Amid prolonged, painfully high unemployment, ABC News Anchor Diane Sawyer for the past year tirelessly advocated a simple solution: buy American-made products. She clearly explained the reasoning: every American dollar spent on an American-made product helps create an American job.
Defying Sawyer's admonition to search for "Made in America" tags, California set a record for using government money to create jobs in China. The Golden State awarded a contract for the new Bay Bridge that created 3,000 jobs in China for five years - a period during which the state's unemployment rate persisted at two percentage points above the nation's already high average.
Now there's an antidote for California's stupidity. It is legislation called the Invest in American Jobs Act. Championed by U.S. Rep. Nick J. Rahall, (D-W.Va.) and Senators Sherrod Brown, (D-Ohio) and Bob Casey, (D-Pa.), it would strengthen existing requirements for buying American products when federal tax dollars pay for construction of highway, bridge, public transit, rail, water systems and aviation infrastructure equipment.
To create 200,000 American jobs, Sawyer has challenged Americans to spend just $64 of their $700 in holiday purchases on American-made gifts. Imagine the American jobs that would be created if "Made in America" were stamped on every single part of all $59 billion in infrastructure projects the federal government funds in a typical year.
That's what Rahall, Brown and Casey want. Unless American-manufactured components aren't available or would be outrageously more expensive, Rahall, Brown and Casey believe American tax dollars should buy American jobs while financing American infrastructure. So they propose to expand the existing "Buy American" requirements and close loopholes that allow governors like California's Arnold Schwarzenegger to circumvent the rules.|
Schwarzenegger contended that California would save $400 million on the $5.1 billion Bay Bridge if it hired a Chinese firm to build steel decking and a 52-story tall support tower and ship them 6,500 miles to San Francisco.
This turned out to be a "you get what you pay for" lesson for California. The state should have been forewarned by years of publicity about problems with Chinese-manufactured products. For example, toxic drywall imported from China sickened American homeowners, corroded pipes and resulted in hundreds of millions in successful damage claims against the Chinese firms that fabricated it. Or there was the tainted blood thinner Heparin from China that killed at least 81 Americans.
In the case of the Bay Bridge, inspectors failed up to 65 percent of welds on the bridge parts manufactured at the Shanghai plant - welds done workers paid $12 a day for laboring from 7 a.m. to 11 p.m. As a result, the state of California and the two American companies it hired to arrange the work, including one ironically named American Bridge, had to send 250 engineers, inspectors and other experts to China to monitor the construction. That created American jobs, but imagine the extra cost.
In addition, the faulty construction delayed delivery by 15 months. Delays are costly. For example, when the California Department of Transportation (Caltrans) received only one bid to perform the work, the agency said advertising the job again could delay the project by 18 months and add $200 million to the cost. Using Caltrans' calculation, the 15-month delay added $167 million in extra costs.
The price tag on the bridge has risen now to $7.2 billion. The problems in China don't explain all of that. But there's no doubt that the $400 million that Schwarzenegger claimed would be saved by shipping the work and the jobs to China has long been overrun by hundreds of millions in extra costs. Organizations like the Alliance for American Manufacturing and the National Steel Bridge Alliance warned of potential problems from circumventing "Buy American" regulations. California ignored them.
Also, Schwarzenegger's estimate that $400 million would be saved failed to account for the wages American workers lost, the taxes they would have paid, or the multiplier effect on the economy when workers spend their wages in their hometowns. In addition, Schwarzenegger's estimate failed to account for the downside of hiring Chinese workers with American tax dollars, or in this case, bridge toll receipts. That includes unemployment compensation, Medicare fees and other costs borne by governments for joblessness.
The Investigative Reporting Workshop at the American University School of Communication included a story about the Bay Bridge project by two-time Pulitzer Prize winning investigative reporters Donald L. Bartlett and James B. Steele in a series called What Went Wrong: the Betrayal of the American Dream.
In their report about California sending the bridge work to China, Bartlett and Steel quote Tom Hickman, vice president of Oregon Iron Works in Clackamas, Ore., one of the American companies that tried to form a consortium to perform the Bay Bridge work. Here's what Hickman said about the jobs California denied American workers and the work California denied his America company:
"These jobs are living-wage jobs and family-wage jobs. They provide health and welfare benefits, 401(k)s and pensions. Our facilities meet all of the environmental requirements, and it just is a very, very difficult thing to compete with the Chinese when you are really competing with the Chinese government (which subsidizes Chinese industry)."
Caltrans argued that no American company had the facilities to perform the work. Hickman said the consortium could have done it. But if government agencies like Caltrans continue to ignore the real costs of shipping work to China, American factories will continue to close. America lost 55,000 manufacturers over the past decade. If that doesn't stop, at some point, America will forfeit the capacity to perform this kind of work.
That would be tragic. It would undermine American strength. Rahall, Brown and Casey are right. American tax dollars should buy American-made products and jobs.
And Diane Sawyer is right. Americans should buy American. Here's a link to her list of American-made gifts and a link to a list by American Rights at Work.
This is the antidote for lost factories and jobs.
