Surely you'll do some more fact-checking. The difference is 23% when all other price considerations aren't taken into account-- transport, levies, ect.--but after due diligence, the difference is actually lower. So there.

Yeah! Let's hear it for California and all those steel workers that can feed their children and buy houses. Not to mention the steel mills that will still be open next time we need to armor our humvees. Ever heard that praise "penny wise and pound foolish." That's you buddy.

???
Dan - maybe it's time to strat charging people for their comments.

BTW- Saw your "NAME" on that blue poisci mag on the top left shelves at the (Your state's Name here) B&N. Which I knew about, but forgot.

Congrats - that must feel pretty OK, huh?

Outsourcing of 500 professors will save University of Chicago, and presumably poor student parents, $100M/year.

Surely there are 500 mediocre professors there, no?

UC is failing in its duty to the students by not outsourcing teaching hacks.

“Outsourcing of 500 professors will save University of Chicago, and presumably poor student parents, $100M/year.”

You have provided a very poor example. Although there are some instances where long distance teaching occurs---most of the time the teacher does best when interacting one on one with the students in the classroom. Some jobs simply cannot be outsourced. How does a barber cut hair over the Internet?

Outsourcing humor via Mr. Sun:

Andrew Wojtanik won the National Geographic Bee. I believe he took first by giving the correct answer to the question, "where are all America's jobs located?"

See link for answer:
http://mrsun.us/2004/05/way-to-go-andrew.html

"Yeah! Let's hear it for California and all those steel workers that can feed their children and buy houses. Not to mention the steel mills that will still be open next time we need to armor our humvees. Ever heard that praise "penny wise and pound foolish." That's you buddy."

Why don't require people to vacation only in the US. After all, a lot of American dollars are going to foreigners that could provide jobs in US tourist locations. Or, let's just eliminate trade altogether and keep all our money at home. people working in tourist traps to buy new homes.

>"Yeah! Let's hear it for California and all those steel workers that can feed their children and buy houses. Not to mention the steel mills that will still be open next time we need to armor our humvees. Ever heard that praise "penny wise and pound foolish." That's you buddy."

>Why don't require people to vacation only in the US. After all, a lot of American dollars are going to foreigners that could provide jobs in US tourist locations. Or, let's just eliminate trade altogether and keep all our money at home. people working in tourist traps to buy new homes.

Yes, there is nothing like completely and totally ignoring someone's point to win an argument, is there?

Aren't there already cases where teachers teach via a two-way video connection? Together with digital homework, the teacher wouldn't have to be there at all. Even some students could be located "remotely."

Also, the "extra" millions spent on the steel stayed here, rather than going to, oh, I dunno, pay for this.

California has incredibly eclectic procurement policies. The Buy American steel at least from what I understand is really not the major cost driver instead it it things like the prevailing wage law (Union driven) and worker's comp costs which are just now starting to decline.

Can someone tell me since when buying "foreign steel" counts as "outsourcing"?

Actually, turns out behind "the state of California's anti-outsourcing procurement rules" (as Dan Drezner writes) is really the "Buy American Act", which is a FEDERAL law that dates back to at least 1954:

http://www.arnet.gov/far/current/html/Subpart_25_2.html

See also this Canadian page which explains to Canadian companies the obstacles involved in bidding on US highway projects:

http://www.dfait-maeci.gc.ca/sell2usgov/buyhighwayreport-en.asp

Surely you will correct this, Dan?

"Surely you will correct this, Dan?"

When hell freezes over.

Establishment hacks are never wrong. They get their opinions from morning NYT.

Something is wrong here. The current price of steel is about $500/ton. Even if the foreign steel were *free*, the $400MM number would work only if there were 800,000 tons of steel in the suspension tower. And if the price difference were $100/ton (25%), there would have to be four million tons of steel in the tower. No way.

Also, the "extra" millions spent on the steel stayed here, rather than going to, oh, I dunno, pay for this.

Uh, the "extra" millions spent on the steel would have stayed here if the Indian steel were bought, too. Better yet, it could have stayed with the people who actually earned it, instead of being taken by the government and given to overpaid American steelworkers.

Dan,

Thanks for including the update. You ask

"One wonders, however, how the cost differential of 25% was determined as meeting the "unreasonable cost" standard."

The answer appears to be in here:

http://www.fhwa.dot.gov/programadmin/contracts/buyamgen.htm

As the first paragraph points out, there are actually two different "programs". The program that actually covers steel was apparently only created in 1982 and revised in 1991. There is a provision for a waiver application, but one would have to research how likely it is that such a waiver would be granted by the FHWA.

David Foster: Very good point. The original Bay Bridge used 152,000 tons of steel, see http://www.zpub.com/sf/history/sf-bay.html.

That times a $100 price difference comes to around $15 million extra cost due to the "Buy America" program. Even if they used more steel for the new construction, it's hard to see how they could possibly arrive at 25 times that much in extra costs.

But the $400 million difference has also been reported in other articles - one even claims it's $500 million. This article does, too, but then it goes on to say that Californian officials are actually trying to get out of having to use US steel so that they can save the money after all!

http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2004/05/28/BAG546TEO91.DTL

Even though the SF Gate article appears to have newer information, the LA Times article is dated one day later, so who knows what actually happened in the end...

