Um, What's Wrong With the Buy American Act of 1933

By Big Tent Democrat, Section Economy
Posted on Mon Feb 02, 2009 at 01:49:54 PM EST
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I asked this question yesterday (I even sent an e-mail to my friend David Sirota with no response) but I am still at a loss about the hubbub over the Buy American provisions in the stimulus package. Is there something that makes this provision necessary considering the fact that the 1933 (yes the one passed 76 years ago) Buy American Act is still in effect and still covering all federal government purchases? Paul Krugman and Matt Yglesias discuss the pros and cons of the policy but no one yet, to my knowledge, has explained why we need a Buy American provision in the stimulus package when we already have a Buy American law that covers all federal government spending? Anyone? Bueller? This is an honest question. What is all this fuss about?

Speaking for me only

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Um, What's Wrong With the Buy American Act of 1933 | 30 comments (30 topical)

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What's to understand? (5.00 / 1) (#3)
by Robot Porter on Mon Feb 02, 2009 at 02:03:24 PM EST

The steel lobby is powerful, and the Dems want to keep them on board.

: Absolutely (none / 0) (#29)
by Abdul Abulbul Amir on Tue Feb 03, 2009 at 08:06:52 AM EST

This is not about the detail of law, but all about politics.
Construction workers lose jobs. So what.

UK Explains (5.00 / 2) (#4)
by jedimom on Mon Feb 02, 2009 at 02:03:47 PM EST

BTD the Telegraph explains how the 33 bill was relaxed:

They also point to the 1930s as a lesson in the perils of protectionism. Congress passed the Buy American Act in 1933, allowing the government to favour US products for government contracts. Restrictions were eased in 1982, but the plans currently working their way through Congress would bring the new law close to its forebear of 75 years ago.
Foreign steel would only be allowed if using US steel drove up the cost of a project by more than 25 per cent, while the bill passed on Wednesday required that the Transportation and Security Administration use American-made uniforms.

It is pretty serious, we are about to go to the G20 April, and they are pushing for world financial roolz, and at Davos World Forum there were one after the otherleaders stressing our need to work together and then this Buy America fiasco happened so now they are upset:

The EU trade commissioner vowed to fight back after the bill passed in the House of Representatives late on Wednesday included a ban ... A spokesman for Catherine Ashton, the EU trade commissioner, said: "We are looking at the situation. The one thing we can be absolutely certain about, is if a bill is passed which prohibits the sale or purchase of European goods on American territory, that is something we will not stand idly by and ignore."

Heh, I was wondering how the globe (5.00 / 1) (#7)
by Militarytracy on Mon Feb 02, 2009 at 02:09:37 PM EST

was going to feel about this Buy American crap, and now I know thanks to you so thanks. I've been having a VERY busy life. I like how when everything is tanking we want the globe to join us in propping things up but after that efff ya all.


Since the globe relies heavily on selling into (5.00 / 2) (#8)
by esmense on Mon Feb 02, 2009 at 02:28:13 PM EST

our large consumer market, perhaps they should effing join in helping us prop it up.


Sure they should and they have, (5.00 / 2) (#10)
by Militarytracy on Mon Feb 02, 2009 at 02:31:14 PM EST

and now we isolate? I'm not sure this is good policy.


: Good policy (5.00 / 1) (#14)
by jar137 on Mon Feb 02, 2009 at 02:47:39 PM EST

I think there is a general need to step back from the global economy in order to prop up the American economy, especially with regard to jobs. We have seen American jobs flow out of our economy over the past twenty years (first, manufacturing jobs left while we were told we were moving to a service economy; then many of the service jobs left to cheaper economies). We need to get people working in this country (in decent jobs, not McJobs) and this is one method of promoting jobs.

