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Rand Paul Says Buying American Isn’t Always Best

by | Jul 24, 2017 | Economic Affairs News

ANDREW MORAN

Where was this guy in the 2016 U.S. presidential election? Promoting free market principles, bashing Republican dinosaurs and warning against interventionist foreign policy. Again, where was he in 2016?

Speaking in an interview with CNN’s Jake Tapper on Sunday, Senator Rand Paul (R-KY) said that buying products with the Made in America tag isn’t always necessarily the best option, especially when cost is the primary factor for low- and middle-class shoppers.

Sen. Paul, who was often the target of personal insults by then-candidate Donald Trump during the GOP primaries, explained to Tapper that it is nice to have a goal of buying American-made goods as much as possible, but sometimes it isn’t expedient to do so. Despite Tapper attempting to go after the president over his hiring of foreign workers and his Trump-branded clothing made overseas, Paul avoided attacks and gave the CNN host an economics lesson.

Paul averred that global trade permits Americans to purchase cheaper goods, which then allows them to stretch their dollars to buy other goods and services in the marketplace:

It used to be a shirt, just a regular button-up shirt, might be $20, $25, and still might be in places. And at Wal-Mart, it’s $7. And so that savings, though, allows working-class people to have savings to get a television set, to go on vacation, to buy gas for their truck. So trade is really a good thing.

The senator’s comments came as President Trump was commemorating “Made in America” week.

Although this is basic economics, most people in politics and in the media forget this as they shout “unfair competition” from the top of their lungs. Prior to the Trump administration, the media and Democrats continued to lambast global trade, accusing corporations and consumers of taking advantage of so-called slave labor. Of course, because the president was pretty much on the same side as the media for years, the likes of CNN and MSNBC quickly changed their tunes.

But, as Kevin Williams of The National Review recently wrote, if a product is “Made in America” so what?

In today’s global economy, the term is irrelevant when it comes to international supply chains. Yes, a product may have been manufactured in the U.S., but all of the supplies, ingredients and trinkets have all been produced in a foreign territory. These tags of “Made in the U.S.A.” are antiquated because the supply chain at any given small business, factory or corporation is globalized.

For instance, let’s take a look at the standard Trump Hotel. Business Insider put together a terrific illustration that highlighted what products are inside the typical hotel suite and where those same items originate from. Ice buckets are manufactured in Thailand, marble slabs come from Italy, synthetic grass was imported from the United Kingdom, lock parts were built in Norway and the disposable slippers were developed in Japan.

Legendary free market economist Milton Friedman superbly elucidated in “Free to Choose” about how the power of the market created a pencil. As Friedman noted, a single person would not be able to build a pencil; it takes an entire planet to accomplish what seems a rudimentary feat. The wood comes from Washington State, the graphite comes from South America, the eraser (rubber) comes from Malaya.

One of the reasons why billions of people have been lifted out of poverty over the last century and change is because of global trade and private enterprise. International free trade – not crony trade like NAFTA or TPP – is what’s driving prosperity in every corner of the earth.

There isn’t a successful country in the world that produces everything it uses and uses everything it produces. Indeed, there are examples of nations that attempt this, even in today’s global economy, such as North Korea and Venezuela. China may seem like it makes everything, but it imports a lot of goods, particularly commodities. The U.S. may seem like it purchases everything it needs, but it exports a lot of goods, like industrial machinery.

Sure, countries are manipulating their currencies and subsidizing their industries, but if these measures make goods cheaper for the U.S. then why should any American complain? (The U.S. shouldn’t start instituting similar policies, though.)

In the end, if Trump is able to sell affordable executive clothing by having his goods manufactured in China then that should be celebrated. If Trump’s Mar-A-Lago hotel is bringing in foreign workers to fill jobs and provide an opportunity to immigrants at the same time then that, too, should be celebrated.

Buying American only achieves the opposite of its intended effects: cost jobs and make Americans poorer. As long as businesses are free to voluntarily trade with whoever they please, we will all be better off in more ways than one.

If Paul were to run for president again in either 2020 or 2024 then let’s hope this guy is the one running, not that watered-down version that held the Kentucky seat in the Senate soon after his election.

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