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Buy America Blues

According to recent news commentary "[']Buy American' provisions in the economic stimulus legislation moving through Congress have foreign leaders threatening retaliation and academics warning that the globe could soon go through the kind of tit-for-tat protectionism that helped deepen the Great Depression." Indeed as Heritage Foundation analyst Daniella Markheim argues in "Buy American Hurts America" the provisions "protect the few at the expense of the many. Under these provisions, regardless of whether America protects only steel or a broad swathe of industry, American families already struggling to make ends meet will have to pay more for goods and services. U.S. businesses and their employees that depend on global markets will find it harder to stay afloat, and economic recovery will take much longer to come to fruition."

Nowhere has the effort to press "Buy America" laws been more aggressive than in defense procurement. The argument is often made that protectionism is vital to protect national security and preserve the US industrial base. A major research study that included industry, academia, and policy experts, however, concluded just the opposite. America's most important competitive advantage is maintaining access to a global industrial base. The report, The Military Industrial Base in an Age of Globalization identified principles for sound defense industrial policy. They include:

Excessive central control is inconsistent with national security and should be avoided.

Policies on the domestic military industrial base should focus on critical technologies, industries, and skills that are not readily available in the global market.

Incentives and open competition in critical technical areas can provide a disproportionate return on investment, encourage the development and furthering of hard science skills, and broaden defense-related industrial capabilities.

Assured access to the global industrial base is necessary for long-term national security.

Not all trading partners are equal. America's closest allies should be considered reliable trading partners/allies for nearly all defense materials.

Greater supply chain transparency is a prerequisite to understanding industrial base vulnerability.

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