I like ABC News. I really do. But in recent months they have aggravated me with a repeating segment called “Made in America.” It’s a red-white-and-blue crusade to solve our economic woes with economic nationalism. It’s bad economics and it’s offensively chauvinistic.
So, one little problem is that ABC News used to report the news and now they do mini-reality TV segments like this. The team goes into a house, a neighborhood, and takes out everything made outside the USA, leaving a shockingly empty scene for a patriotic family or block to “makeover” with American-made goods. They have viewers sending in videos about U.S.-made products and they roam around to get U.S. Senators to pressure the gift shops in Washington, DC to replace foreign-made objects. Personally, I don’t really mind the reality TV show aspect because I always record the BBC News to tell me what’s actually happening in the world, places that maybe ABC used to have reporters but can’t afford to send them anymore. (The BBC is awesome — that’s a different rant.)
But the unthinking nationalism — that bothers me. Like the global economy is a zero-sum game, Americans are more important and deserving than everyone else, and we should be getting ahead at their expense and not let them do so at our expense. Of course the economics are wrong because there is no such zero-sum game and, in fact, trade creates wealth big-time. Our last really big depression, in the 1930s, was made much worse by economic nationalism in the protectionist measures of the Smoot-Hawley Act. Trade crashed and so did our economy.
But what really bugs me is the parochial view of the United States versus the world. One of the world’s richest countries should circle the wagons and not let any of its wealth slip out to the poorest countries. It’s unseemly. My unease peaked during a segment where the team provoked some U.S. kids to look inside their T-shirts and one teenager reported, “Bangladesh — Yuck!”
That teenager obviously has no idea what selling that T-shirt means to some dirt-poor family in Bangladesh, a family of human beings just like the American ones but unimaginably poorer. Textiles are one of the few, labor-intensive, industries where very poor countries can hope to export and begin to develop their economies. In 2002, textiles made up three-quarters of all exports from Bangladesh, according to the IMF. Not surprisingly, textiles have declined in the United States where wages are higher. ABC News puts up a whole web page bemoaning this with a “click here” to buy an American-made T-shirt. For many years the U.S. had steep tariffs on imports of textiles, to pander to domestic U.S. producers, but the industry kept shrinking anyway. Since 2005, under a World Trade Organization treaty that the United States signed and supported, all textile tariffs and quotas were eliminated worldwide. But the cotton that goes into clothing is still grown under government subsidies in the USA ($50 billion since 1991) and other rich countries, choking off cotton farmers in poor countries who want to export.
There is a problem with trade that hurts the U.S. economy, and that is the violation of trade rules by some of our trading partners, notably China. When we produce something like a movie and China allows it to be pirated widely, that’s wrong. Also if foreign countries sell us things made with slave labor or inadequate safety standards, that’s also wrong. But that’s not what ABC News is talking about in their “Bangladesh — Yuck” series.
Diane Sawyer keeps reminding us that if we all just sought out a few more made-in-America products, tens of thousands of U.S. jobs would be created. She never mentions that this would make no perceptible change in U.S. unemployment with 14 million unemployed in a labor force of 150 million.
ANY economist will tell you that the way out of this recession is more trade, not less. Americans need to produce more and better stuff that we are good at making, and it’s not T-shirts. It’s airplanes, movies, software, pharmaceuticals, soybeans, and more. So we buy the T-shirt from Bangladesh, and they use the money to buy our soybeans or airplanes. It’s called “comparative advantage.” Do what do best, and trade for the rest. Too bad TV news is not one of the things we do best. I say, “Made in America” — yuck!