Don Davis

Could More 'Made In USA' Mean More Jobs?

Filed By Don Davis | August 15, 2011 9:15 AM | comments

Filed in: Politics
Tags: Barack Obama, Democrats, economic policy, election campaigns, Jobs, Labor, Made in USA, TSA, Union, White House

MadeinUSA.jpgWe gotta grow some jobs, and that's a fact, and we probably aren't going to be able to do it with big ol' jobs programs funded by the Federal Government, what with today's politics and all, and that means if this Administration wants to stay in the jobs game they're going to have to find some smaller and more creative ways to do it.

They are also going to have to come up with ideas that are pretty much "bulletproof," meaning that they are so hard to object to that even Allen West and Louie Gohmert will not want to be on record saying "no, no, no!" - alternatively, solutions that work around the legislative process entirely could represent the other form of "bulletproof-ery."

Well, I have one of those "maybe bulletproof" ideas for you today, and it has to do with how "Made in USA" the things are that our Government buys.

The archer sees the mark along the path of the infinite, and He bends you with His might that His arrows might go swift and far.

Let your bending in the archer's hand be for gladness;

For even as he loves the arrow that flies, so he loves also the bow that is stable.

--From "The Prophet", by Kahlil Gibran

For the rest of the story to make sense, we'll have to define a term - "Made in USA."

Most manufacturers in the United States have to meet a very stringent standard before they can refer to a product as "Made in USA. Here's how the standard is described by the Federal Trade Commission:

Traditionally, the Commission has required that a product advertised as Made in USA be "all or virtually all" made in the U.S.

There are special rules, most notably for automobiles (also textiles, wool, and fur), but for the most part everyone else goes by the "all or virtually all" standard when they claim something is "Made in USA" - with one giant exception.

When the Federal Government "Buys American," anything with over 50% U.S. content is considered "Made in USA." This is the law, according to the provisions of, naturally enough, the Buy American Act, 41 USC 10a - c. (Beyond the law, there are also certain federal regulations and executive orders involved; for now we'll just call it all "the law" and let it go at that.)

Now there doesn't seem to be anything immediately evident in the law that would prevent the Federal Government from purchasing more than 50 percent U.S. content if we wanted to, and the Big Idea here today is that if government at all levels began to purchase more than 50% U.S. content, we could create more U.S. jobs, now and in the future, and we could do it with a minimum of muss and fuss.

Obviously, there are practical limits as to how far you could take such an approach (for example, good luck buying a "Made in USA" laptop), and the current law has exceptions that reflect that reality.

But consider this: there are about 450,000 vehicles in the Federal inventory (that does not include military combat vehicles), with roughly half of those belonging to the Postal Service. The General Services Administration buys about 65,000 vehicles a year (they run the Federal motor pool, and that's the other half of the inventory).

Beyond that, think of all the billions upon billions of dollars of more mundane things the government buys every year: janitorial supplies, paper and toner, desks and chairs - you get the idea; now imagine if more of all of that was made right here.

One example of how we can do better can be found in Celina, Tennessee, where a garment factory that was doing work for the Air Force found itself unable to compete for a subcontract on $100 million worth of uniforms being made for the TSA; that's because the uniforms were being made in Mexico instead.

If the work was being done here, it could mean about 300 jobs in a town that could really use them. (By law, military uniforms are supposed to be made in USA; that's an imperfect process.)

Some things already are restricted: If we don't have a reciprocal trade agreement with a country, they generally can't sell to the US government. China and Taiwan fall into that group.

I'm often guilty of running stories too long, so we're going to cut this short today with a summary - followed by a cliffhanger that should keep you looking forward to Part Two:

Government buys a whole lot of stuff, and we could be buying more of it in the USA, and if we did, it could translate into jobs in places like Celina, Tennessee.

But it's not as simple a picture as you might think, and when we get together next time, we'll talk about the impact of free trade agreements on "Made in USA" purchasing, we'll get the AFL-CIO's reaction to all of this, and, if all goes well, we'll see if we can provide official reaction from the Obama Administration.

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Agreed that 'Made in the USA' would create many new jobs.

However what you fail to mention is that government in the US works on behalf of businesses and corporations before they work on behalf of ordinary people.

Industry and corporations far prefer goods to be manufactured in China or Mexico as it is far cheaper for them.

Therefore the government will NEVER work on behalf of the people before the corporations.

It is only the farming industry (who receive massive socialised government aid) who are exempt from this.

The US government supports free market capitalism. Free market capitalism cares solely about profit. Therefore who cares if US citizens are out of work. Just so long as profits are maximised on behalf of the government's corporate masters

michael moore would come at this issue in a different way, and here's what i think he would say: there is more money to be made selling things to people who make good middle-class incomes than there is selling things to broke people.

ultimately a government that works for the interests of corporations is obligated to maintain a strong economy for those corporations, just as it help them maximize fishing resources and mineral rights and forest "harvesting" - even if the corporations don't always realize it's for their own good.

