As students, putting the economic situation into perspective is difficult. We focus on our classes, some of us on our jobs and maybe our student loans, but beyond that, we are somewhat detached from the inevitable threats to the American Dream. Meanwhile, the real world is aching, pained with an unemployment epidemic and a gangrened market. To help, the government is poised to throw hundreds of billions of dollars at the States to cure our economic maladies.
This new New Deal will be expensive, but it will allow Wisconsin to rebuild its infrastructure and re-establish a sense of order in chaos. Although the plan is no miracle for the economic conflict that we are enduring, the focus on Wisconsin-made goods and services is the right antidote.
In dire times, Wisconsin can’t afford to send profits and job opportunities abroad because the state and its people need the money here. This is exactly why free trade and outsourcing would only further fester our economic infection.
Recently, to complement the stimulus plan, lawmakers in Wisconsin prescribed two laws to help guide recovery, both of which deal with establishing an intimate partnership between the state and its businesses.
The first, called the Wisconsin First Bill Act or AB1, encourages state bureaucracy to spend at least 2 percent of the budget by patronizing Wisconsin businesses and avoiding outsourcing. What the bill means is that approximately $20 million will be spent within our state rather than overseas.
The second bill, called the American Jobs Act or AB2, is very similar — it just binds another state entity to the same cause. It also obligates the state to enter contracts only with Wisconsin and United States businesses that keep operations in America, rather than overseas.
The AB1 should be praised for many reasons, and not just by Democrats or fair-trade super-liberals. What the bill essentially aims for is a local mindset. The bill only affects 2 percent of the budget, yet is essentially a promise for progress, for looking forward, something that Wisconsin definitely knows how to do. The bill also requires that Wisconsin use the state’s businesses in a greater capacity than years previous.
Rather than thinking about the ways that two percent of business can come from Wisconsin, the bill directs more attention to the question of where the other 98 percent of the money is going. If Wisconsin really thinks this will be an effective way to help heal our state, than shouldn’t we strive diligently for it and aim for something like 20 or even 10 percent?
Though the bill has the clear reason like any goal, the outcome is uncertain. Wisconsin politicians predicted the financial gain of the bill is “indeterminate,” meaning that it is too difficult to know if this will make the state gain or lose money. It sounds a bit risky on the surface, but because the logic behind it appears sound, it is an opportunity Wisconsin is willing to take advantage of.
Both of these bills introduce new values to Wisconsin and the United States. Both are more protectionist in nature, allowing local economies to thrive by producing goods and services for themselves rather than paying for the profits of other economies to prosper. They both are deliberate attempts at refocusing state spending in order to help state businesses out, and although their cost to the government is unknown, the effect on the taxpayer and state as a whole should be positive.
One problem with these Wisconsin bills is a possible altercation with the WTO, but this problem is really a possibility.
Because the United States is a signatory with the World Trade Organization Government Procurement Agreement, favoritism in trade cannot be granted to a domestic state over lowest bidder contracts, which often come from overseas.
This is actually opportunistic for the United States because we need some emancipation from the World Trade Organization. While seeming like an organization to help foster economic growth by deregulation of trade, the WTO is just a heavy steel ball that the United States is tied to while at the bottom of an economic hill. If Americans want to climb out of this recession, we can’t depend on free trade to do it.
Because of NAFTA, the WTO, and traditional free trade values, America can no longer produce goods and services, which is how a country stays healthy. Free trade enable countries like Mexico and China to produce everything so cheap that American manufacturers now have no ability to produce. The physical landscape of America shows this; factories that historically employed a bulk of our country are now sparse.
Often times protectionism is criticized as hindering competition, but if such free trade values are preached and practiced like they are today, America will never be able to produce anything domestically because it can be done cheaper elsewhere. Meanwhile, we rely on beating competition from China and India to produce technology and innovation rather than products that actually sell. The United States shouldn’t shut off imports completely, but there should be more efforts to create jobs to protect America.
Patrick Johnson ([email protected]) is a freshman majoring in English and journalism.
