Buy American?

By Joe Whitaker

Whenever economic times become tough; manufacturers, retailers and sometimes our own government establishes the familiar cry “Buy American!” This phrase dates back to 1933 when the U.S. Congress passed the Buy American Act more or less requiring that all products used in U.S. government contracts were purchased domestically. This was done in an attempt to spur a recovery from the Great Depression. American citizens were encouraged by industry and the government to “Buy American.” In effect, what it really did was cause foreign governments to retaliate against us by implementing trade restrictions and tariffs that made it difficult for us to sell and export our products outside the U.S. With more protectionist policies and less competition, inflation and lower quality products were the result. The U.S. was considered by the world as being “isolationist” which resulted in breakdowns in communication and resentment. After WWII ended in 1945, experts could look back and say to themselves “…that Buy American Act didn’t work so well – the only thing that made our economy recover was this awful war.”

While the Buy American Act certainly was not the cause of the Second World War, its policies certainly didn’t win us any friends nor cause a benefit to Americans. The Buy American Act is still law, but is not enforced as it was in the 1930’s.

Now again, we are being told to Buy American. I consider myself as patriotic as the average American. When I have the choice or am aware of the choice between purchases of American goods vs. foreign, I will chose American when all other things are equal. However, if the price of the foreign product is far less and the quality is as good or almost as good, I prefer to keep more of my money for me and will choose foreign. Increasingly, making the choice to Buy American can be pretty foggy. With our global economy, components and products are sourced from all over the world making the Buy American choice almost impossible without doing weeks of research. For example, my Chevy HHR was purchased from a dealer in Florida after being delivered by GM. Where did GM build it? Chevy HHR’s are assembled in Ramon Arizpe, Mexico by General Motors de Mexico using parts made in the U.S., Mexico, Japan and other countries. The same week that I bought my HHR, a friend bought a Honda built by U.S. workers in Marysville, Ohio.

Recently, a customer came into our showroom complaining that the wheels he purchased from us for his Corvette were made in Japan. One of our counter people walked out to the parking lot with him and pointed out that the wheels on his car as delivered by GM were also made in Japan. So who bought American here? In the case of my HHR, I can say that I bought an American car. However, I didn’t put much money in the pockets of U.S. autoworkers. Ironically, the guy that bought the Honda put more in the pockets of the everyday American than I did; and he didn’t “Buy American!” Where is the much talked about (and finally available) 2010 Chevrolet Camaro built? Try the General Motors of Canada Ltd. assembly plant in Oshawa, Ontario, Canada. If you buy a new Camaro, you certainly are buying “North American” but you are not buying American in the true meaning of the phrase.

Americans overwhelmingly choose value first and country of manufacture a distant second when buying their products. Twenty years ago when Sam Walton was still alive, Wal-Mart bragged on TV and in their stores that they bought American products and encouraged consumers to “Buy American.”. That quickly changed to “we buy American products when we can.” Today, that claim has gone right out the window. Why? They were told by their customers that they wanted value and the best products for their money no matter where it was made. Nobody can argue that Wal-Mart is the largest corporation ever created in America and now employs 1.4 million people; mostly here in the U.S. Their success and obvious benefit to all Americans is not as a result of “Buy American.”

During tough times like now, retailers are quick to jump to and advertise the catch phrase of “Buy American” when they really mean to say “Buy From Us.” In reality, a patriotic American acts as a capitalist and an individualist: he buys the best, wherever it may be found.