5/12/2011 3:31 PM ET|
What if you had to buy American?
It might be supremely patriotic to stop purchasing imports, but the consequences for US consumers and the economy would be devastating.
Legions of patriotic Americans look for "made in USA" stickers before buying products, out of a desire to support the country's economy.
But what if we all were restricted to purchasing only those goods that were made in America?
Our homes would be stripped virtually bare of telephones, televisions, toasters and other electronics, and many of our favorite foods and toys would be gone, too. Say goodbye to your coffee or tea, and forget about slicing bananas into your breakfast cereal -- all three would become prohibitively expensive if we relied on only Hawaii to grow tropical crops.
We'd have to trash our beloved Apple products because the iPod, iPad and MacBook aren't made in the U.S. Gasoline would double or triple in price, given that we now import more than 60% of our oil. And you couldn't propose to your true love with a diamond ring: There are no working diamond mines in the U.S.
Moreover, a complete end to imports would actually hurt the U.S. economy, because consumers and domestic companies would lose access to cheap goods. Trade protections, whether through tariffs or quotas, cost the economy roughly $2 for every $1 in additional profit for domestic producers, said Mark Perry, an economics professor at the University of Michigan-Flint and a visiting scholar at the American Enterprise Institute, a conservative think tank.
"If we restricted trade to just the 50 states, what would happen immediately -- and would increase over time -- would be a huge reduction in our standard of living, because we wouldn't have access to the cheap goods we get from other countries," Perry said. "We also wouldn't have any export markets, so companies like Caterpillar and Microsoft would have a huge reduction in sales and workforce." (Microsoft is the publisher of MSN Money.)
So what do we make of heartfelt pleas to save U.S. manufacturing by buying American, or the many websites (see one here) that catalog U.S. sources for an array of products? Or the Buy American Act, which curbs government purchases of products that are made overseas?
Do such efforts actually hurt the country they're trying to help?
The argument for buying American
Marc Kruskol, 53, a publicist based in Palmdale, Calif., goes out of his way to purchase products that are made in the U.S. because of his concern over the decline in manufacturing employment.
"I truly believe that we could go a long way towards fixing the economy if we would just put people to work making things in this country that are made in other places," said Kruskol, who spends hours scouring made-in-America websites or visiting brick-and-mortar stores in search of U.S. products.
He recently spent $10 on a pair of salad tongs made in America, which he tracked down in a restaurant supply store, after rejecting 99-cent foreign-made tongs. And he was happy to spend $650 on a domestically produced barbecue grill rather than a $450 imported one, just to support his countrymen.
But financial experts say that it's best for America if you buy the cheapest product you can find without sacrificing quality. Their explanation rests on the concept of efficient manufacturing. An efficient producer creates the most valuable goods with the least possible expense, selling those items at lower prices than competitors who are less efficient. A country benefits when its manufacturers become more efficient.
VIDEO ON MSN MONEY
Until we DEMAND that products that enter this country are made with the same "considerations" as home grown products, we will NEVER fix the imbalance.
we impose 40 hour work week, child labor laws, OSHA, polution controls and MANY other things on our manufacturers, yet do NOTHING when a country with much lower standards is willing to skip all this and under price our products.
IF we truly believe in child labor, 40 hours, etc, we should impose tarifs or other such duty on imports to compenstate for the other countries not agreeing with our social and environmental rules.
1) The author give no genuine data, where does this every $2 spent for 1$ profit number come from? No source mentioned, no data, just simply stated as fact; proof of incompetent journalism.
2) The fact the author does quote from Perry's article talking about fluctuating exchange rates is also misguided due to a simple fact, China undervalues its currency to the American dollar to guarantee a trade advantage. Although it is true our economy is moving from manufacturing to more service & technology, the above fact still stands.
3) The author makes no mention why a foreign manufacturer such as China is more efficient and terming them as such is grossly misrepresenting the facts which are as follows: China has no labor standards, workers protections, fair wages, child labor laws, no respect of copyrights or intellectual property to name a few. China does not adhere to manufacturing standards of safety. Please recall the poisoned baby powder milk, the imported toys made with lead paint, improperly manufactured drywall that caused wiring in a house to corrode (please look up these stories). Of course when these issues were brought to China's attention, no compensation was provided for the damage they caused, at least what could be said about Japan's Toyota is that they at least were active in working a solution. Finally, no mention is made of the fact that China is still more or less a Central Planning style of economy although not truly a fully communist economy anymore.
