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ECONOMIC PATRIOTISM (or, No Ford in My Futura)

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Headlined to H3 3/11/09

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It’s time to re-brand the concept of ECONOMIC PATRIOTISM (formerly known as protectionism). If you believe that it is contrary to contemporary trade policies, well, precisely! Supply-siders? Just look at the overflowing shelves at any department store (70% discounts notwithstanding), or car dealerships with acres of unsold 2008 and 2009 models – in spite of enormous sales incentives - oodles of supply and no demand! That is to say, nobody’s buyin’ nuthin’ – especially cars.

About a hundred years ago, Henry Ford realized that if he paid his employees enough, they would be his customers as well. That logic has been discarded, as the largest concessions in the "Auto Bailout"(loans) have been demanded of the workers. Contrary to the babbling blowhards of business reportage, the entry level wage of UAW worker is $14./hr, increasing to a ceiling of $26./hr. Wages for non-union workers at plants assembling foreign cars in “right-to-work” states fall within the same range (but would plummet if the union contracts were dissolved in a bankruptcy). After payroll taxes and other deductions, this is hardly enough to support a family and afford a new car payment anymore, no matter how modest the model. But your next “American Car” is being built by workers making 1/5 of those wages!

After years of “Free-trade” policies, which have primarily meant that anything could be imported into the United States market without tariffs – though generally, the exporting country doesn’t reciprocate – the concept of protectionism is re-entering the discussion. And it’s starting in France. This week, French President Nicolas Sarkozy put his foot down. While French carmakers are getting government funding (Citroen Peugeot, specifically), they may not take that money and open plants in the cheaper-labor Czech Republic. The French taxpayer’s money must employ French autoworkers in French plants.

In the United States, Protectionism has been treated as though it would destroy the very fabric of our economy. Newsflash: that rag is torn, and it’s time to revisit some policies that worked well before the insanity of Reaganomics set in.
Ford is about to introduce its 2010 Ford Fusion and Mercury Milan Hybrids, stylish mid-size sedans that get 30% higher mileage than a comparable Toyota Camry Hybrid, at several thousand dollars less. Just one problem: they’re made in Mexico. Ford, of course, is the only “American” carmaker to - thus far - refuse federal subsidies. How? Well, Ford’s Mexican workers are making less than half what their American counterparts are being paid ($4.50/hour). Not to be outdone by concessions forced on UAW workers, the new Ford Fiesta, arguably (based on its success in Europe) the car that may save Ford in the high-quality entry-level market will be made in Mexico by workers whose union has conceded to a further slicing of their wage to the unlivable rate of $1.50.hour! A dollar and a half an hour is lower even than the $2./hour wage paid to auto workers in China. ¡Que Fiesta!

It is time to turn to Economic Patriotism, and it’s up to each of us to take the moment or two when shopping to find the domestically produced option (the extra cost, if any, is keeping your neighbor working). Whether or not tariffs or “domestic content” are ever regulated by the government, we can choose to buy domestically produced products – whenever it will be that we actually buy anything again.

STILL MADE IN THE USA should be bookmarked on everyone’s computer. It’s a great resource (and fun) for discovering what products (everything from clothing to vacuum cleaners) are domestically produced (and even which are union-made).

 

Michael Fox is a writer and economist based in Los Angeles. He has been a corporate controller, professor, and small business entrepreneur. After a life-altering accident, he spent five years learning more about medicine and the healthcare (more...)
 
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 Thank you for letting us know about  St... by Sherry Gadberry Turner on Thursday, Mar 12, 2009 at 12:06:05 AM
And emphasize the use of the phrase "Economic Patr... by Michael Fox on Thursday, Mar 12, 2009 at 8:57:43 AM