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Thursday, November 26, 2009
Al's Book: Chapter 2 - Built to Break
BIG Question: Does America’s obsession with over-consuming poorly constructed, low-priced goods produced abroad, place our country at a significant competitive disadvantage for the years ahead? How will our wasteful, throw-away society impact future generations?
My ninety seven year old friend and sage Frank Dean always tells me that something changed after the “second war”. More than likely Frank has noticed the difference between a community based, self-sufficient, quality oriented and accountable society to one in which greed, entitlement, ego, and power have eroded the very fabric of what made our society the benchmark for many cultures around the world.
I now continue with my saga of how pervasive and persistent short-term thinking in western culture has placed our world in a very precarious position. I received some nice feedback for my first chapter, and I hope this one is enjoyable for readers as well. I did learn after talking with several people that my thoughts did get circulated and forwarded - that is the power of the electronic world...thanks. Unfortunately nobody is forwarding from within the Mailchimp e-mail program that I am using to circulate the book. If you like what you are reading and would like to share this line of thinking (and calls to action) with others, please do so from within the original e-mail and then others will be able to join my mailing list. It only takes a minute and this is how change can happen in a big way in the electronic age (our President was elected due to his campaign efforts online) Here we go with chapter 2.....
That Feeling
We are constantly bombarded with the images…stuff. Things we don’t really need. We have all experienced the sensation - items we feel good buying, but then produce an empty, hollow sensation soon after we get them home. We wonder why we purchased them and often feel guilty. Consumerism is rampant. It infiltrates virtually every aspect of our lives.
Even after the 9/11 disasters, we were told to get back in the saddle and “go shopping”, as if this was patriotic. The waste is incredible. The average American “consumer” produces over 4.5 pounds of trash daily and directly or indirectly uses an average of 1,383 gallons of water per day (USGS 0ct, 2009). But believe it or not the numbers for total water use are actually 30% lower than they were in the 1950's. Here in the States we are told that the more we buy, the stronger our economy will be – perhaps, but certainly only in the short term – our current rate of consumption is not sustainable for long.
The “liquid sunshine” (oil) that took millions of years to produce and is now directly or indirectly utilized to produce virtually every good or service we consume, is being burned up in the blink of an eye in geological time. Most experts predict we only have 35 years of supply remaining, and we may have already passed peak levels of global production. Getting our “fix” by routinely “treating ourselves, because we deserve it” as many ad campaigns infer, will most likely be looked back upon by future generations as selfish, short-sighted, and foolish behavior.
What are we really buying?
How many times have you purchased something only to find that it breaks or falls apart soon thereafter? It was inexpensive, it served a purpose for a short period of time, and you’ll just buy another replacement, so what’s the big deal you rationalize. But what is the true cost associated with consuming large amounts of mass-produced products fabricated on the other side of the world that don’t last? What becomes of them? Over time how much do we really spend? Is “manufactured obsolescence” for real, or just a cute euphemism?
My good friend Kevin O’Hanlon recently made a powerful observation: “We are a nation who traded in our motivation, personal progression, ethics and decency for comforts. That was done methodically by greedy men who wanted to control the masses and capitalize and they found a lot of willing victims”. Purchasing mass produced, poorly crafted products that offer only
short term “comfort” utility are a prime example of his train of thought.
As someone who has renovated a couple of older homes, I can share from experience just how many products are now so poorly made. From items as simple as screws that strip or snap, to defective power tools, to broken plastic rakes and pump sprayers for my garden, products routinely break in a very short period of time. I want to purchase hand-crafted, high quality products that will last, but it is getting harder and harder to find them anywhere. Don’t get me wrong, plastics have many
great applications (I should know, the one business I recently sold offers a virtually invisible plastic mesh grid that keeps deer out of gardens and properties). But should we really be making tools and equipment from plastic? And since I recently learned at a presentation by Jean Michelle Cousteau that there is now a swirling vortex of plastic twice the size of Texas in the Pacific ocean, I’m not feeling so great about all the deer fence I sold and the cat fence I continue to sell… (at least I don't see any in this photo :)
Attempting to lead by example in Costa Rica…
Since purchasing our 150 acres of cattle land overlooking the Pacific over three years ago, my partners and I have struggled with how to develop our property in the most environmentally friendly way with the least amount of impact to the land, surrounding communities, and to the planet in general. Our journey has taken us down many paths and stimulated numerous ongoing discussions as they relate to material selection and building techniques. The process has been full of learning opportunities and we have had to continuously challenge ourselves and our Project Manager, Patrick Kelly to think outside the box on how we go about developing the community area of the property.
We took a long-term view from the start, and began our investment in the land by first planting close to 2,000 tropical fruit trees – some of them rare and exotic. We also planted some endangered hardwoods and are also allowing many of the areas that had been heavily grazed to rejuvenate naturally by selecting the best species that pioneer on the land, and removing the less desirable ones by machete to provide more room.
We recently had to compromise slightly on our no chemicals policy on the farm by allowing for fumigation of teak timbers prior to construction of our guest casitas. Not doing so could mean building collapse and failure over time from termite damage. When we weighed the options we felt we had no choice, as there were no all natural fumigants that we could locate (not entirely true, as I just found out that orange rind oil can be quite effective). With plenty of orange trees on the finca, we will need to explore this alternative. This is a perfect example of how it is so easy to fall into the same old conventional and short sighted line of thinking that has permeated our culture for at least two generations now. It is almost like we have to re-train our brains for how to think critically and creatively – things that I’m afraid are not being taught in our “one size fits all” schools.
