The ‘Buy American’ Order: Cynical or Ignorant?

By Kevin D. Williamson

Wednesday, April 19, 2017

Donald J. Trump is nothing if not a consummate entertainer, and the character he plays on television — “Donald J. Trump” — has appeared in all manner of entertainment: the game show he hosted for many years, pornographic films, the 2016 presidential campaign. Now he is taking on a strange new role: that of Debbie Wasserman Schultz.

Trump, who is surrounded by people who fancy themselves “nationalists” (in the cause of what nation, it is not entirely clear), is wading deep into an ancient puddle of stupidity most recently explored by Barack Obama (remember his “nationalist” moment, which lasted for about a month in 2011?) and Debbie Wasserman Schultz, the woman who (accidentally) did more than anyone other than Kellyanne Conway and Hillary Rodham Clinton to put Trump in the White House. To call it “economic nationalism” would be too grand: It is merely a very narrow form of special-interest politics consisting of backdoor handouts to favored corporate interests.

Trump has signed an executive order organized around two themes: “Buy American” and “Hire American.” In sum, the executive order is intended to provide incentives for American businessmen to . . . not act too much like the guy who built Trump Tower with illegal-immigrant labor and who relies on the H-2B visa program to keep Mar-a-Lago stocked with dishwashers and housekeepers. That guy, if we are to take Trump’s rhetoric seriously, is kind of a jerk, one who doesn’t care about the country at all.

The “Buy American” order is, in Trump style, pretty vague, with a lot that will need to be filled in later by people who know what the hell they’re talking about. (Fortunately, he does have a few of those around.) It makes minor administrative changes to existing “Buy American” federal procurement rules, which date back to the “Buy American Act” passed in 1933, a year not renowned for the excellence of its political and economic ideas. Bad call, Herbert Hoover.

The Buy American Act essentially requires that the federal government go to U.S.-based providers both for raw materials such as steel and concrete and for finished goods such as computers and automobiles. Because this is incredibly stupid and fundamentally unworkable, there are waivers: Washington loves a waiver — see the Affordable Care Act. Writing an unreasonable law and including discretionary waivers puts a great deal of power in the hands of politicians, many of whom turn out to be interested in such things as money and power, which introducing a large element of uncertainty and outright capriciousness into the procurement process.

The current waiver options are pretty broad: The Buy American rules can be waived if the desired goods are not available in the United States or if U.S. providers produce goods of insufficient quality; if the cost of U.S. goods is “unreasonable”; if waiving the rules serves “the public interest.” In practice, that means if you have the right friends and make the right donations, the Buy American rules may be used to steer contracts your way. If you don’t, they won’t.

This is how you get perfectly legal corruption.

Another set of relevant rules, dating from 1979, permit the Buy American rules to be waived in favor of companies based in countries that waive their own procurement preferences, if they have them. That gets complicated for Trump, because it includes not only our NAFTA trading partners but all the signatories to the World Trade Organization’s accord on government procurement, a list that includes the European Union, China, Japan, the Republic of Korea, New Zealand, Singapore, Switzerland, Norway, Israel, Canada, and the mighty nation of Liechtenstein, the free-trading capitalistic powerhouse so open to outsourcing that it uses another country’s currency (Go, CHF!) and yet, in spite of leaving itself open to exploitation by wily foreign neo-mercantilists, manages to have the highest personal incomes in all of Europe.

The U.S. Department of Defense, which cares a great deal about having the best stuff, has more than 20 reciprocal procurements of its own. There are further agreements on things like trade in civil aircraft, which means that even Macau gets a nose in under the free-trade tent. (This 2005 GAO report is a pretty good explainer.) That’s a lot of paper, much of which cannot simply be set aside with an executive order.

Trump’s order contains some truly risible feel-good provisions, e.g. moving the sign-off requirements up the chain of command in the agencies and requiring cabinet officers to think good and hard about whether companies are based in countries that have trade practices that Donald J. Trump might consider unfair.

Don’t expect that to have much impact. It’s just another exciting distraction: chum for chumps.

No serious person in Washington takes this Buy American stuff seriously as anything other than what it is: a shakedown. But Washington is not populated exclusively by serious people.

Which brings us to Debbie Wasserman Schultz.

A pig can sniff out a truffle from a mile away, and Schultz can root out a wheedle, no matter how low or dishonorable, in practically any situation. In the wake of the 2008–09 financial crisis, corporate welfare had a big moment, thanks in no small part to Barack Obama, who was willing to throw out the rulebook (and the bankruptcy code) in order to make sure that the GM bailout functioned as a bailout for Michigan Democrats, the most important chapter of which is called the United Auto Workers union. Republicans, who sometimes remember that they are the party of free enterprise, opposed this: GM’s feckless management and its corrupt and useless union bosses were fit for each other, Republicans reasoned, so let ’em hang together. Schultz suddenly discovered economic nationalism. If it were up to the Republicans, she said, “we would be driving foreign cars.”

At the time, she drove an Infiniti FX35, a $50,000 SUV that isn’t made in Detroit.

Schultz went on to say that Republicans who opposed bailing out Democratic interest groups rejected “American exceptionalism,” a favorite conservative idea at the moment.

Economic nationalism and — a plainly fascist term — “economic patriotism” were all the rage in the Obama years. Ted Strickland — the former Ohio governor who upon leaving office was laid so low as to go to work for the Center for American Progress — gave a speech in which he indicted Mitt Romney’s deficit of “economic patriotism.” (Being all class, he later told a laughing and cheering crowd that the death of Antonin Scalia “happened at a good time.”) Barack Obama, complaining that George W. Bush’s economic policies were lining Chinese pockets, denounced him as “unpatriotic.”

Trump told the crowd in Wisconsin that his order will “protect workers and students like you. It’s America First — you better believe it!” Of course, that’s what Obama said when he was stirring the same mess for the same reason. That’s what Debbie Wasserman Schultz says when she wants a handout for her friends in Michigan. That’s what Ted Strickland used to say back when people listened to things said by Ted Strickland. People have been saying the same dumb things back to 1933 and the original Buy American Act. It was said for decades before, going back to the debate over the Corn Laws in England.

But it wasn’t protection from Big Daddy that made the United States the most powerful country in the world and the one with the most dynamic economy in human history. It was innovation, work, and investment, none of which can be managed on a fly-by-wire basis from the White House or from Mar-a-Lago, no matter how excellent the professional performance of all the nefarious foreigners employed there.