So Senator Harry Reid, D-Nevada, thinks that the privately-funded United States Olympic Committee “should be ashamed” for providing its teams with uniforms made in China and that the uniforms should be “burned.” Senator Kirsten Gillibrand and Representative Steve Israel, both Democrats from New York, quickly weighed in on the controversy with a joint letter to the USOC expressing their displeasure. After courageously defending its initial decision and in the teeth of a growing controversy, the USOC blinked and announced that henceforth it will require team uniforms to be domestically manufactured.
But why should the USOC be ashamed of its initial decision? Ashamed–for using its donors’ and sponsors’ dollars wisely and economically by outfitting the U.S. Olympic teams with attractive and high quality uniforms that can be produced less expensively in China than in the U.S.? Ashamed–for doing what millions of ordinary Americans do every day when they make the most economical use of their scarce dollars by buying Chinese-made products at Walmart, or when they use an Acer notebook, watch a Sony television or vacation on a Norwegian cruise line? I think not.
Indeed, it is Senators Reid and Gillibrand and Representative Israel and their ilk in Congress who should be ashamed and burned in effigy. For they and their cronies are responsible for the profoundly anti-consumer trade barriers that keep the inefficient, zombie U.S. clothing industry alive. Despite the enormous protection afforded apparel companies and their union against competition from more efficient foreign manufacturers, in the last ten years employment in apparel manufacturing has fallen from 350,000 to 147,300. Last year, it was estimated, 98 percent of all apparel and 99 percent of all footwear sold in the U.S. was manufactured abroad. There is nothing regrettable or shameful about this result. It was brought about by the voluntary choices of American households looking for quality and value in spending their hard-earned incomes.
What is shameful and scandalous is the robbery of American consumers by corporate welfare policies that prevent them from buying in the lowest cost markets. In 1994, when the last comprehensive study of the costs of protectionism in the U.S was published, it was estimated that the annual cost to consumers of clothing (apparel) protection was $21.158 billion. Of this amount, apparel firms and their workers reaped an extra $9.901 billion of ill-gotten gains, while the rest was lost to the economy through “dead-weight” inefficiencies or went to the U.S. government in the form of tariff revenues and quota rents. There were an estimated 152,583 jobs “saved” in this industry at an average annual cost of $138,666 per job, far more than the average worker earned. It would have been far, far cheaper to permit the workers to be laid off and simply pay them their regular wages and retraining costs out of general government revenues until they found new jobs. This transparent policy would have saved consumers billions, permitted them to engage in free trade with whomever they wished, and prevented inefficient production from continuing to distort the U.S. economy. But of course this would have cut off corporate welfare to clothing firms and caused a powerful union to shrink and lose dues revenues, both of which contribute heavily to Congressional elections. And it is unlikely that the heavily-burdened U.S. taxpayer would have approved of such special treatment of a small group of workers.
In any case, you can be sure that Reebok, Levi’s, and Champion, the previous U.S. manufacturers of Olympic and Team USA uniforms, as well as the Union of Needletrades, Industrial, and Textile Employees (UNITE) are very grateful to Senator Reid et al. and come election time will somehow find a way to generously show their gratitude.