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The Problem with DHS's Plan to 'Buy American'
An anonymous reader points out a Cnet report on the
Homeland Security Authorization Act, which would require that more than 50 percent of the components in any end product bought by the Department of Homeland Security be produced or manufactured in the U.S., writing "The Pentagon has agreements with 21 countries that waive the act, but an amendment that just passed the House would prevent the DHS from waiving the 'Buy American' restrictions. "The president of the Information Technology Association of America observed that this means the DHS may 'have to learn to do without computers and cell phones,' since he could not think of any manufacturers of those devices that would meet the 50% threshold."
a rather stupid rulling here , If your going to run a department which deals with national security it is in your intrests to use the best avaliable .Arguments on the usefullness of the DHS aside , if they want to perform to peak effiency they must use the best the world has to offer not the best the USA has to offer.
The only things certain in war are Propaganda and Death. You can never be sure which is which though
i find it sad that our own government agencies are being forced to buy american because they wouldn't otherwise. what does that say about the american economy?
that the 'Buy American' scam is really just an attempt to protect American companies from cheaper competitors under the guise of 'security'
Do not try to read the dupe, thats impossible. Instead, only try to realize the truth
What truth?
There is no dupe
The United States manufactures primarily US Dollars. Military hardware is second to that. In exchange for these two products, other countries send everything else here.
This is insane.
The sum result is that the products bought will be more expensive than they would otherwise be.
What exactly is the benefit of this? American companies benefit by having more trade? but they're *paying* for that additional trade in their taxes, because the State has to pay more to buy the more expensive products.
--
Toby
I believe it. It seems we are (sigh) again repeating history. After large battles we temporarily go into short periods of extreme isolationism of one sort or another. This seems to be one of those knee-jerk reactions. Think about when the buy American stuff started (which war was it again? umm, WWII perhaps?). And which cars do we hate the most? (other than Ford, I mean) Oh thats right.. the cars built by our greater adversaries. Ignoring good technology to punish others or to feel self righteous is only self defeating and limits your possible options. This, too, shall pass.
** "It's not my job to stand between the people talking to me, and the ones listening to me." -- Pego the Jerk
Either by corporate globalization (searching for cheap labor) or "not in my backyard" syndrome, we've moved most major manufacturing out of this country (or we let it go).
And now some showoff congressman is demanding DHS 'buy American.' (Do we still make stuff here?)
What kind of hilarity can ensue? Let's see:
- corporations will move a few employees around to meet the claim of 'made in America'
- countries who make our products get pissed 'cause we're threatening their income- trade sanctions, sabre rattling, etc.
- exceptions will be made for certain countries with attendant political maneuvering. End result: almost every country will be on the exceptions list. Except the axis o' evil / 'terra' nations.
"So the government can spend an extra $8 per item times how ever many items. What does that mean? That means they raise taxes to pay for it."
Haven't you heard? The government has been cutting taxes for the last 5 years and sticking the difference in the national deficit. 'Cause, you know, that's free money that the taxpayers of America aren't responsible for.
What counts as a "component"? If I sell a computer with all the screws made in the US, but everything else made somewhere else does each screw count as a component? If so that's an easy one to solve.. 20 screws, 10 other components, 66% "American Made". What if the hard drive has American transitors in it, does that count? How about if all the steel in the screws was "american" steel, but they were produced in China, are they American screws or Chinese screws? How about the Intel processor that was designed by American engineers by an American company, but produces in say Malasia?
The whole idea sounds rather stupid and vague in these modern times where everything has multiple sources. You don't even go into the whole political thing of "buying American" to see how silly the whole thing is.
AccountKiller
Ah, the horror of cost accoounting.
That $8.00 per item savings translated, in the past two decades, into complete shutdown of the textile and clothing manufacturing industry in the U.S. That meant millions of people thrown into the local Wal-Mart job, if they were lucky, and onto welfare if not. And Wal-Mart exists because it passes its healthcare on to the local state's tax-supported public services -- not to mention the number of Wal-Martish employees who are on food stamps because they aren't paid enough to eat.
That eight bucks cost us our electronics sector, our manufacturing sector, software, it goes on and on.
The "savings" is localized on someone's balance sheet. The cost incurred to generate that savings is measured in ruined careers, disappeared industry, impoverished people, and let's not forget, the almighty national security hole caused by our inability to make our own defense equipment.
