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A powerhouse economic roundtable faced off today on "This Week with George Stephanopolous" over the controversial "Buy American" provision of the economic stimulus package now before the Senate.
FedEx CEO Fred Smith argued the plan, which in part would require companies to buy iron and steel manufactured the U.S., would ultimately hurt global trade.
A powerhouse economic roundtable faced off today on "This Week with George Stephanopolous" over the controversial "Buy American" provision of the economic stimulus package now before the Senate.
FedEx CEO Fred Smith argued the plan, which in part would require companies to buy iron and steel manufactured the U.S., would ultimately hurt global trade.
On TV today, they showed a worker in the Caterpillar plant who said that "Buy American" sentiment will hurt CAT something fierce, as fully HALF of the big earth movers and bulldozers they manufacture go overseas. If we start to play favorites, other nations will too, and CAT will lay off even more people.
Normally, I would be all for any 'buy American' campaigns; However, the steel industry is probably the last place I would ask for such a thing. American steel is expensive when compared to other steel-producing nations, and forcing the 'buy American' policy will only cause more layoffs and price increases. Another thing is that the US exports quite a bit along the lines of heavy machinery, automobiles, rail, etc. If there is a sudden spike in the price of US exports, no one will buy it.
But wasn't the 'buy American' initiative only for the new infrastructure construction projects? If that is the case I am ok with it, as long as the private sector is not forced to buy it.
To recap a post from earlier, we are going to need to be on friendly, amicable, cooperative terms with the G20 countries et al. as the world looks to rebuild the global financial architecture. Already simmering (mostly) in the background is the fact that this whole calamity was brought on by US excesses. The "Buy American" terms are just another slap in the face from a foreign perspective -- as if the whole world is really just about us. Those restrictions won't make us nearly as much as what they could easily cost us, and it would probably be a good idea at this point to accede to foreign wishes and take them out. Plenty of American goods will be bought in any case, and if we try to shut out others at this point, we can count on there being retaliation. Don't forget that international competition instead of cooperation was a very significant factor in prolonging the Depression. It could be again if we don't mind our step...
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