The “built to break” scenario has also reared its ugly head on the farm in the form of some poorly mass produced hardware and a handful of shoddy miscellaneous construction supplies. For the most part however, we have been able to avoid poorly constructed products by primarily using an interesting combination of locally supplied or produced building materials.
Here’s just a small list of some of the key materials and their sources:
1. Thatch roofs for ranchos – From wild oil palms on farm and from adjacent farms – a renewable resource.
2. Teak timbers, frame wood, and floors – farm raised on adjacent fincas.
3. Earthen plaster walls – clay and straw clippings taken directly from each building site are mixed with locally supplied lime and sand.
4. Earth bag retaining walls – re-claimed chicken feed bags filled with our own soil.
5. Steps for trails – fallen hardwoods on the finca
6. Tile roof for guest casitas – re-claimed antique barrel tile from Nicaragua
7. Concrete form wood and outdoor shower decking – fallen timbers on finca.
8. Stone for entry gates – from our own riverbed.
9. Future bamboo tree houses, privacy screens, and bridges – from “guadua” bamboo groves now planted and growing on site.
10. Support posts for ranchos – Madera negra trees blown down in storms on a neighboring farm and pulled out by oxen.
11. Doors, cabinets, windows, furniture – local carpenter/woodworker using local, farm certified woods.
For additional information about our unique project, visit: www.FincaLasBrisas.org
To further “walk the talk” on “sustainable” (this word is way over used lately and
its meaning has become blurred) construction we are also engineering our structures to withstand 90 mph winds and 7.5 earthquakes. The thinking being not only the issue of safety, but for how valuable resources should be used properly so they perform their service for as long as possible. We have visited a famous church constructed with earthen walls in the nearby town of Nicoya. It has been standing for close to 500 years - its walls are two and a half feet thick and made of earthen plaster.
A Disappointed Child
A couple of years back during a visit with our friends and finca partners, Ray and Darlene Coker in Florida, I was yet again exposed to our ongoing short sighted “built to break” mentality. One evening our friends’ son Ben was excited to go outside and hit some balls off the new ball tee his dad just purchased for him (to the tune of $50). It took only three swings of the bat for this seven year old to crack one of the plastic components that supported the tee. The moment was lost, and now my friend Ray has to take time from his schedule to return the broken item. He may or may not find time to do this. If he does take it back, he will certainly receive a new one, no questions asked, but at what cost to Ray (and his time and fuel to get to the store)? What about the global environmental impact when you consider how many items break in increasingly shorter periods of time, and then just end up in our burgeoning landfills, floating around at sea, or burned and emitted into the air we breath.
An example of poorly constructed items impacting lives on a grander scale was also
revealed during a bike ride on the same trip to Florida. As Ray and I pedaled down a back street through a working class neighborhood, I began to detect the smell of something that had recently burned. As we got closer to a small Jamaican Café, Ray explained how a few days earlier this very popular upstart restaurant had been gutted by fire due to a faulty beverage warming device. A “built to break” scenario? A strong possibility, and now this restaurant has to go through all the frustrations of completely renovating their establishment while risking that the interruption in service may cost them their client base and eventually their business.
Could it be that all this anguish and cost to the insurance company (assuming the owners was able to afford the proper insurance to begin with) could have been avoided if the manufacturer of the warming device had taken a long-term view to the impact that the quality of their products would have upon the customer? It is not a stretch to speculate that billions of dollars in lost productivity, safety, efficiency, and foregone serviceable life of products and structures are racked up every year due to products that are “built to break” and not built to last.
Author Giles Slade in his book “Made to Break” documents that Americans threw out 315 million computers in 2004, and 100 million cell phones in 2005. The problems associated with this are numerous – consumed energy in the production, transport and marketing of the goods. Environmental toxins produced during the mining of the raw materials, manufacturing of the goods, and then of course how to dispose of the technical materials such as heavy metals and other toxic compounds (a lot of these electronics are shipped to Asia where children (small fingers) disassemble them. Why can’t computers be made so they can easily (and cost-effectively) be updated with the new technology inside instead of trashing the entire device? If I was Michael Dell I would re-invent my company now, becoming the leader in “refurbishable” computer hardware products – talk about a paradigm shift.
Slade goes on to say that this is all simple economics – the shorter something lasts or the more quickly it goes out of style (think fashion changes in clothing), the sooner a replacement will be purchased, i.e. – more revenue. This line of thinking first became evident on a large scale in 1923 when GM began its “new car of the year” marketing strategy. Each year a new design would come out with new design changes and “must have” bells and whistles.
The rate at which obsolescence now occurs is disturbing – so many products simply wear out or fall apart in increasingly shorter periods of time. A prime example of late would be acid washed/distressed jeans. The fabric on many of these pants is already so threadbare on the shelf at the store that the useful life of the clothing has probably been cut to 25% of what it was when the jeans came out looking and feeling more like canvas (and yes I had some pairs like that back in grade school)
I sold my soul…
Or at least it sure feels like it. Over the past year, with the economy in upheaval and consumer spending way off, my cat fencing compan, Purrfect Fence (keeps cats happy and safe outdoors) fell upon very hard times. We had already been experiencing profitability and cash flow issues due to significant raw material price increases over the past three years, but when consumer spending shut off and sales dropped significantly, I was faced with a crisis like nothing I had ever encountered before. We had to dramatically change how we did business, or close the company and/or file chapter 11.
