What Does “Buy American” Mean?

The common refrain I hear with buying a car given the state of the economy is “Buy American” or “This wouldn’t have happened if everyone bought American.” I recently saw critical comments to Parents.com’s top choices in Family Cars because it is not promoting the purchasing American Cars. Aside from being a bit simplistic if not communist in terms of not allowing people freedom of choice with respect to their buying decisions, it is also unrealistic. The generally accepted principle of free-market capitalism is that the best allocation of resources is achieved through consumers having free choice, and producers responding accordingly to meet consumer demand. Capitalists usually support free trade and the abolition of subsidies.

What does buy American even mean in a global economy? There is no such thing as a 100% American made car, and just because a car is “American” doesn’t mean that it actually contributes to American jobs or the local economy. Recently husband and I went into a Ford dealership to check out the Ford Fusion. Weasked about parts and assembly… the engine came from Japan, and the car is actually assembled in Mexico. Whereas with Toyota, it’s actually made and assembled in a nearby city a few miles away in Fremont, CA. From a purely cautious consumer point of view, there are also dangers in buying from bankrupt companies that are discontinuing product lines (eg. GM is discontinuing Saturn and Pontiac) — it can impact resale value as well as product support.

In my opinion, what’s truly smart is to buy the best product from companies that actually build a competitive product and support it with your hard-earned money. If all things are equal, by all means, do support your local economy, but there is no reason to support inferior product or a company that won’t support you back.

Check out the recent (July 2009) Cars.com American Made Index. Most of the cars don’t have an American brand:

Cars.com American-Made Index Crowns Toyota the Most ‘American’ Manufacturer!