Come On, China, Buy Our Stuff!

A Gap Inc. store in Shanghai, China.

A Gap Inc. store in Shanghai, China.

By NYT ADAM DAVIDSON    Published: January 25, 2012

The first time I visited China, in 2005, an American businessman living there told me that the country was so huge and was changing so fast that everything you heard about it was true, and so was the opposite. That still seems to be the case. China is the fastest-growing consumer market in the world, and American companies have made billions there. At the same time, Chinese consumers aren’t spending nearly as much as American companies had hoped. China has simultaneously become the greatest boon and the biggest disappointment.

It wasn’t supposed to be this way. In 2000, the United States forged its current economic relationship with China by permanently granting it most-favored-nation trade status and, eventually, helping the country enter the World Trade Organization. The unspoken deal, though, went something like this: China could make a lot of cheap goods, which would benefit U.S. consumers, even if it cost the country countless low-end manufacturing jobs. And rather than, say, fight for an extra bit of market share in Chicago, American multinationals could offset any losses because of competition by entering a country with more than a billion people — including the fastest-growing middle class in history — just about to buy their first refrigerators, TVs and cars. It was as if the United States added a magical 51st state, one that was bigger and grew faster than all the others. We would all be better off.

More than a decade later, many are waiting for the payoff. Certainly, lots of American companies have made money, but many actual workers have paid a real price. What went wrong? In part, American businesses assumed that a wealthier China would look like, well, America, says Paul French, a longtime Shanghai-based analyst with Access Asia-Mintel. He notes that Chinese consumers have spent far less than expected, and the money they do spend is less likely to be spent on American goods. Read more of this post

Ford Salaried Workers to Get Raises & Bonuses

Associated Press – Thu, Jan 19, 2012

DEARBORN, Mich. (AP) — Ford Motor Co. is showing confidence in its turnaround and the U.S. economy by giving pay raises and bonuses to 20,000 white-collar workers mainly in the U.S. and Canada.

Workers got letters from President of the Americas Mark Fields last week saying they’ll get 2.7 percent base pay increases on April 1. They’ll also get bonuses this year based on their individual performances, spokeswoman Marcey Evans said.

Ford made $6.6 billion in the first three quarters of last year. It will report fourth-quarter earnings later this month. The company’s U.S. sales rose 11 percent last year. It has made a huge turnaround since 2006, when it lost $12.6 billion and had to borrow more than $20 billion to stay in business.

Salaried workers didn’t get pay raises last year, but many were granted performance bonuses. They got only merit pay in 2010 and no raises or bonuses were given in 2009, Evans said.

The raises are necessary to keep Ford’s pay competitive with other Fortune 100 companies, Evans said. Each year, Ford studies pay at competitors and other companies, she said.

Ford also raised its matching contribution to the salaried employees’ 401(k) retirement plan. The company now pays 60 cents for every dollar an employee contributes, up to 5 percent of their salary. This year the contribution will rise to 80 cents, Evans said.

She would not say how much the raises, bonuses and additional contributions will cost the company.

The raises rankled some United Auto Workers members because they did not get annual pay raises in a new four-year contract negotiated with the company last year. During the contract talks, the company told union negotiators that it didn’t want to give raises to avoid recurring annual expenses.

But the workers got signing bonuses and lump-sum profit sharing payments that are worth at least $16,700 over the four-year contract. Workers at General Motors Co. and Chrysler Group LLC agreed to similar contracts with payments smaller than those given to Ford workers.

“I’m disappointed to hear that,” Mark Caruso, president of a UAW local at a factory in Saline, Mich., said of the white-collar raises. Caruso said morale already is bad among workers at his plant west of Detroit. A Ford holding company is trying to sell the factory to an auto parts supplier.

A UAW spokeswoman in Detroit said Thursday that she would check with her superiors to see if the union will comment on the white-collar raises.

The pay raise announcement was reported early Thursday by the Detroit Free Press.

Ford compensation records obtained by The Associated Press last year show that UAW-represented hourly workers have seen larger increases in pay and benefits over the last decade than many white-collar workers.

