During his State of the Union address last night, Biden loudly and emphatically proclaimed that we shoud all “buy American” in support of the mythical resurgence of American manufacturing. It begs the question: American what?
What companies who were importing their products are now manufacturing them in the U.S.? I’ll be damned if I can find them. About the only American-made products you can find are cars and trucks, and that’s only if you do your homework to figure out which ones are actually made here. Few are, and the ones that are contain a lot of foreign content. How about a new Ford Mustang EV? Surely that’s made here, since Biden also praised the work of Ford and GM to build their new electric future in the U.S.. Nope – made in Mexico. How about a Chevy Bolt EV? Nope – made in South Korea. How about a Ram truck? Surely that’s made here? Nope. Unless you’re buying a high end model, most are made in Mexico. My next door neighbor tried to “buy American.” He assumed that if he bought a Buick he was buying American. He was mortified to learn that his new Buick Envision was built in China.
Biden highlighted Intel’s plans to build a new semiconductor plant east of Columbus, Ohio, and introduced Intel’s president who sat in the gallery. They’re not actually building it yet, mind you. That’s waiting on legislation that would essentially pay them to build it with taxpayer dollars. The same is true of the auto industry’s grand plans to go all-electric in the U.S. The plans are there, but will only be executed if and when the government passes legislation to pay them to to it.
If there was any real resurgence in American manufacturing, it would show up in our trade results. Imports would be down and exports would be up, resulting in a declining trade deficit in manufactured goods. Look at this chart: https://petemurphy.files.wordpress.com/2022/01/manfd-goods-balance-of-trade.pdf. Our deficit in manufactured goods is exploding. Clearly, American manufacturing remains in rapid decline. People aren’t buying American because they can’t find any American-made products to buy.
If I need a tool, for example, I can get cheap ones at Harbor Freight. Everything at Harbor Freight is made in China. But I want to buy American. So I go to another tool store that carries high-quality brands that used to still be made in America. I pick up the box and, sure enough, find that it’s made in China. It’s definitely a better-made tool, but still made in China – just to more stringent specifications.
Regarding the economic sanctions being imposed on Russia in retaliation for their invasion of Ukraine, one that Biden mentioned is that he has cut off their access to high technology products. What a laugh! Hardly any such products are made in the U.S. any more. Computers, cell phones, semiconductors – you name it – everything is made in China, and the U.S. has no control over Russia buying them from China.
Biden rattled off his long list of initiatives to support American manufacturing. All of them are trivial and ineffective, designed only to create the illusion of supporting American workers. The one initiative that he could take that would be effective is to slap tariffs on imports of all manufactured goods, not just from China but from any over-populated country in the world who preys on the American market to support their bloated labor forces by stealing manufacturing jobs from Americans. But has he? He doesn’t even have the guts to impose tariffs on China – tariffs that even the Chinese agreed would be fair – in the wake of China’s abject failure to meet a single goal of the Phase 1 trade agreement.
Biden also took credit for creating six million jobs during his first year, linking this to the mythical resurgence in manufacturing. The truth is that the economy recovered that many jobs from the pandemic-caused depression a year earlier. However, through November of last year, the U.S. employment level still remained 3-1/2 million jobs below the level of February of 2020. By that measure, we remain mired in a deep recession, thanks in no small part to the decline in American manufacturing.
It makes me sick to hear these politicians playing the American people for fools. We sure got another heavy round of it last night.