Betting Against America

     It used to be that when the going got tough for the USA,  Americans would come together  to fix their problems, whatever they were.  In the face of whatever ailed us - war, inflation, joblessness, hunger, recession, depression  -  Americans would roll up their sleeves and take a positive, confident, "we can do it" attitude.  And we always could and would. 

     President John F. Kennedy, the son of a wealthy American family,  didn't view his wealth as something that separated him from the welfare of his fellow countrymen.  He served in the military during World War II and almost lost his life for his country.  He served as President of the United States and did lose his life.  President Kennedy summed up his philosophy, and the philosophy of most Americans at that time when he said, "Ask not what your country can do for you, but what you can do for your country." 
     This patriotic belief in doing what's best for your country, has taken a back seat these days, it seems, to the greedy self-interest of some wealthy Americans.  I was disappointed to read recently in The Washington Post ("The dollar no longer almighty," 4/22/11) that multimillionaires and billionaires like Warren Buffet (Berkshire Hathaway) have been "shopping" in other countries, such as South Korea and Japan, opening factories, and predicting that the  US dollar will fall, and ultimately, fail. 

     While it's certainly true that the USA's economic and budget deficit problems have weakened the US dollar,  I believe that the right-minded and patriotic response of an American who has made his or her fortune here  should be to bet on the USA, not against it.  An American businessman should be energizing this country's economy by buying businesses and opening factories in the US, and creating much-needed jobs here, thereby strengthening the economy and the US dollar.  In theory, this is what all that money the wealthy saved from their tax cuts was supposed to do, wasn't it?     

     Instead, Buffet and other super rich Americans, such as Bill Gross (Pimco), are betting against their country.  They are investing their wealth in wholesale foreign businesses, then instilling fear in their investors and the American stock market by predicting the fall of the dollar, and hoping their predictions will become a self-fulfilling prophecy.  If and when the dollar does fail, their foreign investments should pay off, and they will make even more money.  In other words, Red Riding Hood makes money off the Three Little Pigs, bets that the Big Bad Wolf will eat the pigs, repeatedly cries "Wolf!" until the pigs get scared,  the Wolf eats them, and Red's bet pays off.  Yes, this is probably oversimplified, but you get the picture - a pretty nifty scam, and perfectly legal.

     To be sure, not all American wealthy businessmen are doing this.  For example, Terry McAuliffe, who I wrote about a couple of blogs ago ("Greentech Automotive"), has purchased a Chinese car company and moved it to the US, opening a factory in Mississippi.  He is also in the early stages of starting a different business in Virginia.  McAuliffe is betting on America, and creating US jobs.  Hopefully, there are other successful American business patriots out there who will follow McAuliffe's business model, and bet on the USA. 

     God bless, Happy Passover, and Happy Easter!  
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This Week's Recommended Product:

 Streit's matzo -  Product of USA made by Aron Streit, Inc., New York, NY

(www.streitsmatzos.com)

Entitlements : Unwealthy : : Benefits : Wealthy

     Being a political junkie, I watched my usual Sunday political talk shows this morning.  The "flavor of the month" topic was, of course, federal deficit reduction.  As usual, everyone - moderators, pundits, analysts, subject matter experts, politicians, and former politicians - used the word "entitlements" when referring to federal expenditures for the poor, middle class, young, and elderly, the "unwealthy," of this nation.  These expenditures include things like Social Security, Medicare, Medicaid, health insurance for the uninsured, and federal tuition assistance programs.  The word "benefits," however, seems to be the word most commonly used when referring to federal expenditures for the rich and multinational corporations.  These expenditures include things like tax cuts for those making over $250K per year, and tax incentives for multinational corporations.

     What's the big deal?  "Entitlements," "benefits" - who cares?  As Shakespeare wrote in Hamlet (1602), "...many wearing rapiers are afraid of goose-quills...,"  or as playwright Edward Bulwer-Lytton wrote, "The pen is mightier than the sword."  I believe this applies to the spoken word, as well.  Repeat a word or phrase enough in a particular way, and it will begin to sound true and believable.  For example, the word  "entitlement" is used in a way to imply something that one feels entitled to without necessarily being deserving of, such as a "free ride," or a "handout."  On the other hand, the word "benefit" is used in a way to imply something that has been earned, and therefore, is deserved, such as a "bonus," or a "dividend."  The more we hear these words used in these ways, the more we tend to believe them to be true.

     Take the example of the General Electric Corporation.  In 2010, GE earned over $14 billion in profits worldwide.  However, it paid $0 in US taxes for 2010.  Supposedly, this was due to the fact that GE claimed losses in the US, although it was profitable in the global economy and had to pay taxes to other countries.  Therefore, GE reasoned, the multinational corporation rightfully received a tax "benefit" from the US by not paying one cent in US taxes.

