“Buy American” and the Death of Competition

Awesome -- here are some more ways we can screw up our economy.

When I heard about the “buy American” provisions in the stimulus package that is moving through Congress, my immediate thought was, “Oh no.”

It’s just one more example of the increasing trend of government trying to plan and control our economic destiny, and the danger of badly botching things looms.  

Proud to be an American
Of course the “buy American” ethos seems quite pleasant and solidly patriotic. Trust that many companies have known that for ages, and it’s not too hard to summon your inner cynic when you think of some companies’ marketing campaigns.

Remember the old days of Sam Walton’s Wal-Mart (NYSE: WMT  ) -- the “Made in the USA” focus was one reason many people shopped there. Our own auto industry knows this, too, and I get particularly cynical there. General Motors (NYSE: GM  ) , Ford (NYSE: F  ) , and Chrysler surely love the fact that many people believe they prove their love for their country by raging all over the highways in giant American monster trucks, and have been known to use related marketing tactics. (Never mind that Toyota (NYSE: TM  ) and Honda (NYSE: HMC  ) actually do employ plenty of Americans right here in the U.S., of course.)

I have no problem with “buying American” as a voluntary choice. On the consumer side, if you want to support American-made products, by all means, please do (although admittedly, it gets harder all the time). I often try to do it myself. You will probably pay more, but paying more to support industry in your own country is one of those interesting, even arguably a bit “irrational,” economic decisions consumers make all the time. 

What we do with our money might not be as cut-and-dry as simply wanting to pay the cheapest price possible, which certainly makes the study of economics a lot more interesting and complex. I suppose that’s why behavioral economics is fascinating.

Many of our industries have gone overseas for cheap labor and materials, but if consumers direct their dollars in a “buy American” way, these industries may have to rethink their strategies.

For example, ever since scandals regarding Chinese production of things like toys and pet food hit, some consumers started to think twice about country-of-origin labels. Industries must adjust. Look at what Mattel went through last year as it had to issue recall after recall of toys with unacceptable lead content. American parents surely weren’t pleased.  

Here come the zombies
Clearly I am no fan of central planning or coercion. That’s why “buy American” as official economic policy strikes me as dangerous. When I wrote about the possibility of a coming economic zombie apocalypse, this sort of thing was on the table as yet another example of artificially propping up noncompetitive companies.

The steel industry was already among those reportedly hoping for a shot in the arm from government stimulus programs as business has plummeted; U.S. Steel apparently lobbied accordingly. The stimulus package that is currently working its way through Congress has a provision that prohibits the purchase of foreign steel or iron for any infrastructure spending that gets government funding through the program. A Senate version adds that any stimulus-funded projects use all American-made materials. Interestingly, General Electric (NYSE: GE  ) and Caterpillar (NYSE: CAT  ) have taken a stand against any such provisions.

Of course this brings to mind protectionism, and also the idea that foreign governments may retaliate by not playing nice with us. As it is, the EU is already reacting with discomfort. And when it comes to China, regardless of how you feel about our trade with that country, we also must remember it is a major U.S. creditor and the fact is, our government has been borrowing heavily.

Meanwhile, many people are bringing up what may be a very salient point since we’ve all been thinking a lot about the Great Depression lately, and that is that protectionism during that time frame helped make the Great Depression so great (in a bad way).

Also note that President Obama acknowledged the dangers of any signals of protectionism, and that he is aware of the possibility of damaging trade wars. We can take some measure of relief that he seems aware of the possible damaging consequences, despite the fact that his own party is pushing for the provisions.

When losers win
Any kind of required favoritism or preferential treatment for some companies or entities over others is far from a free-market policy, and the economic ramifications over the long haul are frightening when you think of how out of whack everything could get when business decision-making is so skewed by random variables.

In keeping with our ill-conceived bailouts of financial institutions, the “buy American” provisions would mean government is once again picking winners and losers and further firing up moral hazard issues. On a very elementary level, I feel this is simply anticompetitive; it could also be another con game in the making. After all, corporate lobbying badly mucks up competition, too.

When it comes to our economic health, a planned economy that picks winners while ignoring economic reality and true competition probably means we’ll all be losers in the end. It’s kind of hard to be patriotic if there is little left to be patriotic about.

Wal-Mart Stores is a Motley Fool Inside Value recommendation. Try any of our Foolish newsletters today, free for 30 days.

Alyce Lomax does not own shares of any of the companies mentioned. The Fool has a disclosure policy.


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  • Report this Comment On February 04, 2009, at 3:07 PM, Homercidal wrote:

    Yeah, all that would be fine if the playing field is level, but it is not.

    Ask any Korean or Japanese person if they would buy a foriegn car, comparable quality and price and they will say no. They understand the simple principle that supporting local industry supports their own jobs!

    So you are going with the "prevailing wisdom" that all American workers and management are simply lazier, stupider and greedier than our counterparts. I might agree with you in the "stupider" thing if you are refering to the "analyst" industry.

    As far as the truck comment, in 1995 there was an 18 week wait for a Chevrolet Suburban. GM was (rightly) under the gun for not having the capacity to meet demand. There was also a lot of talk about their lack of a V10 or V12, even though the 454 out performed the Ford and Dodge engines.

    Name an American manufacturing industry that is doing well. Unfair trade practices, stilted exchange rates, burdensome tax laws, a total lack of a health care policy have made the playing field very unlevel.

    No, far easier to call Americans stupid than to ever address the real issues.

    Personally I am looking forward to the day when we can outsource writing dumb articles to China.

  • Report this Comment On February 04, 2009, at 3:11 PM, Buyusa wrote:

    Alyce Lomax, The person that wrote this article is another tree hugging dirt worshiper that is tearing this country down. If you cant see that corporate greed, political payoffs and outsorcing american jobs to forien countries has ruined our economy than you are an idiot. The only way to fix the problem is to bring work and jobs back to america. Honda and Toyota assemble cars in america. They dont manufacture the parts in america. All the profits go back to Japan. People like Alyce Lomax need to understand that people who make thier living in the US auto industry read her articles (as bad as they are), that supports what she does for a living. She support what they for a living by purchasing american made cars. Why dont people get it. Right now there are people in the midwest crying because the value of thier home is down $100.000.00 dollars and they have two toyotas in the garage. Go figure!

  • Report this Comment On February 04, 2009, at 3:17 PM, ByeByeAmerica wrote:

    The last time Congress acted this stupidly and placed that tariff on Chinese, it was a real winner. 1000 steelworker jobs saved in Indiana and Pennsylvania.

    Worked real great, China merely put a 2 tiered steel price in place -1 price for export, lower price for steel used in Chinese mfgd goods. Result 25,000 to 30,000 jobs lost in Ohio and Michigan in the auto parts sector.

    This time there will be a zero increase in steel workers jobs in the US after Canada (a net importer of US steel) slaps on a retalitary "Made in Canada" provision.

    The final straw would drop when Canada and Mexico tear up NAFTA and demand that the US pay for oil and natural gas in Euros. America is already bankrupt, this would be the foreclosure on the US dollar.

  • Report this Comment On February 04, 2009, at 3:17 PM, indianajon wrote:

    I would agree with everything this article has to say except for two points that I feel are not addressed. (1) If markets were really open in the countries of our trading partners(ie china, japan, italy, mexico etc) instead of having protectionist legislation already in place then some of the industries in the U.S. would be able to compete on a level playing field. That is just one part of the problem with the auto industry. Since the Japanese have never had to worry about health care costs for their employees they have had a distinct advantage over Detroit for years in money available for investment in new programs.

    (2) The stimulus package doesn't change laws or provide a buy american incentive for any construction projects other than the ones provided for in that package. Every steel maker in the world is still eligible to compete for any other construction project in this country except for those relatively few that are outlined in the government stimulus package. After all, the entire purpose of that package is to give THE U.S. ECONOMY a jump start. The U.S. taxpayer would be getting short changed if several hundred billion dollars of that package immediately left this country to buy foreign made steel.

