Why Buy Local? What You Buy vs. Where You Buy
Where I live in Vermont, there is a strong impetus to keep your consumption as local as possible. The reasons are obvious. Keep your dollars local to support your communities and your neighbors. Even though the cost might not be as competitive, we feel it is a small price to pay to provide a regional economic stimulus.
There needs to be, however, an understanding about not just supporting a local business but also a local product. In terms of vegetables and cheese, that’s easy to do. Local farmers selling goods within their communities. In terms of automobiles, computers, and household goods, the decision is more complicated. You may buy an auto from your neighborhood dealership, but if the car is imported, does that really help our community? This thinking translates to any purchase made that involves an imported product. We at Amer1ca One feel strongly that there needs to be a balance between where you buy and what you buy. For instance, a $30,000 imported car only provides a local support of approximately 10-14% of that cost; $3000-$4400. Perhaps the concept of ‘local’ needs to be refined.
By in large, in business and economics, what goes around comes around. Although income is not distributed evenly, to a certain extent, an economy is like a rising tide. People in one region can influence the people in another. In Vermont and NH, where the number one industry is tourism, we rely greatly on visitors from Boston and New York. As their economies percolate, they permeate into other regions. As consumers, we need to realize that by just buying local, we may not be maximizing our influence to stimulate everyone’s regional economy. Imported goods are the kiss of death for local economic stimulation.
So when you consume, try to balance out the ‘Where You Buy’ vs. the What You Buy’. After all, you make your money in America, we encourage you to spend it on America. Thank you.
Friday, May 27, 2011
Friday, May 20, 2011
America Still Makes Stuff
America Still Makes Stuff
Most Americans are aware of the demise of manufacturing in the United States. Pick up an item in any clothing store, and you will see products from all over the world but probably nothing from America. Our day to day consuming gives one the impression that America doesn’t make anything any more. Simply not true.
Granted, our manufacturing sector has been shrinking since the 1960’s; from 33% of our economy to about 11% today, that still translates to almost 1.8 Trillion dollars in income. Only recently we have been surpassed by China but we still manufacture more than Germany and Japan combined.
Since manufacturing is crucial to our economic and social stability, it is crucial that every American recognize the need to consume with this in mind. Since consumers have enormous control to influence and determine what is sold, we urge you to exercise that power. Express your desire for ‘Made in America’ goods and ask any retailer accordingly. By pressuring our retailers, they will have no choice but to stock American goods. By supporting domestic products, we keep our dollars within our shores; thereby, stimulating our economy instead of others.
After all, you make your money in America, we encourage you to spend it on America.
Most Americans are aware of the demise of manufacturing in the United States. Pick up an item in any clothing store, and you will see products from all over the world but probably nothing from America. Our day to day consuming gives one the impression that America doesn’t make anything any more. Simply not true.
Granted, our manufacturing sector has been shrinking since the 1960’s; from 33% of our economy to about 11% today, that still translates to almost 1.8 Trillion dollars in income. Only recently we have been surpassed by China but we still manufacture more than Germany and Japan combined.
Since manufacturing is crucial to our economic and social stability, it is crucial that every American recognize the need to consume with this in mind. Since consumers have enormous control to influence and determine what is sold, we urge you to exercise that power. Express your desire for ‘Made in America’ goods and ask any retailer accordingly. By pressuring our retailers, they will have no choice but to stock American goods. By supporting domestic products, we keep our dollars within our shores; thereby, stimulating our economy instead of others.
After all, you make your money in America, we encourage you to spend it on America.
What Exactly Does 'Made in America' Mean?
What Exactly Does ‘Made in America’ Mean?
Many consumers want to buy products made in America. According to a recent Adweek Media/Harris Poll, a large percentage of Americans respond to an ad that identifies a product as being domestic.
18-34 Years Old 44%
35-44 61%
45-54 66%
55 and Older 75%
It is difficult, however, to know what exactly is ‘Made in America’. For instance, when one thinks about domestic automobiles, we identify with the Big 3. Cars.com has an American Made Index that rates vehicles built and bought in the US. Factors include sales, where the car’s parts are made and whether the car is assembled in the US. Here are the top 10.
1. Ford F-150
2. Chevrolet Cobalt
3. Chevy Silverado 1500
4. Toyota Tundra
5. Pontiac G6
6. Toyota Sienna
7. Ford Escape
8. Chevy TrailBlazer
9. Chevy Malibu
10. Ford Explorer/Sport Trac
Please note that Chrysler doesn’t have a single car on the list while Toyota has two.
When evaluating a product, there are several elements besides where it is assembled. In terms of an automobile, consider where the product is both designed and engineered, where the parts come from especially the engine and transmission, where it is assembled, and where do the profits go after it’s sold. To be fair, the Big 3 do most of their engineering and design domestically. Both Honda and Toyota also employ those skills within the US.
