By Tom Blakeman, February 27, 2020
A major theme of all MBA programs in the late ’70s and early ’80s was all about globalization and being ‘multinational’. It was thought profitable and desirable to allow everything to be sourced and manufactured from wherever in the world that could provide the product at the least delivered cost. A secondary theme was all about how companies could leverage their long-established core business, brand name, and history of product quality, reliability and service to enable financial endeavors.
Over the years these themes propagated and grew until now we have reached a point where many of our basic everyday needs origin in some foreign country or another. The latest revelation is that many medical supplies and drugs are sourced in China or India. Who knew? Most car parts are now made and sourced in China or Mexico. Folks out of work knew that. Companies like GE disregarded their core businesses for so long, to pursue financial endeavors, that many have recently have been on the verge of bankruptcy.
Many old line American brand names don’t mean much anymore. Craftsman Tools and Black and Decker are but two examples. It used to be everyone knew that Craftsman was a Sears brand, was only sold in a Sears store and was guaranteed for life. Now, few know who actually owns the Craftsman brand or where the products might be made. Black and Decker once was a reliable product maker but over the years most of their products got outsourced and produced in batch lots in some third world country. Once the batch is sold, good luck trying to get a repair or a part or, heaven help you, get another matching item – the batches change every year!
Then there is the logistical supply chain. America began disregarding that shortly after World War II. During the war we built and manned fleets of cargo and other ships like the world had never seen. Those ships played a major role in winning that war. Americans not only owned the fleets but also had control and allegiance of the crews manning them. But soon after the war ended it became “too expensive” to build the ships in this country or man them with American crews. As a result there are now relatively few US built or manned ships plying the worlds oceans. This not only means that we now have a shipbuilding industry that is only a shadow of it’s former self but we also do not ultimately control our supply chain for most the goods and products made in other countries.
This all has sort of snuck up on us quietly over the years. Who knew? But it was all planned decades ago in the business schools. No one seemed to care as long as the goods were cheaper. We became a throw-away society. Product quality didn’t matter because we could just go buy another cheap item. It didn’t matter that the factories closed down because those workers who had had good-paying jobs could just go on welfare. And, the smart and lucky who ran the “multi-national” companies got rich merging, divesting, right-sizing, and on and on.
But now we have what could be a serious National Security issue at our door step in this Corona Virus. And, so we’ll just throw a few billion dollars at it and go on. . . maybe.
By Tom Blakeman, February 27, 2020
Gene Garner
02/27/2020 — 11:53 am
Tom notes some disturbing facts about our economy and where we’re heading. Another big problem we will have to face is our budget deficit and how we will pay for it.
As of today we are $22 Trillion in debt to the rest of the world. We have added $2 Trillion in the last 3 years and look to add another $1 Trillion this year. The main reason for the increasing deficit was the tax cuts last year and the increased spending by Washington D.C.
The spending habits of the federal government are duplicated by our POA and are not sustainable for much longer. The “two-tier” assessment increase only added to the spending frenzy and has driven us farther in debt. And what do we have to show for it? The streets aren’t any better maintained, we don’t have the internet support we need, our marketing effort is a joke and we’re paying the general manager more than the governor.
We’ve been “asleep at the wheel” and need to take matters into our own hands. Hopefully this coming election will give us some relief both nationally and locally.–Gene
Minn Daly
02/27/2020 — 12:31 pm
ThNk you Tom for this insight on what’s happening now to the GLOBAL economy! We need to make America first, always. Thanks to TRUMP we are finally going back to accomplishing this goal. Minn Daly
Walter Chance
02/27/2020 — 2:12 pm
Thank you Tom. As much as I hate to say it. The Coronvirus is a blessing in disguise. It shows how dependent we are on foreign products and how ‘cheap’ things are. I buy quality and don’t mind spending more to get. Problem is it’s harder to find. We need to diversify as a Country. All your points are spot on. I think 5G through Hauwai was another example of the ‘security issues we face. I hope Washington is listening
Moe
02/27/2020 — 2:39 pm
Of note, Trump is the only president to acknowledge the dangers of the global economy and single sourcing vital things from communist dictatorships. He is also the first president to do anything about it.
The whole situation is a wake-up call…we don’t need half the junk we import from China…and we sure don’t need them stealing all our engineering and technology.
America is the only place on the face of the earth where storage depots are a multi-billion dollar business.
Quit buying the junk. You will be happier…trust me on that!
And buy American…even if it costs more…who cares??