  • Report this Comment On February 04, 2009, at 3:19 PM, Brettze wrote:

    Alyce

    I am all for free trade to a point... I am not for wiping out our whole industries in the name of free trade. I agree that it is a wise economical idea to allow competitiors from outside America to do business, because this simply mean lost business for our own domestic industries.. This is enough of an incentive for any of our own industries to be as competitive as they can get. Our industries are not stupid enough to think that it is ok to allow outside competitors to grab all of America's business... Usually the difference between competitors in quality is nothing more than a veneer worth.. Very little difference..

  • Report this Comment On February 04, 2009, at 3:21 PM, ivan2001usatyaho wrote:

    While I agree with many of the things Alyce says I have to disagree with her thoughts against the buy American policy. To me buy American means buy anything made in the U.S. of America. That can be foreign owned companies as well as long as it is made here in our country. This would mean American jobs. Most of the American owned companies out source anyway so in my opinion it the same as buying foreign made products but with an American brand on them. It's time we worried more about our own country than corporate profits.

  • Report this Comment On February 04, 2009, at 3:27 PM, Brettze wrote:

    We allow Japan carmakers to grab as much market share as they care to .. Now they are grabbing over 50% of America's car market. It is starting to look like it is breaking the back of our camel.. Now politicians are scurrying around about saving GM and Ford.. Doesnt it look like it would be a wiser decision to limit Japan penetratoin of our market to a certain percentage and leave it... This should be adequate incentives for GM and Ford to work harder and try to grab as much market share back from Japan.. We allowed GM and Ford to weaken too far that they are no longer able to overhaul their lineup of models to meet today's more stringest fuel efficiency requirments now in place.. It ended up becoming far too costly for our country ... Free trade is vital to the world economy, but there is nothing in it that says that it is vital to wipe out industriies from corporate invaders from outside... It is not working out as we thought in the first place..

  • Report this Comment On February 04, 2009, at 3:31 PM, Brettze wrote:

    Japan had been selling yens to keep their cars affordable to Americans.. If not for them, cars would be priced at least $30,000 by now.. It is not all about quality but prices.. we are still enjoying Japan cars at artificially low prices while it last.. I dont know how much longer it will last... This is the only way we can save GM and Ford by allowing dollars to devalue even further with Japan stopping selling yens ...

  • Report this Comment On February 04, 2009, at 3:35 PM, Brettze wrote:

    GM and Ford were forced into building more SUVs and PickUps in order to survive because of persistent Japan's selling of yens.. It was the only way GM and Ford could survive without any regards about the future oil supplies against the apparent rapid growth in oil demands .. America were using 22 million barrels of oil a day up from 17 millin barrels in less than a span of a decade.. This was a rapid spurt in demand of oil that finally propel our economy into a tailspin as oil prices zoomed to $145 a barrel.. Yet, we are quite content with blaming the financial industries for our economical undoings... The real culprit was oil and always oil...

  • Report this Comment On February 04, 2009, at 3:37 PM, Brettze wrote:

    Our economy is at a standstill primarily because of 'OIL PARALYSIS" .. Everyone in the back of his head already know that any recovery of our economy will surely mean a rapid spurt in oil prices and topple our economy all over again.. This is why banks are not willing to lend to anyone., anymore... Now everyone is allegric to fossil fuels except the dirty firewood!!!

  • Report this Comment On February 04, 2009, at 3:40 PM, Brettze wrote:

    Alyce

    You simply cannot make any arguments in favor or not about free trade on a standalone basis.. You have to look at everything in a interwining basis all the effects and reactions and as such.. Free trade is not somthing you can place on a pedestal in an economic museum...

  • Report this Comment On February 04, 2009, at 3:42 PM, Brettze wrote:

    I already have my fills of your analyst's bogus showroom style arguments...

  • Report this Comment On February 04, 2009, at 3:44 PM, Brettze wrote:

    Look at climate change politics.. why are we focusing on coal as the dirty fuel while we are still burning firewood on the equivalent of several dozen forest fires ongoing in Ameirca... NO pollution controls whatsoever.. What it should tell you is that we are not making much sense anywhere..

  • Report this Comment On February 04, 2009, at 3:56 PM, edyboom223 wrote:

    Alyce, please do not take any hurtful comments to heart. My father works for GM, so you would think that I might be angry with you like some others are. The fact is that you can't argue with the truth. I don't know what will happen in the future, but there is a reason the US auto companies need help and the foreign ones don't. GM needs to take responsibility for its irresponsible past and the problems that have come as a result. I do feel bad saying this, but my dad is grossly overpaid at GM. I hope that GM does fine and that he can retire and everything works out. At the same time, I am a college graduate with a job and making less than one third of the money he does while doing many times the work that he does in a much more stressful environment. I have benefited greatly because of GM and my family has been very lucky. At the same time, doing what's best for your employees should not be what's most important to a company. Doing what's best for the company should be most important, and doing so would, in the end, be what's best for it's employees as they would not be at risk of losing their jobs. Keep up the good work Alyce.

  • Report this Comment On February 04, 2009, at 4:00 PM, albertnelson wrote:

    Outstanding article.

    Thank you Alyce!

  • Report this Comment On February 04, 2009, at 4:05 PM, menefer wrote:

    We don't need an official "Buy American" policy but we do need to buy American made goods when possible. We are almost certainly the only country where it is uncool to drive a domestic automobile. Consumers in other countries understand that it is in their best interest to buy their own products. Here in the U.S. we've bought into a "consumer" society where we consume and the rest of the world produces. How do you think it is working so far? The U.S. auto industry accounts for 50% of all manufacturing in the U.S. We need a manufacturing industry and no matter how much money we give the big three, they will fail if Americans don't wake up and support America. If the big three go under our way of life will not be far behind. Buying foriegn cars assembled in this country is not the same. A large percentage of the auto's cost still leaves our shores and will never return.

  • Report this Comment On February 04, 2009, at 4:34 PM, ATrustingFool wrote:

    A lot of really good comments and answers for how we should be saved... the only problem with all of this is the premise that Obama wants to save us. What would be the quickest way to bring in Socialized everything ? His antics have already brought his poling down to 20% and comments from Canada, Germany, Japan, etc etc... already see thru this man with things being said like "He is driving America right into the ground !" and guess what - he is ? The stars have aligned with a Democrat House and all that stands between us and a living hell is a few good men. Let's hope they can't be bought... for all of our sakes... not just Ammericans at stake here... the world economy is at stake here and I don't believe he has our best interest at heart for one moment. He has his own agenda and it is scary !

  • Report this Comment On February 04, 2009, at 4:34 PM, PlatoSpeaks wrote:

    So the economic solution is to send the money directly to China. China can make more "junk" for Wal-Mart, so Wal-Mart can sell it to people who don't need it, who can pay for it with money that they don't have.

    It reminds me of the "classic" definition of insanity. Doing the same thing over & over expecting different results!

    One can understand why the mind of the "investor class" thinks like this because they believe (it is a religion) that real wealth is created by printing paper, stocks, bonds, currency.

    What the "investor class" fails to realize and has never realized is that real wealth is created by and from the exertion of physical labor.

    At some point, a human being has to actually get their hands dirty in order to produce a commodity, product or service which gives "value" to the "paper" being held by the "investor class".

    The "investor class" does not believe this because the doctrine of their religion holds that all wealth is created by the almighty "god of paper" whose value is determined in the "temple" by the high priests of Wall Street.

    This "belief" in the "god of paper" became a "mania" of greed leading to the creation in the "temple" of subprime "magic paper" which was "diced & sliced" by the high priests of Wall Street & spread like a virus around the world.

    The virus destroyed the "temple" & the high priests have gone to the the "beltway bailout" temple to make a "burnt offering" of the taxpayers, the people who actually work for a living and earn their "daily bread" by getting their hands dirty.

    We have come full circle and discovered that the high priests of Wall Street do believe in physical labor and

    that the true value of Wal-Mart is that the minimum wage, part-time, tax paying workers at Wal-Mart are going to bail out Wall Street billionares.

