Let's start with one basic idea-- "Buy American" provisions are not protectionism (and by the way, neither have much to do with "fair trade", but that's another question). In fact, the bigger danger is that without such provisions in stimulus packages around the world, global production and trade could collapse.

Protectionism is when a national government requires PRIVATE purchasers of any product to buy only domestic versions of a product or pay such a high tariff on foreign products as to obtain the same result. The "Buy American" provisions in the stimulus are quite limited, applying only to purchase of iron, steel and manufacturers goods for about $78 billion in public works. This is hardly enough to undermine the global trading regime, but fears that federal spending would not lead to creating domestic jobs could have undermined support for the overall hundreds of billions needed for the stimulus. Requirements to buy domestically may be the key to convincing enough nations to pass sufficient amounts of stimulus to jumpstart the global economy

The problem right now is that nations fear that going into heavy amounts of debt could undermine their economies in the future. Even worse, if stimulus spending goes to buy foreign products, that debt will do little to revive their own economies in the immediate future.

What we face is a bit of a global prisoner's dilemma or free riding problem. Globally, all nations would be better off if each would engage in fiscal stimulus, but any individual country doing so might be hurt if they are the only ones doing so-- or could benefit tremendously if everyone else does so, but they don't go in debt.

Domestic buying provisions tied only to the stimulus amounts constituting debt dedicated to stimulus can solve that prisoner's dilemma. Each nation can expect to reap immediate job creation results from that stimulus debt, even as those citizens thereby employed will be free to spend their new salaries on all matter of goods, foreign and domestic, thereby adding to global demand.

If domestic buying requirements tied to stimulus debt encourage nations to engage in greater stimulus, the end result will be greater global spending, greater global demand and expanded global trade -- despite the tut, tutting of the "flat earth" free traders.

"Free trade" is not dedication to global trade. It is an ideology that opposes all the forms of trade regulation that can actually increase global demand, from strategic domestic buying provisions to "fair trade" rules that would raise wage standards around the world and increase the buying power of consumers.

Under the current crisis, "free trade" ideology will lead to less trade, while "buy american" and "fair trade" principles will lead to more trade and greater global wealth. So ignore the critics of "buy america" provisions -- often the same people who celebrated unregulated global financial markets -- and follow a bit of common sense.