The savings in moving our economy overseas goes into few pockets, but the costs come out of all our taxes. And the real costs never show up in the Economist or the cable news shows, because those are paid by the poor and almost-poor, the invisible majority that don't really count.
Those tax savings are lost on the back end.
It's bloody true!
Any country (my own included - UK) which imposes virtually ANY form of trade sanctions, does so to protect their over-priced home produce. This perpetuates global poverty by preventing someone from competing against you.
This is a bizarre twist on trade sanctions - I'll give you that. But to demand that a certain percentage of a product is manufactured in your own country just smacks too much of trade protection.
For security? Give me a break. . .
Since the government buys their equipment using money from the US taxpayers, it seems in the best interests of the taxpayers and the country to keep as much of that money in the country as possible. Consider the following:
The US government outsources everything to companies in other countries - everything from highway construction to phone support to the IRS. Making up a number for the tax rate, call it 40%, that people pay, including the federal taxes in gas, phone service, licensing, income taxes, etc. This means that every year 40% of the countries GDP goes to another country or countries. That reduces the overall "value" of our country by that much. At the other end, if we pay nothing to other countries for services or aid or anything, the "value" of the country remains the same.
Now, I understand that this isn't realistic economically, but it illustrates the point. As a government, isn't it better for their citizens if as much of their expenditures as possible remain in the country? Yes, it is possible that buying from an outside source is cheaper, (for the nation as a whole), than buying locally. (For example, many food crops won't grow in the US and to irrigate/climate control the fields to support those crops would cost more than buying them outright from somewhere else.) However, for a few percentage points difference in the price, I doubt it, since we have to consider income taxes that the country "gets back" by taxing the workers who produce it. (Assuming all other aspects are equal.)With that said, I think it would be better overall to embrace a true global economy, so if someone in India can do a job better/faster/cheaper then they can do it. However, since we don't have a world government, and we still have this annoying habit of killing each other over things like imaginary lines on a map, I don't see any real alternative to being somewhat protective of the country you happen to reside in, whether that is the US, the UK, China or India.
Reading code is like reading the dictionary - you have to read half of it before you can go back and understand it.
... "why?". The world's becoming globalized - you can argue over and over if this a good or bad thing, but it's the way it is. I also have to wonder how many electronic devices are manufactured in the USA today. Yes, even USA companies have their products built elsewhere. Thanks to that you can buy your computers, consmer and electronic gadgets at the price you pay for them now.
Is there a real motive for such a decision or it's just a "Geee, we're 100% american!" sort of thing?
Yes, that's right, and those people are poisoning themselves, particularly in China. The pollution in the industrial cities is so bad that if it goes unchecked, it will, paradoxically, threaten their economic survival. Ruined land and water is no good to anybody.
Tangentially: have you ever driven on I-80 through the Rust Belt? I'm talking about former manufacturing hubs like Buffalo, Gary, and parts of Cleveland. They look abandoned. And the factories? Rusting and abandoned. It's sad, not only because of the unemployment and social upheaval, but because great swaths of that abandoned land cannot be reclaimed for agriculture. The soil and groundwater is too polluted. So the hulks of the factories remain, the rusting monuments to America's fading greatness.
Now, what's really eerie are all of the abandoned strip malls: just boarded-up buildings and weedy expanses of grey asphalt. Nearby, you find housing built in the 40's and 50's, some abandoned by the people who once made their livings in the factories, some filled with poor immigrants, others by retirees who try to keep up appearances and put out their flags on Independence Day. I'm not being lurid here, either. There are a thousand towns like this and they are depressing places. What will become of them?
"OH SHIT, THERE'S A HORSE IN THE HOSPITAL!"
This forced nationalism is strikingly similar to the conditions in pre-WWI Germnay as well. Which is something to think about.
So if a laptop is designed in the US and has an Japanese-made CPU, a Chinese hard drive, a Korean TFT screen, a Filipino keyboard, etc., etc. how do they By value? By weight? What does "Made in XXX" really mean anyway?
I think you and everyone else have missed a major point. What happens if the devices our military depends on are not developed and made in america? Two things:
1. Our military won't be able to keep up with the technical advances of other countries because we no longer produce enough engineers and scientists. All the engineers will be overseas
2. Our national defense will depend on foriegn companies selling us equipment which they may choose not to do at some point in time.
