Baraka_Guru

Personally I think "Buy American" is a mistake, a knee-jerk reaction to a recession, a turtling to protect jobs that will likely do more harm than good. Nationalist economies are a thing of the distant past. Globalization is a reality we cannot ignore; our economies are co-dependent.

The Canadian backlash to "Buy American" is growing, but Americans should be concerned too. There are many employed in the U.S. to help with exports from Canada. What about those jobs? If the American market dries up in certain Canadian industries, so too would the job market for these export handlers. If Canadian companies are forced to do business elsewhere, they might not return if the new markets are found to be more lucrative (e.g. there is high growth potential).

Protectionism has its role, but this is not the way to use it. I can see reasons to help certain industries (e.g the Canadian culture industry), but to encourage widespread nationalist business across the board could be disastrous. It could drive prices up and shed jobs on both sides of the border, which isn't a good thing to happen during a recession, is it?

What do you think of "Buy American"?
Does it have short-term merit?
Does it have long-term consequences?

__________________
Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
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inBOIL

I think it has long-term merit when dealing with countries whose governments actively maintain a trade balance unfavorable to us (e.g. China), but it does more harm than good in the majority of cases. I can't see any benefit to restricting our trade ties to Canada, and the E.U., for example.

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Willravel

It's not very free market. When it comes to some products (cars), it's downright stupid.

Charlatan

We can look to what happened in the 1930 to see how protectionism made the depression worse for everyone.

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IdeoFunk

Precisely. It's beyond wishful to think that other countries won't put through policies that act as countermeasures to this. I know right now in Canada at least the talks are largely in favour of persuading the States to amend this provision somehow as opposed to adopting a similar provision. I really don't see how this is a sensible way of the US addressing its trade deficits with China.

ASU2003

If taken to the other extreme, where everything will be imported from foreign countries, what would be left here? Farming is done by a relatively small workforce now, banking should never have become as big as it did, same with real estate, health care isn't an easy thing to get into, and law school is just as tough. There is truck driving, home repair, and taxi driving but those jobs will be done by immigrants for a lower price.

All of a sudden we would become like India with a rich upper class and a poor bottom class that is poor for various reasons.

And there are things that are only made in America (aren't there still?). If the government bought those first, they would get back 40% or so in taxes (sales, income, capital gains, corporate taxes, etc...). The Americans who got paid for doing the work, would then buy products made in foreign countries. And this would improve the foreign economy, and then they may buy some products from another country, inside their own country, or even from the US. It is the whole velocity of money idea, that only works when the money moves through all sectors and all of the countries.

And the macroeconomic idea of outsourcing jobs that no one wants when unemployment is at 4%, starts to lose credibility when the unemployment level is 15%. Then it is all about the cheap labor.

And it all comes down to the inflation dilemma. The previous generation wants their investments/savings to go up and be worth more, but also want prices to come down to where they were when they were young. The only way to do that is to cut costs in the production. Labor is a big expense, as is natural resources used to make items. But, the other way is to take out the demand for the products. If no one can afford to buy things, the well-to-do people will be able to buy things cheaply.

raeanna74

I don't know how other's view the 'buy American' idea but what sticks out to me is that foreign products, especially those produced in China are inferior than American or other countries. This may not be the case but the issues with tainted dog food and tainted baby formula among other incidents that I can remember at the moment, tend to give the impression that Chinese products are more unsafe. Grated we've had our own foibles with Peanut products and spinach too but for some reason we tend to forget those problems more quickly. I don't really know why. Then there's my own personal experience that every product that I buy that breaks or fails early on in my ownership, inevitably seems to be produced in China. Granted I tend not to check the country of origin when the product functions without issues and there could be many that are also made in China. It's the problems that we tend to see and make a connection with.

I have a feeling that the economic 'isolationism' sentiment is partly steming from our awareness of product issues as well as the desire to encourage economic growth. Now how to fix it? I have no clue. All I can do is budget, work hard, and hang on tight until this recession rebounds.

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ASU2003

It might not always be the case, but the China examples (including lead paint on toys) show a willingness to cut corners and do things as cheap as possible to make more money or undersell their competitors (including Mexico & Taiwan). And they don't have the 'strict' environmental and safety regulations that American companies have to meet.

The American examples were accidents for the most part. It's true that they could hire people who get paid enough to live in cleaner conditions, or at least give them gloves, masks and Tyvek suits to isolate their bacteria and germs from contaminating the product (or maybe they do and one bacteria found it's way in).

roachboy

the central problem with this meme is that it's meaningless. unless what is meant by it is "buy from small-to-medium sized firms that do not operate on a version of just-in-time and which do not trade publically"---in which case there'd no be much in the way of consternation about effects--it means nothing.

for example, if you look at the GENERAL NOTES; GENERAL RULES OF INTERPRETATION to the us tarrif:

Harmonized Tariff Schedule of the United States

and try to figure out what exactly is and is not an import, it gets a little squirrely...

this link
http://www.intracen.org/tfs/docs/pub...s/ruleori2.pdf
takes you to a piece that tries to systematize various legal definitions of country of origin.

you'd think this would be simple.

