I just heard a woman on the radio (frankly I don't know who she was but she must have been a political candidate or someone in a party committee or something such). She claimed that (1) we have never had such a protracted period with the unemployment rate over 8%; and (2) that the price of gasoline is 110% higher now than when Obama took office.
All this led to a pitch for Mitt Romney as better qualified to be President.
Let's look at these claims and examine whether they are to be blamed on Obama. First, the price of gas. It's been stated many times that one reason that gas prices have risen is that world demand for oil, led by increasing living standards in China and India, has been rising. Everybody has heard of the law of supply and demand: with greater demand, the price is going to rise.
Second, Obama has been guiding the US back to economic health after a worldwide near-meltdown of the economy and the banking system in 2008—before he took office. The economy is still not robust and thus employment has been improving only gradually. It probably would take New Deal–style programs to make a big difference in that—programs which the Republicans definitely would fight tooth-and-nail and almost certainly would successfully block.
I heard someone talking about the power of the President. The bottom line was that the president does not have as much power as people tend to think. Our government is divided into three branches—the so-called Separation of Powers, which has shown itself to be a wise provision of those who established our form of government. So the Executive Branch (the President and his cabinet departments) can't do everything on their own.
Where government departments and agencies can influence the economy, we have (again) Conservatives and Republicans crying out that the government has too much power and advocating for little or no regulation—the "free market" philosophy which, as they'd like us to forget, is what caused the economic mess in the first place.
So it looks like they (the Conservatives and Republicans) want to blame Obama for any and all problems the country is experiencing, but at the same time they want to negate or thwart any power he or his cabinet departments might actually have to affect those same problems.
Looks to me like they just want to blame.
Updated May 13, 2012
Copyright © 2012 by Richard Stein
Showing posts with label unemployment. Show all posts
Showing posts with label unemployment. Show all posts
Sunday, May 6, 2012
Friday, December 2, 2011
Should You "Buy American"?
The television network ABC has been carrying on a year-long "Made in America" campaign, to point out to its viewers what products are made in America, with the idea that, if consumers are aware of what brand names are of American manufacture, they will (hopefully) prefer to buy those products.
In Seattle, a local organization tried to get a buy-American advertising campaign onto the sides of public buses; but the Seattle transit authority declined the ads, saying that they were espousing a politically and economically controversial position.
There was considerable outcry over this, and the transit authority reversed its position. In this instance I think I agree with the "buy American" organization and not the transit authority: I don't see anything particularly controversial about the advertising or its aims.
Nowadays, practically everything one buys in the US seems to be made in China; and to some degree—probably a considerable degree—that represents manufacturing jobs lost to American workers. And we currently have a rate of unemployment in the US that is unacceptably high.
Entire industries in the US have been pretty much destroyed—for example clothing manufacturing (as of quite a while ago) and more recently, shoe manufacturing.
Who is to blame? I want to look at several parties and maybe assign some blame to each.
First, China does not play fair. They keep the exchange rate for their currency relative to the dollar very low. Thus Chinese-made merchandise can be sold ridiculously cheaply—even after the wholesalers and retailers involved add on shipping and import duties to the items' cost. (It might surprise you that the shipping and duty really don't come to that much.) So American producers simply can't compete.
Second, look at merchandisers like Walmart. It's in the nature of capitalism that a retailer which can sell something more cheaply than its competitors has a competitive advantage. Chances are, the customer does not look to see where the item was made (which of course is what the campaigns are all about) but simply goes with the low price. And the cheaper item these days, is usually Chinese made.
So now, third, the consumer: A lot of consumers not only like to save money, they need to save money. This is the situation of some families, particularly lower income families with several children: if they can get their purchases more cheaply, that may mean that they can buy shoes or winter jackets for all of their children, instead of for only one or two. Even if they don't pay attention to where those items are made, and maybe don't care, I think they deserve some sympathy.
I think yet another party should get some of the blame. I'm pretty sure that a $60 or more Tommy Hilfiger or Polo Ralph Lauren shirt, which is made in a third-world country, does not have to be made in that third-world country to be profitable for Hilfiger or Polo--or for the retailer. When the item is on sale and its price is reduced to half, I promise you the store is still making a profit.
Now one exception to all this is cars. I had a neighbor who, when I was extolling the reliability of the Honda I owned at the time, said, "I think that if you're American, you should buy an American car." Well, nowadays, in this age of the global economy, it's not so simple. Did you realize that the price stickers on cars in the showroom are required to show the percentage of "domestic [parts] content"? I saw a Ford Taurus where the domestic content was only 65%. It's not too uncommon for an "American" car to have its major parts, like transmissions, made in Canada or Mexico or an Asian country.
