Monday, February 02, 2009

Should Obama 'buy American?'

There are many critics of the 'bailout bill' President Obama is promoting, but one aspect in particular is proving to be very controversial.

Obama's 'bailout' consists of tax cuts and public spending. Much of this spending will be in the form of development projects, intended to bulk up America's infrastructure and create jobs by building roads, bridges and other 'public works.'

In an effort to promote American industry, this initiative is tempered by a commandment to 'buy American.' If bridges, roadworks or buildings require steel or other resources, the bill demands that these materials are sourced from the United States itself - inspiring the rest of the world to cry 'protectionism' in protest.

It's an interesting situation. With the federal government pledging to buy American steel, it could give the American steel industry a huge boost - helping secure jobs and profit in an industry that's particularly beleaguered by undercuts from foreign imports.

However, the pledge to 'buy American' means the federal government will be deliberately purchasing more expensive materials, offering less value for taxpayers and shamelessly flouting the 'free market' system that's meant to be at the heart of American society.

The international community is understandably upset. The United States has free trade agreements with dozens of countries, agreeing not to put up tariffs on imported goods even if it puts more pressure on their own domestic industries to remain competitive.

With the American economy often driving the world economy, it's understandable that steel-producing countries hungrily eyed up the boost Obama's spending plans would have made to their own besieged economies and are now disappointed by the news.

That being said, Obama indicated that the purpose of his spending plan was to boost employment and secure jobs in America. Is it so wrong to give an important domestic industry (important enough that the Pittsburgh Steelers were named after that city's steelworkers) a much needed boost during this economic downturn?

Subjectively, I support Obama's decision to promote American industry and encourage the government to spend on American products. I'm reassured that there's a 'safety clause' which liberates any project from using domestic materials if the price of those goods would increase the overall project cost by 25% or more.

Objectively, however, I know that this form of patriotic protectionism never works. Successful business evolves through a form of economic Darwinism. Companies that remain competitive remain in business. If Obama gives a temporary boost to a beleaguered American industry, it will merely postpone their inevitable decline.

I'm just about old enough to remember the end of the coal industry in Great Britain during the 1980s - a tragic period in which a subsidised industry finally accepted that it could no longer afford to support the thousands of employees who relied on it. Do we want to see a repeat of that?

A look at America's experiments with protectionism in the past reveal that government mandated 'buying American' is a self-defeating solution. Despite the apparent logic of boosting the economy by encouraging domestic industry, protectionism almost always winds up hurting the economy, not helping it.

It's also ripe for graft and corruption. If the American steel industry knows it has a captive market, there's nothing to stop the price of American steel elevating overnight. Without foreign competition to drive the prices down, it's a seller's market.

It all ends up with the taxpayer paying more. Considering the ambitious nature of the bailout bill -and how much it will cost us, our children and our children's children to repay - that's not something any politician should allow to happen.

Republicans often tout America's 'free market' system of Capitalism, but the sad truth is that the system already fails to stand up to scrutiny. With powerful unions in many of America's industries, plus subsidies for farmers and tariffs on many imports, the American economic system is already twisted and manipulated by politicians to profit a canny few.

While things like petrol are dirt cheap compared to Europe, other commodities (most obviously milk and cheese) are vastly inflated compared to prices abroad. If Obama pledges to 'buy American,' surely this situation is just going to get worse.


ck said...

I actually support the 'buy American' on most all government contracts.

sxychikadee said...

Excellent points on both sides Roland.

In my mind, buying American would also increase an overall needed patriotism in American society - especially if only Americans are hired for the jobs.

Oh my goodness.... I just agreed with CK. The plane air I breathed today must be getting to me. ;)

Two Dogs said...

Only one problem on your take of the "buy American." On steel, it says buy US steel, UNLESS it is cheaper from another place or the supplier in the US cannot meet the deadline. Asian steel is always cheaper because it is 16k steel. The buy American language in this SPENDING bill is useless.

And there are zero tax cuts in the bill at all. There ARE tax credits for people. These tax credits shall never be passed because CBO will not let that pass muster.

The actual name for this bill should be The Welfare for Welfare Bill, because that is exactly what it is. In case you have not read it, try, this site breaks down each individual spending proposal, along with the number of jobs that it would supposedly create. Check out the Heritage Trail in Natchez, MS with a 600 million dollar price tag for 65 jobs.

Infidel753 said...

The reason protectionism is normally considered harmful is that it limits the number of, and therefore limits competition among, sellers -- which is bad if you are only concerned with what is best for the buyer because you are the buyer.

In the case of ecomonic-stimulus spending, however, part of the express purpose is to benefit sellers, because of the jobs those sellers will create or at least preserve.

That being the case, it is perfectly legitimate to target the spending to benefit those sellers which create or preserve the jobs we are most concerned about -- that is, those in our own country.