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it make you sick.

-kamau brathwaite

Baraka_Guru

Interesting...the focus on China when you have this:


Source: World Trade Atlas * Merchandise trade, February 2009

That's right: North American trade? It's double the trade with China. Mind you, this is just merchandise, but you get the idea. And some of you were just talking about merchandise anyway. What about natural resources? Services?

This is bigger than China. This also affects North America, Germany, Japan, and "All Others."

As roachboy points out, this is a rather confusing thing they're trying to do.

__________________
Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot

shakran

Buy American has always struck me as a stupid notion, no matter what the economy happens to be doing. If you want me to buy American, then Americans should make quality products at competitive prices. You know. . The American Capitalist philosophy. In the 80's we used to get crap for buying Toyotas because "it's a goddamn Jap car. Buy American!" Fine. When Chevy makes something that's as good as this Toyota, I'll be happy to buy it. That's competition for ya.

And it's the same today. I am more than happy to buy American when American is what I want or need. Don't try to play legal maneuvering games to funnel me down the path of buying American. Tell the damned American manufacturers to figure out why people are Buying Foreign, and then adjust their products to become more attractive.

ASU2003

It's pretty simple, lots of people only care about price. And if the foreign product is $2 cheaper, that is enough. It doesn't matter that the US company had to cut pollution levels, pay 10x higher wages, pay the US Fed/State taxes, pay for health care, deal with the legal stuff, etc...

Then again, try buying an US made HDTV. There are a lot of products that have been eliminated because they couldn't get the cheap people who want to get the best deal, regardless of a bigger impact to the society they live in.

shakran

And yet Honda and Toyota sell so many cars, despite being more expensive to buy, and more expensive to get parts for. How do you explain that?

FuglyStick

Bias. I've posted links here before that refute the consensus that domestic autos are inferior to imports. Buy what you want, but don't claim it's because the domestics are an "inferior" product, because that simply isn't the case.

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ASU2003

Because the US car makers make as many cars as possible, put them on dealers lots, and then at the end of the year, they have to slash prices (which kills resale value). Honda and Toyota only make a car once you buy it. They limit the supply of cars into the market to keep their value high.

I'm not sure about the parts, but if there is a GM part and a 3rd party part maker competing in price against each other, but you only have one source to get the foreign car part, it will cost more because they know you will pay it.

Baraka_Guru

We're not just talking about cars here. We're talking about the steel, the parts, etc., that might come from outside the U.S.

"Buy American" isn't merely directed at end-user consumers; it's directed at business too. Think about the impact on business-to-business purchasing. Think about all the items that flow across the border before anything is even made.

__________________
Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot

Martian

It's my opinion that 'Buy American' is the kind of ill-advised blue collar reactionism that gives Americans a bad name within the global community. See also: 'The Trrists Win!'

It's not even feasible to implement. It's a massive headache logistically. It makes no sense at all.

American perceptions regarding quality are largely overblown in both directions. The only thing I'll buy solely because it's US made is a guitar.

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- Ben Harper, Show Me A Little Shame

shakran

Which proves my point. If Americans think something is higher quality, they'll pay more for it. So if you want me to "buy American" you'd best make damn sure you're making high-quality American stuff. Whether the superior-quality-of-Japanese-cars is currently true or not, the perception exists because it was certainly true for more than 2 decades. American car companies cheaped out on quality in order to save a buck, with the result that they made truly terrible cars when compared with foreign products. Perhaps there was some smug "aww. Americans will buy American!" thinking going on there, or more likely they were just stupidly seeking to maximize today's profit without consideration of tomorrow. Whichever it was, Americans noticed that while Japanese cars were more expensive, they also lasted longer, and reacted accordingly. This refutes the concept that Americans will always buy the cheapest product, which is what my Honda/Toyota post was speaking to.

roachboy

nostalgia: this meme is about nostalgia.
it doesn't represent a statement about consumption patterns.
it certainly isn't a statement about how production operates.

__________________
a gramophone its corrugated trumpet silver handle
spinning dog. such faithfulness it hear

it make you sick.

-kamau brathwaite

Charlatan

As I suggested elsewhere, the spirit the feeds this trend is the same one that feeds the urge to elect the BNP in the UK and has locals here talking about getting rid of foreign workers in favour of jobs for locals.

Bad economy means tougher times at home. This leads to looking for a scapegoat. Them damn foreigners are to blame. Why should they benefit at our expense? Send them home. Keep the money here.

You get the idea.