For several years we had continued to source and purchase locally produced steel components from the southeastern Pennsylvania area. We knew all along we could be buying from China at much lower prices, but we felt it important to support local suppliers and provide the highest quality products to our customers. What happened over the past four years is what I am sure many other business owners and managers that are now sourcing onshore have faced over the past decade – dwindling customers due to higher costs. Americans want inexpensive products – quality and life expectancy are now less important. More “stuff” is better.
Between 2006 and 2009 prices on raw materials increased an average of 50% for our company and correspondingly our kit price to the customer went from around $500 to almost $1,000. As we raised our prices, we lost more and more customers – only a select group of people seem to be concerned about quality and locally produced goods. Soooo… I had a choice: close the business, lose my investment, lay my people off, OR source from China at prices as much as four to five times cheaper on certain parts and try to revitalize the company. I chose the latter mainly because in this economy I couldn’t sleep well with the idea of letting my two full time workers go who had both recently purchased their first homes. Am I happy with my decision? Not really, but unless I can lower my costs and increase sales, my company will soon be out of business.
Our Obsession with “New”
In the Southeastern Pennsylvania town where my deer fence company office was previously located there is a mix of newer and older homes. During the past ten years, a “renaissance” of sorts has played out in the town due to the proximity of a new highway that was built a few years ago. For this reason, a once sleepy blue-collar backwater has become a burgeoning corporate office center with a myriad of restaurants and shops. For over a year on my way to work each day I would pass an old stone home along the main street that was in much disrepair, but whose one hundred year old structure appeared sound as well as visually appealing.
After more than a year on the market, (unheard of at the time during the not so distant real estate boom) the property finally sold. Since I had flirted with the idea of purchasing the property myself for conversion into an office for one of my businesses, I couldn’t wait to see how the new owner would go about bringing the glorious old stone back to life. I soon found out, when a few days later there was nothing left but a leveled lot. Many people probably drove by and saw “progress”, but what took shape in the coming days were two particle board shells for what are destined to become poorly constructed and aesthetically unappealing “new” homes.
Assuming the foundation was structurally sound, why did this old building get torn down, and what was the long-term “cost”? Certainly it may not have been cheaper in the short term to restore it, but the social and environmental “costs” over the long-term are numerous: 1) Loss of a well made, hand-laid stone home with historical significance. 2) Several tons of hand-collected farm fieldstone needlessly added to a landfill. (I assume this to be the case, but it is not confirmed) 3) The trees required for the lumber needed to frame the new houses. 4) Loss of an aesthetically pleasing structure that once restored would have long outlasted the newly built homes.
On a recent business trip to a certain east coast gaming city, I encountered yet another short-sighted construction-related scenario. It was disturbing me to see that the fifteen- year old casino hotel that I was a prisoner in for three days during a convention was already falling apart. The backside of the building through which I loaded my trade show booth had been so poorly constructed, that it appeared to already be in need of significant renovations. Cutting corners on construction materials and craftsmanship in the short term will most likely result in the entire façade being torn off, taken to a landfill, and new raw materials being quickly installed to look good for a few more years. Waste and poor quality have now become accepted as the norm. We live in the moment, for the most part oblivious to the scope of the waste going on around us.
Contrast all this to how we are constructing dwellings in Costa Rica and one will
find a very different scenario. For starters, it has been our philosophy all along to share resources and minimize the impact upon the land. To achieve this we have designed and funded from lot sales a community center facility that will act as central area for socializing, dining, and cooling off in the shared infinity pool (minus the chlorine).
When “Built to Last” mattered
Before the advent of the modern day vanity plate, Mercedes Benz customers proudly displayed “vanity” mileage plates on their front grills informing others how many miles their car had traveled. The company and owners were both proud of the length of service that the vehicle had achieved. What changed? Why have we become obsessed with acquiring more “stuff” as opposed to owning fewer, well made items. It is actually a simple formula: Marketers position their products as “must have” items that consumers “need”. Ads on TV prey upon egos and insecurities of consumers and suggest that you and your family will be happier if you just acquire more “stuff”.
My mom recently followed this line of thinking that new was better. After having visited us in Maine this past summer, she decided that our old fashioned applesauce mill (came with the house when I bought it) wasn’t good enough for some reason. Thanks for the thought mom, but upon closer examination, I beg to differ. This old hand crank mill (and the old fashioned egg beater with maple handles stamped “made in Vermont” on it) have both been around for probably seventy years cranking out thousands of 
gallons of applesauce and countless scrambled egg and pancake breakfasts. The photo here shows Coleman proudly turning the crank soon after helping me make a big batch of applesauce from our tree out back. Owen is shown playing a game with the flimsy plastic and paper thin steel model made in China and marketed under the name of a famous celebrity of sorts. I’ll take the old school models any day – they were built to last for generations. (plus I couldn't figure out how to put the new one together)
The “Invisible Hand”
In economist Adam Smith’s free market economy, “outsourcing” of some form is all but inevitable – the business typically goes to the low cost producer. With current wages in India and China tracking at just 15-30% of U.S. wages, it is obvious where many products are now being produced. The disturbing point here is that if the U.S. continues to abandon manufacturing and capital re-investment in plant, equipment and R & D, then when the time does come that wages begin to elevate significantly in the East, the U.S. will not be in a position to be competitive. If virtually all the manufacturing is offshore, it is also logical to expect that the technical and engineering jobs will follow – at a lower cost of course.
