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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 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 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 from abroad and leads to economic warfare 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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