In any case, the two bids were actually submitted by the same set of companies as a complete deal, including the steel, so it's not as if California would be buying the steel on the market for $500/ton.

Makes one wonder whether the companies knew of the 25 % regulation and increased their "use American steel" bid by just under 25 % over their actual costs to take "advantage" of the "Buy America" program.

Doesn't it? Hey, this could be a real scandal. :-)

Not to mention the steel mills that will still be open next time we need to armor our humvees. Ever heard that praise "penny wise and pound foolish." That's you buddy.

Nonsense -- U.S. steel makers are capable of competing on price, especially when they're forced to because of, um, competition. Insane policies like buy America rules actually make our steel industry weaker by reducing the need to make steel plants as modern and as efficient as possible. By your logic it would make sense to strengthen the auto industry with government rules shielding them from the Japanse (yup, that would sure strengthen the industry!).

Uh, the "extra" millions spent on the steel would have stayed here if the Indian steel were bought, too.

Explain please. If I buy a tandoori chicken from India, my money goes to... India. If I buy same tandoori chicken from U.S., the money will presumably stay here in the U.S. Even if the Indian chicken costs $1 less, some might consider spending the extra $1 on the U.S. version is better.

There is no defense of "Buy American" policies. Protecting the steel industry (or any other) through penalizing everyone else who must buy that steel keeps no more wealth in the nation. Wealth is about productivity, not allocation or consumption. If we are keeping our steel industry in diapers we are not allowing those workers and the capital they work on to create maximum wealth. Simple example: lower tarriffs and U.S. auto manufacturers become more competitive and hire more,... ex steel workers?

The most patriotic thing you can do is buy best product. If you are worried about armor plating your humvee, don't. If someone threatens our steel supply our brave forces will see to it that the threat is removed and someone will cry out "It's all about steeeeel!"

The issue about armor plating humvees is a serious one and should be treated as such. During the Iraq war, a Swiss firm refused to deliver a JDAM component on grounds of "neutrality." It is not unreasonable to ask whether certain strategic technologies should be maintained at some level in the US as a matter of policy. Also, defense contractors and subs should be required to include very strong language in their contracts with suppliers (US and non-US) to the effect that supplies will not be deliberately withheld, and providing for very high liquidated damages in the event of such withholding.

Explain please. If I buy a tandoori chicken from India, my money goes to... India. If I buy same tandoori chicken from U.S., the money will presumably stay here in the U.S. Even if the Indian chicken costs $1 less, some might consider spending the extra $1 on the U.S. version is better.

The comment was responding to a comment about the extra money. If American chickens cost $6, and Indian chickens costs $5, and you buy the Indian chicken, then the $5 goes to India, but the extra $1 does not.

A suspension bridge over a mud flat just for the sake of vanity already will cost about a billion dollars more than it should.
Liberals have already outsourced California's lumber industry, our oil industry and our electrical industry, so what is another basic commodity?
Incidently, nations that pull that neutrality crap should pick up a ten year ban on contracting with us.

David Foster: "It is not unreasonable to ask whether certain strategic technologies should be maintained at some level in the US as a matter of policy"

I'll give you "should be maintained" with caveats. Hamstringing up our economy, i.e. our source of strength, can't be included in that. Nationalizing, in any degree, our steel, oil or JDAM production doesn't help us. I like the your suggestion of contracts that demand delivery. I don't like the implication that we should screw whole industries for reasons of strategic reserve. Better to actually create the reserve. For example we have strategic reserves of steel, ammo, and wheat. Perhaps we need to have more. As in WWII, we can beat our plows into swords if we need to in a hurry.

And yes, I know our Shermans were inferior to their Panzers and that was partially due to our lack of metal reserves. So *do* need reserves. We *don't* need a Soviet-style permanent military economy. Our military is strong today because we are a free country, not because we are an isolationist self-contained walled garden-- we aren't and we become one at our own peril

Walter re: Ten Year Ban

I agree some sort of reprimand is in order. You are with us or against us - there is no neutrality.

Re: Outsourcing of professors.

This is a bad example. You do not _need_ to outsource teaching, since labor is mobile, and American universities now basically can recruit globally.

I am not sure what the percenetage of foreign born professors at Chicago would be, but it is probably higher than most industries. An American universities benefit in return.

For the consequences of protection of nationals in academia, look no further than Canadian universities, where it is very difficult to higher anyone who is not a Canadian resident. And Canadian universities suffer as a result.

David Foster: "It is not unreasonable to ask whether certain strategic technologies should be maintained at some level in the US as a matter of policy"

The problem with that argument is that everything is strategic at some level, and the decisions will end up being political, not military. (Hello, mohair!)

A reader from a university - (not Chicago) writes:

"Re: Outsourcing of professors.

This is a bad example. You do not _need_ to outsource teaching, since labor is mobile, and American universities now basically can recruit globally."

A good full prof in India costs about 10 times less than a junior prof like Drezner costs for UChicago. If UChicago would be like regular for-profit organization, they would have fired Drezner and brought in 5-10 Indians on freed money or, better still, established campus in India for full tuition paying American students.

As UChicago is a monopoly of sorts, they don't give a damn, goverment money and tuition hikes make up the difference.