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310 Comments
- kd420, on 02/02/2009, -17/+99This is an incredibly stupid policy. The Great Depression happened less than 100 years ago, and people still forget the consequences of protectionism? http://en.wikipedia.org/wiki/Causes_of_the_Great_D ...
It seems really simple at first, just balance the trade deficit and things will get better. But there are two problems with this.
1) There are treaties that mandate free trade, i.e NAFTA and WTO obligations.
2) If you ignore these, other countries will be forced to do the same, thus negating trade surplus gains.
I'm from Canada, so I know there are lots of jobs here that depend on exports to the US, but if this policy is enacted we will have little choice but to reduce or cut off trade to the US in favor of other nations. We currently supply 20% of the energy to the US, and if you impose restrictions on NAFTA, do you think we'll keep feeding you energy with no penalty? Protectionism doesn't work, end of story. Economists everywhere agree that the negative effects outweigh the positive by large margins. http://en.wikipedia.org/wiki/Protectionism#Argumen ...
I've heard similair calls for "Buy Canadian" as well, because it seems to a lot of people here that the US is leeching off of our resources. But the fact remains that these distinctions between countries are mostly artificial when it comes to economics. By cutting off trade you are essentially cutting off a vital part of your economy. The consequences _have_ been disastrous, and will be disastrous if implemented. - bobjrn2, on 02/02/2009, -30/+90"Buy American" is the worst economic policy to ever be endorsed. We live in a global market, how can you even attempt to justify such a statement. Do you not realize that foreign companies hire domestic help for their domestic factories? Do you not realize that even though the company may be established in a foreign country, it probably has US investors? America needs to trim the fat and stop taking out loans they can't afford to pay back. Ignoring this recession will only make it longer.
- LordRedSnake, on 02/02/2009, -8/+51This is not a Republic or Democrat issue, this is an economics issue. Most economists worth their salt will tell you that protectionism is unequivocally bad. It ends up introducing a boatload of inefficiency into the economy and causes us to waste resources. Republicans have finally got some sense after supporting protectionism, but they still don't practice what they preach all the time. See GWB and steel tariffs to fulfill Cheney's election promise in West Virginia, not to mention support across party lines for farm subsidies.
If you want to keep and create jobs here, you need to allow businesses to make the most economical decisions. Raise the price on imports and you actually destroy jobs. When we start introducing tariffs, it increases the price of goods and services throughout the chain of production. US companies end up having to buy higher priced inputs like steel. Where do you think they offset these cost increases? They cut their workforce, and introduce automation to remain competitive. They also pass the costs on to you, the customer. So if you think it's your patriotic duty to pay more for everything you buy, by all means, go for it. But mandating it is just destructive.
Want to create jobs? Make it cheaper for businesses to stay in the US. Don't raise their costs through tariffs, taxes, and burdensome regulation. Let us specialize in what we do best rather than trying to do everything poorly. - Lifehedge, on 02/02/2009, -8/+42It goes to basic Economic understanding that trade is beneficiary for all parties and creates wealth. No nation benefits from closing it's borders.
- muckemuck, on 02/03/2009, -2/+27You can't get out of debt as a consumer - you must add value and be a producer. For years one of our primary exports was DEBT. That may come to a screeching halt when people realize the countries that have a manufacturing base will be the place to put their money for the future. If the US doesn't build a manufacturing base it'll sink.
Protectionism is bad - but being a debtor nation AND a consumer nation is even worse. - rgremill, on 02/03/2009, -5/+30If we dropped the so-called stimulus package, this issue would go away.
- SheilaNoya, on 02/02/2009, -52/+76The Republicans used to be the ones claiming they were patriotic as they waved their American flags and shouted "Buy American". Now they've completely flip-flopped and say "Don't Buy American". Instead, they want to be able to sign over contracts to all of the offshore corporations they helped globalize.
The entire purpose of the stimulus package is to create JOBS. We have manufacturing plants closing down all over America. Buying from American companies help keep jobs here in America. Some of the profits made by American companies also comes back to the government in taxes.
Our trade deficits are already sky high. We already buy far more from the rest of the world than they buy from us, so this whole opposition is a sham. Rebuild America with American made products and materials and keep our jobs HERE IN AMERICA. - magamiako, on 02/03/2009, -0/+21I would have to say I'm torn on the issue. On one hand, I like the idea of having work to do here in the US. I like money, I like having a job. And when people buy from my company (an American one), I get to keep my job. I know there's all sorts of talk from people about how "oh protectionism doesn't work!" Reality is: if my company doesn't make money, they lay off tons of people. Which they have done and continue to do.
