The Economic and Political Necessity
In my home state of Vermont, I see countless bumper stickers (some of them actually holding the car together). One of the most common is ‘Think Globally, Act Locally’. Vermont does have a certain brand and identity that should be economically valued. Perhaps the word ‘locally’ needs to be redefined.
We certainly live in a globalized economy. Vermont farmers are competing with French cheese, Canadian maple syrup and Christmas trees, and beef from Brazil. As America’s trade deficit mushrooms and as unemployment rises, perhaps a more ‘American’ definition of local is called for.
During this pandemic, America has lost over tens of millions of jobs and countless more are presently underemployed. Within that loss are numerous manufacturing jobs, many of which may never come back. Economists refer to this adjustment as the forces of Globalization. There needs to be a new economic force: one that is more sensitive to our neighbors, our environment and our nation. We think ‘locally/Americanly’ before we buy. Allow me to clarify the benefits and rationales.
1 – Maintain Domestic Manufacturing Platforms
As America becomes a more service oriented economy, we have seen the manufacturing sector go from 33% to 11`% of GDP. As this number continues to shrink, we are losing the ability, as Angela Merkel of Germany said, ‘to make things’. As we know from our history, we should not be reliant on other countries to manufacture items that are crucial to our sovereignty. Domestic manufacturing is essential to our own security. This has been keenly evident with our lack of proper equipment and face masks during this pandemic.
2 – Control of our Dollar and Foreign Affairs
China currently has over a trillion dollars in US Treasury Notes, compliments of our unbalanced trade with them. Since we need those dollars to maintain our deficit spending, in a ‘backdoor’ way we are beholden to them. Since China currently runs an annual trade surplus of over $200 billion dollars, their coffers of greenbacks will simply continue to grow.
It had been the hope that as China industrialized and developed a more vibrant middle class, their political policies would become more tolerant and democratic. Sadly, that has not been the case. The ruling communist clique has continued to maintain an iron fist on human rights, freedom of expression and even the internet. It is America’s duty to be the voice of freedom and democracy in the world. Since China has so much fiscal leverage over us, basically, we have kept our mouths shut.
It is time to recognize that imbalanced trade with China is undermining us not just economically, but politically and socially as well.
3 – Military and Political Adversary
As China’s wealth grows, so does its influence in the world. Often the positions of the US are dramatically different from those of China (Iran, North Korea, Africa and Taiwan). Our current level of trade is what finances their military growth. More dollars in the Chinese coffers means more funds for defense, R&D and an enlarged military presence. The Chinese position will only become more aggressive and confident.
4 – Jobs and Social Stability
In general, manufacturing jobs do pay more than service oriented ones, especially at an introductory level. A middle class wage is crucial to provide stable housing and, therefore, a stable environment for a family. Also, very simply put: working people pay taxes. The more they pay, the less our budget deficit becomes. If we are ever going to lower taxes, work with good wages must be provided to all.
There is a group of conservatives call the ‘Republicans for a National Interest’. Their voice is one that reflects conservative values while honoring the need for domestic production. Please review their website: nationalinterest.org for further clarification.
Like Japan forty years ago, China has either stolen or pirated billions of dollars worth of US technology. America has not been aggressive in confronting this issue. Importing products of minimal technological value has not hurt America’s economic position. However, it is only a matter of time before Chinese software, computer chips, hardware, AI, etc. begin to flood the world’s markets.
It is not only Patriotic to buy American, but economically and politically necessary. It’s time to define ‘local’ as the land from sea to shining sea.