While there are many, many issues to be addressed about our financial mess, no one would argue that most of the difficult problems would resolve themselves if the economy were growing. Growth, as I’ve written before, is the only way out of our decline. This is the core of my objection to a fiscal stimulus program built around the idea of infrastructure investments.

But, even while that initiative has just barely started, it’s being weighed down by a very predictable demand from U.S. manufacturers that federal spending guidelines contain “Buy American” provisions.

There is merit to the idea that investments in domestically manufactured goods will extend the impact of the government’s investments. But, stipulating such choices undermines the speed and quality of the stimulus the feds aim to create, because it will limit the available options. And, that limitation squanders the taxpayers’ very real stake in all this spending. (Such stipulations also contradict free-market principles, but at this point, no one's listening to those arguments.)

Worse, such mandates implicitly invite lawmakers to pick favorites among companies and organizations to be helped by their “investments” — and thereby to reward the highest contributors, or the favored voting blocs, or the local interests of specific legislators. At that point, we’re just a wink away from “earmarks” and “pay for play,” and all the other governmental vices we’ve been assured will no longer take place in Washington’s new era.

Worse still, using federal policies to mandate commercial activity leads to a change in purpose: the aim of the stimulus becomes not the growth we all need, but the results that government officials must identify in order to prove the effectiveness of their efforts.  And, because financial results are never guaranteed, they define their success in terms of “fairness,” “opportunity,” or “social progress.” All of these are fine results, but they’re not the stimulus we’re being sold.