If it's like DOD / Corps of Engineers contracts, the penalty is you don't get paid. When we do a Corps job, it states in the specifications you must meet the "Buy American" act. If I install foreign-made items, I have to either produce documentation confirming that the vendor is on the "exceptions" list the DOD has (which won't work for this case) or I have to replace the items.
Otherwise, the Corps won't sign off on the job and we don't get paid.
What a load of crap and overgeneralizations. Government programs giving work to minority owned businesses are doing so to stimulate the economy, usually in ghettos where there is no cash flowing. The end result is a net increase of tax paying middle class people (who may be non-white) and all the benefits that go along with being affluent. Your painting of all minority owned businesses as incompetent borders on racist.
In this thread, we the +5's tend toward denouncing the US's choice to effectively do the same thing. Is there some method to the madness? I'm genuinely curious...
This is not just bad for free software, but this is a clarifying special case of why this requirement is in practice a subsidy. Things will be bought that are not required to do the job.
In addition, it should be remembered that US dollars flow back to where they can be used as legal tender. Ie: the US. Buying goods from abroad initiates the whole process of trade. But then economic and scientific illiteracy are patriotic: Americans live in a post-rational culture AFAICT.
Wikileaks, no DNS
Eventually, some bureucratic fig-leaf will emerge, e.g. the Puzzle Palace's waivers for 20+ countries.
OTOH, what sort of remark is it concerning the US that it is simply not cost-effective to make anything here anymore?
I'll try to be positive, and avoid the flamebait flogging of last week by saying: demonstrate some US-designed and built products (that don't suck), and I'll happily buy. For a company with the right marketing, it's a good opportunity.
Get thee glass eyes, and, like a scurvy politician, seem to see things thou dost not.--King Lear
...the US-House of Saud relationship was cemented by FDR and continued by his successors both D and R. Apparanty few realize that.
Free Mac Mini Yeah, it's
No no no, not true at all. Americans do make things that people want and are willing to pay big money for: overpriced houses.
It used to be that we ran our economy on manufacturing. Then we made a shift to a "service economy" which lasted a couple years before the services followed the factories. This left American capital with no way to grow. The housing bubble that we are now seeing is a consequence of that capital seeking a way to increase in an industrial economy that doesn't make anything anymore. America is no longer producing real wealth. The housing bubble is a delusional way for residual capital to continue to produce wealth, even if only for a short time.
Now we run our economy on asset appreciation, and buy all other goods and services from overseas with borrowed money. The only sector of this economy that can appropriately be called "manufacturing" is the construction industry, which has perfected the creation of grotesque McMansions that require a trip in a car just to get to the nearest grocery store. Zoning laws typically forbid anything to be built within walking distance of a McMansion, except other McMansions, so as to avoid even a momentary pause in the overall housing appreciation on which the American economy (and the property tax) depends.
Paradoxically, it seems everyone wants to live in a place where nobody makes anything anymore, and has to drive to get anywhere (like say a place that sells cheap Chinese crap or oversized food portions) because these house prices just keep going through the roof! I know people who made more money last year just living in their ugly condos than coming in to work. Careers in real estate are extremely attractive at the moment. It's a way you can still make lots of money even if your limited skills prove incapable of producing real wealth. And real estate is a magnet for investors, to the detriment of real industries that need infusion of capital. What venture capitalist in his right mind is going to invest in some factory making widgets when he can sink his capital in some pricey real estate and double his money in a few years? A bubble can often crowd out other forms of investment. Nobody wants to invest in anything but houses or dotcom stocks or tulips or whatever.
When the bubble pops, an enormous amount of housing will suddenly hit the market as speculators liquidate at the highest price. There will be lots of money flying around for a short while, then it will disappear and America will become a nation of overweight suckers who don't make anything trapped in their houses full of cheap Chinese shit paying adjustable rates with an average 3% equity position on properties that have lost 30-40% of their value since being purchased at bubble prices. And after treating the currency like a cheap whore for so long with overextended credit, we will find that the inflationary pressure on the dollar has driven up interest rates. As incomes collapse, the bond market will be flooded with T-bills crowding out private borrowing as the government desperately seeks capital at high interest to prosecute the wars that secure access to the oil markets upon which this house of cards has been built. It's awfully hard to fight wars when you don't make anything, but we have no choice when we live in houses that require a steady supply of gasoline just to be livable. The plan is to borrow forever and pray that the Rapture comes to save America and help us get out of actually paying all these loans back to the Asian banks who are now nervous about holding so much dollar-denominated American debt.
