Stoking steel

The stimulus package Barack Obama wants to start implementing has a very weird rule.

Much of the money will be spend on the decayed infrastructure in the USA.
Many bridges need to be repaired or even rebuild.
For this a lot of steel is needed.

Steel can be bought from all over the world.
Usually, when steel is needed, it is bought where it is the cheapest.
Steel used in the USA can be coming from China or Europe.
But this time, the stimulus package forbids this.
The steel must be bought in the USA.

This is called protectionism.
What has at least two consequences.
The steel will be more expensive.
And the countries that cannot sell their steel to the USA, usually retaliate by banning importing certain products from the USA.

In the short term, getting the steel only from the USA seems not to be such a bad idea.
It keeps the US-steel industry in business.

However, in the long term it is very damaging to an economy.
The particular industry operates without competition and will become inefficient.
And the counter measures by other countries may damage the national US economy more than the advantage of buying American steel only.

Protectionism and boycotting imports is not an unknown tune to the US Government.
In the USA there is a huge meat industry and they like to export their products.
To Europe as well.
But the Europeans refuse to buy American meat.
The reason is that American meat is coming from animals that are given growth hormones.
That end up in the bodies of the meat eaters and can cause cancer.
In Europe meat with growth hormones is therefore considered dangerous for the health.
So they choose not to buy it.
Instead, they get meat from other countries like Argentina.
This doesn’t please the US-Government.
As a punishment for not buying American meat, the US Government is not allowing imports of certain European goods and products.
The WTO (World Trade Organization) has condemned this US policy but nothing is changing.

We live in a complex world.
Boycotting, banning, limiting, sanctions: they are no good solutions.

A better idea is to import only from countries where the wages paid there to the workers are at least the same as in the importing country.
If a product is made somewhere by workers paid less, it cannot be imported and the product has to be made in the own country.
If a product is made somewhere and the workers are paid more, it becomes beneficial to produce the product in the own country: it will be cheaper.
For a country like China to export, it must first raise the wages of their workers.

A result of this system will be that products become more expensive.
But a result will also be that workers worldwide will be paid a decent salary.
Something that cannot be claimed right now.
The cheap stuff from China in Wall*Mart is available only because too many Chinese work like slaves.
They are earning low salaries, have hardly social welfare and live in miserable conditions.

In the end, everybody can buy what one needs.
If it becomes more expensive because workers get paid more decently, it only will take a little longer before the product can be bought.
We will learn to save money again before we buy something.
And we will learn again only to buy what we really need.

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To learn the details and facts of the US-trade policy for not being able to sell hormone treated meat, click on:

http://74.125.47.132/search?q=cache:HVfxgRtt2YAJ:www.eurunion.org/eu/index2.php%3Foption%3Dcom_content%26do_pdf%3D1%26id%3D1722+usa+retaliation+import+sanctions&hl=en&ct=clnk&cd=5&gl=us&client=firefox-a






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