Senator Dorgan and Brown introduced a "Buy American" provision into the Senate stimulus bill. Harry Reid supports it. Joe Biden supports it. But Obama and the Rubinites like Larry Summers seem to be publicly opposing it.
The provision says that stimulus money must be used for manufactured goods produced in the United States unless doing so would violate international trade agreements.
Polls show an 86% approval rating for this provision among voters, but outsourcing multinationals like Caterpillar and General Electric are mounting a campaign against the provision. This is not the Change We Can Believe In.
The U.S. has the biggest trade deficits in its history. China manipulates its currency by pegging it to the dollar at a 35% undervaluation rate, making all Chinese goods 35% cheaper than they would otherwise be. South Korea, Japan and other countries do also. Europe and Asia all have provisions to procure domestic goods. Canada labels all its pork and beef as "Raised in Canada" to spur consumers to buy domestically. The Chinese government owns the majority of its steel industry (as well as more than 50% of its economy), and subsidizes the rest, so those companies can never fail.
We pretend other countries are free traders at the behest of our multinationals and Wall Street Masters of the Universe. But they are not.
Obama distributed "Buy American: Vote for Obama" stickers during the campaign. He attacked John McCain in a radio ad for McCain's lack of support for government procurement of American motorcycles.
But last night the President told Charlie Gibson of ABC News that he does not like these provisions if they will risk a "trade war." Larry Summers said the same in a Columbus, Ohio newspaper. Every time the fair traders try to level the playing field in the face of economic decline and foreign protectionism, the government and multinationals and Wall Street raise the "trade war" specter. It hasn't happened. We just suffer economic decline with their policies, which are as outdated as Milton Friedman.
The stimulus package won't stimulate much if we just spur the purchase of offshored production and do not dedicate it to jobs here. U.S. taxpayer money should benefit U.S. taxpayers.
The Lawrence Summers "free trade" crowd have produced only huge trade deficits. Deregulating trade has produced the same results as deregulating financial markets... and energy (Enron)... and other sectors. Our economy and citizens cannot take more of this.
Hopefully Obama will remember his campaign promises. Buy American does not violate international trade laws. We need to stimulate our own economy. Our credit cards and home equity loans and tax dollars cannot finance the trade deficits any longer.