The stimulus bill passed by the House last night contains a controversial provision that would mostly bar foreign steel and iron from the infrastructure projects laid out by the $819 billion economic package.

A Senate version, yet to be acted upon, goes further, requiring, with few exceptions, that all stimulus-funded projects use only American-made equipment and goods.

Proponents of expanding the "Buy American" provisions enacted during the Great Depression, including steel and iron manufacturers and labor unions, argue that it is the only way to ensure that the stimulus creates jobs at home and not overseas....

Nations including China and many in Europe are preparing to spend billions of dollars of taxpayer money on stimulus projects. American companies are angling for a piece of those pies, and retaliatory measures against U.S. companies, executives argue, could significantly complicate those efforts. This week, a European Commission spokesman threatened countermeasures if the Buy American provisions are approved.

"There is no company that is going to benefit more from the stimulus package than Caterpillar, but I am telling you that by embracing Buy American you are undermining our ability to export U.S. produced products overseas," said Bill Lane, government affairs director for Caterpillar in Washington. More than half of Caterpillar's sales -- including big-ticket items like construction cranes and land movers -- are sold overseas.

Opponents, including some of the biggest blue-chip names in American industry, say it amounts to a declaration of war against free trade. That, they say, could spark retaliation from abroad against U.S. companies and exacerbate the global financial crisis.

At a Morons Society gathering last weekend, I was on a panel discussing the economy. One of the questions during the Q&A made me realize that there's a widespread misconception out there about the stimulus package: People think this is a WPA-style plan to employ people off the streets. Now if you're going to lavish tax money on infrastructure projects, I'll concede it makes good sense to use trained construction workers, not random day laborers. But politically it's still a union payoff. And there's no public-spirited reason to overpay for materials (or, for that matter, for labor).

But the cost to taxpayers isn't the biggest problem with the bill's protectionism. A trade war threatens to exacerbate the single largest danger in the worldwide downturn: that a serious contraction in China will lead to domestic unrest and that that the Chinese government will engage in military aggression to focus frustration outward.

VIRGINIA POSTREL: However you pay for it, the cost of health care won't go away. The fundamental question is the one you started with: Where do we get the incentives and feedback we're used to in other industries? I don't want to overemphasize this, but one problem is simply that patients expect health care to be free to them. Why don't I pay my primary care physician like I pay my hairdresser or plumber and save insurance for very expensive, unexpected events like cancer? (I'm ignoring the issue of chronic disease, which is a serious one, for the moment.)

SHANNON BROWNLEE: Returning to your previous comment about patients shopping around, I can only think that people who argue that the ill should be able to control their own care can't possibly know any really sick people. In particular, they can't possibly know anybody with a complex, chronic illness—which is, of course, just the kind of patient who is costing us the most money.

VIRGINIA POSTREL: People don't necessarily want their primary care physician coordinating their care. In fact they hate it when HMOs make them gatekeepers. But they want SOMEONE coordinating. Maybe we need more use of the role you see with transplant coordinators for kidney transplants—a highly organized physician's assistant (at least when I was a donor) who makes sure everyone gets what they need and the patient stays in the loop.

SHANNON BROWNLEE: I think that's a perfectly reasonable model—pay out of pocket for primary care, either on a per visit basis or per month, and then have catastrophic care. There are a couple of problems with this model, however. 1) A lot of people don't have the money to pay for frequent visits to their PCP. 2) Patients aren't particularly rational about the way they decide what’s needed and what isn't. Probably a better model is the capitated, per month payment.

Posted by Virginia at 01:14 PM | TrackBack

A must read. [Via Greg Mankiw.]

UPDATE: More advice from the indispensible Luigi, with Alberto Alessina.

On the other hand, their wares are unprofessional-looking germ carriers.

Be careful what you wish for--empty planes, lower credit card balances, less shopping. You just might get it.

In April 1945, the Airmen were photographed by Toni Frissell, a noted fashion and society photographer (she did the photos at Jack and Jackie's wedding). Frissell knew glamour and, unlike many of her contemporaries, she didn't need a studio or heavy retouching to create it. Her photos of couples cuddling in the park are as appealing as her shots of models on the steps of the Jefferson Memorial. And she loved natural light.

