Posts Tagged ‘united states’
Step into a casual conversation with someone about the economy, and it’s not uncommon to hear someone say “Everything is made in China”. Looking on the bottom of half the items you purchase at the store (even grocery stores are selling items from China) you’ll discover a “Made in China” sticker or engraving on the product. It would seem that “Everything is made in China” is an observation of the truth. Yet it isn’t.
I’ll digress for a moment… My company does a great deal of manufacturing in China. So, after developing a new product, we didn’t consider anywhere else but China for our manufacturing. The idea of Korea, Vietnam, Guatemala, or any other country wasn’t on our mind at all. We have established relationships with factories and suppliers in China. We have agents in China that perform our quality control. It’s just the natural choice.
Delay after delay after delay soon had me thinking that something wasn’t quite right with our choice of factory, so I set out to do some research into the materials we needed. During the process, I found that the United States had a massive manufacturing industry. In fact, US manufacturing as of 2009 is still larger than China by $200 billion! To top it off, the apparel industry (which is what our new product is) was the largest manufacturing industry in the United States! My mind was ablaze with opportunity…
At the center of the US apparel manufacturing industry? Los Angeles (and New York). I found countless pointers to the California Market Center. Fashion shows, trade shows, manufacturing resources, suppliers… Everything was right here in Los Angeles, and my timing couldn’t have been more perfect. The LA Textile Show was just a week away!
Fast forward to the Textile show and mountains or research, phone calls, Internet searches later… I found the suppliers of the materials I need for our new items but what about the finisher? Fortunately, I found Fashion Business, Inc, a non-profit resource for the fashion industry in the United States. They had a couple of seminars they were doing during the LA Textile show that were right up the alley of what I was looking for, and the material suppliers at the show were very helpful as well.
The materials (of which I could choose American, Italian, and any other sources) were at the ready. There was no 30 day wait like I had with my China factory, and the materials were genuine leather as opposed to the bonded leather product we were being sold as genuine leather in China (a costly endeavor I’ll save for another blog). Finding a finishing company that was still in business was going to be hard to come by, but I was feeling quite positive about manufacturing a product in the United States! Especially one made with all US materials!
I made an appointment with a belt finishing company in Los Angeles (one of less than a handful left from an industry that used to be filled with competition). As soon as I walked into the LA location and showed them the belt… “We can’t make that type of belt. We don’t have the ability to make feathered edge belts in the United States.” Uh oh… But I wasn’t going to stop until I had checked every single belt finisher off my list!
Finisher after finisher had the same story. We don’t have the ability to do that here. I had a very memorable conversation with a finisher in New York:
Jared: I have a leather belt I’d like to make here in the United States
Jared: I want to manufacture a belt in the United States, use US materials and US labor. Put people to work here. There are half a dozen more reasons I can give you.
NY: Well, it’s going to cost you a lot more than China.
Jared: I know. I’ll worry about that with my pricing, and I have a very unique product so it’s a bit different from the run of the mill belt. However, I have to tell you that I have a unique men’s belt, and I want a feathered edge.
NY: Feathered edge? We can’t do that. Nobody in America can do that. Good luck (click)
I’ll admit that I was a bit disheartened by the weeks of searching for a finishing company only to be told that my particular want is not possible by half a dozen of the dwindling field of belt factories in the United States. I even went about changing the product to a more casual design that would not require the feathered edge. I really wanted a US made belt!
I’ll admit that I’m pretty happy that all this happened. I developed a new casual version of our product that is amazing, and I did eventually find the perfect finishing company that can make both the beveled edge and feathered edge belts. They are even providing a great wealth of knowledge and resources for future designs, leathers, and other materials that will help expand the belt line.
US manufacturing is not dead. It’s struggling and merely a shadow of itself. However, when I consider the continued rising costs of raw materials on an international level, the skyrocketing costs of fuel and freight charges for products manufactured in China, and the constant problems we had in particular around this belt… Made in USA is the clear direction and entirely possible! The quality of the product is better. The turn around time is much faster. The ability to launch new styles and materials is much easier. There are a myriad of benefits from “onshoring” the production of this new product!
Obama is talking a talk that sounds great on the surface but can ultimately lead to a massive loss of jobs in America rather than creating jobs. Bernanke is helping to speed along this economically devastating Administrative policy with equally rash monetary policy. I understand where Obama is coming from. He wants to create jobs in America. The thinking by the Fed is that by the Fed devaluing the USD (US Dollar), American goods will become more affordable to China and other nations. Sounds great! On paper…
However, it is a clear indication that Obama and Bernanke don’t understand the United States’ position in the world economy. An import economy does create jobs, contrary to what the Obama Administration makes it sound like. Yes, manufacturing jobs have been lost in America. However, importing still creates jobs. A lot of jobs for that matter, and higher paying jobs! The major key to being a strong importing nation is having a strong currency. The stronger the USD, the greater the ability to import products from other countries.
