Argument: Buy American provision will cause protectionism and further harm
(diff) ←Older revision | Current revision | Newer revision→ (diff)
Clive Crook. "Protectionism And The Stimulus". National Journal. February 7, 2009 - The spirit of Smoot-Hawley lives on in stimulus bills' 'Buy American' language. [...] During the past few months, as the severity of the recession has become clearer, drawing parallels with the Depression of the 1930s has been a staple of economic commentary. Rightly so: This may yet turn out to be the worst economic setback for 70 years, and the Great Depression says something about how bad things can get if governments fail to respond quickly and about the need to learn from history.
Speaking of that, remember Smoot-Hawley? One can overstate its role, no doubt--it did not actually cause the Depression--but most economists, I think it fair to say, believe that the effort in the 1930s to boost domestic output by restricting imports made things worse. The collapse of world trade, and hence global output, was helped along by deliberate policies in the United States and abroad, as governments tried to keep employment high at home by shifting unemployment overseas. In the end, everybody was worse off.