Professional economists generally look for ways of improving labor productivity. And most economists would take a dim view of protectionism (and other market barriers). So you would think that the US transit industry, with its dismal labor productivity, is fertile ground for research, right?
Apparently not. Consider this “Research Brief” written by Dr. Jeanette Wicks-Lim at the UMass Political Economy Research Institute. Called How “Buying American” Can Raise the Job-Creation, the report argues in favor of greater Buy-America requirements for transit vehicles purchases:
How many jobs does the U.S. economy gain when manufacturers raise the domestic content of their products? This research brief presents estimates which show that, on average, when manufacturers fully source the components and subcomponents of their vehicles domestically they create at least 26 percent more jobs than manufacturers that only meet the 60 percent Buy America requirement.
What she fails to consider is that the 100% Buy-America vehicle will be as much as 2x more expensive. It will also be much less reliable, and take years to custom-design.
That extra expense is an opportunity cost. Billions of dollars is being wasted that could go towards expanding the transit network, or running more transit service. Those things provide jobs too. As well, the overall economy would see benefits from have more extensive and frequent transit service.
Systemic Failure 
I saw this a few weeks ago and, if you look in the comments at this post, you’ll notice that it seems like every commenter other than me was a member of the Jobs to Move America coalition. http://www.nationaljournal.com/policy/insiders/transportation/mass-transit-buy-america-and-the-economy-20140113#comment-1202199781
I made the same point, but they don’t really seem to care about spending the money efficiently.
At this point, I’ve resigned myself to the realization that economists are essential grease for various systemic failures in general, and that the “discipline” is as much in need of a revolution as the FRA. Microeconomics is fine, but macroeconomics is riddled with golden calves and faulty premises (and in some casts, flat-out contradicted premises), the structures built upon are, at best, wanting, and at worst, little more than glossy mathy enablements for our current (and breaking down) finance status quo, and the practitioners all seem to be engaged in unending quasi-religious crusades between what appear to be at least two major intractable dogmatic positions. It is a major vector for disciplinary decadence, and despite its excessively burnished reputation, if you crack it open you’ll see that when it comes to actually doing science, it is a joke. Better science comes out of anthropology. And to put the cherry on the cake, the last time good new blood infused the discipline, it was Keynes himself–after a century when economists added relatively little to Adam Smith’s core insights, and in fact managed to perpetuate most of his mistakes. (This is in stark contrast to the trajectory of post-Darwin biology, say, or post-Einstein physics, or post-Pasteur pharmacology.)
If you want to find systemic failure on a truly grand scale, just take a look at the economic literature. Oftentimes ironically funny, sometimes jaw-droppingly depressing in the sheer wrongness, and only very very very very very rarely anything remotely approaching insightful.
A point not mentioned is that we don’t (or shouldn’t) build transit systems simply for the purpose of creating jobs during the construction or procurement phase, but for the economic benefits that the improved mobility of the new system provides. It is during the operational phase that the primary benefits accrue. In fact, building something just for the purpose of providing temporary employment is just “make-work”, both wasteful and inflationary.
Just think how many more jobs would be created if each US transit agency operated its own local iron ore mine, steel mill, tool making shop, semiconductor fab, hydrocarbon cracker, nuclear power plant, sewage system, cotton plantation, textile mill, school system, concrete plant, etc.
Dr Jeanette Wicks-Lim is really on to something. World Class!
As a graduate of UMass Amherst, where the Political Economy Research Institute is located, I would like to apologize for this on behalf of all intelligent human beings.
We need to require all transit agencies to purchase only vehicles assembled using hand made whitworth nuts and bolts. Just think of all the lathe operators and lathe manufacturing jobs that would be created. And the lathes that you would have to built in order to built the lathes that would build the lathes that thread our USA nuts and bolts. I just had a job creation in my pants.
Oh, protectionism is fine… it encourages national resiliency and lack of dependence on foreigners.
The problem is that this is SECTOR-BIASED protectionism. There’s no Buy America requirement for automobiles.
The traditional way of doing protectionism is the flat, blanket import tarriff on all goods. This works a lot better.
And Steve S.? Standard microeconomics is GARBAGE. It’s as bad as macro. Supply curves, one of their core ideas, are a myth; they don’t exist. Advertising and marketing are ignored. Experimental results are disregarded.
There are some live branches of economics with actual research, including experimental economics, econometrics, practical finance, environmental economics, and a few people studying institutional organization. Micro is not one of the live branches.