Reiteration of the Ridiculousness - A "Buy American" Update

To reiterate the "Buy American" clause included in the latest stimulus package is a representation of the flawed understanding of both basic economic and financial principles continually displayed by those people responsible for engineering the fiscal stimulus package, republicans and democrats alike. As outlined previously, a "Buy American" clause is EXTREMELY effective at accomplishing the following:

1. Enriching selected industries, such as the steel manufacturing industry, at the expense of the economy as a whole (steel manufacturers collect additional revenues, but the artificially high prices divert demand away from other industries).
   
2. Not increasing employment for the US economy as a whole (steel manufacturers see a decrease in unemployment , but as mentioned above the artificially high prices serve to dampen demand in other industries leading to job cuts in those industries).
   
3. Angering our trading partners with a protectionist trade policy

China does not agree with the policy and has vowed to keep a "Buy Chinese" clause out of their stimulus package. Maybe we can get Chinese policy advisors to talk some sense into US politicians.