[chiuchimu]

It was good for Japan and good for American consumers who wanted to buy cheaper cars with better gas mileage at a time when gasoline prices skyrocketed. Old fashioned and out of date businesses and industries need a kick in the pants every once in a while. No American car companies went out of business, that I am aware of at this time. They were forced to change their business models and relook at what the American market was looking for (smaller cars with better gas mileage). .

Yes, consumer benefited. The discussion was about the economy which didn't.
U.S. car companies survived by closing shop and going to Mexico. Jobs were lost. Suppliers lost big contracts. Japan got rich.

Welcome to the world of spin doctoring. As American companies were rethinking their business plans there had to be a way to make Americans "buy American" even if it was a more expensive and inferior product -- introduce "Buy American" as a catch phrase to make patriotism a part of a car purchase. Even today there are parts or the US where it is hard to find a "foreign" car, even though many "Japanese" cars are built in America and many American cars are built with Mexican parts.
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I agree about the spin to an extent. But plants in America did close down and operations moved to Mexico. Japanese cars were not made in America at that time( Honda started in mid 80 I think).

Fair competition is good for the consumer. If outdated companies suffer, they need to update and catch up, or go under. That's capitalism. No private business is owed consumers or profit if it is selling inferior products.

Competition IS good for the consumer and if trade agreements are well planned, even good for both economies. But any single import item takes money out of circulation and sends it to a different country. If the trade is totally unbalanced then it hurts the economy. For varies reasons, the simple Idea that Capitalism is good across international borders is false. That's like saying, "If American car companies went bankrupt because they were inferior to Japanese cars then they deserve to go bankrupt." In some countries, companies get help from the Government. The U.S. funds a lot of R&D by way of military contracts. Some countries don't have strict codes to follow etc... The playing field is not always fair - why force the rules of a fair game? A country and an individual is different.