So what is the answer? High tariffs and protectionism put in place by our government? Probably not. History has shown that these programs do not work over the long haul – free markets usually work much better. But how can American companies compete with producers that operate in areas where environmental laws are all but non-existent. Seems to me we need a level playing field here. Perhaps tariffs are in line for oversea goods that are produced in an environmentally unfriendly or exploitative way. But the question still remains - how will America continue to fuel its own economy moving forward? Where will the high paying jobs come from?
In my opinion we need to look no further than our own energy and food independence (both chapters to come). Having recently watched “Food Inc.” and several other documentaries that portray our government subsidized industrial style agriculture machine, I have become increasingly skeptical of the food security of such a system. In the early 1900’s more than 50% of our work force was on farm tending diverse, smaller local farms, producing quality, organic produce for local consumers. Now less than 1% of our population works in farming, and our grain-based system (utilized to produce cheap meat and processed foods), much of it genetically modified, is based almost entirely on high inputs of petroleum and chemicals to induce unsustainable high yields of grains such as corn and soybeans (think Monsanto).
Close to home and heart…
I needed this segway to bring everyone up to speed on the latest with the ongoing corporate greed that shrouds upstate Pennsylvania and the New York City and Philadelphia watersheds. I am going to diverge a bit from “built to break” for a moment, but in reality the subject I am about to cover isn’t far off the mark, as it is rife with short sighted thinking with respect to our natural resources and pure drinking water for future generations. Also the techniques and shortcuts used to cut costs in extracting “natural” gas can be directly related to built to break – inadequate amounts of concrete for wellheads, shoddy coupling of pipes, etc.
So in a nutshell, I have officially joined the fight to protect water resources for the City of Philadelphia (the Delaware River Basin). Interestingly our property upstate where my moss supply company is located borders the Dyberry River – a feeder to the Delaware. As it stands, thousands of “natural” gas (methane) well permits have been granted by the DEP (Department of ENVIRONMENTAL Protection) all over the state of Pennsylvania. The process utilized to recover the gas trapped over a mile down in the Marcellus Shale is called hydraulic fracturing or “fracking”.
Fracking requires drilling over a mile down and then out hundreds or thousands of feet horizontally in several directions (even under other people’s land). 1 – 2 million gallons of surface water (lots of water delivery trucks burning more fuel), sand and a cocktail of dangerous VOC’s, biocides, and other nasty chemicals are then pumped under very high pressure through the underground (drinking) water column, and ultimately a mile down to split the shale and allow the gas to release and be extracted.
The process is fraught with many potential pitfalls, including surface water contamination (only a fraction of these “frac fluids” - often supplied by Haliburton) are recovered, and those that are sit in plastic lined storage lagoons or are shipped to already over-capacity water treatment plants along our rivers, “treated”, and then discharged. The discharged waters are very high in salts, a variety of dissolved solids, and can contain radiation that is pulled up along with many other toxins from deep within the ground. The benzenes and toluenes and many other carcinogens cannot be removed by the current water treatment processes – these and natural gas that escapes through fissures in the shale end up in our drinking water. http://www.youtube.com/watch?v=U01EK76Sy4A
The fracking process has only been used on a large scale for about 5-8 years in shale plays in Texas, Wyoming, and Colorado. Its long term effects upon surface and groundwater are severely under-studied. A disturbing film shot in Colorado called “Split Estate” was recently released, and shows just how devastating this type of gas extraction can be on the environment and to people’s health. Now the process is moving east with the heavy endorsements of Penn State University, Governor Ed Rendell, and of course the more than willing major media outlets (more about this bunch in a later chapter) who have covered the topic up and down, touting all the huge economic benefits for the state. All for only a few years (perhaps only two over a period of twenty years according to a PSU geologist) supply of gas for the country – if that, as some experts believe the entire shale return rate is trumped up just to bring in heavy investment dollars – sound familiar?
Interestingly, the Rendell administration who said they needed the tax revenue from
the well drilling to make a budget shortfall of 60 million has since backed off and is not even going to charge a tax on drillers like other states do…instead they are leasing an additional 32,000 acres of Pennsylvanian’s pristine state forests to the gas companies at depressed prices due to currently low methane “natural” gas prices. Interestingly, “natural” gas is not so natural, and when leaked or flared off, contributes 25x the global warming effect by volume compared to C02. Pennsylvania currently has over 660,000 acres of state lands leased for gas exploration.
The city of Pittsburgh has been on bottled water advisory due to salty tasting water now three times in the past year or so. This has never happened before until the fracking process and associated waste water discharge began upstream on the Monongahela. Over a thousand cases of water contamination have already occurred with the fracking process nationally in just a few years, and one of the first series of wells to be drilled in Susquehanna county has already contaminated private water wells in a nine square mile radius and killed numerous fish in a small stream (well water sample being poured at left). Lawsuits have already been filed. A retired high level oil and gas industry executive has recently even gone on record as saying how risky and dangerous the fracking technique can be. EPA studies out west confirm this as well...yet the charade continues about how safe this extraction methodology is.
In New York City, the mayor of Manhattan, Scott Stringer is coming out very strongly against this process with a “Kill the Drill” campaign in his borough – see YouTube clip here: http://www.youtube.com/watch?v=Au4p7clRk-Y&feature=player_embedded Many other large environmental organizations are joining the fight, including the Sierra Club, Trout Unlimited and the Delaware River Keeper Network (a terrific organization who really needs support to protect the Delaware River).
