Dear America,
A couple of days ago, I heard an interview with Michael Bowen, a vice-president and equity holder at a company called Prestige Ameritech. Prestige Ameritech is the nation's largest manufacturer of surgical face masks and respirators, and he was interviewed about the shortage of those health care supplies and why his company didn't ramp up production to accommodate the national need...why didn't they have enough manufacturing capacity as it was. His response was nothing less than a critique of American economic policy relative to international trade.
Bowen told of his company previously buying a new factory and fitting it with new machines in response to the SARS virus epidemic of 2003. After the epidemic, when the need was no so dire, those who bought from Prestige during the crisis because of the increased capacity they had developed began buying their masks in Mexico, and Prestige was left with excess capacity, which had cost them so much that they nearly went bankrupt when that excess had to be idled for want of demand. Then he was asked about the market for their products and he answered as expected except for one thing. He said that hospitals and other entities that use face masks constituted their market, but when he was asked how much of the market the U.S. government comprised, he said, "zero," and when the interviewer asked him to repeat what he had said, he said it with more emphasis. That's when he recounted the SARS build up of the past and the financial debacle it was for his company. The interviewer noted that he sounded angry, to which he replied that he wasn't anymore. At this point, he noted, he was just puzzled by the fact that wasn't explicitly mentioned. Even our government doesn't buy American anymore, and that is really the problem.
Donald Trump has made note of the fact that in a crisis situation, we, as a nation, cannot afford to be without vital industries, like steel manufacturing for example. He made his usual flamboyant effort to promote the interests of the steel industry, but in the end, it all came to a grandiose next-to nothing. Then came his shot at bringing the automobile industry back to this country from Mexico--which, by the way, manufactures the surgical masks and respirators that our government buys for our military and veterans' hospitals--in the form of the "USMCA" that he touts so highly as one of his "great" achievements. But all that treaty does is increase slightly the percentage of American parts that our auto companies have to use when they build their cars in Mexico. The auto assembly jobs stay there, and American workers who built the cars in the sixties and seventies are still without those jobs, and for that matter, the jobs making those medical supplies that we now complain we can't make fast enough stayed in Mexico too.
All of this and much more demonstrates the real nature of a problem that we should have addressed decades ago, but that we can't address without structural change in our form of capitalism now. If we had imposed tariffs on goods that we made better than anyone else back then, our export markets might well have remained sound because there were no close alternatives to, for example, American cars. But we didn't impose such tariffs, at least not to the extent that our domestic and foreign markets were protected, and as a result, foreign products improved to the point of being equal to what we produced, and often superior. Foreign management practices became more efficient than ours as did foreign manufacturing technology, and then, there was no advantage to buying American so we no longer had any leverage in foreign markets. When the Chinese got rich, they bought from Mercedes and Infinity, not Cadillac and Lincoln. And for the run-of-the-mill goods we use every day, Chinese products got cheaper as American ones got priced out of the market. So the jobs making those products went to China too. Even the more high-toned goods, like I-phones, are not made in America anymore. The Chinese make them in factories where workers are forced to live in dormitories. In fact, when President Obama once asked Steve Jobs what it would take to bring those jobs home, Jobs arrogantly replied, "Those jobs are never coming back." We don't even buy American labor anymore.
So, instead of new trade agreements that do less than enough to restore American jobs for American workers, we are going to have to find another way to keep the nation's essential industries from atrophying and becoming insufficient for our crisis needs, like the needs we have relative to the COVID-19 pandemic. We will have to find a way to induce Americans to buy American, and those in other countries to do so too. The Chinese use governmental subsidies to help their workers compete internationally. In that vein, we could at least require our government to buy American. Are you listening, Donald?
Your friend,
Mike
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