Online at: http://politicalaffairs.net/article/articleview/8194/

Why "Buy American" is Good Policy: An Interview with Scott Marshall

By Political Affairs
Archives - Dates and Topics 2009 online headlines for April 2009 click here for related stories: economy

3-31-09, 11:00 am

Additional resources:
Political Affairs #96 - Cultural pluralism and the left in historical context
Editor's note: Scott Marshall, interviewed here, is the chair of the Labor Commission of the Communist Party USA.

PA: I know you followed the stimulus bill as it was going through the legislative process pretty closely. One of the provisions in the bill was the so-called Buy American provision. Could you talk about what that is and who supported it?

SCOTT MARSHALL: Basically the labor movement supported it. The Buy American provision was changed a couple of times, but in its initial form it mandated that public projects in the stimulus package receiving tax dollars must have some domestic content. In other words, if you were building a highway, you would buy the cement, the rebar steel, and other things needed for that highway manufactured by corporations in the United States. Later this was changed to stipulate that all manufacturing goods used for public works projects under the stimulus package must be purchased in the United States.

PA: So that’s the final version as it is now?

MARSHALL: That’s the final version – at the federal level – but a lot of this money is going to be spent at the local level, of course, in states and municipalities. These bodies are supposed to abide by the federal guidelines, but they also have flexibility. For example, if you have a project in a city and no one makes the widget you need for that project, then you can buy it anywhere. But if it is available for purchase from a manufacturing company in this country, then you need to buy it from that company.

PA: The measure did face some strong opposition. Who opposed it and why?

MARSHALL: Much of the opposition came from the National Association of Manufacturers and the Chamber of Commerce, along with other industry groups, although not all. Some of the industry associations also supported it. But basically the fiercest opposition was from the National Association of Manufactures and the Chamber of Commerce. The reasons are obvious. A huge portion of their members have moved production overseas and now operate factories in third-world and developing countries, including China, where they went for cheap labor and relaxed environmental standards – and then they reimport those goods. So they were very much against the provision to buy goods manufactured in the US. Of course, that’s not what they said. What they said was that this is all protectionism, that it would ruin trade and make the economy even worse. Those were the main forces opposing the "Buy American" provision.

Now, I have to say that there are quite a few people on the left and some in labor who opposed it too – I think in large part because of previous experiences around Buy American campaigns. I do want to make the point that I think the choice of the term Buy American is unfortunate, because I think it clouds the issue with past campaigns. The Buy American campaign of the late 70s and early 80s really was a very different animal, and almost all on the left opposed it and rightfully so, because then it was a question of basically shilling for the US corporations. It promoted jingoism. By the way, let me just say that that is part of the problem of calling it the Buy American campaign, because it opens the door to a phony kind of nationalism which I think is harmful to the labor movement and harmful to the people's movement in general.

But I want to make the point that I think there are important differences between the present labor-supported Buy American provision and the previous company-led campaign. One thing that is really different is that none of this is about erecting tariffs – none of this is about erecting barriers to trade. Another argument used that is untrue is that it violates trade agreements. It does not violate any trade agreements to have a domestic content provision in the stimulus. The domestic content measure in terms of where the tax dollars in the stimulus are spent is, by the way, not a policy that is unusual in any country that is trying stimulus. Every country that has a stimulus plan has a domestic content part of that spending, including China and the developing countries, but also including the industrial countries, Britain, Germany and France, etc.

PA: It simply seems to be about this: If taxpayers are going to pay for something, it ought to benefit local communities first. It seems that that is what this kind of project is about now.

MARSHALL: That’s right.

PA: One alternative to the "Buy American" concept that some people have proposed is "Buy Union," buy products that are made by union workers. What do you think of that idea?

MARSHALL: I think it is exactly right, and I wish we were at a point in terms of international solidarity that we could go with that. We should be aiming in that direction definitely. "Buy Union" would be a much better slogan and a much better way of moving things in a new direction. But again, in the present stimulus package, I don’t think it violates any principle to say that tax dollars ought to be spent for something here in the US. I don’t think that is in violation of any international agreement. As for "Buy Union," even for domestic content, yes, if it can be bought union, it should be bought union, absolutely. I think that’s a good idea.