As I retreat from my soapbox, let me leave you with this one thought: Government
and the oil and gas industry are in my opinion way too co-mingled…a high level Pennsylvania DEP executive recently left his post to work for the gas companies, Penn State University sponsors a consortium for the gas industry (also endorsed by the governor’s office), and five years ago, the federal government signed a bill that repealed the clean water act, making gas and oil companies exempt from large portions of the very laws that were hard fought for years ago to protect the right to clean drinking water for all. My fear is that if drastic action is not taken soon and drilling utilizing this highly dangerous fracking process continues, then clean drinking water could be impacted for generations to come in several northeastern watersheds. (photo - Dunkard Creek in WV frac fluid contamination)
See the Grit TV piece here: http://lauraflanders.firedoglake.com/2009/10/05/the-f-word-will-gas-drilling-destroy-nycs-drinking-water/
Tell the Daily Show to cover this issue:
http://forum.thedailyshow.com/tds/board/message?board.id=story_suggestions&thread.id=18198
And…Most importantly, copy and paste the letter below, sign, and e-mail to the e-mail address below….before it’s too late. Spread the word, we don’t have to sit idly by while the profit margins for oil and gas corporations dictate the health of our families and our environment. The mainstream media refuses to share this information to date, so we need to do it ourselves.
I will be having a meeting in upstate PA at our home in Honesdale at 7 PM on December 17th. There will also be a meeting at Temple University at 7 PM on December 10th which I will also be attending - I hope you can join me. Please e-mail at alanbenner@gmail.com for exact details for the Temple University meeting location or directions to my house upstate. We all owe to ourselves to better understand what is about to happen to our enviroment in the PA, NY, NJ, DE, MD region.
DSGEIS Comments
Bureau of Oil & Gas Regulation, NYSDEC Division of Mineral Resources
625 Broadway, Third Floor
Albany, NY 12233-6500
dmnsgeis@gw.dec.state.ny.us
WITHDRAW THE DRAFT SGEIS ON SHALE GAS!
The Draft does not address the many impacts that shale gas development and hydraulic fracturing will have on our water supplies and watersheds. If allowed to move ahead, gas development will ruin our communities. DEC must:
1. Withdraw the Draft and issue a moratorium on all drilling permits until a new effectively protective assessment is adopted
2. Truly assess the environmental impacts of hydraulic fracturing and do not allow its use until safe, nontoxic technology is developed
3. Draft a new comprehensive SGEIS and propose regulations to govern natural gas development.
Please listen and take precautionary steps now, before our water supplies and resources and are degraded by pulling back the Draft!
Signature
________________________________________
Off my stump and back to “Built to Break”…
Conservatives Wave "Bye" to Manufacturing Jobs
The show covered below aired just three years before things imploded in this country due in part to outsourcing and of course the over leveraging of assets. Perhaps John Stossel has a different view now…
According to www.Newshounds.us, Fox News Channel has a message for all you blue collar workers out there worried about losing your jobs to overseas competition: Tough luck.
As a pre-cursor to our current woes, Neil Cavuto, on his "Cavuto on Business" show Saturday (November 12, 2005), interviewed John Stossel, the co-host of ABC-TV's "20/20" program and author of Give Me a Break, on the topic of manufacturing jobs going overseas.
“Sending jobs overseas creates new jobs”, Stossel said, “because when a company saves money by exporting jobs, it has more money to do new things.”
Cavuto asked Stossel, "People say manufacturing jobs are leaving. What do you say?"
"Bye!" said Stossel, waving at the camera. "There's nothing wonderful about manufacturing jobs. I think if you look at what we want for our kids that should answer the question. We don't want them working in a factory where the work is underpaid, I mean, is very hard, it may be uncomfortable. ... We want them taking jobs as engineers, as biologists. We think the services jobs are good for our kids. I think it's great if people in other countries want to manufacture things and we can just import it and pay for it with our service jobs."
Stossel brushed aside Cavuto's question about whether countries that do not make things lose their dominance. "Where's the evidence. We can trade for the goods we need," he said. Stossel added that we need not worry about bad relations arising with the nations we import from because we can just switch to someone else.
Cavuto did a lackluster job of interviewing Stossel. He never pressed him on any point, such as whether running a negative trade balance as the U.S. does is good for the nation in the long run. Nor did he force Stossel to really deal with the issue of relations with trading partners on which we are dependent for manufactured goods. I think that's because Cavuto basically agreed with Stossel and knew that Fox News Channel's position is the same. Manufacturing workers usually are represented by unions. Get rid of the manufacturing jobs and you get rid of the unions and that will make business happy.
Let’s take a closer look by examining what could happen if the current trend of global “outsourcing” continues at it’s torrid pace. First and foremost, Stossel may be wrong in his assessment in favor of having only the “desirable” jobs here and none of the “hard” labor related jobs. For example, is it rational to expect all the “good” jobs would stay here as all the manufacturing moves abroad? Why would they? If a global corporation can hire an on site engineer or computer programmer in India for 30% the cost of an American engineer who isn’t even located on the same side of the globe as the production facility, who are they going to hire? What jobs will be left for Americans? We can continue to consume products made abroad, but how are we going to pay for them for the long-term if we are no longer creating wealth through capital investment, or production of goods and re-investment of the profits.
A ten year low in the trade deficit of just 26 billion back in May of this year has since begun to increase again, with numbers back to 36 billion by October. Savings rates were as low as .8% annually as of April ’08 but rebounded to close to 6% by May of ’09. They have since tapered off to 3.3%. Historically savings rates in the U.S. between the 60’s and 80’s were in the 8% – 10% range – seems we have lost our appetite to plan for the future, and are focused on living in the moment. Meanwhile in China, savings rates have recently approached 25%, and this country will no doubt be in a much stronger financial position sooner than later compared to the U.S.
