I'm a big believer in free trade. Free trade is responsible for the United States becoming the economic powerhouse of the world. Without free trade, we certainly would not benefit from the best products at the best prices that the rest of the world has to offer. These days, however, there is a new case to be made for buying American-made products and American-provided services.
The auto industry has certainly suffered as a result of people buying cars manufactured overseas. The major auto-makers in Detroit are teetering on the brink, and it's entirely possible GM or some other American auto-maker won't be around this time next year without government intervention. During better times, I would have been inclined to say let the companies fold. If a company can't remain competitive in a free market, then natural selection would dictate that the company either needs to adapt or die.
These days, I am taking a different point of view. With millions of Americans losing their jobs, and many small and major American businesses shuttering their doors, I have made a new pledge for 2009. Whenever possible, I will not only buy American, but I will buy locally-produced goods and services. Although I may be accused of protectionism or isolationism, I see it as a way of keeping my dollars in the local community and in my country, helping local businesses and in turn preserving local and American jobs.
The problem is that I will be hard-pressed to find something that is completely American-made. Many American companies have outsourced the manufacturing of their products to other countries. The other problem is that even when I can find an American-produced product, it will likely be more expensive than foreign products Granted, I don't plan to make many large purchases this year, but when I do I will look first for something produced by an American company. If that isn't possible, I will at least purchase it from a local, or "mom and pop" retailer.
There are ways of finding American products, if you are willing to do your research (which many don't. They opt for convenience).
1. Look for "Made in the USA" label. If you're not sure where a product is made, check out the label. In some cases, a product may be manufactured overseas with components made in the USA, or vice-versa, but this is usually noted on the product.
2. Do your research. There are web sites which list products completely made in the U.S., such as buyamerican.com, unionlabel.org or buydirectusa.com. There are many, many others. A little extra time and research before making a major purchase will turn up American-made alternatives if they are available.
3. Shop locally. I'm guilty of driving into the city to purchase items from the Big Box stores for the cheaper prices, but this year I will be more inclined to purchase items from the stores in my own local area, where my neighbors are employed. Even if you can't find American-made products in these stores, at least you are supporting a locally-owned and operated business. This also goes for buying products online. If I'm buying a product online, I'm sending my dollars elsewhere. This doesn't help my community and our local economy.
Not everyone will share my endorsement of giving preference to local and American goods and services. The Ayn Rand Institute, in an article titled "Buy American is U-American", says:
"International trade is not mortal combat but a form of cooperation, a
means of expanding worldwide production. The benefits of international
trade flow to both trading partners, even when one of the countries is
more efficient across the board. This is the "Law of Comparative
Advantage," covered in every economics textbook. Free trade does not
destroy but creates employment."
They are correct, of course. This IS taught in every economics textbook. However, this is my personal choice. The United States is suffering a crisis of conifidence in its economy by its own people. Banks aren't giving out credit, and people aren't buying. If this continues, the recession will only deepen further. If the recession worsens, and lasts for an extended period of time, then the United States faces a depression. In the 1930's, people didn't spend money. The less money that was spent, the more businesses suffered. As businesses suffered, more people found themselves out of work. After people lost their jobs, they had no money to spend, and so the cylce continued.
Americans have become very good at spending their money. Where they spend their money has become all the more important during these troubled times.