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Sunday, June 8, 2008

Made in America, a Label that is Harder and Harder to Find.

If an american company can increase it's stock value by outsourcing its labor to other countries, how does that help America citizens? If a company actually disassembles assembly lines and sends them overseas where cheaper labor will reassemble and run the assembly line, how does that help America?

One argument that is used is if American companies don't stay competitive in the overall cost of their products, they will simply lose market share anyways. I don't have an exact answer to that conundrum, but I do know that if local economies don't spread wealth threw enough hands, that local economy will suffer either a quick, or slow death. An import economy does not replenish
a local economy anywhere near as effectively as products that are actually made in america.

Can't American stores guarantee to stock a certain percentage of completely made in america products on their shelves? 25%, 30%, 33%? Shouldn't every American store guarantee a certain amount of American made products are sold within their stores?

2 comments:

Anonymous said...

Might I recommend if you're going to talk about economics, you actually learn something about it?

You say If an american company can increase it's stock value by outsourcing its labor to other countries, how does that help America citizens? If a company actually disassembles assembly lines and sends them overseas where cheaper labor will reassemble and run the assembly line, how does that help America?

First, you have to keep in mind that Americans do actually work at those companies, so those people benefit. All Americans benefit because products are more affordable. This raises the standard of living (which is often measured through consumption, for lack of a better metric). It also controls inflation; many economists have identified this particular fact as one of the reasons for relatively low inflation over the past few years (Less so this year, clearly). Moreover, keep in mind that many American firms that employ Americans, such as retailers and even many manufacturers, benefit from cheap import; their cost of doing business is lower, the marginal cost of producing products is lower, and they don't go out of business (and can afford to hire their workers).

Furthermore, there's an interesting tone of xenophobia in what you say. What about the people employed in factories abroad? Certainly, the working conditions can always be improved, but the benefits of these factories abroad in terms of the economic and social development of third world countries is undeniable, particularly in SE Asia.

One argument that is used is if American companies don't stay competitive in the overall cost of their products, they will simply lose market share anyways. I don't have an exact answer to that conundrum,

That's telling. It's also probably true.

local economies don't spread wealth threw enough hands, that local economy will suffer either a quick, or slow death. An import economy does not replenish
a local economy anywhere near as effectively as products that are actually made in america.


This doesn't make a hell of a lot of sense. I think I understand your point, and it's true that there are winners and losers from trade. However, the overall gains from trade outweigh the losses, and there a variety of existing policy solutions to help communities and individuals who 'lose' from trade.


Can't American stores guarantee to stock a certain percentage of completely made in america products on their shelves? 25%, 30%, 33%? Shouldn't every American store guarantee a certain amount of American made products are sold within their stores?


For some firms, that might not be possible or feasible, no. How would you enforce that? And how would raising operating costs for retailers (which this would inevitably do) help American workers?

A.M. said...

It's all about running the same money through as many different hands, and at each stage, some type of value is added to the product.

That very basic, very foundational way to run a strong economy has been thrown under the bus and instead we have 99 cent disposable stuff from abroad.

We really may not come out of this economic malaise we are in because so many layers of the local economy have been replaced by an import economy.

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