Income inequality—shrinking

As government transfer payments to low-income households exploded in the last 50 years, their labor-force participation collapsed and the percentage of income in the bottom quintile coming from government payments rose above 90%.   WSJ Incredible Shrinking Income Inequality – WSJ

"Nobody making under 400,000 bucks would have their taxes raised. Period. Bingo." – Joe Biden, May 22, 2020

Of course, that doesn't tell the whole story. An increase in the federal corporate tax rate to 28 percent as proposed would raise the U.S. federal-state combined tax rate to 32.34 percent, highest in the OECD and among Group of Seven (G7) countries, harming U.S. economic competitiveness and increasing the cost of investment in America. When businesses are taxed more they either move to another country or raise our prices. So who is Biden kidding?

Few people could get elected promising to raise your taxes, but Biden isn't few people. He's just Barack Obama 2.0.

International trade--how it helps the global population

What's the cause of international trade and American jobs going off shore? We know our corporate tax rate is the highest in the world.  List of Countries by Corporate Tax Rate  I hope the new president can start there--bring down the taxes to make the United States more competitive.  If Mr. Trump can bring that down, will jobs return; or is it unions, environmental regulations, and the work ethic of Americans who have been told only college educated people should vote or have rights? What about all the products made or grown in the U.S. which are then shipped out and assembled in Vietnam or Bangladesh?  What about the people employed in countries that depend on American based companies? There is a Levi factory in Ouanaminthe, Haiti that is critical for many families.  There would be more if Haiti itself wouldn't be so corrupt in its trade arrangements. I care about American workers, but I also care about the very poor and unemployed in Haiti. It's a very low wage by our standards, but it helps stabilize those developing nations, and perhaps slows the flow of immigrants looking for economic opportunity.

One of the pleasures of volunteering at the pregnancy center is - - folding baby clothes. Sometimes I launder them if a new batch has arrive.  I’ve even ironed them (who in the world would dress a young child in linen with lace and appliqués--probably grandma?). Each new baby's parents who are clients are given a huge shopping bag full of baby items from size zero to about 12 months, onesies, diapers, underwear, seasonal outfits, coat and hat, footwear, sleepers, blankets, towels, with a toy, book and Bible. I love the little Buckeye shirts in size 3 months.  (Parenting classes and mentors are also available, but we can't put them into shopping bags.) Clothing that isn't given as layette gifts because of wear, or they are beyond the age range, are put in "free" boxes for the moms to look through and select.   Some are holiday wear like Halloween, Christmas or Easter that may have been worn only once.

 Here’s what I found last week--in one hour of sorting (by size, season, sex, type) and remember these are donated (used) so I have no idea what year or decade they were made.

 

I‘m assuming anything made in China is the oldest, because many American/global firms have moved to cheaper labor, first to other Asian countries, then Africa and South America. Carter's reports it sells more than 10 products for every child born in the U.S.! It just doesn't tell you, except on the label, where those products are made. The only clue on a company web page, may be a disclaimer like this at Garanimals, if anything is said at all: " Before any of our products can be sold in North America, the materials, paints, sealants and all components that comprise them are tested rigorously by independent testing facilities to ensure their safety."

• China:  Vitamins Baby, DG Baby, Carter’s, PLC Place, Baby Gear, Osh Kosh, Seseme Street, Strawberry Patch, Fisher Price, First Impressions.
• Hong Kong: No brand on label
• Vietnam: swim trunks (no brand label), Baby Gap, Gymboree, Carter’s
• Thailand: Okie Dokie, Gymboree, Little Lindsey. Carter’s,
• Cambodia: Carter’s, Faded Glory
• Malaysia: Carter’s
• Philippines: Carter’s
• Sri Lanka: Garanimals
• Bangladesh: Circo
• India: Baby Boden, Onesies
• Arab Emirates: Faded Glory
• Portugal: Baby Boden
• El Salvador: Garanimals
• Honduras: Garanimals
• Kenya: Faded Glory

Geography lesson

I keep my clothes so long, I have stuff in my closet, "Made in the U.S.A." But getting something new (for my birthday) is always an opportunity to study geography. Try it. Made in China is so yesterday.

Today's outfit (lavender, purple and beige print on white cotton) was made in Malaysia. What an interesting country--tiny, multi-ethnic and multi-cultural. About half are Malays, and the others, although citizens, are ethnically Chinese, Indians, and indigenous peoples. Its politics are race based. They have a British style government with both a king and a prime minister, and the state religion is Islam. It's been in its current configuration of various states since 1965. This tiny country has a GDP rate of 6.5% that makes us look like we're over regulated and run by socialists! It's the descendants of the Chinese and Indians that really drive the economy, although they aren't the "real" Malay (must be Muslim), and there's friction (Wikipedia).

I see nothing wrong with global companies, some based in the USA, to look for the best deal for their investors elsewhere. (Nor did Donald Trump when he had his clothing line.) The cotton may actually be grown in the U.S.--it travels all over the world. Same for the fabric dye. The machines may be American made, and possibly the ships and crews (although that's probably not the case anymore). The designers and marketers and retailers are probably Americans. If we could get the corporate tax rate under control (highest in the world making us non-competitive), the actual cutting and sewing of the shirt might come back.

According to 2014 data from the OECD, the combined federal and state statutory corporate tax rate for the United States is 39.1 percent. The average of the other 33 members of the OECD is 24.8 percent — 14.3 percentage points lower than the U.S. rate. (Forbes)