The stimulus bill passed by the House last night contains a controversial provision that would mostly bar foreign steel and iron from the infrastructure projects laid out by the $819 billion economic package. …
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But most damaging, critics say, would be the "protectionist message" attached to imposing such barriers on foreign companies.Nations including China and many in Europe are preparing to spend billions of dollars of taxpayer money on stimulus projects. American companies are angling for a piece of those pies, and retaliatory measures against U.S. companies, executives argue, could significantly complicate those efforts. This week, a European Commission spokesman threatened countermeasures if the Buy American provisions are approved.
Here is
Protectionism by Bhagwati:
The fact that trade protection hurts the economy of the country that imposes it is one of the oldest but still most startling insights economics has to offer. The idea dates back to the origin of economic science itself. Adam Smith’s The Wealth of Nations, which gave birth to economics, already contained the argument for free trade: by specializing in production instead of producing everything, each nation would profit from free trade.
Just before Christmas, Australian had economic stimulus. Ironically same period TV sales increased dramatically which are mostly Korean and Japanese made. People joke about all Australian spent their stimulus money brought foreign made TV, which it might consider economical substitute for holiday. Watching TV during the holiday.
