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In his quest to "Make America Great Again," President Donald Trump has spent a week encouraging us all to buy products "Made in America."
That makes for a good slogan—who doesn't want to support home-grown businesses?—but bad and incoherent policy. Most of all, it will do little or nothing to help Americans who have been put out of work by changes in technology and the economy.
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For starters, it's hard to even get a clean definition of what it means to be made in America. The Jeep Patriot, for instance, pushes nationalism in its very name but its transmissions are made in Japan, Germany, and Mexico. The same is true for dozens of products carry a "made in America" tag—oftentimes, a lot of something is assembled or sourced outside the United States and only a little bit of labor is added within our borders.
The United States often has much higher labor costs than foreign countries, which means the same thing created solely in America would have an astronomical cost. According to one estimate, if Apple iPads were made in America, they would cost $967 a piece or about three times today's basic price. The resulting fall in sales would cost about 67,000 manufacturing jobs.
Pushing "Made in America" carries other costs, too: To hype his "Made in America" policy, President Trump invited 50 exemplary companies to the White House for a photo op. It turns out that 21 of them received various federal, state, and local subsidies worth about $600 million. If you're taxing Peter to subsidize Paul, chances are you're not creating much real economic activity.
Pushing economic nationalism is also an affront to personal liberty and basic economics. Why shouldn't individuals be allowed to buy the products they think are best and cheapest regardless of where they come from? You might as well tell people to only "date American" or "vacation American."
Virtually all economists agree that protectionism dampens economic activity and growth by increasing prices and keeping workers and resources in sunset industries that will need more and more help to stay afloat. One study of industry-specific protectionist policies found that trying to make people "buy American" led to consumer losses per job saved of over half-a-million dollars. And for all the talk Donald Trump and others hve made about bringing back "good-paying" manufacturing jobs to America, the fact is that manufacturing jobs as a percentage of the work force peaked in 1943 and has declined ever since. We're truly a post-industrial nation.
There's no question that even with historically low unemployment rates, many Americans are having trouble finding good-paying, rewarding jobs in a global economy that demands constant upgrades and changes from workers. But the best way to help them is by pursuing policies by help produce the sort of economic growth that creates new jobs, new opportunities, and new wealth for all of us: Lower government spending, flatter and less distorting taxes, and less regulation.
Telling us all to "Buy American" is a cheap slogan best left on baseball caps made overseas.
Edited by Todd Krainin. Written by Nick Gillespie. Cameras by Meredith Bragg.
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