Does the government have the right to protect American companies from foreign competition by any means, even with industries (cars, consumer electronics, etc.) that other countries are better at than us?
I say let consumers buy whatever they think is best, and if American companies want business, let them earn it.
Life is a tragedy for those who feel and a comedy for those who think.
Intersting question, especially when you consider how the American government complains when other countries do similar things. But yes the government does have the right to protect their industries, so long that said protections fall within GATT guidlines.
If I was discussing Lucy Lawless but I wrote Lucy Topless, would that be a Freudian typo?
Robodude, it’s a matter of deciding whether we want to operate with our business ethics, or our competitor’s. We can scream about unequal business practices all we want, but do you want our trade ethics reduced to the lowest common denominator?
RoboDude, you raise a good point.
But the recession of the 1970’s/early 1980’s was caused in large part by American car buyers switching allegiance to foreign cars. No part of the ecenomy was untouched by the effects of massive layoffs & plant closings in the auto industry.
American consumers were well-served by the freedom of choice to buy Japanese imports that were not only more fuel-efficient, but also more reliable than American-made cars of the time. But if that consumer was happy not to have had to pay $500 extra (in excise tax) for that car, was he also happy when the tire factory laid him off because their sales to automakers were down by 50%? When the restaurant he ran went belly up because laid-off auto workers couldn’t afford to eat out? When the clothing store he worked for didn’t give him a Christmas bonus because holiday sales were so slow? That inexpensive Japanese car could certainly become no bargain if you factor in all of the ripple effects.
Sue from El Paso
Siamese Attack Puppet - Texas
Experience is what you get when you didn’t get what you wanted.
It’s funny how the American sentiment of “Buy American” is so completely against the basic values America was created for.
The whole idea of capitalism and freedoms in a free market allow a consumer to make a choice of what to buy. all the folks crying “if you don’t buy american you’re not supporting us” don’t realize that by ignoring a better non-american product you also defeat the purpose of having a free market.
If you feel that you must suffer, then plan your suffering carefully–as you choose your dreams, as you conceive your ancestors.
I agree with you Robo except that I believe your alarm is unwarranted. I can’t think of a country in the world whose trade policies are more geared to the consumer than the US.
Compare our policies to those of Europe or Canada which are disposed to protecting labor. They are currently enjoying 10% or higher unemployment (I will acknowledge their social policies play a large part in the numbers as well).
In Asia, trade policies are set with corporate interests in mind and we’ve seen what’s happened there.
While I have problems with many government policies, trade is not one of them.
Majormd,
And they switched not just for the Hell of it, but because American car makers were complacent and putting out absolute crap. Is it your contention that people should buy a significantly inferior product just because it’s a US product? While I’ll buy a US product over a foreign one if all else is equal, if all else isn’t equal I will certainly buy the better product.
And what about the massive amount of Federal tax money spent to prop up some of the US car companies? Perhaps if taxes weren’t jacked up so high to bail out politically influential businesses, then the ripple effects wouldn’t have been as bad because there would be more money around to cushion them.
Kevin Allegood,
“At least one could get something through Trotsky’s skull.”
Riboflavin asks:
Protectionism is not an all or none phenomenon. No one can look at where we are now & say that the shake-up of the automobile & related industries was a bad thing. But when a cataclysmic shift in market forces occurs, import taxes which are phased out over several years gives American industries the capital to invest in the R&D that will allow them to be competitive in the open market in the near future, with much less draconian effects upon the workforce, and the remainder of the economy.
Riboflavin continues:
Cite, please. The US government provided loan guarantees so that an ailing Chrysler could obtain the cash it needed without incurring the crippling interest rates often assessed half-dead or other high-risk businesses. The US government did not provide loans or other direct money to Chrysler. And what happens? Chrysler comes out with the K-car, followed by the mini-van, followed by the by the earliest marketing of SUVs to suburban off-road wannabe’s. Oh, the loans guaranteed by the US government? They have long since been paid off, since before Lee Iococca retired, with nary a penny of the guarantee claimed from the US government.
-Sue
I am extremely skeptical of this. Do you have any numbers showing the amount of consumer spending dollars lost to layoffs of American auto-workers (may want to compare to total…).
I would argue that what happened in the 70s and 80s was more about the US’s growing pains as it phased from an industrial based economy to a service based economy - a result not just of buying foreign products but of US companies moving low skill jobs where low skill labor is cheap. This was far more than the auto industry - this was nearly every manufactuaring industry.
Granted, the need to move labor to where it is cheap is a result of living in the global market, but there are very few people far enough left (and fascist enough) to suggest complete economic isolationism. The answer to the American worker then, is deal with it.