To the Point
I’m not an expert policy analyst, but a comment in today’s National Review made a lot of sense, “The problem with trying to spend $1 trillion quickly is that you end up wasting a lot of it.” I thought, “Hmm, that is probably really true.” Then I got to the part of the package where “$87 million for a polar icebreaking ship” was listed, and my thoughts were confirmed. How is that, along with “$850 million for Amtrak” (if I’m not mistaken, they haven’t been able to make a profit in years), stimulating the economy?Also, today’s Wall Street Journal has a good article on the fallacy that ‘buying American’ is good for the economy. Here’s the point in microcosm:
Suppose that we did not allow free trade between the 50 American states. Citizens like me in New Jersey would be far worse off if we could not buy pineapples from Hawaii, wine and vegetables from California, wheat from Kansas, and oil from Texas and Louisiana while we sell pharmaceuticals to the rest of the country. The specialization that trade makes possible allows all of us to live better.
The same principle applies to international trade. The root to strike in this ‘buy American’ line of thinking is a working definition of market competition. It is more than likely that proponents of ‘buying American’ don’t have one.
Comment by Carl Clegg on 6 February 2009:
The Obama mentality is based on the premise that an effective bailout requires steep government spending, protecting American jobs and industries (including those that are not competitive), and increasing entitlement programs. This mentality requires a belief in the fallacious Keynesian doctrine called the “Multiplier Effect” in which every dollar spent by the government leads to $2 in national income. If this were true, then the more government spends, the wealthier our nation would become. Unfortunately, the wealth of nations has never been created by government spending. But as the WSJ article points out, reduced trade barriers, reduced taxes, smaller government, and the elimination of pork spending is the antidote to misguided Keynesian policy.
Comment by gail lightfoot on 20 June 2009:
I gave some thought to ‘buying American’ because it seemed to make some sense not to ship so much ‘stuff’ back and forth across the seas – catching fish in Scotland, shipping them to Asia for cleaning and packing and then back to Scotland where they are most popular – until I also remembered that we are so interwoven commercially now that nothing is totally one nation or another’s product. There is no way to back up and who would want to anyway? So, I may buy a Ford but I won’t kid myself that I am ‘buying American’. In fact, the idea that a gun made and sold in one state can get around gun laws – I really do wish it would work – will be lost because there is no such thing as totally and completely manufactured in one single location. Not that the gov’t will need to apply that logic to enforce their laws. They will simply say they can, courts will agree and no one will fight back effectively.