: Is isolationism the only choice? (5.00 / 5) (#20)
by esmense on Mon Feb 02, 2009 at 03:25:58 PM EST

Let's be clear -- pursuing trade in the way we have over the last 30 years has not worked as optimistically predicted. Over those 30 years we have lost significant productive capacity, seen real wages stagnate and decline, and seen the once mighty American consumer market -- on which much of the world depends -- increasingly supported by little more than easy and questionable credit. As consumers, we are tapped out. And that isn't just bad for Americans, its bad for every single one of our trading partners.
I live in the most trade dependent state in the nation, Washington. So I certainly am not against trade. BUT I've also had a front seat to some of the problems created by trade policies that tolerate protectionism on the part of other countries while insisting their products get a free ride here. When we clear cut our forests to send our raw timber to countries that refuse to allow us to sell finished wood products into their market -- destroying good paying jobs and whole communities in the process -- we certainly are not being "isolationist," but are we being smart?
When our apple producers spend more than a quarter of a century trying to get even the most tiny, restricted amount of their product into the Japanese market, prevented from doing so by the most transparent and absurd regulations and excuses, does anyone suggest that JAPAN is being "isolationist," endangering the world and free trade?
Well, maybe they should. Because such behavior on the part of our trading partners has harmed us, and in the process, inevitably harmed them and everyone else.
I don't know if Buy American is a solution to any of this. I doubt that it is. But I do think that we need to wake our trading partners up to the fact that SOME effort to restore our productive capacity and get our workers and consumers back on their feet is required -- not just for our benefit, but for the rest of the world's.

Yes, I want the rest of the world to help (none / 0) (#9)
by steviez314 on Mon Feb 02, 2009 at 02:30:30 PM EST

In fact, I would like to send Europe and Asia a bill for military services rendered, 1946-present.

They can even have 30 days to pay.


Do we have to pay up on what we (5.00 / 1) (#11)
by Militarytracy on Mon Feb 02, 2009 at 02:31:48 PM EST

owe China today too?


: China and the U.S. have a good Trade Policy. (none / 0) (#15)
by steviez314 on Mon Feb 02, 2009 at 02:49:16 PM EST

We buy their poisoned products and they buy our poisoned securities.
We need each other. Sure, our rates would be higher if they didn't buy our bonds, but over there, the blood would be flowing in the streets if we didn't buy their exports.

Oh, yes, since (5.00 / 1) (#12)
by gyrfalcon on Mon Feb 02, 2009 at 02:39:38 PM EST

we only put our military all over Europe out of altruism and not in the slightest anything to do with our own self-interest.

Call the waahhhmbulance!


Yer crackin me up :) (none / 0) (#13)
by Militarytracy on Mon Feb 02, 2009 at 02:41:11 PM EST

: Glad to amuse (none / 0) (#28)
by gyrfalcon on Mon Feb 02, 2009 at 11:52:45 PM EST

If you don't want to cry at the ignorance, at least we can laugh.

LOL already on Wiki.... (5.00 / 1) (#6)
by jedimom on Mon Feb 02, 2009 at 02:07:01 PM EST

Wiki

In certain government procurements, the requirement purchase may be waived if purchasing the material domestically would burden the government with an unreasonable cost (the price differential between the domestic product and an identical foreign-sourced product exceeds a certain percentage of the price offered by the foreign supplier), if the product is not available domestically in sufficient quantity or quality, or if doing so is in the public interest....
Under the 1979 General Agreement on Tariffs and Trade (GATT) Government Procurement Code, the U.S.-Israel Free Trade Agreement, the U.S.-Canada Free Trade Agreement, and the World Trade Organization (WTO) 1996 Agreement on Government Procurement (GPA), the United States provides access to the government procurement of certain U.S. agencies for goods from the other parties to those agreements. However, the Buy American Act was excluded from the GPA's coverage.

: Jedimon gets the ... (none / 0) (#25)
by Robot Porter on Mon Feb 02, 2009 at 06:43:34 PM EST

"Google is Your Friend" award for today!
;)
I think this, combined with Visclosky/Steel Caucus backing, explains it all.

