In 2008, Congress passed sweeping bailout legislation for the white-collar financial sector, but failed to take comparable action for the blue-collar manufacturing sector.
As Steelworkers President Leo Gerard said, "The message here could not be more clear: Washington will bailout out those who shower before work but not those who shower afterwards."
Fast forward to 2009. Scare stories on Buy America are being ginned up by a perverse alliance of corporations (who want to deflect attention from the fact that they offshore U.S. jobs) and pro-corporate foreign governments (who want to deflect attention from the fact that they do not allow U.S.-made iron and steel in THEIR countries' transit and procurement projects, as we show in a forthcoming memo.)
That's right: a Buy America provision that affects a tiny fraction of stimulus spending and national income is being used as a pretext to make all sorts of threats: that it violates U.S. trade commitments (it doesn't), that it's some sort of radically new policy (it isn't); and that this offends other nations (news flash: Canadians want job programs just as much as we do).
But where was this perverse alliance when the U.S. financial bailout was going through? As a new document from the WTO shows, the Bush administration's approach to the financial crisis was much more nationalistic than many of our top trading partners. While most nations opened up their financial sector reforms to subsidiaries of foreign companies, the U.S. TARP and other programs are (in practice) geared almost exclusively to domestically owned banks.* (Not to mention that the Bush administration jacked up tariffs on French Roquefort cheese to 300%.)
Where were the cries of trade war then? I think Scott Sinclair, the Canadian writer, had it right when he said:
The Senate now faces tremendous corporate pressure to weaken the Buy America provisions of the stimulus bill. As I told the Dayton Daily News, "We need to use all the tools that are available to help put people back to work... This is one of those tools."
(*If you know different, please let me know!)