  • Report this Comment On February 04, 2009, at 4:41 PM, rogeradj wrote:

    when you only have so many marbles in a jar how do you keep those marbles?? when you buy something they take a marble out of that jar. how does it get back into the jar so your jar dosen't run out of marbles?? when you buy american it get's put back into the jar. when you by foreign it get's put into another jar. well it's true that when foreign buy's american they put their marbles into our jar, but when we buy 10 marbles to their 1, eventually our jar will be empty. what do we do then?? we can't buy foreign because we don't have any marbles. we can't buy american because by that time we really won't be making anything but big mack's & whoppers.

    you continually hear that the automakers (and this really applies to all sectors) have to shed their union contracts to compete with the rest of the world. do you know what that means?? we are not bringing the world up to our standard of living, but we are bringing the american workers down to the 3rd worlds standard of living. which standard does the world want?? we don't have to build barrierrs to keep the americans in, but isn't it to keep the illegal 3rd worlds out??

    you can call it protectionism if you want, and i guess it really is, but if we don't protect ourself, will china, mexico, argenita, and the rest of the 3rd world econimies going to protect us. i don't think so. i really think they just want to take our marbles.

  • Report this Comment On February 04, 2009, at 4:43 PM, dyadco wrote:

    "Buy American" is a wonderfully patriotic cry...but really, is it the RIGHT thing to do?

    Time and time again, when investing, we are told to look at the quality of the company and the quality of the management before putting our hard earned dollars in.

    To me, that is the key to any investment: be it in equities, be it in depositing money in a bank, buying new home (check the builder etc) or "buying American".

    Many above have mentioned motor vehicles. To me, the reason why Honda, Mazda and Toyota have grown to much is that they simple produce a better product. This has led to US producers trying to catch up...but they still haven't.

    Sure, IF an american product is as good or better..then buy it. If its not, by buying it, we are only supporting a business or industry that shouldn't be supported.

    The US was built up by innovation and quality. These two factors should be why we buy American.

    Look at Apple: great, innovative products...and although they are American, they manufacture overseas. So, do we stop buying Apple? I don't think so.

    To me, the "Buy American" is really a political call...perhaps a wake up call to be more aware of what we are spending our money on.

    Also remember, that many of our trading partners are much more than that. Many are true and reliable allies and friends.

    So sure: "Buy American" IF its a better product....but don't just blindly "Buy American".

  • Report this Comment On February 04, 2009, at 4:43 PM, IIcx wrote:

    Policy related to Buy American is logical at the Federal level. They are using taxpayer dollars from all States.

    We're a Repubic of State interests and State policies.

  • Report this Comment On February 04, 2009, at 4:45 PM, VictoriaLee1 wrote:

    Of course a large protion of the bailout package will leave this country. If capital and raw materials and know how can flow freely - as they can in a global economy -then labor costs are the only differences. Consequently anything that can be manufactured elsewhere - will be manufactured elsewhere leaving America largely with agriculture and service sectors. Any bailout package aimed at rebuilding infrastructure and "green" projects will benefit steel that can be produced more comeptitively elsewhere or solar panels that can be ( and already are) produced a lot cheaper in China, Philippines etc than the US. All the know-how exists outside of the US for the majority of commodities, because of technology transfer and own development. The inconvenient consequence of "free competition" is that it leads to America's decline and the rapid rise of China India etc. I have nothing against that, after all America didnt like England's leadership and wealth either and wanted to make herself wealthy. But being on the other end of the stick why do we have to be thrilled about it plus contribute to it with taxes? I dont remember England creating a bailout package in 1812 that had to be "fair" and ended up with American goods in England.

    So far the US was growing at a slow pace ( ~2%) while low cost countries grew 7-12% fueled by exports. As the US can not sustain this growth - housing market collapse- the US growth turns negative , but the difference remains the same. The bailout package cannot change this. Free market will favor the lowest cost commodity- bringing business there.

    China is a big creditor now and with more trade from the bailout package it will be even bigger in the future. Even if positive growth returns sometime in the future ( at least nominal like during the 1930-s) this difference in growth will remain the same or will get bigger - as a result of "free market". But why does Alyce likes this so much? The English werent so thrilled when they went into stagnation/ relative decline and America started to skyrocket...

  • Report this Comment On February 04, 2009, at 4:45 PM, usaforever wrote:

    When the CEOs decide to ship jobs overseas, they look at the potential cost differential in salary (and that looks enticing), but then tend to ignore the other related costs associated with this practice:

    The potential data security issues with our SSNs and personal information in the hands of people who live close to or in unsavory countries.

    In the long run, the US will lose its technological advantage since students are reluctant to enter a profession where they know that the jobs are dwindling. This has both economic and national security ramifications (the big differentiator for the US in times of war is our technology – we have a relatively small number of people compared to China or India, etc).

    From my friends experience, many foreign workers have little loyalty to the company they work for (they change jobs at a moments notice). This is somewhat of a culture difference, but in the long run it can lead to a ‘Shaky Foundation’ for the company and the nation. How much does it cost to retrain a new employee and how valuable is loyalty?

    If the CEOs would consider problems such as language barriers, time zone issues, quality of work, the actual phone/network costs for people conferencing all over the world, and the negative effect that job loss has on your work force, the numbers may not look as good for the off shoring activity. On the subject of quality of work, there were several times when the work that was received from their foreign location had to be re-done. For example, they had some web pages and database connection code which had database connection information spread all over (not encapsulated into a data object). So, when a change was made to the database connection, several programs had to change. The idea of Object Oriented Design doesn’t seem to be fully embraced by some.

    How many US Govt Contracts does IBM have? If they want to bid on or maintain their US

    Govt contracts, they need to use US employees to service a large % of the work for those

    contracts. Currently, because of a lack of enforcement for such practices, we as

    taxpayers are paying for companies like IBM to ship US jobs to foreign countries.

    That is an amazing paradox (paying for our own demise) and we can thank the Bush

    administration and congress for being in this position. Also, in 2005, the

    US Congress voted to give additional tax breaks for companies that ship jobs overseas.

    I would like an explanation for the senators and representatives that voted for this

    legislation -- How does this benefit the American people?

  • Report this Comment On February 04, 2009, at 4:53 PM, hagan203 wrote:

    THE ONE MAJOR ITEM THAT ALL YOU SO CALLED ANALYST SEEM TO OVERLOOK....WHEN IT COMES TO AN AMERICAN BUYING A FOREIGN AUTO THAT IS MADE IN AMERICA.....AND THIS IS NO SMALL ITEM....IS THE FACT THAT ONE HUNDRED PERCENT OF THE NET PROFIT RETURNS TO THE FOREIGN COUNTRY, IN MOST CASES JAPAN. So some of the work goes to the American locals...after the plant and grounds and often TAX ADVANTAGES to the foreign auto maker ... which will take years and years of TAXPAYER ASSISTANCE to repay to the American taxpayer. SO MY MOTTO IS AND ALWAYS WILL BE....

    ~BUY AMERICAN~ but that also means SCUTTLE NAFTA ...and if that offends our neighbors, if it is indeed a MUTUAL agreement, then WHY are they offended?? TRUTH IS, FOLKS, THAT THE AMERICAN MARKET IS THE LARGEST IN THE WORLD....AND WEE WILLIE AND HIS TROUP GAVE MUCH OF OUR MARKETS AWAY ... WITH ALMOST NOTHING IN RETURN. On top of that, the former idiots in our Republican govt' gave MORE to the Iraquis' than the US public will ever see in return. IT IS AS THO OUR GOVT' TREATED ITS CITIZENS AS THO WE WERE AN ENEMY. Then, on top of that, while we, the American public shares nada...zip...when Wall Street "makes" money ...we are required to pony up when the jerks create 20 new billionaires in the previous few years ... yet we BAIL them OUT??? Frauds, all....and all are guilty of flawed thinking.

