On the stimulus plan, remember, we're not alone
2/11/2009PROTECTIONISM has some appeal. It also presents problems.
The idea is that somehow the pursuit of free trade policies - or, the pre-eminence of globalization in today's world economy - has somehow sold many Americans down the river in the name of internationalism. The demise of Pittsburgh's steel industry is attributed to it. The export of U.S. jobs, such as in "outsourcing" to India, the Caribbean, and Africa, is considered to be due to a lack of protection of U.S. workers by the U.S. government.
The latest skirmish in this ongoing battle has to do with the current economic stimulus bill. Will it have a "buy American" piece in it, or won't it? If it does, that would be considered a restraint of free trade and would invite litigation or retribution by America's pesky foreign trading partners.
On the one hand it is perfectly normal for Americans to begin thinking that way as they hear the wolf huffing and puffing outside their doors. They harken back to a happier day when they predominantly bought American products, thus keeping workers at work, recycling the country's money through the hands of our countrymen, and not letting any more of it than necessary end up in the hands of foreigners.
But this is to long for the America of the 1950s, an America that no longer exists.
Except for the World War II years, when new models of cars were unavailable, every two years from the 1920s until the late 1960s my father bought a new Chevrolet. He didn't think in terms of "buy American." He simply bought American. Then his needs changed and he bought a Volkswagen bus to replace his Chevrolet station wagon - it was more spacious, got better gas mileage, was more reliable, and was better suited to his needs.
The first car I bought myself was overseas in Nigeria - a Volkswagen Beetle. That was in part because American companies didn't consider it worth their trouble to export to Africa because of the rich U.S. domestic market. Besides, the roads were too narrow and for American cars, gas was too expensive, and there was no service available.
Now the world market is such that American and foreign companies and financial relationships are so intertwined that, even if we wanted to, there would basically be no way to buy exclusively or even primarily American. There is no way to unscramble this egg.
I challenge anyone to find me a medium-to-large-sized company that is not international, that is "pure American." Companies known as American export overseas, import components for their products from overseas, borrow overseas, invest overseas, and in many cases manufacture overseas. To throw that into reverse, or even to imagine that it is possible to throw it into reverse, is simply to be out of touch with economic reality.
Now, does that cripple us in trying to target our economic stimulus package toward fixing the ills of the American economy? Absolutely not. It only means that we need to think carefully about what goes into the package.
By that I do not mean that the fat Republican cats, such as Senate Minority Leader Mitch McConnell, should be allowed to drag their feet and "perfect" the stimulus bill until all that remains of it is more tax cuts for the Republicans' wealthy constituent base.
What I do mean is that as much of the stimulus as possible should go into jobs - jobs in the United States and projects that improve the infrastructure of our country. Money should go to American schools and health facilities. Contracts should not go to what clearly are foreign companies, although, to avoid screaming and yelling from overseas, it needn't say that in the legislation. If foreign governments complain, they should be quietly reminded that their stimulus packages will not benefit American companies.
It is also true that if the Americans employed to carry out work financed by the new stimulus plan then choose to go to Wal-Mart or elsewhere and spend their wages on Chinese imports, so be it. They probably will, in fact. From that point on, it is up to American companies to compete for their dollars with products they want.
There are a few other matters we need to clear up before heading off on a program to benefit the American economy by placing formal nationalistic, protectionist restrictions on what can be done with economic stimulus money. One has to do with the supervision and morality of American companies and financial institutions.
Speaking of nationalism and protectionism, there is a need in this country for people to think more about the good of their fellow Americans.
Who eats peanut butter, or, rather, who ate peanut butter? Answer - most Americans, particularly our children. So who in the company in Georgia shipped peanut butter they knew was infected with salmonella? What is the difference between the owners and managers of that company and the operators of the companies in China who sold and shipped milk with melamine in it?
Then there are the Wall Street institutions that were so large that they couldn't be allowed to fail - to save the rest of us - who accepted billions from the federal government - our money - and then paid themselves big holiday bonuses. In their case, U.S. protectionism should be in the form of our government protecting us from them, not protecting them from foreign devils.
I am enthusiastic about protecting American workers, their jobs, and America's ability as a nation to swim competitively with the best of our competitors. I favor strongly the economic stimulus bill and other efforts by the Obama Administration to pursue the President's top priority - restoring the health of the American economy.
At the same time, this objective needs to be pursued in full awareness of the realities of the global economy, one of which is manifestly interconnectedness. What would we do if China responded to its own economic woes by cutting its massive purchases of U.S. Treasury bonds, those which finance our economic stimulus plan?
Dan Simpson, a retired diplomat, is a member of the editorial boards of The Blade and Pittsburgh Post-Gazette.
E-mail dsimpson@postgazette.com