Buy American provisions and other forms of protectionism will destroy jobs, not create them. They are an irresponsible and self-defeating response to a downturn in world economic activity. Beggar-thy-neighbor policies create more beggars and hostile neighbors. Let's hope that President Obama presses his Democratic colleagues in Congress to listen to him, and to British Prime Minister and Labour Party head Gordon Brown. As Mr. Brown put it at Davos, "Protectionism protects nobody, least of all the poor."
Thursday, February 5, 2009
Princeton economist Malkiel argues in the WSJ that president Obama should veto all "Buy American" provisions if he doesn't want to repeat the mistakes of Robert Hoover. Here is a passage (HT Mankiw):