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(Wall Street Journal)   How "Buy American" can hurt U.S. businesses. Wait, what?   (online.wsj.com) divider line 70
    More: Interesting, U.S. government, Office of Management and Budget, Americans, Environmental Protection Agency, summons, Canadian government, grief, in Washington  
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3384 clicks; posted to Business » on 16 Sep 2009 at 5:20 PM (5 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2009-09-16 11:43:05 AM  
it will hurt a few but help a lot more.
 
2009-09-16 01:34:07 PM  
Just another example of how the invisible hand will biatch slap you when you try to fark with it.
 
2009-09-16 01:39:34 PM  
Law of Unintended Consequences--obey it, biatches.
 
2009-09-16 01:42:35 PM  
Dancin_In_Anson: Just another example of how the invisible hand will biatch slap you when you try to fark with it.

Actually, the invisible hand is broken, and one of the things Mr. Smith will tell you is that massive consolidation of industry and business into the kind of conglomerates we have now is one of the things that breaks the fingers. Too big to fail. Glad I can teach you something today.

FAIR trade. Not FREE trade.
 
2009-09-16 01:42:56 PM  
Of course extreme protectionism is bad. It pisses off the rest of world and takes away China incentive not to invade us.

But having the massive trade deficit that we have now will drain the economy. We making very little and buying everything. Though, buying items manufactured by child labor overseas is great for stock prices (fark you WSJ!).
 
2009-09-16 01:45:15 PM  
How is this surprising? It is basic economics in action. This is exactly the type of trade wars economists feared would occur with the "Buy American" clause. In response to the clause, The Economist released this cover:

blogs.thestate.com

/hotlinked
//The Economist did exaggerate.. a lot.
 
2009-09-16 01:46:50 PM  
Schrodinger's Petting Zoo: Of course extreme protectionism is bad. It pisses off the rest of world and takes away China incentive not to invade us.

But having the massive trade deficit that we have now will drain the economy. We making very little and buying everything. Though, buying items manufactured by child labor overseas is great for stock prices (fark you WSJ!).


Oh, I'm sorry. I thought This, and These were the incentive not to invade. Not to mention that they are (currently) as dependent on us as we are on them. But tell me how it's all just trade-based.
 
2009-09-16 01:48:37 PM  
Let me mention that I realize that extreme protectionism is bad for economies. But perhaps maybe if we had gone with.... FAIR trade,rather than FREE trade, we might actually manufacture things in this country, instead of being an economy of banks and middle managers.
 
2009-09-16 01:54:43 PM  
HotLonelyTeenageGirl: Actually, the invisible hand is broken, and one of the things Mr. Smith will tell you is that massive consolidation of industry and business into the kind of conglomerates we have now is one of the things that breaks the fingers. Too big to fail.

Um, no. And for what it's worth, there is nothing too big to fail.
 
2009-09-16 02:03:24 PM  
HotLonelyTeenageGirl , do us all a favor and define, once and for all, "fair trade."
 
2009-09-16 02:07:34 PM  
HotLonelyTeenageGirl: Oh, I'm sorry. I thought This, and These were the incentive not to invade.

China doesn't care as much about their soldiers as we do. Also, you're assuming that America (FARK YEAH!) is invincible.

HotLonelyTeenageGirl: Not to mention that they are (currently) as dependent on us as we are on them.

That's kinda the point that I was trying to bring across. They attacking us would being killing the goose that laid the golden egg. So, it's in their best interest to keep good relations with America.

Also, if we decided to just outright stop trading with China, it would wreak havoc on their economy. The government and the people would look for someone to blame, and we would be conveniently placed at the front of the line. With a destabilized economy ripe for demagogues, some bad decisions will be made. Just look at what Glen Beck at what he has done with the little he had to work with.
 
2009-09-16 02:14:42 PM  
Wall st won't like it. Wal mart won't like it. but American manufacturing will love it.
 
2009-09-16 02:15:11 PM  
Meh. There have to be more products that we can buy that are made in America before this theory becomes a problem.
 
2009-09-16 02:19:43 PM  
HotLonelyTeenageGirl: Let me mention that I realize that extreme protectionism is bad for economies. But perhaps maybe if we had gone with.... FAIR trade,rather than FREE trade, we might actually manufacture things in this country, instead of being an economy of banks and middle managers.

What is your definition of fair trade?
 
2009-09-16 02:22:50 PM  
Bufu: HotLonelyTeenageGirl , do us all a favor and define, once and for all, "fair trade."

Oops, didn't see your post, Bufu. Sorry for the redundancy.
 
