Buy American=Declaration of War on Rest of World
The odious U.S. House of Representatives has tagged a Buy American clause onto the Obama administration’s $819 billion (or more) fiscal stimulus bill. If this were to become law, U.S. federal spending would, wherever possible, be restricted to goods and services produced by U.S. companies. The main promoter of this act of global economic vandalism was the U.S. steel industry, but other import-competing industries have lobbied also. It is quite likely that the Buy American net will be cast even more widely when the Senate gets its turn at the fiscal stimulus act.
There is little doubt that if the Buy American provisions of the Economic Stimulus Package were to become law, this would amount to an economic declaration of war on the rest of the world. The response of the assembled non-U.S. finance ministers in Davos made this clear. Retaliation from the EU countries and the rest of the world would follow swiftly. Because this disastrous U.S. Congressional action follows so closely on Treasury Secretary Geithner’s declaration that China is manipulating its currency, it is essential that the Obama administration draw a clear line in the sand.
If anything like the Buy American clause inserted by the House survives in the bill president Obama gets on his desk, he must veto it. The questionable value of the fiscal stimulus is overwhelmed by the unquestionable domestic and global harm caused by the Buy American clause. If president Obama fails to veto a protectionism-laced bill, it will be clear that we have a wuss in the White House. If such is the case, God help us all.
~Willem Buiter in the Financial Times, "YES WE CAN!! Have a Global Depression If We Really Continue to Work At It…"