And look at the cars with Japanese brands which are assembled in US plants. Assembly in the US means US workers have employment when you buy that vehicle. And the domestic content might actually be higher than that Ford Taurus: a lot of parts like windshields, headlights, batteries, tires, and power-window controllers probably come from domestic suppliers, and major components may be made at the assembly plant.
The same ABC network did a little study in which they tried to determine which car purchases would produce the most jobs for American workers; and they found that buying a Toyota Camry would actually produce more jobs than a certain car with an "American" nameplate.
So, if you want to "buy American" when you are car shopping, don't pay the main attention to the name: you can look at where the vehicle was assembled—that's on the sticker, too—or, more importantly, look at that "domestic content" number.
Update, July 4, 2012.
Here is an article on this subject from AOL Autos:
http://autos.aol.com/gallery/the-most-american-cars/?icid=maing-grid7|main5|dl7|sec1_lnk2%26pLid%3D175630
Update, June 8, 2013
An interesting little sidebar in the July, 2013 issue of Car and Driver:
Second, as I have often said, the people who are trying to "buy American" and go buy Fords, Chevrolets, and Buicks are misguided.
Copyright © 2011 by Richard Stein
In Seattle, a local organization tried to get a buy-American advertising campaign onto the sides of public buses; but the Seattle transit authority declined the ads, saying that they were espousing a politically and economically controversial position.
There was considerable outcry over this, and the transit authority reversed its position. In this instance I think I agree with the "buy American" organization and not the transit authority: I don't see anything particularly controversial about the advertising or its aims.
Nowadays, practically everything one buys in the US seems to be made in China; and to some degree—probably a considerable degree—that represents manufacturing jobs lost to American workers. And we currently have a rate of unemployment in the US that is unacceptably high.
Entire industries in the US have been pretty much destroyed—for example clothing manufacturing (as of quite a while ago) and more recently, shoe manufacturing.
Who is to blame? I want to look at several parties and maybe assign some blame to each.
First, China does not play fair. They keep the exchange rate for their currency relative to the dollar very low. Thus Chinese-made merchandise can be sold ridiculously cheaply—even after the wholesalers and retailers involved add on shipping and import duties to the items' cost. (It might surprise you that the shipping and duty really don't come to that much.) So American producers simply can't compete.
Second, look at merchandisers like Walmart. It's in the nature of capitalism that a retailer which can sell something more cheaply than its competitors has a competitive advantage. Chances are, the customer does not look to see where the item was made (which of course is what the campaigns are all about) but simply goes with the low price. And the cheaper item these days, is usually Chinese made.
So now, third, the consumer: A lot of consumers not only like to save money, they need to save money. This is the situation of some families, particularly lower income families with several children: if they can get their purchases more cheaply, that may mean that they can buy shoes or winter jackets for all of their children, instead of for only one or two. Even if they don't pay attention to where those items are made, and maybe don't care, I think they deserve some sympathy.
I think yet another party should get some of the blame. I'm pretty sure that a $60 or more Tommy Hilfiger or Polo Ralph Lauren shirt, which is made in a third-world country, does not have to be made in that third-world country to be profitable for Hilfiger or Polo--or for the retailer. When the item is on sale and its price is reduced to half, I promise you the store is still making a profit.
Now one exception to all this is cars. I had a neighbor who, when I was extolling the reliability of the Honda I owned at the time, said, "I think that if you're American, you should buy an American car." Well, nowadays, in this age of the global economy, it's not so simple. Did you realize that the price stickers on cars in the showroom are required to show the percentage of "domestic [parts] content"? I saw a Ford Taurus where the domestic content was only 65%. It's not too uncommon for an "American" car to have its major parts, like transmissions, made in Canada or Mexico or an Asian country.
And look at the cars with Japanese brands which are assembled in US plants. Assembly in the US means US workers have employment when you buy that vehicle. And the domestic content might actually be higher than that Ford Taurus: a lot of parts like windshields, headlights, batteries, tires, and power-window controllers probably come from domestic suppliers, and major components may be made at the assembly plant.
The same ABC network did a little study in which they tried to determine which car purchases would produce the most jobs for American workers; and they found that buying a Toyota Camry would actually produce more jobs than a certain car with an "American" nameplate.
So, if you want to "buy American" when you are car shopping, don't pay the main attention to the name: you can look at where the vehicle was assembled—that's on the sticker, too—or, more importantly, look at that "domestic content" number.
Update, July 4, 2012.