2009-09-16 02:24:07 PM  
You know, you aren't allowed to warn of doom for both free trade and restricted trade. You can only doom one side.
 
2009-09-16 02:29:18 PM  
Hobodeluxe: but American manufacturing will love it.

Absolutely. They can build the products as shiatty as possible and sell them for the highest price possible and there's not a damn thing the buyer can do about it.
 
2009-09-16 02:31:37 PM  
Dancin_In_Anson: HotLonelyTeenageGirl: Actually, the invisible hand is broken, and one of the things Mr. Smith will tell you is that massive consolidation of industry and business into the kind of conglomerates we have now is one of the things that breaks the fingers. Too big to fail.

Um, no. And for what it's worth, there is nothing too big to fail.


Are you really going to argue with me about Adam Smith and his feelings about massive consolidation of industries into massive duopolies and such? This is one of those times where it's better to say nothing when you're misinformed. You brought Adam Smith up with "invisible hand", Mr. Armchair-Libertarian. Keep on digging.
 
2009-09-16 02:32:58 PM  
Wait, what?

Buy American might hurt 'em, but buying American, not so much.
 
2009-09-16 02:35:12 PM  
Bufu: HotLonelyTeenageGirl , do us all a favor and define, once and for all, "fair trade."

There is no truly firm definition, but the way I define it is: "don't exploit cheap labor". As I said before, welcome to America 2009. We manufacture nothing. It's cheaper to do it elsewhere, and we promote working conditions that Americans would never accept, just so I can go to Wal-Mart and buy a 10-pack of socks for $4.95. You can easily google.
 
2009-09-16 02:38:38 PM  
Schrodinger's Petting Zoo:
Also, if we decided to just outright stop trading with China, it would wreak havoc on their economy. The government and the people would look for someone to blame, and we would be conveniently placed at the front of the line. With a destabilized economy ripe for demagogues, some bad decisions will be made. Just look at what Glen Beck at what he has done with the little he had to work with.


Truly no doubt, there. It would make every previous war in history appear to be a simple bar-fight.
 
2009-09-16 02:52:07 PM  
i253.photobucket.com

Begun the fecal sludgewars have.
 
2009-09-16 03:00:53 PM  
What is fair market?

No monopolies, no consolidation of a nations wealth or reasources. Everyone has a chance to enter a market to survive or die. No outrageous bonuses for doing your job. More equitable distribution of the profit with all the employees who helped the company achieve said profits.

Acknowlegement that some businesses should not be run for fantastic profit margins. Rampant competition. Realization that a corporation has a responsibility to the community first, customer second and shareholders last.
 
2009-09-16 03:01:18 PM  
HotLonelyTeenageGirl: Are you really going to argue with me about Adam Smith and his feelings about massive consolidation of industries into massive duopolies and such?

Yep. I damn sure am. No company is "too big to fail". There will always be someone there to pick up the pieces. The more government tries to fark with it (singular monopolies notwithstanding) the more they are going to fark it up and this story is a prime example. Competition has been all but eliminated and we the people will get for our money the shiattiest possible quality at the highest possible price.
 
2009-09-16 03:11:47 PM  
HotLonelyTeenageGirl: Bufu: HotLonelyTeenageGirl , do us all a favor and define, once and for all, "fair trade."

There is no truly firm definition, but the way I define it is: "don't exploit cheap labor". As I said before, welcome to America 2009. We manufacture nothing. It's cheaper to do it elsewhere, and we promote working conditions that Americans would never accept, just so I can go to Wal-Mart and buy a 10-pack of socks for $4.95. You can easily google.


You can't pay 21st century wages with a 19th century infrastructure, the difference in productivity will not allow it. Without jobs, you can't improve the infrastructure to demand higher wages and benefits.
 
2009-09-16 03:17:58 PM  
HotLonelyTeenageGirl: As I said before, welcome to America 2009. We manufacture nothing.

I work in manufacturing. Getting a kick...
 
2009-09-16 03:34:37 PM  
Oh look it hurt exports to Canada almost as much as it dented imports from Canada. I predicted this back when this was first proposed.

I understand wanting to get off China's teat, there's a massive trade deficit with them, but going all protectionist on countries with which you have a healthy balanced trading relationship is stupid.
 
2009-09-16 03:45:01 PM  
I sleep easy knowing that we can still manufacture outrage with the best of them.
 
2009-09-16 03:54:15 PM  
GAT_00: You know, you aren't allowed to warn of doom for both free trade and restricted trade. You can only doom one side.

Not if you just want to warn doom for doom's sake.

