Wednesday, July 18, 2012

Mankiw on the US Olympic Uniforms Made in China

Greg picks on Senator Reid:
Will some enterprising reporter please ask Senator Reid for the opportunity to inspect the senator's closet and check the labels of his clothing to make sure they are all American-made? I look forward to seeing Mr. Reid's bonfire. In the alternative, I would be happy to send the senator of copy of my favorite textbook. He should pay particular attention to Chapters 3 and 9.
Hey – I think we all get the point about comparative advantage. Larry Popelka made the case for Greg:
Garment manufacturing is a low-cost commodity business. Most of the value in the apparel industry comes from design, technology, sales, marketing, and distribution—not manufacturing. The successful players in apparel, such as Ralph Lauren and Nike (NKE), figured this out long ago
. Look – we all understand that Ralph Lauren did what was best for Ralph Lauren and if the US Olympic Committee wanted these uniforms to be both designed by both Ralph Lauren and Made in America, maybe the contract with Ralph Lauren should have said so. But Larry also noted that politicians in BOTH parties are angry at Ralph Lauren. So why is Greg lecturing Senator Reid and not certain Republicans. For example, Donald Trump loves to China bash even though his clothing line is also Made in China. Of course, Trump is not the GOP Presidential candidate – that would be Mitt Romney:
On the campaign trail, Romney labels China’s leaders as “cheaters” and “currency manipulators.” His ads say the Republican nominee would be a president who “stands up to China on trade and demands they play by the rules.” He has vowed to issue, on his first day in office, an executive order labeling China a currency manipulator.

4 comments:

Jack said...

If reference is being made to text book concepts like comparative advantage, then the concept ought to be more adequately explained. What about this part of the definition, "...both countries will still gain by trading with each other, as long as they have different relative efficiencies."? What is it that the US ships to China to regain some of its own advantage? And garment manufacturing is only one example in the case of Olympic uniforms. Electronics anyone? Steel?
Printing?

The over arching issue is that the US has given up its manufacturing base and no matter how one values design and technology our economy does not seem able to survive on those aspects alone.

Will said...

An executive order labeling China a currency manipulator! The prospect must be... absolutely terrifying.

pAw said...

This is absurd. Team USA should be garbed in uniforms made by Americans. Period end of story. Ralph Lauren's profits don't rely on a few hundred uniforms. They could have easily made that decision ahead of time before a public lashing. Our two cents http://redwhiteblue.co/2012/07/olympic-committee-receives-patriotism-injections-senate-2014-team-usa-uniforms-america/

pAw said...

This is absurd. Team USA should be garbed in uniforms made by Americans. Period end of story. Ralph Lauren's profits don't rely on a few hundred uniforms. They could have easily made that decision ahead of time before a public lashing. Our two cents on this story.