Consumer manufacturing overseas is depressing

[jpgray]

Beyond the obvious reasons, these occur to me:

We are the largest, richest consumer market in the world.

Most developing countries that are growing well are doing so by selling goods or services for our consumer market.

Our retailers demand low prices to crush competition and expand.

Our producers of consumer goods want high profits and so manufacture their goods offshore.

The service sector can barely replace lost manufacturing jobs in quantity, and cannot replace them at all in quality.

Our high consumer spending is sustained more and more by debt.

Based on the above, there is no happy picture of globalism, there is no economic axiom behind Apple's $100 billion or any other massive profit-taking on the new "low" prices, and there is no plan for the future in anything but the shortest term. Developing countries are growing on our unsustainable debt-based spending, but our consumers will have neither the income or credit to sustain this for long. Our companies are profiting enormously by marking up goods manufactured at lower costs offshore, but our consumers will no longer have the jobs to sustain the large profit margins even on those lower prices for long.

To take Apple alone as an example (there are many others), the idea that we could so debase ourselves and undermine our entire future so that a single generation can buy a gimcrack nothing for $600, whose only purpose is portable consumption of free and shoddy content, or content readily consumed at home at higher quality with an already-owned device, is appalling to me. At least after a year or two the rest can enjoy the same gewgaw at a third of the price, and so read Gawker comments or listen to the latest pop song on the go, just like those they were invidiously compared to a year before, buoyed by the belief that it is all part of some grand economic expansion, prophetic of a nice and rosy future for us and the third world.

Does anyone believe that here?

[JDPriestly]

1. K&R

I like to knit. In the early 1980s, I made several sweaters of good yarn. I can still wear most of them. One is worn out. The styles are traditional and remain quite good.

I am beginning to need some new sweaters -- not to replace those but of lighter yarn.

I plan to knit them myself, not buy ready-made. That is because the ready-made sweaters I have bought in recent years fall apart in just a couple of years. Why should I spend money on something that wears out that fast when the things I make myself wear so well?

I think that is probably true of a lot of the cheap imports we are offered in the stores. They will wear out very quickly. They weren't worth the labor that went into making them. It's better to buy the components whatever they are and make something yourself.

If you are working you probably can't choose to do that. But I'm retired -- I am not spending the few dollars I have on junk I will have to replace very quickly.

[pampango]

2. Of course, China and other "developing countries" sell more to Europe than they do to the US.

We are not the "largest, richest consumer market in the world". Europe is. And Europe's middle class is much healthier than our because their income distribution is much, much better than it is in the US for a variety of progressive reasons.

"Most developing countries that are growing well are doing so by selling goods or services for our consumer market." They sell even more to Europe's consumer market.

If Europe can do it, so can we. Our middle class problems have everything to do with what we have done to ourselves than anything that poor countries have done to us.

Reagan and others since have cut taxes for the rich. Europe never did that. Reagan and others have weakened our unions. Europe never did that. Reagan and other slashed our social safety net. Europe never did that. Reagan and other recklessly deregulated corporations. Europe never did that. I could go on but you get the idea.

To portray the US as a helpless giant at the mercy of mean developing countries obscures our own responsibility for our situation. Rather than lamenting "What can we do? Poor folks in the world are taking advantage of us." Do what Europe has done and take care of our own people. Once we have a European-style strong middle class, the rest will take care of itself.