DOOM! The end is NIGH! etc etc
 
2009-09-16 03:55:16 PM  
HotLonelyTeenageGirl: Bufu: HotLonelyTeenageGirl , do us all a favor and define, once and for all, "fair trade."

There is no truly firm definition, but the way I define it is: "don't exploit cheap labor". As I said before, welcome to America 2009. We manufacture nothing. It's cheaper to do it elsewhere, and we promote working conditions that Americans would never accept, just so I can go to Wal-Mart and buy a 10-pack of socks for $4.95. You can easily google.


You forgot to mention "living wage."
 
2009-09-16 05:32:34 PM  
Nationalistic Economy!
Socialist Government!

/nee noo nee noo
 
2009-09-16 05:34:24 PM  
I work for a company that produces luxury goods in Los Angeles. It works out pretty well for me: people pay more for our product, but it is much better quality than a product half the price from China. Hundreds of people in the U.S. are employed.

I know it's popular on Fark to trash Walmart and Target, but I usually avoid those stores. I find that I cannot go in there without spending at least $100 on random junk, made overseas. I buy necessities either from Amazon or my local supermarket chain. I don't like buying "disposable" clothing like from Forever 21 or Express... I rather buy less, but buy quality pieces from stores with good customer service and if the piece is manufactured in LA that also influences my decision.
 
2009-09-16 05:55:23 PM  
It will hurt retail outlets that capitalize on slave wages and marked-up Chinese imports.
 
2009-09-16 05:59:38 PM  
Dancin_In_Anson: Just another example of how the invisible hand will biatch slap you when you try to fark with it.

Yeah, China monkeying around with their currency to beef up their exports really buried the poor bastards.
 
2009-09-16 06:00:04 PM  
GaryPDX: Nationalistic Economy!
Socialist Government!

/nee noo nee noo


I believe you have the adjectives on those nouns transposed.
 
2009-09-16 06:01:46 PM  
HotLonelyTeenageGirl: Actually, the invisible hand is broken, and one of the things Mr. Smith will tell you is that massive consolidation of industry and business into the kind of conglomerates we have now is one of the things that breaks the fingers. Too big to fail. Glad I can teach you something today.

Adam Smith also made a point of explaining that capitalism was a means to an end, and that the pursuit of wealth shouldn't preclude enjoying yourself.

But, just like in the normal office environment obsessive type A bastards ruined it for the rest of us.
 
2009-09-16 06:09:38 PM  
Quite a bit of big businesses campaigned against this.
The company I work for sells something like 55% of stuff over seas. China is a huge buyer these days.

Now everyone is turning to our (overseas) competitors because they can't sell their stuff here, so why buy stuff from us.
 
2009-09-16 06:15:12 PM  
RE: "Fair Trade"
Here in the Caribbean, they have banners for the Hugo Chavez controlled PetroCaribe hung all over the place. They all mention "FAIR TRADE" in giant block letters. So, for those wishing a detailed explanation of what "FAIR TRADE" entails, Hugo Chavez has that all figured out.

Frédéric Bastiat wrote Sophisms of the Protectionists in the 1800s. Not much seems to have changed since then, really. Interesting read if you have the time.
 
2009-09-16 06:31:43 PM  
Bob Weese, a spokesman for GE Canada, said the group's wastewater-treatment business was having a tough time bidding for contracts with U.S. municipal governments because of the procurement rules.

And their tough time has NOTHING to do with the fact that GE industrial equipment is, by and large, junk? Even their PLC lineup ain't that hot anymore.

I'm doing the I&C for a poop plant north of NYC, so far it's been:

* US (Allen-Bradley) PLC equipment.
* Swiss (Endress & Hauser), but made in the US instrumentation.
* US (Square-D) panel devices
* German (Phoenix) power supplies
* French (Telemechanique) motor starters.

For the ones laughing about the last one, the Schneider rep was in today with a Tesys U starter. It's a work of art, far better than anything American out there. Very user friendly and VERY well made.

A lot of the heavy stuff's still made in the US, though the evil people at Flygt sell lots of pumps here. But generally, you'll see a lot of US made stuff, with the I&C and electric gear being American, Swiss, German, or French. No American company makes a mag meter worth a shiat (literally), though there's some good American made venturis out there.

Oh, where was I? Oh yeah - ther'es nothing wrong with decent made foreign stuff, or buying using it. It's when everyone goes and buys junk based on price, that things suck. I've had lots of customers try to save a buck and spend 3 times as much in the end...
 
2009-09-16 06:59:04 PM  
HotLonelyTeenageGirl: Bufu: HotLonelyTeenageGirl , do us all a favor and define, once and for all, "fair trade."

