Stop Sending Your Money to China

I frequently advocate that people in the USA should Buy American products and services. It's time for outsourcing to end, and everyone in the United States, citizen or not, has a vote in this process. We vote with our purchasing decisions. Whether you are buying a tube of toothpaste, a household product, or a new car, buy something that is made in USA or has the maximum amount of US content. We have to break the cycle of sending our money overseas to China and others so that they can lend our money back to us at high interest rates. Every time you buy a US product you keep money in circulation within the USA; you increase demand at US companies which creates jobs for US workers; and you give incentives for those companies to invest in new equipment and learn how to make better and more competitive products. The economy started downhill when American companies started having products made overseas to enhance short term profits. It's time to think long term and rebuild American manufacturing capabilities. The one and only solution is your looking for the Made in USA label. The government in Washington can't fix the situation, but you can, one purchase of US goods and services at a time. Each US purchase is a vote for prosperity. Read those country of origin labels...Vote early and often.

Jobs and the U.S. Economic Recovery

According to the Bureau of the Census data (Click on the title of this piece.), there are only 17047 firms in the United States that have more than 500 employees. There are 19,523,741 firms that do not have any employees at all. These are one-person operations that may be run on a full or part-time basis. There are also 5,885,784 firms that have payrolls, 4,980,165 of which have fewer than 100 employees. The most direct path to economic recovery lies in a combination of more people starting their own businesses and a significant percentage of small businesses adding a single employee. The Federal Government would do well to encourage entrepreneurship and to take steps to make it easier for small businesses to hire one additional person. The leverage of small businesses on the economy is huge, and their employees tend to stay with their companies for as long as those businesses remain economically viable. Add to these choices the fact that the government is finally starting to encourage the manufacture of products domestically, and we may find the light at the end of the tunnel.

You Should Look a Gift Horse in the Mouth

The old adage is Don't Look a Gift Horse in the Mouth. In my mother's view, it meant that if someone gives you a present, you should accept it graciously, even if it is something that is not exactly what you want. My view is that the economy fell apart because greedy people failed to examine that steed. Too many people jumped at the chance to get homes, cars, and other luxuries they couldn't afford with loans and cheap credit they knew they couldn't repay (at least not in this lifetime, based on minimum payments). I'm old-fashioned enough to be suspicious whenever someone offers me something that sounds to good to be true. Read that fine print and you'll find that it almost always is. The size of our economy is a function of how much credit is being used. The quality of our economy is a function of how much we save, how much we keep spending within our means, and how frequently we buy products that are manufactured here rather than abroad. Don't always look to cheat the system, or you may find that there won't be a viable system at all in the future.

This Speech Has Been Long Overdue.

Jeffrey Immelt of General Electric Company has made a speech that is worth reading in its entirety. He says things that our leaders should have said long ago. Click on the title of this post to read it.

What If?

What if lenders were required to submit loan analysis forms showing a reasonable probability of repayment to a regulating or insuring agency before issuing mortgage loans? (or at least a computerized go/no-go program to minimize feedback delays)?

What if the government had been willing to invest even half of the proposed bailout amount into infrastructure improvements so that more people had jobs and the wherewithall to repay their loans (Does anyone remember Keynesian economics?)?

What if the government encouraged people to Buy American so that more of our capital and jobs stayed here and the dollar was worth more?

What if the government encouraged people to save money in the banking system by not taxing interest on savings accounts?

What if business management salaries were pegged to results in both directions so that they went down when the business did poorly as well as going up on increased profits?

What if U.S. imports carried higher duties that could be partially offset by purchases of our exports?

What if non-emergency government spending was required by law to be balanced by corresponding income?

What if banking and credit companies were legally barred from having fees and penalties that were not openly shown in the LARGE PRINT and proportional only to the amount of money specifically involved in the case of late amounts?

What if companies and banks could not disclose your personal information to others unless you specifically allowed them to (Opt IN, rather than Opt OUT)?

What if automobile companies could not promote "Flex-Fuel" or natural gas vehicles in any area where the alternate fuel was not readily available for purchase?

What if we all had to avoid complaining for at least one day per week (You would live longer.)?

The Future Belongs to Those Still Willing to Get Their Hands Dirty.

Once upon a time there was a country so ingenious and tied into the work ethic that when aggressors were inundating the world with warfare, this country within just a few years manufactured enough advanced equipment to turn the tide and restore peace. This happened right after that same country's economy went through a depression during which all that latent capability had nothing to do, and many people were out of work and struggling to survive. After that big war the people of this country said they wanted to never be poor again, so they surrounded themselves with fancy material things they had learned how to manufacture. Later they said that they could be even richer and could better forget that past depression if they just did clean service work and let other countries do the dirty work for them. So the ingenious country taught lots of other countries how to make things for them and told their industrial people to do clean service jobs. Time passed, and the people of the ingenious country were content with using their service profits to buy many neat things from countries they had taught to supply them. This worked well until they learned that in a world unified by computers and communications, other countries could do the service jobs too. And when the people of the ingenious country tried to go back to making their own products, they learned that they no longer had up-to-date capabilities, and that they had convinced themselves that products made by others were better. So the ingenious country headed once more for a depression because it had very little to sell that others wanted, and it sent most of its money to others for the things it thought it needed. The moral of the story: 1. Capabilities and their continuous further development are far more important than short term rewards. 2. Assets that are squandered are no longer assets. 3. What you know trumps what you have in the long run.