We are told we will entertain the world, we will develop new technology - fine, but won’t developing countries come up with their own forms of “Hollywood”? (India already has) What happens when the Chinese flood the market with new technology to align with all their gleaming new manufacturing plants funded with U.S. debt?
Instead of drilling in our back yards for the last vestiges of fossil fuels just to squeeze a few more years of global warming out of these carbon resources, why isn’t our government making the difficult sea change policy shifts on energy investment that are needed now to make change happen for renewable energy. My neighbors in upstate PA heat their entire home for around $150 a year using a geo-thermal system, and in the process emit very little C02. The problem is this system requires a 20k investment. Why can’t our government come up with very aggressive programs in the energy sector so that homeowners can afford to switch to sustainable energy resources like geo-thermal, solar, tidal, and wind now. The amount of healthy “green collar” jobs this would produce on shore would be simply amazing. From my perspective we need look no further than the oil and gas lobbyists that have had a strangle hold on Washington for decades. Walk the talk President Obama, and break that beast now.
But who can blame them?
Okay so the big corporations have sold us down the river for cheap foreign labor, right? True to a point, but should we all be angry and blame corporate America? Not really. For the most part we have no one to blame but ourselves. We control what we buy. If we really wanted to bring manufacturing back on shore, we would insist that goods be produced in the U.S., and, or be of higher quality, or we would not purchase them. Corporations are simply in business to make the most profits for their shareholders – ironically the people they laid off are often the same people who are buying the products they produce.
What the big box stores really offer is convenience - an opportunity to purchase virtually everything the average American (thinks) they need all at one location and supposedly at a low price. What ends up happening more often than not is that shoppers are so happy with the “low prices” for the poorly constructed goods, we often end up purchasing many additional “chachkas” that we don’t even need.
If we are going to complain about lost jobs, then we should never again purchase all the sneakers, clothing, electronics, and other consumable products now manufactured abroad.
But the goods are cheaper so it allows more people to raise their standard of living, right? Not necessarily. If products break or wear out in increasingly shorter periods of time and have to be replaced, then aren’t we just held hostage by these low cost “consumable” goods and producers? In a sense our dollars can become our voice. What we buy, where, and how often, will dictate what producers bring to market and how they design and manufacture them.
The Real Cost of Low Price
Is it reasonable to expect that a DVD player selling for $39 will provide years of quality service? In reality, in order to be obtaining the best value for ourselves, and for future generations, perhaps we should be asking ourselves the following questions prior to purchasing a product:
1. The utility of the product. How well will it perform the job we are asking it to do and for how long?
2. The true cost to society and the planet to produce the product. This would include the distance the goods traveled to reach their final destination. For example, many garments produced abroad are fabricated from cotton grown in the U.S., subsidized by our tax dollars, and then shipped overseas to be constructed by individuals earning pennies per hour, before being sent back to the U.S. The costs to the environment are staggering.
3. Higher paying manufacturing jobs lost overseas.
4. More unwanted, broken “stuff” that will need to be disposed.
5. Do we really need the item we are about to purchase or could we save and wait to purchase a higher quality product that was produced at a living wage.
Who came up with the Dollar Store anyway? We might as well have the truck running out back ready to head to the landfill. (sorry - a pet peeve)
A Lack of Care & Attention to Detail
There are currently many examples of how the “built to break” mindset has trickled down to a wide range of daily business activities and is expressed as a general lack of care and/or attention to detail. Here are just a few:
Products that are shipped with missing parts
Items that are broken upon arrival due to rough handling by shipping companies – my mail order companies experience this on a regular basis.
Frequent typos of all sorts, even in national newspapers, magazines, and books.
Poor craftsmanship on virtually any type of construction project
The “Disposable Razor” Model
A recent experience in my office has further reinforced my views regarding how large corporations now design “manufactured obsolescence” into as many consumer products as possible. This particular scenario involved a relatively new ink jet printer. The toner cartridges ran out of ink, and because I didn’t know I had to change them right away, the ink solidified down inside the ink ports, rendering the equipment useless. The manufacturer will remain nameless, as I believe the industry in general has designed all these units with one thing in mind – making as much money as quickly as possible from consumers who must constantly re-purchase pricey replacement toner cartridges as well as new replacement printers. I will be sending it back to the manufacturer with a nice note informing them that I have taken my business elsewhere, and asking them to please properly dispose of this now useless equipment.
My office equipment experience has repeated itself a handful of times – the printer (or computer monitor) works for a year or two and then breaks down. Since these companies don’t have a repair department, and I can’t reach a live person at an onshore customer service department, I end up calling a local shop that specializes in printer repairs. These all too friendly “repair shops” (really distributors for printers) inform me time after time “it will be more expensive to have it repaired than to buy a new one”. How is it that we have been trained and conditioned to accept this as logical? Perhaps we just tell ourselves, it doesn’t cost that much, and it would be nice to have a new one anyhow.
