We Americans Own the American Market

 We Americans own the American market.  Others – foreign companies and multinationals – sell in our market only with our permission.  It is not their right to sell in our market, it is a privilege that we have granted them.  Our Congress, acting upon our instruction, has every right to determine who can sell in our market and under what terms and conditions.

I want to assure you in this the most beloved of all holiday seasons that what we aspire to do, i.e., determine how we and others conduct international trade within the boundaries of the United States, is a right that exists in natural law and is embedded in our Constitution.

What we clearly seek to accomplish in this website and through discussions in this blog is to manage trade between the U.S. and other countries in such a way that it benefits Americans first and foremost, and citizens of most of the rest of the world as an intended consequence.

We will ask ourselves, at the end of the day, can we look down from the mountaintop and proclaim that we have created our brave new world, a world that we have imagined, a world that we have hoped for and a world that we will eventually will to our children and future generations of Americans?

The obvious answer to me is that we can.  Si se puede. The proposed new American doctrine of “51% of all manufactured products sold in the U.S. market, with rational exceptions, shall be manufactured in the U.S.” not only makes sense, it is the easiest and quickest way to a new and revitalized America.

The reasons are clear as a sunny day in the eternal sunshine of southern Nevada.

First, no foreign country or a company manufacturing its products in a foreign country has an inalienable right to sell such foreign-manufactured products in the American market. They have the privilege of doing this because we Americans have granted them that privilege. But we do so consistent with our Constitution. And our Constitution grants the U.S. Congress, acting on our behalf, the right to regulate all commerce between the U.S. and other countries, between the various states, between the United States and the Indian tribes.

Second, trade with foreign countries must be beneficial to us Americans and not lopsidedly beneficial to our trading “partners.” We do allow trade to be lopsidedly in favor of China, Japan in the recent past, South Korea, etc., but only on the assumption that such lopsided trade is temporary, that over the long haul, the movement of goods will become two-way and not virtually one-way, which it is now with China and some other countries.  We therefore have a right to force the issue of mutually beneficial trade.

Third, the goal of foreign trade must be zero, or close to zero. That is, ideally a country’s exports to another country must be roughly equal to its imports from that country. In the 1960s and prior decades, net U.S. foreign trade was only 4% of gross national income. Our exports to other countries were just slightly more than our imports from them.

Fourth, American consumers are the greatest economic engine in the universe. Any country or multinational that sells in the American market must be put on notice that Americans will no longer allow unfettered access to that market under rules prevailing in the 20th and earlier centuries. Trade rules must change, and foreigners’ access to the American market must be conditioned upon whether such trade creates jobs in America. No longer shall it be enough to say that cheap goods are made available to Americans, we must make sure that no country is able to export its unemployment to America and destroy American jobs.

Fifth and lastly, globalization must benefit most if not all countries on the planet. The U.S. must serve as an example for the rest of the world. We must encourage other countries to adopt policies similar to our 51%. Imagine what would happen if countries such as South Africa, Uganda, Argentina, Uruguay, the Philippines, Indonesia, Myanmar, Cambodia, Pakistan, etc. have their version of the 51% rule. Those countries will experience a boom in construction of industrial plants and in hiring to staff the new factories that shall be set up. Most countries will be both producers and consumers all at once. Gone will be the export economies that sell to the rest of the world but buy very little from the rest of the world.

The U.S. will maintain its preeminence because our standard of living will recover its lofty heights achieved in the 20th century, but close on our heels will be other countries.  That last point is important.  Other countries must realize their potential too, not just the U.S.

This is our brave new world. We can do this. We can do this by setting the example. We will require that 51% of all manufactured products sold in the U.S. are manufactured in the U.S., within reason. We will watch as other countries adopt similar policies. We will watch as China’s growth slows down and as other export economies realize that they can no longer take advantage of other countries whose markets are open to them.

The wealth of the world will be distributed equitably, and the resultant boom will benefit the greatest number as most countries experience a rapid growth in their middle classes.

