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:

http://www.washingtonsblog.com/2010/12/letting-fraud-continue-will-not-restart.html

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.

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.

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.

www.cleveland.com/world/index.ssf/2010/08/chinese_aircraft-carrier-kille.html

The following is a letter I sent out recently:

Dear Senator, Assemblyman, etc,

Today I looked at a news article on Yahoo.com and I think you should take note of it. Here is the address:

http://finance.yahoo.com/news/1962-glass-could-be-Cornings-apf-978849301.html?x=0

The main thing I want you to know is that Corning glass, a company headquartered in New York is making billions because of a special type of glass they invented which is very useful in cell phone screens and TVs. The sad part is the benefits of this product, which was invented in New York, are going to produce more jobs - in KENTUCKY and JAPAN. Nothing in New York. I think the reason for that is because costs are so high in New York for everything from taxes, utilities, regulation and even higher energy prices. We need leaders with the courage and the foresight to reduce these burdens on business, even if it means short term pain through budget cuts, because in the long run it will mean better and more jobs, so people won't need to rely on the state as much. Plus it will mean higher tax revenues to fund all the vital services that New York does do a good job of providing. Thank you for your time and consideration. Sincerely,

Michael L
Hopeful Citizen

It is not the best example of my writing but in this case sending something imperfect is far better than not sending anything at all. We need to bring attention to these matters, and that means taking action. One letter is not terribly effective, but thousands might be. I KNOW we have the numbers on this one folks. We cannot afford to be silent anymore. Lets get going!

To make it easier, here is a convenient way to search for your elected representatives contact info:

http://www.usa.gov/Contact/Elected.shtml

When we go shopping and buy a product, it is easy to imagine that the shiny new thing we take home with us is the only result of spending our money. Shows like the fascinating "How Its Made" do a good job of showing just how complex things can get behind the scenes.

Go to the hardware store and look at two hammers side by side. There might be some superficial differences but essentially you have the same thing - a metal head and a wooden handle. However, if one is made in the US and the other is made in China, there are some stark differences between these two objects that can't be seen on the shelf in the store.

Chances are the US made hammer is more expensive. If the end product is the same (I'll give the Chinese hammer the benefit of the doubt and assume its of equal quality, however unlikely), why would we choose to buy the more expensive one?

The biggest difference is not what was made, but how.

The hammer started out as raw materials- iron ore in a mountain and a tree in the forest. In the US there are significant restrictions on how those materials are obtained. Contrast that with images like this from China where economic growth takes precedence over the health of the populace and environment.

In the United States workers enjoy a relatively safe workplace environment. We have organizations like OSHA which set safety standards and conduct inspections. We also have a legal system that allows workers who are injured due to the negligence of their employer to seek legal compensation. These things do increase costs, but the benefit is peace of mind, not having to constantly worry whether we'll be grievously injured on the job and unable to support ourselves or our families. The average Chinese worker does not enjoy that safety net. Check out what the NY Times had to say about it:

The Problem - A First Hand Account

Recently while shopping for a shovel and a pair of garden gloves I decided to make a point of only buying a product that was 100% manufactured in the United States. The first store, Home Depot, had NOTHING. The second store, Lowes, had NOTHING. Even the smaller local hardware store I visited had NOTHING. Not one store had a single product among all those available that was made in the United States. ONE was assembled here from foreign components. This experience was not unique, the quest I described I have undertaken on many shopping trips and most of the time the result is the same. The shock and disbelief the first time this happen has given way to disgust and anger. I try to make the right choices but sadly myself and others like me are in the minority. At times it is impossible to even make the right choice because, like in this situation there is no domestically produced option available. There is an economic war on and we are loosing badly and worse, most people seem resigned to it. My goal for this blog is to raise awareness and inspire the people of this country to fight back by making smarter choices at the store, working and studying harder, and spreading the word!