The UAW, according to the records, was able to protect longtime factory workers from changes to health care, overtime and other benefit cuts that salaried workers were forced to take. The average hourly worker at Ford received wages, benefits and overtime totaling $109,020 in 2010, up 17 percent from 1999. But the average salaried factory supervisor made $99,760 in wages and benefits, up just 2 percent in the same period, the records showed.

Only in America with Larry the Cable Guy

Larry the Cable Guy – Premieres Tuesday, Feb. 8 at 9/8c Polo veteran Rick Bostwick lets Larry in on the perils of playing polo both to your body and your bank account.

History Channel Trailer: Larry the Cable Guy 

DELRAY BEACH, FL., (Business Wire) —  Made in USA Certified, USA-C Polo Team is featured in a segment for The History Channels new series “Only in America with Larry the Cable Guy” (the official working title) which is set to premier in the third Quarter. The series will feature “Blue Collar Comedy” star Larry The Cable Guy exploring the United States revealing bits of US history, while also immersing himself in the jobs, hobbies, and lifestyles of the locals that “celebrate the American experience.”

In one of the segments slated for the series, Larry explores Wellington, FL, home of  The International Polo Club, Palm Beach (IPC) and the Museum of Polo & Hall of Fame.  Larry recently was filmed at the Bostwick Family Stables in Wellington and is featured learning how to play the game of Polo against the Made in USA Certified USA-C Polo Team.

Made in USA Certified USA-C Polo Team is a perfect partner for the “Only in America with Larry the Cable Guy” series as the company is the leader in independent third party assurance verification for genuine “Made in USA” products and services.  Made in USA Certified is a strong advocate for US Business, US Manufacturing and the American workforce which is most definitely part of the whole American Experience.

About Made in USA Certified, Inc. (www.usa-c.com)

Made in USA Certified, Inc. is the leader in independent third party assurance verification for genuine “Made in USA” products and services. Our Seal of Certification assures the consumer that the “Made in USA” or “Product of USA” claim is true– keeping you and your family safe, giving consumers peace of mind and helping to support and promote products and services Made in USA, one factory, one business at a time.

Trust but Certify! ™

Premieres Tuesday, Feb. 8 at 9/8c Polo veteran Rick Bostwick lets Larry in on the perils of playing polo both to your body and your bank account.

History Channel Trailer: Larry the Cable Guy 

State Of The Union Speech Text 2012

Below, Obama’s prepared remarks as released by the White House.

As Prepared for Delivery –Mr. Speaker, Mr. Vice President, members of Congress, distinguished guests, and fellow Americans:

Last month, I went to Andrews Air Force Base and welcomed home some of our last troops to serve in Iraq. Together, we offered a final, proud salute to the colors under which more than a million of our fellow citizens fought — and several thousand gave their lives.

We gather tonight knowing that this generation of heroes has made the United States safer and more respected around the world. For the first time in nine years, there are no Americans fighting in Iraq. For the first time in two decades, Osama bin Laden is not a threat to this country. Most of al Qaeda’s top lieutenants have been defeated. The Taliban’s momentum has been broken, and some troops in Afghanistan have begun to come home. Read more of this post

The State of the Union 2012

Watch it here tonight at 9PM ET.  State of The Union Address

“On Tuesday night, I’m going to talk about how we’ll get there. American Manufacturing – with more good jobs and more products stamped with Made in America. American Energy – fueled by homegrown and alternative energy sources. Skills for American Workers – getting people the education and training they need so they’re ready to take on the jobs of today and tomorrow. And most importantly, a Return to American Values – of fairness for all, and responsibility from all.” – POTUS

Kudos to President Obama for promoting manufacturing.  As Scott Paul said in a recent Huffington Post op-ed “now is the ideal time for the president to promote manufacturing: “If the president really wants to see “Made in America” stamped on products shipped all over the world, he needs to be bold. We’ll be watching. And so will voters.”

Will you be watching?

