Kamis, 20 April 2017

Buy American and Hire American

When this blogger started blogging in 2009, his very first post was titled "What is American goods, anyway ? " Eight years later, when returning back from a two year hiatus in blogging,  the same theme resurfaces as the second innings of blogging is started.

The trigger for this post is of course Trump's executive order titled the same as this post, which he signed with much fanfare three days ago.  The order , of course, is pure bombast and is only meant to show that the President is doing "something". It simply orders the Secretary of Commerce to tell the world what the hell this means in 60 days and orders sundry other Ramamrithams to specify how it will be implemented  in 150 days. I was not aware that you need an Executive Order to tell people to do their jobs, but apparently in the world of alternative reality, that is required.

Precious little, other than nuisance value, will come of it. For you see, in today's globalised world of supply chains it is almost impossible to determine what is "American" as my first ever post argued.  If "value added" is the yardstick for measuring national origin, then your iPhones are as American as mom and apple pie even though they are entirely manufactured outside the US. If the physical act of manufacturing (read final assembly)  is the yardstick, then the iPhone is Chinese while BMW is American.  If the entire supply chain has to be in the US, most products will simply disappear off the shelves as some of the raw materials and components are simply not available in the US and have to be imported.

The Executive Order gives some clues to the warped thinking - apparently they would like  that "for iron and steel products,  all manufacturing processes, from the initial melting stage through the application of coatings, occurred in the United States ."  US iron and steel has been on decline for decades. Only an idiot will set up steel capacity in the US - after all the next President can sign another Executive Order to the opposite. Not a single new job will be created. What will only happen if this pig headed policy is even half tried is that the existing US steel plants will jack up their prices. The American consumer shall pay.

The problem of disappearing jobs is a real and serious one, but there are no easy fixes. It cannot be tackled by trumpeting economic nationalism. It certainly cannot be solved by sitting on the toilet seat and tweeting whatever comes to your mind.

By the way, the GOP was meant to stand for free markets and trade. It would have been appropriate if a President Sanders were to try something like this. But a Republican President ?

PS : Its nice to be back. Sorry for going away for two years - I was dabbling in a social enterprise in the interim, but am now back in retirement, and therefore back to blogging.
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