There should be incentive to keeping jobs in the US, and it shouldn't come at just a monetary price tag. Unfortunately, it's all about the money. And if there's no money to be made here, then there's no reason to have companies here.
We have nothing to export. We don't have tons of cheap labor. We can't survive on $2/day like they can in some of these nations. We've built regulations into our system to protect our workers and our consumers. We can't just go throwing lead paint into toys and poisons into toothpaste to reduce the cost of production.
Unfortunately, as a result of this and the result of the ability to communicate and travel to far off nations there's no incentive at all to have jobs here when you can make significantly more money doing it elsewhere.
So yes, I believe we need some way to enforce some minor protectionism in our economy. I'm not saying cut off completely import and export or anything of that nature. But I'm saying there needs to be incentive to stay focused on our country. There's nothing wrong with this. Most other countries have a protectionist policy when it comes to their workforce and it works out very well for them. - LordRedSnake, on 02/02/2009, -1/+18No you didn't hear of the "Hoot Smalley" Act because it doesn't exist. It's the Smoot-Hawley Tariff Act.
- Hetman, on 02/02/2009, -19/+35The world is flat. I reccomend reading it. We are a global economy now. This is a stupid economic policy.
- inactive, on 02/03/2009, -5/+20If the American public DID buy more American products it would help our economy. We will have to find a good balance between buying American and buying imported goods.
- bombula, on 02/03/2009, -21/+36Nonsense. The laissez-faire economic ideology that demonizes protectionism is the same dogma that lead to deregulating the financial sector and torpedoed our economy. The typical rationale - that protectionism from the Smoot Hawley Act caused the Great Depression - has been entirely discredited (like, for instance, the fact that that Act didn't go into effect until nearly a year AFTER the crash...). Other examples commonly cited are the Asian Tigers - the newly industrialized Taiwan, South Korea and post-war Japan. Omitted in those cases are the massive policies of protectionism supported by the US that made explosive growth in those economies possible - and all with the specific aim of containing communism.
Today, China's economy benefits from massive protectionism. Any idea what the tariffs are on US cars imported into China? 25%. It used to be higher prior to China's WTO entry.
Even Adam Smith and Ricardo were proponents of protectionism, saying that capital should be preferentially retained in local markets in order to sustain long-term stability and growth. It's Friedman and the other laissez-faire priests preaching the dogma of free trade that brainwashed the conservative right with this nonsense, for which there is not one iota of evidence that it does anything except enrich individual companies.
Newflash: helping corporations and a handful of billionaires and ***** everyone else is not good for a nation's economy. Trickle down doesn't work any better today than it did in the 1860s when it was known as Horse-and-Sparrow theory (feed the horses enough and some will get through to feed the sparrows...). It's a bankrupt ideology. Literally. Corporate profits of the Fortune 500 tripled over the course of the Bush administration. Good for America? Not so much.
Not only should nations protect their markets with both regulation and tariffs and quotas, local communities should do the same. Local communities that protect small enterprises against the likes of Wal Mart have overwhelmingly benefited in terms of jobs and livelihoods.
Stop drinking the Kool Aid. - Flatpicker, on 02/03/2009, -6/+19Most of us in the US are not economic guru's. To really understand the global economy takes quite a bit of thought and understanding of how the systems work together. We do know what is fair and unfair though. Seeing local, low wage jobs moved to third world countries where the wages can be made even lower falls into that unfair column. Reading stories about how the cost of a pair of shoes is driven mainly by the amount of advertising spent on them vs. the amount of labor or cost of materials in them just strikes us as wrong. So yes, I would like to see a tariff placed on those products that are being made while exploiting the workers who have made them even if it costs me more. But at the same time countries that fairly compete with the US should not be penalized. If they have the same labor laws allowing unions, the same environmental laws, workplace safety laws, accounting laws (and I am sure the list can go on and on) then they should be allowed to freely trade with us.
- inactive, on 02/02/2009, -7/+20Its the foreign countries that are opposed to it. Did you even RTFA before you posted that crap? Ever heard of the Hoot Smalley Act?
- Metasquares, on 02/03/2009, -4/+17This was how High Fructose Corn Syrup became popular. Tariffs on foreign sugar cane created an economic incentive to find something cheaper... and now it's in widespread use despite the deleterious health effects.
- Gimped, on 02/03/2009, -3/+15My american neighbors. Please understand the point of your friends up North. Look at it from our perspective, we manufacture very few consumer goods, except cars. Most of our industry is natural resources, oil, trees, steel, etc. We export a lot and we import a lot. If you stop buying our steel, we cannot buy your end goods. Even though your goods aren't made in your country, the money still goes to your workers. People like the Apple engineers who design great products, but don't actually build them. We are all in this together. You are being duped by your government to forgo your right to choose what you buy. They do this by wrestling your hard-earned money away from you through taxes. Don't fall for the the trap.
