Buy American Opponents: Un-American
What do Russian Prime Minister Vladimir Putin and the U.S. Chamber of Commerce have in common?
They both oppose provisions in the economic recovery package that would ensure that taxpayer dollars are spent on products that are made in America—to the maximum extent possible. The Buy America provision survived the Senate debate last night, despite attempts to kill it by someone who consistently wraps himself in the American flag: Sen. John McCain.
In the words of United Steelworkers President Leo Gerard, organizations like the Chamber of Commerce and Business Roundtable "want to give American tax dollars to foreign manufacturers to create jobs overseas."
The U.S. Chamber of Commerce wants to spend the tax dollars of unemployed Americans to create jobs in China and Indonesia, Korea and India. The 15 business groups sent a letter to Congress opposing provisions added to the recovery package that would strengthen existing laws requiring government agencies to buy American steel and other products when building public works projects with tax dollars.
In the House, the Buy America provision, sponsored by Rep. Pete Visclosky (D-Ind.), required stimulus projects to give a preference to American-made steel and iron with certain exceptions. A Senate committee made it even stronger-Sen. Byron Dorgan (D-N.D.) extended the Buy America provisions to include "manufactured goods." An amendment introduced last night by Sens. Dorgan, Brown and Baucus clarifies that the Buy America provisions in the recovery bill will be applied in a manner consistent with U.S. international trade obligations.
In a discussion last night on PBS with John Bruton, European Union ambassador to the United States, AFL-CIO Secretary-Treasurer Richard Trumka successfully put in perspective the European protests against Buy America, listing some of the ways Europe protects its own industries and pointing out that
this is a stimulus package to get the American economy going. Now we’re going to spend almost $1 trillion, and we won’t get our economy going unless we actually spend that money here and create jobs here. It’s American taxpayers saying we want to spend our money to get American jobs and the economy going.
On Facebook, a group set up in support of Buy America-Spend American Tax Dollars on American Companies-is fielding attacks on the provision. The trolls making noise are in a minority. Recent polls show 86 percent of Americans support the Buy America provisions-including 79 percent of Republicans.
On Jan. 29, the American Iron and Steel Institute (AISI) released results of a national survey of more than 1,000 adults showing that the vast majority-86 percent-supported the Buy America provisions for stimulus projects.
Yet, as David Sirota notes, the corporate campaign against Buy America is gaining steam. One of its scare tactics is to assert that "by restricting the use of foreign-made materials and goods, these provisions could precipitate retaliation from other countries."
Economist Dean Baker puts this "trade war" red herring in its place, asking:
Why would our trading partners start a trade war over a bill that increases demand for their exports? That’s right, the stimulus bill will increase demand for imports, including for imported steel. The bill will lead to more growth, which will increase demand for all products, including imported steel. That will be the case even if we have barriers that limit the use of imported steel for a small part of the stimulus. So, will our trading partners start a trade war because we are buying more of their products?
Buying American goods with U.S. taxpayer dollars is a no-brainer. So, if fears of a "trade war" aren’t the real reason for opposing Buy America, what is?
Baker has the answer:
"Free traders" could not care less about free trade. They don’t like policies that favor ordinary workers, like those in the steel industry. On the other hand, they are very happy when the government intervenes to help the rich, as was the case with the Wall Street bailout.
And that’s un-American.