Friday, June 11, 2010

Buying American part two

In the last blog post for Responsible Community, the personal decision to buy American was discussed. Here we take a look at the same decision from the view point of official U.S. policy.

In the fine print it states that if you include American made products as a high percent of your total investment you will be able to bid on a project. The project is part of the stimulus package created by congress. It is for, of all things, waste water management, heavy industry items that are at the core of American manufacturing.

Meet Mr. Pokorsky owner of Aquarius Technologies Inc. located in Port Washington, Wisconsin. His company makes equipment for waste water treatment. His equipment is all manufactured in America with some suppliers located in other parts of North America. With $6 billion of the stimulus package earmarked for just what he makes, this was to be a boom for Pokorsky.

Except Canada heard about the Buy American prevision of the package. Some of Pokorsky's suppliers and many of his clients in the great country to the north didn’t like the possibility of being excluded from the contracts. As an example, the town of Halton Hills west of Toronto decided to do something about that. The town of 50,000 people is amending their procurement policies to make sure American made products don’t get used. As Mayor Rick Bonnette says, "We won't be taking any products from any country that is discriminating against us."

In response to the movement in Canada to amend procurement policies Pokorsky said, "If that sticks, well, there goes 25% of my business.  To me, Ontario may as well be Indiana."
Many people are examining the Great Depression because of the current economic climate. It is argued that the depression was made even worse because of another way of supporting American made products. The U.S. government at the start of the down turn attempted to protect American jobs by placing a tariff on foreign goods. France, England and Germany responded with their own tariffs on our products. Trade dropped dramatically and made the economy all over the world worse.

As a selling point in the unofficial market place, being made in America can be seen as a benefit to the buyer, if the buyer is American. But, if you are Canadian, Mexican or another country making decisions based on the content of the material, maybe that wouldn’t be such a great benefit.

As a community, if we want to make policy decisions based on maintaining and growing American jobs we need to avoid building the castle of protectionism. The official policy theory of buying American to protect American jobs is a great sound bite in an election. But, the way official policy works out in practice is occasionally just the opposite.

Protectionism as a community policy is a great idea… that doesn’t work.

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