The Federal Reserve, under Bernanke, has weakened the USD significantly over the least several years. The Obama administration is trying to create more manufacturing jobs in America on the backs of the import industry. Yes, import jobs will be lost as the USD continues to decline, but the result isn’t going to be layoffs, it’s going to be import businesses going bankrupt.
Now, this isn’t a too big to fail claim about the import industry. This is a claim that America doesn’t have the ability to produce all the same products that China does. What has taken decades to build in China is not going to happen overnight in America. Additionally, the typical Chinese worker makes a fraction of what an American worker would make for the same product. So, either American’s are going to have to take lower paying jobs or the cost of products are going to skyrocket!
Some argue that China is manipulating the RMB (Renminbi/Yuan) so that it’s export business continues to thrive at the detriment of America. There may be some validity to the claim the claim of currency manipulation, but it isn’t much unlike Bernanke’s QE and QE2, which are just fancy terms for devaluing the dollar. That is what Bernanke has done. He was devalued the USD. You can call it Quantitative Easing all you want, but a rose by any other name…
There is a large trade deficit between America and China, but it’s not across the board. For instance, where are Chinese airliners getting their planes? Where are they getting their MRI equipment? The advanced technology comes from America. A weaker dollar will lead to lower real profits by Boeing, GE, and other leading American businesses. Here’s the reality of a weaker dollar. So what if your widget sells for $500 when that $500 is only the equivalent to $300 from just 10 years ago!
A weak currency policy is a terrible monetary policy for America. An Administrative policy supporting exports is a good one when the focus is on exports that those other countries can’t make. Is the US really going to compete with the Chinese with making knock off MP3 players and cell phones that get thrown away every 2 years? Those will only be high paying jobs because the value of the USD will have declined to much to make America competitive with China that we’ll have gotten to the status of a 3rd world economy.
I’m being dramatic for a reason. The world economy has been centered on a strong America and strong USD for decades. The result of a devalued USD and trade restrictions with countries we’ve been importing from for decades is not what anyone in America is going to want. Enormous amounts of wealth has made its way to other nations like China, Mexico, and others. Those countries are seeing improvements in their quality of life. The US should continue to lead the world economy with a strong USD position and strong import position. The whole idea behind imports and exports is that countries export what they do/make best and import what other countries do/make best. The US still does and makes many products, services, and technology better than any other country.
The Solution: The Obama Administration should focus on leading technology industries (instead of rehashing dying industries in America) and creating greater tax incentives to grow those industries (just like Clinton did with the Internet)! Congress should act as well to impeach Bernanke. It is fully within the power of Congress to do so. Further, the Obama Administration can take action in the Treasury Department by not selling bonds to The Federal Reserve. These actions would send a sound message to the world economy that the United States is standing for a strong USD, strong US consumption, and leading the world economy out of this depression with swift action. These actions would take about 9 months to catapult the US economy and world economy out of this depression. The message to the rest of the world is that America wants to continue to *lead* the global economy rather than play a reactive role in the global economy.
I can’t tell you how many times I’ve heard people complain about our “greedy” capitalist society. Quite often they are referring to Walmart, the oil industry, and companies who “ship jobs” overseas. There are others, but one of these poses a serious question for capitalism:
Walmart (and hundreds of other retailers) purchase the majority of their products from China. China is a communist country. Are selling and purchasing communist goods acts of capitalism?
Certainly, a cornerstone of capitalism is the free market, but what is it when that “free market” that a capitalist nation purchases from is a communist country? Some might argue that it qualifies as a mixed market economy, but that is a moot point for various reasons and is irrelevant to the question.
People who complain about the “greed” of capitalism will argue that profit driven capitalism is what drives corporations to purchase cheap products from communist countries like China. However, I argue that it is (1) our fear of inflation that drives companies to find cheaper markets like China and that (2) searching for these cheaper products in a communist country is not capitalism.
It’s not like we don’t know China is a communist country. It’s not like we don’t know that the Chinese government filters all money that we send to Chinese banks when our corporations buy products from their factories. We also know that we could, if we wanted to, manufacture these same products in America or another non-communist country. And we also know that our government has given China, a communist nation, favored nation status. With government intervention in support of a communist nation, how can anyone consider the actions of Walmart and other retailers who purchase from a communist country capitalist greed?