    Our congress should be required to put in 25 to 30 years (as are the general public) before they can retire .... AND they should be reduced to ONE person from each party for each state ... PERIOD. They have been a do nothing congress...and yet they continue to "Live the good life" ...while the ordinary guy loses his home to theives and then on top of that loses his job. WHAT KIND OF COUNTRY IS THAT? THE HOME OF THE FREE AND THE BRAVE?? Home of the stupid, apparently. ONE LAST THING ... THE USA should do as it is done in England....since, after all, we have obviously, kings and queens here...and all paid ads shoud be banned from TV. The big stations NBC CBS ABC FOX CNN, etc, CONTROL the news for the public....with always a slant toward the Republicans. GIVE SOME THOUGHT AS TO HOW MUCH LESS THE PUBLIC WOULD NEED TO PAY FOR ITEMS LIKE FOOD, GASOLINE, AUTOS, IF WE DID HAVE THE BIG COMPANIES PAYING OUT BIG DOUGH FOR THE THIRTY SECOND ADS.. ... THE LIST GOES ON AND ON. D. HAGAN

    FEB 4, 2009

  • Report this Comment On February 04, 2009, at 4:56 PM, rightpriority1 wrote:

    Alyce Lomax, respectfully, you are idealistic to a fault.

    Toyota, Honda, and the other JOEM's enjoy a huge protected market in Japan. The government incurs huge tarriffs on any foreign company vehicles sold in Japan, and this allows the JOEM's to sell their products in their own market for much higher prices than they sell in the US.

    The Honda Accord in Japan - Starting price $34,000 USD

    The Honda Accord in US - Starting price $21,000 USD

    The Japanese have NO choice, essentially, in their market to buy anything but a Japanese car, because the government is so restrictive on imports.

    The Japanese market is around 8.0M vehicles/year. All their profits are made in Japan, and the dump their products in the states until the US companies are bankrupt.

    Answer me this, how much do you think your Honda Accord will cost in the US once the Detroit three are gone? Hold on to your xxx.

    Between Japan's protected market, and the Japanese Gov't picking up the tab on health care and retirement, it doesn't look like Toyota and Honda are such brilliant businessmen afterall.

    BUY AMERICAN! We need to support our own jobs, and keep competition in the market. The US Auto market is not just hourly employees, there are hundreds of thousands of design, marketing, finance, accounting, legal, human resources, IT, etc jobs that this industry provides. Most everybody I know in one of these jobs has at least a master's degree.

    Those jobs for Honda & Toyota? 99.9% of them are in Japan, of course.

  • Report this Comment On February 04, 2009, at 4:57 PM, theguru7 wrote:

    That Alyce broad should pull her head out of her rear end and take up knitting or something at which she may be more skilled. I don't understand how they let a mental midget write articles! Alyce, don't you realize the what effect buying foreign products has on our country and economy? Don't you realize that is why our country is now in a DEPRESSION, yes, I didn't say recession!

    There is simple thing called cause and effect. Every time you shaft the American worker you also shaft yourself. It's like cutting off your nose to spite your face. When you buy foreign it causes an American worker to lose his job. As American workers lose their jobs that is one less person going out to dinner, buying a car, going to the movies, buying life insurance, etc, etc. Therefore it starts a snowball affect on other companies and services in this country. Eventually those other companies start laying off because their volume goes down. It snowballs till more and more Americans get layed off. Then you have a recession or depression because people aren't spending. It's not rocket science, it's that simple.

    You mentioned foreign car companies employ American workers. Yes, but the labor cost of a vehicle is only 8% . That is a fact you can research if you don't believe me.

    Where do you think the other 92% of the profit goes?? Yeah, back to Japan where the the CEO's and owners live. Do you think they pay taxes on their profits to the United States??? Who makes up for those lost tax revenues?? Yeah, look in the mirror for the answer! American car companies pay their taxes to the US federal government. While we are on the subject of income tax. Who makes up for the lost income tax for those Americans who lost their jobs. You guessed it, the other Americans who still have jobs. You might not see it yet, but eventually the government will raise your taxes to make up for this lost revenue. You don't think the government is going to operate with less money do you?? Do you really think the government will operate on a smaller budget. They won't, they need the money to take care of the rest of the world. 10 billion a month just for Iraq. People like you that aren't loyal to America because you don't think buying foreign will affect your job are now getting a rude awakening. It might not affect your job directly, but the depression will affect you in some way. If you have a 401K look at your portfolio! These are all direct causes from the depression we are in. Companies are selling less, their stock value goes down. This recession is already causing many Americans to lose their homes.They deserve to be foreclosed on because they caused their own demise by buying foreign all these years thinking it wouldn't affect them. Now they are finally feeling the effects but it is too late. Lose your home with pride America, quit being a cry baby and crying about it, you brought it on yourself.

  • Report this Comment On February 04, 2009, at 4:57 PM, hagan203 wrote:

    EDIT: Third line from the bottom: "IF WE DID NOT HAVE THE BIG COMPANIES PAYING OUT BIG DOUGH FOR THE THIRTY SECOND ADS ..."

    ADDENDEM TO THE PREVIOUS POST

    D. HAGAN 2/4/09

  • Report this Comment On February 04, 2009, at 4:59 PM, Redtom100 wrote:

    I like commenting on this issue since I am retired from an American car company. We could never sell our products in Japan because of their import rules that made it impossible and uneconomical to import autos. I believe in free trade, but fair trade comes first. Ask an American rice farmer what he has to go through in Japan. In fact, ask any farmer who grows anything in America what Japan is like. They have a farm lobby that will have violent riots regaading many of our farm good. Japan is for Japan. In that way, they are the same people we fought in 1941. Japanese think they are better than anyone. Study them. Almost every country out there protects their own turf. In many cases, we need to protect ours.

  • Report this Comment On February 04, 2009, at 5:00 PM, Fabonz wrote:

    I have always bought american BY CHOICE.

    In 1988 I was delivering some MRO parts to a local GM plant. Lotst of activity that day due the the arrival of their new $50 million KOMATSU press.

    Most of you will recall there was a HUGE "buy american" movement going on at the time. I asked the GM manager how they could buy a Japanese press while telling "US" we should buy American. He just shrugged and mumbled something about how it was the best press out there "for the money".

    The real irony was that years earlier I had several clients (a US companies) that manufactured similar machines that went out of business due to cheap foreign competition.

    When US manufacturers start buying exclusively US labor (no plants abroad) and US materials and machinery (steel, rubber, presses, etc.) then they can

    ask us to buy only US products.

    And I don't want to hear "no US companies Make what WE NEED". That sounds a lot like "jobs americans won't do".

  • Report this Comment On February 04, 2009, at 5:03 PM, Redtom100 wrote:

    One other thing I wanted to say. What are we going to do with those who do not attend college in this country? College does not suit everyone. I am worried that we are creating a huge sub class who will make next to nothing for an income and be a festering sore in our society. When the riots start, will our trading partners come to our rescue? Not a chance.

  • Report this Comment On February 04, 2009, at 5:07 PM, Arlechina wrote:

    you are a smart woman. Nice article

  • Report this Comment On February 04, 2009, at 5:08 PM, defendourcountry wrote:

    My approach is buy gods made / grown in USA, there is one exception, since the 90's I do not purchase vehicles from the big three. While in Europe and other parts of the world they sell more fuel efficient cars, here at home we still drive gas guzzlers.

    Don't get me wrong I still believe in Capitalism and free enterprise but there is got to be a change.

    We have to protect our industry and if a limit has to be imposed on the quantity of foreign cars to be sold every year in the US so be it.

    Guys I do grocery shopping and last time at a big grocery chain in California the garlic was from China!

    I told my wife don't buy it.

    Nationalism is a word that many people do not even remember anymore.

    The question is: have we learn something from the past? ... We won WWII, helped Japan to rebuild their country but look the results so far...

    Oil the less we buy from Saudy Arabia and the likes the better, we give them money and in return we have 9-11...

    US car manufacturers need to speed up and start using technology to get away from petroleum as fast as we possible can. Personally I am not concern at all about what will happen if we DO NOT BUY oil from foreign governments.