Here is an article on this subject from AOL Autos:
http://autos.aol.com/gallery/the-most-american-cars/?icid=maing-grid
7|main5|dl7|sec1_lnk2%26pLid%3D175630Update, June 8, 2013
An interesting little sidebar in the July, 2013 issue of Car and Driver:
Globalization means that even domestic automakers are importers, bringing Buicks from South Korea, Fords from Turkey, and all manner of Chrysler models from both north and south of the border. In fact, only one volume brand is solely American-made: Jeep. All Jeep vehicles are assembled in either Detroit; Toledo, Ohio; or Belvidere, Illinois.Two comments on this: First, it is to be hoped that this news about Jeep does not impel lots of people to go buy Jeeps because recent news has it that Jeep has a serious design defect which makes the gas tank likely to explode in rear-end collisions, and the NHTSB has been pressuring Chrysler to recall Jeeps to fix the problem
Second, as I have often said, the people who are trying to "buy American" and go buy Fords, Chevrolets, and Buicks are misguided.
Copyright © 2011 by Richard Stein
Friday, November 11, 2011
Evil Corporations, or Slacker Workers?
As of the middle of this year, corporate America was doing quite well. According to Brian Rogers, Chairman of the investment firm T. Rowe Price, America's corporations had earnings double those of a year earlier; they were rolling in cash; and they were buying back their own stock and increasing dividends—all signs that business was very good and these companies were quite profitable.
Yet the little American is not doing well. As everyone knows, we have a high rate of unemployment. People are struggling and are losing their homes. Poverty is at an all-time high rate. Food banks haven't got enough food on their shelves to feed all of the hungry.
So one has to think about the wide discrepancy between the health of corporate America and the financial well-being of millions of everyday American families. Or ask, If these companies have been doing well, why aren't they hiring back all the workers that they laid off during the recession?
Just to use a little logic, those companies evidently are getting along okay with fewer workers, or, as they might put it, with a leaner work force.
We could look at this in two ways. First, maybe the workers who are still there are being worked harder--and I am sure this is the case in some and perhaps many instances. In the terms of what would now be only a metaphor, the plant managers are running the mill (or assembly line) very fast and the workers are scrambling to keep up to where they are pretty much exhausting themselves.
This is doubtless true in some cases. Figures for productivity are up, meaning that there is indeed more output per worker. Workers are working harder.
On the other hand, there have been studies that show that the average American worker (in an office) is actively working only about half the time. Again to use an old metaphor, he or she spends too much time gossiping around the water cooler. In more modern terms, people sit at their desks making personal calls, surfing the Internet, texting, and so forth. We all know this is true, and 99.99% of workers have been guilty of this.
So it's true that more work could be gotten out of workers. I'd say that maybe in a few instances, the bosses have become evil slave drivers, cracking a whip over the poor gangs of workers. And workers in many sorts of jobs seldom or never would have an opportunity to goof off. But in other cases there was indeed some slack that could be squeezed out, and employers are merely getting more of a full day's work from their employees, and it's hard to blame them for that. It would not be realistic to expect that they are going to hire back workers if they have found that they simply don't need them.
Copyright © 2011 by Richard Stein
Yet the little American is not doing well. As everyone knows, we have a high rate of unemployment. People are struggling and are losing their homes. Poverty is at an all-time high rate. Food banks haven't got enough food on their shelves to feed all of the hungry.
So one has to think about the wide discrepancy between the health of corporate America and the financial well-being of millions of everyday American families. Or ask, If these companies have been doing well, why aren't they hiring back all the workers that they laid off during the recession?
Just to use a little logic, those companies evidently are getting along okay with fewer workers, or, as they might put it, with a leaner work force.
We could look at this in two ways. First, maybe the workers who are still there are being worked harder--and I am sure this is the case in some and perhaps many instances. In the terms of what would now be only a metaphor, the plant managers are running the mill (or assembly line) very fast and the workers are scrambling to keep up to where they are pretty much exhausting themselves.
This is doubtless true in some cases. Figures for productivity are up, meaning that there is indeed more output per worker. Workers are working harder.
On the other hand, there have been studies that show that the average American worker (in an office) is actively working only about half the time. Again to use an old metaphor, he or she spends too much time gossiping around the water cooler. In more modern terms, people sit at their desks making personal calls, surfing the Internet, texting, and so forth. We all know this is true, and 99.99% of workers have been guilty of this.
So it's true that more work could be gotten out of workers. I'd say that maybe in a few instances, the bosses have become evil slave drivers, cracking a whip over the poor gangs of workers. And workers in many sorts of jobs seldom or never would have an opportunity to goof off. But in other cases there was indeed some slack that could be squeezed out, and employers are merely getting more of a full day's work from their employees, and it's hard to blame them for that. It would not be realistic to expect that they are going to hire back workers if they have found that they simply don't need them.
Copyright © 2011 by Richard Stein
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