Thursday, October 20, 2011

Will US Regulators See the Light? US Solar Panel Manufacturers Seek Protection From Unfair China Trade Policies

Today I noticed this article during my daily scan of the news:

In short, seven domestic solar panel manufacturers filed a trade case with the Commerce Department accusing China of subsidizing its own panel manufacturers to an unfair degree. In some cases the subsidies are enough to allow Chinese panel producers to sell at prices that would normally incur a loss. The clear long term strategy is to give Chinese panels a huge price advantage long enough to put all their competitors out of business. This is not just conjecture. The practice is already well documented in the rare earth metal industry where the Chinese control an estimated 95% of production and can now set prices because they have a monopoly. Rare earth metals are important in a variety of industries, especially electronics such as cell phones. They are also used in catalytic converters on automobiles and in the magnets found in wind turbines.

To remedy the situation the complaint is asking the Treasury department to impose a 100% tariff on imports of Chinese panels. The idea of a tariff is appealing because in addition to removing unfair competition from China it has the added bonus of generating revenue which the government sorely needs right now.

One point the article makes is that if tariffs are imposed the cost of solar panels in this country will go up. This is true. One budget neutral way to address this would be to eliminate all subsidies for the oil, coal and gas companies. These large corporations are doing fine on their own, making billions in profits in recent years. Subsidizing energy from these unsustainable sources just fattens the profits for these companies at taxpayer expense. Theoretically they also make these sources cheaper, artificially widening the gap between the price for renewable vs. unsustainable fossil fuel sources.

Instead the money should be used to offer rebates to homes and businesses who choose to install US made panels, helping offset the the fact that panels made here cost a bit more. As US production grows it should be possible to achieve the economies of scale that are the other reason why Chinese panels are cheaper.

Monday, January 31, 2011

Asking to tell me where it's made.

Dear Amazon,

Mounting evidence has led me to believe that many of the economic problems being faced in the economy of the US are the result of the outsourcing of US jobs. I want to make purchases from as many American companies as I can so that I can keep myself, my family, friends and fellow citizens employed and productive. The most basic part of that choice is the ability to determine where a product was made. In conventional stores it is fairly easy to look at the label for the country of origin.

Recently I was shopping for a backpack and saw a link to your site. I like - your website is very easy to use, seems secure and has a good selection of products at reasonable prices. In this case though, I chose not to buy the product because I could not determine where it came from. As an amazon customer I would be much more likely to use your site and make purchases if your company could somehow prominently display where each item is manufactured or even enable your search tool to filter results based on that criterion.

Thanks for reading. I look forward to many future purchases of American made goods through your website.


Michael L

Monday, January 10, 2011

To bee or not to bee..

That is the question now being faced by American beekeepers. The answer to that question is largely in your hands.

To summarize an article I recently read in the Globe and Mail, China is the largest global exporter of honey. The standards for the production of this honey are, not surprisingly, lower than here in the US. Chinese beekeepers are allowed to use a type of antibiotic which has been shown to contaminate the honey itself. The antibiotic is banned from use in the US. Honey processors also take a turn, sometimes diluting the honey, sometimes using cheaper high fructose corn syrup to cut it but maintain sweetness. US authorities are aware of these practices and have imposed tariffs and import requirements on Chinese honey. Since then imports from other Asian countries have surged at unprecedented rates. This indicates that through methods of varying legality Chinese honey is in effect being laundered and then re-exported to the US under the label of a different nation to circumvent the tariff.

I highly encourage you to read the whole text here:

This article shows the limitations of tariffs for regulating trade. In many cases, tariffs are desirable. They are a tool that can help to protect US industry from foreign firms that receive subsidies designed to bankrupt rivals or that aren't legally held to the same standards of quality and safety as companies in the US. The bottom line truth is that this inferior honey is being sold to us because there is a demand. Regardless of whatever -isms govern the US and China, the fact remains that where there is strong enough demand, a market will emerge whether it is wanted or not. That is the simultaneous beauty and horror of the free market- it is very effective and efficient at providing goods and services to those who want them the most. If you have the money you will get what you wish for, so be be careful as the saying advises. In this case the American consumer is asking for a jar of yellow sticky stuff labeled honey, the cheaper the better, regardless of the implications of what is (or isn't) on the label.

Ignorance is part of the problem - if customers don't know a product is tainted or that important corners are being cut to make it, they can't change their behavior. One goal of my blog is to promote awareness of issues just like this so people can make better informed choices. You can help by telling your family and friends. You can also help spread awareness by sharing my blog, so consider linking to this article through your facebook. Its easy, just click on the facebook icon below.

Saturday, December 18, 2010

The Federal Reserve recently announced that it will print and additional 600 BILLION dollars in an effort to stimulate the economy. The general thrust of their argument for doing so is that printing money reduces the value of the US dollar relative to other currencies. This makes our exports cheaper and imports more expensive which is supposed to help US companies compete abroad.

There are two major problems with the Feds plan:

1.) Printing money decreases the value of the dollar by causing inflation. Think of all the money in an economy as a loaf of bread. Say after eating three slices you are fully nourished. Then one day the flour producer decides to cut the flour he sells by adding an equal portion of sawdust. You buy the same amount of flour at the same price (your labor) but now you have to eat twice as many slices to get the same amount of nourishment. Inflation decreases the value of money which hurts people who have saved money, and people living on a fixed income.