There is no truly firm definition, but the way I define it is: "don't exploit cheap labor". As I said before, welcome to America 2009. We manufacture nothing. It's cheaper to do it elsewhere, and we promote working conditions that Americans would never accept, just so I can go to Wal-Mart and buy a 10-pack of socks for $4.95. You can easily google.


I hate to burst your little bubble, but the US is the largest manufacturing nation in the world and we're still increasing the amount of things that we manufacture (most years 2008 and 2001 were exceptions). Not a lot of people are employed in the manufacturing of most goods (machines do a lot of it now) but we do manufacture more than anyone else.
http://curiouscapitalist.blogs.time.com/2007/05/23/the_us_is_still_the_worlds_b i g/
 
2009-09-16 07:02:03 PM  
PsychoPhil: It's when everyone goes and buys junk based on price, that things suck. I've had lots of customers try to save a buck and spend 3 times as much in the end...

that right there is where we get farked. I used to work for a company that would repair a 30 year old forklift several times a year, because it was really used past it's capacity

between the cost of the repairs (massive) and the cost to rent a another forklift, plus the downtime for an entire shop (sole large forklift) it'd have been cheaper to replace that thing within the first year, but mgmt wasn't thinking about the long term costs
 
2009-09-16 07:05:36 PM  
If you support unfettered free trade, that is a fine philosophical point. It would be deeply problematic for me to think that an American deserves more than a Chinese or Indian worker for the same work.

But, you must simultaneously eliminate those laws applied within this country that put American workers at a disadvantage in competing in the world market. Obviously the minimum wage. Environmental laws. Labor laws. Overtime wage rules. Labor safety laws. Laws that force poor families to send children to school instead of earning for the household. Even down to the laws that make it illegal for 30 people to live in a house (as is common in much of the world).

If you like those do-gooder laws, you can't concurrently end-run around them with imports without putting a straightjacket on the competitiveness of our millions of unexceptional 2-digit-IQ workers. It is hypocritical. Either tariffs to balance the effects of our own social-conscience laws, or allow a proper race to the bottom. One or the other.
 
2009-09-16 07:16:18 PM  
loonatic112358:
that right there is where we get farked.


I try to explain it to customers, and many listen, but others don't. They'll insist on THEIR favorite POS instrumentation or control stuff, even though better stuff exists. One customer, we replaced a dozen of their horridly unreliable flow meters with top shelf (E&H - though BB and Siemens are about as good) stuff. The old crap would short out if it got wet, jam up (turbine units), and were generally a pain in the ass. The new stuff just works. And it's got nice features that they like. They eventually made the stuff thir new standard for everything there.

I used to work for a company that would repair a 30 year old forklift several times a year, because it was really used past it's capacity

I know places that excel in 'run to destruction'. Funny thing is stuff always breaks when you need it the most....


between the cost of the repairs (massive) and the cost to rent a another forklift, plus the downtime for an entire shop (sole large forklift) it'd have been cheaper to replace that thing within the first year, but mgmt wasn't thinking about the long term costs

Most managers can't think beyond next week. We had one project where we deliberately oversized a control cabinet because we knew the rest of system was going to get upgraded and the new equipment would work best in the cabinet we were building. Everyone laughed at the huge cabinet with not much in it, until a year or so later, when sure enough, the system got upgraded. We sent a guy over to add an "upgrade package" to the panel, and it's ready to run all the new stuff.

These days, even with the economy, I'm still trying to buy and sell quality to my customers. I don't want to have to keep out servicing junk, even if they're paying me for it...
 
2009-09-16 07:27:17 PM  
With the recent fall of the US dollar against the Canadian this would be a good time for the US to be promoting trade rather than stifling it, at least with Canada.
The dollars drop is an opportunity for US exporters that protectionism, and the inevitable retaliation, will reduce.
 
2009-09-16 07:28:30 PM  
nelsonal: HotLonelyTeenageGirl: Bufu: HotLonelyTeenageGirl , do us all a favor and define, once and for all, "fair trade."

There is no truly firm definition, but the way I define it is: "don't exploit cheap labor". As I said before, welcome to America 2009. We manufacture nothing. It's cheaper to do it elsewhere, and we promote working conditions that Americans would never accept, just so I can go to Wal-Mart and buy a 10-pack of socks for $4.95. You can easily google.

I hate to burst your little bubble, but the US is the largest manufacturing nation in the world and we're still increasing the amount of things that we manufacture (most years 2008 and 2001 were exceptions). Not a lot of people are employed in the manufacturing of most goods (machines do a lot of it now) but we do manufacture more than anyone else.
http://curiouscapitalist.blogs.time.com/2007/05/23/the_us_is_still_the_worlds_b i g/


I'm sorry. I must be confused by the term "Rust Belt". Dude, I live in Houston, TX. I am aware we "manufacture". That does not excuse what has taken place the last 30 years. In the interest of civil discourse, I will also point out the dick-assery of the american worker as well as the american executive.
 