The problem isn't imports, but outsourcing of manufacturing. Most of the products made in other countries like China are still made by U.S. companies. Chinese brands have only a minor presence here, limited to manufacturers like Haier and Lenovo.

more and more it looks like chinese companies are buying up american brand names to get around that image problem; here's one example.

Bill Perdue Bill Perdue | August 15, 2011 2:48 PM

I think this misses the point. Jobs will be created as the economy improves and that will never happen with Democrats, Republicans and Teabaggers in the WH and Congress. Secondly, economic nationalism will only deepen the global depression.

The productivity of US workers is very high and increasing, which means, from an economic point of view that wages are down, workers are working in unsafe speedup conditions with fewer benefits and that and profits are way, way up. Working people as a whole are facing pauperization because of the union busting strategy introduced by Obama against the UAW and state governors like Cuomo, Walker, Brown and Scott. Many workers are underemployed, working two or more McJobs at low wages with no benefits just to keep their homes or feed their dependents. A third factor limiting job growth is the deliberate policy of the Administration aimed at keeping unemployment at high levels.

The quick and easy way to zero out unemployment is to end US aggression around the world, bring the troops home and tax the rich at the 90% progressive rates of the Eisenhower years, using that to fund a multi-trillion dollar effort utilizing AFL-CIO hiring halls to green agriculture, industry and the infrastructure. That will create jobs, and jobs worth having.

Combined with union busting and their policy of permitting the export of jobs by signing a host of new FTAs, the refusal of the Administration to do anything substantive about unemployment leads us to one clear conclusion: The way to get more jobs is to vote against Obama and his Teabagger, Democrat and Republican allies in Congress, to fight to unleash the AFL-CIOs Labor Party, and to build unions.

On November 6th, 2012 vote for the left, vote against Democrats, vote socialist, vote against Republicans and Teabagger. Or simply sit it out. Our energies should be focused on building unions and the Labor Party to end Obama's wars, austerity, and unemployment.

we've been round and round over some of this before but...

--i would certainly not characterize the fight against unions as somehow just an obama fight, particularly when you consider that the patco firings and the first major successful assaults on the uaw took place during the reagan administration (remember "roger and me"?).

--i would not characterize the labor party as an afl-cio institution, and if it somehow is, you will note that the vast majority of that union's membership have rejected the party; almost without exception they belong to one of the two major parties. (we could have a long, long, long, discussion about how this came to be, but the fact remains that the labor party is currently attracting less than 5% of the afl-cio's membership, and i'd bet the farm that that's a generous estimate.)

i talk to labor leaders from time to time, and they don't seem at all interested in the labor party; they do seem interested in influencing the major parties, most particularly the democratic party - and if you look at how the afl-cio has spent their money and people power over the past several election cycles, they seem to be devoting most, if not all, of their political efforts to influencing the democratic party, not the labor party.

--many union members have concerns regarding their own union's governance, especially when it comes to the problem of union leaders being "co-opted" by management (and history suggests there's good reason to be worried); there is no reason to believe that a "union-oriented" government would be any less prone to this problem than today's "capital-oriented" corrupted government.

--as i have said before, the arguments you present supporting socialism would find more traction if you had an example of where socialism was working well, and that's always been a problem that's been difficult to overcome. even france seems to be rejecting their version of socialism, and it appears to be related to the tax burden (although, to be fair, there is a huge race issue that's making the white french electorate a lot more conservative these days as well).

---speaking of conservative, i would not be in any hurry to unleash a social revolution on this country until i understood just how that might go down in places like macon, georgia, or caldwell, idaho, or anywhere, arizona, or across the entire upper peninsula of michigan - and i'll tell you right now, in those places, this bird ain't even gonna fly.

you're going to have to sell this a lot better to bring along some centrist and conservative voters, and at this point, that seems to be a low-probability event...unless democrats flame out in a manner that would have to be described as historically amazing, and republicans simultaneously nominate someone to the right of rick perry.

Don,

I do agree more purchases of Made in the USA is important but its not that simple. The error is in the system government has set up. Free trade is not always equal or even fair. Many of our trade treaties are very flawed.

If we add in government meddling into the process we create more issues. Government should not be in business. It should merely regulate it for fair and equal exchange and consumer protection. Anything else unbalances the system because government then makes the laws and can manipulate them to their own benefit.

What's the solution? There is no magic answer. Ultimately people have to insist on USA made products and push the issue. Government needs to stand back and let things unfold as they will. Trade treaties need to be fair and equal for all parties involved and violations of such be grounds for serious sanctions or termination of such treaty.