How U.S. Lost Out on iPhone Work

iPhone - People flooded Foxconn Technology with résumés at a 2010 job fair in Henan Province China NYT   1-22-12

iPhone - People flooded Foxconn Technology with résumés at a 2010 job fair in Henan Province, China.

By NYT  and   Published: Jan. 21, 2012

When Barack Obama joined Silicon Valley’s top luminaries for dinner in California last February, each guest was asked to come with a question for the president.

But as Steven P. Jobs of Apple spoke,President Obama interrupted with an inquiry of his own: what would it take to make iPhones in the United States?

Not long ago, Apple boasted that its products were made in America. Today, few are. Almost all of the 70 million iPhones, 30 million iPads and 59 million other products Apple sold last year were manufactured overseas.

Why can’t that work come home? Mr. Obama asked.

Mr. Jobs’s reply was unambiguous. “Those jobs aren’t coming back,” he said, according to another dinner guest. Read more of this post

Made in the USA… and China: Why the new paradigm will be to manufacture in both China and America. And Southern U.S. states will win big on jobs.

If I had told you in the summer of 2009 that America’s long-suffering manufacturing industries would lead the lackluster recovery from the Great Recession, you probably would have wondered what I was reading—or smoking.

I would have been correct, however. As a June 1 report from the Institute for Supply Management (ISM) noted, May 2011 marked the 22nd consecutive month in which U.S. manufacturing expanded. Exports have driven much of the growth. Last year, for example, U.S. exports increased more than 20 percent, according to the Census Bureau, and some 85 percent of those exports were manufactured goods.

It comes as no surprise that manufacturing employment also is on the rise, with related jobs increasing last year for the first time since 1997.

The good news about U.S. manufacturing is no fluke. For reasons I will explain below, the manufacturing renaissance should continue for years to come. Read more of this post

Obama to Draw an Economic Line in State of Union

A signer interpreted President Obama’s campaign speech on Thursday at the Apollo Theater in New York. His third State of the Union address, before a joint session of Congress, is set for Tuesday.

By NYT    Published: January 21, 2012

WASHINGTON — President Obama will use his election-year State of the Union address on Tuesday to define the role for government in helping to promote a prosperous and equitable society as an American tradition, hoping to draw a stark contrast between the parties in a time of deep economic uncertainty.

In a video preview e-mailed to more than 10 million supporters on Saturday, as South Carolina Republicans went to the polls to help pick an alternative to him, Mr. Obama promised a “blueprint for an economy that’s built to last,” with the government assisting the private sector and individuals to ensure “an America where everybody gets a fair shot, everyone does their fair share and everybody plays by the same set of rules.”

Mr. Obama has honed that message for months as he has attacked Republicans in Congress and on the presidential campaign trail, contrasting it with what he has described as Republicans’ “go it alone” free-market views.  Read more of this post

Spend, Spend, Spend. It’s the American Way.

 

GRIDLOCK in Congress implies that there won’t be any collective decision to spend more as a nation to get out of our slump. Increases in deficit spending seem unlikely, and so does the balanced-budget stimulus I’ve been advocating in this column. For now, we must pin our hopes for a robust recovery on the willingness of millions of consumers to spend substantially more.

But what really drives consumer spending? Economists are reasonably good at divining how consumers tend to react to changes in government policy, but in the absence of such policy, and when the economy is in the doldrums, they aren’t very good at predicting spending shifts.

A new book, “Beyond Our Means: Why America Spends While the World Saves”(Princeton University Press), offers some insights. It was written by Sheldon Garon, a Princeton professor who is not an economist but rather a historian with a sociological bent.

Professor Garon says that our willingness to spend is driven most prominently by our reaction to major events in our collective memory, including wars and depressions, and that it also depends on national character, which differs across countries and through time. Spending, of course, is shaped by deliberate government policies. Notably, during wartime, governments all over the world often start huge public-information campaigns to promote saving.

The United States, however, is something of an exception. More than any other country, Professor Garon argues, it elevates consumer spending to a virtue, sometimes minimizing saving. There is even an idea here that it is patriotic to spend, rather than to save.

