Hospitals & Asylums    





Buy American Goods HA-1-12-06


By Tony Sanders


Economists expect a relatively happy holiday for retailers, forecasting a 5.1% rise in sales from last year.  On Black Friday, the day after Thanksgiving traditionally devoted to Christmas shopping, retailers reported $14.7 billion in sales, 3.4% up from last year.  The average shopper was estimated to have spent $350. The issue that this article hopes to address is the $800 billion international trade deficit.  Although the US has run a trade deficit since the 1970s, at the turn of the millennium this negative balance became more pronounced and in 2005 the Bureau of Economic Analysis reported imports were valued at $1.677 trillion and exports of $894.6 billion for a balance of -$782.4 billion.  The U.S. current-account deficit is the broadest measure of U.S. international trade in goods and services, receipts and payments of income, and net unilateral current transfers (such as gifts) increased to $218.4 billion (preliminary) in the second quarter of 2006 from $213.2 billion (revised) in the first quarter. For the balanced account deficit (BAD) to be less than $1 trillion for FY 2007 merchants must buy and sell American to slow the growth of the trade deficit from –$829 billion in FY 2006, to no more than $850 billion in FY 2007.  Only when US petroleum reserves and other development projects begin working can we expect the deficit to go down.  As a share of U.S. GDP, the trade deficit remained 6.6%. 

Steps must be taken to redress this international trade deficit.  Hospitals and Asylums addresses this form of fiscal depression, that is even more mentally disabling than the federal budget deficit, in the Chapter pertaining to the liberation of the District of Columbia Mental Health System from St. Elizabeth’s Hospital at 24USC(4)§225h, that was drafted between 1988 and 1990, to make provisions for the enforcement of the Buy American Act of 1933 by the Mayor, as amended 41USC(1)§10a that states, Notwithstanding any other provision of law, and unless the head of the department or independent establishment concerned shall determine it to be inconsistent with the public interest, or the cost to be unreasonable, only such un-manufactured articles, materials, and supplies as have been mined or produced in the United States, and only such manufactured articles, materials, and supplies as have been manufactured in the United States substantially all from articles, materials, or supplies mined, produced, or manufactured, as the case may be, in the United States, shall be acquired for public use.

It is hoped that private companies will Buy American of their own accord in fulfillment of their patriotic duty to bring the trade deficit down by investing in import substitution.  Bilateral free trade agreements also have a proven track record for reducing trade deficits towards a balance closer to equality between nations.  It is true the US is an open and free market and the government cannot force the private sector to purchase American made products.  We must therefore resort to reason.  Companies are selling foreign products because foreign goods are cheaper. Consumers, wholesalers, retailers and manufacturers must make an effort to Buy American whereas it is considered bad to have an international trade deficit. To balance the account deficit without causing inflation the government must support American manufacturers with subsides and tax relief, to control inflation.  Congress must make an effort to improve domestic manufacturing by promoting vocational education and industrial marketing programs. It is permissable under international law to subsidize domestic industries in order to control inflation. It is strictly export subsidies that are prohibited by the World Trade Organization.  To be self sufficient the US must harmonize the domestic supply chain with the domestic demand for goods through the process of import substitution.

To make the decision to Buy American merchants will need to compare their catalogues with those of American manufacturers to substitue American made goods for foreign goods at little or no cost to the consumer.  The government will need to subsidize this manufacturing venture through tax relief for domestic price negotiatons and market research for no to low inflation to the consumer in the transition to American made goods. The National Association of Manufacturers (NAM) reports that in 2005 manufacturing employed 14.3 million workers in the United States and another 6 million in related industries such as wholesaling and finance. Nearly 3 million jobs were lost between 2000 and 2003. In 2005, the U.S. manufacturing sector, in terms of GDP, was close to $1.5 trillion. U.S. manufacturers exported $782 billion of goods overseas in 2005, or nearly two-thirds of total exports. Nearly 40 percent of exports go to neighboring NAFTA countries. In the 2006 Statistical Abstract: Domestic Trade the US Census Bureau reported that in the USA there are as estimated 438,301 wholesalers employing 6 million employees with a payroll of $255 billion and shipments totalling $4.376 trillion.  The retail trade has 1,115,902 establishments employing 15 million employees with a payroll of $307 billion and sales totalling $3.173 trillion.  Congress will encourage merchants to diversify the size of US manufacturing from $1.5 trillion to over $2 trillion through a tax relief subsidy beginning in 2007 to foster ingenuity and self sufficiency as a nation.

