Friday, October 28, 2011

The Cold Hard Face of Protectionism

There's a story in the Wall Street Journal about how Maytag is laying off 6,000 US workers. Apparently they've noticed they're selling far fewer large appliances in the US, and counter-intuitively, their raw materials costs are going up. An economist would say this is fine and normal. They say the market has descended to only people replacing their appliances, not to upgrade. I have no doubt this is a fine market reaction. There is no need to produce more appliances than we as a society can buy. The jobs, raw materials, and sales can go elsewhere.

However, we don't expect the capitalists to roll over and take factory closings, reduced sales, reduced profits, and market fluctuations. No, they're now blaming manufacturers of competing products from Asia of dumping products below cost, and enlisting the Department of Commerce to levy a "fee" to cover the difference between the cost and the price. This is legal, but dubious.

What's really happening here? The drop in appliance demand is a normal market adjustment-- it's directly related to the real estate business, which despite very low interest rates suffers from several distressing issues. First, there are few qualified buyers. Real estate prices remain unstable and depressed. And there's horrible unemployment. It's no wonder there's lower demand for new appliances. No problem. It's happened lots of times in the past. The markets will adjust.

But what Maytag wants to do is to shrink AND take some money away from the Asians. This is what gangsters do. Hire some muscle on the waterfront, and some money changes hands. And as a result the prices for our appliances stay high, Maytag gets to expense a lot of capital write-offs, more money is spent in the legal system, the Department of Commerce gets to flex its power. And more of Maytag's infrastructure is sure to be shipped to Latin America, Brazil, Mexico, or Asia. All of the manufacturers mentioned in the article are global businesses. Their shrinkage in the US will be offset by gains in other markets. And yet, they will surely write off large losses in the USA, reducing their US taxable income and hence their taxes. They're laying off 10% of their US workers.

[Maytag] faced intense price pressure from South Korean competitors LG Electronics Inc. and Samsung Electronics Co. as they attempt to expand their U.S. market share by offering steep discounts on high-end appliances.

The U.S. Commerce Department on Thursday issued a preliminary determination that found Samsung, LG and other appliance manufacturers sold imported refrigerators in the U.S. at prices below the refrigerators' production costs.

The department said anti-dumping fees ranging from 4% to nearly 37% could be imposed on refrigerators with bottom-mounted freezers unless the manufacturers increase their prices. Whirlpool filed a product dumping complaint against the companies earlier this year.

So the thing is, the Department of Commerce should not be allowed to levy new fees on imported appliances, because it will do nothing to help consumers, and does nothing but buoy prices against the wise feedback from the market, for the benefit of an industry which will move their capacity to another market. Why is it plutocrats are total free-market zealots, except when they go totally protectionist defending their own markets? It's stupid, greedy, devious, and anti-free market. And enlisting government help is corrupt.

I'm sorry the link to the Wall Street Journal only connects to a part of the article and a paywall, but I wasn't able to find a working link to the information elsewhere. (Here's the best article I found) I got to read the whole WSJ article because it was linked from Google. I don't blame the WSJ for charging money for their material. This link connects to a long, detailed, and well written article, with high quality original reporting, that no doubt cost the WSJ a lot to produce and publish. Unfortunately, this means in order to learn about the foibles of the capitalists, you need to be rich enough to subscribe to the Journal. Grrr...

Thursday, October 27, 2011

Occupy your kitchen! Disposable storage containers worst product in 20 years

They're made by all the companies who brought you plastic bags, then zip-lock plastic bags, and then 3-ply double strength freezer storage bags. Ziplock makes them, and Dow, who makes Glad plastic wrap. Now they all make "semi-disposable" plastic food storage containers. There are others who manufacture/sell them as well, and supermarkets have some house brands and generics too. All plastic food containers with light-weight snap on tops. Someone had the deep insight that food storage containers (a la Tupperware) were too expensive, and so they came up with a less expensive alternative. Great!

