"Buy American," Give me a Break

The so-called "Buy American" clause that has found its way into the latest iteration of the fiscal stimulus package has attracted a lot of attention, and rightfully so. Are we really so desperate that we are willing to revert back to a protectionist trade policy and in the process destroy decades of trade reform that has benefited US businesses and consumers alike? Let's take a look at the two main objectives this brilliant policy will accomplish (using the example of a "Buy American" provision on concrete):

1. We piss off (excuse my French) our trading partners including the Euro zone and China by distorting the international open market for concrete. Is it a good idea to upset your trading partners in a time of economic crisis, especially when exports were one of the biggest contributors to GDP in H208? The EU has already publicly acknowledged that they will file a trade claim against the US if the "Buy American" provision finds its way into the stimulus package.

2. A few players in the concrete industry along with concrete workers benefit, while the cost is transferred to the rest of the nation. For example, we end up spending $300m building a school using overpriced US concrete as opposed to spending $200m using cheaper imported concrete. Is this really beneficial to the taxpayer who is on the hook to pay for this school? And while this provision benefits the concrete workers it is extremely disadvantageous to the remaining US workers, employed in other industries that are adversely affected by the high prices (stifles demand in non-concrete related industries) and artificially inflated wages in the concrete industry.

This fiscal stimulus plan continues to become more unimpressive by the day.

UPDATE: OBAMA AND COMPANY SMARTEN UP