President Obama to water down 'Buy American' plan after EU trade war threat

So... no one has yet addressed the issue of stimulus money being distributed to select industries. I don't see how this is a viable long-term plan.

If a large proportion of the trillion dollars worth of planned infrastructure development is placed in the hands of one or two corporations, they will have a very good reason to jack up prices as high as they like. This is only going to make Americans worse off. I'm sure that's obvious. And you can't tell the companies not to increase prices. That would only confirm that this new, changed America we've received with Obama, has finally transformed into the command-style national socialist state economy that it has been leaning toward, in covert, for the past twenty or so years.

Everything from cars, trains, ships and airplanes to kitchen appliances, cutlery, wrist watches and surgical equipment are all going to be more expensive. American corporations will make a lot of money, and American taxpayers will be in even greater debt. Isn't this the sort of preferential treatment that has so far engendered a lot of the resentment for the Wall Street elite in the past few months? How would you propose "Buy American" is a viable option? Any employment created will be entirely artificial, and only last a very short amount of time before the corporations can no longer afford to keep wages at a level that is consistent with workers' ability to enjoy a quality of life at healthy CPI levels. People will get laid off, and then we will have returned to the same mess we're in now.

I just find all of Obama's plans to be very risky. The success of any of the stimulus measures is predicated on the rapidity at which they take on some sort of effect. They're not assured. Either he's very confident in this plan, or he's even more confident in the ability of his celebrity. He's deliberately taking the country into greater deficit and provoking the anxiety of the international market, all in some hope that by the time all the damage is done, American consumption will have dramatically increased and the world market will have consequently been rehabilitated.

He's playing a timing game that just isn't in his favor, what with incredible speed of the global market in its ability to react to any of these measures.

[edit on 5-2-2009 by cognoscente]

Now correct me if I am wrong but isn't this just about steel. US steel for US infrastructure? If so, lets look at this rationally.

US steel imports and exports

The US suffers a trade deficit in steel when it comes to imports v's exports. Is it really so wrong for them to want to use US steel for their own infrastructure first before all other? Only to stimulate the economy.

I would be interested to know if the americans can produce all the steel they need without requiring imports. I would hazard a guess and say no. So she will still need to import. Where is the problem for the rest of the world?

Lets just say that the americans dont do anything and their situation gets worse (ie) car industry goes bust. Then their need for steel will also reduce. Would this be a greater evil for countries that export steel to the US. Having no market at all. Now, even if all the US steel is used for rebuilding the infrastructure then wont they still need to import steel to use on the projects that are not related to this particular piece of legislation.

I am an Aussie and I can see where they are coming from in this particular situation "US steel for US infrastructure". Sorrry I dont often see eye to eye with you guys but with this I do.

With all this infighting I am reminded of an old Discovery channel ad that says we are all part of the web of life, and what we do to that web we do unto ourselves. With this crisis we need to stop thinking America v's rest of the world that seems to have developed with this thread. We are all in this together so together we need to find a solution. Because no matter where this crisis started we were all part of the problem with rampant consumerism and the need and use of credit. And while the blame can be put at the feet of the greedy few, who out there can honestly say that if the opportunity to make an easy million fell at their feet, they would not take or at least consider the offer. Greed is a human failing not just an American.

reply to post by cognoscente


That is exactly what the first bail out bill did it was distributed into selected big banks that were too big to fail leaving the small banks to fall into the hands of the ones that had the money to buy them.

Now the Senate Version of the bill is the one that you may apply what you are afraid off, this version change the wording into "job-creating investments as investments it will fall into the hands of any private intstitution or financials that will generate money and distribute it as see it fit.

Look at this idea,

Tax cuts for Working Families - $247 billion
Job-creating Investments in Infrastructure and Science - $165 billion
Job-creating Investments in Health - $153 billion
Job-creating Investments in Education and Training - $138 billion
Job-creating Investments for an Energy Independent America - $82 billion
Job-creating Tax Cuts for Small Businesses - $21 billion
Helping Americans Hit Hard by the Economic Crisis - $72 billion
Law Enforcement, Oversight, Other Programs - $10 billion

See the wording.

