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Buy American: Another Job Killer in the Jobs Bill


Posted by Kelsey Zahourek on Thursday, September 22nd, 2011, 12:41 PM PERMALINK


Included within the 2009 “stimulus” plan was the protectionist Buy American provision that required manufacturers to give preferential treatment to domestic producers of iron, steel and other manufactured goods in spending on infrastructure. Not only did this force taxpayers to pay more money for the same goods that could be purchased more cheaply from foreign manufacturers, additionally countries from Europe to Asia signaled their own buy domestic policy aspirations, hurting American exports and jobs in its wake.

I understand political motives behind these sorts of measures, but it makes horrible economic sense. Yet Obama has once again chosen politics over the economy. Within the President’s “American Jobs Act” lies a provision that mandates all iron, steel and other manufactured goods must be domestically produced as part of around $80 billion in infrastructure spending.

Such protectionist measures raise costs for consumers and businesses. When businesses are forced to pay more for products, that increase gets passed on to consumers, who are then forced to forgo spending elsewhere. In other words, by protecting one industry, countless others are losing billions of dollars in profits.
Not only do Buy American provisions restrict growth, but they inevitably cost more jobs than they purport to create. After the 2009 provision, employers across the country were forced to lay off workers as a direct result of Buy American requirements.  One factory in Pennsylvania let go 600 employees because some of its products include goods produced overseas.

The insistence on the Administration including time and again this protectionist provision proves they don’t know the first thing about economic growth and job creation. As pointed out on this site numerous times, there are many, many things wrong with Obama’s jobs legislation and the entire bill should be scrapped.

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