Fixing our economy: Buy American Products in Self-reliance vs. protectionism

I am sitting here watching Nancy Pelosi on Meet the Press.  She stated we need to return jobs to America in self reliance, but not protectionism.  Regardless of her splitting hairs here, I agree that to get our economy going again, we have to start doing several things:

1. Start rejecting all the global economy nonsense as promoted by Bush that led to the outsourcing of American jobs to the cheapest labor anywhere in the world.  This globalization might explain why are economy is so bad right now.

2. We need to become self-reliant on domestic production even if that is protectionsim to strength our own nation including our economy by buing American again. In addition, we need to tax in protection, foreign products here in America from countries like China. I understand that if we do revert back to buying American, either in self-reliance or by protectionism, that will be inflationary and lead to less choice domestically so there is that downside.



3.We also need our yahoo politicians to tax those corporations, both foreign and domestic that rely on non-domestic labor/manufacturing at a higher corporate tax rate;  than those corporates that do not outsource globallly what they manufacture.  Pelosi suggested a 35% corporate tax rate on corporations doing most of their business oursourcing outside of the US; while those corporations that do not do so, at a 10% corporate rate.

First, I am no fan of Pelosi. But what she stated related to taxing corporations, I actually agree with some of what she argued this morning.  When I reflect back on my classes in economics, we as a nation have to remember the mutliplier effect of a given dollar.  In other words, if one dollar stays in America, there is a positive multiplier effect where that dollar is invested. Like jobs that increase taxes and tend to lead to a rise in housing prices.

Second, if we keep the dollar multiplier effect here domestically more often, then we benefit from any given investing dollar staying in America.  With globalization, due to the same multiplier of any given dollar, when we outsource or buy products from a foreign nation like China, then China instead of the US enjoys the multiplier effect of a given dollar.

Basically, reverting back to a popular slogan from the sixties, "buy American".  I concur. Whether we call it self-reliance or protectionism does not matter that much. What matters is our national economy and jobs need to be restored in America for many reasons; even if we give due effect to the high risk of inflation and less to choose from globally.  If we do not, then there is little chance there will be any sustained economic recovery until we do so.

So buying American is a double edged sword. We fix jobs and the economy on the positive side, and have to take the hit on inflation and less products to choose from globally.  On one hand, I would rather stay focused on what is best for my nation and take the negatives associated with having limited products made here domestically.

 On the other hand, in practical terms, that means we would have to buy a Chevy or Ford again;instead of a better quality produced foreign auto like a Honda or Nissan.  At least there should be a price to pay for buying foreign products to level the incentive of consumers who choose to buy  products made outside the US.  Then merely apply that to many other industries, whether that be clothing, agriculture or consumer electronics.. 

We cannot fix our own domestic economy and still advocate for global products made anywhere in the world using the cheapest labor sources anywhere in the world. I realize in summary, buy American in self-reliance and protectionism can be argued either way. There are arguments supporting both positions. 

What I do realize is there is need to level the global playing field here, that tends to make me support again, this idea of buy American, again. I also realized to level the playing field globally requires trade tariffs and restrictions, and a good chance of trade wars internationally as other nations reciprocate.

We as a nation need to both understand globalization is not always a good thing, plus we need to level the global playing field for a while with some kind of inflationary protectionism to restore to America, what made us a great and prosperous nation leading to jobs, infrastructure improvements and re-industrialization domestically; which in turn will be a real kickstart to our economic recovery.

Buy American needs to be a priority slogan again.  That, I agree with. 





.