    We can not save the world nor we should keep trying, we need to look at our needs and work hard to rebuild this great nation.

  • Report this Comment On February 04, 2009, at 5:08 PM, ktgunn wrote:

    I don't want to hear that Toyota and Honda create jobs for workers in the US. I get enraged when I hear that garbage.

    Americans are the world's foremost capitalists and we MUST KNOW that capitalism is NOT about the paycheck. Capitalism is about profits, dividends, capital gains.

    Who gets to keep the profits and who gets the dividends matters. Paychecks keep you alive under the yoke; profits set you free.

  • Report this Comment On February 04, 2009, at 5:15 PM, ziq wrote:

    Though I hardly agree with PlatoSpeaks' entire economic analysis he makes some good points. It is well to remember that economic value is created by human labor of some sort.

    Free market theory depends on a few premises, like free flow of information and people acting rationally. These are often overlooked by worshipers.

    Look at the geniuses at Enron. Thanks to the magic of deregulation, they were able to "create" imaginary fortunes by trading energy, without any expertise in actually producing it. When the free market encourages an Enron it is not based on either transparency or rationality. A free market, by itself, does not guarantee a good outcome.

    A good analogy may be the human body. Thanks to millions of years of evolution, most diseases self-correct eventually. But some don't and intervention is needed. Infections may go beyond the immune system's ability to deal with them, or the immune system itself may turn against the body's own organs, sometimes requiring intervention up to and beyond our current state of knowledge. Our current patient, the economy, will not recover just by turning the free market loose on it.

  • Report this Comment On February 04, 2009, at 5:17 PM, BigPowerAl wrote:

    Listen guys...it took legislation to allow free trade...Free trade is a policy just like Protectionism is. I agree, many people wrap around it the flag, but the "free traders" wrap it with the moral cry of "competition is the foundation of capitalism" just as much if not more so. Just as you can look at the motives behind the supporters of Protectionism and criticize it, you do the same for the "free traders". Many free traders see the world's poor as the real beneficiaries of free trade...aka a solution to wealth distribution in balance. It doesn't take a genious to realize freetrade leads to the means of production being moved to where its the cheapest...(either in labor, transport, pollution, lax regulations, etc). Many would argue that lax regulation does not make a level playing field, nor does labor cost in countries where health care is provided by government subsidy (albeit of less quality). Ross Perot was right about the "giant sucking sound" would be heard when Natfa came into being.

  • Report this Comment On February 04, 2009, at 5:21 PM, Redtom100 wrote:

    I guess I cannot leave this alone. The writer did not do any homework regarding what American companies are doing with their product. I know Ford so I will speak of them. In 2010, the Mercury Milan and Ford Fusion will introduce a hybrid that will get over 45 miles per gallon. It will cost 1/3 less than their current hybrid because they found a better and smaller battery. This is hardly a truck roaring around. Another thing, when large vehicles were made, they were made due to demand. Even the Japanese increased their SUVs and large truck mix by a lot. I am tired of people thinking the company says let's just give them huge vehicles. Also, in the next 2 model years you will see Ford bring a lot of Ford of Europe designed cars. The writer should let people know that Ford has as good quality as the Japanese according to J D Powers. Even the socialist Consumers Reports begrudgingly admits it, Their vehicles are also many of the safest in the world.

  • Report this Comment On February 04, 2009, at 5:31 PM, burlybull1 wrote:

    In 1972 I bought my first Toyota. I bought it because it had many consumer friendly and innovative features that Ford, Chrysler or GM did not have until many years later. I bought it because the doors closed evenly and the gaps were uniform. I bought it because there were no loose parts on it that fell off onto the showroom floor and no marbles placed in the gas tank by some disgruntled worker. When I sold the car it had 132,000 miles on it with only routine maintenance.

    I also owned a Honda motorcycle when everyone else rode American made Harleys which lost nuts and bolts constantly due to the vibration of the engine. I saw the arrogance of the leaders of those corporations and I predicted their comeuppance some day.

    I now own a new Chevy Malibu. An excellent vehicle built well because of competition.. Too little, too late. Lack of competition breeds disdain by American CEO's. This is just bad policy!

  • Report this Comment On February 04, 2009, at 5:31 PM, ziggy103 wrote:

    First of all, I am really tired of these people who think that Obama should have fixed the entire global economy of the planet by the end of his second week in office....(Got to still be W's 4% fan club alive and well)..

    For those of us more firmly entrenched in reality, it's obvious that this mess didn't happen overnight, and won't be fixed overnight either. And party politics isn;t the answer either, smart people have to figure out how to slowly get the Country back on track...

    I will tell you one thing. Being a strictly 'consumer-based economy' is one of the chief reasons we are where we are today...This has been slowly happening for decades..Call it protectionism, or whatever. Finally a cap on CEO and Executive salaries... Hallelujia! about time....

    No , things have been going so great ...really....with CEO salaries, and offshoring, and no/little manufacturing, that I think we should just stay that course...Who said it above about the definition of sanity....Well it's true

  • Report this Comment On February 04, 2009, at 5:33 PM, TMFJoeInvestor wrote:

    "The person that wrote this article is another tree hugging dirt worshiper that is tearing this country down."

    This is true. I've seen Alyce hug trees AND worship dirt. Sometimes at the same time!

  • Report this Comment On February 04, 2009, at 5:43 PM, rags2riches247 wrote:

    I am sorry, but this is taxpayer money and if the government wants to buy American, it has that choice. This isn't a law or tariff. It is a one time stimulus. The whole point is to hire Americans to do work- not to set up a permanent economic strategy. What would people say if that $800 billion went to buy overseas commodities, equipment, and services? They would say, I wish I would have just gotten the stimulus as a tax cut because the US government just sent my tax money to another country.

  • Report this Comment On February 04, 2009, at 5:54 PM, WMDeconomy wrote:

    Absolutely Buy American! No argument there, now where is a list of products made by and in America? Already,most electronics can't be found.

    Clothing? Not found in the stores I shop in. Heavy manufacturing? Outside of Defense what do we have?

    Food? We still do produce most of our food, although much more is coming from outside our borders.

    Shelter? Looks like many homes will be owned by institutions with the Democratic US Government as a partner. I'm sure there will be many regulations to own one of those homes in the future.

    Executives can only earn $500K now if the bailout money is used by a company. Expanded health care for children now enacted. Nothing wrong with these last two in a general way.

    Proposal: If a concern (such as the Chinese government) wants to sell goods inside the US, the manufacturer will have a manufacturing plant in the US using US workers and management with only 1% of profit allowed to go back to foreign government. A set of consequences for not following this rule will be need to be determined, but I'm thinking tariffs equivalent to the amount of dollars the Americans not employed would have earned plus benefits plus taxes and of course the federal taxes on the foreign companies profits to be a max of 1%.

    I'm sure other readers can improve on this proposal. Of course, much of this stream of income could be used as capitalist seed money to restart all those factories now gone overseas.

    The French gal once said let them eat cake. I say stop all US foreign food/grain sales and let's just see what foreign countries will be willing to do to have a slice of bread.

    My handle, WMDeconomy, food will be our weapon of mass distruction. I don't want world domination, I want Americans to have the basics, every last one of us regardles of race, creed, national origin, or sexual orientation.

    So yes, buy only American!

  • Report this Comment On February 04, 2009, at 5:56 PM, jahbu wrote:
  • Report this Comment On February 04, 2009, at 5:56 PM, jahbu wrote:

    This about sums it up

  • Report this Comment On February 04, 2009, at 6:13 PM, Babble100 wrote:

    Level playing field: fine principle but it works against, rather than for GM, Chrysler, Ford. They have worse gas mileage than most foreign car makers, so Detroit scores poorly on environmental care. So that means that a truly level playing field would put an even greater burden on Detroit.

    Let dying dinosaurs die.

  • Report this Comment On February 04, 2009, at 6:14 PM, tzups wrote:

    Sounds like this article is written by someone that is anti American and like to see out-sourcing. This attitude is exactly what got this country in trouble. Out-sourcing jobs is not in our best interest. Call me a protectionist, I would be happy to protect this country and its markets. Mr Perot warned us many years ago. Did you listen???

