Made In The U.S.A.

NPR: Why Buy American?

In Adventures on February 4, 2009 at 8:02 pm

I’m political, but not very smart. My Republican friends (as if!) point that out frequently (the not smart part). Look at that: first sentence and I’m digressing already.

I’m political, but I only kinda understand certain things. Lots of things. That’s especially true when those things apply to economics. And trade. And that sort of applies to my resolution to only buy American before we can’t buy American any more. So I’m writing about it.

So my interest was piqued yesterday when I heard on NPR a discussion about the “Buy American” provision in the proposed economic stimulus package. My favorite part was in the prologue, in which they followed up with a Chrysler worker they’d spoken to in December. He gave me some insight into what it’s like to be an American auto worker these days. He just got off a 6-week furlough. He’s worried about being permanently dismissed, so he’s studying for a Master’s Degree in Chinese philosophy. If he loses his diemaking job he has a backup plan: to use his new understanding of China, combined with his years of experience in the auto industry, to work as a liaison between Chinese manufacturers and the American auto companies for whom they will make parts when he loses his current job to those very Chinese manufacturers.

I kind of do feel like a traitor with this backup plan of mine. Outsourcing and globalization has played a large part in the downfall of the American working class and I guess in a way I’m selling out. But it’s just where I’m at.

American auto workers and steel workers and many other workers would love the stipulations on buying American that currently exist in Obama’s proposal. As I understand it, it essentially stipulates that any stimulus funds used for facility construction or repair must use American-made steel and supplies. This “only buy American” stuff is called protectionism when it’s government mandated. And it raises a question: is this good for America, or bad?

Chrysler workers and Steelers fans might say good. Many economists say bad.

In the Great Depression (or “first” Great Depression, depending on your ratio of optimism v. pessimism) they say that our protectionist policies actually sunk us further into recession. Tariffs imposed on imported goods prompt other countries to do the same–limiting the amount of American-made goods they import into their respective countries, and further hampering the financial outlook for the American worker whose company is suddenly facing less demand due to the foreign tariffs on their goods.

So: what’s that mean? According to NPR it means that government mandates on buying American-made goods will result in disproportionately reduced exports and a deepening recession in the U.S. (and, presumably, abroad). So: perhaps the only time tariffs are good are if your country doesn’t export anything.

Maybe we wouldn’t need to export as much if more Americans bought American-made stuff.

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