Opinion: Buy American, create a dependent?

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If you did your children’s homework for them in high school, how would they fare in college? That question comes to mind whenever I read or hear an argument in favor of requiring the federal government to ‘buy American.’ The latest example: the Op-Ed article we ran this week by Leo Hindery Jr., Leo W. Gerard and Donald W. Riegle Jr.

Hindery, a media investor, and Riegle, a former Democratic senator from Michigan, are involved in something called the Smart Globalization Initiative at the New America Foundation, a think-tank well stocked with my current and former colleagues; Gerard is president of the United Steelworkers union. They argue that requiring the federal government to buy American -- that is, to award procurement contracts to U.S. manufacturers when their products are made domestically and available on reasonable terms -- would provide a critical lifeline to the country’s shrinking manufacturing base. Almost every other major industrialized nation has a requirement of that sort, they argue, so why shouldn’t we?

I’m not a trade lawyer, so I won’t try to make the case that such rules violate international trade agreements. Instead, I’ll just ask how such guarantees help U.S. firms stay competitive in a global marketplace. Is it better to give them 100% of one government’s business (ours) than to force them to vie for it, potentially making them better able to win contracts around the world? And if ‘buy American’ requirements somehow resulted in a larger U.S. manufacturing industry, could those rules be dropped in future years without causing even greater problems? That’s the argument many conservatives made against the stimulus package, which (among many other things) expanded unemployment benefits and helped states lay off fewer workers. When the stimulus dollars run out, will states have the political will to reduce benefits and shrink payrolls back to an unsubsidized level?

Don’t get me wrong, I don’t think these questions all have obvious answers. It’s entirely possible that, by guaranteeing U.S. firms the domestic market, ‘buy American’ provisions would enable U.S. manufacturers to sell their goods more aggressively overseas. (Granted, they could run afoul of anti-dumping laws if they cut foreign prices too deeply.) And there’s little reward for being a free-trade purist if your major competitors are tipping their scales in favor of domestic firms. Nevertheless, I don’t think it makes sense in the long term to shield U.S. manufacturers from competition, even when tax dollars are paying the bills. The federal government can and should try to stop the erosion of manufacturing jobs, but it should do so by creating a better environment for entrepreneurs, promoting investment, increasing the supply of skilled workers and battling to open markets overseas.

-- Jon Healey