    If you are for outsourcing jobs, how about this, lets send all our people in prisons to Mexico. About $15,000 per head should take care of that. We spend about $43,000 a year now. I'm sure they would be treated well in Mexico. Hey, this may also work as a crime deterrent!!!!!

  • Report this Comment On February 04, 2009, at 6:23 PM, ScottyBFlyin wrote:

    I still think - at this current time - we need the Buy American provisions to get our workers back to work. Put a sunset clause of December 31, 2010, if you like. Free trade is great! I like it. BUT, THESE ARE EXTRAORDINARY TIMES!

    If we continued with your theory of "let the market dictate" (which I generally like), could we apply that to union labor, too? Why do most jobs REQUIRE a union worker, or at the least union wage scale? Why can't the average guy or average company bid at a lower price? That's not the answer to our problems, but that's my question...

  • Report this Comment On February 04, 2009, at 6:23 PM, Redtom100 wrote:

    Babble100 You have no idea what you are talking about. Go out and talk to dealers. Look in the internet at MPG. I am frankly sick of people who fire a lot of shots and are one blank short of a full magazine. At the Detroit Auto Show, GM and Ford addressed mileage. There are plenty of high mileage auto and even more are coming. in the next 9 months.

  • Report this Comment On February 04, 2009, at 6:26 PM, TMFDiogenes wrote:

    I'll confirm that too, Joe. Alyce does, in fact, hug trees.

  • Report this Comment On February 04, 2009, at 8:02 PM, aaron747 wrote:

    The current state of the economy shouldn't be blamed on free trade or any foreign country. The problem is PERSONAL ACCOUNTABILITY! A foreign concept for some, but if we were all a little more responsible and didn't allocate 50% of our monthly income to a mortgage, or take out 7 year loans on $40,000 cars that we can't really afford, maybe there would be less foreclosures and bankruptcies...

    Play a little economic defense at home and don't worry about what washington does.

  • Report this Comment On February 04, 2009, at 8:41 PM, mikesevers wrote:

    Free trade has to be equitable. In the textile business and furniture business we can no longer make certain products due to OSHA standards and yet those same products with those unsafe production standards are being produced overseas and emitting those same unsafe vapors into the enviroment overthere and the products are brought back into our country for our retail consumption. Why is it unsafe for us to produce these products and okay for our trading partners? It is hypocritical. Do we not care about our neighbors or just ourselves and cheaper prices? Put the same standards on products produced in other countries as we have here.

  • Report this Comment On February 04, 2009, at 9:43 PM, Blennophobic wrote:

    So far, I've only read articles here at Fool to learn. I felt compelled to comment for the first time on this one because there is nothing useful in this article to learn. Even though I'm Canadian and probably benefit more than the average American from free trade, I'm in complete disagreement with this article. Buy American is the right thing to do at this time... and so is buying Canadian for us north of the border (but is anything still manufactured in Canada?). We need to take a hard look at ourselves and our consumption patterns. Ask ourselves the hard questions like "do I really need that gadget?" or "What if I bought fewer things each year, but bought better quality ones made at home?" The landfills would thank us too.

  • Report this Comment On February 04, 2009, at 10:34 PM, shoalfree wrote:

    The basic article appears at first read to be rather superficial; but then achieves notable results viz-a-viz some very erudite commentary. Thanks!

  • Report this Comment On February 05, 2009, at 1:30 AM, CoolStockGuy wrote:

    Yeah I will never buy an American if you give me a choice. Because, I saw Ford,GM cars as well as Harley Davidson's bike.Both of them have thing's in common are Finishing and quality which is really ugly .

  • Report this Comment On February 05, 2009, at 2:08 AM, pocopanda wrote:

    I am a Canadian

    1. I think Americans are blessed to now have Obama as your President. He became President on January 20 and this is only February 4. Give the guy a break. In my opinion, you have the right man for the job.

    2. I drive a Honda accord. I used to drive a Chev Impala and an Oldsmobile. I went to the Honda because it is simply a better built car and the gas mileage is awesome.

    If the U.S. would improve the quality and the gas mileage of their cars and forget the horsepower rush, I wouldn't hesitate to buy another GM or Ford etc.

    3. If you want to avert a depression, stay away from protectionism. Free trade helps all countries.

    If you want to buy American products to support your country, then do it with my blessing.

    4. Don't forget, the current global recession started in real estate with Banks lending money to buyers that weren't qualified or able to pay their mortgages. When the real estate prices began to fall, their mortgages were many times more than the value of the home.

  • Report this Comment On February 05, 2009, at 5:08 AM, eobermeier wrote:

    I am afraid, that these comments represent more or less the opinion of the American population. And this is frightening. I just hope the resonsible ones know what they are doing.

  • Report this Comment On February 05, 2009, at 7:59 AM, arthur13206 wrote:

    So far I must say I'm with PlatoSpeaks, Rogeradj, Homercical, and Menefer. I will no doubt be accused of taking their sentiment to an extreme. Also a warm thank you to our good friend from the North Pocopanda.

    America would do well to focus as much trade as possible toward those countries we currently have a positive trade balance with. It is also in our best interest to work with countries who ensure the quality of their products at least as well as we do.

    Should we be blamed if we require importers to meet the same high standards for food, medication, toys and other products that our own industries must meet? If we can not do that is trade really fair?

    If importers are taking shortcuts to sell inferior products with high levels of pesticides and other contaminants Americans at least have a right to know the risks. Products need to be checked for quality at the point of entry. The alter of free trade was created to sell Americans short. "Free trade" is short on Quality, short on Fair Wages, short on Health Care, short on Environmental Protection and drenched with greed.

    Fair trade on the other hand shows equal respect for profits and values from both sides. The cost of Human Rights, Health Care, and Environmental Protections need to be factored in and those values must be included with the product. American workers compete very well if those things are included. Importers must not be allowed to deface, devalue, and defile other nations in the name of profit.

    Call me a rebel if you must. There is plenty of greed and fault to go around. Somewhere along the way Americans stopped looking out for each other. We will all have to make sacrifices to get things sorted out. Those who were corrupt and made insane profits while others were impoverished will have to pay.

    As for those who use this crisis as an excuse to take crude political stabs at our new President? SHAME on YOU!!! Most Americans gave GW Bush plenty of rope to hang himself and he put it around our necks. Bush socialized the risk and privatized the profits. Greed is not a family value!

  • Report this Comment On February 05, 2009, at 8:01 AM, Formula74 wrote:

    There are many good and warranted arguments here, but for those who are too lazy to read all of them, let me sum it up.....

    The U.S. is becoming the "WORLD'S B1TCH!"

  • Report this Comment On February 05, 2009, at 8:33 AM, redneckdemon wrote:

    I hope they can read an article and actually comprehend what the person who wrote is saying, instead of picking the first line they disagree with and skipping straight to the comments box.

    A shortage of insults down here wouldn't hurt, either. I mean, really, "mental midget"? Did you even read the article? I didn't see anything up there saying that the big three made crappy vehicles. I didn't see anything saying "Burn in hell, my fellow American pig-dogs!".

    I saw lines like this one:

    "I have no problem with “buying American” as a voluntary choice. On the consumer side, if you want to support American-made products, by all means, please do (although admittedly, it gets harder all the time). I often try to do it myself. You will probably pay more, but paying more to support industry in your own country is one of those interesting, even arguably a bit “irrational,” economic decisions consumers make all the time. "

    And for the Obama fanboys out there who pounced before making sure that deer in the bushes wasn't the grill of a fast moving Jeep:

    "Also note that President Obama acknowledged the dangers of any signals of protectionism, and that he is aware of the possibility of damaging trade wars. We can take some measure of relief that he seems aware of the possible damaging consequences, despite the fact that his own party is pushing for the provisions."

