Apr 212017
 

Drawing of the Thomas B. Jeffery Co. factory in Kenosha, Wisconsin (circa 1916) (Photo credit: Wikipedia)

by Thomas L. Knapp…….

On April 18, US president Donald Trump visited the Kenosha, Wisconsin headquarters of Snap-on to speak in front of an American flag made of the company’s tools and publicly sign an executive order titled “Hire American, Buy American.”

The order itself is small beans — it just orders four federal agency heads (Homeland Security, Justice, Labor, and State) to “review” policies and recommend changes that tend toward hiring and spending domestically instead of abroad. But such changes would just increase Americans’ cost of living (and their taxes) rather than “saving Americans’ jobs.”

In his signing remarks, Trump complains that “for too long, we’ve watched as our factories have been closed and our jobs have been sent to other faraway lands.” He omits both the reasons for manufacturing moving abroad and the effects of manufacturing moving abroad.

Capital tends to flow to where it can be most profitably invested. There’s no secret conspiracy to deprive Bob in Wisconsin of gainful employment so that Li can have a job in Shenzhen. If a manufacturer can make a widget in Shenzhen, get that widget to America, and sell it at less than the cost of making it in Kenosha, Shenzhen wins … and so does the consumer who buys that widget for less than it would have cost if Bob had made it. In fact, that consumer may be Bob himself, who’s now hopefully making or doing something more profitable than manufacturing widgets.

I have two relatives who worked (in the 1980s) for a company that made blue jeans. One operated a sewing machine, the other was a sewing machine mechanic. Then the factory closed and the company moved production abroad.

They both found jobs in other fields. I’ve not discussed their wages or working conditions with them, but my impression is that they made out okay. Not everyone does, but on the whole we’re better off with freer trade that tends to lower the prices we pay for goods and push our own work toward its most profitable and efficient uses.

The other day, I went shopping for jeans, and it suddenly occurred to me that the pair I was looking at cost less than a similar pair I bought circa 1990, and that not even accounting for inflation. I thought of my relatives.

Trump claims to be thinking of my relatives too, but his economic fantasies would harm them in the name of protecting them.

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Thomas L. Knapp (Twitter: @thomaslknapp) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.

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Thomas L. Knapp
Thomas L. Knapp is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.
 April 21, 2017  Posted by at 12:44 am Issue #215, Thomas L. Knapp  Add comments

  8 Responses to ““Buy American, Hire American” is Anti-American”

  1. It only makes sense for Federal and State agencies to try to buy American but they need to utilize the bidding process which many do not believe in or try to use. Bringing jobs to America, particularly the manufacturing jobs far out-ways any added cost, any negative affect.. The signing of NAFTA by Clinton was the beginning and we who worked in manufacturing especially the auto industry knew what was going to happen which was the slow destruction of the middle class. More good paying jobs, less on public assistance should mean lower taxes. The liberal agenda of helping other countries at the expense of our country is just plain wrong.

    • “It only makes sense for Federal and State agencies to try to buy American”

      Well, that depends.

      If the goal is to get the best product at the cheapest price so that the taxpayers aren’t paying $2 for something that should cost $1, then no, it doesn’t make sense for federal and state agencies to try to buy American. It makes sense for state agencies to pay the least they have to pay for the best they can get regardless of who makes it or where it comes from.

      On the other hand, if the goal is to encourage feelgood nationalist BS and make American consumers and American workers and American taxpayers pick up the check for complete divorce of government operations from logic and reason then yes, by all means wave the “buy American” flag.

      “The signing of NAFTA by Clinton was the beginning and we who worked in manufacturing especially the auto industry knew what was going to happen which was the slow destruction of the middle class.”

      Prior to NAFTA I was a low-paid, non-union factory worker at Tracker Boats.

      After NAFTA and BECAUSE of NAFTA, I became a high-paid, union factory worker at Reckitt & Colman (production of French’s mustard was consolidated in the United States due to NAFTA — prior to NAFTA it was cheaper to run plants in Mexico and Canada than to pay the tariffs).

      Ten years after NAFTA, full-time employment in the US had grown faster than population had grown.

