Leo Gerard, president of the USW, among others, is quite bold in alleging that the domestic content provisions of the House stimulus bill do not violate international trade agreements. Judging by the near universal reaction of opposition by European, Indian, Chinese, Russian, Latin American, Canadian, Mexican and other governments, its hard to find anyone outside of the US who agrees.
Gerard's argument on economic grounds does not have much support. Passing a broad domestic content provision in the stimulus will not resurrect the basic steel industry. Nor will it restore once flourishing communities founded on union manufacturing wages. Protectionist measures have a poor record generating sustainable growth or innovation. Plus, they will certainly result in retaliation by trading partners – with all that that implies in a very fragile world economy.
Fortunately, much domestic content in the stimulus bill is assisted by the emphasis on education and health care. And, guiding most steel and materials used by proposed infrastructure investments to domestic manufacturers is already allowable.
Nonetheless, any resident of a decimated industrial city or region in the US knows that the measure of suffering de-industrialization brings is not enumerated in economic arguments or technicalities but instead in lost homes, divorces, abandoned college dreams, suicides, alcoholism and drug abuse, and devastated communities. These are the indexes easily accessible from first hand experience.
There is no simple legislative wand that can solve the economic crisis, or erase the complexities of its global dimensions. The truth is that much depends on the quality and size of the fightback that can be mounted in industrial communities. Its a time for politics, more than economics. The first step is the demand for transparency. The public interest in fostering rising incomes and stable economic growth must overrule private obfuscation or corporate misdirection. The secrets of every closed or threatened plant must be laid bare for the public – especially working people – to understand the specific challenges that must be overcome. Undoubtedly, in some cases a thorough exposure will result in a finding that targeted public investments or intervention and reasonable protection can restore jobs. However in others, the age of the plant, a very sour history of industrial relations, corporate corruption, or disappearing (or remote) markets can demonstrate that no reasonable public investment will result in a sustainable solution. In these situations, only bold steps to re-invent the community and restructure the local economy have a chance of success.
The second step, in the latter case, is facing the truth. Precious time can be lost in denial, when the next critical step is mounting a campaign to obtain all necessary income, insurance and retraining support from both the failing corporation and the federal government. The size of this package is very much influenced by the size and determination of the fightback. A fully insured, fully funded college education for laid off workers and their families, with income protection for the duration, would be a success. Further, the government should be compelled to fulfill its role of employer of last resort for unemployed workers. The Obama administration's call for much expanded national service is an important handle here.
Re-inventing and restructuring a local economy in this post-bubble world can and should be viewed as ready-made workshop for socialist solutions to the global economic crisis: exert all efforts to insure that health, retirement, housing, and minimum income protections are publicly provided or guaranteed; then focus on turning loose all innovative forces to find new niches of economic activity. With regard to the latter, if socialist theory is correct, the consumption of enhanced public goods – culture, sports, recreation, advanced education, service and many commodities classified as intangible – will become the most important new indexes of wealth. While some may think this far-fetched for an "advanced" economy like the US – do not neglect the experiences of China and Vietnam in devising creative mixed-economy solutions!