If you mentally replace the phrase "job-creating investments" with "unconstitutional federal spending," you begin to see that the bill actually consists largely of a whole laundry list of pet spending projects very like the fiscally irresponsible, unconstitutional, federal overspending that has piled up an unfunded federal liability of over $50 trillion dollars (see a very enlightening 30-minute video clip of the movie "I.O.U.S.A." online at www.youtube.com...).

What's more passage of this $888 billion stimulus bill would ensure that this year's federal budget deficit would be well over a trillion dollars. And, we're told that this would only be the beginning of many years of trillion dollar deficits. This would likely lead to unprecedented levels of inflation.

Don't be fooled by the small cosmetic changes that will be made during the amendment process, this bill will still contain hundreds of billions of dollars of unconstitutional spending.

www.finance.senate.gov... f

Summary of the $888 Billion Stimulus Bill Under Debate in the Senate


www.usnews.com...

Regardless of the reason for changing the package, legislating "buy American" is a form of tariff, or trade barrier.

The simple fact is trade barriers, or tariffs, only ever hurt the country that implements them. They give no benefit whatsoever. Never have in the history of the world and never will. They cost jobs and money. And for rich trading nations like the US or Australia the effects are even worse than for poor countries.

This is not a theory, or political belief. It is a fact of basic history.

That sophisticated countries like the USA, or my country Australia, still have politicians who propose them in the 21st century is just sad.

Originally posted by TheWorldReallyIsThatBorin
Regardless of the reason for changing the package, legislating "buy American" is a form of tariff, or trade barrier.

The simple fact is trade barriers, or tariffs, only ever hurt the country that implements them. They give no benefit whatsoever. Never have in the history of the world and never will. They cost jobs and money. And for rich trading nations like the US or Australia the effects are even worse than for poor countries.

This is not a theory, or political belief. It is a fact of basic history.

That sophisticated countries like the USA, or my country Australia, still have politicians who propose them in the 21st century is just sad.

However I do not think you are taking into account the normal line of business that are day to day which is not impacted by such a claus.

This like awarding a very large contract to yourself...

This is not full bore protectionism

... so the Buy American clause says that the 800 billion that the Stimulus will make available are to be spend on American goods. I'm one to quickly disagree with everything the US does they spend more percent of their GDP on healthcare than we in the Netherlands and it still sucks.
But not this time, well !DUH! their gonna use their money the help their economy!! Why would they do anything else. It's not like they embargo any of our products. They just use their money to buy their products.

This is not full bore protectionism

Agreed. It is only a very mild form of protectionism.

My argument is that any, no matter how slight, form of protectionism is harmful to the party doing the protecting.

Your analogy of awarding a large contract to oneself is a good one.

A company that does so avoids the possibility that there may be another company out there that can do the job better or cheaper. Over time a competitor will discover that better or cheaper way of doing it. And at some point in the future must compete with the company that does not outsource. There is only one result possible.

Any gains will always be offset by the longer term loss. So short term job creation will be wiped out by greater job losses in the future.

A direct example. The car industry in Australia is a good example. At one time we actually made good cars. I always owned Australian designed and made Fords. But we had one of the most subsidised and protected car industries in the world outside Europe.

The government started in the 90's trying to remove these protections but they were just too slow. Foreign cars, even with the tariffs (import taxes) became cheaper, and frankly, much better than the local product. Now if we completely removed these taxes local car production would be wiped out in an instant.

I now drive a car made in Korea. It is better and cheaper than anything I could ever afford from an Australian manufacturer.

What is the solution to the car making industry problem in the USA and Australia?

Frankly there isn't one. We, including me, are not prepared to work for the low wages necessary to compete in that industry. We should just not be making cars any more.

Just some figures for everyone discussing BUY AMERICAN... and to comment on whoever said a Nissan had more American parts in it than a Chevy. Well, they're wrong... Here is an approximate percentage of American labor in cars sold here. Figures are a year old, so it might be a little different now.