Simply a resurgence of ethics needs to occur. A pride in American made items and a political will to do what is right more than what benefits ones self.

first things first: you can't buy the better part of a trillion dollars a year worth of stuff and not be in business - and in fact governments are, by legal definition, municipal corporations.

moving on...there are indeed issues with free trade that have to be addressed, and we'll be doing that in part two - but that said, government seems free, to some considerable extent, to buy more "domestic content" if the will is there.

in this country, government would obviously be prevented from forcing this choice on the public - but it is also true that government could choose to make domestic purchases either for the stimulus effect or for national security reasons, as we do with military shipbuilding today.

at what point does walmart's current business model collide with "made in usa"? i'm not sure, but i do recall when walmart saw it as a strategic advantage to position themselves as selling "made in usa" (remember the "bring it home to the usa" slogan walmart used during the '90s?), and i would suggest that a retailer seeking an advantage today might try the same thing - even to the point of developing a parallel line of branded products with usa sourcing at a premium price.

Nice idea, but there are instances -- and I suspect, many instances -- when the price premium for buying "Made in USA" goods will be so high (if you can find certain goods "Made in USA" at all) that it will not be cost-effective -- meaning, the premium expense placed upon the govt will not be worth the few extra domestic jobs created. So a plan such as yours requires that each purchase be analyzed in a rather sophisticated manner, and this analysis itself adds to the overhead of the plan.

I worked in a bottom-tier management position for the City of Los Angeles, and one of the duties I had was to approve and monitor the purchasing transactions for my unit. For L.A. (and I am sure, for any major US city) there are custom regulations, passed by City Council or the directing board of your department, that need to be followed. (For example, during my tenure, we had an anti-apartheid South Africa resolution that prohibited us from buying the products of companies that do business in South Africa, unless that company is the only source for that product.) These regulations resulted in a vast bureaucracy that was so slow that petty "corruption" took place just to get this purchase or that purchase processed thru the system in a timely manner. (That is, if you can call taking the Director of Purchasing out for lunch at one of the most luxurious restaurants in town in turn for his favors "petty corruption" -- the guy had a fancy lunch every day, paid for by the lobbyist de jour, and probably ate better than Oprah, who diets. Fancy, free lunches became the accidental job perk for running an office that processes paper at a glacial pace -- talk about "perverse incentive"! But I digress.)

So ... generating US jobs is a worthy goal, but maintaining some modicum of govt efficiency and cost-effectiveness is also worthy, and these goals are in conflict. In a word, for some purchases your plan, Don, might make sense, and for other purchases, it is either cost-prohibitive or flatly impossible. Sometimes the category a certain purchase falls into will be obvious, and sometime, I suspect most times, the purchase must be analyzed carefully. One thing is certain, this plan might be called the "Government Purchasing Analyst Job Security Act".

Bill Perdue Bill Perdue | August 16, 2011 3:59 PM

First the secondary issues:

'i would certainly not characterize the fight against unions as somehow just an obama fight..." Good, neither would I. Nor did I. I did mention Cuomo and Brown, Walker and Scott so I fail to see the validity of what you're claiming.

Regarding the Labor Party you claim "you will note that the vast majority of that union's membership have rejected the party; almost without exception they belong to one of the two major parties." When did they reject it? How could they reject it if Trumka won't let it run candidates.

The AFL-CIO Labor Party was founded and is held on a leash by AFL-CIO constituent unions. The AFL-CIO is increasingly angry with the Democrat Party, criticizing it on many occasions and threatening to leave it and it's candidates at the altar. Although I doubt Trumka will carry through in 2012, he may have to do so later. That can't happen too fast and when it does it'll destroy the Democrats.

Of course union bureaucrats are opposed to the Labor Party, which is why the labor left wants it unleashed.

No European nations are socialist, not Sweden, not Germany, and never France. Social democratic and socialist ideas are very different sets of political ideas.

Your fear of how socialist ideas will play in some regions is irrelevant. Socialists don't think change will come from elections, period.

Now back to your original post.

What makes you think that economic nationalism, a key part of the Teabagger program, will help?

Will it encourage the growth of unions and the better pay, benefits and working conditions if they and Obama are busting them?

How will economic nationalism solve the core economic problem driving this depression - that profits are so high and wages so low - because of the policies of Obama and his Teabagger, Republican and Democrat allies - that working people cannot buy what they produce. http://www.youtube.com/watch?v=qOP2V_np2c0&feature=player_embedded

How will economic nationalism increase the 'American' content of products produced by GM, Ford and Chrysler? Ford products are assembled all over the world. GM sells most of it's product to China. Chrysler is an Italian company, etc.

You didn't comment on 90% of what I wrote.

Bill Perdue Bill Perdue | August 16, 2011 4:01 PM

oops, this is a reply to Davis' reply to me.