More US Jobs Moving To Mexico

Refrigerator maker Whirlpool has decided to close a plant in Evansville, Indiana and move the operation to Mexico, eliminating 1,100 (US) jobs in the move. The plant produced top freezer models, which are apparently not as popular as in past years. The action was taken to "reduce costs" and the company pointed out it was no reflection on worker quality (which will be absolutely no consolation to the 1,100 workers):

Whirlpool spokeswoman Jill Saletta ..... said the plant closing had nothing to do with worker performance.

"This decision is around cost," she said. "We had to take a look at which plant we could get the best cost position in, and because top-mount refrigerators are not in the demand that they used to be and they're more of a commodity item, Mexico offers us the best cost platform to continue to produce (them)."

I don't have a clue how a top mount freezer is a "commodity item," and a bottom mount or side by side model is not a "commodity." What is it? I thought all appliances were commodities.

Buried within this decision is the clear implication that despite their "not bad" performance, the employees in Evansville are the root cause of the loss of their jobs: if it wasn't cheaper to produce these appliances in Mexico, the jobs might remain in Evansville, and the primary reason Mexico is cheaper is the employee pay.

Since Whirpool is technically an American company (based in Michigan), it's difficult to understand how they can justify moving jobs to Mexico (please don't tell me we're in a "global economy"-that terminology was a corporate creation for the benefit of corporations). I can understand that they wish to consolidate manufacturing and make better use of their larger plants (Evansville was a small factory by Whirlpool standards), but I just can't understand this decision.

I'd like to suggest that people looking for refrigerators look at Whirpool's competitors, but I have no idea if any of them are made in the US anymore. If anyone does know, leave a comment.

If I say that "we're all in this together" I mean that if your neighbor loses his or her job, it has an impact on you, whether or not you're prepared to acknowledge or recognize that fact. If you want to preserve US jobs, consumers have to start reading labels to find out where a product comes from and make decisions based on more than just price. We need to break out of the Wal-Mart mold.

Footnote: Feeling Safer?

Just days after I wrote about the Phoenix, AZ "protest" involving people carrying firearms, including an assault rifle, outside a visit by President Obama, a prominent travel advisor noticed it as well. It seems that the author of numerous travel guides, Arthur Frommer, has announced he won't be spending any travel money or time in Arizona, since that State's "laws allow people he described as "thugs" and "extremists" to openly carry firearms."

I'm sure that everyone carrying firearms in Arizona under this law is not a "thug" or "extremist." That said, it seems that any "thugs" or "extremists" who choose to carry guns around in Arizona apparently are free to do so. And that doesn't sound particularly safe or reassuring to me. A friend recently told me that "gun nuts" and "nuts with guns" are not the same, but I'm still waiting for him to explain the difference.

I'm with you Arthur.

Footnote: On Shopping Carts

If you were interested in my 7/10/09 post, Red Lights and Shopping Carts, you might be interested in Michael Josephson's take on why you should return shopping carts to their corrals. It's not to impress anyone:

People of character do the right thing even if no one else does, not because they think it will change the world but because they refuse to be changed by the world.

Read Josephson's article here.

Feeling Safer?

Well, it's legal to carry around loaded guns, including assault rifles, in Arizona, even at an appearance of President Obama. Sigh. I don't get how more people carrying firearms makes us safer. The main problem for me is that I think that as our population has risen, so too has the number of mentally unbalanced and irrational among us. Even in states that don't allow "concealed carry," the number of people whipping out guns to "settle" disputes is staggering. There was a recent news article in which a few guys got into a fight over cutting in line at a roadside food cart in Tampa, FL. After one punch was thrown, one pulled out a gun, shot the other guy in the dispute, and also shot a bystander, who later died.

I just don't get how adding more guns, and concealed ones at that, makes any of us safer. It sure doesn't feel safer. Doesn't the Secret Service have enough to do without also having to watch people marching around the perimeter of a Presidential rally with firearms? How many more school kids in Chicago are going to die in gun violence before Americans get fed up with the National Rifle Association and its unbridled and well-funded campaign to put guns in everyone's hand?