I would like to also mention a parallel thing that has gone on. During the talks on the auto bailout, people who supported the bailout took to calling Southern senators who were opposing it “the Senator from Toyota,” because there were foreign-owned auto companies in their states – which is really ridiculous, because those people care just as much for any kind of capitalist enterprise. They weren’t particularly championing Toyota. They were championing non-union. They were championing the fact that these plants had moved to their states because they were non-union states and because they were non-union plants. That was a real misnomer. They should have been called the Senators from Non-Union States, not the Senators from Toyota.

PA: One other objection I have heard is that the economic crisis is global in nature, so that taking an approach that focuses on a single country’s economy may either exacerbate the economic situation in other countries or fail to have a global effect. Have you heard that?

MARSHALL: Well, I have heard variations of that. The problem with this argument is that there is no way at this point in time – in terms of how governments, how labor, how capital is organized – to have an overall stimulus plan that affects every country. That just doesn’t exist, and there is no way for one country, and certainly not one with the United States’ record of imperialism and economic plunder around the world, to build such a consensus or develop such a plan. So what you are left with then, according to this point of view, is that if we cannot do that, then we shouldn’t do anything here either. And that’s ridiculous.

The other side of this is that many of the key players in the global economy are implementing stimulus programs. I think that is all for the good, and that is much closer to getting us to some kind of balance in the world crisis. Another thing that needs to be taken into consideration is the difference between the bank bailout and the stimulus package. The stimulus programs around the world that are going to have a real impact on the crisis are ones that build up their their country's productive capacity and provide sustainable economic development. I know, for example, there are big discussions in China about how basing their productive capacity and growth on exports is not sustainable, and that what they really have to do in China, in order to develop a sustainable economy, is to raise the living standards of the working class and increase domestic consumption. That is what they are doing with their stimulus. Their stimulus package is almost all aimed at infrastructure, health care, and the internal development of their economy for their own use. In the US, unfortunately, the jobs and infrastructure side of the stimulus plan is not as big as it should be, but it is still a huge part of our stimulus package. Most other countries have stimulus packages that are similar to ours. There needs to be more spending on jobs and infrastructure going forward. That needs to happen, and I think that’s the way things are going to go. But how can we control that international situation? To say that the "Buy American" clause stops that, that is preposterous.

PA: One final thing. The stimulus package finally passed in the Senate after an arduous fingernail-biting couple of weeks. Could you give a brief assessment of the victories and setbacks that have occurred in the legislative process, and your assessment of the possible outcomes? I know that is hard to predict, but what is your preliminary thinking about the impact of the stimulus package?

MARSHALL: I think the most important impact actually might be political, in the sense that you’ve got huge majority support in the country for the idea that we have to spend money to build our infrastructure and to rebuild our country, and that is what will get us out of this mess. I saw a poll yesterday that shows 60 percent support the package – and that is why people support it. I think the battle for it was actually good in a number of ways. You saw the enthusiasm, optimism and drive that elected Obama – in the labor movement, for sure, and almost all the other movements, turned toward the fight for the stimulus. I think people got a lot of experience in the process, and it was a big victory. It also shows the bankruptcy of the Republicans. Such a strict party line, except for three people in the Senate, is just an incredible display of the lack of any kind of understanding of where people are in this country, what they feel about this crisis, and what they think needs to be done.

I think that some of the tactics Obama and Congress used on this did hurt the bill. The bill is not as good as it could be. On the other hand, it sure opened a lot of people’s eyes and sure drew a line in the sand about who is fighting for the people and who is not. I think that bodes well for the future. I suspect that it won’t be long until we will have to reconsider more stimulus, particularly in infrastructure. We took hits in terms of schools and some other areas. One of the things I felt worst about was that there was not enough money for mass transit, because I came out of the railroad industry and building railcars. I think that is an extremely important part of any modern infrastructure that is going to serve the further development of the country, especially green jobs and all of that kind of thing. So we took some hits there, but I think it was a really good experience. And I do think it is going to do good. Like you say, none of us, especially those of us who are not trained economists, can predict exactly how things are going to go, but it makes sense to me that this is going to save and create a lot of jobs. I think the stabilization part for the states is also going to help a lot. But it is going to be an ongoing fight, and the next part is going to be a fight over how that stimulus money is actually spent on the ground and how quickly it gets into the system. I think that will be a big political fight.


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