__________________
"My hands are on fire. Hands are on fire. Ain't got no more time for all you charlatans and liars."
- Old Man Luedecke

william

"Buy American"? Where can I buy an American built TV? Stereo? Radio? Microwave? Cell Phone? How about a blender? "Buy American" is a joke to me. This was the greatest country in the world, and we sold out. Quality gave in to profits.

Baraka_Guru

Just because Asia took away much of the electronics manufacturing, it doesn't mean the American economy is some kind of joke. And it's not that Canada produces these things either.

For the most part, the impact of Buy American affects companies involved in mining & smelting, agriculture, and other sectors of primary industries.

__________________
Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot

ASU2003

But we also didn't have massive trade deficits, workers you can't get a raise because there are 5 people willing to do their job for 25% less, massive increases in the amount of pollution because there are no limits on it, and a host of other issues.

If China and India were to buy American products instead of buying the cheaper knock offs, that would be part of it. But when your 'American company' consists on a few upper management in the US, and cheap labor overseas, the executives will make the money for the products they sell, not the workers.

Baraka_Guru

______________

Are you suggesting throwing good money after bad? If labour markets dry up because of cheaper labour overseas, that's a sign to shift into different markets rather than try to compete directly. You can't compete with Asian labour costs, so compete elsewhere. That's what the U.S. has done with the increases in the service and tech sectors. Pollution is another thing, but it has little to do with Canadian/U.S. trade relations in light of "Buy American," which is the focus I'm concerned with.

Nike and other companies that are more about ownership and marketing than manufacturing aren't the issue here. The issue is American protectionism as some kind of mechanism to make things better in the economy. This is not the way to do it. We don't have the same economy now as we did 70 or 80 years ago. We are globalized and are therefore dependent on world trade to meet our demands and to keep our supply side going. Protectionism is a threat to that. Think of all the Canadian farmers and steel workers who have to hear about this "Buy American" thing, all the while realizing that America is their #1 market. Also think of the people who help import Canadian goods—American workers. Also think of those in the industry who have to deal with increasing prices because of shifting purchasing habits that aren't geared toward the usual supply & demand price effects.

Protectionism does more harm than good, especially the way markets work today. There are already systems of tariffs and quotas in place, which is why we have NAFTA in the first place. An added social pressure to "Buy American" will only cause more instability in an already unstable marketplace.

__________________
Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot

Cynthetiq

really? but I don't see how this fits into the Buy Local for the whole conservation and green aspects. Isn't that about the same diatribe but yet that seems to be "just fine and good" since you're supporting the farmers and food growers.

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Baraka_Guru

The difference is that buying local is a growing trend, and the market will have to shift to accommodate that. "Buy American" is a shock to the system, where it is suggested to up and buy American goods and services as soon as overnight if you really could.

The other argument is that buying local wouldn't be as much of a concern if the transportation industry did better with efficiency, renewable sources of fuel, and emissions reduction/elimination.

Either way, "Buy American" will cause short-term problems and is a band-aid solution that might not even have a net benefit, while the "buying local" issue is a long-term challenge.

__________________
Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot

Rekna

Here is my semi-ignorant take on "Buy American". For consumers there should be no buy American requirement. People should be free to buy what they want. There should be no "Buy American" requirement on businesses. Businesses should be able to buy what ever products they want. Government entities should buy American whenever possible.

When it comes to stimulus funding I believe the buy American clause is a good idea. The point of stimulus money is to stimulate the American economy. I do not see a problem with requiring the government or businesses that receive stimulus money to buy American with any stimulus money they spend. The requirement should not extend beyond the stimulus money they receive.

Buy buying American we are ensuring that money is going directly to the US and not to the Saudi Royals or any other foreign entity. Much of that money will still end up in foreign countries but not until it at least goes through our economy once.

This is US tax payer money that is being spent to put American's to work. Personally I don't care if other countries don't get jobs out of this. If Canada is so worried about jobs then why don't they create their own stimulus program?

TUDelftstudent

It's pretty clear that if America cranks up the "buy american" idea too much, the rest of the world can easily do the same. The EU now has more citizens than the US so if they start to boycott each other it's obvious who will win. And I didn't even mention Asian countries.

Still, it might break the current trend which shows a steady imbalance in the income/spendings. For years, America has imported more than what's been exported, creating a debt. It can't go on forever

inBOIL

Your second paragraph directly contradicts the first. The impact one country has on another's economy depends on how much they buy and sell, not how many people they have. If all countries implemented isolationist economies, the rest of the world would lose production/jobs more than the U.S., although it would be a mess for everyone.

__________________
And you believe Bush and the liberals and divorced parents and gays and blacks and the Christian right and fossil fuels and Xbox are all to blame, meanwhile you yourselves create an ad where your kid hits you in the head with a baseball and you don't understand the message that the problem is you.

