People and leaders will cut off their economic noses to spite their faces when faced with issues of pride, territorial aggrandizement, philosophy (like Marxism), religion, etc.

Believe me, I am all in favor of economic efficiency along Hazlitt/Mises/Friedman lines, but military and industrial power must also be maintained. Economic power feeds these, but cannot be allowed to subvert them.

To bring us back to Shark Tank, Donny seems to be doing well – googling him to see what has happened to him is how I found this blog. Would he be doing even better if he had the product made in Taiwan or S Korea? Would consumers have more $$ in their pockets of they were buying a S Korean Invisirack for $549 instead of an American made one at $689? Yes. But he will be able to make stamped receivers for sub-machine-guns or whatever else if we need that when the time comes, and I’m ok with that.

There is another benefit to producing in the US, since I’m on a ramble -

I used to work in inventory planning for a major publisher until 2002, then left the industry and came back in 2004 working for another company. Up until 2002 we printed all our books with printers whose manufacturing facilities were in MO, OH, and TN. By 2004 the new company I worked for bought books from the company I left in 2002, and that first company had moved all its work to vendors who then printed their books in China and Singapore. When it used to take 6 weeks at the height of the busy season to have 50,000 1,100-page color hardcover art history books printed and delivered from an American print facility in 2002, in 2004 it took 3 months to get 600 40-page color hardcover childrens’ books printed and delivered by ship across the Pacific. Forget the unit cost for materials less shipping – the opportunity cost was enormous!

My colleagues who stayed with the 2002 publisher had to carry more stock against the possibility of a sales spike because they knew it would take longer to get inventory if they ran out. This results in more warehouse space, greater increase of product obsolescence and spoilage, etc.

Add to that, the political instability of many foreign countries, possibility of nationalization, etc, and what made sense to someone in a corner office on the front end, i.e., moving production overseas, makes no sense on the back end in some cases. But in the prevailing US corporate culture, VPs move on to other 6-figure jobs in 2-5 years and do not have to live with the havoc such decisions cause, while they are patted on the back and given raises and promotions for making the decisions in the first place.

Sorry for the soapbox, and thanks for the opportunity to vent ;)

What effect do you think economic inter-connectedness has on nations’ incentive to go to war with one another?

I read Henry Hazlitt’s ‘Economics in One Lesson’ in high school 30+ years ago and at the end of the school year I bought all my teacher’s spare copies and gave them to friends.

The issue with farming out manufacturing jobs overseas, is that in the next war, we need a manufacturing base to support the war effort. Between WWI & WWII Britain emasculated its defense industries and lost much of its manufacturing base to the US, Germany, et al. When war came not only did they not have enough capacity to make destroyers and Spitfires in the quantities needed, they did not have the machine tooling the make the manufacturing facilities to produce the destroyers and Spitfires they needed. They were lucky that the world’s largest industrial power – not the world’s largest service economy – was sympathetic to them and then came into the war on their side.

Who will we rely on like that? China? Japan? Germany? What if they are on the other side? What if they are indeed on our side, but they are an ocean away with supplies subject to interdiction by the enemy?

Farming our jobs out to China is particularly bad since they are our fiercest competitor and most likely opponent. Yes, we will get cheaper lamps, truck racks, and cell phones in the meantime, allowing us to focus on what we are best at – financial shenanigans and real estate development – but when tens of thousands of artillery pieces and 6-wheel drive 5-tons trucks are what is needed, we will be as poorly prepared as the British in 1939. We cannot even produce enough MRAPs for our needs in Afghanistan and that is not a major industrial power opposing us there.

I worked for an importer of Chinese manufactured goods and dealt with 19 different Chinese manufacturing concerns 6 years ago. Believe me, I wouldn’t wish that job on anyone and we do NOT need those jobs here. The products were markedly substandard, the manufacturers’ ability to respond to customer needs were atrocious, i.e., nonexistent, and a consumer is much better off buying a non-Chinese product of any origin in the medium and long run.

So, Hazlitt yes, but in the real world, we don’t exist in a purely economic vacuum, we have political and military and realpolitik concerns to address which benefit our country, just as much as economic efficiency.

Buy 1) American, 2) from a friendly nation like Britain, Canada, Australia, Taiwan, or Japan, or some other NATO or SEATO ally 3) from a neutral nation like Sri Lanka or Brazil, 4) from anyone but China, and 5) from China if there is no other option.

Go Donny!

The issue with farming out manufacturing jobs overseas, is that in the next war, we need a manufacturing base to support the war effort. Between WWI & WWII Britain emasculated it’s defense industries and lost muc of its manufacturing base to the US, Germany, et al. When war came not only did they not have enough capacity to make destroyers and Spirfires in the quantaties needed, they did not have the machine tooling the make the manufacturing facilities to produce the destroters and Spitfires they needed. They were lucky that the world’s largest industrial power – not the world’s largest service economy – was sympathetic to them and then came into the war on their side.

Who will we rely on? China? Japan? Germany? What if they are on the other side? What if they are indeed on our side, but they are an ocean away with supplies subject to interdiction by the enemy?

Farming our jobs is particularly bad since they are our fiercest competitor and most likely opponent. Yes, we will get cheaper lamps, truck racks, and cell phones in the meantime, allowing us to focus on what we are best at – financial shenanigans and real estate development – but when tens of thousands of artillery pieces and 6-wheels drive 5-tons trucks are what is needed, we will be as poorly prepared as the British in 1939.

I worked for an importer of chinese manufactured goods and dealt with 19 different Chinese manufacturing concerns 6 eayrs ago. believe me, I wouldn’t wish that job on anyone and we do NOT need those jobs here. The products were markedly substandard, the manufacturers’ ability to respond to customer needs were atrocious, i.e., nonexistent, and a consumer is much better off buying a non-Chinese product of any origin in the long run.

So, Hazlitt yes, but in the real world, we don’t just exist in a purely economic vacuum, we have political and military and realpolitik concerns to address which benefit our country, just as much as ecomomic efficiency.

Buy 1) American, 2) from a friendly nation like Britain, Canada, Austrialia, Taiwan, or Japan, or some other NATO or SEATO ally 3) from a neutral nation like Sri Lanka or Brazil, 4) from anyone but China, and 5) from China if their is no other option.

Go Donny!

Now, bank obviously get an extra-market advantage from FDIC insurance and borrowing from Fed discount window, I’m certainly not trying to say the banksters aren’t getting perks from their cozy relationship with federal reserve and the treasury, but I think increases in the money supply benefit the Gov’t…. or am I missing something?

This is the financial engine that turns our US economy, like it or not.

I believe in your simple assessment of the situation and those who think governments are somehow magically different than business or individual finances are plainly lost in a belief system not based on math.

I am a simple Dairy farmer that is living in the house my Great grandfather built in 1870. All my family history and belief system is based on austerity and fiscal conservatism. We have never had any financial disaster or upheaval in150 years of business. Not even in the depression years even though my ancestors were not in the government farm program and took no subsidies.

I will not claim things were not tight but we made it through without needing help.

Experts can claim what ever they want but I base my financial and economic beliefs on 150 years of success of what has worked in practice. I wonder how many can match that?