"Buying American" is anti-American

Buying something that is made in the US _just because it’s made in the US_ is bad for the US. And if you’re paying more to buy patriotically, it’s bad for you personally. It seems like it’s a good idea to help your fellow Americans to buy products they make, and it _is_ good for _those_ people, but it’s bad for everyone else in the country. Trade with other countries helps the US prosper.

Imagine you want to buy a product and have a choice of one made in your country and one made in another country. Assuming that both are of equal quality (or good enough quality for your needs), you should buy the cheaper one, regardless of where it’s made. If you buy the one made in the US, you pay more, leaving less money for you to buy other things. Having less money is bad for you. It’s also bad for the US because you didn’t give any money to the people in the other country.

How can giving money to another country help the US? The people in the other country are just like you, they need products too. The money you send to them when you buy things allows them to buy American-made products, if they choose. If a US company produces the better product for them, the Americans who make that product profit.

Why do we need the other country to buy from us? There are 6 billion people in the world, i.e., potential buyers of American-made products. There are 300 million Americans, that’s 5% of the world’s consumers. If America doesn’t sell products to the rest of the world, every American needs to spend 20 times more on American-made products than they do now. If you have 2 TVs, you need to buy 38 more (assuming you can find an American-made TV). If you buy a case of Coca-Cola a month, you need to buy 20 cases per month — if you can’t drink that much, just pour it down the drain and be happy that you’re helping the employees of Coca-Cola you’ll never meet. You have to do this for _every_ product you buy. Americans simply can’t do that any more than the people in other countries can do that. So we do need other countries to buy American-made products.

What if we buy foreign-made products but the other country doesn’t play fair and refuses to buy from the US? Even better! This is called a “trade surplus” in your country (your country exports more than it imports) and a “trade deficit” in the other country (their country imports more than it exports). A trade surplus is good for your country for the same reason it’s good for you personally: if you received (imported) more goods than you paid for (exported), you’d be pretty happy. Obviously, it’s in the best interests of the other country to get something back when they send something to your country, so they will buy from US companies too.

And if they still refuse to trade? Technically, trade is not about exchanging actual products, trade is done in money. US dollars are given to the other country. If the other country takes the dollars but doesn’t spend them, they are essentially burning the pieces of paper the dollars are printed on. Less dollars in existence makes you wealthier because each of your dollars are worth more than they used to be. So if we take their products and give them money they don’t use, they’ve been cheated, not the US.

But they will just exchange dollars into their currency and they’ve still cheated the US, right? They can’t do that. Exchanging currency is not magic where one currency is transformed into the other. When you exchange currency you are selling one currency and accepting another currency as payment. If no one wants the currency you’re trying to sell, it’s worthless, just like trying to sell anything that no one wants. If they are refusing to buy American-made products, dollars don’t help them so no one will want dollars because there’s nothing they can buy with them. So dollars are worthless to them in that case. Once again, they’ve essentially burned the dollars you gave them, which makes you wealthier.

So if we trade with them, they will trade with us.

What about the dangers of making other countries wealthy enough to threaten us economically and/or militarily? This is one-sided thinking. The belief here is that money goes from your country to the other country but money never returns to your country from the other country. As I explained above, that won’t happen. Well, it won’t happen unless the US makes lousy products that people in the other country don’t want. But if US companies continue to make products people want, the US will be fine economically and, thanks to taxes, militarily as well. So the companies in the US have to compete. What’s new about that? Competition makes you stronger, lack of competition makes you lazy and weaker. Buying American-made products simply because they’re American-made makes America lazy and weak.

8 thoughts on “"Buying American" is anti-American

  1. When a country like the US is held to a higher standard than most of the other producers around the world it is nearly impossible to compete both in and outside of American shores. A fair wage, safety in the work place and reasonable weekly work hours is an American standard that does not come without a cost. The Communist and Fascist manufacturing markets are able to dictate lower wages, longer work hours and dangerous work environments with a resulting lower retail price to the consumer. Introducing a less expensive product to the consumer has a short lived gain with long term risks. Do we all forget lead paint in children’s toys or the Chinese manufacturer of a heparin ingredient that may have cost several deaths due to inadequate systems for ensuring safe production of the raw materials it uses. The Food and Drug Administration recommends disapproval of any new applications listing that company. I am sure we all know the power of American legislation on foreign shores.

    A simple corporate name change or properly placed political pressure by foreign powers will make the FDA and its recommendations go away. The risk of penalty is virtually nonexistent for a foreign manufacturer and the risk does not outweigh the gains. Fair trade, I don’t think so.

