I am quite concerned with the legislation that is working its way through the US Senate which would require all companies receiving U.S. bailout or stimulus monies to use U.S. suppliers. This could throw a number of Canadian industries from auto to even forestry a serious curve ball. On a broader philosophical level, many economists believe that U.S. isolationism during the Great Depression significantly worsened and lengthened that downturn. Obama’s own economic advisors have said as much but he has a huge Democratic Senate to deal with.
On one hand, I sympathize with the Buy American thinking. You have thousands of manufacturing firms and suppliers in the industrial heartland cutting back and even closing their doors – why allow Canadian, Mexican and Chinese goods to be brought in with U.S. taxpayer funds (bailout or stimulus monies)?
But on the other hand, the USA has been the big winner in the globalization trend. For every one job lost in a manufacturing or service industry, there have been five created in high tech and specialized service industries. America has harvested millions of lower value added jobs and added tens of millions of higher value jobs.
That does nothing to stop the fuming by Lou Dobbs and his hordes. They either don’t by the argument (lose one, gain five) or they ignore it altogther.
I was thinking tonight it is a lot like Ontario Premier Daulton McGuinty. The ‘system’ in Canada for the past 20 years (far more than that but let’s stop at 20 here) has led to unbelieveable economic growth in Ontario (particularly in the Ottawa to Windor Corridor) and the quid pro quo for that has been some scraps sent down east in the form of increased EI, Equalization and CHT transfers. McGuintly, again the Dobbs parallel, doesn’t see the “give us all the jobs and you take the scraps” argument. He just sees the scraps going to Atlantic Canada and thinks that is unfair.
The parallel between Dobbs and McGuinty is not as threadbare as you might think. If they spent less time fulminating over the unfairness of the system and more time studying it, they might just understand that little 80/20 rule.