I suggest that if DHS wants to "buy American", they should station their field agents in houses in Atherton where the median house price was $2.5 million (when I hit Preview the first time, it may have gone up by the time I clicked Submit). Set up some cheap interest only loans at an adjustable rate. Tom Ridge just has to remember to "refi" every couple months and sell when the getting's still good, and the program will pay for itself, at least for now, maybe until the end of the term in 2008.
The other thing that struck me (coming from a household that made over 200k a year) was how poor the people working there were. I remember one girl bragging abuot how well she was doing -- she had a dvd player and a ps2.
Which makes her richer than 95% of the world's population. Poverty is relative; as long as there are any differences in wealth, there will be people near the bottom. But the bottom in the US and other developed nations is far higher than the rest of the world, and far higher than it was anywhere 100 years ago. You can thank capitalism for that.
How to solve most of our problems: 1.Lots of nuclear plants. 2.Cure aging.
This isn't a partisan issue. I don't know whether the US-Saud relationship was politically wise under FDR given what they knew back then and given what the world was like back then. What I do know is that over the last 20 years, it has become increasingly clear that it is incompatible with US claims of advancing democracy and freedom around the world.
If the current president still doesn't know that continuing the US-Saudi relationship on these terms is a mistake, he is either stupid, or has a financial interest in the relationship that keeps him from doing the right thing, or both.
Thanks for turning this into a partisan issue. Good job. The entire debate has been improved because of your ridiculous attempt to point out that another political party is just as pathetically corrupt as the one that is currently in power. I salute your blind political idolatry.
I hear all sorts of people complaining that we're not doing enough!
We go somewhere, people complain, we don't, they still complain.
World politics are messy, but sometimes I think that invasion is the only way to clean somewhere up. I would have taken out Iraq better than 10 years ago.
I figure that the only reason Bush used the WMD argument for going into Iraq was because that was what the Europeans would go for. I figure that we went in because it was a humanitarian nightmare, we had forces tied up just guarding the border, he was flaunting the sanctions, the oil for food program was a joke because of all the corruption, and Bush didn't want another Cuba hanging around for decades.
I'll say this: 99.9% of the starvation in the world today is political in nature. And yes, I consider most war political in nature.
I don't read AC A human right
The game of chicken continues until one of two things occurs. (1) Other countries pull out of the US. A cascade effect occurs and the world is in a depression. (2) Other countries don't pull out and slow, steady inflation causes US foreign debts to be effectively erased.
There's a number (3): the world economy gradually loses its dependency on the US economy, then other countries pull out of the US, and the rest of the world is just fine. This is what I think will happen over the next fifty years.
I'm not very familiar with economics, but I think that another reason for overpriced housing is the fact that banks have virtually no restrictions on who they're lending to. My understanding has been that you need at least 10% of the purchase price for a downpayment, preferably 20%, and you need to have good credit to get a good interest rate. These days, ANYONE can get a loan with practically nothing down and still get a good interest rate regardless of your credit history.
I don't have any of these issues - I have excellent credit and I can now afford a 20% downpayment on a house that was priced reasonably (a few years ago), but with today's housing prices that same amount I have for a downpayment is only about 5% of a house that isn't as nice.
Can anyone with an economics background provide some insight? Will banks ever tighten up their lending standards, and if so would that help adjust prices to a more realistic level?
I'm also concerned about these interest-only loans that people are getting. A friend of mine only owed about $100K on his house in California, but got it appraised recently for $350K so he took basically took out a second mortgage and bought himself a $70,000 car, a $40,000 car, took a bunch of expensive vacations, bought some big screen LCD TVs, and wasted his money on a bunch of other luxury goods. He's only paying the interest on the loan, which is about $1000 a month. I know he's not alone - MANY people throughout the USA are doing this. I know another guy who makes $40,000 a year and somehow managed to buy a $500,000 house. I simply can't understand how this is possible. Interest-only loans for the first few years are great, but what happens when you have to repay the principal?
Again, a question for the economists: Will housing prices drop once these interest only loans expire and principal has to be repayed?