Jim Horton suggested in his Nov. 18 letter that consumers should buy American products instead of foreign products. His point was in response to an earlier letter I had written in which I had said that people should be out buying plasma TVs, the newest cell phones, and hybrid cars. Those were examples that I had given to illustrate the need for consumers to increase their spending, as 70 percent of America's GDP is driven by consumer spending.
I did not intend to imply that America's economy was entirely based upon the sale of plasma TVs and cell phones. Since the 1970s, America has undergone a phase of de-industrialization, and much of our economy has become service-based. According to 2004 statistics provided by the U.S. Bureau of Economic Analysis, housing, food, and transportation expenses consisted of more than 60 percent of consumer spending. While telling everyone to "Buy American" may make for a great marketing tool, protectionism is obsolete in the era of globalization.
In his letter, Mr. Horton mentioned General Motors. GM has over 50 parts factories in Mexico. Detroit may house its corporate headquarters, but GM is a multinational corporation. Big businesses do not value patriotism. True capitalism ignores national borders, and smart consumers buy the best products. For the average consumer to succeed in a global society, our government must ensure that citizens are healthy, educated, and skilled enough to work, earn, and spend their money. Strong consumers will demand goods and produce wealth. A competitive and balanced tax structure can ensure that wealth cycles. Spending and labor drives the economy. Productive consumers produce wealth. It is in all of our interests to create a system that maintains our health, educates our people and trains our workers to adjust to changing economic conditions.