    Unless we support our industry thru providing a honest pay wage for a full days work and make our government penalize foreign industry for not honoring trade quotas we will continue to be priced out of the world market due to these thoughtless Governmental trade agreements or poorly negotiated Union contracts. Our fate is virtually sealed. When trying to deal with foreign markets an American manufacturer has to deal with the following barriers:

    High Tariffs, Unreasonable customs, corrupt testing agencies, bribery, unreasonable labeling requirements, theft of Intellectual property, mandated higher wages.

    You can not continually send US dollars out of America while less dollars are coming in, the pot will soon empty. Small business’s that have to deal with the Chinese manufacturing powerhouse don’t have a chance of survival. Big business that have to deal with unreasonable union contracts and unfair trade policies don’t have a chance. Dealing with policies inherently designed for the demise of American industry is sign of the times. It is time read the sign and for the American Government to stand behind the American employer and employee. Unless this happens we will be reading our epitaph, “Not Made in America”.

  2. You seem to think that forcing US employers to pay higher wages has no consequences. Higher wages mean the products cost more, which means they sell fewer, which means the company makes less money, which means they either pay lower wages, have fewer employees or go out of business (which causes 100% job loss).

    You are essentially arguing for protectionism. I know of no economist who thinks protectionism is a good idea for anyone. It sounds good in the same way that eating a lot of food and not gaining weight sounds good. That’s not possible even if the US government mandated it.

    America needs to compete with better products, higher-quality products and new innovative products and it must do this _constantly_. Trade laws aren’t going to keep America’s economy going strong when the rest of the world refuses to play by our rules. America will be the one left out in the cold.

  3. Troy, You seem to jump to conclusions, as I stated “fair wage” … That is a wage that is both fair to the employer and employee. Today however “poorly negotiated Union contracts” are often one sided. They force an employer to pay $50-$75.00 per hour to a person worth 1/3 to one half that wage. These contacts secure employment till death or until retirement. The result is, it impossible for the employee to be held accountable. This often fosters a poor work ethic and in turn quality suffers.

    Protectionism- no! Accountability – yes! If you live in the real world and you deal with these foreign markets you might realize that many of these markets are corrupt. They readily steal American technology, disregard trade agreements, have an inexhaustible labor force and encourage sweatshop environments. All these factors only make our manufacturing costs higher and theirs lower. You can have all the innovation you want, innovation comes with a cost of development and once the technology is stolen your investment is lost.

    When American employers disregarded workers rights the American union was a necessity. A necessity that has outlived its usefulness. The American government addressed this problem. Now all workers are protected both Unionized and nonunion workers. Will you see this in the third world and foreign markets? I say not anytime soon. Why, because employees don’t have a voice, wages are stable and as a result prices will always be lower.

    The economics professors and economists should try working in these markets prior to being allowed to educate. Their policies over the past 40 years led us to where we are today. To promote foreign trade while selling off American manufacturing is a policy destined for failure.

    America has to redevelop its American owned manufacturing base and not rely solely on technology or service. Governmental support during this rebuilding is essential, it must protect it from unnecessary unionization, taxation and foreign intervention. In this way we will be able to be able to compete in the worldwide market.

    Governmental policy promotes foreign investment and foreign trade all the while they are forcing Americans out of business thru high tax’s, regulatory laws with the list going on endlessly. If you are penalized for making a profit in an already struggling economy and not working with the same margins as your foreign competition you are left out in the cold with Uncle Sam kicking you out the back door and while holding the front door open for foreign industry.

  4. For wages, how about using the free market to determine wages rather than have labor unions and negotiated wages? Nobody can determine a “fair wage” for anyone, the free market is the only way to do that.

    Can you give an example of a foreign market that stole American technology (are Americans allowed to steal foreign technology?), disregarded trade agreements, have an inexhaustible (they have an infinite population?) labor force and those that encourage sweatshops? Bear in mind that “sweatshops” are bad by US standards, but they’re wonderful by 3rd world standards — those people have to start somewhere on the road to prosperity.

    Yes, the policies of economists have led us to where we are today: an economic superpower. 😉 Just because it isn’t perfect doesn’t make it bad.

    I disagree that America needs to redevelop manufacturing. Manufacturing is gone forever in the US, we need to get over it and focus on creating higher-wage jobs. If it’s not a robot taking over manufacturing jobs, it’ll be lower-wage people in less-developed countries. This is good for America (see paragraph 4 in the original post). Trade makes everyone prosperous. That’s been well-understood for hundreds of years.

  5. Troy, I would love to see a world that lets the free market determine wages. That dream was lost with the Big Brother attitude of the modern socialist American Government. But that is another issue for another time.