Follow Leo W. Gerard on Twitter: www.twitter.com/uswblogger
Why doesn't Disney, parent company of ABC put its money where its mouth is and produce all the Disney items right here in the USA...?
there is also the deceptive product labelling practice you see on food stuffs, personal care products and over the counter medications. The package says "distributed by" an american company, but you really have no idea where it came from. sometimes you have to open the sealed package to find any indication of country of origin
offshoring jobs , industry and technology which is what the trade deficit represents is all the evidence you need to see this
I always watch ABC News Diane Sawyer because of her Buy American features.
It was not California's stupidity so much as Schwarzenegger's. According to Public Citizen most of the free trade agreements have provisions that prohibit, local, state, and federal government from giving preference to US made products.
Rahall, Brown and Casey have the right idea. Pass the legislation.
1) The High Trade Deficit: The strong dollar weighed against other currencies put's American manufacturing at a disadvantage. This means it cost more money per dollar to manufacture something in the US, while the dollar goes a longer way outside the U.S. This is why we import everything and produce nearly nothing.
2) Capitalist Competition: Let's assume the are two equally competitive car companies in the US called company X and company Y. Everything is fine until company X decides to move to cheaper labor outside the US. Now company Y has a problem. It can either stay in the US and fail, or it too can move it's production outside the U.S and compete. We could place regulations on company X and company Y to have them come back to the US, but it a global market with global competitors, you have to also get company P and company Q to move their production back to their respective nations too.
And to be clear, it is completely possible for corporations to pay the high costs of labor, taxes, and the regulations in the US and make a substantial profit. They will have you believe the US over regulates and taxes, and that it's labor is too expensive and undeserving, and this is why they move production outside the U.S. The truth is just pure greed and competition. It's more money in the pockets of CEOs, shareholders and the 1%.
Really? So the American corporations just make cheaper stuff and pocket the increased margin rather than charging customers less for the product? Why did American consumers abandon Main Street to shop at the box stores - was it to ensure corporate executives could make more? The Buy American driving force appears to have been readily abandoned by Americans.
Here's what The New Yorker -- that mad right-wing mag -- said:
"Free trade with poorer countries has a huge positive impact on the buying power of middle- and lower-income consumers—a much bigger impact than it does on the buying power of wealthier consumers. ..... That means that lower-income Americans get a much bigger benefit from the lower prices that trade with China has brought."
Read more http://www.newyorker.com/talk/financial/2008/05/26/080526ta_talk_surowiecki#ixzz1h1SqsclJ
What's funniest in your assetions -- and it's hard to pick -- is that you assume pension funds like CalPERS, the largest pension fund in the US, and a fund that serves public retirees -- is not compelled by ERISA fiduciary requirements to dump the American stocks that have reduced earnings because they use expensive labor, So if you have your way, investors abandon American companies for more profitable ones. Or American companies raise their prices and consumers -- like you and me -- pay more.
"The Buy American driving force appears to have been readily abandoned by Americans."
We want American made in our homes, but due diligence dictates, one of these for $2
or 2 of the same for a dollar from wall mart, even if inferior.
In reality, if they had saved ahead of time, they could have bought American. Poor people or of reasonable means should never buy cheap, ever! Unless you believe you can afford to keep replacing it, The savings are short term and the box stores count on this.
If wages go up, American made products will fly off the shelf as the middle class changes their buying habits, and the box stores will have a significant earnings loss, thus hitting China etc where it hurts.
"Why did American consumers abandon Main Street ... was it to ensure corporate executives could make more?"
Yes, exported jobs caused an abundance of labor who had to purchase cheap products from department stores that manufactured cheaply outside the US. Inexpensive labor and resources allows to undersell "Main Street," and simultaneously generate more profit. Also, "Main Street" disappeared because it couldn't compete with big companies.
"That means that lower-incoÂme Americans get a much bigger benefit from the lower prices that trade with China has brought." That would be true if it didn't cost US jobs. Now we have to buy more cheaply because of disciplined labor in the U.S. This is why the credit markets expanded. We need money to buy necessities we can't afford because of the jobs and money labor lost.
To be simple:
US: cost of production and overhead: $12; selling price: $15; profit: $3
Outside US: cost of production and overhead: $3; selling price: $10; profit: $7
i.e. It's more profitable manufacture outside the U.S, and cheaper to sell as well.
And I really don't care what your article says. If you're getting your information from somewhere, it shouldn't be some random dude from some random publication. Who cares.
OBAMA, Keeping us out so far of another Repub great depression given a worse situation than in 1929 when we had not outsourced 80% of our private industry, had trade surpluses, funded our own debt, still fed and clothed ourselves, stopping the 850K job losses per month, doubling the stock market, saving the Auto industry, half of what little we had left of our private industry, in the face of repubs opposition with 450 filibusters, more than in the last 100 years...,Is a miracle.
It took 7 years to fix the Reagan mess, 15 years to fix the Hoover mess and this will take at least as long since 30 years of trickle down supply side race to the bottom has killed us. We went from first in wages to 14th, from trade surpluses to massive trade deficits and from the world's largest creditor nation to the worlds largest debtor nation and that was just Under Reagan.
