John Stossel on why "Buy American" is a dumb idea:
It would not only not create prosperity, it would cost jobs and make us all poorer. David R. Henderson, an economist at the Hoover Institution, explained why.
"Almost all economists say it's nonsense," he said. "And the reason is: We should buy things where they're cheapest. That frees up more of our resources to buy other things, and other Americans get jobs producing those things."
This is what people always forget. Anytime we can use fewer resources and less labor to produce one thing, that leaves more for other things we can't afford. If we save money buying abroad, we can make and buy other products.
The nonsense of "Buy American" can be seen if you trace out the logic.
"If it's good to Buy American," Henderson said, "why isn't it good to have Buy Alabaman? And if it's good to have Buy Alabaman, why isn't it good to have Buy Montgomery, Ala.? And if it's good to have Buy Montgomery, Ala. ..."
Actually, some people have gotten down to this level, but not with the intent of "tracing out the logic" to show up the nonsense, but because of those mistaken beliefs that they are helping with such protectionism. And some people who should know better have endorsed the idea. That's why we have the Buy Indiana initiative from Gov. Mitch Daniels, who on his first day in office set goals for state agencies on purchasing more goods and services in state.
Sorry to say it, but Indiana doesn't always have the best product at the best price. Sometimes we do, and more power to all those who can sell to the state. But sometimes we don't, and our elected and appointed officials owe taxpayers value for their money, getting the best deal possible, wherever it is.