Of course prices will tend to rise in the short term because production costs will increase temporarily. That is to be expected. But we here in the U.S. know that cheap prices at Wal-Mart and Target are NOT good for the country. What is good for Americans and people around the world is to have good jobs. People who have good jobs can afford to pay for the products that they buy even if those products are more expensive than they are now.

Remember, before the Japanese and the Chinese, most of the things that we bought at Sears and J.C. Penney were made in the U.S.  And they were expensive. But we did not mind, because we had jobs, we had good jobs, and we had good careers. We could afford to pay for those American goods because we had money.  We could buy houses and cars.  We could marry, have children and own our own homes.  We did not have to stay with mom and dad.

My friends, toss these principles in your heads during this holiday season. In January we will resume our journey and think of better ways to spread the news.  We will look at the devastated manufacturing industries that have been sacrificed to the gods of globalization and ask:  how and why did we let it happen?

We Americans are ready to take control of our markets again. We have this power to choose what we will buy and what we will reject. We have this power to influence our President and our Congress to change the rules of international trade in a way that assures us, our children, our loved ones a bright future. We reject the idea that America is in permanent decline.

We will lead the world in this new enlightenment.  We will open the eyes of the world to a truth that has been forgotten:  the truth that we own our economy and we have the right and the duty to set the rules of commerce in such a way that the commerce benefits us and not some villagers in a faraway country such as China.

The America we know is forever upbeat.  We are Americans, and we will never, ever feel that we are on the way down.

Happy holidays to all!

The horrible tragedy in Newtown, Connecticut should convince us all that something must be done about our unfettered love and adoration of guns.  We must also remember that our society is broken and must be reformed in many other areas, such as immigration, taxation and international trade.  We must make across-the-board adjustments in our body politic if our country is to emerge from our many national crises as the America we all know.  Finally, we grieve for the loss of the 20 angelic voices and their teachers who sacrificed their lives in defense of the children.

 

Emphasis on Quality abroad, protection at home

From China comes the surprising news that the increasingly affluent Chinese youth actually have a penchant for American products. Chinese consumers under the age of 40 are attracted to American manufactures such as toiletries, consumer electronics, apparel and fashion accessories and books, music and videos. Not to mention GM’s Buick, which is a hot-selling automobile in China across the age groups.

The Chinese have a positive view of American-made products, which have a reputation for their quality, as opposed to Chinese-made products which the educated and affluent Chinese consider as of lower quality.

The research was conducted by Research International and commissioned by UPS. The cynics might consider the study biased since UPS is a huge beneficiary of the feverish pace of China-America trade, which is currently lopsidedly in China’s favor. Still, since we are talking here of an awakened giant and its more than 1 billion people, this very encouraging news is a big deal.

We’ve all heard of China slapping tariffs on foreign-produced goods to protect Chinese industry. We’ve all read about foreign companies setting up manufacturing facilities in China because the Chinese government encourages foreign multinationals to manufacture in China products intended for the Chinese market.

The Chinese people apparently have other ideas, with the affluent and middle class young – affectionately called “Chuppies,” a Sino version of the American “yuppies” – wanting to see more American products in their local stores.

But let’s not be fooled by this surprising breaking news. American products have a long way to go before they become entrenched in people’s minds over there. We must forge ahead with our drive to bring the bulk of American manufacturing back to America.

We consumers can help accomplish this only by insisting that 51% of all manufactured products sold in the U.S., with rational exceptions of course, shall be manufactured in the U.S. within five, seven or ten years, depending on the complexity of the products.

The Japanese and Koreans have a built-in bias against American products. The Japanese love American sweets and fast-food franchises, such as Kentucky Fried Chicken. And of course American culture. The Koreans love American toiletries and movies. But these two major export economies are self-sufficient and don’t need any of our manufactures. Japanese and Korean consumers feel their products are superior to American counterparts and there is really no great demand in those countries for American-made products. They do import Toyota Camrys and Honda Accords, which are made in the U.S., but these are products that use Japanese and Korean-made parts.

It’s striking that those two giant export economies love American foods, which are low-technology products. High-tech, they go with their own products. There are exceptions, of course, such as airplanes, which were the biggest single American export until recently, when gasoline and fuel became America’s single most important export.