    Please don’t insult our intelligence with flippant remarks like:

    (are Americans allowed to steal foreign technology?)
    Or
    (they have an infinite population?)
    Well the Chinese workforce in 2005 was 776,047,410 (is that 3/4 of a billion?) In my mind YES
    vs.
    American Total population in 2008 is 304,059,724. (That’s our total population = 2 their workforce)

    “sweatshops” are bad by US standards, but they’re wonderful by 3rd world standards
    Are you crazy – do you know what a sweatshop is or did you think I wrote sweetshop?
    I guess you think that human rights are for those that know what they are!

    You ask for examples of foreign industrial and economic espionage, I recommend you read the National Counterintelligence Executive’s report to U.S. Congress from February 2005.

    A few examples the non – existent illicit actions from abroad follow:

    Corning Inc. – 2005 (PicVue Electronics, a Taiwanese Corp. Illicitly acquired intellectual property for (LCD Flat Panel Glass)

    Avery Dennison’s Concord, Ohio – 1997 (Four Pillars Enterprise, a Taiwanese competitor targeted, their research facility, and stole Avery Dennison’s intellectual property.)

    Cleveland Clinic Foundation – 2001 (Takashi Okamoto and Hiroaki Serizawa were indited for the theft of intellectual property, then they provided the stolen research to a research facility owned by the government of Japan.)

    Citroen and SigmaTel – their patented methodologies were misappropriated by Chinese competitors and used in products marketed in China, so that, in effect, they ended up competing against their own product.

    Whether Chinese, Japanese, Taiwanese or Governmental theft they all had little or no research costs associated with development, the products were made available at a price considerably lower than the company that owned the patent could possibly afford to offer due to developmental costs.

    These are the areas typically targeted:

    Semiconductor production processes
    Computer microprocessors
    Software
    Proprietary information
    Chemical formulas
    Information systems
    Military production processes and communication systems
    Aeronautics
    Electronics
    Armaments
    Energy materials

    Now back to your questions…….

    We are an economic Super Power?

    Borrowing how many trillions of bailout dollars from China to shore up a defunct Banking system, Auto Industry and housing market. How is that super…?

    Just because it isn’t perfect doesn’t make it bad.
    It doesn’t make it right either!

    Higher Wage Jobs, supplied by who and when will they be available?

    Do you expect the government to supply these jobs?

    Do you expect the private sector to develop this only to be taken by excessive taxation?

    “Trade makes everyone prosperous”
    Trade makes only those that have a product you want prosperous.

    I have a bag of air do you want to trade for a bag gold?

  6. I appreciate your posting comments, although I have no idea why convincing me about your economic and political beliefs is important to you. I’m not going to waste any more time on this with you. You clearly have little understanding of economics and just seem angry at the current world economic problems.

  7. Troy,
    Sorry, to ruffle your feathers! Convince – no, Understand – yes…… I saw our discussions in a totally different way. Totally enjoyable. I hoped you would convince me why all the facts I related showed us a different fate. Instead you call me angry and lacking understanding. Opinions differ, understanding makes us grow. You quoted, I debated – you asked , I answered and you walked away. In life you can not walk away, stand up for your views, understand your views , believe your views. Don’t just be a follower, become a leader. Convince the listener and yourself why you feel the way you do. There is no better teacher than life itself – much of “our” discussion is my life experience not politics. I hope you have a long life, always question, always grow

    Cynical – yes Without hope – no.

  8. You say things like the US is not an economic superpower, you quote population statistics as a measure of workforce (according to you, if I have 10 kids, I’m guaranteed to be wealthier than the person with only 5 kids), you say that we’re borrowing money from China to pay for our stimulus package, you don’t understand that wages are just the price of labor and the free market determines the price of everything and you don’t understand how trade works when you say “Trade makes only those that have a product you want prosperous”. These things tell me you don’t have even a basic grasp of economics.

    You talk about human rights with regard to sweatshops, you equate improving technology to stealing technology and you claim capitalism is not “right”. These things tell me you are angrily trying to cast morality on economics. You are too short-sighted to realize that all economies, even powerful ones, go through cyclical downturns (as well as upturns). You are the type of person who in the 1970s high inflation, 1980s banking crisis and high interest rates and now in the 1990s/2000s bubbles-bursting, cries that the sky is falling and we must repent and see the error of our ways, only to be proven wrong again and again and again.

    You’re either trying to waste your own time trying to argue your brand of economics to a stranger on the internet or you’re trying to waste my time. Either way, I’m not going to engage with you. If you really cared about economics you’d have read a book or two about it. Or go to talk to an Econ 101 professor, they will steer you straight and have more patience than I do for your ignorance. If you think you know more about economics than economists then go write a book yourself and if your theories that go against all economic schools of thought are correct, you’ll win the Nobel Prize in Economics. (Yeah, I know, no publisher is smart enough to publish your book because it’d blow up the corridors of power in this country because the world isn’t ready for your wisdom.)

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