Friday, March 5, 2010


Article VI of the federal Constitution provides that "no religious Test shall ever be required as a Qualification to any Office or public Trust under the United States." But I think people who are elected to either house of Congress should be required to take an economics test in order to qualify to be seated in Congress. Those who fail (and my guess is that a large number of current members would flunk) would be required to go to school for two years, after which they can try running for Congress again.

Exhibit A is this press release from Senator Chuck Schumer, Democrat of New York. But responsibility is shared by some other Democrats, including my own junior senator, Bob Casey, Sherrod Brown of Ohio and Jon Tester of Montana.

Their premise seems simple. If the federal government is going to spend money to create economic stimulus, those funds should finance work done by American workers. And that's exactly what certain simple-minded senators think.

First problem: products do not tend to be purely American or purely foreign. The Honda that I drive was assembled in the U.S. from parts, some of which are American and some of which are foreign. The same goes for the components of Texas windmills that are at the heart of this controversy. It clearly makes sense for recipients of U.S. government grants to look to whichever suppliers are able to give the best value for money. Restricting the supply chain strictly to American suppliers would inevitably waste money.

Second problem: it makes no sense to try to create American jobs in a vacuum. Globalization is literally a 13-letter word; but, in some people's opinion, it's figuratively a four-letter word. I disagree. Globalization is necessary, in order to allow the concept of comparative advantage to improve the standard of living of Americans and of people in other countries. If we domestically produce those products and services that we can produce with greater relative efficiency, and import products and services in relation to which foreign producers have a comparative advantage, everyone is better off. On the other hand, history shows that countries that cut themselves off from the global marketplace subject their people to extreme poverty. Just ask the average North Korean.

Oh, and that reminds me. Those prospective congressional representatives who are studying economics should be required to minor in history. For example, they should learn how the recession that began in 1929 was turned into a great depression, when American international trade policy was turned in a radically protectionist direction. As we begin to emerge from the recent recession, a new wave of protectionism could produce a similar result.

The philosopher George Santayana famously said that "those who cannot remember the past are condemned to repeat it. " It wouldn't seem fair if all Americans, as well as potential trade partners abroad, were condemned to repeat that history, just because some of our senators are ignorant of economics and history.

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