I recently attended a Lakers' basketball playoff game and took notice of the fact that Toyota Motor Corp. (NYSE: TM) was a major sponsor advertising at Staples Staples Inc (NASDAQ: SPLS) Center. This, while our home grown car companies are all on the verge of collapse.
As we write stories on the depressed economy readers frequently comment about "buying American" as a theme that will help the greater good by keeping jobs and money in the United States.
This patriotic notion got me thinking about what would happen if we carried it further? Would we stop advertising and promotion of foreign products? Would we restrict discussion of foreign products in the media all together? Would we limit the production of foreign products here, even if they are providing jobs for Americans?
Where are the boundaries? These restrictions would tread on many of our liberties. Freedom of speech; freedom of assembly (no pun intended) ; even the most basic, like freedom of choice. Nope, "buy American" is one of those things that seems fine in theory but is not workable.
We live in a global economy; we must continue to compete globally. This is not a recent development, as some might think. We have had a global economy for many centuries. We only started complaining when we became less competitive. Our core strength is our creativity, our value system, our willingness to take risk, and historically our education system. Add to this our substantial natural resources and it is possible to increase our competitiveness.
I also think that we should reduce our consumption while we increase our savings and investment. We must continue to invest globally so that we are always at the economic table. For those that would like something worthy of complaining about, we must continue to work very hard to level the playing field when it comes to trade, patents, copyrights, judicial process, and access to foreign markets. This discussion I will leave for another time, but comments are welcome.
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I do not own shares of TM or SPLS.
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Reader Comments (Page 1 of 1)
5-26-2009 @ 9:34PM
Beltway Greg said...
Sheldon, I thought that was you sitting beside Jack. Americans grew far too fat, happy, and complacent. I live in Washington, DC and hardly anyone drives an American car. This should change given the reliability ratings of Detroit's latest offerings but it will take a great deal of time. Not to mention the prices. They're practically giving them cream puffs away. Sadly, our kids have a value system that is skewed to the glutius maximus. Everyone wants to be an office worker. I have a friend who is an electrician who makes well over $100K a year, works bankers hours, and sets his own yearly schedule. If he goes to a high school career day he pretty much gets booed out of the place. He can't find anyone reliable to apprentice with him. In the words of the late, great Judge Smells (Ted Knight) from Caddyshack, "The world needs ditch diggers too." We're importing technical workers and engineers from foreign countries and in the words of Bill Gates, off the record of course, the really tough problems go to Beijing. The savings rate will increase and it is just a matter of time, probably a long time, before we work off the housing inventory. If we get serious about education we can get ourselves out of this mess. Besides, greed is good. But hey, don't blame me for the economic downturn, I gifted another IPod touch this week and I've been to Starbucks twice today so I'm doing my part. My car, a 1988 Mercedes Benz with 210K. That's not likely to change anytime soon. What can I say, I need to cutback someplace and asking me to forgo coffee and IPods is akin to waterboarding if you ask me and Dick Cheney.
6-15-2009 @ 1:58PM
tom routley said...
sorry to say that this "buy American" mantra has already stirred up a vicious circle. I am in Canada and, since we apparently didn't do NAFTA effectively, we now find that all levels of US government below the feds are refusing to buy Canadian made goods. So now we have all the Canadian mayors signing up to not purchase US made goods.
Notwithstanding all the signs that we all understand this is not the way to get out of our economic situation, we are letting the cheap political rhetoric create a monster. Hillary, don't just tell us all it will work out OK (see Niagara Falls June 13th comments). Force the issue downstream. The genie is just going to keep wafting out of the bottle until we all choke to death on local yokel home brew protectionism.