Monday, February 2, 2009

Protectionism for me but not for thee.

The Buy American provision of the stimulus package is a slippery slope.  One the one hand there is in fact an excellent argument to be made for requiring the raw materials needed for projects funded by stimulus money to be American made.   More cash will flow directly into the hands of American consumers who will in turn put it back into the economy much more quickly than overseas investors.   In any case there is hardly any reason to grow the trade deficit in the short term with public money.

The caveat here of course is that the provision be limited only to stimulus spending and should transpire by a date certain, otherwise we do run the risks of job loss and provoking retaliation from our trading partners as Minority Leader McConnell  warns.  All of which raises the question as to why  he trots out the Chicken Little posture on trade so selectively.

McConnell has a long history of supporting anti-free trade protectionist legislation when it is otherwise called The Farm Bill.    Apparently no risk of job loss, retaliation, or shame strikes McConnell as he votes "Yea" for legislation that, among other things, protects domestic sugar producers from the very kind of overseas competition he thinks  the stimulus package should embrace.   All the while you and I pay roughly twice what the rest of the world pays  for an abundant commodity to prop up  a cartel.  Indeed McConnell seemed gleeful in over turning Bush's veto of subsidies that pay out 74 percent of total expenditures to only  10 percent of all recipients and excludes 67 percent of all producers.   He even fought for a provision to put Kentucky horse farms on the dole.  

One wonders of course why McConnell sees such risk in policy that puts money directly in the hands of American working people but  no risk in spending  billions that benefit the few and raise massive barriers to trade.   While I wouldn't hazard a guess I think anyone taking a stand "on principal" against American workers ought to answer for the contradiction.

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