Why "Buy American" Means Something

As we sit in the middle of this depressed economy, the government's hands are tied when it comes to "Buy American" discussions and rules. Because of our participation in the World Trade Organization and other international trade negotiation groups, our government has to take the position that our markets are open to products from any other country, so that other countries will equally allow open sale and distribution of our products. Way back during President Reagan's administration, I attended a meeting on international trade at the Chicago Mercantile Exchange, where the top U.S. Trade Negotiator was the speaker. During that meeting he talked about our disadvantages in trade because other countries had lower costs than we did. At that time at least the U.S. market was the source of the majority of consumption in the world. When I suggested that we offset cost advantages of other countries by controlling access to our markets, he looked at me as though I was absolutely crazy.

Maybe the government won't talk or think about "Buy American", but individual Americans certainly should. If you buy an American product, the dollars you spend stay in this country and circulate through the hands of many businesses and individuals. If you buy a product from another country, you send most of those dollars (except for the retailer's share) outside of the U.S. financial system, and they circulate through hands in another country. This costs U.S. jobs and endorses the terrible financial bias in favor of short term profits over long term planning and profits. If we had been thinking long term, we wouldn't have our industries (especially automobiles) in the terrible situation they face now. When we consistently run a huge multi-billion-dollar-per-month trade deficit for many years, we find that our country and our stock market have to get funding from other nations to support our economy. Right now, China's government is questioning the ability of the U.S. Government to pay back the money America has borrowed from them. China is also trying to get the dollar replaced by a different currency as the standard currency for settlement in international trade. We have had great advantages in the past because of the strength of our market and our currency. As they both weaken, we have to make decisions with a constant concern for how the countries to which we owe huge amounts of money will react. These are not good trends. Maybe, as an individual, you have bought goods from other countries because of lower prices, perceived status, or even technical preference. I suggest that if we all keep up such practices, we will undermine our future standard of living and even our ability to negotiate deals and treaties from a position of strength. Americans have the opportunity to guarantee that their country remains strong if they take the American product and service options when they are purchasing in the marketplace. Back when Britain was the greatest international power, there was the common expression, "penny wise and pound foolish". Look where that approach got them. Don't take the approach that a present bargain has no connection to a strong future. If American firms are supported, they will achieve greater volumes of units sold, reduced costs, and increased technology. All of these things will benefit you in the long run.