeced out of $400 million that could have been used to fund any number of cockamamie liberal leftwing-nut ideas America’s most liberal city has. The state of California could sure use that $400 million now with their budget crisis, the worst of all 50 states! Reality is sure a bitch when it falls out of sync with ideal liberalism day dreams these rulling Democrats have. Sure the use of the steel in the bridge refitting project employed American steel workers, rail workers, and truckers, but how good of a deal was it?
The liberal Democrats are tripping all over themselves in Washington DC now trying to ‘save the day’ by nationalizing this or that, and spend spend spend our way out of the crisis so as to ‘not let a good crisis go to waste’. This particular buy American measure is just another shinning example of short sighted, illogical, out of touch with reality, (and in the pocket of lobbyist, special interest groups, and trade unions as well as how ignorant to how modern economies operate) these people passing our laws really are. Where is the ‘Hope and Change’? From here the government is being steered by the campaign contributors and special interest groups who funded the current lot of super liberals we have in power now instead of the ‘open, transparent, and accountable’ government we were all promised last fall. For every action there is an opposite and equal reaction; politics is not exempt.
America, over the past 20 years, has made many trade pacts, treaties, and alliances we can not just back out of now, or afford to if we could. During this time the world has changed, modernized, and begun to raise in wealth, influence, and power. Europe has consolidated currencies and formed a super trade group we can not ignore. Emerging markets and rouge nations are exploiting their natural resources to fund expansion and projects we just don’t want to see fulfilled. Our old enemies are striking allegiances to rebuild their power and they would love to see us crippled and isolated economically through this. We live in a global economy, period. Trying to turn back the clock now will disrupt the entire balance and spark off conflicts, digressions, and problems we really can not afford to see happen.
The benefactors of this buy American clause will be few and far between the much lauded 20,000 daily unemployed people Dorgan mentioned. Politicians may be many things, ignorant and stupid among them, but one thing they really know how to do and do well is to lie and manipulate those who elected them so smoothly it seems natural. Buy American and keep jobs here to help our people, they proclaim loudly. Sure, if Americans wanted to and could afford American made goods. Now this is the distracter they use to get deaf, dumb, and blind sheep of the masses to follow them. Their measure is mainly for the steel, concrete pre-fabrication, and construction industries. A real hard look at the jobs saved, created, and impact on the nation as a whole spells out the total opposite, net job loss!
How many of the 20,000 a day newly unemployed people can readily go to work in one of these fields today? 1,000, 500, 100? Steel workers are unionized, you have to join the union to get the job, and that could take years to go through plus the hassle of staying in a union. Concrete, its hard and dirty work, been there and done that and nearly ended up in the hospital for it. Construction, again mostly unionized, and they tightly limit the access to card carrying members only. So what jobs can be saved and how many real jobs can be created by this? How about saving this stimulus of tax payer money to put real SUSTAINABLE projects together? All the pork in this every expanding stimulus package is giving all us Americans high cholesterol and blood pressure and not a real long term survivability plan. Saving 5,000 steel jobs over the next year is great, but what about when the stimulus funds and programs run out? These steel workers will be on the unemployment lines then and have just delayed their fate by a few months. I keep saying it again and again, we can not compete with emerging markets cheap labor! Stop trying, instead shift the work force into a more highly trained, skilled, and educated one that can lead the world with new technologies, innovations, and specialties that emerging markets can’t! Stop clinging to the ways of the 20th century! Wasn’t this election about looking forward and not backward, oh sorry wrong party and candidate.
What are the pitfalls of this folly of protectionism? Domestic downturn as tax dollars are wasted and run out faster, unemployment is only staved off until demand runs dry when the projects are completed, goods made from these sectors will increase in price and production time as oversea supplies collapse as trade reprisals and spats escalate, WTO legal action, US based companies like GE (50% of their work comes from overseas contracts) Caterpillar, AIG, BoA, Met Life, Goodyear, etc. all loose market share and profits as oversea work erodes or goes away completely, allied trade partners break alliances and begin trading with the EU, rouge nations, or worse our enemies therefore strengthening opposition to American products, goods, and reputation abroad, America’s image as a fair and friendly nation, America’s reputation as a friend to emerging markets and supporter of human rights, numerous devastating and destabilizing humanitarian crisis as foreign economies weaken more and unemployment takes root in nations who just recently clawed their way out of poverty, oh, that is all I can think of off the top of my head.
The truth is the reaction to this action would be bad for not only America but for the world in the long term. The media is now pouncing on this as stupidity, LA Times, NY Times, Wall Street Journal, and others all state this would set off global trade wars that could put is into worse economic climates for the foreseeable future. The independent Peterson Institute for International Economics has stated in a published review this week of the measure that is will cost America more jobs then it saves in the short term! Now Obama can smell the political decay of those backing the measure and is getting an earful from Canada, Briton, the EU, Brazil, China, and others that if this happens they will act, act swiftly, and act decisively to protect their own interests against America and he his scared of being part of it. In an ABC interview this week President Obama stated “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.”
Buy American was a great idea in the 1990’s, but we consumers laughed at it all the way to the bank as we passed up over priced union made goods for cheap labor foreign produced goods. Well, that was almost 20 years ago and we can’t reverse course now. In the light of the crisis we are in, if we tried to force the country or even cities to buy American then prices, inflation, and taxes would have to rise to such a degree Mexico would look at us with pity and shake their heads in dismay. Just as the times of that Great Depression saw the end of the agriculture age in American as farmers flooded cities for work and jobs, the paradigm is shifting again. Instead of fighting it we need to embrace it, learn from the mistakes of the past and put the majority of our current manufacturing sector into history where it belongs. Spend stimulus funds on re-education, high-tech job training, and American unique job sectors instead of extending unemployment, pork barrel pet projects that will only lead to higher taxes to sustain after the stimulus money is gone. Spend the money on modernizing our education and medical sectors so we can compete with superior education systems in China, Japan, India, and other nations who have passed us up on reading, science, and math and STOP dumbing down education because you think inner-city youth are not as smart. Yes, we need help now, but we need the right kind of help, not the kind that postpones the pain for 6 months to a year. Use the money to push the country into a new era, a 21st century era, an era where we can dominate and excel, not scrape by and follow the same path we have for the last 90 years because that is not progress, that is stagnation.
Typical of liberal leftwing thinking, they are putting the cart before the horse and not thinking beyond their current Senate or House terms to the long range impact and message this measure would make to the world. They are being bullied by their union cronies, lobbyist financiers, and fellow crackpots who can only think up good ideas while stoned, drunk, or half asleep in their vacation homes or cocktail parties. The world is much smaller then it was in 1930, 1980, 1990, or 2000. The cold hard reality is China is the largest holder of US currency, debt, and the only country who can and is willing to look at buying enough treasury bonds to keep the Pelosi’s, Reid’s, and Obama’s of the Democratic party in a job and our country from falling apart. The cold hard truth is that our national security and survival depends on the existing trade alliances we have and keeping them strong enough to withstand the temptation of our trade partners from making our enemies richer and more powerful.
We Americans have been the richest and most powerful nation on the planet for 60 years and we are the example for emerging countries. Our actions are felt far beyond our borders as this present economic mess painfully demonstrates. If we begin to turn our back on the world now, and doing this will signal that we are doing so, then we can expect to lose the small shred of credibility we have left and Mr. Obama and the liberals ran their campaign’s on the mantra of restoring our place in the world to a respectable and honorable nation, protectionism and perceived protectionism policies will accomplish just the opposite, we will look like spoiled brat, pick up our toys and go home when upset, children that we are.