Is America Too Corrupt To Keep Up?

A sovereign nation investing its wealth in its domestic economy seems like a no-brainer, especially during a global recession. But in this crazy age of American politics, even that has become a controversial notion.

This is the subtext of a dispute that simmered beneath the pomp and circumstance of this week's U.S.-China summit. As The New York Times previously reported, the Obama administration is calling on the World Trade Organization to use its power to halt the Chinese government's wind-energy fund specifically because the money is "contingent on ... manufacturers using parts made in China rather than foreign-made components." The program, along with the Chinese regime's broader domestic procurement requirements for wind farms, have helped the Chinese wind industry capture almost half of the global market for turbines.

Setting aside the bilateral wrangling over WTO arcana, China's industrial policy success carries a basic lesson: When a nation couples public spending with incentives that encourage domestic corporate investment, an economy tends to grow its own wealth-building industries. That's simple enough to understand, right?

Evidently, not within our own government. As "Buy China" policies now economically supercharge the world's most populous nation, the White House and congressional Republicans have opposed many of the very "Buy America" proposals that might help us keep up — and that obstruction has come at a steep price.

Remember, Businessweek in 2008 warned that in an America with few domestic purchasing mandates, any economic stimulus — whether spending or tax cuts — would likely "leak" abroad, thus "reducing its impact on jobs here." When congressional Democrats responded in 2009 by trying to expand the meager "Buy America" regulations still on the books from the Great Depression, President Obama opposed the effort. He argued that targeting stimulus dollars at domestic investment would "send a protectionist message."

Following his salvo, Congress blocked the initiative and — big shocker! — a year later, ABC News was reporting that between 54 percent and 79 percent of the money in the stimulus bill's key wind energy program had been spent overseas.

How could this happen? In a country of "USA!"-chanting sports crowds, flag-waving rallies and saber-rattling political rhetoric, why haven't our lawmakers passed muscular "Buy America" statutes that might compete with the "Buy China" policies?

Not surprisingly, it all goes back to the principle that patriotism may play well with voters on the campaign trail, but corporate cash ultimately rules the day in our nation's capital.

As Bloomberg News reported during the stimulus negotiations, the U.S. Chamber of Commerce fiercely lobbied against the "Buy America" provisions when Congress debated them, just as the group lobbies against similar proposals today. That may seem strange coming from an organization whose name pays homage to this country. But don't be fooled: The chamber is a front group for huge multinational firms whose first priority is not this nation's economy, but a profit-maximizing business model based on exporting jobs and production facilities to low-wage countries abroad. Those firms, of course, make massive campaign contributions to both parties and such donations come with the expectation of legislative favors — like, say, killing initiatives to strengthen "Buy America" laws.

Thus, our current position of humiliating weakness. Here we are, supposedly the world's most powerful country, begging the WTO to intervene on our behalf so as to prevent an economic competitor from making basic investments in its own economy. And we're doing this all because our political system is too corrupt to permit a similarly competitive posture here at home.

Considering that sad reality, when Americans see the next wave of bad unemployment news and mass layoffs and want to know who is responsible, we shouldn't shake our fists at communists in Beijing; we should look directly at our own leaders in Washington.

David Sirota is a best-selling author whose upcoming book "Back to Our Future" will be released in March of 2011. He hosts the morning show on AM760 in Colorado. E-mail him at ds@davidsirota.com, follow him on Twitter @davidsirota or visit his website at www.davidsirota.com.

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