Communism has gotten hold of lawmakers in New York! This isn’t McCarthy style scare tactics folks, this is the real deal. One the surface, people might be thinking that the whole Amazon Tax thing is no big deal. Amazon might win, probably, perhaps, hopefully, right?
New York is attacking the constitution of the United States. Furthermore, they are expecting our businesses to foot the bill for the constitutional challenge. Our businesses are going to have to pay to prove that our constitution protects us from the economic greed of lawmakers like those in New York. Yes, our businesses are footing the bill. I say New York should have to repay Amazon for ALL legal expenses if Amazon wins the lawsuit against New York. That should keep idiot lawmakers from abusing the power that we gave them!
There is a lot of concern about the state of our economy, but I have an ingenious idea for solving a major economic drain in our economy for generations to come!
During the last 20 years, we’ve seen the rise and fall of our economy several times, but over all… We’re doing pretty well. We’ve seen the rise of entire industries like the Internet and alternative energy. And during these 20 years we’ve had only a Bush or Clinton in office.
Let’s just do away with the presidential election after we elect Hillary. We could then have Jeb be president for eight years. Then we can switch to Chelsea for eight years. Then another Bush. Back to the Clintons.
Think of all the money we will save on elections! The secret service will save money because they won’t have to protect guys like John McCain and Barrack Obama. That $40 million that Barrack received in March… Rather than wasting it on a needless presidential campaign, it could be spent on our products and services. $40 million in one month! Couldn’t *YOU* use an extra $40 million? He needlessly raised $32 million in January too.
Since the Bushes and Clintons are Democrats and Republicans, we still maintain our two party system just like we have over the last 20 years. It is utopian politics! We still have democracy because we have Congress. We still have a two party system. We just don’t have to worry about the president anymore. SWEET!
Hundreds of millions of dollars are wasted on presidential campaigns every 4 years. If we just stick with Clintons & Bushes, we’ll infuse a HUGE amount of cash into our economy by not wasting it on needless campaigns. Support American Royalty and vote for Clinton this November.
Just last week, I has started publishing information about energy-based inflation. I had the idea and predicted it in a paper I wrote for an economics class almost 5 years ago. It was the first, and only, B graded paper I had ever written in an economics class. The professor gave it this low grade because he ultimately disagreed with me that energy could cause a ripple of inflation in the American economy.
This morning, I check my email to find further support for my theory of energy-based inflation. The Washington Post published an article about how Coal Can’t Fill the World’s Burning Appetite. To sum up their article, circumstances have shot the price of coal up by 50% or more over the last five month. While this short-term spurt in price may be able to be absorbed by businesses, don’t count on it. The price of coal is not going to be coming down any time soon. Same with oil.
What does this mean for America? Well, if you read the report from our government, guess where we get 49% of our energy from? If there is a sustained increase in the price of the resource that generates 49% of all of our energy, you can bet your house that prices are going to go up everywhere!
The bottom line is that energy is driving inflation in our economy, not interest rates. Watch what happens to all the rate cuts by the Federal Reserve this year. They will go to offset the energy costs. It will temporarily stabilize energy inflation, but it is not a permanent solution. Energy costs will rise, and the Fed will be powerless. Changes in the energy market are the only thing that will curb energy-based inflation. I’ll post my solution on Wordscause this evening.
My company is gearing up for a significant push into Internet Marketing. One of the first things I did was go an find a great resource for researching keywords. There are dozens of them on the market: Keyword Tracker, SEO Book (which uses several other research tools), Google Keyword Suggestion Tool, and my personal favorite Keyword Discovery. While researching some health related keywords, I decided to do a little bit of research on obesity from a search point of view.
I believe I’ve found out why we have such a tremendous obesity problem in the United States. According to my research, there are 27,786 search terms that include the word obesity in them. Terms like “childhood obesity”, “causes of obesity”, etc. Obesity itself is searched 57,226 times/year. Seems like a lot until we look at food…
717,364 search terms that contain the word food. 239,736 for food all by itself. But what about fattening foods like desserts and McDonalds? 28,181 searches for dessert and 154,619 searches for McDonalds! How about cheesecake, which has nearly 32K searches/year!?! Compare that to the 13,037 searches per year for the term “how to lose weight”.
There it is folks. Apparently, we don’t think that we are overweight. All the articles must be wrong. Or boring. Perhaps they are too boring to read because the articles about cheesecake are so much more appealing. MMMM Cheesecake 😛