The reality in which we live in 2009 is vastly different than the America of the late 18th century when the Constitution (including the Second Amendment) was adopted. Even if the Founding Fathers really believed everyone should have the right to own a firearm back then, I sincerely doubt they anticipated the largely non-agricultural and densely populated nation we've become. Furthermore, they certainly wouldn't have anticipated the changes in the weapons themselves. I might not object to everyone having a musket to carry around, as opposed to an AK47 assault rifle. The musket took a long time to load, long enough for the others in line for the food cart to get out of the way. Or to beat the crap out of the musket carrier as he was reloading...

Is The GOP Marching Off Another Cliff?

There apparently is some hope for those of us who are dismayed by the screaming and yelling from the Right and disruption of town hall meetings about health care reform. Froma Harrop has some observations on why this is just another example of the GOP's penchant for "red faced crusades":

The right wing has launched another of its red-faced crusades. When that happens, the loser is ultimately the Republican Party. Sure, obnoxious behavior gets a lot of attention. So do car wrecks.

Harrop goes on to recite a litany of examples starting in 1998 with the GOP attempts to remove Bill Clinton from office and up to 2005 when "Republicans tried to make hay out of the Terri Schiavo tragedy." In each case, she goes on to highlight how out of touch the GOP was with voters and how that translated into losses in the House of Representatives and US Senate.

Read her column and take heart. One can only hope the GOP's influence in Congress is further diminished.

Banks Are Not Your Friend

Anyone who is interested in hearing about how Big Banks are only interested in making money, not in benefiting customers or society, may want to listen/read to this article on Marketplace last week (8/6/09).

Up front, I want to say that it seems like a lot of people who have mortgage problems right now have no one to blame but themselves. Some never read contracts. Some should never have tried to buy any house, based on their income and past credit status. Some should never have bought houses that were far beyond their means. That said, some were mislead by bankers, brokers, and realtors.

The Marketplace story deals with the Federal government's attempts to get the banking industry to modify the mortgages of people who are struggling to hang on to homes in this recession. The Obama Administration recently released some statistics on how the mortgage modification efforts are going, and while some Big Banks are having some successes, some others are not. So if you're looking for another Big Bank to despise, you might want to add Wells Fargo to your list.

It seems that one of the obstacles to modifying mortgages is the same thing that some say started the entire mortgage meltdown and Big Recession: mortgage backed securities. These were loans that were bundled together with other mortgages and sold to investors. Unfortunately, many of these bundles contained less than stellar loans, and when people began defaulting, well, the rest is history. Since many of these Big Banks didn't retain the loans they made, but sold them off as fast as possible, some might say that they had relatively less incentive to make solid loans from the outset.

When the banks bundled these loans together and sold them off to investors, some banks, like Wells Fargo, remained as the loan "servicer." So while the homeowner sends his/her check off to Wells Fargo each month, the bank technically doesn't own the mortgage any more.

"...Wells Fargo sold the loan to Goldman Sachs. Goldman then bundled it with nearly 3,000 other loans, and sold off that package of loans to investors as a mortgage-backed security. It kept Wells Fargo on to collect payments from homeowners."

You may recall Goldman Sachs. Those are the investment bankers that reported record earnings for the second quarter of 2009.

At any rate, when homeowners now ask for lenders to modify their mortgages so they can keep their heads above water and keep their homes, some are being told they can't modify them because the "investors" won't allow it. In one particular case covered in this article, the reporter investigated the contract covering the mortgage bundle to the investors and it contained no restriction at all on the loan servicer's (Wells Fargo) ability to change virtually any aspect of the mortgage.

The situation seems to be such that once again, the bankers and their lawyers are mostly covering their backsides. If a contract is even slightly vague about what the loan servicer can do, the Big Bank will do nothing in order to avoid getting sued. The homeowner is left holding the bag.

