"Buy American"....is that a good idea?

  • Posted by a hidden member.
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    Feb 19, 2009 1:38 PM GMT
    It's a clause in the Stimulus Package. But in the long run is that a good idea?
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    Feb 19, 2009 3:45 PM GMT
    NNJfitandbi saidIt's a good idea when Americans make a better product. I'm told that some American cars are actually great, and that part of the problem is just image at this point. Not a good idea to buy American if American product is inferior, though.

    I was thinking more of the fact that they are making it a requirement, not an option. It shouldnt be hard to make a sale if you have a superior or cheaper product. I saw a story on the news about a US company that has developed a process to make high quality steel more cheaply from scrap metal. It should be able to out compete foreign steel, but the Stimulus package mandates buying US steel. I think that will only start a cycle of protectionism.
  • dfrourke

    Posts: 1062

    Feb 19, 2009 3:45 PM GMT
    Everything I have been hearing [mostly reports and 'chatter' on NPR] are that 'protectionism' does not do well for the global economy...we engaged in protectionism in the 1930's during the great depression and one of the unfortunate consequences was that it drew out the depression recovery for almost a decade!

    so, I agree with NJfitandbi...if our product is better 'yes'...buy American...but to instill clauses within our Stimulus package that protect American business from having to compete globally and put out a good product does not seem to be a good idea...otherwise there is less incentive to change...

    - David icon_wink.gif
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    Feb 19, 2009 3:46 PM GMT
    The "Buy American" clause was simply to put American tax dollar to work buying American products first. The idea is a great idea. Most of the products in which this would apply would be heavy equipment, steel and such. Not your average hammer.

    It's putting American tax dollars to good use putting American workers back to work. I'm all for it in this specifc case
  • Timbales

    Posts: 13993

    Feb 19, 2009 3:48 PM GMT
    define 'American'.

    Items made by US companies? Items made by US workers? Items made from raw materials from the US? Items assembled in the US?
  • OptimusMatt

    Posts: 1124

    Feb 19, 2009 4:12 PM GMT
    Soo....after pushing so hard for years for globalization, after allowing so much of its industry to outsource to other continents to cut costs by exploiting cheap foreign labour...all of a sudden its ok to screw over your biggest trading partners because your economy tanked and took the global markets with it?

    hrm. Yeah, that doesn't sound short-sighted at all. Nope, perfectly sane and logical that is. Fuck the rest of the world - buy American.

    Sigh.
  • TexanMan82

    Posts: 893

    Feb 19, 2009 4:18 PM GMT
    Protectionism is never a good thing.
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    Feb 19, 2009 4:28 PM GMT
    Just need the particulars on HOW to buy American, ie, what % of foreign parts is allowable? I'm all for buying American as long as the jobs to produce such are American. That's my deal.icon_confused.gif
  • OptimusMatt

    Posts: 1124

    Feb 19, 2009 4:30 PM GMT
    Well, I'll be honest - I'm not all that up on my global economics, so I'll pretty much be staying out of this fray.

    At the end of the day we're all concerned about our own countries, and my concern over 'buy american' stems from my own selfish interest in MY country.

    The USA has shafted Canadian industry HARD in the past irrespective of NAFTA regulations and my concern is that they will do it again, fucking our economy in an attempt to bolster their own. *shrugs*

    Buy American all you want, but uh...keep your problems within your own boarders.
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    Feb 19, 2009 4:35 PM GMT
    BioMatty saidWell, I'll be honest - I'm not all that up on my global economics, so I'll pretty much be staying out of this fray.

    At the end of the day we're all concerned about our own countries, and my concern over 'buy american' stems from my own selfish interest in MY country.

    The USA has shafted Canadian industry HARD in the past irrespective of NAFTA regulations and my concern is that they will do it again, fucking our economy in an attempt to bolster their own. *shrugs*

    Buy American all you want, but uh...keep your problems within your own boarders.


    Strongly agree.
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    Feb 19, 2009 4:43 PM GMT
    It is a terrible idea. Period. Reaffirms my suspicions that human beings often forget the tough lessons of the past. The Smoot-Hawley bill of 1930 which raised tariffs on imports in order to boost purchasing of US goods started a wave of protectionism around the world that helped ensure the recession of 1929-30 turned into the depression of 1929-39.
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    Feb 19, 2009 5:27 PM GMT
    Cowboiway saidThe "Buy American" clause was simply to put American tax dollar to work buying American products first.

