Terrible Economics in an Obama Advertisement
Fortunately, I don't have TV at home, or I would be subjected to this more frequently (I saw this at the mechanic's shop), but the above advertisement has absolutely terrible economics.
(No, I do not care that Romney ads also have terrible economics. If you want to link me to a Romney ad with terrible economics, I'll agree heartily and lament the state of the American electorate. But there's no reason to do so. I don't want to see it, and it won't change the fact that the above ad is terrible.)
The problem with this ad is that there are far, far, far more American tire consumers than American tire producers. If a Chinese company can produce a tire for $1 less than an American company can, that Chinese company could save Americans roughly $300 million a year (the U.S. goes through roughly one tire per person, per year). According to the video, this threatened "a thousand American jobs" (a number which is, pardon the pun, more likely inflated than deflated). Unless these tire manufacturing jobs were paying $300,000 a year, which seems unlikely, Americans as a whole would have saved far more in reduced tire costs than we lost in wages. We would be better off to have lost the jobs and bought the tires.
The reason we keep making this mistake is that the lost jobs are immediate, tangible, and have an impact on nameable individuals and communities. Saving $4 on a set of tires, however, escapes notice.
(Before you bring up monopoly pricing and all the dangers that could come about by Chinese influence on the tire market, tires are a good which is relatively easy to manufacture. If China started monopoly pricing, someone else would start up a plant in short order.)
"Saving Jobs" also deals in a counter-factual. You never know whether, if fact, the American jobs would have been lost. Only 200 may have been lost, or a reduction in wages, or the American manufacturer may have been able to find some efficiency gains, or, or, or. All we really know is that the Chinese were offering us a deal on tires, and we refused to take it.