The Stupidity of "Buy American:" The Case Against Economic Protectionism

[ronny]

There are two issues at work here. One is the "global economy" thing, which, in and of itself, ain't a bad thing.

The problem is the second issue, that being that the "global economy" thing isn't allowed to work. The U.S. of A. has an economy which is artifically hand-cuffed by a massive regulatory system. It's incredibly difficult today just to try to start up a business, and that's just the beginning. The EPA and all the little EPA-wannabees restrict American manufacturers at every turn.

Until government learns it's place and begins to work to help American industry, we're gonna be in trouble. In the meantime, I'll do everything I can to buy American. I tried to buy a KelTec PMR-30 today, but I didn't have enough money. Rats.

 

[Glocktogo]

That's not a muscle car; it's a sports car. Nice try though.

Not a sports car, it has a functional rear seat. With 530hp & 488 lb ft of torque, it could qualify as a musclecar. Technically it's a 2 door coupe just like the Stang, but you're partially right. It's probably more correctly a grand tourer. Musclecars tend to only do well in a straight line. The GT-R does well in every respect. Better than it has a right to, considering the price point.

I say that having owned two Mustang GT's and a Trans Am.

 

[Glocktogo]

Muscle car? Speed limit is 70 mph in Oklahoma. What's the point? I'd rather have somethin' that got me better MPG so I can spend that money on somethin' I can really use....

These days you can get it all in a car. Speed, handling, breaking AND decent mileage. My 96 Mustang GT convertible routinely got 25mpg. So did my 03' Vette convertible. My WRX actually only gets 23-24, but that's partially due to the AWD system, which gives it insane roadholding and excellent winter driving characteristics (my wife would rather drive it in the snow & ice than our 4WD 4Runner). She's getting 30mpg in her IS 250, which isn't a musclecar but is reasonably quick. I'm getting 25.5 right now in a 342hp GS 460. Those are all observed, not what some lying EPA sticker says. I've found that depending on driving style, sometimes the car with a lower EPA rating will have better observed mileage. It's all about torque, driveline efficiency, final drive ratio, coefficient of drag, gravity, telekinetic strength of the driver, solar wind, and pixie dust.

Seriously, considering how much time I spend in a car and how much I like to drive, spending a little extra for a car that does most everything well is definitely something I can use.

 

[-Pjackso]

As (few) others have stated, I disagree with the article.
Although, the article is more applicable if you define the 'perspective' of the reader.

Perspective:
1) THE INDIVIDUAL. (i.e. economic level 10 ft level)
If the intent of the article is to maximize the buying power of the INDIVIDUAL, then buying cheapest is best. Usually cheapest is foreign. The money saved allows you to purchase more products, (and if buying more cheap products) allows you to purchase more foreign products. You start with 100% USA dollars (in your pocket), and spend it on foreign products (now 100% in foreign profits). Where does all the foreign profits go? ...well that's a discussion for itself. Does it employ American jobs? maybe. But only until it's cheaper to move somewhere else. wages/taxes/tariffs/transportation.

2) The COUNTRY (USA). (i.e. economic level 10,000 ft level)
From the country level, the intent is to generate wealth (from service, manufacturing, etc). Let's limit the discussion to manufacturing products. Manufacturing is a stable means for employing average people to produce wealth (via. products). There are other ways to produce wealth (i.e. service), but I don't think you can use the 'service' model to employ the shear numbers of average people. So from a 10,000 ft level, the USA contains a number (X) of manufacturing jobs, which generates wealth in the USA.
If the article is encouraging average people to only buy cheapest products (which happens to be foreign), then who's buying the USA products? If fewer people buy USA, then the manufacturing base shrinks - and employment shrinks.
How does the manufacturing base stay in the USA, with the severe imbalance of worker wages, benefits, safety, and taxes?
Or to state it differently, how does the WEALTH base stay in the USA? I don't have the answers, but the FLOOD of CHEAP import products doesn't help.
...Am I against cheap? No.

At a minimum, I would recommend a balanced trade deficit across the borders. This would at least stop the financial bleeding.
Would it be car for car? No. It could be total wealth exported vs. total wealth imported. If there's a imbalance, increase/decrease the import tax until it's balanced.
That would force a higher tax onto the imported products, which makes exporting JOBs less attractive to companies, and would encourage producing INSIDE the USA. (foreign or American companies)
But just like the annual budget, the USA/foreign trade balance should be balanced annually.


Am I against foreign products? No. Do I like cheap prices? Yes - but at what costs?
I am against EXPORTING ALL THE USA WEALTH, which this article is definitely encouraging.
I'm fine with a fair combination of USA and foreign products.



http://en.wikipedia.org/wiki/Balance_of_trade
http://www.census.gov/foreign-trade/statistics/historical/

 

[Twmaster]

This ^^^

+1

 

[JD8]

If you don't buy America...... the terrorists win.

 

[vvvvvvv]

Yep, even though I think the Toyota still had a GM 350 in it, I think, which I thought was kind of funny.

Nope. All the makes run their own 358ci engine design. They are based on a Chevy small block 350, but Toyota engines are different from Chevy are different from Ford are different from Dodge.

Also, in most years each make has two engine designs actually approved. The old "legacy" version that the underfunded teams tend to use, and the newest version that the well-funded teams develop and use.