2.) At present, the most critical import of the United States is oil. Our entire transportation system runs on it and it is also a critical feedstock for the production of food, plastics, chemicals and pharmaceuticals. If oil costs more, the US companies that use it to produce things will have to pay more. It is possible thoise companies may pass on those costs to the consumer. Either way it reduces their competitiveness. This is the opposite effect of the one stated as the reason for printing money.

A more constructive approach would be to reduce government spending. I advocate doing so by significantly reducing spending on offense- as opposed to defense, which might include better inspections of incoming cargo for WMD, invasive species and doing a better job of border security. Since inflation does seem inevitable at this point, I also advocate a freeze in spending increases for all government agencies without exception. This would result in a gradual cut to spending in nominal terms and would force government to prioritize which spending is the most important and to cut waste. The final result of the savings should be to reduce taxes on businesses- provided that they HAVE NOT OUTSOURCED any jobs during the tax year in question.

This article also explains the situation:

Sunday, November 14, 2010

Shopping at Walmart

As a general rule I do not shop at Walmart. I do acknowledge that their prices are generally lower than average. However, I also realize that a large part of why those prices are low stems from the pressure Walmart puts on its suppliers to lower their prices in return for access to Walmart's stores- a huge slice of the market. One way many companies choose to lower prices is my closing American factories, firing their workers and setting up shop in a foreign country where wages are much lower.

The price, environmental impacts and long term availability of oil and its byproducts concern me just as much as the wholesale export of American jobs. I guess in general you could say that any economic activity that is obviously unsustainable gets my attention. For that reason I try to use as little gasoline as I can. One tactic I use to achieve that goal is by consolidating my shopping trips so I drive fewer miles. Today while driving from the bank to the grocery store I remembered the washclothes that were on my shopping list. My route took me directly past Walmart, so on this occasion I decided to stop there since it was the only store on my planned route that would have them.

While walking through the store I spotted some shelving units- another item on the list of things I wanted to buy. To my surprise, it was actually made in the US so I decided to buy it. I also remembered that I needed to pick up some 30-06 cartridges for my deer rifle. Walmart carries Remington and Winchester brands, which are both domestically produced, so a box of those went into my cart as well. Sadly, regardless of brand the washclothes, my original reason for stopping were not made in the US.

For Walmart, 2 out of 3 isn't bad. I am always hesitant to shop there, but in this case it was worth it. Walmart is a company that is clearly ruled by the bottom line and that bottom line is profits. They will sell whatever nets them the most money. Hopefully someday soon the sentiments expressed in this blog will become more widely felt and millions of people will actively strive to buy things made where they live. Hopefully when that day comes the managers at Walmart and stores like it will look at their sales numbers and think, "Wow, demand is really increasing for US made products. We should expand the number of US made options that we sell." That will be the day when we see our economy truly turn around.

Friday, October 1, 2010

Deny China Our Slice of the Pie

This is what I have to say after reading this article on Yahoo.

Manufacturing gains in China are coming in large part at the expense of the American worker. I emphasize worker, because the corporations that employ them are the ones increasing their profits by exporting US jobs. With the sums of money these corporations are making, they can easily contribute enough money to politicians to gain influence and ensure that the status quo as they make it is maintained. Every day we hear about a new career field that is being outsourced. It is a shame the decision makers can't invest the same creativity in things like research and development.

The victory of this system has been so complete that people seem to be numbed and take for granted that it is happening. We have even become complicit by voting with our dollars for the decision to keep exporting jobs if we are presented with goods that are a little cheaper (and usually of much lower quality).

We cannot depend on the political establishment to do anything about the mass exodus of American jobs overseas. They are part of the problem that needs to be dealt with, and soon. Elections come only so often, and even if the incumbent is booted there is no guarantee that their replacement will have the courage to turn down the campaign money.

No, the only real option outside of political revolution is for every American citizen to start supporting their neighbors, friends, family and hell, even themselves if they have the privilege to still actually make something here. We all need to BUY AMERICAN WHENEVER POSSIBLE and push the companies selling us things to offer more American made options.

One thing you and I have in common with large multinational corporations and political elites is that at the end of the day, we are all fundamentally in the business of self preservation. Companies and politicians will do what they need to do to maintain their edge and that takes money. As citizens and shoppers we decide who gets that money. Speak with your wallet since that is the voice they hear the loudest. Only when enough of us really embrace this change in our behavior will they get on board and stop undermining us.

Thursday, August 5, 2010

We need to realize as a nation that buying Chinese goods is simultaneously destroying our economy and also our tax base, which funds our military. That same purchase also puts money into the hands of the non-democratic Chinese government which then invests it in military technology. On top of that, China can then can turn around and make even more money by selling that technology to our enemies. For any rational American, continuing on this path is criminally insane.

That is just our trade with China. Remember who we buy our oil from.

Most economists will say that Protectionism is a bad thing because the loss of exports from domestic manufacturing more than offsets the gains from favoring it in the first place. That's only true if you export more than you import, which clearly isn't the case anymore. Would it cost more to buy products made mostly within the United States? Yes, of course but as a developed nation we also place more importance on things like civil liberties, worker safety and environmental conservation. The other upside is that if you are buying American you are paying the wages of someone like you and they are doing the same in return.