What if Things Were Made in America Again?
Our Buy American Mention of the Week!
by Roger Simmermaker
August 20, 2017
Every now and then I discover a book that I like enough to review since I think should be in the hands of every American and every member of congress.
What If Things Were Made in America Again: How Consumers Can Rebuild the Middle Class by Buying Things Made in American Communities by James A. Stuber definitely fits that criterion.
The author of this thought-provoking book holds a master's degree in political science from Columbia University and a law degree from Georgetown University. He also has the enviable experience of being a legislative assistant to a member of congress, which in my view gives him boots-on-the-ground experience in how politics actually works in this country.
In his book, Mr. Stuber is quick to point out that American politics doesn't always work in the best interest of America. Far from it. If you're a critic of free trade like I am, you know this to be true.
His views are contrary to the view of free trade-leaning economists and legislators, whose prescriptions to our problems are largely inadequate and are limited to trade adjustment assistance for laid off workers, creating short-term or one-time jobs like infrastructure (both involve going further into debt to pay for them) or simply even more free trade.
One can argue that there is more than one possible answer to our nation's problems, but James Stuber focuses on the one main answer I can agree with: Rebuilding the middle class through the power of consumer choice. In other words, buy American-made products as often as possible to create jobs, stimulate growth, and bolster prosperity.
It may sound overly idealistic at first, but when Mr. Stuber puts real numbers and real jobs (along with the faces of real Americans) behind the idea to crystalize it in a form we can all relate to, the real benefits of a 'Buy American' policy comes into clear focus.
We currently have a trade-in-goods deficit of over $750 billion annually, nearly half of that with China alone. James Stuber estimates about $600 billion of that is subject to consumer discretion. If we reduced that even further and brought home just $500 billion in consumer spending to America's shores, how many American jobs would that create?
A study published in 2014 reveals it would create 5.8 million U.S. jobs, and 2.3 million of those would be in manufacturing. Total economic production (or Gross Domestic Product - GDP) would increase to $720 billion in just three years.
The expansion of 2.3 million manufacturing jobs into 5.8 million total jobs is realized by the other secondary jobs that are created from the growth of jobs involved in manufacturing. These jobs include those in domestic parts-content jobs, as well as other jobs in service industries like restaurants, theaters, and hotels, which become the recipient of domestic spending because more Americans have more money in their pockets to spend. After all, seventy percent of all economic activity is comprised of consumer spending. Even economists favoring free trade will admit to that.
If you think free trade was supposed to produce more discretionary spending due to cheaper import prices for the American consumer, you might want to reconsider.
Mr. Stuber points out the pitfalls of a low-price, low-wage economy. The fear that blue collar families are standing on thin ice and worry that on any given day that they might fall through has now extended to professional positions as well. In an October 2016 poll, thirty percent were very fearful they would lose their job in six months; 28 percent were afraid of not being able to pay their mortgages, and 39 percent said that they were losing sleep because of their financial situation.
Researchers have established that in U.S. labor markets impacted by Chinese imports between 1990 and 2017, transfer payments sharply increased for things like unemployment, disability, retirement, healthcare, and other social costs that all U.S. taxpayers must pay for. There are actually 84 federal means-tested programs from Section 8 low-income housing, the Low-Income Home Energy Assistance Program, the Supplemental Nutritional Assistance Program (SNAP - formerly the Food Stamp Program), Supplemental Security Income (SSI), etc.
If we protected American producers and jobs from low-wage completion from China and elsewhere, we could avoid laying off American workers, who in turn sign up for these necessary but tax-revenue draining programs that all Americans must pay for through their tax dollars.
It's really very simple. If American manufacturing jobs decrease through bad free trade policies (and unemployment increases), taxes will likely go up. If legislators don't want to raise taxes to compensate for more social ills in society due to increased unemployment, then budget deficits and the national debt increases, along with greater interest payments on the national debt.
Increasing import competition from abroad not only drags down manufacturing wages, but it also puts downward pressure on wages in other job sectors. Why? Because laid off manufacturing workers increase the number of Americans now seeking employment in the other remaining job sectors, which are often service jobs that are not subject to job losses through foreign competition. It's simple supply and demand. The more workers seeking the same job, the lower the wages will be for that job.
Author James Stuber maintains that only the American consumer can solve the competition dilemma. If consumers demand products made in American communities, companies have no option but to respond.
Of course a stifling of international trade can help. James Stuber highlights the work of sensible economists like Paul Samuelson, who won the Nobel Prize in economics and noted that wage losses for American workers are not necessarily offset by lower prices for imports. Samuelson believed that when a low-wage nation like China or India improves call center or computer programming technology, the "real wage has been lowered." Samuelson famously noted in an interview with the New York Times that "If you don't believe that changes the average wage in America, then you believe in the tooth fairy."
Let's avoid tooth fairy notions that free trade benefits the United States and get back to the basics of supporting American-made products like Author James Stuber advocates in his new book, What If Things Were Made in America Again: How Consumers Can Rebuild the Middle Class by Buying Things Made in American Communities.
You can get your copy of this great new book for a special price here for just $22.95 plus FREE shipping! That's cheaper than the price at Amazon.com (even if you get free shipping through Amazon Prime).
What If Things Were Made in America Again: How Consumers Can Rebuild the Middle Class by Buying Things Made in American Communities is a great read, and I highly recommend it to any American who is concerned about American manufacturing and America's future.