Except these disposable storage containers (they are marketed as cheap enough to leave at a party) are a terrible product in their own right.
  1. They are thin walled, but they're made of all plastic, and plastic still does not break down. A small amount is recycled, but I think only enough to make the public less concerned. Much of that plastic still goes into landfills. Some of the containers have recycle symbols (some say "Pete"), but I am skeptical of how much is actually re-used.
  2. They are made with a material unsuitable for "permanent" food storage. Their soft-surfaced plastic is extremely difficult to wash clean by hand, and more or less requires a dishwasher. In the dishwasher, however, their deep ridges (the only way to make them strong enough to keep their shape is to form them with deep ridges) keep them from drying effectively. 
  3. They are not great to use in a microwave because their surfaces start to break down. I believe they also release BHP when heated. Yum!
  4. Several different companies make them, so of course all of them have tops that are incompatible, which means they're less likely to last. Few things are more frustrating than the last rectangular tub not fitting snugly under the last rectangular top.
  5. They're sorta disposable, and sorta reusable, and sorta recyclable, and just cheap enough at the cash register that we can throw them away.
  6. They're marketed to be inexpensive, and hence easier for the middle class shopper to buy, but they're in every way more expensive than the alternatives: They're wasteful, they add hugely to the waste stream, and they don't work that well in the first place.
Jars, or covered ceramic, or even plastic bags-- because they're lighter and contain less plastic-- are a better alternative for food storage in our kitchens (My wife and I are slowly adopting pyrex glass storage, but it's expensive up front).

Some might say we should buy this junk to maintain jobs, but the only jobs I see are for factories in Asia, and perhaps for the sales persons who sell them in this country. It would be great if this kind of thing didn't have to be made in Asia and thrown away here.

Any thoughts about this?

Friday, October 21, 2011

Signs the banks are costing us money

1. "Americans Grossly Underestimate Their Own Credit Card Debt"

2. US graduates and students hold $1 trillion in student loan debt.
(This may not be true, could be just $550 billion (wow, that's a relief. not):

3. Banks to post billions in overdraft fees in 2011.
The "$16 billion" seems made up, since I read recently that it was $40 billion as recently as 2009. There's no way to trust either Huff Po or the published numbers-- everyone is motivated to lie and make up their own statistics. Still, overdraft fees victimize people who haven't figured out how to avoid them.

There's a kind of innumeracy which, coupled with hard financial straits, makes people misunderstand their finances, and basically bounce checks. I haven't bounced a check in so long I can't collect from the BofA class action settlement, but I know I did in the 90's, when it still cost less than $20.00. Ugh, in fact I bounced many checks, costing hundreds of dollars in fees. After years (and some pay raises), I finally learned how to not overdraw my account. I truly believe there's a group of people who just can't process numbers representing their money in their checkbook. Others never catch up with their current obligations, and they bounce checks too. And these people get victimized by the banks, but their victimization doesn't teach them how to avoid doing the same thing in the future. It just reinforces their powerlessness around money, and makes them poorer. It's reprehensible to profit from some peoples' inability to do the math. And especially nowadays when employers pay electronically into our checking accounts. You've got to have a checking account to get paid. but if you're no good at managing it, they'll take a whole lot of your money in fees. Creeps!

4. Banks charge non-profits 7.7%+ of online donations to process credit/debit cards.
I just donated online, and the recipient's website asked if I wanted to pay the service charge too. I did, and was surprised how much it cost. In an earlier time it would have been embarrassing for a bank to charge that much to a non-profit. Banks no longer have such quaint compunction, to try and act fairly, to try and hide their true nature.

I also don't believe it's allowed, in a contract with Visa or other credit card, for the merchant to tell their customers/donors the cost of the transaction. That may have changed in recent legislation. I know my hairdresser asks that fee and tip be on separate card swipes. Grrr... In fact I try to use plastic for a restaurant tab, and then tip in cash. Everything moves faster that way, the staff is paid quicker, and it avoids a big bank gouge to process the tip and tab separately. Bastards!

Thursday, October 13, 2011

GAP follows money out of US

According to reports, the GAP clothiers is planning to close 34% of its stores in the US, and will, according to the LA Times, "focus on international expansion ."
screenshot from Google News
So what, the romance is over when our credit cards hit their limit? (shaking fist)

And an addendum here, for my blogging friends. I have one suggestion, which I am going to use from this day forward, and that's to give good titles to your blog post if you want it be found in searches.

