July 17 2012
No Olympians in Economics
Vicki E. Alger
My colleague Charlotte Hays penned a terrific editorial on the manufactured crisis of the made-in-China Olympic uniforms. Here are some more items to consider.
Sen. Charles Schumer (D-NY), along with a handful of his Democratic allies, want to mandate that all future American Olympic uniforms be made in the United States. Never mind that the U.S. Olympic Committee (founded in 1894) is a charitable, 501 (c)(3) organization that operates on donations, not taxpayer subsidies—which begs the question of Congressional authority to mandate any such thing in the first place. And, no word yet on how Sen. Schumer and company plan the keep the cost of doing business stateside affordable. But yesterday’s Wall Street Journal described this plan as amounting to “a made-in-America dunce cap.” Here are a few economic reality checks, compliments of the Journal:
…[I]mports of all kinds drive American jobs and export competitiveness. … 62 percent of the $2.2 trillion of imports in 2011 were inputs for producers.
…[T]he American Apparel and Footwear Association says … these two markets in the U.S. employ more than four million people in everything from design to marketing, merchandising and retail. The International Trade Commission says more than half of the value of imported apparel sold in the U.S. is American. The Commerce Department says that more than 50 percentof direct importing operations in the U.S. are small businesses.
Imports also raise U.S. living standards…prices of many tradeable goods like electronics, toys, furniture and apparel in the U.S. have been dropping over the last decade even as the price of nontradeables like health care and education have increased sharply. [Emphasis added.]
So imports help boost American productivity, keep prices low, employ people, and nurture small business? “The horror, the horror,” as the Journal put it. As for the folks backing the planned “made-in-America” mandate, the Journal concluded:
These are the same geniuses whose tax-and-spend policies make the U.S. economy less competitive. A country that worries about where its Olympic clothes are made has bigger competitive problems than those berets.