Frissell was the ideal photographer to capture the Tuskegee Airmen for posterity. As this DG slideshow illustrates, she captured the glamour--and dignity--of these young men, whether posed looking skyward, working on engines, listening to briefings, playing cards, or receiving "escape kits" of cyanide. And, presumably for hometown newspapers, she noted their names and hometowns, which are included in the slideshow captions.

Not all the aviators will make it to the inauguration, of course. Many, indeed, never made it home from the war--something I was reminded of when Googling Ronald Reeves, the Blair Underwood lookalike in a few of the photos.

UPDATE: Rand Simberg advises me that upgrading MT is a nightmare. He recommends Word Press. We use Typepad for Deep Glamour. I'd be happy to go with either, but I need someone who can make the transition without losing the look and feel of the page.

One of the most interesting questions is what will happen to scholarly journals. Economics, the focus of our discussions, has long been a field in which working papers could circulate for years, with great influence, before they were finally published. (Here's a famous example, by Nobel laureate Eric Maskin.) Now, however, the web make those drafts quickly and easily available not only to economists working in a particular area but to journalists and the general public. As Brad DeLong pointed out when I saw him recently in Palo Alto, journalists, particularly online publications, will now quote a working paper without interviewing the author, something that wouldn't have happen in the past. (I still prefer to interview scholars before writing about their work, but then--as you may have noticed--I also resist the publish-now imperative of web writing.)

Given this situation, Tim Kane wondered whether the traditional process of peer review is the best way of vetting scholarly work. Could some sort of web-based community do better than two anonymous referees and a journal editor? Could you mix Slashdot-style review weights, earned over time, with weights assigned by the Powers that Be to people who've earned offline reputations as scholars and referees?

One reason working papers take on greater importance in a web-oriented world is that, shockingly, scholars usually do not own the copyrights to their published articles. Journals demand the copyright as a condition of publication. And, of course, scholars exist in a publish-or-perish world. It is usually illegal for a professor to put the final version of a published article on his or her website. Hence the importance of working papers--and the travesty of gated scholarship.

One sign of resistance: On March 5, the UCLA library will hold a seminar for UCLA faculty members titled, "Don't I Own My Own Work?": Negotiating to Keep Your Copyright. Here's the description:

As a UCLA faculty member, you must be productive in a "publish or perish" environment. But in your rush to publish, are you signing an agreement with your publisher without reading it fully or understanding its implications? You might unknowingly surrender your copyright and, along with it, the rights to use and reuse your work as you wish. Find out how to read author agreements and how to negotiate to keep your rights. Learn from colleagues who have efficiently negotiated agreements without risk to their academic advancement.

Some mathematicians are birds, others are frogs. Birds fly high in the air and survey broad vistas of mathematics out to the far horizon. They delight in concepts that unify our thinking and bring together diverse problems from different parts of the landscape. Frogs live in the mud below and see only the flowers that grow nearby. They delight in the details of particular objects, and they solve problems one at a time. I happen to be a frog, but many of my best friends are birds. The main theme of my talk tonight is this. Mathematics needs both birds and frogs. Mathematics is rich and beautiful because birds give it broad visions and frogs give it intricate details. Mathematics is both great art and important science, because it combines generality of concepts with depth of structures. It is stupid to claim that birds are better than frogs because they see farther, or that frogs are better than birds because they see deeper. The world of mathematics is both broad and deep, and we need birds and frogs working together to explore it.

Dyson is always worth reading, and this is a particularly rich piece, full of personal reminiscences as well as insights into the way mathematics and science work. And it demonstrates a characteristic that is far too rare in both great minds and ordinary ones: the ability to appreciate the importance of genuine difference, rather than to argue that one's own approach to problems (of whatever type) is the only correct--or the better--one.

It's the worst regulatory news I've heard in a long time--and it predates the new administration by a half year. Sidney Wolfe, who seemingly never met a new drug or device he thought should be legal, has been named to four-year term on the FDA's Drug Safety and Risk Management Committee. He's got the "consumer" slot. Well, I'm a big-time pharmaceutical consumer, and this man does not speak for me.

His philosophy: "If there were any question, they would take the drug off the market." As he explains in the WSJ video above, the committee he'll serve on goes into action when questions have been raised about a drug. So I guess we know what he'll be thinking about each and every one the panel is supposed to evaluate. (He will maintain his position at Public Citizen while serving on the panel.)

What I really want to know is, Who maneuvered him into this position, and how?