[graph]Congress is currently considering raising the minimum wage by $1.50, from $5.15 to $6.65 per hour in three installments. Congress last enacted legislation in 1996, increasing the minimum wage by 90 cents from 1996-1997. The minimum wage was first enacted in 1938 as part of the Fair Labor Standards Act (FLSA). Initially just 25 cents per hour, the minimum wage has been raised several times in the decades since. In real (inflation-adjusted) terms, the minimum wage reached its peak in 1968, when it was worth $6.92 in 1998 dollars. Efforts to increase the minimum wage are generally supported by unions and liberal anti-poverty organizations, who say it will help the nation's working poor. A full time minimum wage worker makes just $10,712 per year, half the poverty line.  Wealth by itself does not promote democracy if the wealth is controlled by the state or a small ruling elite. A resource-rich country can have a relatively high per capita gross domestic product, but if its natural wealth is centrally held and does not nurture an autonomous middle class that earns its wealth independently of the state, the prospects for political pluralism, civil liberties, and democracy are probably no better than in a poor country without resources. For wealth to cultivate the soil for democracy, it must be produced, retained, and controlled by a broad base of society, and for wealth to be created in that manner, an economy must be relatively open and free. 

Political rights are defined as the ability of a nation’s citizens to participate freely in the political process. This includes the right to vote and compete for public office and to elect representatives who have a decisive vote on public policies.  Civil liberties include the freedom to develop opinions, institutions, and personal autonomy without interference from the state. The ideal of free human beings enjoying freedom from fear and want can only be achieved if conditions are created whereby everyone may enjoy his economic, social and cultural rights, as well as his civil and political rights as they determine for themselves.  For trade and the economy to succeed the State must respect the inherent dignity and equal and inalienable rights of all members of the human family as the foundation of freedom, justice and peace in the world or people do not want to do business. Throughout the 20th century America has been a bastion of free market liberalism and democracy.  Until the third quarter of the century the US ran an international trade surplus however in 1971 a trade deficit manifested that was wrestled with in the 1970s after which time the nation resigned to a deficit that began to grow at an alarming rate in 1998 and the trade deficit is now nearly so large as exports. 

The fact that the international trade deficit is increasing and the liberal theory that that the market is reliant upon freedom from fear and want indicate that there must be an infringement upon the civil liberties obstructing the sale of American made goods.  This theory is vindicated in the timing of the first appearance of a trade deficit in 1971, the same year that Nixon embarked on the “war on drugs” against the criticism of the United Nations.  This theory is further reinforced in the way that the deficit began increasing at the time that mandatory minimum sentencing was first introduced.  It was not however until the Clinton administration reinforced mandatory minimum sentencing in 1996 that America gave up hope in American freedom and the trade deficit really began to be a problem.  Whereas freedom is generally accepted as the basis for economic success it is not difficult to imagine that the slave trade would harm international trade. Freedom is more than an economic theory in the USA, the enormous size of the slave trade and the corruption inherent in the traffic in humans make freedom a judicial dilemma of nearly military scope.  Freeing large numbers of criminally convicted people is clearly a danger to the safety of the communities where these people are released.  An even greater danger is presented by prosecutorial interest in crime as justification for prison slavery and finance. The US Civil War clearly shows that people are willing to fight and die for the irrational right to own slaves.  Congress must however unify the nation for freedom.  Congress must admit to the prison population problem and make progress regulating the release of nearly half of the US prison population.  Congress must make it clear that we are all for freedom and must support only laws that promote freedom.

Text Box:  [D]To improve the American economic situation freedom takes on new importance.  For economic success the principles of free trade will clearly need to be applied domestically to protect the market economy from judicial interference while networking merchants and manufacturers.  Congress will need to take responsibility for the resolution of trade disputes and not refer them to the judiciary.  In practice this means that federal trade regulatory agencies and corporations need to employ more economists and fewer lawyers because business disputes must not be referred to Court but should instead be resolved by the Chambers of Commerce, Congress and Executive Branch.  The role of the lawyer is exclusively that of defending the rights of the criminally accused while protecting society and they must not be tempted to neglect their job with the riches and luxuries of the market economy.  If successfully implemented the amount of corporate crime and misconduct, real and imagined, should dramatically go down because the companies will be regulated by agencies competent in business ethics and able to revoke their licenses.  Congress must provide oversight of domestic trade negotiations because it is from the legislature that all government spending comes from and subsidies, mostly in the form of tax relief, will be needed to prevent the price of goods from rising as the nation Buys American. 



Sanders, Tony J. Hospitals & Asylums. Buy American Goods. 46 pgs. HA-1-12-06.