Regarding assembly, that equates to approximately 20-25% of the total value of an automobile. It is fine and well that Volvo, BMW, Mercedes, Hyundai, Kia and Volkswagen have assembly plants here, BUT, they are a minimal investment. When the major parts still come from overseas, it’s a modest contribution at best. They are what Mrs. Thatcher referred to as ‘Screw Driver Plants’. Please look at the Invoice attached to the car’s window. It does reveal the level of domestic content.
Finally, profits don’t stay within our borders. The money goes to help investment and capital improvement in other countries. That is a major justification to support the Big3.
Cars are much easier to determine domestic content than electronics. Let’s take the IPhone. Like so many electronic gadgets, the nuts and bolts are made in various countries in Asia. So does it make sense to get an IPhone vs. an Asian or Finnish brand? Absolutely. Apple does most of its design and engineering in the US. Since their products are extremely popular and profitable, those funds return to California to continue research and development on new products. That means getting an HP computer vs. an Hitachi makes good sense. At least some of the funds return to America.
Globalization has made the world difficult to understand. Even the concept of an ‘American company’ is a little hazy. In general, American companies are better to support than foreign ones, and foreign ones that include US content (Windows software, Intel computer chips, etc) are better than those who don’t.
Finally, what goes around doesn’t always come around. Since we run trade deficits with our top 9 trading partners (and with 12 of the top 15), we need to do our part to either keep our dollars within our shores. America has been good to us; as consumers, return the compliment.
Many consumers want to buy products made in America. According to a recent Adweek Media/Harris Poll, a large percentage of Americans respond to an ad that identifies a product as being domestic.
18-34 Years Old 44%
35-44 61%
45-54 66%
55 and Older 75%
It is difficult, however, to know what exactly is ‘Made in America’. For instance, when one thinks about domestic automobiles, we identify with the Big 3. Cars.com has an American Made Index that rates vehicles built and bought in the US. Factors include sales, where the car’s parts are made and whether the car is assembled in the US. Here are the top 10.
1. Ford F-150
2. Chevrolet Cobalt
3. Chevy Silverado 1500
4. Toyota Tundra
5. Pontiac G6
6. Toyota Sienna
7. Ford Escape
8. Chevy TrailBlazer
9. Chevy Malibu
10. Ford Explorer/Sport Trac
Please note that Chrysler doesn’t have a single car on the list while Toyota has two.
When evaluating a product, there are several elements besides where it is assembled. In terms of an automobile, consider where the product is both designed and engineered, where the parts come from especially the engine and transmission, where it is assembled, and where do the profits go after it’s sold. To be fair, the Big 3 do most of their engineering and design domestically. Both Honda and Toyota also employ those skills within the US.
Regarding assembly, that equates to approximately 20-25% of the total value of an automobile. It is fine and well that Volvo, BMW, Mercedes, Hyundai, Kia and Volkswagen have assembly plants here, BUT, they are a minimal investment. When the major parts still come from overseas, it’s a modest contribution at best. They are what Mrs. Thatcher referred to as ‘Screw Driver Plants’. Please look at the Invoice attached to the car’s window. It does reveal the level of domestic content.
Finally, profits don’t stay within our borders. The money goes to help investment and capital improvement in other countries. That is a major justification to support the Big3.
Cars are much easier to determine domestic content than electronics. Let’s take the IPhone. Like so many electronic gadgets, the nuts and bolts are made in various countries in Asia. So does it make sense to get an IPhone vs. an Asian or Finnish brand? Absolutely. Apple does most of its design and engineering in the US. Since their products are extremely popular and profitable, those funds return to California to continue research and development on new products. That means getting an HP computer vs. an Hitachi makes good sense. At least some of the funds return to America.
Globalization has made the world difficult to understand. Even the concept of an ‘American company’ is a little hazy. In general, American companies are better to support than foreign ones, and foreign ones that include US content (Windows software, Intel computer chips, etc) are better than those who don’t.
Finally, what goes around doesn’t always come around. Since we run trade deficits with our top 9 trading partners (and with 12 of the top 15), we need to do our part to either keep our dollars within our shores. America has been good to us; as consumers, return the compliment.
Saturday, May 14, 2011
Free Trade Fallacy
Most economists, politicians and Americans believe that trade should be free. Good and services should travel from country to country with minimal difficulty and resistance. The beauty behind free trade is that it should be a ‘win-win’ situation for all participants. It is assumed that ‘free trade’ will also become ‘balanced and fair trade’ in which there is a sense of parity among participants. Sadly, for America, that has not become the case.
As you can see from the chart below (US Census), we run trade deficits with our top nine trading partners and twelve of the top fifteen.
