Tuesday, February 03, 2009

Made In a Handbasket

Free trade critics are backing what free trade supporters (including the U.S. Chamber of Commerce) oppose: A federal proposal that would require goods and equipment used in what could be a $1 trillion federal economic stimulus program be “American-made.”

U.S. Sen Byron Dorgan, D-N.D., is sponsoring the “American-made” rule for construction and other equipment that would be used in the economic stimulus program, which funds public works, water, transportation and other construction projects as well as broadband communications deployments and energy research.

Free trade critics such as the U.S Business and Industry Council back the idea, saying it will help American manufacturers and be sent overseas.

The U.S. Chamber of Commerce opposes the restriction, worrying it will spark trade retaliation from other countries.

---- As I have always been a proponent of federal contracts using "American made" products, I lean toward support of the above rule - but the likelihood of passing such a rule is nil to none - if a snowball freezes and it does pass, move out of the way of the oncoming political gravy and hog train.

Both progressive and conservative bloggers say the idea is a replay of the 1930s Smoot Hawley Tariff act, the Great Depression era, yadayada, etc. According to these exspurts we have been down this "protectionism" road before, and this made-in-America road rule will lead us to bread lines, double digit unemployment rates, and worldwide misery, as if the world is currently one well-fed, employed and joyful global village?

Yessirree, blogging geniuses are claiming Smoot Hawley created the Great Depression, fostered nationalism worldwide (think nationalism/Hitler). Last week and next week they will tell you the Great Depression was caused by too much credit, or wealth disparity, and/or that only the New Deal saved us - none of it true but never let facts stand in the way of a good-sounding blog post. (These wise guys are usually the first to claim the US needs to return to the gold standard, never mind that the gold standard didn't prevent the Great Depression.)

Made in America rule is not the same as a tariff act - the current debate bans the purchase of foreign construction material for public works projects. Nor does the rule necessarily mean all those made in China items will be gone from the shelves of Wal-mart or beyond your price range because of retaliatory trade practices. Smoot Hawley hiked the tariff on over 800 imports, such as sugar, cattle, shoes, matches, and eggs. Canada retaliated by cutting shipments of bacon and eggs - should they do so again, woe be to us and Mcmuffin?

Spending large sums of the $1 trillion Obama package at home on "goods and equipment" makes sense to me. An oft heard refrain from some folks goes something like this: If Americans made a decent product then Americans would buy made in America.

Swooshing over the heads of such folks is the fact that for average Joe Consumer - most everything he buys, even what he considers the expensive brand name, is still cheap foreign made with cheap labor and cheap materials. Joe is just stupid enough to pay extra for a name label. I remember the era of "you get what you pay for" but have noticed in the last 20 years that is no longer the case. Goods and products that once were dependable for quality are now shoddy. Planned obsolescence.

The drawback to senator Dorgan's rule is the more than likely chance that those corporations in America (many foreign owned) will gouge the taxpayer for the cost of those made in America goods and equipment. Without stringent oversight we will have $600 toilet seats, $800 screwdrivers, and a poor-quality infrastructure that continues to crumble. You do realize, there is no such animal as "stringent oversight."

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