     GE, along with Deloitte & Touche, IBM, Morgan Stanley, Goldman Sachs, Microsoft, Texas Instruments, SBC, and Verizon were among the top outsourcers of U.S. jobs beginning in the year 2000.  Research turns up virtually no information on the number of US jobs that have been outsourced, and the G. W. Bush administration assisted in this lack of information by requiring no federal reporting  of outsourced corporate US jobs. (Ed. note: My research yielded no new legislation in this area, leading to the conclusion that there are still no federal reporting requirements at present.)   

     What we're left with are concrete examples of outsourcing, such as GE's closing of its last incandescent light bulb factory in Winchester, VA, in 2010, the same year that it paid no US taxes.  Incandescent lighting, according to federal law, must be phased out by 2014 because it is less energy efficient than newer, greener technology, such as compact fluorescent lighting (CFLs.)  However, although GE could have retooled its Winchester factory to produce green technology light bulbs, it chose to close the factory and outsource its jobs to China, a communist country where there are cheaper labor costs and less environmental controls.  Adding insult to injury, GE also chose to blame the US federal government for the closing of its Winchester plant, claiming that GE was a victim of the new federal law.  

     According to wealthy multinational corporations, and the politicians who reap large corporate contributions for their campaigns, this is why we should feel sorry for companies like GE and give them a tax "benefit," while cutting "entitlements," for the middle class worker, the poor, the young, and the elderly. As voters and consumers, we can be the final judges.  As voters, we can work for and vote for candidates who care less about big corporate contributions, and more about what's right and good for the American people.  As consumers we can vote with our dollars at stores, farmers' markets, and online  by buying "Made in USA"  goods and products.

Sources:

http://www.phrases.org.uk/meanings/the-pen-is-mightier-than-the-sword.html

http://tntalk.wordpress.com/2008/03/18/us-outsourcing-and-multinational-corporations/

http://money.cnn.com/2010/04/16/news/companies/ge_7000_tax_returns/

http://www.heartland.org/full/28516/GE_Closes_Last_Incandescent_Light_Bulb_Plant_Jobs_Sent_to_China.html

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This Week's Recommended Product:

Viking appliances - Made in USA by Viking Range Corp, Greenwood, MS (http://www.vikingrange.com/consumer/index.jsp)

Ed. note:  Since GE is known and widely purchased in the US as both a household lighting and an appliance brand, I wanted to find companies that make household light bulbs and appliances in the USA, but was unable to find companies making household light bulbs in the US.  If you find any, please post to the blog.

Greentech Automotive

     Yesterday, I listened to Terry McAuliffe, successful businessman and former political strategist and candidate, discuss the progress of his latest business venture, Greentech Automotive, a newly established US automobile company committed to the advancement of clean automotive technology.

     Aside from its promise of clean technology, the exciting thing about Greentech Automotive is that McAuliffe acquired the business from China, and moved it to the United States!  This new, green business venture has found  a home in Mississippi, where its first plant, a 400,00 square foot facility, is being built.  According to McAuliffe, the first car, a small neighborhood electric vehicle (NEV),  is expected to roll off the assembly line in July of this year, and, the first order has already been placed for the car by buyers in China! 

     In addition to this first electric model, plans are in the works for other green technology models -  a sports car, a mid-sized car, and a subcompact.  Additional US plants are also planned for the future. The venture will initially create 300 additional US jobs, and at full production, is expected to create another 4,000 - 5,000 US jobs.

     While all of this is a very good thing, Greentech Auto's electric car will be made from foreign-made components, and assembled in the USA.  This makes it ineligible to be recommended as a "Made in USA" product on this blog.  Therefore,  I not only congratulate Terry McAuliffe for creating new US jobs, and especially green technology jobs, but I also challenge Terry McAuliffe to not just assemble, but to manufacture his auto parts in the US.   How many US jobs would that create, I wonder?

Sources: 

http://www.businesswire.com/news/home/20100520006358/en/Terry-McAuliffe-Announces-Major-Expansion-Greentech-Automotive

http://174.143.144.175/index.php/news/terry_mcauliffe_pursues_a_new_shade_of_green_with_mycar_project   

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This week's recommended products:

·         Cadillac Escalade (non-hybrid) & Escalade ESV, Cadillac DTS - Made in USA by General Motors

·         Ford F-150 & F-250, Ford Focus, Ford Expedition, Ford Taurus, Lincoln MKS, Lincoln Navigator - Made in USA by Ford

·         Jeep Liberty, Chrysler 200, Dodge Avenger, Dodge Nitro,  - Made in USA by Chrysler

·         Accord Crosstour,  Acura RDX,  Honda Pilot, Honda Ridgeline - Made in USA by Honda (non-union)

·         Kia Sorento - Made in USA by Kia (non-union)

·         Toyota Sequoia, Toyota Tundra - Made in USA by Toyota (non-union)

Note: The models recommended are manufactured and assembled in the USA. Other models by General Motors, Ford, and Chrysler may or may not be manufactured in the USA.  Check the sticker on a specific vehicle to find out where its engine and transmission are made.