    Remember kids: Reading is Darwins way of saying "shut up and learn something". Once that has been accomplished, feel free to point out flaws. Keep in mind that people like me are a lot more likely to take you seriously if you don't sound like an irate 7 year old.

  • Report this Comment On February 05, 2009, at 9:42 AM, hsmith1415 wrote:

    Buyusa, you have it wrong. Honda and Toyota and Nissan DO buy American steel and manufacture in this country. Sure, not all of the parts are made here, though. Just like Caterpillar builds much of their equipment outside the USA. And as for the profits going back to Japan ? True, and guess where the company is going to invest those profits - into the areas where they are making money, which is right back here. As for GM 'profits'? Guess where they will invest capital - into the areas where they are making money, ie China.

    Your thinking doesn't reflect the current reality. There should be a Buy American 'first look' clause, for sure. It's our job to operate efficiently and provide top notch quality to make American-made be the right choice all the time. And there must be Fair Trade, not just Free trade. And when I 'buy American' with my next truck, it'll be made right here in the states, with steel that my company makes - but it won't be from the Big 3.

  • Report this Comment On February 05, 2009, at 11:15 AM, rsherbert wrote:

    The sad irony -- (1) How much has it cost American taxpayers for the $40 "coupons" to purchase converter boxes for the MANDATED switch to all digital TV transmission? (2) How much more did taxpayers add to that when we made the purchases? (3) This is the easy one - where did each and every one come from? Exactly -- China! Yes, the govt REQUIRED us to send that $ straight to China. Did the U.S. even have the capability of producing them?

    Shifting industry to enable cheaper products seems logical & efficient. And we Americans are in favor of it, as long as it does not directly impact our household. However, the gradual process has "come home" to more & more American homes. So then comes the question, who has benefited? Certainly stockholders, as a whole. But perhaps more & more of those stockholders are now unemployed. And who else benefited? Absolutely, top level management received the greatest benefit through compensation pkgs tied to annual bottom lines. Short term rewards with no regard for long term consequences. That's what I see.

  • Report this Comment On February 05, 2009, at 12:03 PM, gec231 wrote:

    What exactly does "Buy American" mean?

    For instance for a car: The Car is designed assembled and manufactured in the US. Do 100% of the raw materials come from the US? Are there any foreign companies in the manufacturing chain? The energy that is used to power the factories is all made from raw material in the US? The food that feeds the workers is all grown in the US? All the workers are educated by people that grew up in the US? All the machine tools were designed by US born and bred engineers?

    When a japanese car is sold in the US to whom to the profits go to? Wage increases of Japanese workers? Should I stop going on holiday? Should I send back my Nintendo Wii? And my Harry Potter Books?

    Let's misguidedly try to help ourselves and screw everybody else. Let's continue to put huge tariffs on south american steel imports and pay more for everything. Let's send back all the foreign workers in the US. All the scientists, doctors and Engineers. I'm going to stop looking at my favorite section of the Met and pretend that the crappy American paintings are my new favorites.

  • Report this Comment On February 05, 2009, at 4:44 PM, venkytalks wrote:

    Plato speaks, I really resonate with your " human effort alone is real money " post.

    As a person from India, I must say that potectionism for USA makes sense. Its bad for India, but good for USA for a couple of decades at least.

    With free trade, the poor and less able American worker will be reduced to 3rd world standards. The only way to keep him rich like he is now is through protectionism.

    Without barriers, people will be paid according to ability. Some 2 million Indians will earn well like top technocrats of USA. Some 20 million Chinese will too - in manufacturing jobs they will take away from Japan and others. But 100 million average Americans who dont have brains to do real quality work will lose their standard of living - they will earn minimum wage and will have no hope.

    If there is justice, these dumb Americans deserve to live in their level of (in) competence. If there is justice, top Indian technocrats and hard working Chinese factory workers will get their due in salary, reaching developed world standards.

    But 100 million Americans will lose their standard of living for this justice.

    It would be stupid of the American govt not to protect them, thinking only of abstract justice - and I dont think US will stay away from protectionism, they are too smart for that. They know which side of their bread is buttered.

  • Report this Comment On February 06, 2009, at 2:55 PM, majordm wrote:

    yep and super size my 'freedom fries'.

    [cant have it both ways]

  • Report this Comment On February 06, 2009, at 6:15 PM, fishandhunt wrote:

    Free trade means we are importing goods produced in sweatshops, factories, and farms by lower class indigenous peoples for pennies an hour, sold to us at prices slightly lower than domestic products, with huge profits going to corporations both here and abroad. Free trade means that we are being inundated with products, including foods, that are produced with little or no product safety oversight. Free trade means that foreign countries can increase their industrial base with little or no environmental safeguards. Free trade means millions of American jobs have been outsourced abroad. Free trade means that our more stringent health, safety and environmental laws can be overturned in foreign tribunals. Free trade means that domestic corporations can dodge U.S. taxes and launder money abroad. Free trade rewards foreign governments that have the most heinous human rights records. So what's so free about free trade? Nothing for us, we will pay dearly in the end.

    To end these abominations, WTO, NAFTA, CAFTA, North American Union, etc., visit, www.citizen.org.

  • Report this Comment On February 06, 2009, at 7:02 PM, edsie wrote:

    Most in our Congress and many of your bloggers do not understand economics 101 nor have they studies the depression and how we slipped from a recession into a depression in 1933 when tarrifs and trade barriers were raised all over the world and global trade came to a standstill sending the worlds economies, including ours into below basement levels. It has started now, not only with us but with Russia and if others follow, the disaster following will make 2008 look good.

    When unemploymnts busts 20% Buy America will not be able to buy very much besides it being 25-35% higher.

  • Report this Comment On February 06, 2009, at 7:28 PM, jellie123 wrote:

    Before Globalization and NAFTA we were:

    The Biggest Exporter of Goods

    The Biggest Creditor

    The Biggest Importer of Raw Materials

    Now we are:

    The Largest Importer of Goods

    The Largest Debtor in the world

    The Largest Exporter of Raw Materials

    We should thank the Trickle-Down economics people for their wonderful economic policies that have brought this country to its knees - before the middleclass fired up the American Economy - now there are a handful of people that have pocketed the wealth in this country and could care less about anyone else - your globalization is nothing more than everyone else counting on Americans to buy their crap and that includes the American companies who have moved out of this country to pay someone fifty cents to make their product and then sell it back to Americans - no problem with trade policy if we are on a level playing field - we need to BUY AMERICAN to keep the money in this country - we need jobs here to make this country run - no problem with companies who want to manufacture outside of U.S., just regulate how many can leave and regulate the sectors that are effected and those companies who want to go they need to bankroll their American employees in retraining and living expenses for atleast a couple of years - not just leave them out to dry -

    If you are in the Middle Class, next time you vote be aware the Republican Party does not represent your economic interest - during the 8 years with Bush, they laid off the Middle Class -

  • Report this Comment On February 06, 2009, at 7:51 PM, fishandhunt wrote:

    AMEN, JELLIE123 !

  • Report this Comment On February 07, 2009, at 10:48 AM, burrowsx wrote:

    Many of the comments above do not make the necessary distinction between

    * a "Buy American" preference and

    * a de jure "Buy American" tarriff

    The former simply puts a preference by the government for its own purchases, without a legal commitment to enforce an unfair and illegal (WTO) price discrimination against foreign goods. Barack Obama can by executive order establish a government preference, without violating the letter of existing trade agreements.

    Equally, the comments ignore the difference between jawboning the American public to purchase, and the American retail industry to supply, American made goods to US consumers. Too often, we Americans are not even given the choice to purchase American manufactured goods. Moreover, even when something is called "American," too often it is only to "finish" or "package" a foreign manufactured product. Americans should be provided with a label for the goods they buy, which tells them the American material and labor content of the goods they are about to purchase. They should be urged to purchase products which keep other Americans employed, even if it costs a little bit more, and makes it necessary to purchase fewer items.

  • Report this Comment On February 07, 2009, at 11:02 AM, dmjst11 wrote:

    Like it or not we are in a global economy. If we get rid of all our treaties and just buy products produced in and by American some believe life would be good.......

