St. Louis car dealing icon Dave Sinclair is a terrific businessman, but his economics leave a lot to be desired. He appeared on the McGraw Show this morning — to which I, of course, was listening — to talk about the auto industry. His economics are pure protectionism, plain and simple. He has a lot of good insight into a business that he obviously knows very well, but then he goes and says things like, “Americans do not have a right to always get the cheapest item available.” (That quote is paraphrased from memory, but the exact quote was very close to that.) He went on to say that he does not buy Nike shoes made by workers in poor countries earning very low wages.
Sinclair has every right to do whatever he wants with his money, but it it absurd for him to declare that “Americans” don’t have the “right” to cheap goods. Americans have the “right” to buy whatever legal products a firm can import into this country, and in order to find customers, firms will attempt to bring those products in as inexpensively as possible. That is called freedom. This ability to have numerous options of varying prices available to everyone is one of the reasons for our high standard of living. Sinclair might say that the general U.S. standard of living should be compromised for everybody in order to benefit some — in this case, union auto workers and American car dealers like himself (although I honestly believe he is not saying this for selfish reasons [not that there is anything wrong with being “selfish” in economic terms]). Imposing punitive taxes on imports of any kind limits the options available to American citizens, diminishes our freedoms, and hurts the economy by subsidizing inefficiencies. (The word “inefficiencies” here is meant in general; it’s not aimed at American cars.)
I just bought an American car four months ago, so even if you disagree with me you can hardly get mad at me. We bought our Durango because it was exactly what we were looking for, not because it was an American car, and my wife and I love it. We also own foreign cars. Our freedoms and our economy gain when citizens are allowed to make whatever choices they want with their money. Protectionism helped put the “Great” in the Great Depression, and if we go in that direction again it will only deepen the great recession we are in now.
