Buy American Clause Not So Bad March 8, 2009

So as I’ve been following the recent downturn in the world economy, and paying a special note to the blame being given to the United States for being the cause of this bleak situation. I guess turnabout is fair play. I mean, U.S. leaders try to dictate to the rest of the world how it should act, and we often play the blame game, so I guess it’s our turn. We took some stupid risks, and now everything is messed up…Sorry. I would like to hear more concrete solutions than blame, but what do you expect it’s human nature, right?

Within this time of note, I’ve been paying particular attention to how this new administration is going about things. President Obama and his team seem to be trying to get the U.S. back in shape, not only for the short term, but for the long term. This brings me to the subject of this post.

In the new stimulus package, that was recently signed into law, there is this little clause headed, “Buy American – Sec. 1605. Use of American Iron, Steel, and Manufactured Goods.” This little clause seems to be getting all the attention, as it apparently rings of protectionism towards U.S. industries. Interestingly enough, since this whole global downturn started many countries seem to implementing “protectionist” policies. From Sarkosy looking to help French automakers by floating them money to Russia raising tariffs on imported cars to India restricting certain ‘made in China’ products from entering its nation, the protectionist swing is going on, and it seems to be the hippest move.

Okay, back to the ‘Buy American’ clause. I don’t know what the problem is? If you read the whole thing, it’s really not that bad. Check it out:

BUY AMERICAN
SEC. 1605. USE OF AMERICAN IRON, STEEL, AND MANUFACTURED
GOODS.
(a) None of the funds appropriated or otherwise made
available by this Act may be used for a project for the construction,
alteration, maintenance, or repair of a public building or public
work unless all of the iron, steel, and manufactured goods used
in the project are produced in the United States.
(b) Subsection
(a) shall not apply in any case or category
of cases in which the head of the Federal department or agency
involved finds that—
(1) applying subsection
(a) would be inconsistent with the
public interest;
(2) iron, steel, and the relevant manufactured goods are
not produced in the United States in sufficient and reasonably
available quantities and of a satisfactory quality; or
(3) inclusion of iron, steel, and manufactured goods produced
in the United States will increase the cost of the overall
project by more than 25 percent.
(c) If the head of a Federal department or agency determines
that it is necessary to waive the application of subsection (a) based
on a finding under subsection (b), the head of the department
or agency shall publish in the Federal Register a detailed written
justification as to why the provision is being waived.
(d) This section shall be applied in a manner consistent with
United States obligations under international agreements.

The heading is all tough and protectionista like, but the actual body of the clause sings a different (at least in my opinion). First of all, this clause is referring to PUBLIC BUILDINGS OR PUBLIC WORKS. The private sector can do whatever it wants, and if a project is found to be INCONSISTENT WITH THE PUBLIC INTEREST things can change. Not convinced that this leaves the door open for foreign competition, well how about if the manufactured product you want is in short supply, too expensive, or just downright sucks? You can opt for an alternative. Oh, and to top this all off this clause states that it SHALL BE APPLIED IN A MANNER CONSISTENT WITH UNITED STATES OBLIGATIONS UNDER INTERNATIONAL AGREEMENTS.

Can I get some relief, and some calm? Of course any project manager that wants to waive this clause so he/she is not in violation of U.S. law, will need to put everything in writing (small price to pay…okay more paperwork – say it…Bigger Government!).

Maybe what the Obama administration is trying to do is motivate U.S. industries to raise their product quality, while making sure things remain fiscally sound. Again, this is pertaining to public projects, so maybe Obama is trying to make the Federal Government fiscally sound?

Personally I think the central government should use homemade products. I would take it as a source of great pride to know that my tax dollars when to the construction of a building that uses quality American goods, produced by my fellow citizenry.

So this doesn’t pertain to fuel, cars (unless built for government use), homes, cotton, food, etc (at least that’s how I interpret it). If China can spend billions upgrading it’s physical infrastructure, and encourage its population to buy Chinese made goods, why can’t we do the same?

In any case, I hope the global community doesn’t get in too much of a huff (I might be too late on that one) over the ‘Buy American’ clause. It’s not as tough as people have been making it out to be.

Peace

Russian Bear Not Hibernating January 10, 2009

Aside from the fact that Russian bears at the Moscow Zoo really were not hibernating because of the lack of snowfall in Moscow, Russia seems to be gaining headlines for other “more serious” reasons (at least where the Europeans are concerned). In a show of power, the Russian government shut down natural gas lines running through the Ukraine, which cut off natural gas supplies to much of Eastern and Central Europe. According to Russia the government the Ukraine was “stealing Russian gas destined for Europe.” The BBC has been reporting on this, and says that since Wednesday, when the pipelines were shut down, European countries like Serbia, that run almost exclusively on gas from Russia, had been severely affected.

Apparently though, Russian and the European Union have signed an agreement that will secure the flow of gas to Europe. The only catch is that the Ukraine has to sign the agreement. But since the relationship between Russia and them have deteriorated so, I wonder if they will sign the agreement (a bit of posturing for face saving is in order here). Maybe under the weight of the European Union the Ukraine will come round and sign the agreement, thus opening up the flow of gas from Russia.

This growl by Russia just underscores why we need alternate fuel sources. How can Europe be at the mercy of Russia? It’s like The United States and oil from The Middle East. We are addicted like a junkie to heroin. Use natural gas, but don’t be a slave to it.

This is not the first time Russia has done this, and Prime Minister Vladmir Putin has asserted that the days of cheap natural gas are over. He is obviously laying the rhetoric for more gas wars with the Ukraine, Europe, and the rest of the world; agreement or no agreement.

I wonder when the growl of the Russian bear will be actively heard in the United States? And how will the U.S. government respond to such growls because this Russian bear’s growl comes with a pretty stunting bite…this is no cub we’re dealing with. Beware.

Peace