Those who charge that the Obama administration is flailing about on economics because it doesn’t have a clue about how the modern world works were served up more ammo this week.
by Mary Anastasia O’grady
Appearing at a breakfast hosted by the Christian Science Monitor in Washington, Ms. Solis was asked “what statement” she was making by ditching the standard black limo that cabinet members normally ride in for a silver Chevrolet Equinox SUV. She explained that she wanted to show solidarity with the American worker.
“I thought what better example could I set [than] if I encouraged my staff to go and see how we could acquire a vehicle that would, for me, send a signal that we are for supporting our American workers, American-made products,” said Ms. Solis. Oops.
Make that “North American” workers and “North American-made” products, because the Chevy Equinox is assembled in Canada. According to the Washington Post, “Demand is so high for the Equinox that . . . [General Motors is] hiring more workers — in Canada.”
Ms. Solis’s office jumped to her defense, pointing out that 66% of the parts in her new car were made in the U.S. Labor Department spokesman Carl Fillichio also noted that “Modern automobile manufacturing is a global industry and General Motors is a company whose reach extends far beyond the boundaries of the United States. Cars assembled here in the U.S. are made from globally sourced parts, just as cars assembled in other countries utilize parts made in America.”
These are all good points but also good reasons why “buy-American” provisions in law don’t make workers better off. What Mr. Fillichio was really saying is that we live in an open economy, and because of that openness capital can be allocated to its highest use. Sometimes that means that consumers are best served if things, or parts of things, are made inside our borders, and sometimes it makes more sense to use labor in other jurisdictions. When customers are happy they buy what you have to sell. That’s what creates wealth and, in the end, jobs.
Now that someone at the Labor Department has picked up on this, maybe word will spread to the White House. Perhaps it could even spur Mr. Obama to send the Korea, Colombia and Panama free-trade agreements to over to Congress for ratification.
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