Peterson Institute Bashes “Buy American” Provision of Stimulus Plan

http://www.reuters.com/article/domesticNews/idUSTRE5115PM20090204

The linked article reports on a “study” by the Peterson Institute of International Economics, one of those “think tanks” that thinks exactly what its global corporate sponsors pay it to think (and whose name should tell you everything you need to know about them), which claims to show that the “buy American” provision in Obama’s economic stimulus plan would actually end up costing American jobs. 

“Buy American” provisions under consideration in Congress as part of a huge economic stimulus bill could create only 1,000 new steel industry jobs and might cost as many as 65,000 across a number of sectors, a new study said on Tuesday.

“The negative job impact of foreign retaliation against Buy American provisions could easily outweigh the positive effect of the measures on jobs in the U.S. iron and steel sector and other industries,” Gary Hufbauer and Jeffrey Schott, senior fellows at the Peterson Institute for International Economics, said in the report.

Their logic is that other nations will retaliate by halting the importation of American goods.  Yeah, OK.  Then what?  Is that it?  Geez, thank God these guys don’t provide advice to the defense department.  Otherwise, their advice following Pearl Harbor or  9/11 would have been “we can’t attack them because they might shoot back.” 

Hey, Peterson Institute!  Hello-o-o-o-o-o!  We’re the ones with the $700 billion per year trade deficit!  We hold all the cards!  Sure, other countries might think they’re being smart by reducing the few imports they buy from us, but then it’s our move.  We stop importing Japanese, Korean and German cars, Japanese motorcycles, Japanese outboard motors, Chinese toys and electronics, Irish computer hardware, software and pharmaceuticals and … Shall I go on, or have I made my point?  Does the rest of the world really want to go down that road?  What would the net effect on American jobs be then, Peterson Institute?  Six million manufacturing jobs come back to the U.S.  Oh, you can deny that, but only by repudiating the methodology used by every nation on earth to calculate their GDP (gross domestic product), which accounts for imports as a net loss. 

It’s only natural that the parasitic economies of the world who feed on America’s market and jobs get shrill whenever they see us reaching for the flea powder.  It’s time for America to take a good, heavy dose, grow a back-bone and stand up for itself.

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2 Responses to Peterson Institute Bashes “Buy American” Provision of Stimulus Plan

  1. Clyde Bollinger says:

    Doggone it! Pete, you need to expand your book readership # 1, and then to use a Pepsi commercial theme say “Wake Up. People!!!
    It just boggles the mind that so many people are willing to just apply the party line to the extreme current situation. If some “economist” a century or two ago said something, it must be pertinent today. Rubbish. This Gavin Kennedy guy is so thouroughly wrapped up in Adam Smith’s stuff that he is oblivious to current conditions. Keep plugging.

    • Pete Murphy says:

      Thanks, Clyde. Gavin seems very fearful of a trade war, which is probably reasonable for someone in the U.K., a nation 7-1/2 times as densely populated as the U.S. But to put blind faith in an 18th century economist makes about as much sense as stopping the evolution of the field of physics with the theories of Isaac Newton.

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