Here is Part 2 of my interview with Roger Simmermaker, author of the book “How to Buy American.” Part 1 can be found here.
Roger Simmermaker is the author of “How Americans Can Buy American: The Power of Consumer Patriotism.” He also writes “Buy American Mention of the Week” articles for his website at www.howtobuyamerican.com and is a member of the Machinists Union and National Writers Union. Roger has been a frequent guest on CNN, Fox News Channel and MSNBC and has been quoted in the USA Today, Wall Street Journal and US News & World Report.
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Q: Is it helpful to “support” companies like GM who aren't as efficient as Toyota ? Shouldn't we buy what we consider to be the best car at the best price we can get as individuals? With GM losing sales to Toyota over the past two decades, it has forced GM to improve their product quality (although not enough to catch up to Toyota). This makes GM a better company than they would have been if we all bought GM strictly because they are American, right?
The General Motors Ontario, Canada plant is the most productive auto assembly plant in North America at only 15.85 hours per vehicle, according to “The Harbour Report North America 2005,” and GM has three of the top five most-efficient assembly plants in North America. GM has been losing sales mainly to inaccurate quality perceptions as defined by the media, and unfortunately the consumer has largely adopted it as truth. GM's problem is not that they don't sell enough cars. They have the highest U.S. market share of any automobile company. Their problem is the low amount of profit they earn per vehicle because of huge health-care and pension obligations that Japanese automakers don't have to pay out. Americans should realize this is an honorable burden they carry for our benefit, because if GM can't sell enough cars and make enough profits and pay for the health care of their workers and retirees, the American taxpayers will make up the difference.
So we can either support GM and Ford now or risk that they might go bankrupt and pay higher taxes later. The option that will result in more American prosperity and less burden for the U.S. taxpayer is to support GM and Ford, not Toyota or Honda. Toyota, by the way, just set a record for recalling more cars last year than they built. Yet you rarely hear of these quality challenges related to foreign companies in the general media. Only American companies seem worthy of challenge.
If America's economy isn't strong enough and America's market big enough to encourage a sufficient amount innovation and competition in all industries, then we're in bigger trouble than we ever imagined. To say that we need foreign competition to keep American companies competitive is a statement that indicates we have large economic problems that cannot be ignored. Free trade – which is unhealthy, unfair, cut-throat trade competition – is the biggest economic problem we face that we will eventually be unable to ignore.
Q: Have you seen the John Ratzenberger show “Made in America ?” If so, what are your thoughts on the show and the stories he features?
I have seen some of his shows and support what he is doing. I think the awareness he brings to the American public is very useful and beneficial.
Q: What obligation to we have to not buy products made in “sweatshop” factories, whether its clothing or the iPod factories, where people are allegedly forced to work 15 hour days and are punished for moving? Is there a moral component to “Buy American” as well as an economic reason?
The most moral economic component is that we require American producers to absorb and abide by the cost of our laws, foreign producers need not absorb and abide by these same laws. Foreign producers aren't required to make contributions towards Social Security or our national defense, among many other things. We need to make a distinction between healthy, fair competition and unhealthy, cut-throat competition. The rules of any competition should be the same for all players, but in the economic world, they are not. When a big company like General Motors carries honorable burdens to the benefit of the American people runs into financial trouble because their competitors don't have the same cost burdens, they are labeled inefficient and we are told to avoid them because they deserve financial ruin.
Simply put, if you want to sit at the poker table and share in the pot, you have to “ante up” just like everyone else. Free trade allows foreign producers to share in the pot of the lucrative U.S. market without “anteing up” like domestic producers. This is unfair and immoral.
The sad fact is that if you want an iPod, you have no choice but to buy from wherever the factory is located. If producers had to “ante up” like producers in America, its likely Apple would have chosen an American factory for production since that would be closest to the most-likely consumers.
It is very important to remember that if we are going to protect the middle class in America, we must protect the jobs that pay middle class wages. It is the duty of our government to not allow Americans, who must obey all American laws, to be victimized by foreigner producers must not. American workers should be seen as contributors to America's prosperity, not labor cost problems to be dealt with.
Q: In your book, you point out the cost of regulation in the United States, including OSHA and the EPA, drives companies to locate factories overseas where there are fewer regulations and lower regulatory costs. What is the solution to this problem?
The solution is to put an “equalizing tariff” on imports that will impose the same regulatory burdens on all competitors in a given industry, which is consistent with the Constitutional obligation of our government to regulate trade with foreign nations. President Theodore Roosevelt once commented that tariffs “Must never be reduced below the point that will cover the difference between the labor cost here and abroad. The well-being of the wage-worker is a prime consideration of our entire policy of economic legislation.” This is the only way trade can be truly fair for all players. If Nike wants to produce in Indonesia, that is their right. But they should have to pay a tariff which equalizes their cost burdens to the same level as New Balance who makes shoes in the USA so New Balance does not become a victim of the costs of American laws that Nike can ignore.
Abraham Lincoln said we should trade where it is necessary and avoid it where it is not. Much of the trade we engage in today is not necessary. Why should we trade for items we already make here in America? I learned as a child trading baseball cards that “trade” was something you did to get something you didn't already have.
There are some items like bananas that are not available from domestic sources, so there need not be a tariff on these imports since there is no domestic industry to protect.
Thanks to Roger for his time spent on the interview. Again, his website is www.howtobuyamerican.com.
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