A key aspect to understanding why government action cannot spur meaningful economic growth and prosperity is to recognize the fact that politicians do not make economic decisions, they make political decisions.
The Minneapolis Star Tribune recently reported on a new state law that "prohibits cities, counties, the state and other 'public employers' from buying uniforms or safety equipment made outside the United States." The man behind this measure is Tom Rukavina, DFL-Virginia. Tom believes that a big reason we are not recovering from this recession is because we don't make as many "things" as other countries do. Other countries, Rukavina contends, "still make things" and he adds, "When you make things, turn natural resources into things, you also turn them into livable jobs."
Rukavina's measure may be noble in its intention, but as many of us know the road to hell is paved with, well, nevermind.
The idea that buying American will inherently spur economic growth is one posed with little intellectual investigation. Rep. Rukavina would be wise to read this article posted by Daniel Griswold, the Director of the Center for Trade Policy Studies at the Cato Institute.
If free trade has truly resulted in the loss of American jobs, why did unemployment rise in the aftermath of NAFTA? While it may be true that America has lost manufacturing jobs as it has opened up trade with the world, it has grown in the service area of the economy. It is not so much that American has lost jobs, it is that demand has directed our economy to evolve and adapt to supply more service-related jobs.
I'll post a couple links and a rather funny yet informative video from reason.tv. I encourage Rep. Rukavina to visit these links and watch the video; not that he will. Heck, I doubt he will ever read this blog - as of this writing, I only have 3 followers, including myself.
Links -
http://www.cato.org/trade-immigration
"Mad About Trade" by Daniel Griswold
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