The editor’s opinion from Marketplace, Northeast Wisconsin’s business magazine. (Obligatory disclaimer: Most hyperlinks go to outside sites, and we’re not responsible for their content. And like fresh watermelon, peaches, pineapple, grapefruit, tomatoes and sweet corn, hyperlinks can go bad after a while.)

August 13, 2008

Hypocrisy, thy name is Barack

You may have heard, or heard about, this Barack Obama ad criticizing John McCain for McCain’s opposition to requiring government to buy American products.

Interesting, isn’t it, that Obama is criticizing McCain for his position against mandating buying American products when there’s one American product Obama refuses to purchase — American oil. Obama’s (and his congressional predecessors’) stubborn refusal to drill for oil in this country has helped make gas prices higher than they otherwise would be, helping lead to the demise of GM’s Janesville plant. (The more supply, the lower the price. You know that, but this and other Obama assertions make me wonder if Obama skipped economics in college, particularly, in this case, the class that discussed competitive advantage.)

As it is, the concept of buying American is a patriotic-sounding canard. (I’d be curious about what Obama’s well-heeled supporters drive.) Apparently Obama drives a Chrysler 300, which is manufactured in Brampton, Ont., which, last time I checked, is not in our 50 states. (Perhaps Ontario is in Obama’s 57 states.)

Buy-American government mandates pose a problem for governments given that the American option may be more expensive, assuming an American option actually exists. The police car following you is likely to be a Ford Crown Victoria, which is built in St. Thomas, Ont., or a Chevrolet Impala, which is built in Oshawa, Ont., or a Dodge Charger, which is built alongside Obama’s 300 in Brampton. Your favorite municipality could purchase a Chevy Suburban or Tahoe, but GM is closing its Janesville plant, leaving Suburban and Tahoe production in Arlington, Texas, and Silao, Mexico. If a police department wants to buy American by all definitions, the department’s choices are a Ford Explorer, built in Louisville and St. Louis, or Ford Expedition, built in Wayne, Mich.; neither, however, are rated for pursuits.

Our driveway features the flip side of this issue. (Not because of police cars parked in it, of course.) My Subaru Outback, as well as its predecessor, was built in Lafayette, Ind. Our Honda Odyssey was built in Alliston, Ont. (Odysseys are now also built in Lincoln, Ala.)

What about police motorcycles, the subject of this pseudocontroversy? Kawasaki used to build police motorcycles in Lincoln, Neb., but stopped in 2005, leaving Harley–Davidson (and, now, its Buell brand) as the only manufacturer to build police motorcycles in the U.S. Some police agencies have determined that Harleys are too large for urban police operations. Moreover, the police motorcycle market is a pretty small market, at least up here in the land of the 14-month-long winter.

So which is it? Is my Outback an American car because a Japanese manufacturer pays Americans to build it? Is Obama’s 300 an American car because a U.S.-based manufacturer pays Canadians to build it? Moreover, is it more important to buy American, or buy what the government agency needs, regardless of which company produced it or where it was built?

As with many other issues, Obama hasn’t been consistent on trade during this campaign. He pledged to reopen negotiations on the North American Free Trade Agreement, but now has backed off.

McCain has consistently supported free trade. During a Senate debate in 2005, he said, “I firmly object to all ‘Buy America’ restrictions, as they represent gross examples of protectionist trade policy. From a philosophical point of view, I oppose such policies because free trade is an important element in improving relations among all nations, which then improves the security of our nation. Furthermore, as a fiscal conservative, I want to ensure our government gets the best deal for taxpayers and with a ‘Buy American’ restriction, that cannot be guaranteed.”

Few reputable economists (or, if you like, only economists employed by unions) oppose free trade. In addition to the obvious benefits of choice and price competition to consumers, free trade benefits workers too. Not only does protectionism not benefit consumers; it doesn’t benefit presidential candidates either; the main protectionist candidates of the primary season, Democrat Hillary Clinton (whose husband was much better on trade) and Republican Mike Huckabee, aren’t running anymore, are they? The candidacies of Walter Mondale, Michael Dukakis, Pat Buchanan, H. Ross Perot and John Kerry similarly failed.

One other oddity about Obama’s ad, as WTMJ radio’s Charlie Sykes pointed out Tuesday: The ad repeats one of McCain’s best lines from his campaign so far: “Not long ago a couple hundred thousand Berliners made a lot of noise for my opponent. I’ll take the roar of 50,000 Harleys any day.”

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