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The big profits made in the usa (china)

The big profits made in the usa (china) Source:
Date: 24-07-2012
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Perhaps US Senate Majority Leader Harry Reid should run for president this year as he seems to have the solution to the United States' high unemployment problem. Something President Barack Obama and his Republican challenger Mitt Romney don't seem to have any answers to.

Reid's solution would be to turn the 8.2 percent of the population that are jobless into hardworking garment workers. At least that is what the 72-year-old Democratic Senator from Nevada seemed to be suggesting last week after learning that Team USA will be going to the 2012 London Olympics wearing stylish Ralph Lauren uniforms that have been made in China.

"I am so upset. I think the Olympic committee should be ashamed of themselves. I think they should be embarrassed. I think they should take all the uniforms, put them in a big pile and burn them, and start all over again," Reid said.

He was later joined in his outrage by more Congressional Democrats, such as former House Speaker Nancy Pelosi. On Monday, a group of Senate Democrats introduced a bill that requires all US Olympic team uniforms to be made in the US.

Perhaps the Democrats should introduce another bill that requires all Senators to set an example and wear made-in-the-USA from top to bottom in order to demonstrate their patriotism. However, if it came into law today, most, if not all, would find themselves going around naked and barefoot.

Senator Reid's so-called patriotism is actually rather unpatriotic. He wants to revive the economy by restoring the labor-intensive garment industry in the US, which means he wants the US to take a step backwards and join the ranks of developing economies, such as China, India, Bangladesh and Vietnam, the big labor-intensive garment producing nations of the Third World.

But if Reid's idea of bringing garment manufacturing back to the US was actually realized, all of the US clothing firms, including Ralph Lauren, would soon go bust because of the high labor costs in the US. Of course, they can console themselves with the thought that they died a martyr and no doubt Reid would eulogize their passing.

Reid, a lawyer by training, does not seem to understand the basic economic principle of comparative advantage, despite his decades of service on Capitol Hill. The production part of the garment industry, which is now done by developing countries such as China, only retains a fraction of the profits in the supply chain; the big money is made in design, technology, distribution, marketing and sales, most of which are done by US businesses.
In that sense, US companies are making the right decision in a free market economy instead of following the path of insanity Reid wants them to take.

Reid's nonsense aside, what struck me most is the silence of the people who should know full well such ideas are madness. Obama and Romney, who probably know better, and other political leaders, who clearly disagree, are afraid to speak up for fear of being labeled "unpatriotic" or "un-American".

However, Ralph Lauren and the US Olympic Committee have been forced to compromise by announcing that Team USA for the 2014 Winter Olympic Games will be outfitted with made-in-the-USA uniforms. This is quite scary in a country that claims to champion freedom of speech and a free market economy.

Senator Reid has not replied to my question about whether he regretted making the outrageous comment. I hope when the Team USA parades in the opening ceremony in London next Friday, Americans feel proud of the athletes in their uniforms. They might even offer thanks to the hard-working Chinese garment workers in Dalian for making such splendid uniforms.
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