BUY AMERICAN---MAYBE

I received an email today about buying American, which, on the surface, seems like being for motherhood and against sin. You have seen this email or similar about comparing brands in big retailers and finding, for example, light bulbs made in Mexico (by GE) and a private brand made in Cleveland, Ohio. Being a good American, I forwarded it on. Upon receiving it, an old friend, with whom I once worked at an American company, gently reminded me that our old company manufacturing garments is now primarily buying overseas and even shifting the last of the products they made in the U.S. to Mexico by 2011 and that a lot of our old business associates and friends would be out of work if we buy only American.

He's right. Sometimes many of us are too quick waving the flag, forgetting that a lot of American jobs are provided by foreign companies. Look at Honda, for example, who make a ton of their cars in Ohio. The same with a lot of other foreign car companies around the states. These companies---and other foreign industries in addition to cars---provide employment for a lot of people.

We also have to remember that in the long run protectionism rarely is of long-term benefit. Ask most economists, and they will remind you that the Smoots-Hawley bill back in the mid-thirties, enacted as a protectionist measure by Congress to "save American jobs" in actuality only exacerbated the great depression. Protectionism starts price wars, and everybody suffers.

I spent a business lifetime in the clothing business, ranging from basic underwear to sports apparel. Back in the twenties the textile business vacated New England for the South with cheaper wages and tax incentives to move there. My grandfather started an underwear manufacturing company in Ohio in 1899, and within my lifetime we were a rarity, operating in the north. I, in the third generation, sold the business in 1972 and by 1992 the company was finished. The South was deserted for overseas, beginning in the sixties, and it is a real anachronism to find an American apparel company. The company my old friend and I worked for made goods in America for many years. When I retired in 1995, they were just starting to import. The rest is history. The point is, we kissed textiles good-bye a helluva long time ago, and I'm afraid they won't come home, which is a reality to be faced.

It is a truism and fact of life that business chases profit and will go where the return will be maximized. So, next time you have a knee jerk reaction like I did, better think in terms of a world market and can American jobs compete there. I still believe we have enough innovative thinkers here in America to create new ideas and jobs, which has to be a constant cycle of innovation, creation, reproduction by cheaper imitators and then back to innovation again. And the beat goes on...