One of the most controversial measures in the soon-to-be-law American Recovery and Reinvestment Act of 2009 has nothing to do with tax cuts, earmarks or CEO pay caps. But the inclusion of one little sentence has set off a firestorm of complaints all over the world. The sentence?
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.
Who knew that we even had manufacturing in the US anymore? Certainly not this girl who moved from rural North Carolina, where her father’s job was more or less shipped to Mexico, to Philadelphia, where once bustling warehouses, now empty, line the streets of North Philly…
But apparently we do. (Where? Pittsburgh? Detroit? I just don’t see it.)
And we’ve decided it’s that important that we want to slap a “Buy American” on the stimulus package.
A move to kick start prosperity – or a recipe for disaster?
Gary Shapiro, president of the Consumer Electronics Association, thinks it’s the latter: “The ‘Buy American’ provisions … will signal to our trading partners around the world that the United States is returning to the bad old days of protectionism and economic nationalism.” (You can read his entire statement here.)
The bill still requires that the US act in a manner consistent with existing trade pacts, a measure that was pushed by President Obama. This means that the countries that we like (Canada, those in the European Union and Japan, to name a few) may still get a share of the new infrastructure projects. But those countries that we don’t like do not have a trade pact with, such as China, India and Russia, get nothing.
Proponents argue that it’s just common sense to require American projects to be built with American goods – especially if those projects are being support with taxpayer dollars. But opponents argue that the measure will make projects more time consuming and more expensive (estimates are that the final costs will be at least 25% more expensive with the “Buy American” provisions), which will penalize taxpayers.
It’s an interesting question, for sure, and one we’ve tackled on the blog before. You may remember that last year, I challenged my readers to think about how they spent their day and to make a note of which products they used and where those products were made. It was so much fun, I’m doing it again!
So again, I’d love for you to play along. Throughout your day, if you see a “Made in…” label, please stop by and leave a note in the comments.
I am anxious to see how much of our purchases are American…
I’ll start.
Once again, I’m typing on an Apple computer that says “Designed by Apple in California, Assembled in China.” Next to my computer is my mobile phone, a Motorola, which, according to the web site is made in Korea. Kleenex tissues next to me say “Made in Canada.”
Sipping on a Diet Coke (bottled in Atlanta, GA) and eating a Snyder pretzel (made in Hanover, PA).
Hanna clogs say “Made in Sweden.” Pandora bracelet, wedding band, both unknown. Sweater made in China, Old Navy jeans “Made in Mexico.”
You?
Almost all non durable goods (food, beverage, pharmaceutical) are manufactured in North America and primarily in the USA. I responded via Twitter already, but my company supports these industries with conveyor and special handling systems. All our equipment is designed and manufactured in Southern New Jersey.
http://www.garvey.com
Ahhh you know this issue is a MAJOR hot button for me and I LOVE you for taking it on again.
Here’s what I don’t understand. Maybe supporting our OWN country is protectionism– but I don’t see G.B or France or any of the middle east oil nations putting up their money and giving us aid from the bottom of their hearts! If we don’t protect ourselves, no one else will.
So I really don’t care if they call us protectionist. And to the people that claim the projects will be more expensive– YES they will be more expensive b/c the cost of living is so high that we can’t live off of $10 a day. But if these people would step away from their greed and wipe the dollar signs out of their eyes, they would see that the initial expense of hiring an American will HELP them in the long run as we use that money to consume, invest, etc.
I think we’ve all seen what happens when you penny pinch your own. We end up in a George Bush recession, er, depression. After all, if these big CEO’s have the money to throw huge parties in Vegas, they can certainly pay out a few thousand more in salaries to keep Americans employed.
lol sorry Kelly. Grrr…..
Why is it that when a lot of folks refer to our last President it is “Bush” or “George Bush” but when they refer to our new leader it is “President Obama”? I notice this more and more every day. What ever happened to respecting the office?
But as to “buy American”. Folks we are way, way, way past that. Companies do not owe any allegiance to any country. They owe it to their stockholders. And if we are dumb enough to give them our money knowing that then I guess we deserve what we get. And if you look at the stockholders of most of the major companies that are still here (manufacturing and all) I would be willing to bet you will see an awful lot of foreign stockholders. So even if you “buy American” the money is still going overseas.
I was very, very disappointed this morning, by the way. Driving to work I did not notice one single construction project yet – didn’t the bill pass the other day? Or does the construction have to wait until President Obama signs it? Can’t hardly wait until June when I get my extra $13 bucks a week – oh wait a minute, I forgot – I don’t get it….forgot all about the phase out……Would someone out there please take the time to point out to me exactly what the stimulus parts of the bill are? I can’t seem to find any. But I’ve never been too bright anyway.
Skip
Skip, you bring up a good point… To whom does the government owe allegiance? To the “shareholders” or to those they ostensibly serve? – They are not always the same.
This was a stimulus package, and this sentence may be the only one in the package to have an immediate stimulating effect on the US economy!
The idea of “protecting” american jobs faded awhile ago. Free trade on a worldwide scale has created a vacuum of manufacturing jobs out of the country. Shareholders drive the decisions of these companies to produce products in the cheapest, most deregulated, and desparate labor markets in the world. Honestly, I believe that mutual funds have diluted the oversight of shareholders who keep these companies honest. That’s right, I said it-shareholders, not gov’t regulators should be leading these organizations to make decisions that provide safe working environments for people to earn a decent wage. Maybe the best act the government can do to help is make it a bit more difficult for board members to be “proxy” voted into their positions.