I've very concerned about the "Buy American" provisions in the stimulus bill that Congress is working on. One of the major factors identified as intensifying the Great Depression was America's use of tariffs on imported goods to encourage the creation of American jobs. This triggered a world trade war early in the depression and accelerated the destruction of trade and American jobs.
The current stimulus bill that Congress is working on says that the stimulus money can only be spent on American produced materials. Europe and Canada are already threatening to challenge. I guess we don't really learn from history and thereby commit the same mistakes over again.
The Republicans have challenged the "Buy American" language and the Democrats have slightly modifed the language to say that if buying American cost more than 25% above the foreign competitor then a waiver may be applied for to buy from the foreign source. Like that will fix things.
We'll see what happens with the final vote.
Interesting note
The Smoot-Hawley Tariff Act which created the tariffs on foreign goods was passed in June 1930 when their stock market was down 40% from its peak in August 1929.
Its interesting to note that our stock market is down slightly worse as of today at 43% (DOW 8,044 on February 5 at 1:27 pm) from our peak of 14,164 in October of 2007. I hope we're not making a similar mistake.
"History may not repeat itself, but it does rhyme a lot" --Mark Twain
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