President Obama has been wishy-washy about his leanings toward protectionist policies in the current economic stimulus package, which faced final approval in the senate yesterday. He has been reiterating the word “change” since the beginning of his campaign, and although this “Buy American” clause was certainly a change from conservative methods of economic stimulation, it wasn’t quite a change for the better.
Although exclusively using American companies in this package may seem appropriate given the current repressed situation in the states, Obama needs to remember that the rest of the world is not picking daisies in the sunshine. They are being flooded by the recession storm. The United States is neither Atlantis, nor any other kind of magical self-sufficient land. The US has depended on foreign trade to boost its economy for the past two hundred years, so why is now any different? America needs help from the rest of the world to get out of its current state.
Providing domestic workers with more opportunities from the package will surely have some short-term benefits, but it will not solve the major problem. It will simply delay the process of fixing the economy (both American and World). Protectionist policies will have the same effect on the United States as emptying water out of a sinking ship will have if that ship has a hole in the hull.
He needs to fix the problem by getting to the source, even if it means facing a tough year. Jobs abroad create wealth to buy American products, which in turn creates more jobs for Americans. Investing exclusively in American workers for government projects will not create the future demand that American industry needs because it involves shunning foreign friends. The EU threatened to retaliate against the US if Obama does decide to include the “Buy American” provision, so it is easy to see the immediate negative effects of the policy. Let’s hope that Obama doesn’t stray this way again in the future, and that Gordon Brown keeps his head clear of protectionism as well.