However, in the case that's highlighted in the article, the reporter examined the contract sold the mortgage in question to investors, and it contains no limitations on Wells Fargo's right to modify the mortgages. In essence, this means that if it wanted to help the homeowner, it could. What was Wells Fargo willing to do? They offered to reduce the interest rate from over 12% to a little more than 4% (this mortgage had started out at about 7.5%). That sounds promising, but they also insisted on adding about $80,000 to the amount of the loan. The extra was an accumulation of unpaid fees, accrued interest, late fees, and what the reporter called "numerous other fees." That's $80,000 added to a $235,000 mortgage. The reporter also said that the contract did not require adding the "overdue debt" to modified mortgages. Predictably, Wells Fargo refused to answer the reporter's questions and insisted the new monthly payment offer was "reasonable." So we are free to reach our own conclusions and mine is that if Wells Fargo wanted to help these homeowners, it could. However, it appears that it is more interested in maximizing its own profit. This isn't a big surprise; after all, "the business of business is business." However, in the midst of the Biggest Recession since the Great Depression, wouldn't it be patriotic and symbolic if Big Banks acted like they cared? They don't have to actually care, just the appearance of caring would be nice.

So remember, Big Banks are not your friend and the only thing that they're interested in is separating you from your money. If a Big Bank (or any other Big Corporation for that matter) says they have your interest at heart, grab your wallet and head for the door as fast as you can. Perhaps it would also be reasonable to patronize a bank other than Wells Fargo for your banking needs.

I think my next post might be about why we need to bring back usury laws.... :-)

Teach Your Children

Have I mentioned that I bike ride most every day (weather permitting)? It's the only form of exercise that I actually enjoy, and I try to get out every morning to do about a 6 1/2 mile course. Much of my route is in a local park, which has really nice walking/biking paths. The pavement is divided like a road with a yellow line down the center and there are mileposts marking distances throughout.

I normally ride in the morning and that generally means there are only a few people using the park, walking dogs, jogging, or just walking. It's pretty nice and everyone stays out of everyone else's way. Some days, my ride is delayed for one reason or another, and I don't get out for my ride until afternoon or early evening. Often, those rides are not so much fun.

Later in the day, when many more people are using the park, I'm finding many more people who don't have a clue how to use public spaces. It can be mothers with strollers, walking down the middle of the path, nearly blocking the way for joggers and bikers. Even worse, I often see two people pushing strollers down the path, side by side, completely blocking the path. Dog walkers with what seem to be 50 foot long leashes, with the walker on one side of the path and the dog about 25 feet off the path on the opposite side. With the leash blocking the path. That's not the dog's fault, it's the owners fault.

My biggest complaint about the clueless way people use public space (like parks) relates to children and they way they aren't getting much, if any, supervision or instruction. It's probably not surprising; if the parents are truly clueless about such things, why would anyone expect them to teach their children?

Today, there were hordes of small children on bikes and roller skates in the park. I'm talking mostly about kids in the 4-8 range on small two wheel bikes. They ride with their heads down, oblivious to what's in front of them, and wander back and forth across the path, not staying to one side or the other. My preference would be the general rules of the road which would suggest (in the U.S.) that you walk/ride on the right and pass on the left. I observed groups of 4-6 young kids scattered around the path, with no visible adult supervision. What supervision there was often was what appeared to be older siblings maybe a quarter mile behind the kids (which is to say there was no supervision).

More disturbingly, there was no education taking place (what President Obama calls "teachable moments"). No one appeared to be taking the time to explain to these young kids how to use the public space, how to share it with others, how to do it safely. It's sad to see this aspect of our community network failing so badly; it's not the schools' responsibility to do this, it's the family that should be teaching these behaviors.

Retired Supreme Court Justice David Souter just the other day gave a speech in which he lamented how little Americans understand about their government. One example is how few people can actually name the three branches of the Federal government. He attributes much of this to the lack of old-fashioned Civics classes in school. Perhaps what I've observed in the park is just a different aspect of what Justice Souter saw in court. Americans don't seem to have even a rudimentary grasp of what's going on around them and how people should interact with others in a socially acceptable and respectful way.

I suppose that if parents are clueless about yielding part of the park path to others, it's no surprise that many of them seem to drive cars the same way. This is just another aspect of what I already wrote about previously, but now it involves the cluelessness of the parents being passed on to their children. It's frustrating. Stephen Josephson talks about the need to "teach your children well," but again, if the parents are clueless, who can expect them to "model" the desired behaviors?

Once again, I have to return to that Ashleigh Brilliant quote: "I don't have any solution, but I certainly admire the problem."