The largest U.S. partners with their total trade (sum of imports and exports) in billions of US Dollars for calendar year 2010 are as follows:
Exports Imports Total Trade
Canada
248.8 76.5 525.3
China
91.9 364.9 456.8
Mexico
163.3 229.7 393.0
Japan
60.5 120.3 180.9
Germany
48.2 82.7 130.9
United Kingdom
48.5 49.8 98.3
South Korea
38.8 48.9 87.7
France
27.0 38.6 65.6
Taiwan
26.0 35.9 61.9
Brazil
35.4 29.3 59.3
Netherlands
35.0 19.0 54.0
India
19.2 29.5 48.8
Singapore
29.1 17.5 46.6
Venezuela
10.7 32.8 43.4
Saudi Arabia
11.6 31.4 43.0
There are numerous reasons for the imbalance in which the finger of responsibility can be pointed in all directions. Here are just a few.
American Mistakes
1. Companies have focused far too long on domestic market share instead of enlarging their sales overseas. Only 1% of our companies do 80% of our exporting.
2. Many US companies have moved their manufacturing facilities abroad; thereby, becoming importers to America.
3. Politically, we have embraced the virtues of free trade while allowing other countries to disregard those values.
4. American consumers are oblivious to the need to support domestic industries.
Trading Partners
1. Many countries with flat domestic consumption (Germany, Japan, Sweden) look to overseas markets (America) to increase sales.
2. We allow our largest importer, China, to manipulate their currency to our detriment.
3. Many countries have not only trade barriers but cultural and social barriers as well. The Japanese will not buy a computer from an American company, nor rice that would cost half the price. China has huge duties on American autos while insisting that major products be made in China.
4. Many countries protect their domestic industries either through direct government funding or subsidized loans. As a business model, Air Bus would never have gotten off the ground without huge subsidies and support. During the recent ‘Great Recession’, there was never any discussion in Europe or Asia about whether or not to support their automobile industries. It was a done deal.
If we wish to influence our trade deficit and help create American jobs, you can do so that as a consumer. Please consider taking the Amer1ca One Pledge.
1. Ask or determine where a product is made.
2. If possible and affordable, consider the American item first.
3. Let retailers know that you are searching for ‘Made in
America’ products.
4. Encourage other family members and friends to do so.
We all have the ability to create jobs and influence change. Please do so with your wallet. After all, you make your money in America, try to spend it on America. Thank you.
As you can see from the chart below (US Census), we run trade deficits with our top nine trading partners and twelve of the top fifteen.
The largest U.S. partners with their total trade (sum of imports and exports) in billions of US Dollars for calendar year 2010 are as follows:
Exports Imports Total Trade
Canada
248.8 76.5 525.3
China
91.9 364.9 456.8
Mexico
163.3 229.7 393.0
Japan
60.5 120.3 180.9
Germany
48.2 82.7 130.9
United Kingdom
48.5 49.8 98.3
South Korea
38.8 48.9 87.7
France
27.0 38.6 65.6
Taiwan
26.0 35.9 61.9
Brazil
35.4 29.3 59.3
Netherlands
35.0 19.0 54.0
India
19.2 29.5 48.8
Singapore
29.1 17.5 46.6
Venezuela
10.7 32.8 43.4
Saudi Arabia
11.6 31.4 43.0
There are numerous reasons for the imbalance in which the finger of responsibility can be pointed in all directions. Here are just a few.
American Mistakes
1. Companies have focused far too long on domestic market share instead of enlarging their sales overseas. Only 1% of our companies do 80% of our exporting.
2. Many US companies have moved their manufacturing facilities abroad; thereby, becoming importers to America.
3. Politically, we have embraced the virtues of free trade while allowing other countries to disregard those values.
4. American consumers are oblivious to the need to support domestic industries.
Trading Partners
1. Many countries with flat domestic consumption (Germany, Japan, Sweden) look to overseas markets (America) to increase sales.
2. We allow our largest importer, China, to manipulate their currency to our detriment.
3. Many countries have not only trade barriers but cultural and social barriers as well. The Japanese will not buy a computer from an American company, nor rice that would cost half the price. China has huge duties on American autos while insisting that major products be made in China.
4. Many countries protect their domestic industries either through direct government funding or subsidized loans. As a business model, Air Bus would never have gotten off the ground without huge subsidies and support. During the recent ‘Great Recession’, there was never any discussion in Europe or Asia about whether or not to support their automobile industries. It was a done deal.
If we wish to influence our trade deficit and help create American jobs, you can do so that as a consumer. Please consider taking the Amer1ca One Pledge.
1. Ask or determine where a product is made.
2. If possible and affordable, consider the American item first.
3. Let retailers know that you are searching for ‘Made in
America’ products.
4. Encourage other family members and friends to do so.
We all have the ability to create jobs and influence change. Please do so with your wallet. After all, you make your money in America, try to spend it on America. Thank you.
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