|
Have you ever noticed that people make a big deal about how much of the economy is based on consumer spending?
That entire discussion confuses me.
Because the ENTIRE economy is based on consumer spending.
Most often people differentiate between durable goods (aka stuff that manufactures consumer goods) and "consumer goods". But in the end does it matter if our economy makes the primary part of it's money from selling goods to the consumer or selling goods to the guy that is going to sell it to the consumer?
The only thing I can figure is that people think it would be better if we manufactured more goods that were sold around the world.
But let's think about it for a second...Wal-Mart-the most successful company in the world by almost any measure is also one the most diversified. It is true that at first blush we would not call "diversified" because they make all their money in essentially one way, they sell stuff. LOTS of STUFF.
But if a company sells everything from motor oil to GI JOE to television sets to organic produce they are EXTREMELY DIVERSIFIED.
However, a lot of those factories in China that have been decried because they pollute a lot and they "stole" "American jobs", are not very diversified. They make one thing. Sometimes two. At most they actually just produce a certain set of things like "molded plastic products". The reason that these factories are not more diversified is that diversification of factories is expensive. REALLY expensive. So the downstream of that is there are thousands upon thousands of chinese factories shutting their doors because the American lack of consumer confidence has meant that American consumers buy less of the stuff they make.
In the end who cares is we make stuff? Or if we sell stuff? The point is an the World Economy each group is impacted by the same things. If people buy less stuff-companies will sell less stuff and manufacture less stuff. Period.
Apologies...I also meant to add that while many scream about how "bad" US manufacturing is...The United States of America currently manufactures more than it ever has.
|
