Thursday, February 5, 2009

John McCain: Promoting Recovery by Building the Trade Deficit

Wow. Just wow.

CNN has an article on some specifics of the stimulus package and the "buy domestic" language in it:

The Senate agreed Wednesday to soften a "Buy American" provision in its economic stimulus package, clarifying that the clause will not override existing U.S. trade treaties.

The so-called "Buy American" provision in the $900 billion stimulus plan would have mandated that only U.S.-made goods be used in projects funded by the bill. Lawmakers who supported the provision said it would help jump-start the economy because it would help American companies.

At the same time, however, senators rejected a proposal by Republican Sen. John McCain of Arizona to strip the "Buy American" language completely from the bill.

Granted, US industry is at it lowest ebb right now, so if we want something more than a car or some cottage-industry furniture we're importing it. Likewise, if Washington is looking to put real investment into public transit the fastest responders will be Siemens (Germany), Breda (Italy), Bombardier (Canada), Fuji Heavy Industries(Japan) and the like, and domestic product to match the imports will likely not be ready for some years. The last domestic light rail manufacturer I heard of was Boeing: there were only two cities gullible enough to buy their unreliable, problem-plagued streetcars (Boston and San Francisco) and only one stupid enough to actually keep them (SFO got BOS's stock when they upgraded). So for the short term at least, we must accept that at least some stimulus dollars will go for products from overseas.

But leave it to John McCain, the man who did his best to sound like he cared for the average Joe (the Plumber) during last year's presidential campaign, to actually propose wiping out any requirement WHATSOEVER that the stimulus even ATTEMPT to source products domestically. That's sure to create jobs, stimulate the domestic economy and improve revenues. Of course it'll only do that in China, India and anywhere else actually making what we'll need, not here where the package is actually SUPPOSED to be having the most impact.

I fully expect that a lot of what we'll need in the short term will have to come from someplace else. And of course we have a whole ream of treaties that require us to give equal consideration to imports from certain places. So if we can easily prove that what's needed for a stimulus-funded project is not produced domestically or is outbid by a NAFTA enteprise I expect that we'll go with the alternative.

The whole POINT, though, of the stimulus package is to rebuild our OWN economy. That should include supports for domestic industries, most of which at the moment are in dire straits. Throwing out any limits on our materials sourcing will do nothing either for domestic production or for the ongoing trade imbalance. Removing those requirements would mean that no matter how well or poorly we recover this time, our economy would remain vulnerable to the next cycle - or to the day when China cashes in all our IOUs. And it would mean we would continue to be dependent on imports for our necessities - and sending our capital overseas and out of reach instead of putting it to use here.

If there was a clearer way for Senator McCain to tell us "the American worker doesn't count," I have yet to hear it.

1 comment:

  1. The simple fact that John McCain is still Senator McCain is testimony to his ability understand basic economics.