For more than a year now, we have been watching the financial data roll in, scouring them for some sign that the economy has finally hit bottom and is on its way back up. Then came the bleak January 2009 U.S. jobs report, stating that American employers eliminated 598,000 jobs last month, the most since the end of 1974. CEOs and economists have begun chattering about depression instead of recession. And many of us in the economic stratosphere are taking our cues from them and holding onto our money for dear life.
The grim prognostications are paralyzing and anxiety-inducing, to the point that people feeling more pressure than ever to find a solution to our nation’s and world’s economic troubles. Several countries’ leaders are trying their hands at stimulus packages, and at press time, we await the imminent passage of the American Recovery and Reinvestment Plan. It calls for a grand tally of more than $900 billion in spending, and yet some economists say that the stimulus package is not large enough, and that we can’t really know if it will be the financial boon that it was conceived to be.
When I wrote January’s column, “Be American, buy American,” it was before the controversial “Buy American” clause was inserted into the American Recovery and Reinvestment Plan. This clause has reignited talk of trade wars and comparisons to the economically devastating provisions of the 1930 Smoot-Hawley Tariff Act. Threats were issued and the language was softened.
Meanwhile, the reader e-mails rolled in. Here are just a few excerpts:
“I can not agree more with you on support for our domestic products. But most of the products on the shelves are made overseas. Who is to blame for that? I have never seen any editorial addressed to CEOs and corporations with the call to their patriotic duties. Most of the time I've read about benefits of outsourcing, and the exporting of domestic jobs, with arguments that American people will get less-expensive products. Maybe so, but unemployed Americans, with no jobs and paychecks, will not buy any products — neither more nor less expensive. Blame executives who, in search of short-term gains, killed American manufacturing and weakened our market.”
“As the plant engineer and head of maintenance for a small-to-medium food manufacturer, I try to buy American on industrial parts and equipment whenever possible. My biggest challenge is finding what actually IS made in America.”
“I have been reading a lot of online comments from people about how we should let the American car manufacturers die. They make lots of comments about how Toyotas and other foreign cars last longer and don’t understand why we would want to save the American car manufacturers. I always post how their purchasing of foreign cars hurts our country as far as balance of trade, employing American workers, etc. They think that just because Toyotas are made here in America that they are helping Americans. I point out that the profits go back to Japan. I also point out that Japan and many other foreign countries buy very little from the U.S. But the plain fact is that most Americans just don’t get it.”
“The greater part of the costs of things sold in the U.S. doesn’t end up in the hands of foreign producers: it ends up in domestic wholesalers, retailers, and governments (in the latter case, through taxation and customs duties). No matter what gets bought in a store, its price is made up largely of wholesaler, distributor, retailer and ‘government’ mark-ups, with other costs such as transport thrown in. Add onto that the advice that any economist worth his salt will you, that open trade benefits ANY advanced country that practices it.”
“It has been unfortunate that in this country that has helped others all around the world, we can at times forget about our own people. I am a college-educated person who has worked all of his life in the manufacturing field, and to watch the jobs go overseas to support other countries that do not help us is beyond shameful.”
“I find it frustrating that several countries, including Canada, European Union, and China, are all upset that the stimulus bill includes a provision to buy American. It’s our stimulus package to save American workers jobs — why should they object to trying to put Americans to work?”
The conversation has been started, but where will it lead? What kind of policies would you like to see implemented to help manufacturers better compete in the global economy?
E-mail Managing Editor Lisa Towers at email@example.com.