In conclusion, to attempt to pass off efficient manufacturing of say China as free market competition is outright misleading at best and an outright lie at worst. When considering that China itself does not operate on any level of accountability, rights or free market and fair trade principles, on must conclude that this article grossly misses the actual point. Now for the countries that do have free market trade principles, rights and accountability on par with our countries, then yes, do buy the cheapest best quality item you can, but when we brazenly allow those that do not play by fair rules to dump their cheap products on our shores, we do our country and other countries with values similar to ours a disservice. Mrs. Lewis, please research more responsibly.
This author fails to take into account the effects on the money stream between buying domestic and import.
When you buy domestic products, your money stays in the local economy. If I recall my college economics correctly, for every $1 spent on manufactured goods, $3 is generated within the economy due to continued use(circulation) of that dollar.
When you buy imports, some or most of that dollar is shipped overseas and no longer has an effect on the local economy. It's not just byebye $1, it's byebye $3!.
I also recall an MSN article recently about the flashlight manufacturer MagLite. The owner has tried heroically (and successfully) to keep his manufacturing in the U.S.. However, due to ridiculous regulations in California about what constitutes American made, they cannot label their product as made in the USA. All because there are no longer any domestic manufacturers for the LIGHT BULBS!
If you can find a quality American made product.....BUY IT!!!
"Offshoring slavery and gross industrial pollution is not a valid example of efficiency."
I was going to write a long-winded post. But the above quote pretty well sums up what I was going to say, and in far fewer words. Well said.
This article is laughable...... service sector? what/where is that? Didn't they outsource that too?
Perhaps the writer is trying to encourage us to continue to be the 'throw away' society that we have become and are trying to change.
We have been Walmarted..... hence the cheap stuff that breaks by time you get it home..... spent 40 dollars on one of those battery powered stick vacs..... utter waste of money as it is now broken and not even 3 months old. Guess where it was made?
We need to bring manufacturing back to this country, and we need to buy more American made products if possible.
At least the guy who spent all that money on the American made grill is enjoying his purchase which no doubt will last for several years. Of course he could have put the money in the bank and watch it disappear in bank fees..... LOL
"But financial experts say that it's best for America if you buy the cheapest product you can find without sacrificing quality. Their explanation rests on the concept of efficient manufacturing. An efficient producer creates the most valuable goods with the least possible expense, selling those items at lower prices than competitors who are less efficient. A country benefits when its manufacturers become more efficient."
This has got to be the most incredibly, out-of-touch comment I have ever had the pleasure of reading. Can someone actually get people to believe this line of thought. People in our country should not be employed because they are inefficient? WOW. It isn't about inefficiency, but I guess these financial experts know soooo much about manufacturing. (sarcasm) The reason goods are cheap to import is because the raw materials used to make them are higher in the US than elsewhere. In China and India the government subsidizes the raw materials. In these countries they don't pay all the benefits to their employees or the level of pay US workers receive. So I guess if that's inefficient, to pay a wage that allows people the money to live and buy things in our economy to keep the economy growing. Let's look at the effects of them not working, high unemployment and a stagnant economy. Where do they get these economist!! They are so out of touch with how the economy operates that they shouldn't be allowed to be quoted for garbage like this article. Especially since there is a scumbag writer to use the misinformed economists quotes. Do some real reporting and expose China and India for their manufacturing practices. The American Manufacturer is by far the MOST EFFICIENT in the WORLD but until the playing field is equal you will continue to see less and less MADE in AMERICA emblems. I've worked in Manufacturing for 20 years now. That makes me more of an expert on manufacturing than some economist that wouldn't know real work if it jumped up and bit him. Get your facts from more reliable sources.
Basic economics will tell you this : if no one has jobs to buy the product, then the company will go out of business. If Americans don't have jobs they cant buy anything regardless of where it was made in, no money to spend in the first place. The only way for Americans to get money is to work which means manufacturers have to eventually bring jobs back to the U.S. or there wont be anyone to buy the products. And if the current trend continues where manufacturing goes over seas, what happens?
People will eventually give up corporate America and go back to their roots (county living like the Amish, but you work for yourself not greedy corporations), the only field where technology has benefited most people is in the medical field, most of the other stuff people can survive without.
If you cant trust the government to protect you and you know corporate America is just there to screw you over, the only person left to protect you is you, grow a set of balls and make a choice.
$400 spent overseas churns in the overseas economy. $600 spent here churns in the U.S. economy.
Slavery does not equal efficiency.
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