Since 2008, I’ve been combating a lot of the disinformation coming from “liberal” economics - specifically Paul Krugman. There has been one overriding belief driving most of the discourse, which is that inflation is GOOD.
According to those on the left (and in the government), rising prices will help get the economy “working again.”
Because, on the surface, that makes no sense, these arguments are often buttressed with cryptic diagrams, complex academic theories, and name-dropping. But it’s all nonsense.
CNN, which is basically the White House’s press department, mistakenly put out an interesting story today, titled, “Your dry cleaning bill’s about to get worse.” And, just to clarify for the Paul Krugman groupies out there, “worse” means “higher,” not “lower.”
The reason isn’t dry cleaning speculators (though Nancy Pelosi might still announce otherwise). It’s because the United States has decided to impose a punitive tariff on Vietnam for producing wire hangers that are - get this - too affordable.
It’s all because of wire hangers. The hangers — which are a big expense for dry cleaners — are likely to get substantially costlier, after the U.S. imposed new trade penalties on hangers from Vietnam last week.
GOOD. That will show those communist bastards! We may have destroyed much of their country over a 15-year period, but I’ll be goddamned if we let them get away with sending us low priced hangers!
Yadegar says the price of gas and hangers — her two biggest monthly expenses after rent — have risen in the last three years, squeezing profits. If she has to pay even more for hangers now, Yadegar isn’t sure how her business will cope.
Yadegar obviously doesn’t understand Keynesian economics.
Sam Monempour, vice president of 3Hanger Supply Company, where Yadegar buys hangers for her outlets, warns that the new duties will require him to nearly double his prices to 9 cents from 5 cents each. The company buys all its wire hangers from Vietnam…
So…to ostensibly make American hangers “more competitive,” we have to double the price of hangers that also incurred the cost of being shipped across an ocean. HORRAY FOR U.S. PRODUCTIVITY! But why is Vietnam such a big supplier of hangers?
Vietnamese manufacturers have benefited from the rising cost of Chinese-made hangers, after the U.S. imposed punitive tariffs on them in 2008, said Monempour. Back then, the U.S. found that Chinese companies were “dumping” them at prices below production costs.
Man, it just gets better. So, hangers would be EVEN CHEAPER if we hadn’t “punished” China for giving us such low prices? That will teach them to subsidize our lifestyle! Obama 2012!
But, c’mon, rising prices are good because then the dry cleaner workers will have more money to spend on the economy, right? Consumption drives the economy, right?
Especially not when those rising prices put the employees out of work:
Indeed, more than 4,000 dry cleaners already have disappeared in the last year as cleaning solvent prices have doubled and budget-conscious consumers have cut back…
So, rising prices cause job loses???????? HELP EXPLAIN THIS AWAY, DR. KRUGMAN! SHOW ME A CHART ON THE IS/LM MODEL! SOMETHING!
4,000 stores may have closed because of higher prices, and our standard of living may have dropped because we can’t afford to dry clean anymore, but - damnit - at least the ‘Merican hanger industry is making a recovery! I don’t trust those cheap Vietmaneese hangers anyway. I bet shirts are falling off them all over the place.
And just how is the American hanger industry doing? Well, let’s ask M&B Metal Products, since they are the only company in American that makes hangers. They’re also the company that pushed for tariffs on China and Vietnam. It’s a private business, but - according to a recent award they won - they have “up to 250 employees.”
So, 4,000 dry cleaning businesses have gone under, with more closures likely, and our shirts are being shrunk in the dryer because we can’t lose those “up to 250” unproductive jobs.
That’s the reality.
Too bad Romney’s satanic Bain Capital didn’t buy M&B and shut it down. Barry would have gotten another good, teary-eyed propaganda video about lost American jobs, but the economy would have been measurably better.
Instead, we have an entire industry in danger because a bunch of repellant nerds who’ve never had a job outside of academia are telling us high prices are GOOD.
Well, as M&B can tell you, they are good - for some people.
- dwangelo posted this