Your Canadian friends. - inactive, on 02/02/2009, -26/+38Stop sending dollars and jobs over seas!
- Elranzer, on 02/03/2009, -1/+13How about a compromise?
We'll buy American, if they stop exporting our jobs. - BloodWenis, on 02/03/2009, -1/+13My biggest issue is the fact that 'the stimulus package to end all stimulus packages', the one we passed a few months ago, did what again? It saved financial institutions from taking their lumps. If we had just allowed the market and the economy to correct itself years ago this wouldn't be so horrible. I wish government would stop thinking so highly of itself and begin to realize that it doesn't correct economic trends, it tinkers with them and most of the time prolongs the inevitable.
- Saitekc, on 02/03/2009, -3/+14Lets just say this "Buy American" idea isn't so popular in Canada right, and I should know, considering i live there. :P
- davenport651, on 02/03/2009, -4/+15I'll gladly pay more if I know the product puts American's to work and is built to a higher quality then a product made in China.
- Trekhawk, on 02/03/2009, -3/+13"We have manufacturing plants closing down all over America."
We have for decades. As someone from a rust-belt manufacturing city I should know. What's your point? There are simply products that we don't make anymore because we couldn't do it competitively. For example, when is the last time you bought an American TV (define what that is for yourself)? - stewacide, on 02/02/2009, -16/+26Obama is well on his way to sub-GWB levels of popularity, at least here in Canada, and it's been what? THREE WEEKS?!?
A trade war will hurt us all and make this recession/depression even deeper and longer. I can understand why Obama doesn't want to expend political capital fighting this, but if this goes through he'll have written off good relations with the US's best friends (i.e. the countries that trade most with it). - NaziHatinChimp, on 02/03/2009, -2/+11They took our jobs!
- mrjdavila, on 02/03/2009, -4/+13Wasn't it Clinton that got NAFTA going?
- dhughes, on 02/03/2009, -0/+9 Let's see, a policy that walls off the world and forces your own people to buy local or else versus being open and willing to trade with your fellow humans. Tough call.
- bigtoes, on 02/03/2009, -2/+11If you think America can have trade agreements with countries that have no environmental or labor policies & compete without lowering our standards you are wrong . These trade agreements aren't even " free trade " . China imposes three times the tariffs on our goods than we do on theirs . I don't think we have one true " free trade " agreement .
- superkendall, on 02/03/2009, -0/+9Buy American is a good rule of thumb as a consumer, but when you are talking REQUIREMENTS to buy American, that is protectionist and a different story altogether.
And many Republicans are not that protectionist, though some are. You are confused because there is a different line here, that both Republicans and Democrats fall on different sides of. - jeremyduffy, on 02/03/2009, -0/+9I'll buy American when and if American ever produces a product that's better/cheaper than the competitor (or at least if it was close).
- jebudas, on 02/03/2009, -2/+10This is the 3rd sentence from the wiki link you posted:
"However, historians lack consensus in describing the causal relationship between various events and the role of government economic policy in causing or ameliorating the Depression." - hdrkid, on 02/03/2009, -1/+9What we need is people to buy less MADEINCHINA junk from walmart. I look for MADE IN USA when I buy things.
- trer, on 02/03/2009, -2/+10The only real solution is for Americans to go where the jobs are...that is illegally immigrate to China and take those factory jobs.
- Thuban, on 02/03/2009, -0/+8Buy American, buy what? Nothing is made here anymore. Fat Cat CEOs & Wall Street have seen to that. A company opens a plant here, or increases the benefits package of its employees and its stock goes down. They lay off, decrease benefits, or ship thousands of jobs overseas and the stock goes through the roof. ***** got it backwards as far as I'm concerned.
- DrSin, on 02/03/2009, -6/+14There is nothing wrong with you as a consumer choosing to buy American made products. Knock yourself out. Be patriotic and sign petitions, boycott Wal-Marts Chinese made stuff, convince yourself that the Hummer is a good car, whatever it takes. That is not the problem.
The Buy American rule is about stimulus dollars being spent on American made iron and steel. Infrastructure stuff. (The senate is working on a version that includes all manufactured goods.) This idea has problems.
* Protectionism has been historically proven to not work and cost American jobs.
* When international markets can't sell in the US, they stop buying in the US too. This costs American jobs.
* Lack of competition drives prices up. US steel companies will be given a license to fleece off stimulus dollars.