For example, in a speech two weeks after the Sept. 11 terrorist attacks, President George W. Bush urged Americans not to be cowed: “Get down to Disney World in Florida,” he declared. “Take your families and enjoy life, the way we want it to be enjoyed.” Personal consumption expenditures increased sharply in October 2001, and the recession that had begun in March of that year came to an abrupt end by November.

In more recent times, many parallels have been drawn to the Great Depression. Presidents and prime ministers worldwide justified their stimulus packages in 2008 and 2009, for example, by saying that if these plans weren’t put in place, we might repeat the economic nightmare of the 1930s. That kind of talk might have been necessary to assure support for stimulus, but it certainly hurt confidence.

And there was another problem. The truth is that stimulus packages never entirely lifted the economy out of the Great Depression. In the United States, unemployment didn’t drop below 12 percent until World War II changed the picture.

In recent months, news that Christmas shopping appeared strong, at least soon after Thanksgiving, was invested with great significance. Holiday cheer, it was argued, might provide the needed stimulus. But this is an old story. In every Christmas season of the decade-long Great Depression, newspapers described a strong, even frenzied, Christmas shopping season.

Perhaps this offers a lesson in bias. It seems that during such bad times even the most respectable newspapers somehow needed to write an upbeat story for the holidays. Confidence-building is part of our culture, and it helps to explain confidence swings.

During the Depression, George Gallup began to compute confidence indexes. But sharp improvements in confidence, as reported in 1938 by Gallup’s American Institute of Public Opinion, did not spell the Depression’s end. Eventually, consumer demand did come roaring back— after World War II, contrary to economists’ widespread fears that the Depression would resume after the war.

Professor Garon details an attitude that Americans, more than people in any other country, have usually had about spending: we tend to think it’s O.K. for people to go into debt to buy gadgets or take vacations. According to this view, such activity will stimulate everyone’s imaginations, and ensure a vibrant economy with plenty of fresh enterprises and innovations. Americans even tend to think that debt burdens may not be so bad — that people in debt work harder to pay it off, again keeping the economic engine humming. We are relatively forgiving of personal bankruptcies, too: they provide a fresh start to allow spending all over again.

IN much of the rest of the world, Professor Garon documents, this approach has traditionally seemed morally repugnant — though until the current crisis, many people worldwide were slowly coming around to the American view.

Governments around the globe have long promoted pro-saving — that is, anti-spending — campaigns. Professor Garon notes that many of these campaigns flourished during wars, when frugality was a necessity to conserve resources. In World War I and World War II, government campaigns left a lasting impression that overspending was immoral and unpatriotic, and for most countries the campaigns did not stop when the wars ended.

The United States had such savings-promotion campaigns during those wars, too, but it gradually ended them afterward. By 1966, the United States had suspended its postal savings system — which encouraged savings by allowing people to buy certificates of deposit at post offices for as little as a dollar. Many countries still have such systems, as part of efforts to make saving seem convenient and patriotic.

Low consumer confidence during the Depression could have been caused partly by fear of war, many commentators said at the time. But it is hard to measure the validity of such claims.

In any case, fear of war doesn’t seem the main problem today, despite some unease about possible crises in places like Iran and North Korea. In the United States, there is concern about the economic stability of Europe, but barring a major collapse there, it is likely to remain a distant worry.

Patriotism may turn out to be a stronger force here. The killing of Osama bin Laden last year will probably be recounted over and over in this year’s election campaign, which, like many campaigns before it, is certain to be filled with patriotic rhetoric. But would a patriotic surge change the mood enough for consumers to take personal risks to get on with the American Dream?

While these kinds of mental and moral factors are very hard for economists to evaluate, they may be all-important for the current outlook.

By ROBERT J. SHILLER  Published: January 14, 2012

Robert J. Shiller is professor of economics and finance at Yale.

A version of this article appeared in print on January 15, 2012, on page BU3 of the New York edition with the headline: Spend, Spend, Spend. It’s the American Way..
Follow

Get every new post delivered to your Inbox.

Join 1,282 other followers