Chrysler 300/Dodge Charger - 75%
Chrysler Sebring - 80%
Chrysler Mini-Vans - 80%
Dodge Ram - 70%
Jeep Liberty - 80%
Jeep Wrangler - 80%
Ford Edge - 95%
Ford F-150 - 90%
Ford Mustang - 70%
Mazda 3/5 - ZERO
Mazda Miata - ZERO
All Volvos - 1% or less
Subaru - 0%, up to 50%
Cadillac CTS - 75%
Chevrolet Impala - 90%
Chevrolet Malibu - 85%
Chevrolet Trailblazer - 85%
Honda Accord - 70%
Honda Civic - 50% AT BEST
Honda CR-V - 5%
All of Hyundai - ZERO to a whopping 30%
Kia - ZERO to a whopping 4%
Mitsubishi - ZERO to a whopping 30% (Eclipse, Galant)
Infinity - ZERO to a whopping 5%
Nissan Altima - 60%
Nissan - others, up to 60%, some ZERO
Lexus - ZERO to 5%, only the RX can be up to 60%
Scion - ZERO
Toyota Camry - up to 80% by model
Toyota Corolla - 60%
Toyota Prius - ZERO
Toyota - most other cars, ZERO, some trucks up to 80%
Audi - 1%
Acura - 5% - 70% (TL is most)
Volkswagen - most up to 1%
Mercedes M/R class - 60%
Mercedes - everything else up to 5%
BMW X3/X5 - 30%
BMW - everything else up to 5%
Mini - up to 5%

Originally posted by cognoscente

If a large proportion of the trillion dollars worth of planned infrastructure development is placed in the hands of one or two corporations, they will have a very good reason to jack up prices as high as they like. This is only going to make Americans worse off. I'm sure that's obvious. And you can't tell the companies not to increase prices.

Exactly. It would act to exacerbate the real cause of this crisis, which is inequity in distribution, as Marriner S. Eccles suggests in his analysis of the Depression.

And if there is no assurance that a certain percentage of that money is actually going to hit the streets in the form of decent wages, none of the bailouts plans will work.

We dont have a trickle down economy. It is a myth. No one, anywhere, has actually had a trickle down economy. All economies are trickle up economies. Sending out checks for a couple hundred dollars doesnt work because it isnt enough to help. It isnt proof that we dont have trickle up economies. It is too little too late. People already in debt from years of wage cutting, job losses, and the erosion of their real buying power are not going to view a couple hundred dollars as money to spend frivolously. They are going to use it to pay off debt or horde it for when things really get bad.

The wealth in the economy needs to be spread out more equitably, so that citizens earn a wage that allows them to consume without going into excessive debt to do so. Or the whole thing comes tumbling down just like it did now, and in the Depression.

I wonder what would happen if we had a president that works for the American people instead of Congress and other countries? I guess we won't know for at least another four years.

reply to post by saint4God


If we dont get more active in all levels of politics, we wont even know in four years. This is more than a republican/democrat problem. Both parties are in bed with corporate interests.

Originally posted by Illusionsaregrander
If we dont get more active in all levels of politics, we wont even know in four years. This is more than a republican/democrat problem. Both parties are in bed with corporate interests.

Agreed. We need to watch the watchers and act when they do not. I've had to stop reading on this thread because it started turning into a bunch of flag-waving and 'who owes who for what'. It is not the time to sever relationships with other countries however it was a mistake to export our jobs for cheap overseas labour. Either we need to replace those jobs with new ones or bring them home...I don't care which...but a 10% unemployment rate is absurd and I cannot fathom why anyone is scratching their head and asking, "How did this happen?"

[edit on 5-2-2009 by saint4God]

reply to post by saint4God


I know I was part of the punch fest, but I am personally just sick of the whole blame America for everything mindset. You dont see Americans here blaming the EU for this. Nor do I see Americans denying our own participation in this mess. But my stand is, and would be in any situation, be it personal or national, if the other parties involved want to just sit around and blame and deny any personal responsibility, then dont participate in the solution. And if they hate us so much and want to sever all ties with us, then shut the heck up and do so now. Why threaten? What does that accomplish? Blame and tears have never solved a single thing. Rational analysis of the mechanics of the problem might.

