The New York Times recently reported that the cost of Chinese-made goods sold in the U.S. has risen steadily for the last eight months.
Photo:baldiri, Creative Commons, Flickr
People have been complaining about Wal-Mart for years, saying their investment in cheap goods at cheap prices was the beginning of the end for American jobs.
From a broader perspective, that appears to be true. Our economy shed 17,000 jobs in January alone, purportedly as the result of trouble on the Street and the collapse of the sub-prime mortgage market, which burst the housing bubble as no other single event has since housing prices skyrocketed in 2000. Even $55-a-barrel oil in 2005 didn’t slow that market, though paying a $200,000 mortgage and filling the tank on an SUV slowed down consumers’ lifestyles to some degree.
Now China is experiencing inflation. Modest inflation (2.4 percent to our 4.1 in 2007) hits the wallet first and the conscious mind afterward. The cost of goods from China is expected to increase by 10 percent in 2008, not including the cost of China’s recovery from recent severe weather that devastated more than 17 million acres of crops. Many of the crops were energy crops, like soybeans, which were used to make ethanol. This event was not factored into the inflation index of 10 percent, so the cost of Chinese goods may well go higher.
Entering a recession with less disposable income since the 1930’s, Americans will have to face the further humiliation of paying near-premium prices for Salad Shooters and popcorn poppers, not to mention pet toys, jeans, pill boxes, Barbie dolls, battery-operated model cars and neoprene gloves.
This may not be all bad. Last September, Mattel announced the third recall in that month of Chinese-made Barbie doll accessories and toy trains. In 2007, there were approximately 100 recalls of, or defects in, goods coming from China. These included dog food, collapsing furniture, children’s jewelry, automobile tires, baby cribs, and medicine. Between inflation and shoddy merchandise, the Chinese are gradually bringing us to our knees.
A word to the wise; if you must buy something made in China, do it with your economic stimulus package refund, preferably before the end of March. There will be blood after, as worldwide economies record first-quarter profits decimated by 10 years of inflation, corporations without borders, the subprime meltdown and the rising effects of global warming.
Disclosure: I don’t own Wal-Mart stock.