I'll be the odd-duck OSA'er then. I have not set foot into a Wal*Mart since March of 2003.

If you've been to Target, K-Mart, Best Buy, et al, then you've spent your dollars the same as everyone who goes to Wal-Mart.

Muscle car? Speed limit is 70 mph in Oklahoma. What's the point? I'd rather have somethin' that got me better MPG so I can spend that money on somethin' I can really use....

The speed limit is just a cut-off point for a tax exemption. Assuming I drive 80MPH on I-40 every time I travel to OKC, I'll save ~22 minutes per trip. Six trips to OKC without a ticket, and I break even because of billable time recovered. Anything above that and I'm making a profit.

 

[Twmaster]

If you've been to Target, K-Mart, Best Buy, et al, then you've spent your dollars the same as everyone who goes to Wal-Mart.

V-M... Nope I don't shop in those Whores, er I mean stores either.

 

[JaredC]

Toyota doesn't make muscle cars and my Shelby GT500 was assembled in Flat Rock, Michigan.

Assembled being the key word. I would bet most of those parts used to "assemble" your car were made else where.

Its funny, America prides itself on being a Free Market economy, but when people use that freedom to buy more competitively priced products that are made elsewhere, people ***** and moan.

Want me to buy American? Price it competitively. Simple as that. Im a plumber, and cant remember the last time I bought US made iron pipe for gas jobs. Its about 2x the price per foot. I use American made pipe, I either make less money on a job or simply dont get the bid because Im higher than the other guy using foreign pipe. So put it simply, I buy American, sure I support an American worker in a factory somewhere who is probably over paid and before too long Im the one out of work. Sure the US pipe is easier on my dies when threading, but the difference isnt enough to make my dies last longer.

The quality on alot of foreign vs. domestic is minimal if there is a difference at all. Look at Winchester for example. There is a huge difference in the pre 1964 model rifles and the post. Both are made in the US, or at least were, but when they switched to an automated plant type of assembly quality suffered. However the price at the time was no different. Point is quality has nothing to do with where it was made, it is only based on the quality standards the company selling the product demands.

I would venture to say its impossible for someone to buy 100% American made in today's world.

 

[-Pjackso]

Want me to buy American? Price it competitively. Simple as that. ...
... sure I support an American worker in a factory somewhere who is probably over paid ...
The quality on alot of foreign vs. domestic is minimal if there is a difference at all. ... Point is quality has nothing to do with where it was made, it is only based on the quality standards the company selling the product demands.
I would venture to say its impossible for someone to buy 100% American made in today's world.

I don't disagree with you, although the American company is battling an -unfair- fight.
The (USA) gov has significantly higher safety measures in place to protect the worker. (OHSA, EPA, FDA, ..you name it.) All of which * SIGNIFICANTLY* improves our standard of living. The foreign companies don't have to absorb those costs, hence they can sell much cheaper. So the 'American-priced' products being too expensive has a lot more variables than just 'over-paid' workers.
If the American products has to compete with foreign priced products (at current unfair manufacturing costs), what options do we have? Do we all simply give up all our standard of living and digress back to foreign wages, foreign working safety levels, foreign pollution levels, and foreign living standards (etc)? I'd vote no.

I still think the idea of a balanced import/export trade would work significantly FOR USA.
In what ways?
1) For foreign products, it would significantly increase the effective price within the USA. This would be effectively a tax on 'unfair manufacturing advantages'. (emphasis on 'unfair') So the USA/foreign price gap wouldn't be nearly as great. Foreign products may still be cheaper, but that's ok.
2) It would help slow/stop the financial bleeding of the American WEALTH. We have been bleeding for decades, and it only seems to be getting worse.
3) Companies eliminate USA jobs and move overseas for the cheap labor and reduced worker safety/pollution levels. Then sell to the USA for ... *MORE PROFIT*. If the profit 'advantage' were significantly reduced (due to higher import taxes) - there would be less motivation to move jobs overseas.
4) The higher import tax would effectively slow importing into the USA and would force the USA to become more of a self-supporting economy. There would still be a global import/export trade - but it would be done on more balanced terms.
I think a self supporting economy is significantly healthier than an economy that DEPENDS on a third party (foreign) to survive. This would be a healthier economy, increase jobs (at all working levels), and in the end the USA would be significantly more self-sufficient.

As for the USA/Foreign quality of products, I'm not sure in either direction. Are you comparing Ford to Honda? Or Craftsmen tools to Harbor Freight tool? (You could cherry-pick your examples to support you side in either direction). Let's just not go there.
I agree, the USA products should always be trying to INCREASE the quality to maintain an advantage over the competition.

I would also agree that it's very difficult to buy 100% American products in today's world. But that's partially due to the -unfair- advantage the Foreign competition has over USA. Until the politicians are willing to stand up and take legislative action take action to level the playing field - I don't think it'll get any better.


As for USA finding funds to balance the budget, ...just look at the trade imbalance:
http://en.wikipedia.org/wiki/Balance_of_trade
http://www.census.gov/foreign-trade/...cs/historical/

Look at the Wikipedia graph (at bottom of page)
It's been over 400 BILLION dollars every year - for the last ten years! (40% of a TRILLION - per year) Yikes!
What happened in 1997? Every since 1997, The import flood-gate was wide open!