Sunday, January 25, 2009

economic nationalism

Here's one I can't figure out, Mr President. Perhaps you can help:

If we're gonna spend $800B more to stimulate the American economy, perhaps there should be a bit of "containment" enacted to make sure that money doesn't just rush out of the coffers of the US treasury through the hands of grab-happy American consumers and into the pockets of Chinese gadget manufacturers and Saudi oil gluttons. Because even though global economics is fiercely complex, one simple fact is easy to convey and hard to dispute: the longer the cash sloshes around in the US economy and avoids slipping out past the borders, the more any benefits of a stimulus will be amplified.

And there are creative ways of making this happen too. Infrastructure and technology projects can be restricted from using foreign contractors (even though they are so much cheaper), money can be doled out in large, targeted dollops (rather than pissed away in millions of meaningless dribbles to undisciplined individuals), disbursements can be focused toward areas where the US economy has the tools and talent to do the work itself.

But see, this is where I get confused. Because if a strategy like this were to work - if the government actually did the due diligence to find effective ways to keep the dollars here rather than sending them abroad, then the rest of the exporting world - that outside world feeding itself on America's hemorrhaging treasury - would grow angry and antagonistic. Economic nationalism would divide the world, elevate tensions and threaten peace, even while it made us locally richer in the short term.

Thus, an ugly impasse. We can't possibly elevate the overall global living standard with exported American affluence. Certainly not now. Even though most of the world thinks we can. But if we act responsibly in our own local interest we'll infuriate our neighbors and end up cultivating enemies.

It's a tough one all right. But the idea of spending all this money to just vaguely hope that good things are going to happen on a grand scale - wow - that's embarrassing. I hope you're not thinking along those lines, Sir.