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Archive for November, 2008

The credit crisis and recession of 2008 are symptomatic of the underlying problems of the American economy.  In my opinion, what has been going on is an overall decrease in Americans’ incomes.  This is due in large part to the loss of manufacturing jobs in the US.  These highly-paid jobs are replaced with either no jobs or poorly-paying jobs.  Despite their decreasing earning power, Americans continued to spend at record rates, financing their spending with credit.  This was evidenced by the housing bubble, where housing was generating record prices while Americans real earning power was falling.  People without jobs or verifiable income were being given loans with the expectation that this ponzi scheme would continue through additional home sales and rising home prices.  Of course this process eventually collapsed as the foreclosure rate began to rise.

However, don’t let the foreclosure crisis guile you into thinking that that is the underlying problem with the American economy.  It is not.  The real underlying problem is the fall in American income and wages.  The #1 cause of this is our trade deficit.  American retailers and outsourcing manufacturers have long falsely claimed that purchasing products made more cheaply in foreign countries is good for US consumers.  What this fails to explain is with what income will those consumers be buying those products?

Let’s simplify this idea with a very simple analogy.  Let’s say there are 2 farmers.  One farmer grows apples and grows 10 bushels of them.  Another farmer grows wheat and grows 10 bushels also.  To keep it simple, let’s say that all you need to survive are apples and wheat and that the only economy that exists is between the 2 farmers.  The apple farmer only needs 1 bushel of wheat to sustain himself and his family but the wheat farmer needs 2 bushels of apples.  So since the apple farmer has no use for the wheat farmer’s extra bushel of wheat, he is willing to <i>lend</i> the wheat farmer an extra bushel of his apples by pawning some of his farm equipment or by outright purchasing the wheat farmer’s land.  So with time, the wheat farmer either goes into debt to the apple farmer or loses his earning power in order to maintain the same level of spending on apples.   Eventually, he either starves or loses his farm if he maintains the same trade imbalance with his neighbor.

American consumers are in the same situation.  Rather than keeping our money at home, we’ve continued to spend at record rates on foreign products.  This money goes overseas and pays for the jobs of foreigners.  That money is not sent back here to buy American products.  Asian and European consumers are not so foolish as to buy as many imports as we do.   A much higher percentage of general merchandise sold in Europe and Asia is domestically produced.

So in my opinion, we now have a simple choice.
1) We spend less and become accustomed to a lower standard of living in accordance with our decreased manufacturing base, or
2) We change our buying habits and buy more American-made products and have a positive trade balance, or
3) We impoverish ourselves through indebtedness to the point of pauperism and slavery to foreign powers (no thanks!)

The choice is ours.

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Made In USA Furniture

My wife decided that rather than jewelry or some such personal gift, what she really wanted for her birthday was a new bedframe.  We have a decent one currently.  It’s about 7 years old but it takes up a lot of room and the foot board sticks out.  Also, there’s no way to store anything underneath.  My wife checked online and so a good design from West Elm for about $1300 plus a hefty delivery fee.  It also has to be assembled.  That’s not a bad price, especially with drawers under the bed and a wood frame.

So I checked the West Elm entry to see if it met my criteria.  The entry didn’t have any information on where it was made.  So I emailed them to find out.  They sent me an email the next day, saying that it was made of rubberwood from Vietnam.  This just kind of stuck in my craw, so to speak.  If it’s imported, don’t they have an obligation to inform their consumers that they’re buying a foreign product?  So I sent them an email blasting them on this account.

Next, we went to a local mom and pop furniture store in Culver City, called Naturaltique.  They make most of their furniture at a small local factory.  We’ve had a bookshelf and an audio/video cabinet made there before and were very happy with the result.  They came up with a similar design for approximately $1500 made of solid pine.  I was chatting with the owner, who happens to be Vietnamese-American, born in Vietnam.  I complimented her on the fact that rather than buying wholesale cheapo furniture from China, they make it right here in LA!  This is what she said: “Of course we make it here.  You can’t import everything.  Then how will anyone here have jobs?”  Just wants to make you slap your forehead, doesn’t it?  A foreign born Vietnamese woman gets it, but so many natives of the US don’t!  She’s a great example to us.  We need to support businesses like Naturaltique and steer clear of the likes of West Elm, Ikea, Crate and Barrel, Restoration Hardware and similar such importation warehouse ilk.

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Gold Toe socks

I was interested in getting some new men’s dress socks recently.  I hadn’t bought any in a while, but the last time was when I had gotten some Gold Toe navy socks, possibly at Marshall’s 2 or 3 years ago.  I liked the quality and the ones I still have were in excellent shape.  They were made in USA at the time that I bought them.

I went to Amazon.com but the information about the socks said Made in USA/Imported.  Now what does that mean?  So I emailed customer services at goldtoe.com, figuring I’d go to the source.  No answer….Ok, no problem, it’s the holiday seaon, they must be busy, so I called them up.  The company is located in North Carolina and a pleasant woman with a southern accent answered the phone.  “Which of your socks are made in USA?”  I asked.  She said that she didn’t know, since so many of them were made overseas (i.e. China).  I said, “You mean you don’t even know which socks that your own company makes are made in USA???”  She said she’d email me back. I told her that it was companies like hers that are destroying the American economy.  For a company that makes at least some of its apparel in the US, they can’t even promote their made in usa products when begged by their customers!!!

That was a few days ago.  I don’t have any answers yet, but will soon look elsewhere.  If so, I will advise you all to steer clear of Gold Toe.

Update 5/24/11

Tried to buy “made in USA” socks from Sears with the Covington brand.  They say “made in USA” on the website, so I ordered a few pairs.  I needed dress socks for work.  Unfortunately, they were “made in China” on the actual packaging.  😦

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