Unemployemnt under Bush from 4% to almost 8%. Under Obama from almost 8% to now 8.6% No the stimulus did not keep unemployment below 8%. It was 8.2% by the time it was passed! The rate of job losses was 50% greater as was the drop in GDP in actuality.
Stimulus was too small and 40% was tax cuts and quite frankly how long does it take to re open 60,000 factories closed under Bush?
Every Great Nation, at some point in their history, ended up cutting their own throats and securing their own demise. We're next.
Anyone who CAlls Obama The Worst PRESIDENT EVERY AFTER THE BUSH YEARS WHERE NO NET PRIVATE SECTOR JOBS WERE CREATED, 911 OCCURED BECAUSE HE WAS ASLEEP ON THE JOB, INVADED THE WRONG COUNTRY and at a cost of trillions, didn’t get Bin Laden, PAID FOR NOTHING, TURNED A $5.5 TRILLION SURPLUS INTO $6 TRILLION IN NEW DEBT, 60,000 FATORIES CLOSED, 3 MILLION JOBS OUTSOURCED, HALF OF HIGHTECH LOST, COMPLETE FINANCIAL COLLAPSE(LARGEST IN WORLD HISTORY), 50% OF WHAT LITTLE PRIVATE INDUSTRY LEFT IN BANKRUPCTY, LOSING 850k JOBS PER MONTH,HANDING OBAMA, A PROJECTED DEFICIT OF $1.7 TRILLION IN HIS LAST BUDGET YEAR AND TEN TRILLION PROJECTED IN NEW DEBT GOING FORWARD OVER TEN YEARS(OVERALL A 31.5 TRILLION DEBT INCREASE SWING UNDER BUSH FROM CLINTON.). THE TAX CUTS THAT WERE PER REPUBS TO PRODUCE 24 MILLION JOBS, MISSED BY 25 MILLION JOBS! WHEN BUSH AND REPUBS CAME INTO OFFICE IN 2001, WE WERE TO BE DEBT FREE, PAYING OFF THE REAGAN DEBT BY 2011, instead a 16 trillion repair bill.,
YOU LOSE ALL CREDIABILITY and then you support the exact same policies that created this mess, deregulation and tax cuts , when taxes are 15% below Reagan and Bush levels, who increased the debt ten fold each doubling Govrnment(their jobs program!).
NO OBAMA has not waved a wand and cured healthcare or the economy( deoindustrialized), all destroyed by repub policies they still embrace.
And you lose credibility when you cannot spell the word. But the strength of your argument is certainly aided by capitalizing 95% of the words. Peace.
He once suggested that we look at what Germany with just a population of 82 million is doing, given it leads us in MFG/Exports and has high wages.
He then went silent!
Here is why, because Germany :
1. Has national industrialization plan. Repubs AGAINST.
2. Has export Rebates of 19%. Repubs AGAINST.
3. Has cheaper National healthcare, not in cost of goods made. REPUBs Against.
4. Has stronger/larger Unions, 4 week min vacations, shorter work weeks, anti-outsourcing regs. Repubs AGAINST .
http://www.youtube.com/watch?v=VJp4479QaSI&feature=youtu.be
5. Has Unions on company Boards, interest free loans to MFGs. Repubs AGAINST.
6. Has 100% higher Min wages. Repubs AGAINST.
7. Spends 3 times as much on Infrastructure. Repubs AGAINST.
8. Spends very little on defense. Repubs Against.
9. Has more/stricter regulations centrally administered. Repubs AGAINST.
10. A leader in wind/solar energy. Repubs AGAINST.
11. A Leader in HighSpeed rail. Repubs Against.
12. Has earlier retirement age/higher benefits/4wk min vacations. REPUBS AGAINST.
13. Has centralized education, not thousands of local school boards fighting over evolution/Christian myths. For science/facts/history. REPUBS AGAINST.
14. Has paid for/affordable College. Repubs AGAINST.
Of course Repubs were for insurance mandates till 2009, for Cap and trade acknowledging global warming, Deficit commission, P/R tax cuts till they were AGAINST.
4) Again freedom, the government can't force this on the system. Workers need to want this enough to overcome corporate barriers to unionization and vote in unions.
5) See previous but replace the word workers with shareholders
6) Good luck getting real support for a higher minimum wage when jobs are already leaving the country in droves. Think about how high it would have to be in NY to be anywhere close to a living wage.
7) Possibly has to do with...
8) I'd be willing to bet that a big reason behind this has to do with the fallout from their last big military encounter. I'll give you a reminder, it didn't go well for the Germans.
9) The entire basis for our economy is based on a (relatively) free economy, plus constitutional issues with instituting a centrally planned economy in the US. Even the necessary and proper clause has it's limits.
10/11) We're backwards on this, the Europeans are much better than us on wind and rail.
12) Again, Americans have an aversion to anything that reeks of socialism, such as socialized retirement which we already have enough of with social security.
13) I agree that's better than our current system
14) Who's willing to pay? That's the question.