John Stossel: The Stupidity of "Buy American"

[Wesker1982]

For the love of liberty please watch/read this



Chapter 23

 

[Krugerrand]

The way i see it... I buy what represents the best value. That is how markets work. If the best value is made in America (which is rare nowadays), China, Turkey, whatever, makes no difference to me. If i spend twice what i could have spent just to "buy American" all that does is leave me with less to spend on other things, which may or may not be made in America. If you want jobs to stay in America, you don't institute price controls (which is effectively what the "buy american" crowd suggest), you simply become competitive. Move to a right to work state, streamline the workflow, be innovative. It's not the consumer's fault that the gov't (with the help of unions) have made it virtually impossible to produce a product in America that is competitive.

Why should people pay more for the sake of propping up some union shop that pays it's labor twice what their worth and passes the cost on to us? You all make the assumption that American Made = Higher Quality. This is just flat out untrue. GM < Honda when it comes to quality, by any measure. Besides, "buy american" presumes you can actually decipher what is american and what isn't. Ford builds cars in Mexico. Kia builds cars in South Carolina.

The people that crow about how people are un-american for buying a product (which represented a far better value) from another country usually do so over a phone that they bought at Wal Mart, or in a car that was built in Turkey, or on a computer that was built in China. They're all hypocrites.

Buy what represents the best value (quality/price) that does the job you need it to do. If it has to come from somewhere else, so be it. That's a market, take it or leave it.

I believe it was a Pat Buchanan piece that explained that when Toyota builds cars in the US, they build them with parts made in Japan. The parts that Toyota USA buys from Toyota Japan are sold at a inflated price. In doing so, the profits go to Toyota Japan instead of Toyota USA. That gives a tax advantage to Toyota USA over US car manufacturers.

 

[willwash]

The same could be said for anything else, too. Paying a little extra for something produced domesticallly isn't "charity". It's an insurance premium. Germany was not hit very hard by the crash of 2008. It has a largely self-sufficient economy. They have a very strong "buy German, support German industry" mentality there, so the result is that during the boom time, yes, people paid more money for an equivalent, but domestically-produced product. But they were largely insulatd from the crash as a result, and now the rest of Europe is turning to them for help while they laugh their way to the bank.

No. For the purpose (defence) that these military products are being produced, one needs to be guaranteed that they'll be supplied in the future as well.

So just because it may be cheaper to buy them when looking at the pricetag, when you include risk into your calculations it doesn't make economic sense anymore. We all know that when they are most needed they probably aren't going to be supplying any.

Sort of the same with relying on police protection. Yes, you've already paid for them, and they have the capability to help you with more men and more guns than you could afford. Yet you do not want to risk that the police isn't going to be there when they're needed. And thus you hire personal security for your store for example. Or buy a personal firearm. These two both aren't the cheapest options, but they reduce risk.

In short, for national defence pruposes buying cheap isn't the best thing, because you need to reduce risk as well. But there's no national defence component in 99% of the industries.

 

[jkr]

its not about hypocrisy.
its is about having stuff to do so that we can trade WITH EACH OTHER so we don't tear ourselves apart, now that we lack BASIC survival skills...if off-shoring our trinkets lets us concentrate on living like human beings ( raising food & family, creating efficient homes, etc) then gr8!

if it results in, well, THIS; we haven't really gained much and lost EVERYTHING

 

[green73]

"Buy American" = subsidize inferiority, avoid productivity

Also...encourage collectivism.

+rep

 

[green73]

For the love of liberty please watch/read this



Chapter 23

+rep

 

[specsaregood]

"Buy American" = subsidize inferiority, avoid productivity
Also...encourage collectivism.

All of you will be singing a different tune once all our capabilities to produce are gone and that is when the world decides to go off the dollar standard. You won't be able to afford any imports and we won't have any domestic products to purchase either.

 

[Sentient Void]

The OP and this thread is so full of win.

No offense, Anti-Federalist.

 

[willwash]

All of you will be singing a different tune once all our capabilities to produce are gone and that is when the world decides to go off the dollar standard. You won't be able to afford any imports and we won't have any domestic products to purchase either.

+rep see my above post re: Germany

 

[green73]

All of you will be singing a different tune once all our capabilities to produce are gone and that is when the world decides to go off the dollar standard. You won't be able to afford any imports and we won't have any domestic products to purchase either.

So explain why Ron Paul is wrong on this issue.

 

[The Free Hornet]

The flaw in this logic is that we can't produce anything as cheap as it can be done in other countries. We're strangled by our own rules and regulations.

You can offer

1) better products and service
2) faster products (no shipping delay)
3) no shipping costs
4) a more "trusted" supplier (less concern that your vendor becomes your competitor)

Also, you pinpoint the problem: a regulatory stranglehood. That is the problem. Subsidizing domestic production with protectionist policies does not get rid of the problem. It means we either pay more than is necessary - the customer suffers the cost of the regulations - or we go without.

Imports are just a cheaper way than fixing Washington. Don't kill the messenger.

It's obvious that if we would have bought products from these factories while they were here they would have remained.

How is that obvious? Substitutes might take over or a different state could get the production. Also, how is it better if everybody else is worse off? Shared sacrafice might seem good but after a pint of blood it gets dangerous.

