Drearily predictable, really. It starts with “Buy America” provisions in the economic recovery act, operating under the assumption that economic decisions can be made unilaterally in a global economy.
Canadian municipal leaders threatened to retaliate against the “Buy America” movement in the United States on Saturday, warning trade restrictions will hurt both countries’ economies.
The Federation of Canadian Municipalities endorsed a controversial proposal to support communities that refuse to buy products from countries that put trade restrictions on products and services from Canada.
The measure is a response to a provision in the U.S. economic stimulus package passed by Congress in February that says public works projects should use iron, steel and other goods made in the United States.
It’s only a little thing, right now. A municipal protest along our longest border, with our largest trading partner, that trade supporting millions of jobs on both sides of the border. But it took three years for the Smoot-Hawley Tariff Act of 1930 to drive down US exports by 66%, while the temptation to keep churning at the engines of the economy will only grow if the recession endures until the election cycle begins. And you can’t help but feel that, having brought the rest of the world to the brink of economic chaos, we really do owe our partners better than this.
Protectionism didn’t help GM survive lower cost, higher quality competition. It probably accelerated the company’s downfall by isolating unions and management from the effects of their decisions.
We used to know that. We used to be unafraid of the rough and tumble. But in their haste to obligate a fresh trillion dollars to the economic recovery, Congress let each and every enthusiast of obscure and disproven theories have a turn at the tiller.
Like Talleyrand’s Bourbons, our political class has learned nothing and forgotten nothing.
I hope they can come to their senses before more damage is done.