January 20, 2009
That 70's Show
Yet another bad idea from the past gets dusted off as the economy contracts. A good friend of the blog sends a link to an article discussing the return of the"Buy American" movement in Michigan.
"If people continue to buy foreign cars, this won't be America for long."
'Out of a Job Yet? Keep buying foreign!' Ford production workers Tony Saputo, left, of Macomb Township and Brian Pannebecker of Shelby Township hold bumper-sticker magnets that Saputo created to discourage foreign car purchases. They sell for $3 at labor rallies.
The Free Press article makes a valiant (I once owned a Valiant...) effort to at least address the complexity of globalization, noting that Toyota and Nissan operate design centers and battery plants in Detroit. Author John Gallagher is balanced and concludes that most people are fixed in their buying habits and preferences.
But it is disturbing that these ideas are gaining currency. The big three made some money between '78 and '08 by building what people wanted (even though they were often evil SUVs) these appeals are economically stupid and are bound to have less appeal today after successful integration of global products, US manufactured Toyotas Hondas and Subarus, and the unpopularity of the automotive bailout.
Economics and Markets
Posted by John Kranz at January 20, 2009 11:17 AM
If people keep buying Belgian chocolate, this won't be America for very long.
If people keep buying Swiss watches, this won't be America for very long.
If people keep buying Austrialian beef, this won't be America for very long.
If people keep buying Philippine pineapples, this won't be America for very long.
If people keep buying Latin American textile goods, this won't be America for very long.
This isn't reductio ad absurdum. It's applying a very basic principle -- namely that any trade, within or beyond borders, allows an economy to specialize and flourish, while protectionism is in fact what destroys economy -- to a specious argument. American automakers are as competitive as horse breeders and buggy makers became a century ago, and they want "help" like certain French industries a century and a half ago:
"You must give me work, and, what is more, lucrative work. I have foolishly chosen an industry that leaves me with a loss of ten per cent. If you slap a tax of twenty francs on my fellow citizens and excuse me from paying it, my loss will be converted into a profit. Now, profit is a right; you owe it to me."
The society that listens to this sophist, that will levy taxes on itself to satisfy him, that does not perceive that the loss wiped out in one industry is no less a loss because others are forced to shoulder it—this society, I say, deserves the burden placed upon it.
If people keep buying Belgian chocolate, this won't be America for very long.
If people keep buying Swiss watches, this won't be America for very long.
If people keep buying Austrialian beef, this won't be America for very long.
If people keep buying Philippine pineapples, this won't be America for very long.
If people keep buying Latin American textile goods, this won't be America for very long.
This isn't reductio ad absurdum. It's applying a very basic principle -- namely that any trade, within or beyond borders, allows an economy to specialize and flourish, while protectionism is in fact what destroys economy -- to a specious argument. American automakers are as competitive as horse breeders and buggy makers became a century ago, and they want "help" like certain French industries a century and a half ago:
"You must give me work, and, what is more, lucrative work. I have foolishly chosen an industry that leaves me with a loss of ten per cent. If you slap a tax of twenty francs on my fellow citizens and excuse me from paying it, my loss will be converted into a profit. Now, profit is a right; you owe it to me."
The society that listens to this sophist, that will levy taxes on itself to satisfy him, that does not perceive that the loss wiped out in one industry is no less a loss because others are forced to shoulder it—this society, I say, deserves the burden placed upon it.
Posted by: Perry Eidelbus at January 20, 2009 12:58 PM | What do you think? [1]