Yes, we do export gas and oil despite the fact that we are the world’s largest importer of crude oil. The reason is pure microeconomics. Oil companies make more money selling their products abroad than selling the same products in the U.S. This creates artificial shortages and the resultant high cost of fuel in the U.S. makes it economically feasible to import crude oil and process the imported crude and sell the gas in the U.S. So the oil companies import crude for the American market. Complicated? You bet.

Some would tell us that it is not necessary to encourage more American manufacturing because the trend to manufacture in America has already started. The cost of labor in coastal China is now in the $3 to $6 an hour range and it has become more economically feasible to manufacture in America again. Don’t be fooled by this. All the Chinese have to do, which they are doing now, is to relocate manufacturing in the inner cities and rural and exurban China. Besides, If it’s not China, it will be some other country in the future.

As long as China and other countries protect their manufacturers from American competition and as long as foreign consumers prefer their own manufactures to American products, the transfer of wealth from Americans to foreigners will continue unabated. When America was rich, we encouraged some of this. We encouraged imports from Japan, Germany and the rest of Europe because America stood alone as the biggest market for manufactures during the decades that followed the Second World War. We watched as those foreign economies rose literally from the ashes as they overtook us in some industries.

We could afford all that because we were the richest country in the world. We are no longer the richest. Our sixteen trillion dollar sovereign debt took care of that. Every month we go deeper and deeper in debt.

We must put a stop to this nonsense. We must rebuild our manufacturing here at home and the only way we can accomplish this is by protecting our industries the way other countries protect theirs.

Our politicians have promised us a new and more hopeful America, an America with a bright future. We cannot have any of that if we do not insist that our manufacturing recovers and we are a manufacturing power once again.

Many of us denizens on the Internet are retirees or semi-retired, and so this is not really for us.  It is for our younger siblings, our children and the children of our friends and neighbors.  It is for all Americans under the age of 55.  We must make sure that we leave America in the same robust shape we found it.

The Chinese keep telling us we are in decline.  Don’t believe any of that.  We are not in decline.  We only have to make one easy-to-accomplish change.  We only need to Buy American.

 

American Televisions and Electronic Products

I recently bought a Westinghouse television set, a 55 in. (diagonal) flat screen LCD, thinking it was made in the U.S.A. The sales clerk assured me that it was made in California by a California company that had bought the Westinghouse brand from the original owners of Westinghouse.

I did not follow Reagan’s trust but verify dictum and bought the TV on the basis of the clerk’s word. Turns out the TV that I bought was made in China by a Taiwanese company called Chei Mei.  All Westinghouse TVs are made in China.

You would think that someone like me who is deathly serious about manufacturing products in the U.S. would know that no TVs are made in the U.S. these days. But, I was hoping that there had been recent changes in the market that I was not aware of. After all, the U.S. has not completely given up on electronics manufacturing. There are specialty products that are still made in the U.S., in the high-end market where price does not matter as much as quality.

Bose products are, after all, still made in the U.S. Probably the finest speakers in the world, Bose boasts of theater quality sound that emanates from small boxes.

There are dozens of U.S. manufacturers that still make their products in America. Some of the notable ones are:

Sirius – which makes data bases for electronic engineers
Sonetronics – makes headsets, earphones, etc.
B & K Manufacturing – high end audio equipment
Krell – home theaters and high end audio and video equipment
Crowley and Tripp – American designed, assembled and serviced microphones
Martin Logan ESL – speakers for audiophiles

There are numerous small American manufacturers that provide niche products in the humongous electronics market in the U.S.

Why no one has started to make TVs in America again is probably a function of the cost of labor in China. Taiwanese companies make their TVs in China because production costs there are much lower than in Taiwan.  Japanese companies have not succumbed to the lure of Chinese manufacturing as yet because they have good business relationships with Southeast Asian countries such as Malaysia and Singapore. South Korea seems to be resisting the temptation of shifting manufacturing facilities to China and the U.S. probably has much to learn from the Samsung conglomerate. How does South Korea manage to compete with companies that have outsourced their manufacturing to China, Malaysia and other low-wage countries?