I looked back through more than a year of posts, and the only ones that drew more than double digit page visits had explicitly named topics in the titles. I can get a tiny nudge in new hits if I link a page on Facebook, but with a well-titled post, I get hundreds (I know, that's pathetic) from searches. Think of it like getting 100 more lottery tickets for the same price. And it's easy. I almost always blog about topical news, but I have often given my posts swervy-hip or literary titles. That's a mistake, because they don't help anyone to find them. When I've included a brand name, or a current event, a date, or a locality in the title, I get an order of magnitude more hits.

If that's what you want, that's how to do it. At least it's a start. Of course, the posts I love the most are the ones that have never had a visit. Oh, yessssss my loveliesssss.

Tuesday, October 11, 2011

Talking Points

OK, this is not the carefully considered and hand-crafted argument you may expect from this blog. These things just came to me on my drive home, so I'm writing them down before I forget them:

1. Money has figured out how to make more money all by itself. This is the reason we have so much unemployment at the same time that large corporations are having their best business ever. More cash. More profits. And no jobs! The fulminating right-wing is even attacking the unions and the public sector. They no longer need them. Bankers and plutocrats can just sit around and dream up ever newer and more exotic financial instruments, sell them to others, and reap the benefits. They took TARP money, sometimes reluctantly, and lent it back to the the government, at interest. If you have a big enough pile of cash, watch it-- it will spontaneously generate more of itself. Trust me on this, I've been reading up. And please note there's a big new free trade agreement before Congress (right now! Call your senator and/or congressperson if you can) that will ruin the lives of more of the worlds' working classes and indigenous people (including many working Americans), for the benefit of globalization.

2. I've been warning about budget cuts for awhile, and finally I have a specific example which, unfortunately, illustrates exactly what I've been thinking. The prosecutor's office in Topeka, Kansas has announced they are no longer prosecuting domestic violence cases, because they can't afford to. Anyone arrested for roughing up their spouse or child will be released. It's just sad this whole brouhaha came up in October, which some Kansans are celebrating as Domestic Violence Awareness Month. Folks, welcome to Mexico! Parts of our government, in the name of "business friendly" tax cuts, can no longer afford to govern. No salaries were cut, no services for the rich were curtailed. They just dropped a whole class of crimes from the "prosecutable" list. No more misdemeanors within the city limits will be prosecuted. And Kansas is a red state! We are in deep doo doo! Note to Occupy Wall Street sympathizers-- perhaps taking a leak in the Topeka Bank of America lobby is still classified as a misdemeanor. Please check with your legal counsel first.

3. And speaking of Bank of America (which is my bank, by the way), I happened to notice today at their downtown branch, on the first floor of a high rise building about half a block from the Occupy Maine demonstration here in Portland, that BofA has hired a private security guard for their lobby front door. This in a building that already has security. I believe this means the "Occupy" protests are having an effect-- making at least one plutocrat squirm with perceived insecurity. It's got to have been quite a squirm to get those cheapskates to actually pay for more protection.

Corporate America no longer needs our labor, our bank deposits, or our namby-pamby laws and public servants. They just hire their own muscle when it gets too risky. They don't pay taxes, and in their view, their protection is all that makes our legal system useful. It's not a good situation. I'm sorry to have to state it this harshly.

Sunday, October 09, 2011

Raise your hand if you thought this was a fashion headline...

Be honest, if you saw this headline, would you think the article was about footwear?
Screenshot of headline atop Google News
I have to admit (probably not reluctantly enough) that my first thought was the summer weather suggested to Mitt that he shed the tassel loafers and strap on some Tevas. The GOP, dominated by fashionistas, create this kind of a skirmish in order to crush non-conformity and keep order in their ranks. "Pedi" behavior.

I've never felt "flip flops" engaged in by anyone, including politicians, is necessarily a bad thing. It indicates the dynamics of education and experience confronting our confusing and ever changing world. To never flip flop means to never change; to never change is to never learn nor improve.

Thursday, October 06, 2011

Another Possible GOP 2012 Contender Drops Out

Surprise! Sarah Palin has indicated she's not running for president. I believe all Sarah wanted was to be rich, she never wanted to be a politician. She's doing fine now; she's built a brand which will continue to bring Sarah and Todd and the kids a good income, and a wardrobe with outfits appropriate for every occasion. She can watch for the Russians when she's in Wasilla, though I don't think she spends that much time there. I'd love to never hear her voice again.

[Ed. Warning, this is a bitchy and subjective post. So be it.]