The EconomistJanuary 30th 2021 Leaders 1112 Mr Biden campaigned on going further than Mr Trump,
whom he castigated for not doing enough. It will take more than
a stroke of the pen to fulfil that promise. As past administrations
have discovered, America’s commitments to the World Trade Or-
ganisation (wto) constrain its ability to discriminate in favour of
its own firms (see Finance section). As a result, Mr Biden’s order
only fiddles at the margins, confirming Mr Trump’s last changes,
giving the White House more oversight of exemptions from the
rules and introducing a vague new requirement that Washing-
ton’s purchases should promote employment.
Yet the president has the support in Congress to go further if
he wants to. He has promised a diplomatic effort to modernise—
code for weaken—the wto rules. And they can in any case be cir-
cumvented by sending money to states and attaching conditions
on how they spend it, which is how the Democrats might struc-
ture their stimulus and infrastructure spending.
Presidents and voters like Buy American because they think it
creates jobs. In a direct sense, it does. But by locking firms out of
global supply chains and shielding them from competition it
promotes inefficiency, destroying more employment than it
creates. By one estimate America would gain a net 300,000 jobs
if it got rid of its local-content rules.
There is no evidence that buying at home boosts innovation
either, whatever its advocates might claim. In fact, it almost cer-
tainly hampers productivity increases in the long term. And cod-
dling local firms is a raw deal for taxpayers. From February Amer-
ican firms will be able to charge their government up to 20%
more than prevailing global prices.
Perhaps the sturdiest economic rationale for buying local is
that it stops the short-term stimulatory effect of new spend-
ing—of which Mr Biden is planning a lot—from leaking overseas.
But that should not be a big concern for America in 2021 because
its stimulus is so enormous. Were Mr Biden’s $1.9trn spending
proposal to pass, it would take America’s cumulative pandemic
spending to more than a quarter of its pre-crisis gdp (before con-
sidering the additional effects of any infrastructure bill). Amer-
ica can afford a little leakage. In any case, the lesson from 2009 is
that requirements to buy American hamper stimulus by forcing
firms to look for new suppliers before they can start projects. It is
not encouraging that Mr Biden’s order will make it still harder to
obtain exemptions from the existing mountain of red tape.
It is a relief that, unlike Mr Trump, Mr Biden supports the
rules-based system of global trade. He will not sabotage the wto
or go out of his way to antagonise America’s allies, whom he
wants to rally against China. But his soft protectionism—which,
thanks to the Trumpification of the Republican Party, is more
popular in Congress than it has been in decades—will rankle the
outside world; the European Union, which recently reached an
investment agreement with China, is already bristling at his ex-
ecutive order. In his instincts about the economics of trade,
America’s new president is not so different from his predecessor.
That is bad news for America and for the world. 7M
ahmoud abbasreally knows how to show Israel the stuff
he is made of. When the Israeli prime minister, Binyamin
Netanyahu, mulled annexing parts of the West Bank last year, the
Palestinian president stopped accepting transfers of tax revenue
that Israel collects on behalf of the Palestinian Authority (pa).
The move left the pashort of hundreds of millions of dollars and
forced tens of thousands of civil servants to take salary cuts. Yet
even after Israel suspended talk of annexation in August, Mr Ab-
bas persisted with his protest. Only in November, facing a self-
inflicted cash crunch, did he quietly relent.
This is what passes for leadership in the oc-
cupied territories. Though Israel bears much
blame for the suffering of its neighbours, the
pain is compounded by the self-defeating poli-
cies of Palestinian leaders. The stubborn men
who rule the West Bank and Gaza often seem
more concerned with preserving their own
power than with improving their people’s lives
(see Middle East & Africa section). Palestinians deserve better.
True, the pa, which runs the West Bank, has been making
some more encouraging noises of late. It has resumed co-operat-
ing with Israel on security and plans to reform its policy of giving
money to the families of Palestinians whom Israel jails for such
things as murdering Israelis—which American politicians taste-
lessly call “pay for slay”. Most important, Mr Abbas has an-
nounced that legislative and presidential elections will be held
in May and July, after 15 years without a vote.But can anyone trust Mr Abbas? He is in the 17th year of a four-
year term as president. He has announced elections before, only
to call them off. If they do take place, they will probably be a
stitch-up between Fatah, Mr Abbas’s party, and Hamas, the mil-
itant Islamist group that runs Gaza. The past decade and a half
has shown that neither is fit to govern.
The last time the Palestinians went to the polls, in 2006, Ha-
mas beat Fatah in legislative elections. That led to a civil war
which left Hamas in control of Gaza. The militants have since
turned the territory into a corrupt, oppressive
and miserable one-party state. They blame Isra-
el’s blockade of Gaza for the fact that jobs, elec-
tricity and drinking water are scarce, which is
fair enough. But it is the militants who hog pre-
cious resources and store weapons on civilian
sites, making them targets. Their attacks on Is-
rael achieve little besides prolonging their own
people’s misery.
Things are better in the West Bank, but not much. It too re-
sembles a one-party state, under Fatah. Mr Abbas rules by decree,
with no hint of accountability. Though he is 85, he refuses to
groom a successor, lest it speed his long-overdue departure. The
president and his geriatric coterie of loyalists inspire little con-
fidence, even from putative allies. “With those people, it’s hard to
trust them or to think you can do something to serve Palestine in
their presence,” said Prince Bandar bin Sultan, a former Saudi
spy chief, on Saudi television last year.Time for Abbas to go
New leadership is needed both in the West Bank and in GazaThe Palestinians