* Buy American guarantees your stimulus dollars will be poorly spent. - inactive, on 02/03/2009, -3/+10I'm sorry but I couldn't get past the part where it said 'A powerhouse economic roundtable faced off today on "This Week with George Stephanopolous"' without laughing. What would that crew know about any Pro-American view or policy?
- Fratz, on 02/03/2009, -5/+12FedEx's CEO being in favor of international trade is so obviously biased, as they have a huge international presence and need other countries to do well so that they do well. The US is only part of FedEx's large market, and they probably don't care if the US does poorly as long as the world overall does well.
- rupaw, on 02/03/2009, -1/+8Hmmmmm, let's think about this.
A couple of million jobs in the US depend on exports. A restrictive "Buy American" policy will certainly trigger a similar response from other nations. Think that this is a good idea?
Furthermore, if Americans buy things that are more expensive or give you less value for the buck just because they are "made in the USA" then America's economy and America's consumers will have a competitive disadvantage.
Why do people who promote "Buy America" hate America so much? - jtscira, on 02/03/2009, -1/+8"Our strength should be in technology, to do things with raw materials that other countries just can't. "
Yeah cause all those other countries are stupid and can't come up with their own technologies.
If we don't rebuild our manufacturing base we are screwed. We can't survive be a country of consumers. Lets bring true free trade back to the USA.
All outsourcing jobs does is make CEO's a higher profit margin and cut American jobs. - muckemuck, on 02/03/2009, -1/+7Flip that around too.. the Chinese are doing their own stimulus package likely funded by selling US debt and unloading US dollars from their reserves - will they be buying lots of US made goods? I highly doubt it. They'll be buying goods manufactured in China and they won't pay for all of it by borrowing money.
- fieldmill, on 02/03/2009, -4/+10Protectionism certainly works, but only if you are the only country (or in a smal minorities of countries) that is practising it. However once major players start down this road you will have other countries raising their own protectionist barrier, which reduces world trade and shrinks everybody’s economy.
Everybody loses; this is exactly what the Smoot Hawley Act led to. This had nothing to do with the Great Crash and everything to do with the Great Depression. By raising protectionist barriers throughout the world; trade crashed, output crashed and the need for workers crashed, hence 30% unemployment.
The Smoot Hawley Act ensured that a stock market crash grew into a decade long depression, which was only really alleviated by WWII - mrjdavila, on 02/03/2009, -1/+7Question: What products do the Chinese primarily buy, I doubt it is American. I don't see anything wrong with being a bit selfish pushing for "Buy American". Charity starts at home. In times like these, we have to look after ourselves and stop lining the pockets of foreign governments/companies - just like at the Oil industry. How much money flows out of the US to Saudi Arabia, Iran and Venezuela. If we use the same mentality where we say that "Buy American" is bad, then T. Boone Pickens is completely wrong and flawed by wanting to be self energy sufficient.
- Trekhawk, on 02/03/2009, -1/+7Just look at North Korea.
- DevinKev, on 02/03/2009, -0/+6That's what old Herbert Hoover did during the Big Recession and we all know how well that went....
- BrandonEagan, on 02/03/2009, -1/+6Does no one care that the "Buy American" provision indisputably violates clearly established international law? It's amazing how everyone on Digg cared about respecting international law a year ago, but now wants to toss it all out the window.
- mrjdavila, on 02/03/2009, -3/+8I agree with tariffs can be work against our economy as long as other countries also play by the same rules and don't impose tariffs on our exports. But what I don't understand with is what is wrong with "Buy American". What is wrong with with pushing for American products? I understand about the global economy and all. To me it does not makes sense that we go into debt with this stimulus package by more than likely borrowing from Chinese banks and then turn around and buy Chinese products. That's half-ass backwards.
- stuffradio, on 02/03/2009, -0/+5Since you seem to know of them, what might those be?
- jtscira, on 02/03/2009, -3/+8Hate to burst your bubble but we have a lot of wind, solar, natural gas, nuclear and coal.
We need to get off of foreign energy.
And we don't need luck we need to get our heads out of our asses. - inactive, on 02/03/2009, -2/+7History repeats itself. http://www.rferl.org/content/Article/1105222.html
- Crazyredivan, on 02/03/2009, -0/+5Actually, this issue will never go away. Any time there is an economic slow-down, people turn to isolate themselves and their countries. Good move when it comes to messy wars, bad when it comes to fixing the economy. The last thing you want is nations increasing tariffs in retaliation against each other, and that's all economic protectionism does.
- publiclurker, on 02/03/2009, -5/+10I take it you are profiting from the cheap exploitable H1B labor? Nobody else would have the nerve to spew out such total BS unless they would personally profit from it.
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