2009-09-16 07:37:32 PM  
HotLonelyTeenageGirl: nelsonal: HotLonelyTeenageGirl: Bufu: HotLonelyTeenageGirl , do us all a favor and define, once and for all, "fair trade."

There is no truly firm definition, but the way I define it is: "don't exploit cheap labor". As I said before, welcome to America 2009. We manufacture nothing. It's cheaper to do it elsewhere, and we promote working conditions that Americans would never accept, just so I can go to Wal-Mart and buy a 10-pack of socks for $4.95. You can easily google.

I hate to burst your little bubble, but the US is the largest manufacturing nation in the world and we're still increasing the amount of things that we manufacture (most years 2008 and 2001 were exceptions). Not a lot of people are employed in the manufacturing of most goods (machines do a lot of it now) but we do manufacture more than anyone else.
http://curiouscapitalist.blogs.time.com/2007/05/23/the_us_is_still_the_worlds_b i g/

I'm sorry. I must be confused by the term "Rust Belt". Dude, I live in Houston, TX. I am aware we "manufacture". That does not excuse what has taken place the last 30 years. In the interest of civil discourse, I will also point out the dick-assery of the american worker as well as the american executive.


Why is letting machines make things bad? That's really what people are protesting (they blame China/India/Japan/Mexico) but it's automation). At one point 90% of Americans worked on farms, but automation has reduced that to less than 1% now. The same thing is happening and will continue to happen in manufacturing (unless we run out of oil in which case we'll go back to the former 90% growing our food and be much poorer).

Essentially we're getting surprisingly close to the star trek type economy, but about 10% of the country owns the replicators. That will likely change as society adjusts to this new paradigm.

The rust belt is rusting mostly because the governments of those states became beholden to the unions who made business operations more difficult than in other areas which are getting investment rather than the rust belt states. Be glad you live in a state that's getting investment.
 
2009-09-16 07:40:19 PM  
nelsonal,

I believe the USA is only #1 there because most of what you manufacture are large budget items. You still make fighter planes in the USA that sell for $5 billion a pop. I believe if you look at people employed by manufacturing compared to China, even adjusting for the large population gap, they're way ahead of the USA.

I think in the long run, it's better to have 1,000 people making a living wage producing widgets, than 25 people making a lot of money producing fighter jets.
 
2009-09-16 07:49:18 PM  
nelsonal,

I understand what you're saying about automation, but the problem is...robots don't buy things....at least not yet.

We try and convince ourselves, well new technologies will come out, new industries, but the fact is, there's a bell curve. A good chunk of society, no matter how much they go to school can't be doctors, or engineers, or the guys making and fixing the robots.

As the robotics get better and cheaper, less people are needed. Who buys your products then? The 10% that still work fixing those things? The people who invent the new machines or markets them? 10% of the population can't sustain the market.

You say how 90% of Americans worked on farms, but let's be honest. There's not that much difference between lugging around some farm equipment and lugging around engine parts. Sure there's differences, but it's things that can be taught to pretty much anyone.

We're running out of jobs that "anyone" can do, which is something that's never happened in human history.
 
2009-09-16 07:50:27 PM  
Why can we not just consider Canada part of the USA in arrangements like this?

On the Canadian border so many business's thrive cratering to both countries that it seems stupid to try to enforce something like this.

It's not like the USA really want to compete with Canada in trade just has much as Canada doesn't want to hurt the USA in trading. We really need to start getting over these petty differences.
 
2009-09-16 07:51:05 PM  
Noirceuil: nelsonal,

I believe the USA is only #1 there because most of what you manufacture are large budget items. You still make fighter planes in the USA that sell for $5 billion a pop. I believe if you look at people employed by manufacturing compared to China, even adjusting for the large population gap, they're way ahead of the USA.

I think in the long run, it's better to have 1,000 people making a living wage producing widgets, than 25 people making a lot of money producing fighter jets.


http://www.federalreserve.gov/releases/g17/Current/table2.htm
It's not all fighter jets, 20% of our output is consumer goods. Watch one of the many shows about how things are made, there's frequently one person who manages 3-4 machines that do most of the work. Even widget manufacturing doesn't require people here. Trading a fighter jet for a bunch of widgets is a pretty good deal, when our fighter jets have few or no competitors and there are a zillion different nations that want them and make widgets.
 
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