The following comments might sound a bit cynical, but my faith in our government and the reporting of economic news trying to improve how we see the recovery is at a very low ebb.
When Nancy Pelosi (DCA) as House majority leader wanted the Air Force to purchase a new aircraft for her trips to California, my faith in the House leadership hit an all-time low. Learning recently that the Senate Armed Services Committee prohibits its staff and presidential appointees requiring Senate confirmation from owning stocks or bonds in the 48,000 plus companies that have Defense Department contracts, but allowing the senators to own stock in those companies (Arkansas Democrat Gazette, Dec. 19, 2010, and the Washington Post) makes it difficult for me to believe our elected officials are making very many sacrifices to represent us. Hence, I am a bit of a skeptic.
The newspapers and news programs on television are very busy reporting that holiday sales figures are up and that must mean shoppers have more money to spend and, therefore, the economy is improving. Believe all that if you wish, but there seems to be a few questions about the validity of their conclusion.
There are some indications that people are spending. The report on CNBC said jewelry sales were up, as were sales of clothing. However, electronics were “disappointing.” Is that a possible indication that the wealthy are buying jewelry for purposes of accumulatinggold? At slightly less than $1,400 per ounce, the very same item of gold would be up about 50 perecent on raw material alone.
And if electronics are not meeting expectations, is it an indication that the households wanting flat screen televisions have already bought them and the younger set has started to deplete their piggy banks reserved for the latest electronic fad?
I would also suggest that the increase in clothing may indicate that some people are going to get more practical gifts for Christmas. Or, another possibility on the clothing sales is my own experience.
It has nothing to do with the holidays that I needed a new winter coat. The health issue did determine when I was able to shop and that it happened to fall within the holiday sales reporting period. The department store is going to show a sale that will help influence future holiday advertising when it had nothing to do with any effort on the marketing department’s efforts.
This incident was significant enough that it might warrant thinking about as consumers. It points out very clearly that department stores have learned how to attract our attention with enormous discounts.
Perhaps I could have bought a less expensive coat at Wal-Mart, but every store seemed tobe selling imported merchandise - as made in Asia, South America or India. The coat I chose was not available at Wal-Mart, but if it had been it probably would have been priced within a few dollars of the final price paid to my source. The price tag started at $160.
At that I laughed, because the whole rack was “half-off” (as in 50 percent off).
That was starting to be a bit more reasonable, but I rather doubt that I would have paid that much. But to help me make up my mind (I am serious), since I am a “senior citizen,” I was eligible for an additional discount of an extra 15 percent. Of course, I would have gotten the same additional 15 percent off because of my department store credit card or because I purchased it on a Tuesday. The object ofthe discounting was to get to a realistic price. When they finally rang up my bill, they brazenly printed out a “savings of $81.”
The truth is simply no one would pay $160 for a $70 coat regardless of the time of the year. You can believe the holiday sales indicate a great improvement in our economy if you wish. I believe my experience tells more of the situation than the sales figures from a wide array of retail stores. You don’t have to be a genius to question the motive behind all the push to show the economy is recovering.
In all my shopping, I found not one winter coat made in America. Twenty years ago I visited a clothing factory in southern Arkansas that produced a very popular line of sports wear. Even though the label is still available, it too is imported today.
My personal assessment of the real benefactor of our holiday spending is the developing countries with lower labor rates and a willingness to set up factories that are reminiscent of our nation’s manufacturing 90 years ago. Many of the Chinese factories are run very much like the company towns where ownership of everything from the food supply to housing to clothing is controlled by the owners.
This kind of operation with vast profits exporting all over the world is in a position to bid up raw materials for their manufacturing processes as they strive to satisfy the needs of an increasingly prosperous population.
Copper, an essential resource in housing, is pushing near record highs at a time when the United States’ housing industry is floundering.
Obviously, we are not the world’s biggest consumer of this commodity. By the time you read this, gasoline could exceed $3 per gallon in Pea Ridge.
This is not the world trying to destroy America’s economy, just the world economy at work. And, it certainly is not helping when a 1 cent increase in the international cost of gasoline negatively affects the American economy by billions of dollars. We are going to have to find a way to deal with less extravagance in our way of life and start putting people back to work in America.
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Editor’s note: Leo Lynch, a native of Benton County has deep roots in northwest Arkansas. He is a retired industrial engineer and former Justice of the Peace.
He can be contacted at [email protected].
Opinion, Pages 4 on 01/05/2011