U.S. multinational companies probably have already learned from the South Koreans but they are not prepared to apply the knowledge they’ve gained. For various reasons, chief among which is probably that U.S. multinationals that manufacture in China are driven by only one consideration – the bottom line.

They leave corporate responsibility and other elusive moral considerations to the smaller manufacturers that are driven less by the need to keep the company stock’s prominence on the New York Stock Exchange than by their moral obligation to their fellow Americans.

This is the reason for my proposed new American doctrine: 51% of all manufactured products sold in the U.S. must be made (assembled) in the United States.

If we don’t force the issue, Satan will be wearing a fur coat before the conscience-deprived multinational CEOs start manufacturing big-time in the U.S. once again. Apple, the most valuable company in the world, is the biggest culprit. Apple sells so much product in the American market and yet it makes next to nothing in the U.S.

Toyota, Nissan, Mercedes, Honda and Hyundai all make some of their cars in the U.S., but Apple hardly makes anything here. This is a mortal sin.

The same guys who extol American ingenuity and hard work almost daily do not believe in those American virtues! Apple is Apple because it is making money the easy way and not the responsible way.  Not through ingenuity but by handing over its manufacturing to the cheap labor Chinese. My intention is not to demean the Chinese. They happen to be sitting on a mountain of advantage in the comparative advantage game – they can make things cheaper than just about everybody else. And they can do everything fast – a sign of high intelligence which appears to be present even among the masses. It is not their fault that they have this advantage over us, but it is also true that the Chinese have given us little in exchange for their access to the U.S. consumer market, an access that in some industries is approaching complete dominance.

But the Chinese also manipulate their currency and the rising Chinese wages are not being felt in the trade wars because of the currency manipulation.

It is time for the U.S. to step in and act.

By the way, the Westinghouse VR-5535Z 55-in. LCD TV is working just fine. I could not resist buying the product because it was selling for only $598, while the Sony 42-in. that I had bought only a few years ago cost me more than $1000 – and it was on sale!

A Proposed New American Doctrine

By Cesar Fernando Lumba

The Monroe Doctrine. From Google comes this brief definition of the Monroe Doctrine.

“The Monroe Doctrine is a United States policy that was introduced on December 2, 1823 (by President James Monroe), which stated that further efforts by European countries to colonize land or interfere with states in the Americas would be viewed, by the United States of America, as acts of aggression requiring US” response, which may include war.

Simply put, the Monroe Doctrine grants the U.S. the moral right to come to the defense of any country in the Americas (North, Central and South) if such countries are threatened by foreign powers, including and especially European powers.

The New American Doctrine I am proposing for President Obama, or whoever emerges victorious from campaign 2012, is this:

Any business entity that markets manufactured goods to American consumers residing in America must, within five, seven or ten years (depending on the complexity of producing.such goods) manufacture 51% of the products that they sell to American consumers within the borders of the 50 states of the Union plus Puerto Rico, Guam, the Virgin Islands and other territories under the jurisdiction of the United States..

Implied by this New American Doctrine is a revamp of the definition of free trade. The concept of free trade must include the notion that free trade benefits all trading partners and not just the giant export economies such as China.  Also implied is the notion that trade where the flow of goods and services is one way is not free since no country is presumed willing to engage in such trade if it were in its power to resist such an arrangement.

Whenever the trade between and among countries degenerates into a competition of those countries to determine who walks away with the greatest benefits then it is no longer free trade. It is instead managed trade, where the export economies maximize their exports and minimize their imports. The trade between China and the U.S. is an example of such trade. Chinese companies and multinational companies that manufacture their products in China have flooded the American market, while American-made products are unable to penetrate the Chinese market, with the exception of just a few products, such as airplanes. Even GM cars that are beginning to make major inroads in China are increasingly made in China, not the U.S.

Technology transfers occur without abatement, which means that the presumed technology advantage of the U. S. over China is either disappearing or has disappeared, depending on the industry.