Erm (5.00 / 1) (#21)
by DaveOinSF on Mon Feb 02, 2009 at 03:45:12 PM EST

2009
- 1933
76 years

: Thanks (none / 0) (#22)
by Big Tent Democrat on Mon Feb 02, 2009 at 04:10:02 PM EST

federal contracts vs stimulus funds to all ... (4.00 / 1) (#1)
by jedimom on Mon Feb 02, 2009 at 01:58:51 PM EST

I was under the impression that the Buy America Act was enforced in re federal contracts.

in the stimulus and later TARP Deux (or "TARP Duh..Its Teh Housing Stoopid" as I call it), I thought with this new senate amendment, (not the House one which applies to iron and steel only), but that the Senate one expands it to ALL funds in this bill, these aren't a contract it's just checks I think...

so if Stimulus sends funds to I dunno Small Business Assistance or even a manufacturer, they couldnt buy their components from say China..

the CAT CEO sounded like he would have a stroke seriously talking about it, they will get shut out of all the China stimulus money in retaliation they fear..

No (none / 0) (#2)
by Big Tent Democrat on Mon Feb 02, 2009 at 02:01:00 PM EST

All federal procurement is covered by Buy American Act.

What else is in the stimulus which is not considered gov't procurement? (BTW, that might be covered by the Buy America Act, which is different.)


: Yes (5.00 / 1) (#5)
by jedimom on Mon Feb 02, 2009 at 02:04:43 PM EST

see my comment below, the ACT was relaxed....

The only thing I want to understand (none / 0) (#16)
by ThatOneVoter on Mon Feb 02, 2009 at 02:52:34 PM EST

is how the Buy America Act of 1933 was passed 66 years ago.

You can be so naive BTD. (none / 0) (#17)
by Ben Masel on Mon Feb 02, 2009 at 03:11:00 PM EST

The language is there so that pols can campaign on it. You can't claim credit for laws enacted before you were in Congress.

that was my guess last time (none / 0) (#18)
by andgarden on Mon Feb 02, 2009 at 03:13:26 PM EST

But (none / 0) (#19)
by squeaky on Mon Feb 02, 2009 at 03:19:20 PM EST

Doesn't it backfire when it is pointed out that this has been law since 1933?

I would think it makes the pols campaigning on it the redundancy look ignorant rather than patriotic.


imagine, if you will, (none / 0) (#23)
by cpinva on Mon Feb 02, 2009 at 06:08:17 PM EST

a politician.

I would think it makes the pols campaigning on it the redundancy look ignorant rather than patriotic.

then, imagine an ignorant person. but i repeat myself.

imagine, if you will, a politician's constituents. then, imagine a large body of ignorant people. wait, i repeat myself again!


: Yes (none / 0) (#24)
by squeaky on Mon Feb 02, 2009 at 06:17:36 PM EST

But Politics has two sides, and if one side rides on something heartwarming and patriotic and all the people lap it up, it better be more solid than utter BS, because the other side will quickly point it out.
IOW if the ignorant masses hear about this provision in the current Dem Stimulus bill, they are also likely to hear that it is an empty gesture. No one likes to buy into something and then find out it is a load of horse pucky.

It had lost ... (none / 0) (#26)
by Robot Porter on Mon Feb 02, 2009 at 06:45:13 PM EST

its teeth. And had strong backing to regain them.

Watch C-Span, the legislature is always doing stuff like this.


: Lost It's Teeth? (none / 0) (#27)
by squeaky on Mon Feb 02, 2009 at 10:27:27 PM EST

It never had teeth. As Feingold put it:

It only makes sense, Mr. President, for the federal government to make every effort to purchase goods that are made in America. A law requiring this common-sense approach should not be necessary. Unfortunately, this law is necessary, and the way in which its many loopholes are being used also makes strengthening it necessary.

Strange (none / 0) (#30)
by squeaky on Tue Feb 03, 2009 at 05:33:05 PM EST

Reuters, Christian Science Monitor editorial, Financial Times, NPR et al all mention the Buy America act as if it does not exist already. Strange that all talk about its appearance in the Stimulus bill as if it was not already law.

You would think that the major newspapers and news outlets would have done their research or be knowledgeable on the subject like out BTD is.