Melinda Noble
02/28/2020 — 9:39 am
Who cares, people who can’t afford to pay more care. High end stores are closing be Walmart is adding retail. You are right trump did do something he added tariffs and we now pay more for junk from China. FYI his and his daughter’s clothing lines are/were made in large part in China as were many of his MAGA hats.
Moe
02/28/2020 — 11:27 am
Don’t buy them, then.
My point was we don’t need much of what China sends us.
And we don’t want to be dependent on them for the things we do need.
Tariffs were needed to get their attention.
Martha Dollar
03/01/2020 — 12:49 pm
Tariffs were needed to even out the playing field. American companies have to pay minimum wage, benefits, etc. Therefore, they have to charge more for the product in order to stay in business.
Chinese companies do not have to pay minimum wage, benefits, etc.
If we don’t charge tarries on products being imported from China, then there is no way the American companies can compete, and they go out of business (or move their company to China).
American companies hire American workers, providing much needed jobs here. We will have to pay a little extra for the products, but we will have more people with jobs, and less people on welfare, which is infinitely better for our country.
Joan
02/28/2020 — 9:38 am
I gave up Fox and MSNBC months ago and turned my focus to local issues. The bipartisanship, anger and rancor throughout our national political system do none of us any good. I was always glad that this website had managed to avoid national politics and the endorsement of one party or candidate over another. That line has now been crossed and I am sorely sorry for all of us. I hope it ends here and now.
HSVP C
02/28/2020 — 10:10 am
Joan, thank you for your opinion. This website posts on a variety of issues, but does mainly focus on HSV only. As the Coronavirus could very well affect residents, and this article mentions the possible shortages in the supply chain, this could very well devastate many of us. Many are elderly and if this virus spreads to HSV, it could be debilitating to a population of elderly with already comprised immune systems. We pray the issue Tom Blakeman discussed does not become an emergency issue in the Village or anywhere else. We do understand your point and would like to invite you to skip any articles you may find offensive. Thank you very much for your input.
Nancy
02/28/2020 — 10:05 am
The Coronavirus makes it clear what was true all along: Your health is as safe as that of the worst-insured, worst-cared for person in YOUR society.
There is a good reason we should be clamoring for a national health service – the reality is here like a punch in the gut.
There is also good reason to be more environmentally conscious and become a more self-sustaining nation. Quit looking down our noses at people that grow their own food (or try), or those that fix auto’s or aircon units. The pretentiousness of rules that prevent gardens and domesticated small animals as food sources (eggs) outlawed because someone doesn’t want to hear chickens in the morning or see their neighbor picking beans (yes, I’m talking about high-flutin’ HOA’s and POA’s.) When people start starving, those self-sustaining food sources will start looking pretty good. We’ll want gates to protect them.
Demand better and quit buying cheap Chinese made products. When a president tells you putting America first is key, but causes wide-spread shut down of manufacturing companies and bankrupting small farmers due to trade-wars, we are not going to ever be a self-sustaining nation again. When science is dismissed, the potential for future inventions and manufacturing of those goods are doomed. I don’t disagree with what has been stated here in the least. The difference is for the last 20 years we’ve seen it coming and did nothing except enable it. Now that we KNOW what’s going on, we should not ignore the awareness, yet here we are.
Andy Kramek
02/28/2020 — 12:37 pm
Nancy, having grown up under a National Health Service, with a brother-in-law who is a Doctor in the UK National Health Service, I can tell you that the LAST thing we need in the US is the Government (ANY Government!) in control of our health.
People who advocate for this have, I notice, never actually experienced the reality of it. Those of us who have, know that it is not a good system. As with all such things the result is always to drag things down to the lowest common denominator, and not to raise them up.
Why do you think there is a booming private health industry in the UK? Those who can afford it buy private insurance (while still paying up to 15% of their salary into the NHS as well). Why do people that if the National System is so good? (Canada bans private health insurance except for things not covered by the National Service).
In 1998 I needed a non-urgent operation on my knee (I could barely walk and could not really go down stairs). The wait time on the NHS was 18-24 months (if I was lucky). Luckily I also had private insur
ance and got it fixed in 10 days.
