Walmart’s Irrational “buy American” Campaign

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Walmart‘s latest push to Buy American and Hire Veterans is irrational.  In a world of interconnectedness in which products from pencils to airplanes are produced with parts and components made all over the world the “buy American” argument falls into pieces.

In today’s world mass consumption economy there is not a single product that can be claimed to be “national” or “unique” without ignoring the intertwined network of global production.  If your argument is “yes” there is such a thing as “100% national” or “100% American” then I will still be able of arguing against your position.  Why?  Because the economy of the United States of America is not only part but dependent on the global economy.

By 2012, only about 32 cents for every dollar of U.S. debt, or $4.6 trillion, was owned by the federal government in trust funds, for Social Security and other programs such as retirement accounts, according to the U.S. Department of Treasury.

The largest portion of U.S. debt, 68 cents for every dollar or about $10 trillion, is owned by individual investors, corporations, state and local governments and, yes, even foreign governments such as China that hold Treasury bills, notes and bonds.

Foreign governments hold about 46 percent of all U.S. debt held by the public, more than $4.5 trillion. The largest foreign holder of U.S. debt is China, which owns more about $1.2 trillion in bills, notes and bonds, according to the Treasury.

In total, China owns about 8 percent of publicly held U.S. debt. Of all the holders of U.S. debt China is the third-largest, behind only the Social Security Trust Fund‘s holdings of nearly $3 trillion and the Federal Reserve‘s nearly $2 trillion holdings in Treasury investments, purchased as part of its quantitative easing program to boost the economy. (Data via: How Much U.S. Debt Does China Really Own?)

So, the next time you think you are “Buying American“, I invite you to reconsider how irrational such an argument is.

RIP James M. Buchanan (October 3, 1919 – January 9, 2013)

Nobel laureate and Classical Liberal economist James M. Buchanan has died today.  He was one of the most important economist of the 20th. Century and will be long remembered for his work on the principles of economic self-interest and their use to understand why politicians do what they do.

He received a Doctor Honoris Causa Degree from my home university at Universidad Francisco Marroquin in 2001 (link to video of his visit to UFM) and his books were some of the most important ones in my education during my college years.  At UFM I learned about Buchanan with Carrol Rios de Rodriguez.  Prof. Rodriguez is one of my favorite teachers and she was the former Director of the a Center for the Study of Public Choice, where the ideas of Buchanan and Tullock first were taught to me.

Here are some interviews to remember the work of this great man and I invite you all to read his books and continue learning!

Hayek and Buchanan: Rawls, Egalitarianism and Social Justice

James Buchanan on Chicago School Thinking: Old and New

James M. Buchanan on Economists and the Great Recession

James M. Buchanan on “Institutional Sources of America’s Fiscal Tragedy”

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Rest in Peace James M. Buchanan

(October 3, 1919 – January 9, 2013)

Related articles

I don’t want a cheaper and weaker iPhone!

I read today’s article”A Low-Priced iPhone Awaits” in the Wall Street Journal with disappointment.  For some reason, it has become widespread for people to think that “successful products = low price” and that “happy costumers = low price“.

While those affirmations are truth I consider them to be only partially truth.

I want to bring into consideration the fact that it is not only “low-price” products what makes customers happy.  As a owner of stores that sell electronic accessories and as a user of cellphones I can tell you this:

  • No matter how expensive a telephone is, the owner of those products is going to be willing to take care of it without caring much for the original price paid for their phone. So, no matter if the phone is a $500 iPhone or a $50 Samsung S 1st Generation.  Both of the owners would consider paying from as little as $10.00 to as much as $75.00 in extra accessories to PROTECT and personalize their phones.
  • The owners of more expensive phones are always willing to invest a little bit extra to protect their phones.  However, the owners of cheaper phones are also going to be willing to pay a little bit extra to “improve” their phones quality and DURABILITY by adding other electronic accessories or gadgets.

That being said, while companies may continue offering lower-price products the overall quality of these items continues decreasing.  It is IMPRESSIVE the amount of customers I used to received in my store with broken screens in their iPhone’s, Samsung’s, and other Smartphone devices.  Those companies are REALLY making a profit by selling products that can be damaged very easily while forcing costumers to buy new ones.

  • When did design became more important than functionality and durability?
  • Why do big screens are so easily to get broken and they are not made with better products?
  • The best example for this is the iPhone that has also what seems to be some type of glass cover in the back! It was impressive to see many of those covers broken and hearing the stories of sad costumers who want to replace it! The behind glass has no functional use rather than just making the product being overall weaker and less resistant…

While the Wall Street Journal article says that “Apple is working on a lower-end iPhone” the only thing I read is “Apple is working on an EVEN LESS DURABLE, WORSE QUALITY and lower-end iPhone”.  This is unfortunate… specially because I still have many of the old generation “black bean” phones that I used to own 10 years ago that are in perfect shape and resistant very hard falls from my pockets when I was younger.

Lets fight this wave of “lower-end products”!  As consumers we should receive the best we can get for our money! Not the worse we can get for it!

Gun control, school massacres and state-failure

The article “More Guns = More Killing” By came to my attention as a good reference of how sometimes more “global approaches” to what we could explain as “local problems” results in sophistic arguments that are of no use.

The article is astonishingly confusing and misleading because the author arguments that it is more/less guns what results in more/less deaths.  And as such, that only by decreasing the amount of available guns the deaths can be reduced.  In order to defend this position she tries to defend her position by bringing a sometimes useful comparison of explaining local problems (those of the U.S.) by comparison to more global regions (in this case, Latin America).

Rosenthal does not propose a better solution than the one she is trying to question and which was proposed by the NRA (National Rifle Association) to President Obama.  Truth, “A society that is relying on guys with guns to stop violence is a sign of a society where institutions have broken down”. Why? Because the bureaucrats and the NRA consider as she does that it are guns the ones that “kill” and as such, it are guns the ones that “give life“.  Neither of the cases can be more false.
The parallels between the Latin American countries with high homicide rates and the US Massacre of schools kids cannot be correctly understood behind the “more guns/less-more deaths” causal relationship.

Then, how? As usual in this times of miss-integration of concepts.  The events in Latin American countries with high homicide rates and the US Massacre of schools kids have no parallels.  The high homicide rates in Latin America are the result of a failed War on Drugs and the institutional decay caused by corruption, state failure in providing rule of law and the reconfiguration of power relations amongst many other causes.  In this case the guns are not a cause nor a solution.  The massacres in U.S. schools are in my opinion the result of a decay of family values and a philosophical problem of identity that can only be solved behind an urgently much needed moral revolution.  In this last case it is not guns or the state which can do much about to change things.

Future massacres in schools can only by stopped from happening when the roots of family decomposition are diminished (divorces, unemployment, family violence, alcoholism, drug addiction, among many others).  The murderers in these schools were seeking for revenge from society and saw that killing kids was the perfect way of enacting revenge on those he was angry with.   Until we understand this things I see no probable hope for future improvement of any of the cases. As well, for as long we have journalists with a philosophy of life that relies on the State as the “giver” or “healer” of society’s problems things are also going to continue going in the wrong direction…

2012 in review

The WordPress.com stats helper monkeys prepared a 2012 annual report for this blog.

Here’s an excerpt:

600 people reached the top of Mt. Everest in 2012. This blog got about 9,100 views in 2012. If every person who reached the top of Mt. Everest viewed this blog, it would have taken 15 years to get that many views.

Click here to see the complete report.