U.S. Trade Deficit Hits All-Time High
http://apnews1.iwon.com//article/20060210/D8FMDGA07.html?PG=home&SEC=news

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If it were due to printing presses running then there would be significant inflation like the Smartest President did until Reagan invited him to retire to a peanut plantation.

Bot.

Actually with respect to the sneaker example, if the sneaker made in Alabama was made better and lasted twice as long I would buy the one made in Alabama. The real problem is that not only are the ones made in Alabama a lot more money, chances are they will last HALF as long. You see, somebody forgot to tell a lot of the fat lazy people that think they SHOULD be making $30 an hour to sew sneakers that if they want to make $30 an hour to do so, they might want to try doing it well!!!!!!

This model is the same for a lot of other American things. You can buy a shirt made in Vietnam for $3.99 and it lasts a year if you're very lucky. Wouldn't you pay $7.99 for one made in the US if it laster 3 years? I would.

Face it, we're (for the most part) a lazy bunch. Once we become as motivated and industrious as our Chinese friends (never happen) -- then we will see the changes. There will always be the stupid ones that would still pay $3.99 and buy the shirt each year. Same people that buy their knives at the dollar store and need to re-buy them every month. Should have just spend $10 and had a knife for 20 years no? That would make it half the price!

Oh well.

Take care.

I see the inevitable happening - a practically borderless world where business is conducted globally, and a firm's location is only determined by where its customers are. We are in the painful beginnings of it now.

But I have a feeling its going to get worse for the average American before it gets better. Living standards might drop, in order to meet the developing world half way. A lot of people are bracing for salary cuts just to hold on to their jobs, or moving to lower paying positions. I still think tariffs would help smooth the transition, but most people say they don't work.

The bright side is maybe it means an end to some of our wasteful ways as we try new things to become more efficient and practical.

If folks believe they get value for a premium price then they'll pay the premium price. ie, Mercedes for 60 years.

But if people are asked to pay a premium price but there is no significant difference in quality, then they'll buy the cheaper product. ie, Mercedes for the past decade has lost considerable market share to Infinit, Lexus, Acura, etc.

I think you're trying to say that we agree.

Tariffs in the SHORT TERM do work. And they work well. For example, say you tell the US Automakers. For 5 years we will charge a xx% tariff on foreign autos. After that 5 years it will be reduced, or eliminated. This gives the US time to compete and protect the US interests (jobs). Problem is the US automakers don't do their part and build cars that people want so the customers go to people who DO... the Japanese, etc.

On the other hand, think about pick-up trucks. That tariff has been in place for ever... and as a result the US makers still have that market.

Odd world, economics, ain't it!

I'm not too sure about that. Seems to me like Mercedes used to be built to last forever but today, I can't seem to help feeling like they are still good but moving towards the disposable car. Take a look at the Bic lighter. Keep using it and you will end up paying more than a zippo which is refillable but why do so many smokers go for a bic?

Isn't that pretty much what Bot was saying?

Bot thinks people will pay premium prices for premium products. I don't believe that would be the way most of the population goes. We seem to be more into the "here and now" rather than keeping something for long term.

I think you shortened my attempt at description such that it becomes almost without meaning. Let me have another go at it and see if I can make it more clear.

People who value a premium product and can afford it will usually choose it. They at least of the freedom to make the choice, whichever they choose.

Folks who don't have the wherewithal to make the choice, don't.

In between are a wide spectrum of people who have varying degrees of ability to make the choice.

Mercedes and other premium marques make their profit by returning value to the consumer that cannot be had for a lesser price. So long as that contract between buyer and seller is valid there will be a market for Mercedes products. However, if another product comes along that offers equal or greater value then the person who would have chosen the Mercedes without question is suddenly faced with a reasonable choice.

The two things that kept Mercedes customers returning, at least in the USA, was a far greater value in terms of two factors that everybody prizes in every product we buy: Safety and reliability. No domestic product came close. Historically, Mercedes engineered for those factors and essentially veneered luxury over the world-class, and world-envied German engineering.

However, the past ten years or so has seen a decline in the fundamental engineering and an increase in luxury and complexity. Concomitantly, the Japanese have gone full-bore into competition on the very things that Mercedes owners have always invested pride and satisfaction: Engineering excellence. The result has been an erosion of confidence in Mercedes and a move from Mercedes to Japanese marques.

From what I read recently, Mercedes has improved quality and basic engineering in the past few years. They have gotten a handle on managing complexity.

Golly I hope so. I look forward to buying another one of these cars and I want one in which I will feel as much pride of ownership as I do for my W124. What a fine old car it is!

B