Republicans Attacking Obama Because Republicans Blocked “Buy American” In Stimulus

Dave Johnson

In the news, Republicans are running ads attacking Obama for “sending taxpayer dollars” out of the country in the stimulus… They depend on the news media to cover with as a “both sides do it” story, which it will, leaving voters confused and misinformed.

The Republican Charge

Republicans level outsourcing accusations against Obama,

The Republican National Committee on Tuesday launched a new website charging that Obama “sent taxpayer dollars” to build solar panels in Mexico, windmills in Denmark and batteries in South Korea. The accusation involves money from the 2009 stimulus package that went to foreign-owned companies or to companies relying on foreign suppliers.

And GOP looks to paint Obama as outsourcer of stimulus dollars,

At an event in Iowa on Tuesday, Republican National Committee (RNC) Chairman Reince Priebus will debut a new website — ObamanomicsOutsourced.com — that features companies that received stimulus dollars and opened factories in foreign countries. Among the examples: a solar panel factory in Mexico, windmills in Denmark and a battery manufacturer in South Korea.

… “President Obama has promised over and over that he would focus on creating ‘jobs that pay well and can’t be outsourced,’ but his record speaks otherwise,” said Priebus in a statement. “Through his ‘stimulus’ program, billions of dollars from hardworking taxpayers were sent overseas.

What Really Happened

If we go back to the time when the stimulus was being debated in Congress, we can see what happened.

Top Republican: Scrap ‘buy American’ stimulus clause.

and

Debate over ‘buy American’ in stimulus,

A “Buy American” provision being debated as part of the Senate’s nearly $900 billion economic stimulus package – requiring that infrastructure projects use U.S.-made materials and equipment – is sparking talk of a trade war and is forcing President Obama to choose whether to defend domestic industries or champion free trade.

The top Senate Republican, Minority Leader Mitch McConnell of Kentucky, said Monday that the measure should be stripped from the bill, saying it could endanger more U.S. jobs than it protects.

“I don’t think we ought to use a measure that is supposed to be timely, temporary and targeted to set off trade wars when the entire world is experiencing a downturn in the economy,” McConnell said. “It’s a bad idea to put it in a bill like this, which is supposed to be about jump-starting the economy.”

Is Buy American With Taxpayer Dollars Protectionist?

During the battle over the stimulus, Paul Krugman explained how Buy American was not “protectionist.” Writing in Protectionism and stimulus (wonkish), Krugman explained that “policy externalities,” mean that the only way a stimulus package can work is if it stimulates. In the absence of a coordinated worldwide response to the financial crisis each country has to be responsible for stimulating its own economy. Or not. Since the world’s economy is far too large for just the U.S. to provide adequate stimulus, our stimulus needs to focus on our economy. Other countries need to stimulate their economies,

Let’s be clear: this isn’t an argument for beggaring thy neighbor, it’s an argument that protectionism can make the world as a whole better off. It’s a second-best argument — coordinated policy is the first-best answer. But it needs to be taken seriously.

What’s the counter-argument? Don’t say that any theory which has good things to say about protectionism must be wrong: that’s theology, not economics.

The right argument, I think, is in terms of political economy. Everything I’ve just said applies only when the world is stuck in a liquidity trap; that’s where we are now, but it won’t be the normal situation. And if we go all protectionist, that will shatter the hard-won achievements of 70 years of trade negotiations — and it might take decades to put Humpty-Dumpty back together again.

Others tried to make the same point, but the Chamber of Commerce and other groups that tend to represent Chinese rather than American interests — but have a lot of power here — objected. And therefore Republicans objected.

The Coverage

Of course, media coverage won’t go into any of the facts or provide voters with the information required to make decisions, they will report the horse race and tell voters “both sides do it.”

CBS: Romney counters Obama outsourcing claims,

For weeks now, President Barack Obama’s campaign has been saying that Mitt Romney made a fortune by getting rid of American jobs. Now the Romney campaign is fighting back.

The presumptive Republican presidential candidate said the president is doing the same thing – with tax dollars.

Christian Science Monitor: Who’s the real ‘outsourcer in chief’? Why Obama, Romney both shoulder blame.,

The trend of outsourcing US jobs predates either President Obama or Mitt Romney, but both have contributed to it in different ways, according to one economist.

Team Obama says Mitt Romney has been a big outsourcer of US jobs. Now Mr. Romney fires the same charge back at President Obama.

Who’s right? And how important is this issue to voters?

Although both sides have used the phrase “outsourcer in chief” about the other, it wouldn’t be fair to view either the president or his Republican rival as a prime culprit in the shift of US jobs overseas. That trend became well established without either of them playing a central role.

NY Times: Obama and Romney Trade Shots, a Few Possibly Accurate, on Outsourcing,

Mr. Obama accuses Mr. Romney of being at the helm of a firm that invested in companies that outsourced their jobs. Mr. Romney, in remarks on Tuesday, called Mr. Obama the real “outsourcer in chief” for sending billions of dollars in stimulus funds to foreign-based firms and companies that “end up making their products outside the United States.”

The particulars have been denied or defended by both sides, and in many cases picked over by independent fact-checkers. In response, the two candidates and their allies have all but stuck their fingers in their ears while continuing with their outsourcing attacks.

Note – the headline and lede — the part most people see and take awy — are “both sides do it” but the story demolishes Romney’s claims.

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