Nancy
02/29/2020 — 11:39 am
How odd. My husband is British and has has NHS as well as our daughters for years. It has worked very well. It does not prevent you have ALSO having private care if you want – but for most things it does very well. So we do have personal experience and as well if we need anything serious done may have to return to the UK for procedures. I would much rather have the option for people to have medical care than NONE AT ALL. So, as you said, there was a wait – as there is here. But you had the option (lucky you had money for that) to get private care. Many don’t have that option and would have no way to get fixed at all unless completely falling over and having to go to an indignant hospital where the tax payer picks up the bill anyway. Please don’t assume that people who advocate an NHS type program don’t have any experience. I’ve had experience with it in Poland and also Canada. It’s not perfect but I’ll be happy a society has access to it rather than having someone with a treatable STD cooking up my fish and chips but couldn’t afford care. The reality is your health is not safe if everyone around you is a carrier of a disease. Our nation cannot utilize its most valuable resources to the fullest potential because they are too sick and unproductive to work. So, no your first hand experience because you have money to afford private health care doesn’t mean a NHS system is bad. Funny – you would have been glad to use it and get the free surgery – but chose instead for your private route. Interesting you oppose such as system because you had to wait and the priority of others were higher. This tells me you don’t care about the health or care of others beneath your pay scale and that folks is the biggest issue of all -UNDERSTANDING the BIGGER PICTURE – its not just about you.
Kirk Denger
03/01/2020 — 4:02 pm
Nancy, you sounded a perfect chord that pleased the lord, Halleluiah!
Dan
02/28/2020 — 3:14 pm
Go to Grand Fork North Dakota and try to see an MD. Hard to get in because all the Canadians getting in because of their healthcare.
#2 Not one television made in USA or radio also I bought a 2005 Equinox new transmission made in Japan, body made in Canada, engine made in China and car assembly in Canada sold in America as American made by GM, tell me how to buy american!
I worked as an engineer on Railroad in the 60’swe would hall Chrysler parts (engine, transmission, rear end,) to Mexico a few weeks later these parts were coming back fully assembled St.Louis,Mo.
Levi jeans made in El Paso moved across border to be made in Mexico, tell me how to buy Amrrican?
Moe
02/29/2020 — 6:01 am
You buy American by doing the very research you have done. The don’t buy the product you have identified as not being American. Do you really need your TV? What is on that is worth watching?
Why buy an Equinox? It is not a very good vehicle. Get a Tesla (76 percent North America parts and assembly).
And the point might just be more than simply buy American. It is to not buy Chinese. So, that opens a lot more purchase possibilities.
Buy from places that are not communists dictatorships. Simple as that. And it can be done.
If it says made in China I simply won’t buy it.
The Beaver
02/29/2020 — 8:51 am
I have to laugh at all the “buy American” chatter. Almost nothing we use in this country is fully manufactured here whether it is high end or “cheap”.
We shop at WM to save a few pennies (for cheap products) instead of shopping at higher priced “mom and pop” stores and this has been going on for decades. We clamor for a “living wage” for minimum wage and minimum skill workers that cannot operate complex machines to produce locally.
How many people can afford a Telsa?
How many could buy a smart phone or laptop if it was made here?
It just goes on and on. This does not even scratch the surface. We all need to wake up and check our attitudes and spending habits.
Nancy
02/29/2020 — 2:10 pm
The point was that we do need to bring back many industries and become more reliant on ourselves. The demand for cheap goods can be curbed but not unless people understand the trade offs. Do we buy new Levi jeans at 100 a pop every time a new style is hyped to no end by a celebrity – or do we wait until the jeans need replacing and we take better care of them? I don’t believe gov’t can control companies going off shore – but they can sure tax them to the hilt to ‘encourage’ them to stay in the US. If there is a way to reduce buying everything cheap and disposable maybe we can make a small shift in the consumer habits. IF you live in Europe, I guarantee you will spend weeks investigating a new toaster and would only replace it after its been repaired 4 times. People will expect the toaster to work for years and they take care of their items. Americans as a whole are wasteful.
Gene Garner
03/01/2020 — 1:37 pm
“For every complex question there’s a simple answer–which is always wrong.” I don’t know who said that but I believe they were correct.
Apple currently assembles the majority of their iPhones in its Shenzen, China, location, although Foxconn maintains factories in countries across the world, including Thailand, Malaysia etc.
And what country buys the most iPhones? China, 228 million followed by the U.S. 128 million. The Chinese that work in those factories buy iPhones because they have a job making iPhones.
Globalization is a fact of life and you’re either part of it or outside looking in. Japan use to be our go-to country for cheap labor, now they are the #3 economy in the world behind the U.S. and China. That happened because we bought Toyotas and Hondas which were better quality and cheaper than Detroit Iron. The same was true with Sony and Panasonic TVs and a host of other products.
It’s called capitalism and it works.
I believe the U.S. has the brains, initiative and opportunity to compete in the world market and win. We don’t need tariffs, trade wars or walls to give us an unfair advantage, plus they don’t work.—Gene