Importing solves a problem Washington created. Protectionism only means now we have two problems to solve instead of one.

 

[specsaregood]

So explain why Ron Paul is wrong on this issue.

He isn't. He recognizes the true problem. And he bought an american car; specifically because it was american made by an american company that didn't take the bailouts at the time.

 

[green73]

He isn't. He recognizes the true problem. And he bought an american car; specifically because it was american made by an american company that didn't take the bailouts at the time.

He's for free trade, a globalized economy.

 

[Ronulus]

He isn't. He recognizes the true problem. And he bought an american car; specifically because it was american made by an american company that didn't take the bailouts at the time.

But he supports free trade. He doesn't say to buy american because it's american. That is counter intuitive to austrian economics.

 

[specsaregood]

He's for free trade, a globalized economy.

He is also for a sound money. He recogizes that it isn't trade that is the problem but our currency and international dollar standard. he also recognizes that it is destroying our country. Being for "free trade" doesn't have anything to do with the "personal choice" of buying american or not. Just that the government isn't making that decision for you.

But he supports free trade. He doesn't say to buy american because it's american. That is counter intuitive to austrian economics.

And yet, he bought an american car specifically because he said he wanted an american vehicle. Like I said above, being for free trade simply means he wants the government out of the decision; it doesn't mean that he personally doesn't favor domestic products.

 

[green73]

He is also for a sound money. He recogizes that it isn't trade that is the problem but our currency and international dollar standard. he also recognizes that it is destroying our country. Being for "free trade" doesn't have anything to do with the "personal choice" of buying american or not. Just that the government isn't making that decision for you.


And yet, he bought an american car specifically because he said he wanted an american vehicle. Like I said above, being for free trade simply means he wants the government out of the decision; it doesn't mean that he personally doesn't favor domestic products.

Ok. So you are not for protectionism. Good.

But the notion of buying inferior and/or more costly products from someone simply because they reside in your tax jurisdiction just seems silly. It certainly isn't economically sound. Check out mise.org.

Btw, do you have a link for your statement that RP bought an American car simply because it was American?

 

[pcosmar]

I would prefer to support American products and American workers.
However,, I see no reason to buy an inferior product at a higher price.

It is a problem of both regulation and monetary manipulation (government) that has destroyed the manufacturing base in this country.

I did a paint job a few years back on the very LAST automobile produced entirely in the United States.
It was a Honda.

 

[specsaregood]

But the notion of buying inferior and/or more costly products from someone simply because they reside in your tax jurisdiction just seems silly. It certainly isn't economically sound. Check out mise.org.

free trade in an environment where you have the world debt currency isn't sound either. find me something on mises that specifically addresses free trade in an environment where one party has an unlimited credit card, I'd be happy to read it.

Btw, do you have a link for your statement that RP bought an American car simply because it was American?

It was in a recent interview on what vehicles candidates drive. shouldn't be that hard to find it was on the forum here somewhere.

 

[green73]

free trade in an environment where you have the world debt currency isn't sound either. find me something on mises that specifically addresses free trade in an environment where one party has an unlimited credit card, I'd be happy to read it.

But what you are advocating is even worse for consumers. It's a psychological form of protectionism.

 

[mczerone]

Stossel's argument is lacking, though he comes to the right conclusion.

First, instead of saying "Buy American is stupid", he could at least say "The Buy American campaign will not have the economic consequences that people think it will". Don't be abrasive to the opposing argument. He's just setting up walls.

Second, there are more reasons than monetary profit to buying American - some as mentioned in this thread. I, personally, don't mind paying extra for local goods, because I want to (personally) subsidize the growth of local industry. I want more farmers around me, more industrial jobs, more academic opportunities, more culture, etc. And I'm willing to pay extra for that rather than spend money that goes to the well being of California or Taiwan.

Third, what is "American" anymore? I remember when I bought my last car they had to say where each thing in the production of each car was done. "American" cars like Fords and Saturns and Buicks were 30% Canadian manufacture, 30% Chinese manufacture, 10% Mexican manufacture, and were sold as "Assembled in America." Think about simple t-shirts, or Leonard Read's Pencil: the work that goes into these products from start to finish takes place all over the world. To try to make "America" a central feature in these products would necessarily reduce quality, increase production times and costs, and limit the types of materials that could be used. As I said before, I'm willing to pay some premium for local products, but I'm not likely to pay 3x as much for a new iPhone made from exclusively American Parts.

Fourth, the "jobs follow what it's cheapest for us to produce" counter that Stossel mentions is somewhat faulty. Real people are specially trained to do certain things, and can't simply switch to the industrial production of coffee if they lose their textile job. While in the long run it might be better for the society to buy textiles from imports, if they all switch to cheap imports tomorrow, their will be a path-dependent effect that could have devastating effects.

It reminds me of an anecdote from when I was supervising some college workers. One guy pointed out that "it would be quicker/more efficient if we did this highly repeated task a different way." I replied, "Yes, it would be. But to get from here to there would cost too much time and effort. For now, it makes sense to keep doing it the old way."

Does it make sense to "buy American"? I don't know, that's a subjective question. There are arguments both ways. But I do know that it doesn't make sense to ALWAYS buy the cheapest option, and it doesn't make sense to ALWAYS buy American.