HOW THEY SEE IT \ Buy American Ignore product's origin, concentrate on the value

By MARK J. PERRY
KNIGHT RIDDER/TRIBUNE
FLINT, Mich. -- American consumers should practice non-discriminatory shopping this Christmas without any regard to the national origin of the products they buy.
Those consumers who do intentionally alter their shopping habits to "buy American" will most likely end up worse off, and will become confused in the process.
Attempts by shoppers to shun "foreign" products during the holiday season to bring down the U.S. trade deficit won't work. And even if changes in holiday shopping were successful at lowering our trade deficit, it does not necessarily follow that our economy would be better off. Here's why.
First of all, in our increasingly global economy, the distinction between "foreign" and "American" goods is becoming increasingly difficult and meaningless.
With global trade at an all-time high, all "foreign" products most likely have some U.S. components, and products "made in America" typically contain foreign inputs. The automobile market clearly illustrates this point.
'Foreign' cars
Are the Toyota, Mazda and Mitsubishi vehicles built in the United States by UAW workers for foreign-based automakers with both domestic and foreign parts "American" or "foreign" cars?
Now that Michigan-based Ford owns Jaguar and Volvo, are those foreign-produced vehicles containing U.S.-built components really "foreign" vehicles?
And does it really matter. No. In the search to find only "American" products, holiday shoppers will end up confused, and will unnecessarily limit their shopping options.
They could also end up with a higher shopping bill and fewer gifts by passing up bargain-priced imports.
Secondly, our trade deficit is ultimately caused by the fact that national spending by American consumers, businesses and government exceeds our national income. Holiday shoppers who substitute "American" products for "foreign" gifts, without altering their overall level of consumption, will not affect our trade deficit by even $1.
Only if we consume less and save more would our trade deficit be affected. The only effective way for holiday shoppers to cut the budget deficit would be to reduce spending, which would lead to weak December retail sales and would stall the economic recovery.
Instead of altering holiday shopping habits, consumers concerned about the trade deficit should write to members of Congress and encourage politicians to stop the growth in deficit spending, which is one of the main reasons for our large trade deficit.
Unfortunately, those who advocate a "Buy American" strategy to promote prosperity are recycling the discredited mercantilist theory of the 1800s, which claims that: a) exports and trade surpluses are good, and b) imports and trade deficits are bad. In reality, neither of those positions is correct, and in fact, both imports and trade deficits can actually be very beneficial.
Local grocer
To understand this, think about how you benefit from your personal trade deficit with your local grocer.
If you import $500 of groceries every month from your local grocery store, and your grocer buys nothing from you, you would have a monthly $500 trade deficit with your local supermarket. Could you possibly make your family better off by buying only $100 worth of groceries this month to reduce your trade deficit with your grocer? If not, then altering your holiday shopping to reduce our country's trade deficit won't make you better off either.
Holiday shoppers should be thankful that they can shop in a global marketplace more conveniently, and at a lower cost this holiday season than at any other time in history.
Consumers should spend wisely on gifts to get the lowest price and the best value, but should pay no attention to labels of national origin.
Whether you're buying Mongolian cashmere, toys from China or a Turkish bathrobe, or taking a sunny Mexican holiday vacation, enjoy guilt-free Christmas shopping and traveling in a global economy, and don't worry about the trade deficit.
X Perry is an economist at the University of Michigan-Flint. Distributed by Knight Ridder/Tribune.