Having been down this road before, I made the decision that this time I would spend more money upfront and order a quality laser printer. Not only would I get a much lower price per page printed, I should also have a piece of equipment that is designed to last much longer. Now I just need to find out where I can responsibly send all our non-functioning computers, monitors, and printers that are piling up in the back of my office…I think I will start sending them back to the manufacturers…If enough people did this, perhaps they would get the message. But then again they would most likely refuse delivery…
Personal “Built to Break” Experiences
In the past two years, the following items that one would expect to last for at least several years broke for no apparent reason (the estimated lifespan of each item is noted next to each item)
Sony Cordless Phone – 3 years
Toshiba DVD Player – 8 months
Dell Printer – Non-functioning upon arrival
Epson Printer – 1.5 years
Wagner Power Painter – 2 years
2 - Pump Garden Sprayers – 1 year, 2 weeks
Black and Decker Drill – unsure, as it was given to me
2 Leaf Rakes – 1 year, one temporarily re-constructed
HP inkjet printer
Motorola cell phone
5 sets of cell phone “ear buds”
Clock for the boy’s room
Electric trimmer/razor - See the comparison photo here of the “overseas model” that lasted a few months, and my new Oster heavy duty model – it weighs about 2x as much, cost about 2x as much but will probably last about 10x longer. It also works much better. Not hard to figure out that value proposition.
5 various digital elf cameras – the slick metal housing design has proven ideal for allowing these cameras to slip from my hands and onto the floor.
Try making your own list – it is an interesting exercise. I know I missed a lot, as it has become a ubiquitous part of our culture.
Consumption Trends: Flashback – written in 2006
This information was pulled together three years ago, but it seems to be quite revealing now three later after what has transpired in the world economy since then...
So we don’t make much of anything anymore, and we don’t provide the service for the products. So what exactly do we do?…We consume…a lot. Recent trade figures (and who knows how accurate they are to begin with) indicate that America’s trade deficit burgeoned from 125 billion, or 1.6% of GDP in 1996, to 857 billion or 6.5% of GDP in 2006.
A moderate level of profits is not acceptable, as most large corporations are now forced by their boards and stockholders to continually beat last quarters numbers or fall out of favor. The days of long term strategic planning are a thing of the past at most companies. The temptations of executive salaries and incentives that now total 400 times the average worker’s wage have driven numerous CEO’s to compromise their ethics and moral compass in the name of quarterly profits.
A recent headline entitled “No stopping the shopping for U.S. consumers” online at The Australian, a global news portal, goes on to list a variety of eye opening factoids. According to the publication, compared with five years ago, Americans are spending 25 percent more at Las Vegas casinos, 78% more on breast implants, and 40% more on sporting events.
Roughly two thirds of all economic activity in the U.S. is consumer spending. Since any drop in consumption would have a significant short-term economic impact, the topic of reduced consumption is not popular with anyone – particularly politicians. Looking back, our living in the moment lifestyles clearly set us up for a fall.
Counting their money…after eliminating our jobs
The short-sighted bean counters and maverick CEO’s in corporate America, have been stripping costs from corporations for years in order to maximize quarterly profits. To a point this is required from time to time to ensure the company is operating cost-effectively. As a business owner I recognize that profits themselves are a good thing, and necessary, but when the job stability for the employees, and the long-term well being of the organization as a whole is placed in jeopardy due to short-sighted decision making, the results can have a devastating effect.
A textbook example is Scott Paper. During the 1990’s the company hired a new CEO, “Chainsaw” Al Dunlop. Low margins in the paper industry had increased foreign competition had forced Scott to take a closer look at its’ corporate structure and overhead costs. Within two years Chainsaw Al had completely gutted the company of employees and expenses, showed a very short term jump in profits and then in just a few short years one of the most easily recognizable U.S. brands was out of business.
Customer Dis-Service…
Life in the day-to-day world is now rife with examples of abysmal customer service. From endless voicemail loops, to websites without phone numbers, Americans are now expected to spend lengthy periods of their own time attempting to resolve customer service issues. The days of picking up a phone and dialing a dedicated customer service agent are quickly becoming a thing of the past.
According to DestinationCRM.com, 28% of all companies outsourced their customer service function in 2006, with 64 % of these outsourced abroad.
As a small business owner, now when I receive poor service and feel the big company is putting their interests before mine, I stop doing business with them and I make sure I tell plenty of other people about the experience. In contrast, when I do receive good service, I almost always complement and thank the individual who provided it. This is important – people need to know when they do a good job.
A perfect example of short-term decision-making at the corporate level is the outsourcing of their customer service functions to overseas service agents who are not in sync with American culture and, or struggle with the English language.
Customers may tolerate poor service for a while, particularly when the product or service they are buying is not readily available. But in theory, poor service opens the door for competitors. A disgruntled customer will show little to no loyalty to a company offering poor service, no matter how great their products or prices are.
My wife, Deena had recently purchased a new computer system, and when the printer started having paper feed problems, her subsequent call to customer service was automatically forwarded to India. Not being one with a lot of patience in these situations, she quickly became flustered by the difficulty in communicating the problem and hung up wondering if the part would even be shipped. Two weeks later with still no results, I volunteered for the follow up call and committed myself to being nothing but pleasant and patient with my Indian friend on the other line. This forty-five minute conversation still produced no results. Finally, on a third try, my wife was able to get another printer to replace the defective unit. The computer company clearly saved a lot of money on this entire process :) ...
Having focused so much attention on the lackluster service offered by many larger corporations, it is only fair to mention that there are many companies of all sizes providing wonderful customer service – for which I am always sure to thank them.
On the flip side is the “miserable customer”. These individuals are set off by the smallest thing and can become so self-absorbed and unreasonable that most companies do it just offer a complete refund and move on. Unfortunately these individuals can make the lives of many customer service agents very unpleasant.