Baraka_Guru

Buy American deal paves way for EU trade pact - The Globe and Mail

It seems they've come to their senses regarding the Buy American trade protectionism. It's now a matter of whether it's too little too late, with regard to the stimulus spending and whether the money is still available. It appears there has been a problem with how the "protectionism" was actually impeding business. Imagine that.

__________________
Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot

ASU2003

I don't really want to bring up this again, but I got an ad in my mail about why buying from small local vendors is better for the community.

Charlatan

I just read that some members of Congress are proceeding with an action to see if they can get the US out of NAFTA.

While I think there is little chance that this will happen, I wonder if these protectionist sorts realize the impact of what they are suggesting vis a vis oil.

__________________
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- Old Man Luedecke

Daniel_

ASU2003: In a country as big as the US, buying "National" and buying "Local" are distinctly different.

If you're in NY state, you are reducing transport miles to buy from Ontario compared to buying from California, so in green terms it could be better to buy from abroad.

The ideas expressed in the thread so far include statements that China has forced the US to buy; which I love - China has not forced the US to buy, they've used the free market against you. And so far they're winning.

US consumers want to own and use more of the world's resources per capita than any other place on earth, and they're not concerned about whether the goods come from an American factory or a foreign one; until their local factory closes down.

It tickles me to see Americans claiming that the Asian factories cut corners, slash standards, falsify results in order to win contracts. Look at luxury cars - some of the best names are German, and these companies have higher barriers to entry than US, higher manning levels, higher energy costs, more health safety and environmental restrictions, and make more expensive cars; but they sell them to you, and you buy them.

You think asian quality sucks? How about your iphone and ipod? Good American design, sure, superlative build quality, and aspirational products; all made in China.

How many people posting here actually have direct contact with Chinese factories? I do - I am responsible for vetting Chinese (and other nationalities) plants for the production of medical devices. The good ones offer brilliant service levels, knowlegable staff, very high specification goods, and all for a lower price than I can make in Europe (by a factor of 3 in some cases) even after you've factored in the transport costs.

Also in many cases the carbon footprint of using China is lower, as you're shipping bulk containers by sea, not small loads by road. It uses more carbon for me to buy 20 pallets of goods made 200 miles away than it does to bring in the same goods half way round the world by sea.

Protectionism is silly, as in the end it forces prices up, forces everyone to raise the drawbridges, and forces taxes up and jobs down.

In the UK there are more jobs ordering, warehousing, delivering, designing, selling, retailing, servicing, accounting for, and so on, foreign made goods than there ever were making locally - the goods are better, the prices are lower, and last time I checked, we're not all living in tin shacks wondering where our jobs in the mines, mills and steelworks went.

If protectionism was the rule, we'd be knee deep in wagonwheel makers, subsidised by the state to "save local jobs" making a product that nobody wants or needs.

__________________

╔═════════════════════════════════════════╗
Overhead, the Albatross hangs motionless upon the air,
And deep beneath the rolling waves,
In labyrinths of Coral Caves,
The Echo of a distant time
Comes willowing across the sand;
And everthing is Green and Submarine
╚═════════════════════════════════════════╝

Charlatan

Protectionism is a knee-jerk response to a problem people don't fully understand.

__________________
"My hands are on fire. Hands are on fire. Ain't got no more time for all you charlatans and liars."
- Old Man Luedecke

Wes Mantooth

Meh, it isn't the best idea but I understand where it comes from. Support your own and get people working here at home, I get why people are all wrapped up in such an idea.

I have a lot of friends who deal with international markets on a regular basis, especially the timber industry, and I don't know a single one that supports the whole buy American stuff unless its the best financial option, they all seem pretty happy dealing with foreign markets if the price is right.

The buy American stuff really comes across more as PR brownie points then an actually philosophy or practice. A great slogan to throw around during elections but something that will probably see little actual practice in the real world. I don't know I don't have much of a mind for the economy and markets so maybe I missed the point by a mile though, just an observation on the topic at hand I suppose.

__________________

macmanmike6100

How about buy quality? We should be holding all products to a high quality standard. The race to the bottom -- best promulgated by Wal-Mart -- means that somewhere along the line there are cuts being made. Ideally, price cuts should come from production innovation. A lot of cuts come from wage cuts (which undermines the economy) or production cuts (which undermines the product itself).

These are things, however, that the consumer needs to care about, and it seems that the consumers (people who vote with their dollars) are not very concerned with how products reach their homes (not very concerned with the consequences of their purchase).

Jetée

UNITED STATES (Woodcliff Lake, N.J.): Photos of the used American flag bin
at the recycling center. It appeared a few months after 9/11 & has remained.

-- (Photo: Fred R. Conrad/The New York Times)


[LENS - NYTimes.]

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