    That sounds good on the surface, but what about when other countries do the same. "You aint gonna buy ours, we wont buy yours."

    I can only approve such a stipulation if another country is subsidizing their industry so that the competition isnt fair. Like China subsidizes its steel. So I could see banning spending stimulus dollars for chinese steel.
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    Feb 19, 2009 5:31 PM GMT
    Caslon9000 said
    Cowboiway saidThe "Buy American" clause was simply to put American tax dollar to work buying American products first.

    That sounds good on the surface, but what about when other countries do the same. "You aint gonna buy ours, we wont buy yours."

    I can only approve such a stipulation if another country is subsidizing their industry so that the competition isnt fair. Like China subsidizes its steel. So I could see banning spending stimulus dollars for chinese steel.


    Every country in this world subsidizes thier industries. Yet when America tries to protect it's industries the world cries out that we are unfair. When the rest of the world stops subsidizing thiers, and freely opens up ALL thier markets to American goods. then I will gladly say Im open to free trade.
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    Feb 19, 2009 5:42 PM GMT
    It would make sense in such difficult times when possible to buy American...but it would be better to have it as an unspoken rule, rather than broadcasting it to other countries...icon_wink.gif
  • jmanorlando

    Posts: 205

    Feb 19, 2009 5:49 PM GMT
    It is a great idea to Buy American but I live by Buy the Best for the value.

    Recently there was an article in the Wall Street Journal showing to cars a Toyota and a Chrysler and it said which is more American?
    80% percent of the parts and labor of the Toyota were American
    While 66% of the parts and labor of the Chrysler were American.

    The fact is that American companies need to find ways to build superior, not equal but superior products than the competition. Several companies do this and the are world leaders. Caterpillar, Cummins, Boeing continue to lead in their fields, so to must GM and Ford if they want to make it.

    If an American company build the best product I will buy it, but I want a car to last a decade with just a few repairs. I have a 13 year old Nissan and will now consider Ford, Nissan and Toyota when I purchase my next car later this year.

    I just Buy the Best.

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    Feb 19, 2009 5:51 PM GMT
    jmanorlando saidIt is a great idea to Buy American but I live by Buy the Best for the value.

    Recently there was an article in the Wall Street Journal showing to cars a Toyota and a Chrysler and it said which is more American?
    80% percent of the parts and labor of the Toyota were American
    While 66% of the parts and labor of the Chrysler were American.

    The fact is that American companies need to find ways to build superior, not equal but superior products than the competition. Several companies do this and the are world leaders. Caterpillar, Cummins, Boeing continue to lead in their fields, so to must GM and Ford if they want to make it.

    If an American company build the best product I will buy it, but I want a car to last a decade with just a few repairs. I have a 13 year old Nissan and will now consider Ford, Nissan and Toyota when I purchase my next car later this year.

    I just Buy the Best.


    Yes, the american car companies make no sense to me. I dont understand why they can build a better car. WTF is up with that?
  • Ritournelle

    Posts: 134

    Feb 19, 2009 5:57 PM GMT
    Strictly speaking, as long as no new tarriffs are imposed, then this is not technically protectionism unless perhaps they ask for voluntary quotas (which foreign producers love, only the consumer loses). If I understand correctly, this is being paid for with new currency allocated in the stimulus package, so it's adding money that previously didn't exist within the macroeconomy, and distributing it into the national microeconomy (this is pretty key, but I'm tired, and haven't had coffee). There is actually a pretty significant disconnect between the interaction of the macroeconomy and the US microeconomy in this case. The government is really performing it's role as a monopsony, and as a result the deadweight loss is self-imposed. If the debt is payed down by our taxes, then we pay for the inefficiency, however if they impose some form of bond scheme, then they might be able to externalize the debt (generally, it's somewhat more complicated if you factor in implicit inefficiencies and negative network externalities on foreign producers).
  • jmanorlando

    Posts: 205

    Feb 19, 2009 6:06 PM GMT
    I think they can, but I really believe that American car companies really do target a car's wear out date, (when things start to break at 60,000 - 80,000 miles) not 175,000 like my car. lol.