The result is the Wal-Martization of America. Nearly all the consumer products sold in Wal-Mart, Target and other department stores are made in China. Some are made in other developing countries. Finding products that are made in America is often a fool’s errand.

This is untenable. Another twenty years of this condition and America will be reduced to an insignificant economic power, dictated to by its biggest creditor -The (Communist) Peoples Republic of China.

As long as I can call myself an American, and if it is in my power, I will not let that happen.

That is why I am proposing this New American Doctrine – 51% of all manufactured products sold in the 50 states and Puerto Rico, Guam, the Virgin Islands, etc., must be made in America. Made in America, as I’ve stated in my previous posts, may be defined as assembled in America. This policy acknowledges that the reality in the global village is that most components that go into the manufacture of most manufactured products these days come from all corners of the globe.

I would encourage all other countries in a position to craft their independent economic policies to adopt variants of the New American Doctrine. They too should require that a significant percentage of all products sold in their markets are made in their countries.

What this will accomplish is the world’s wealth shall be spread among citizens of many countries and will not be concentrated in the hands of a few billionaires in China, Japan, the U.S. and Europe.

Should foreign companies, including American multinationals manufacturing their products in foreign countries, fail to comply with the 51% requirement, their products shall be slapped tariffs which will then be used by the U.S. government to provide subsidies to U.S. factories that manufacture the tariffed products.

Hello, managed economy? You bet. The U.S. government must manage its economy more selfishly. It can no longer afford to be the bastion of classic, laissez-faire free trade while its major competitors protect their manufacturers either through outright tariffs, banning entry of foreign competition, such as China’s ban on Facebook, or through currency manipulation.

Meanwhile, through blogs such as this, U.S. consumers shall be educated in the virtue of insisting that 51% of all products they buy are made in the U.S.

Hello Apple. Hello Vizio. Hello Nike. Hello Everybody. You are now on notice.

There will no longer be pure export economies, such as China today and Japan in the late 20th century. There will eventually only be export-import economies.

What this will do is slow the development of China, which is a good outcome since its development has so far come at the expense of the U.S., Europe and arguably, Australia and much of Asia.

The American Consumer

The American Consumer.  The last line of defense against the flood of competition from cheap products made by cheap labor in overcrowded sweatshops.

The American Consumer.  He has built fortunes in our country and is building fortunes in foreign countries, such as China, India and Mexico.

He must turn his gaze homeward now and look to build modest fortunes once again in America.  He knows he can do this.  All he needs to do is insist that some of the products that he buys are made right here in America.

What is meant by “made in America.”  It means the products are assembled in America.  Because of globalization, many of the components that go into the manufacture of many products come from the four corners of the globe.  This is not likely to change significantly in the future, but the assembly of such components into finished goods can easily shift back to America.

There is evidence that U.S. manufacturing is on the rebound.  With help from the American Consumer, U.S. manufacturing can successfully bring back the glory days of the U.S. economy.  Before finding manufacturing jobs for others, we must endeavor to find such jobs for Americans.  Buying American made products will add to U.S. employment and keep Americans employed in meaningful jobs.

In our next post, we will present electronics and high-tech products that are made in America.  It is our hope that Americans will develop a preference for those home-made products.

 

 

Hello world!

The American Consumer.  The last line of defense against the flood of competition from cheap products made by cheap labor.

The American Consumer.  He has built fortunes in the past and is building fortunes once again in foreign countries, such as China, India, Mexico, Japan and South Korea.

He must now turn his gaze homeward and look to build modest fortunes once again in America.  He knows he can do this.  All he needs to do is insist that many – not all – products that he buys are made right here in America.

This website will list products that are manufactured in the U.S.  What does “manufactured” mean?  It means the products are assembled in the U.S.  We realize that because of globalization many components that go into the assembly of finished products come from all over the world.  We can therefore realistically expect that U.S. manufactured products will continue using components that come from the four corners of the globe.  Hopefully, U.S. manufacturers will start making the components that are used to assemble their products.  That is a goal for the foreseeable future.

In our next blog, we will discuss electronics and high-tech products.  Stay tuned.