  2. You say prior to NAFTA it was cheaper to run plants in Mexico and Canada than to pay the tariffs. That is wrong. NAFTA is why manufacturing went south. They went south because it was cheaper. I can remember exactly where I was when NAFTA was signed. I was in a manager’s meeting with all of the big boys of one of the big 3, Where did you get your information as we are always hearing complaints about low paying part time employment with no benefits. The number of people on governmental assistance has been growing since NAFTA and many people needing help can not get anything. US made which excludes Canada product quality is better than anywhere in the world. I am talking all products made here no matter who owns the company. The trouble with governmental agencies buying from the US is those buying do not try to get the best deal and very seldom go for a biding process that also includes quality. NAFTA and other trade agreements have hurt the US worker and that fact has been discussed for decades.

    • “Where did you get your information”

      From the recruiters for Reckitt & Colman who had to hire a crap ton of new workers when NAFTA allowed them to shut down their plants in Mexico and Canada and consolidate their operations in Springfield, Missouri.

      In order to sell mustard in Canada and Mexico, it either had to be manufactured in Canada and Mexico or else it was tariffed at a high enough rate to not be price competitive in those countries. Once NAFTA allowed them to manufacture it in the US and sell it in those other two countries without tariffs that’s exactly what they did.

      Sorry that the facts screw with your political viewpoint, but that’s the thing about facts — they’re facts whether they screw with your political viewpoint or not.

  3. Where on earth do you come up with “political viewpoint” as part of this discussion? I lived right in the middle of the results of NAFTA. Sure, it did not affect me directly but inside discussions told us the financial incentives were going to be too big to resist. The plant I worked for at one time made 25% of the North American engines for one of the big 3 and had about 5000 employees. Today, this plant makes less than 10% of those engines and employees about 800. This plant has always gotten those excellent awards and there are all kinds. I use to put those presentations together to justify these various awards. Either you are the one with the political agenda or there is a difference in information feed to the northern and southern states.

    • Engines are not mustard. Yes, employment went up in some sectors and down in others after NAFTA, and in some cases it went up or down because of NAFTA.

      According to the Bureau of Labor Statistics, ten years after NAFTA went into force, more Americans were employed full time than were before NAFTA went into force, even accounting for population growth, and the real (i.e. inflation-adjusted) wage for that employment was higher ten years after NAFTA than it was before NAFTA.

  4. The main issue is NAFTA started the demise of the middle class. The lower class expanded as good paying middle class jobs shrunk. Public assistance went up. New jobs created had no or very little benefits. The unemployment rate does not take into consideration for those that have given up looking; therefore, you can double that rate and be much closer to the actual unemployment rate. All governmental statistics are skewed. We all know that. We all know that and just hope our comparison of one set of like data to another is still like comparing apples to apples but certainly not accurate ( I use to be a statistician). One of the reasons Trump won was because he promised to bring jobs back to America and make trade benefit our country. Your saying NAFTA has been good for our country. I say it has not. You base your opinion of the Bureau of Labor Statistics. I say they do not have all of the data and that data is skewed towards a positive outlook. Free trade is fine if it benefits all countries involved. As a country we have enjoyed prosperity and wanted to help other countries enjoy the same. That’s great as long as it doesn’t hurt the American people.

    • “The main issue is NAFTA started the demise of the middle class. The lower class expanded as good paying middle class jobs shrunk.”

      As I pointed out in an earlier comment, the average real wage increased over the decade after NAFTA went into effect, as did employment. The only way to turn that into “the demise of the middle class” is to say “sure, the lower class got richer, but the upper class got richer FASTER.” Which might be a matter of concern, of course. But it’s not like the lower class, or the middle class, got poorer.

      “Public assistance went up.”

      That would bear more specificity. More recipients? Higher cost per recipient? Higher cost overall? What do we mean by “public assistance?” Quick research says that both the number of recipients and the cost per recipient of SNAP and TANF benefits fell in the decade following implementation of NAFTA. That doesn’t mean they fell BECAUSE of NAFTA (Clinton and the Republican Congress passed “welfare reform”), but apparently NAFTA at least didn’t STOP “public assistance” from going in the opposite direction from your claim.

      “One of the reasons Trump won was because he promised to bring jobs back to America and make trade benefit our country.”

      Yep — that’s how/why I predicted he would win the presidential election and accurately predicted the outcome in 48 of 50 states six months ahead of the vote.

      “Your saying NAFTA has been good for our country.”

      In your imagination, perhaps. Anywhere else, no.