Young and ready for hard work…“not”
Seen any high school or college kids out getting some fresh air and earning some extra money doing landscaping, farming, or contracting work lately? - probably not. Many young people today are not at all interested in any form of physical work, or proving themselves before making the “big money”, or performing any tasks they feel are “below them”. For many contracting companies to stay in business they must increasingly turn to foreign workers to perform reliable labor-related work. If foreign workers were further restricted from entering our country, several industries, including many in the agricultural and construction sectors could collapse. For most privelaged white kids it's more video games and ATV's. (at least for me as a youngster, pong wasn't quite stimulating enough to keep me locked in on a video game 24-7)
Many younger U.S. workers also appear to have developed an attitude of entitlement and an unwillingness to be flexible when it comes to their job descriptions. Many citizens believe that the government and or their employer should take care of them completely. Much of this was born long ago out of temporary entitlement programs that were set forth in the “New Deal” by President Roosevelt. At the time, these were designed for temporary use to help lift the country out of depression, but many still continue today. Some of these programs have not evolved with the times and actually reward individuals for long-term behavior that is counter-productive. Instead of being utilized as they were originally intended, as a “bridge” to help those truly in need get their lives back in order, they are now often taken for granted as a source of income. A better idea might be to invest more money into long-term educational, worker training, and community re-building programs.
Leading by Example
The even bigger long-term concern relates to what will happen when China’s 1.3 billion people all begin to demand a lifestyle comparable to that found in the West. What about India? There are also many other developing nations whose standard of living will rise significantly in the coming years, and without adequate energy, agricultural products, and consumable goods being produced in a sustainable way, the ability of the planet to support this type of demand for the long-term will be all but impossible.
If we as Americans can preserve our lifestyle while reducing consumption, it will be a win-win for the world. There will need to be some sacrifices made for conservation of resources in the short term, and in a capitalistic culture, this can only occur voluntarily with or without the help of government tax incentives. With raw materials becoming more and more expensive (think oil, steel, plastics, grain, etc) it becomes more and more likely that the simple economic model of supply and demand will dictate we produce goods and services that have a longer useful life and are efficient users of energy. The purchasing decisions we make now as consumers will help shape world consumption patterns and have a ripple effect across the globe.
What we can do…
1. Invest in companies that take a long-term view of themselves and how they interact with the world around them (i.e. invest in companies that invest in the future) This is a basic supply and demand function – the more that is invested in a company, the more capital they have to invest for growth, and the more valuable their stock becomes.
There are now many “socially aware” mutual funds that will only invest your money in corporations that pay living wages, minimize environmental impact, and conduct business in a sustainable manner. As these funds become more popular, the companies that they are investing in have more capital with which to grow, become more competitive, and produce better and better returns for their investors.
Stop …analyze what they are doing – are they offering products and services that better society over the long haul? Are they socially and environmentally conscious?…The more people that invest in companies that are leading by example, the higher the value of the stocks will become.
Sell: I recently sold off some mutual funds that could potentially have been directly or indirectly connected to oil and gas production. If enough people sold off their shares in companies that they do not personally feel good about, or are not being good long-term stewards, this could cumulatively have a significant impact upon how companies do business or if they can even stay in business. We do have much more control than we realize.
2. Purchase fewer, but higher quality items that are made to last. Buy them from companies that pay a living wage, and support local businesses whenever possible. Purchasing locally produced goods costs the planet a lot less resources by significantly reducing transportation costs and the energy and pollution associated with moving the goods. Purchasing locally also fosters a sense of community and supports smaller, independent companies – the same entrepreneurial businesses that made our country strong, and provided the middle class with secure, well-paying jobs in the first place.
3. When things break, return them to the manufacturer with a note explaining how their product was defective and that you plan on passing the word regarding how their products are poorly constructed. By doing this as opposed to taking them back to the retailer, perhaps manufacturers will receive a clearer message with respect to their current “built to break” strategic model, and re-think their short-sighted views of designing and constructing products that require replacement in a short period of time. (Update: take this line of thinking with a grain of salt, as a malfunctioning Toshiba DVD player I sent back with a “note” never received a response.)
As this work is being composed, America has a unique opportunity to move itself and the world on a different path. We still have clout and power, and can dictate how things get done. This may not last for long. According to Bill Bonner and Addison Wigggen in their landmark book, “Empire of Debt”, Americans are revered in many parts of the developing world as the leaders of the world. We need to start leading by example in all that we do.
Sea Change: Better utilize existing resources by renovating existing city homes by the block and entire small rural towns in economically depressed areas, and provide significant tax incentives for businesses AND individuals to return to these areas.
If city, state, and federal governments supported this activity on a more aggressive scale, we could conserve resources by converting entire communities with urban blight into desirable areas in which to live. This would simultaneously protect environmentally sustainable and productive farmland that is all too often being turned into sprawling developments and strip centers. This “homogenization” of America is occurring from coast to coast in many suburban areas. The loss of productive farmland in regions with adequate rainfall in close proximity to large metropolitan areas will most likely be critical in the future for the production of sustainable food supplies for large cities. Right now many of these farms with the richest topsoil in the most sustainable growing areas are being divided up into housing developments with oversized homes.
What I am reading/watching:
1491 – New Revelations of the Americas before Columbus - Charles Mann
Going Local - Creating Self-Reliant Communities in a Global Age – Michael Shuman
Food Inc. – A pretty amazing documentary about our food supply
Too many depressing YouTube clips about fracking for “Natural” gas (smile)
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