    Ideally we could produce most of what we need because our country is blessed with natural resourses such as iron ore, coal, oil, natural gas, etc.

    Problem is our new administration is shifting away fossil fuels so we will need to import items like steel, plastics, glass, etc.

    But we will be green!!!!!!!!!!!

  • Report this Comment On February 07, 2009, at 12:30 PM, none0such wrote:

    Many people who exclaim Americans should buy American goods need to understand that what constitutes an American good is a matter of debate. Apple and Boeing utilize OEMs and foreign subcontractors, respectively. While they do retain the net profits from the sales of their products - which benefit the shareholders of these companies - actively seeking out these and other "American" products means the loss of some American jobs.

    I live in Taiwan and I own a Ford that, at the time I bought it 7 years ago, was the number one selling sedan in Taiwan. The body was manufactured in Taiwan and the engine was imported from somewhere. I bought it because it was a good car and a good price. I remember looking at a Mitsubishi back then that had very similar styling to the Ford, most of it exactly the same. The price was similar too. It was only then that I thought I would buy the Ford instead since the profit would go to my country. I think that is what it means to buy American. Competition is a good thing for everyone but our biases usually get in the way.

  • Report this Comment On February 07, 2009, at 1:21 PM, trenton1ryan wrote:

    < Most Americans gave GW Bush plenty of rope to hang himself and he put it around our necks. Bush socialized the risk and privatized the profits. Greed is not a family value!>

    Speaks for itself-thank you.

    We don't have enough billionaires who really care about the middle (and lower) class imo. With all their money and clout, they could band together and force the politicians to finally do something to actually change things. But since they're all on the same team, and we're not even allowed to their practices, we're all gonna suffer-bad. Hopefully, they'll suffer more than they think they will...selfish bastards.

  • Report this Comment On February 08, 2009, at 8:19 AM, SAMSCREEK wrote:

    While shopping at a Dollar General store the other day, I noticed a cart full of boxes with merchandise to be put on the store shelves. EVERY single box on the cart was marked "made in china".

    When you purchase produce at your local grocery store, you better look at the county it was grown in. At least the produce grown in America is regulated as to the amount of INSECTIDE that can be used and what type. Other countries don't have that regulation.

    Bon Apetite.

    I try to buy American and Canadian when ever it is reasonable. I trust these two countries to put the best product on the store shelf.

    I absolutely will not buy anything made in China, not because I don't like the chinese, but because it is the most polluted place on earth, and they have no problem producing polluted products to sell to other countries.

    Now, for you Bush bashers. It was Bill Clinton that signed the NAFTA bill. It was John Kerry bashing Bush about sending jobs off shore, yet his wife, who own's Heinz had shipped all of their jobs of shore.

    Double standards......

    I agree that George Bush made mistakes, but so did Bill Clinton and Jimmy Carter.

    I am in the 10-15% tax bracket, and because of tax breaks that President Bush has had enacted, I don't have to pay taxes on my qualifed dividends this year and also the bank stock that I actually made a profit on when I sold it in 2008.

    What we have now is a president that has no back bone to stand up to Reid and Pelosi. What happened to the "no pork in the stimulus bill" It's nothing but pork. How long will the honeymoon last??????

    By the way, I bought a Nissan Murano last year (2008) and absolutely love it. I wanted to buy a Chevy, but could not affort to pay the union priced

    vehicles. I have always been a chevy truck lover.

    Ya'll have a nice day now, ya hear.

  • Report this Comment On February 09, 2009, at 3:00 PM, LearnYourFacts wrote:

    I always find such great pleasure in reading the comments of the misinformed general public. Before you spout off on subjects you know nothing about, you might consider doing a little research. For the Japanese automakers, yes their profits go back to Japan, but what do you think gets done with those profits??? Unlike our "domestic" automakers, they actually reinvest the profits as capital back in to the company itself through expansion projects, research and development, and renovations, not increase the salaries of their executives to unreasonable amounts of money. And where do you think most of that money gets reinvested...you got it...the great old U.S. of A. Do a little research as to what a company like Honda's investment in the U.S. has been. Do a little research as to how much of their automobiles are assembled with parts manufactured in the U.S. You people who spout off about things you know nothing of would be better to keep your mouths (or keyboards) quiet. All you do is stir up animosity's that should not exist because you're not stating facts, only your perceptions which are unfounded. Do the research first and you'll likely find that some of the products you believe to be Japanese are actually more American made than that of the Detroit 3.

  • Report this Comment On February 10, 2009, at 11:40 PM, sotruth181 wrote:

    "Not increase the salaries of their executives..."

    Consequently, Toyota said, directors' annual pay will increase by an average of 5 percent to ¥122 million per head and the total salaries for the directors and auditors, including their bonuses, will come to ¥3.92 billion for business 2007. JapanTimes June 2008

    Lessee, thas...122/0.9 = $1.4million/yr for directors.

    vs. $12.00/hr for newly fired temp assembly workers.

    "Do a little research......Honda's investment in the U.S. ..."

    Honda has announced they are relocating their U.S. motorcycle manufacturing operations to Japan. A statement quotes president and CEO Akio Hamada as saying, "This was a complex decision tied to the important role that Honda in Ohio plays within our North American automobile operations." Honda's Marysville, Ohio plant produced 44,000 VTXs and Gold Wings last year, and a total of 2.25 million motorcycles and ATVs since it opened in 1979. Also consolidating to the new plant in Kumamoto are motorcycle manufacturing operations from Hamamatsu, Japan.

    http://motorcycles.about.com/b/2008/02/28/honda-says-sayonar...

    They are investing in the US?????? No kidding?

    I'm glad I have such unfounded perceptions.

  • Report this Comment On February 11, 2009, at 11:46 AM, vapoly01 wrote:

    Wow, the Alyce (and free trade) haters here clearly have no grasp of economics.

  • Report this Comment On February 11, 2009, at 7:01 PM, Dart65GTConv wrote:

    Buy american? No i'll buy Chinese, they will need the money to lend for the Bailout. Congress would bail out a boat buy putting more holes in the bottom to let the water out while still afloat.

  • Report this Comment On February 12, 2009, at 12:15 AM, jtpaul wrote:

    To "buy American" doesn't help, though it would be nice, because it costs too much to produce many of the things we've come to enjoy here in the States.

    If this bill really is a stimulus bill and you want Americans to purchase large items to get the economy moving wouldn't you wnat them to give them incentives to buy a a car (remember the Auto Industry bailout)? Why would you remove the sales tax stimulus from the bill? If you want to encourage Americans to buy a house (remember the housing and mortgage industry) why would you remove the $15,000 incentive?

    Perhaps it is because someone thinks some of the other issues in this "stimulus bill", though non-stimulative and which should be addressed more appropriately in a different bill, reward whoever the power that be wants to reward immediately (note the very few earmarks) rather than creating jobs for Americans.

    Why would Congress take a bad "stimulus bill" and make it worse? Congress does need to cut some of the "non-stimulus" pork out of this bill and if they want to call it "stimulus". Perhaps they should try and get the current pork into a different bill - like their budget and quit selling these portions as a dire need to pass or the sky will fall. Got any chalk?

    This bill looks like the last eight years of compromise and smoke and mirrors in the Senate that we've seen the past eight years starting when Daschle was the Senate majority leader. This congressional action reminds me of the Everready battery bunny... it keeps going....and going...and going. (ugh).

  • Report this Comment On February 24, 2009, at 4:04 PM, shayfer wrote:

    We already have a Buy American Clause in all Federal Government contracts. What's the fuss? This should have been ferretted out years ago with the development of the Federal Acquisition Regulations (FAR). This is nothing new !

  • Report this Comment On February 24, 2009, at 4:37 PM, petaylor wrote:

    Hmmm... didn't Airbus win the contract over Boeing to build the new C130? I think this is a clear example about what I mean when I say "buy American".

    I think it's a matter about where the dollars flow... into an American centric company or into some other country's company coffers.

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