11.17.10

Oh No! My China Socks With Holes Won’t Be As Cheap!

Posted in Made in China at 10:09 am by George Smith

I love the New York Times. Its reporters always find the crummiest among the crumbums to dress up.

Today:

For American business, the United States currency dispute with China is a two-sided coin.

On the tails-we-lose side are companies like New York-based PS Brands, one of the biggest American importers of socks. With the Obama administration pressing China to raise the value of its currency, the cost of Chinese-made socks is likely to rise. So PS Brands’ main supplier here is demanding shorter contracts at higher prices.

“Before, I could price six months out,??? Elie Levy, chief executive of PS Brands, said during a recent factory visit here. “Now they only want to price 30 or 40 days out because the dollar could lose value.???

Meanwhile, the American companies most likely to oppose Washington’s currency fight with Beijing are businesses like PS Brands — Wal-Mart would be another good example — that get their goods from China
and sell them in the United States. Those companies’ balance sheets are likely to suffer, and American consumers more likely to feel the effect …

Which is entirely true. The middle class gets a great coin toss coming and going. It’s always heads China and corporate America win, tails it loses.

It got pole-axed when all the manufacturing moved from here to China and we lost the ability to make socks to a country that sells them back with holes ready to appear after one wash.

Jobs went to China for the sake of cheap shoddy goods bought by people who still had jobs or who could put more and more on credit. And now that the economy is shot, the same among us have a hard time even affording the cheap stuff. Wal-Mart is beset by more and more of its customers only spending their food stamp budget.

What a moral business model. The national economic policy that caused it could not have been spun from finer cloth.

Then there’s those who benefit from the currency war. The few in the new “artisan” economy. Businesses that hardly employ anyone in the US and make high end goods the Chinese state buys.

For American exporters like Staco Systems, above, a weak dollar makes its products more attractive abroad … an American company 9,000 miles away, in Irvine, Calif., where the prospect of a weaker dollar is actually good news. There, Staco Systems, a maker of aerospace electronics, has a growth business selling parts to state-owned aviation companies in China. If anything, a stronger Chinese renminbi would make Staco’s products even more attractive to buyers in China.

Got rid of mass middle class work for the sake of penny-ante Swiss watch-type businesses. That’s progress.

As usual, I have a song for that. And I had it yesterday.

The China Shuffle — about socks with ready-made holes and other stuff — here.

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