The risk of weakening American companies by shielding them from competition is a long-term risk. It isn't an issue with the stimulus plan unless its protectionist components become permanent. Temporary rules to limit the benefits to limit the benefits to US companies shouldn't pose that problem.

As for lack of competition driving prices up, don't we have more than one steel producer in the US? They will compete with each other.

It's absurd for other countries to expect us to tailor our policies to help them. No one is talking about the EU or Russia or Japan making sacrifices to help bail out the United States. Each country has to concentrate on its own problems. In the long run, a strong US economy helps everybody.

Anonymous said...

情色電影, aio交友愛情館, 言情小說, 愛情小說, 色情A片, 情色論壇, 色情影片, 視訊聊天室, 免費視訊聊天, 免費視訊, 視訊美女, 視訊交友, ut聊天室, 視訊聊天, 免費視訊聊天室, a片下載, av片, A漫, av dvd, av成人網, 聊天室, 成人論壇, 本土自拍, 自拍, A片, 愛情公寓, 情色, 舊情人, 情色貼圖, 情色文學, 情色交友, 色情聊天室, 色情小說, 一葉情貼圖片區, 情色小說, 色情, 色情遊戲, 情色視訊, 情色電影, aio交友愛情館, 色情a片, 一夜情, 辣妹視訊, 視訊聊天室, 免費視訊聊天, 免費視訊, 視訊, 視訊美女, 美女視訊, 視訊交友, 視訊聊天, 免費視訊聊天室, 情人視訊網, 影音視訊聊天室, 視訊交友90739, 成人影片, 成人交友,

免費A片, 本土自拍, AV女優, 美女視訊, 情色交友, 免費AV, 色情網站, 辣妹視訊, 美女交友, 色情影片, 成人影片, 成人網站, A片,H漫, 18成人, 成人圖片, 成人漫畫, 情色網, 日本A片, 免費A片下載, 性愛, 成人交友, 嘟嘟成人網, 成人電影, 成人, 成人貼圖, 成人小說, 成人文章, 成人圖片區, 免費成人影片, 成人遊戲, 微風成人, 愛情公寓, 情色, 情色貼圖, 情色文學, 做愛, 色情聊天室, 色情小說, 一葉情貼圖片區, 情色小說, 色情, 寄情築園小遊戲, 色情遊戲, 情色視訊,

Anonymous said...

做愛的漫畫圖片, 情色電影分享區, 做愛ㄉ影片, 丁字褲美女寫真, 色美眉, 自拍俱樂部首頁, 日本偷自拍圖片, 色情做愛影片, 情色貼圖區, 八國聯軍情色網, 免費線上a片, 淫蕩女孩自拍, 美國a片, 都都成人站, 色情自拍, 本土自拍照片, 熊貓貼圖區, 色情影片, 5278影片網, 脫星寫真圖片, 粉喵聊天室, 金瓶梅18, sex888影片分享區, 1007視訊, 雙贏論壇, 爆爆爽a片免費看, 天堂私服論壇, 情色電影下載, 成人短片, 麗的線上情色小遊戲, 情色動畫免費下載, 日本女優, 小說論壇, 777成人區, showlive影音聊天網, 聊天室尋夢園, 義大利女星寫真集, 韓國a片, 熟女人妻援交, 0204成人, 性感內衣模特兒, 影片, 情色卡通, 85cc免費影城85cc, 本土自拍照片, 成人漫畫區, 18禁, 情人節阿性,

aaaa片, 免費聊天, 咆哮小老鼠影片分享區, 金瓶梅影片, av女優王國, 78論壇, 女同聊天室, 熟女貼圖, 1069壞朋友論壇gay, 淫蕩少女總部, 日本情色派, 平水相逢, 黑澀會美眉無名, 網路小說免費看, 999東洋成人, 免費視訊聊天, 情色電影分享區, 9k躺伯虎聊天室, 傑克論壇, 日本女星杉本彩寫真, 自拍電影免費下載, a片論壇, 情色短片試看, 素人自拍寫真, 免費成人影音, 彩虹自拍, 小魔女貼影片, 自拍裸體寫真, 禿頭俱樂部, 環球av影音城, 學生色情聊天室, 視訊美女, 辣妹情色圖, 性感卡通美女圖片, 影音, 情色照片 做愛, hilive tv , 忘年之交聊天室, 制服美女, 性感辣妹, ut 女同聊天室, 淫蕩自拍, 處女貼圖貼片區, 聊天ukiss tw, 亞亞成人館, 777成人, 秋瓷炫裸體寫真, 淫蕩天使貼圖, 十八禁成人影音, 禁地論壇, 洪爺淫蕩自拍, 秘書自拍圖片,