Buy American, Promote Democracy

By SAM URETSKY

It took longer for the Brits to achieve democracy than it did their erstwhile colonies, but because they moved slowly, they may have come up with a better plan. England took its first step towards democracy in 1215 when King John signed the Magna Carta. England came close to its present system after the Glorious Rebellion of 1688, which established that Parliament ran the government, while the monarchy was retained on salary to wear funny hats and encourage tourism. The monarch’s picture was also on the currency, which eliminated the embarrassment of having the president who signed the Indian Removal Act on the $20 bill.

This system is used in other nations with some success. While Donald Trump was a failure as leader of the government, he might have been a success in a ceremonial role, and his picture would be perfect for a $3 bill.

In the United States, we combine the ceremonial with the political, and it doesn’t always work. On Jan. 25, President Biden signed an executive order meant to bring more of the $600 billion of annual federal-procurement spending to American businesses and workers. From experience, it was ceremonial, but it is economically sound, if it works. A successful Buy American plan would create jobs, and increase the tax receipts of the government.

According to The Economist (1/30/21) “In 1933 Herbert Hoover signed the Buy American Act, which attempts to generate American jobs by restricting how direct federal purchases are made. It says that agencies must prefer domestic bidders for American-based contracts worth more than $10,000, as long as at least 50% of their products are home-made, and (for big businesses) they are no more than 6% more expensive than the cheapest foreign alternative.” The numbers have changed over the years, but the success of these plans hasn’t.

President Trump signed several buy American orders, usually focused on steel, but also one that called for more American production of essential drugs. These orders accomplished very little.  According to the Los Angeles Times, “… the White House provided just one set of data — direct federal procurement of foreign-made products amounted to $7.8 billion, or 3.6% of the total, in fiscal 2019.

That compared with $6 billion, or 3.5% of the total, in fiscal 2016, the last year of the Obama administration.”

Part of the reason for Trump’s failure appears to have been his inability to stay focused very long. Early in his administration. President Trump issued an executive order that required federal agencies to produce annual reports detailing their purchasing practices. On 8/30/20, the Los Angeles Times reported, “it appears that no such reports have been produced.”

There are also problems with organization, regulations and trade treaties to be worked out. The Agreement on Government Procurement (GPA 2012) consists of 21 parties covering 48 World Trade Organization) members. One of the basic principles of the GPA is “detailed procedural requirements regarding the procurement process designed to ensure that covered procurement under the Agreement is carried out in a transparent and competitive manner that does not discriminate against the goods, services or suppliers of other parties”

Another challenge is that some essential components of vital products may not be available in the United States. The rare earth metals, yttrium and the 15 lanthanide elements (lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, and lutetium are essential for many electronic products, including televisions, smart phones, computers, and many of the electronics used in defense applications. Solar panels, wind turbines, and electric car batteries also require these rare metals. But China provides 90% of the export market. The United States purchases 80% of its rare earth metals from China, and China is focusing on using these elements for its domestic applications.

The US Geological Survey, part of the Department of the Interior, published an extensive report, “Critical mineral resources of the United States—Economic and environmental geology and prospects for future supply” discussing the future need for these metals. The only rare earth mineral mine in the United States is Mountain Pass in California, but Round Top Mountain, in West Texas, has been estimated to contain a supply of these metals that would last over 100 years. While there have been serious questions about environmental safety, if the land can be safely mined it could lead to a revival of American electronics production.

Texas, which owns the land, has requested that Round Top be prioritized as part of any infrastructure program. This implies that any administration that is serious about infrastructure would bring manufacturing back to the US. Buy American might not be a joke after all.

Sam Uretsky is a writer and pharmacist living in Louisville, Ky. Email sdu01@outlook.com.

From The Progressive Populist, March 1, 2021

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