That's no solution

  • February 5, 2009
{mosimage}If there is something that history can show us, it’s that barring the gate and looking inward to ease the economic pain of this recession is not a wise route to take. One need just check the history books and see how taking this path only worsened the Great Depression back in the 1930s, when the United States brought in the Smoot-Hawley Tariff Act to protect its economic interests. Global trade fell off by two-thirds, turning a recession into a full-blown depression, the worst economic crisis the world has ever experienced.

Yet that appears to be part of the solution the United States is banking on to get out of the current recession. The multi-billion-dollar stimulus plan proposed by the U.S. House of Representatives and Senate is heavy on its “Buy American” details, shutting the doors on other nations and some of their goods in an effort to stimulate the American economy. A controversial provision of the House’s version of the bill would bar virtually all foreign iron and steel from the stimulus plan’s infrastructure projects, while the Senate’s version, still to be voted on by The Register’s press time, would extend the U.S.-only requirement to all goods paid for by the plan (though it appears President Barack Obama is attempting to water down these provisions).
Canada, and indeed every U.S. trading partner, stands to be greatly damaged by this policy. And who stands to lose out most? Well, certainly the poor and the tens of thousands of people who are newly poor, already reeling from job losses. As the U.S. bishops have told their political leaders in a Jan. 28 letter to the House and Senate, “Economic policies that assist and protect the ‘least among us’ are the right thing to do morally.” The current plan is not the right thing.

What is not taken into account with this made-in-America solution is that the problem goes beyond American borders. By putting on the blinders and trying to internalize the solution, the United States is wasting an opportunity to not only show leadership on the matter, but in partnering with others to find a way to end the crisis. That should be the way forward.

Some wise words were once spoken by a very wise man 2,000 years ago: “Do unto others as you would have them do unto you.”

Few wiser words have been spoken in the interim. And U.S. leaders should take heed. By enshrining protectionism into its stimulus package, the United States is setting the stage for retaliatory policies from its trading partners. Going into battle with one another is a sure way to exacerbate the crisis.

Looking out for the common good is never the wrong solution. Politicians worldwide, beginning in the United States, must make sure that any solutions to this recession should be for the good of all. We may be in for a rough ride in the short term, but by working together, in the long haul, the world will be much better off.

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