Buy American Clause Not So Bad

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

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  1. October 21, 2009 at 8:04 pm

    Of course I agree that buying American made goods helps our economy, see our site irondoorsofatlanta.com . The problem is not all in supply and demand, more over the U.S. companies (industrials) are behind the 8 ball with imported goods that are already flooded in the market. There are so many items made out of country that our “bar” for quality has been set by our willingness to settle for a 2% reduction in price without looking at where that money goes using the excuse “looks like a duck”, but its more like a pile of feathers.

    U.S. manufacturers are naturally predisposed to be of higher quality for the simple purpose of keeping people from breaking down thier doors and dragging them into the streets. What good does a “Manufacturers Warrantee” do you if your “Manufacturer” is out of country. China does not “have” to recoginze so much as a U.S. patton, and if you have a real problem what out come would one expect from a foreign judicial system. Do you remember the “lead paint toys”, in fact it wasn’t until 2008 that the FDA set up operations to “monitor” the handleing of food items in and from verious countries, ONLY SINCE 2008!!

    As an American small business owner I have been battleing the import of decorative iron doors and windows from China and Mexico for some time. We stay competitive by expecting the lowest possible return on each individual sale hopeing volume will fill in the gap. Since the economical decline, a huge imported residential “iron door” surplus has been thrown into the market at rates sometimes lower than current raw steel cost. This type of marketing or branding is being played out all over the country, while this should be called “starvation marketing” it is looked upon in business as SOP, and even more tragically not even noticed by the public. Ironically this can be caused by investors (American investors) buying up a huge lot of reposesed or forclosed assets and/or goods, most often also ending up with ownership of a name or brand built by someone else (false representation if you ask me) followed by a massive reduction in retail price and tons of product for a while. See, the fact is these types of businesses can’t continue this type of supply (since they got the product for pennies on the dollar to begin with) at this price forever. Once the supply is used up the cost will once again return to normal levels. Until then, we will continue to offer the best quality available for the best price possible.

    To conclude, we should all buy American made goods in support of our economy, even better our Nation. Hold on small business owners, our labor (or stress) will not be in vein.

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