There is a lot of patriotism and pride with buying American products made by Americans. It is a hot issue that raises people’s love of country, emotion, and wanting to protect American jobs from outsourcing abroad. While it is a valiant, honorable, and well-intentioned idea, buying American campaigns simply for the benefit of buying American made products does not work and actually hurts far more Americans than it helps.
In the United States military, there is a saying that, “It briefs well.” Ideas that top brass often come up with and implement look great on paper, but those same ideas are often impractical and pointless to realistically implement. They make people look good while briefing their superior officers, but they do not translate into tangible results on the ground. The same can be said for many government laws and policies. Buying American campaigns like the one many of us grew up with and the newest one that politicians have been trying to slip into the recent stimulus bills hurt many more people and raise the prices of goods for everyone than the few jobs the provisions save.
The thought process behind the laws is to keep American jobs from being shipped overseas. We have done the same things in the past through tariffs and import taxes. Raising taxes on imported goods in an attempt to force exports to rise is a good idea if the United States were the only country trying to export its goods. If we raise import tariffs, the increased taxes results in a price war with other countries. More and more prices climb, raising the cost of goods for everyone, hurting more people than the slim minority of American jobs that the laws were originally designed to protect.
We are not the only country passing stimulus bills this year. We are in a worldwide recession. China is passing large stimulus legislation, and Europe is passing huge spending bills like the United States. Passing laws that require US companies to buy American goods will enrage other countries to protect their own countrymen’s jobs. It will spark a never-ending circle of price increases as each country retaliates. American businesses cannot afford to sit on the sidelines while the world buys other products from countries that do not practice protectionism.
There will come a point when Americans and politicians alike will have to make the choice between American jobs and low cost goods. It is the classic Wal-Mart problem. You can no longer have both in the United States. The cost of our labor force and the extra benefits that are required with their service such as healthcare, safe working environment, pensions, etc. are too great to make American manufacturing truly competitive. America no longer makes the cheapest textiles, automobiles, consumer electronics, etc. Our competitive advantages have shifted away from those industries. It is long overdue for Americans to realize that we are no longer the dominant world leader in these industries. We must continue to redefine the jobs and industries that are now at the leading edge of America’s new competitive advantages such as technology, software, financial services, etc. Those are the industries that are the basis for America’s new competitive advantages and a new way forward for American jobs.