Buy American

Buy American! Made in the USA! These and other, similar sentiments, were once proudly placed on products and bumper stickers throughout the land, a constant reminder of the need for Americans to support their own businesses, rather than go running off to buy from Japan or China, Mexico or any of the other export nations that send in goods and extract American wealth. It was a good thing, an answer to American manufacturing jobs going overseas. Buy American-made products to save American jobs, what could be simpler?

Have you noticed that sort of economic patriotism has, to a great extent, gone by the way. The disappearance is a implicit admission that America has lost vast amounts of its once-great manufacturing base, has turned from a production-based economy to a service-based economy, and that Made in the USA doesn’t mean the same thing it did a generation ago. Along with that shift from production to service has come a lowering of wages and benefits for American workers as well as a dependence on foreign countries to provide things that we, only a generation ago, were exporting to them!

A Chance to Reverse Things

It is a sad state of affairs for a once self-sufficient nation, but the Senate has a chance to begin turning the situation around. The legislation now before the Senate is the Buy American provision of the stimulus package. Essentially, the provision would require the US Government to buy all the supplies and materials for any public works program from American companies.

No imported steel, no imported electronics, it would all have to be homegrown, which would stimulate manufacturing and distribution as American goods are shipped to American job sites. When it was unveiled at the beginning of the week, the Europeans howled. Of course they did, they want a taste of the stimulus pie, too, and Buy American would shut them out of the biggest public works project on the planet. President Obama is talking compromise on their complaints, trying to calm their fears, but the bigger issue regarding Buy American is right here at home.

Domestic Production vs. Exports

There are those at home who don’t find the prospect of buying American that appealing because of the effect it could have on the export sector. Todd McCracken, President of the National Small Business Association fears a backlash from other countries that could hurt small exporters, which account for a third of the export business in the US. “If you look at 2008, the one bright spot in the economy has been exporting,” McCracken said in a recent Wall Street Journal interview. “We don’t want to create any retribution against US companies.” McCracken also doubts that small businesses would benefit all that much anyway, believing instead that big business would be the major beneficiary.

There is no question that in any major economic shift, there will be winners and losers in the private sector. There is something about the attitude of those opposed to the Buy American program that is paralyzing. When McCracken says “We don’t want to create any retribution against US companies,” he is admitting that what the world thinks about America is more important than what Americans think about America. Yes, exports might suffer, the dollar figures could go down, but if this can put a dent in the ever-growing unemployment figures, that would be an acceptable trade-off.

The Bottom Line

That is what change is all about, trading one thing for another. There is no panacea that will cure all our economic ills. Every solution offered has a downside. The question is this: what plan will put more people to work? What plan will have the largest domino effect, stimulating the most second-tier companies? History tells us that increased local consumption stimulates local production. It has worked before and it will work now. It is time to Buy American.