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False economy; `Buy American' move by WHA is misguided.


Worcester Housing Authority Executive Director Raymond V. Mariano's proposal to give American companies preference when buying appliances and building materials Building materials used in the construction industry to create .

These categories of materials and products are used by and construction project managers to specify the materials and methods used for .
 is grounded in good intentions, but cannot be justified on economic or public policy grounds.

The proposal, which is modeled on the "buy American" provisions contained in the 2009 American Recovery and Reinvestment Reinvestment

Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash.

1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares.
 Act, has gained the support of several Central Massachusetts legislators, who plan to introduce legislation in January that would amend state law so that WHA contracts do not necessarily go to the lowest bidder, as is currently required.

The Legislature should reject any such legislation.

While "buy American" rules would appear to support manufacturing jobs in the U.S., the reality is that they are simply a form of protectionism that invites retaliation RETALIATION. The act by which a nation or individual treats another in the same manner that the latter has treated them. For example, if a nation should lay a very heavy tariff on American goods, the United States would be justified in return in laying heavy duties on the manufactures and  from abroad and leads to economic warfare economic warfare

Use of economic measures by governments engaged in international conflict. These may include export and import controls, shipping controls, trade agreements with neutral nations, and so on.
 that reduces activity, profits and wages for all.

It is important to recognize that the vast majority of the world's consumers reside outside the U.S., and American businesses must compete in a global marketplace in order to succeed.

Mr. Mariano estimates the WHA's annual purchases at between $10 million and $12 million. That's a significant sum for taxpayers, but vanishingly small in the scale of the global economy.

The supposed economic boon that would arise if all public agencies were to give American companies preference is an illusion, for any such large-scale efforts would, in fact, draw retaliatory actions by foreign competitors.

The WHA should continue to seek the best possible value for the taxpayer dollars it handles.

If American companies can provide the best quality and price to meet the agency's needs, so much the better, but state law should not be amended to include the false economy of "buy American" provisions.
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Title Annotation:EDITORIAL
Publication:Telegram & Gazette (Worcester, MA)
Article Type:Editorial
Date:Dec 9, 2012
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