    Seriously, the marketing is that the general public will want a new car rather than repair. Although they will never say it, they fear that Americans will keep a car forever if it is really well built.

    Fact is people keep cars on average 4 - 5 years and then want a change, so they can build cars to last 120,000 and 150,000 miles and in the long run become profitable. The pain is they must understand that they will sell less each year for the next few years.

    Ford is getting better and GM is getting better.

    I hope Ford surprises me when I am ready to buy, but I really do love the Maxima I own and the current one. icon_smile.gif
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    Feb 19, 2009 6:09 PM GMT
    i dont get any dam money either way, im still a dependant, BOOOOOO icon_evil.gif
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    Feb 19, 2009 6:41 PM GMT
    NNJfitandbi said
    BioMatty saidSoo....after pushing so hard for years for globalization, after allowing so much of its industry to outsource to other continents to cut costs by exploiting cheap foreign labour...all of a sudden its ok to screw over your biggest trading partners because your economy tanked and took the global markets with it?

    hrm. Yeah, that doesn't sound short-sighted at all. Nope, perfectly sane and logical that is. Fuck the rest of the world - buy American.

    Sigh.


    Haha.

    Well, the rest of the world has been incredibly protectionist. America is seen as a huge market, which it is, but our products are not welcome. I see no problem in the government expressing a preference in times of trouble. Europe, China, Japan do it in times of prosperity.

    And we just consume their shit and get further into debt, driving their prosperity.

    Case in point: the pharmaceutical industry. America subsidizes free healthcare abroad because foreign corporations charge whatever they want here to make up for the stingy reimbursements offered by the governments of Europe. These same corporations spend billions lobbying against universal healthcare in the US. (Not to mention the difference in compensation and benefits paid to European and American employees of the same company.)

    Trading partners? Ahem. . .

    The US is the world's market. Unfortunately, we won't be consuming as much. Blaming the current economic crisis on the US is only justifiable if we also credit the US for much of the world's prosperity.
    I tend to agree with NNJ. I don't think the rest of the world is as open to American products as America is to theirs. Spending our own tax dollars to create jobs in America, even if our products are more expensive, is a good idea. One thing we have to accept is the US cannot afford to do everything, including bailing out all of the other economies of the world. I'm not in favor of protectionism, but for a while I don't see anything wrong with "buy American."
  • Posted by a hidden member.
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    Feb 19, 2009 6:44 PM GMT
    COLORED TEXT GOES HERE U.S.A. all the way for me. I beieve in supporying our county 1st. Im also Union. kirk.icon_smile.gif
  • metta

    Posts: 39108

    Feb 19, 2009 6:47 PM GMT
    As with most things in life, I think that it is important to have a balance. Buy American when you can. But don't do it exclusively. We still want to be able to export products and work with companies on an international basis.
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    Feb 19, 2009 6:52 PM GMT
    kirk45 saidCOLORED TEXT GOES HERE U.S.A. all the way for me. I beieve in supporying our county 1st. Im also Union. kirk.icon_smile.gif

    Can you see that the US might be supported better by a more balanced, thoughtful spending plan, than a knee-jerk buy it only if it is made in America? Like what Metta8 says above.

    I also think we need more unionization to balance the obviously out-of-touch executive class in this country.
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    Feb 19, 2009 7:07 PM GMT
    Well the "buy American" clause has two potentially huge exceptions. The government can ignore it in specific instances if complying would be "inconsistent with the public interest." Also, the government must apply the measure "in a manner consistent with U.S. obligations" under international trade agreements. Sounds to me like more of our tax dollars will be flowing to other countries, anyway.
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    Feb 19, 2009 7:35 PM GMT

    'Buy American' makes sense to me. One of the reasons the Chinese economy has been booming in the last decade is that their export-import ratio is very favorable. How many items around your house say 'made in China'? Americans still have the biggest purchasing power in the world, all of that capital is better invested domestically than sent abroad (hypocrisy here, as much of my stocks are in the euro market).

    I'm not saying we should pursue a policy of protectionism. At the same time, the increases in foreign imports in recent years have two negative consequences: 1- the US has become more susceptible to negative market trends abroad, and more dependent on foreign productivity; 2- American manufacturers have suffered greatly. We need to re-establish the balance between exports and imports. For the time being, that means foregoing foreign products in favor of American goods.