Understanding China, One Blog at a Time

An American in China

Interesting Post on Buying American

Posted by w_thames_the_d on October 10, 2011


from here, The following is an excerpt from this site which allows us to make wise decisions about our purchases. The site showcases American products that are made in America. One of the reasons this is interesting is that an American product produced in America creates jobs in both the upstream and downstream markets. What this means is that when San Francisco outsourced the building of their bridge which I blogged about here and here, they ‘saved money’ insofar as 400mm less was spent on its fabrication but it also ‘ unsaved’ insofar is it actually took money from the economy. For instance, all of those 3000 or so Chinese workers got paid to manufacture the bridge as did their bosses. So all of this money stayed in their economy making it larger. This is also true as their company made a nice profit which was shared with Chinese and stayed in the local market as well.

But in addition to this , all of those 3000 workers had to buy clothes and food which gave money to Chinese manufacturers who had to buy raw materials from other Chinese and so on. In addition n to this, taxes should have been paid which bolsters the economy and aids in construction projects as well as providing for the aged. Due to a thing called the multiplier effect, 1 dollar introduced into the US economy actually creates more than 1 dollar of wealth. The idea is that I buy 1 dollar of goods from you and you then spend .7 and now the economy actually has expanded by 1.7 dollars instead of merely 1. Which means that by ‘saving us money’, the California government actually cheated us out of the multiplier effect thus removing what could have been up to 400 x multiplier effect of money going into the sagging US economy. The question is, how much did the bridge really save us..

.but I digress, here is the snippet about identifying how American are American made cars…

Excerpt from here or here
Buying an American-made Camry is not buying American

By Roger Simmermaker
10-9-11
A few auto review websites have recently listed the U.S.-built Toyota Camry as the apparent “most American vehicle” for 2012. The problem with this declaration is that it is determined on criteria that is simplistic at best.
For the 2012 model year, according to TheCarConnection.com website, the gasoline version of the Camry is projected to have a 92 percent domestic parts-content, while the hybrid version scores a much lower 59 percent because the drive components and battery packs will be imported from Japan.
And since the automobile window stickers must combine content percentages based on a “carline” basis, the combined 2012 figure for the Camry is 89 percent (the 2011 percentage is 80). Now how we can combine 92 percent (for gasoline Camrys) and 59 percent (for Hybrid Camrys) and come up with 89 percent (according to the American Automobile Labeling Act) is beyond me, but this is just a minor distraction from the main “most American vehicle” classification problem anyway.
Buying American is more than just about point of manufacture or assembly and the domestic content of any given product. The true definition of “Buying American” is buying an American-made product from an American-owned company with a high domestic parts-content within that product. Prime consideration should be given to the ownership of the company since American companies typically pay nearly twice as many taxes to the U.S. Treasury as foreign-owned companies.
The Ford Explorer Sport Trac actually has the highest domestic parts-content (90 percent) but Ford ceased production of the Sport Trac at the beginning of the model year. The Ford Explorer comes in at 85 percent.
If you would like to see where major components like engines and transmission are manufactured for various vehicles and where they are actually assembled (2011 data), please visit http://www.howtobuyamerican.com/content/db/b-db-autos.shtml. When you do, you’ll see American companies overwhelmingly produce more cars and trucks along with their engines and transmissions in America.
After all, which is more American: a U.S.-built car from an American-owned company, or a U.S.-built car from a foreign-owned company? Answer: a U.S. built car from an American-owned company. Why?
Because when we ‘Buy American’ in the purest sense of the term (buying an American-made product from an American-owned company with a high domestic parts-content) we reward American owners, American investors, and American stockholders, keeping jobs, profits and the tax base here.
When we buy an American-made car from a foreign-owned company, we reward foreign owners, foreign investors, and foreign stockholders.
continue here http://www.howtobuyamerican.com/index.php

One Response to “Interesting Post on Buying American”

  1. gowron said

    ACME!

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