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How Cheap Is Too Cheap?

So I am probably one of the few who just got this, but here goes anyway in case there are some who still don't get it.

So as a consumer I have always been taught to find the best deal. So I like most people do what we can to get the lowest price on what I buy. However, with the global economy the way it is, I have finally realized that maybe some things I buy are too cheap. This may sound strange, but hopefully by the end of this you'll understand and maybe even agree.

So let's say that an American company, which is difficult to determine these days but that is another discussion, can make widgets for $3.00 each. But a Chinese company can make widgets for $1.00 each (more likely $.10 but that is also another story). So as a consumer given the choice I would choose the Chinese companies widgets and save the $2.00. But in so doing I would be putting the American company out of business, because unless they reduce their costs they can't compete and will go out of business (yes this is simplistic, but seeing everyone loosing their jobs makes me think this isn't rocket science). As well all the employees would have to find work elsewhere.

So what have we learned, in this very simple example? I think we have learned that there is a cost to wanting things to be cheaper. I think we have learned that that cost maybe our neighbors job. And that when our neighbor loses his job, will he abandon his home? What will that do to your home value?

Now I don't propose that we all go out and pay as must as possible for products simply because they are made in American, in fact I wonder what is really still made in America. As well when I see statistics indicating that today's average CEO makes 500 times what the average employee makes, it makes me think the problem with American companies is the greed of the executives (but as before that also is another story).But what I suggest is that "cheapest" may not be the right method to use to find a good deal. In the end, what might be the best is to but locally when possible. To use your only real power, that of a consumer, to put money in a place that is likely to help you. That of course isn't a country other than the U.S.