Eat At Your Own Risk: Foreign-Made Food and Drugs

The recent earthquake and tsunami in Japan were terrible, natural disasters with potentially far-reaching effects.  (Note:  Our thoughts and prayers go out to the victims of these tragedies, and we  urge anyone who is able, to contribute to organizations and projects who are working to bring support and assistance to the victims.)  These disasters, which have resulted in the damage of nuclear reactors, and subsequent radioactive contamination of Japanese drinking water and the Pacific Ocean, also serve to remind us of the importance of knowing where our food comes from and what it contains.  Once an ocean is contaminated, not only its sea life, but the plants and animals who drink rainwater evaporating from that ocean, can become contaminated.  Combined with the inspection procedures of foreign-made food and drugs, consuming these products can be risky business.  Consider these facts:

Fact #1:  In recent years, American consumers and their pets have experienced health and safety issues relating to imported edible products, including melamine-tainted vegetable protein and dairy products, salmonella-tainted peppers and other contaminated fruits and vegetables,  contaminated toothpaste, and contaminated heparin (a blood thinner.) Some of these incidents have caused Americans and their pets to become ill or, in some cases, die.

Fact #2:  In February, 2010, the Food and Drug Administration (FDA) announced that it expected nearly 20 million shipments of food, drugs, cosmetics, and other products to arrive at U.S. ports of entry from foreign countries. (Ten years ago, that number was about 6 million shipments, and 20 years ago, the number of shipments was only a fraction of that.)

Fact #3:  Last year, the FDA had less than 500 inspectors to inspect those 20 million shipments; in other words, each inspector had to inspect over 40,000 shipments in one year.  Consequently, less than 1% of imported products and 8% of imported drugs got inspected.

Fact #4:  The FDA has been relying heavily on a border inspection program of foreign-made products that checks less than 2% of incoming food at the border.  Importers may flood the US market with substandard products because the FDA is unable to effectively prevent this from occurring.

     What can you do to protect yourself and your family?  Read labels and buy "Made in USA," "Baked in USA," and "Product of USA" fruits, vegetables, food products and medicines whenever they are available. Not only does this simple act contribute to the U.S. economy, and help to conserve and create U.S. jobs, but all, or virtually all of the ingredients in these products, must originate in the USA, and are put together in the USA according to USA standards. If a package or label doesn't state it, don't assume the product was made in the USA.  Many companies/brands will label products with US patent numbers, the company's US address, or the US address of the distributor, giving the appearance that the product was "Made in USA," when in fact, it wasn't.

Fact #5:  The previous Congress sought to improve the effectiveness of FDA inspections of foreign-made products by enacting new legislation, the FDA  Food Safety Modernization Act (FSMA), to dramatically increase inspections of overseas food facilities, hire new inspectors, and hold US importers more accountable. This bill never became law. The bill was passed in November, 2009, by the Senate, but not by the House.  At the end of each session of Congress,  all proposed bills and resolutions that haven't passed are cleared from the books. Members often reintroduce bills that did not come up for debate under a new number in the next session.

      Finally, to give a real-life example, I went to the produce department of a local supermarket the other day, looking for a 2-lb. box of fresh strawberries.  I gravitated to a familiar brand, "Driscoll's," with a bright yellow label, picked up a box of good-looking strawberries, and started to put it in my basket.  Then, I stopped and read the label -  "Product of Mexico."   My eyes scanned the shelves, and right next to those strawberries, I noticed boxes of strawberries with white labels and an unfamiliar name, *"Classic Dover."  These strawberries were the same price for the same 2-lb box as the other strawberries, and were just as good-looking.  I picked up a box and read the label -  "Product of USA."   There was also another sticker on the box that said *"Picked fresh daily by Mike Lott Family Farms."  Guess which strawberries I bought?

Sources:

http:  //www.foodsafetynews.com/2011/02/fsma-import-rules-may-foster-global-food-safety/

http://www.ombwatch.org/node/10777

http://www.govtrack.us/congress/bill.xpd?bill=s111-510

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This week's recommended product:

Fruits and vegetables that are "Product of USA," including "locally grown" fruits and vegetables (as they come into season.) 
*The "Classic Dover" strawberries I purchased are a variety of strawberry typically grown in Dover, FL, and surrounding areas east of Tampa, FL.   Mike Lott Farms of Seffner, FL, is one of many strawberry growers in that area.  The farmers work very hard to protect their strawberries from frost and other adverse conditions, and their resulting beautiful and juicy strawberries are a large part of the local economy.

Previous recommendations:  Tom's of Maine, Inc. (www.tomsofmaine.com), The Ceramic Source (www.ceramic-source.com)