I could not agree more that the PEOPLE of the world should come together and figure out a solution to this mess. Our leaders, all of them, got us into this. They arent going to come up with a solution to it, in my opinion, because they havent the foggiest notion what really went wrong. And it would be nice if the people recognized that this problem wasnt caused by the little people anywhere, but by policies that simply are not working. Anywhere.

However, if you were in a personal mess, and there was someone in the same mess with you, and all they wanted to do was lash out, blame, and cry, would you not be better off distancing yourself from them? I say you are better off. They are not helping by doing that. They are hindering. If I were on a sinking ship I would do everything in my power to help the other guy off the boat rather than let him drown with it. But there would come a point where if he refused to actually start moving and just wanted to sit there and cry about the fact that the boat was sinking, and blame everyone for the fact that the boat was sinking, I would leave his butt on the boat and move on myself. I would not sink myself just to let the blame game continue until he/she was tired of it. I am not that stupid. Nor am I that sainted.

I see what you're saying and it really should come down to our personal responsibility as a country. There is not one single other country that 'stole' our jobs so I'm not sure why people get so angry at them. We GAVE them the jobs and the 'we' part is the company management who got a better deal for the same amount of work. If I were in India and someone came up to me and told me they'd like to train me as an IT helpdesk person surely I'd say "oh yeah!". It's hard to worry about where the job came from when you have a spouse and kids to feed. The kicker is a jobless, homeless America means no taxes for the federal government (as far as I know) so they're going to have a real mess to deal with due to corporate irresponsibility. I'm all for helping the world, but only when we have our act straight first...else we better start learning the native language of those who do.

reply to post by saint4God


Agreed. No other country stole our jobs. Those policies were freely enacted by our own governments, who were encouraged in that direction by business people. And since we are responsible for our politicians actions, via voting, it is our responsibility to wrest control of our political system back from the corporations.

And I do not blame anyone in any country for taking a job offered to them. I would do the same thing in their shoes. But I do think it was a horrible policy for our people to allow corporations who make their money in the US, who benefit from our infrastructure, and laws, and military, and government programs, who happily take all that America has to give, to move jobs out of the country.

We have been quietly and steadily eroding the ability of our own people to make a decent living for the past 30 or so years. This economic crisis didnt happen because of something that happened in the last couple years, it wasnt really sudden. The stage has been set for this for at least 20 years. It just took that long for the whole thing to bear fruit. Sure, it accelerated at the end, but so does a boulder pick up speed as it rolls downhill. No one assumes the last 10 feet of incline was the cause of the boulder crashing into something. Most reasonable people realize that it was caused when the boulder originally broke free and began to roll down hill.

I can't even express how disappointing this news is.

The Chosen One is now hitting your bottom line.

This points clearly to favoring globalism over economic recovery.

I'm sure it has already been mentioned that China and France have policies mandating the purchase of domestic goods over foreign goods. I'm also confident, with a little research, more EU countries with similar policies could be found.

H1B Visa's + EU pressure + Liberal Pork = America Comes Last

Work harder, if you can find work, because the world is counting on you to provide.

reply to post by Marmota monax


Interesting you bring this subject about the visa as it seems that now Obama is going to appoint somebody that has received millions of dollars advocating for the workers visas for private companies to the National Economic Council where she will serve as a deputy economic adviser, according to computerworld.com.

So the stimulus package will be lobbied out to favor foreign workers if the clause of buy America only doesn't extend to American workers only.

I can understand why we can't put tariffs and other restrictions on imported goods, as that would mean retaliation from the rest of the world and violate the free trade agreements this country has made in the past.

I don't understand, though, why we can't use the stimulus to buy American products and hire American labor. Free trade wouldn't be dead. Americans will still buy Toyotas and Hondas and cheap Chinese goods at Wal-Mart, because in hard times they will want to stretch their dollars. But as far as possible to buy American? Why would that not be allowable to the rest of the world? Maybe I don't understand the economics well enough to get that part of Europe's protests,

Educate me please Why should the USA be afraid of the NWO.....let's take over the NWO movement and govern the whole world....Now that's gotta benefit everyone don't you think?

reply to post by Sestias


Thank you. That's just the thing I don't undrstand myself. Their's nothing in the package that says we're not going to trade with anyone else.