The Worst Part of the Stimulus

It appears we may have a stimulus package that nobody likes and nobody thinks will fix the country. With all the partisanship gift packages in there – it appears the Democrats are trying to ram through everything they couldn’t do in the last eight years – there is one part of the package that is extremely unnerving that the media, naturally, has ignored. This is the noble but very badly flawed “Buy American” clause in the Stimulus Bill, which has an excellent potential of making the recession far steeper and deeper than it already is.

Introduced by Senator Byron Dorgan (D-ND), this would give “preference to American-produced materials and products,” especially commodities like raw materials and agriculture. In other words, if a new bridge is built preference would be given to American steel, cement, machines, etc. Sounds good? A nice payback against companies that outsource jobs? WRONG.

If the recession has taught us anything, it is that Tom Friedman was right. The world is truly flat and our economy is global. The recessions that whacked Japan and Russia 10 years ago barely registered elsewhere. But we have brought down the entire global financial system. When a financial crisis in the U.S. indirectly destroys the economy of Iceland, you’ve got a global problem.

Companies and cities that build bridges have as much right to find the best and most economical commodities they can. And many of them have been going overseas to find things like steel to build their bridges. This is one of the biggest benefits of the global economy and global trade. You don’t need me to tell you how vital exports and free trade are to American companies. “Buy American” would be a huge step backward to the days of isolationism and protectionism. In fact the last time the economy was this bad, protectionism boosters succeeded in passing the Smoot-Hawley Tariff Act, one of the worst laws ever passed in modern history and something that prolonged the Great Depression for years.

Shutting off the trade flow to other countries will guarantee one thing – other countries will respond in kind. The result would cost far more American jobs than the stimulus could ever produce. Dorgan’s clause is not nearly as far-reaching as Smoot Hawley, but the global economy is far more linked than ever and a tit-for-tat closing of foreign markets to U.S. goods (and vice versa) would make the recession worse than it already is.

To his credit, President Obama has already stated he doesn’t like the clause. And I’ve got to hand it to John McCain, who has been all over Dorgan’s mistake. But it’s possible Obama will overlook it just to get the thing signed. Let’s hope he reconsiders, or the stimulus will be far less underwhelming than many already fear.

More Info:

The Organization for International Investment: A trade group my company belongs to lists the reasons why Buy American would be horrible for America.

Buy American Debate: A listing of op-eds from economists and union bosses who dread having Buy American as part of the Stimulus

My earlier post on why foreign trade and investment is good for U.S. companies and workers

Thanking Alex Rodriguez

And so it has come to this. Whether you now call him A-Roid, A-Fraud or (my favorite, thanks to the NY Post) A-Hole, Alex Rodriguez has done one great thing. He has just made life an even bigger hell for Bud Selig, Don Fehr and Gene Orza – the three men who destroyed baseball. What was once the world’s most popular and greatest sport has sunk under these three men’s ineptitude and unwillingness to confront what the NFL and NBA did long ago. Their collective buck passing on cheaters and baseheads has once again alienated millions of fans and destroyed the credibility of an entire generation of players.

Rodriguez was supposed to be the Great Hope of these three. After Barry Bonds’ fiasco, they hoped A-Roid would help shatter the home run record and restore baseball’s reputation. Even Rodriguez’s haters in Boston and the Bronx would applaud him knocking Bonds off his pedestal. No longer. Now there may be another asterisk next to a record holder who will hopefully never enter the Hall of Fame.

And it’s another kick in the teeth for Yankees fans. Why do all the abusers end up in pinstripes? Whether it’s Clemens, Giambi, Sheffield, Pettitte or Rodriguez, the Yankees are amassing a reputation as the See-No-Evil team that rolls out the welcome mat for baseball’s worst role models. All baseball managers have tough jobs, but Joe Girardi’s just got even harder. At least they only have to deal with Rodriguez for another nine years.

Putting on my PR flack hat for a moment, it sure was one curious interview that Rodriguez gave the other day. The good news is that by at least admitting his guilt and apologizing, Rodriguez already showed he’s smarter than Barry Bonds and Roger Clemens (not that that’s difficult). He also chose the vaunted Peter Gammons as his interviewer, and Gammons helped by throwing softballs without any follow up questions. Peter, you’re a great journalist, but why didn’t you ask A-Rod to specify which “banned substance” he took? How could Rodriguez not possibly know what substance he was taking? Was it injected or not? How many times did he take it in three years? Does he think he will still make the Hall with the Babe Ruths and Hank Aarons, or wallow in disgrace with Bonds and Pete Rose? What about the 60 Minutes interview where he lied about steroids?

You could tell Rodriguez had tried to memorize a speech for his mea culpa, which he couldn’t quite pull off without saying the word “uh” about 200 times. He never used the word “steroids” once. He also looked like he had on way too much makeup and lip gloss for the TV cameras. Bet he won’t hear about that in the Yankee locker room.

At this point, it doesn’t look like an insurrection is going to topple Selig or Fehr from their perches, so baseball can continue losing fans, respect and advertising dollars while the ship keeps sinking. They probably won’t listen to advice from anyone who can help them save the game. But since you’ve been kind enough to read this, baseball is in dire need of a “Truth Commission” where players can come forward and offer some kind of confession in return for some sort of amnesty. Maybe they don’t get prosecuted and are eligible for the Hall, but all the statistics and records they set during the years they used PEDs are voided from their record. Until the truth comes out, prepare for more A-Rod scandals to emerge and for many of today’s best players to continue deceiving America.

More Info:

My earlier post on Thanking Barry Bonds