"Buy American" Part of Obama's Stimulus Plan

**tidus1203** · February 9th, 2009 12:50 PM

Basta para sakin protectionism is very short sighted. Long term its a disaster. I normally don't agree with Keynesians on most points but on this one I agree very much with them that protectionism is a disaster in the long run. Its just political posturing but has no economic substance whatsoever.

**FWC** · February 9th, 2009 06:02 PM

First of all, don't get me wrong guys. I'm also against protectionism. I also believe that long-term, it would be disastrous. But I am trying to rationalize why the US (Obama, in particular), is pushing for this.

Let's imagine a neighbor who got rich. So decided to take life easy and pay other people to do things that he used to do. He had his car washed at another neighbor's shop. He buys food from another neighbor's restaurant. He asks another neighbor to tend his garden and another neighbor to drive for him. He derives pleasure from an occasional visit to the local brothel, etc.

Then suddenly, he made some bad investments and his wealth got depleted. So he decided to do things himself. He now washes his car, cook his own food, mows his garden, drives himself, and satisfies himself by playing with himself. Sure, he may not do it as efficiently and effectively as the experts do but he gets by. Can we blame him?

Why don't we also blame ourselves for being dependent on him by receiving his business when he was doing well?

Bad PR? Who cares? What will good PR benefit you if tomorrow half of your countrymen are starving?

Besides, take note that it is just a stimulus, i.e. something which will speed up a reaction. Once the reaction gains steam and is running, you can do away with the stimulant.

(Sorry if some of you find the humor in bad taste. But hey, it's got some grain of truth in it, right?)

**Jun aka Pekto** · February 9th, 2009 07:17 PM

I suppose it could work. I mean in the past, I've seen Koreans buy their own Hyundai Excels. They stuck with that car even though it was a clunker and much better cars were available.

I've seen the same with American cars back in the early 80's. But, that was before the time of the global economy.

Me? Personally, I have no problems buying a Big 3 car. I've done it before and I never needed a President to goad me into buying one.

**tidus1203** · February 9th, 2009 11:59 PM

Competition bring better products. Protectionism avoids competition and will create stale products because they know they will always have a customer who has no choice but to buy their cars.

**CVT** · February 10th, 2009 08:43 AM

I guess we need a "certain measure" of protectionism. More so now when we are facing the painful repercussions of "leaving the economy to the free market". There has to be some "level of control" somewhere to provide the necessary check and balance in the system.

I guess we all realize that we need a little of everything. Globalization will not function on its own,- there has to be a "certain measure of control". Countries will then need to find the acceptable balance in the system, based on their unique requirements.

(OT: Just like it will be harmful to have total freedom. It has to be freedom with responsibility)

7404:laundry:

**redorange** · February 10th, 2009 09:05 AM

FWC I like your analogy. Remember Japan did the same thing after WW2 and Korea did the same also to build up it's economy. They made it a point to buy products made in their country first before considering foreign made products. Even now the Japanese will patronize theirs first before others, hotels here owned by Japanese will buy form Japanese businesses first before others.

The US economy is down and if it takes patronizing American first over others then that's what needs to be done. Obama shouldn't care what the world thinks because the people of the world aren't the people that voted him into office, his voters are the Americans and he needs to answer to them not everyone else.

Sure it might be bad short term, but how can you worry about long term if the problem may not even allow you to get that far if you don't make a short term solution. Right now thousands are losing jobs and homes and you can't tell them you don't want to do something because what may or may not happen 15-20 years from now could be bad. He has 4 years in office and that is the mandate given and he needs to solve the problem within his time frame.

**empy** · February 10th, 2009 12:25 PM

Originally Posted by tidus1203

Competition bring better products. Protectionism avoids competition and will create stale products because they know they will always have a customer who has no choice but to buy their cars.

exactly. who suffers here? the consumer of course, because they are saddled with inferior products at a higher cost. and the industry itself because it will not be competitive globally and face retaliation overseas.

as a case in point, have you guys experienced (or heard about) the RP car industry during the Marcos era? you can have any car you want as long as it's a Lancer box type :rofl01: during the same years other countries were experiencing a boom in vehicle tech while having a choice of affordable and reliable cars

as an american consumer i like having the choice. i can buy a shirt made in china for $10, or a "proudly made in the USA" shirt for $50. that's fine in a free market, but i don't like being compelled to pay the $50 if i don't think patriotism is worth the extra $40. that simply isn't efficient. that's what happens when you have protectionism.

**FWC** · February 11th, 2009 02:03 AM

Originally Posted by empy

...who suffers here? the consumer of course, because they are saddled with inferior products at a higher cost. and the industry itself because it will not be competitive globally and face retaliation overseas.

The question is, are American products really inferior in quality? Or is their quality so good that it justifies the higher price? In fact, I believe its the latter case. In fact, that may be the one cause of their problems. They made their products so good that it took a longer time to replace them. I've got a Black & Decker coffeemaker which my sister sent me from the US back in 1995. It's still serves me well. My daughter got a China-made coffee maker as a wedding gift three years ago. In less than a year, it got busted!

We trade food equipment from the US. Companies with money buy them even if they cost three or four times more than China-made equipment because they last 10 to 15 years. But a cash-strapped company will buy China-made ones. After 2 or 3 years, they scrap them and buy new ones.

Originally Posted by empy

...as an american consumer i like having the choice. i can buy a shirt made in china for $10, or a "proudly made in the USA" shirt for $50. that's fine in a free market, but i don't like being compelled to pay the $50 if i don't think patriotism is worth the extra $40. that simply isn't efficient. that's what happens when you have protectionism.

This kind of thinking is another cause of the problem the US is facing at the moment. Everybody wants to buy the cheaper imported stuff which resulted to the imbalance in trade. In the end, everybody in the country loses.