Just 1 unintended consequence of Stimulus Share This:





The Obama Stimulus Package received next-to-no reflection and, so, it invites unintended (tho' often predictable) consequences to define what it will achieve in practice. Case in point...



On January 30, the Globe and Mail ran



Why is a Canadian newspaper analyzing U.S. legislation from the '30s? The



America's largest trading partner is Canada. Thus, the Stimulus package -- if passed as a new type of Smoot-Hawley Act -- would not only violate the current agreed-upon terms of trade (e.g. the North American Free Trade Agreement) but also deal a body blow to Canada's economy. All the while, of course,it would raise prices for goods/raw materials being sold in the U.S and reduce exports due to retaliatory tarrifs. If free trade is a prerequisite of peace, then tariffs are a prelude to hostility.



Of course, Buy American provision of the Stimulus Package. U.S. trade officials have already offered assurances that the president can waive parts of the Stimulus Bill if they violate obligations of NAFTA. Meanwhile, the Senate may well expand the Bill's protectionism to include manufactured goods; the proposed Senate provision states that a project may not be funded "unless all of the iron, steel and manufactured goods used in the projects are produced in the United States." Let's see who wins...commitments from the past or the current Buy American mania.



Obama's scheduled visit to Canada should be an interesting one. His first formal television interview was to the Arabic cable TV network Al-Arabiya (Dubai-based, pro-American) in order to tell Muslims that "America is not the enemy." Maybe he'll deliver another one on the Canadian Broadcasting Corporation? It would probably be just as effective. Back to category overview Back to news overview Older News Newer News



Printer Friendly Wendy McElroy - Sunday 01 February 2009 - 21:43:58 - Permalink I believe that unintended consequences are the most powerful forces in human life. I do not diss the power of making plans and seeing them through but, as John Lennon once said, "life is what happens while you are making other plans." An unintended consequence of attending a protest rally years ago was meeting the young, bearded revolutionary to whom I've been married for 20+. Despite the foregoing, unintended consequences are in-and-of-themselves neither good nor bad; like reality, they are value neutral. But they can interfere or assist with human values like prosperity or achieving intended goals. Happily, through reflection, it is possible to decrease unintended consequences that are predictable and, so, to make your overall plans/life a bit more secure. For example, if you look both ways before crossing the street, you decrease the predictable chance of being run over while crossing. (Don't worry about losing the delightful and awful "surprise!" factor in life; it will always be there in bucketfuls.)The Obama Stimulus Package received next-to-no reflection and, so, it invites unintended (tho' often predictable) consequences to define what it will achieve in practice. Case in point...On January 30, the Globe and Mail ran a commentary entitled "SMOOT-HAWLEY ACT PROVED DISASTROUS LEGISLATION IN 1930s." According to Wikipedia , the Smoot-Hawley Tariff Act (sometimes known as the Hawley-Smoot Tariff Act) was an act signed into law on June 17, 1930, that raised U.S. tariffs on over 20,000 imported goods to record levels. In the United States 1,028 economists signed a petition against this legislation, and after it was passed, many countries retaliated with their own increased tariffs on U.S. goods, and American exports and imports plunged by more than half. In the opinion of some economists, the Smoot-Hawley Act was a catalyst for the severe reduction in U.S.-European trade from its high in 1929 to its depressed levels of 1932 that accompanied the start of the Great Depression.Why is a Canadian newspaper analyzing U.S. legislation from the '30s? The D.C. Examiner explains, House Democrats insisted on including â€œBuy Americanâ€ provisions in the $825 billion economic stimulus bill. The provisions â€“ which are mirrored in the Senate Democratsâ€™ version of the legislation - require that federal funds for stimulus projects can only be spent on steel and iron from domestic producers. Thatâ€™s another way of telling foreign producers to keep out.America's largest trading partner is Canada. Thus, the Stimulus package -- if passed as a new type of Smoot-Hawley Act -- would not only violate the current agreed-upon terms of trade (e.g. the North American Free Trade Agreement) but also deal a body blow to Canada's economy. All the while, of course,it would raise prices for goods/raw materials being sold in the U.S and reduce exports due to retaliatory tarrifs. If free trade is a prerequisite of peace, then tariffs are a prelude to hostility.Of course, Canada is optimistic about being exempted from theprovision of the Stimulus Package. U.S. trade officials have already offered assurances that the president can waive parts of the Stimulus Bill if they violate obligations of NAFTA. Meanwhile, the Senate may well expand the Bill's protectionism to include manufactured goods; the proposed Senate provision states that a project may not be funded "unless all of the iron, steel and manufactured goods used in the projects are produced in the United States." Let's see who wins...commitments from the past or the current Buy American mania.Obama's scheduled visit to Canada should be an interesting one. His first formal television interview was to the Arabic cable TV network Al-Arabiya (Dubai-based, pro-American) in order to tell Muslims that "America is not the enemy." Maybe he'll deliver another one on the Canadian Broadcasting Corporation? It would probably be just as effective.