Consumption Rules

The Wall Street Journal reported on a practice that is becoming more and more common in China: getting a group of people together that are interested in buying the same thing, meeting at a certain store at a given time and place, and demanding a group discount. It’s called tuangou, or team purchase. Consumers will arrange the details in chat rooms or on internet websites like 51tuangou.com, that are designed to cater to these types of arrangements. I guess when you put 1.3 billion people together in one country they’re bound to think of some way to use their numbers to get discounts.

According to the article, Chinese consumers have negotiated discounts for anything from cabinets to new car purchases–and been successful at getting up to 35% off! For some reason, this type of deal-finding just hasn’t appealed to the American consumer: (more…)

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Jeffery Sachs , in an article in the New York Times entitled “In Principle, A Case for More Sweatshops” (Allen R. Meyerson, The New York Times, June 1969), was quoted as having stated, “My concern is not that there are too many sweatshops, but that there are too few.” Now, to give you a perspective of who Jeffery Sachs is: He earned his bachelor’s degree from Harvard. He is currently a professor of Economics at Columbia, and is best known for his work as an economic advisor to Latin America, Eastern Europe, the former Soviet Union, Asia and Africa. And as a much less-experienced individual myself, I agree whole-heartedly with Dr. Sachs’ statement.

The truth is that sweatshops exist because the alternatives–usually agricultural work or prostitution–are worse environments. And as for the usual conditions of sweatshops–which seems to be the basis of the argument against sweatshops–one cannot expect a company to build a factory overseas and then create conditions to match those found in the US. This is because if a company were required to create a work environment exactly like those found in the US they would simply have all their factories in the US, receive tax benefits, and then the native peoples in third world countries would be left with no alternative to the agricultural and prostitution occupations. Therefore, next time we buy clothes, we need to make sure that the tag reads “made in Guatemala” or “made in Latvia”, and by so doing, we are helping large American corporations put more capital into third world economies.

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News of chaos in Iraq is no longer a surprise to any of us. Reuters reported on some of the most recent unrest, and most of the major news outlets report the growing possibility of a civil war, especially if we were to pull our troops from the area. (although they’ve been suggesting the possibility for some time now)

I guess my questions are these:  What is democracy?  Is it possible for one country to impose democracy on another country?  Are we making progress toward an attainable goal? What does America have to do to be successful in Iraq?
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Advice is cheap. Especially investment advice. Everyone (including me) is willing to share their opinion of the ‘next big thing’ but it’s usually all talk about huge potential returns, without disclosing any of the risk. I assume this is why people get involved in companies like 12dailypro.com, which had a great run luring thousands of people in with promises of 44% returns in 12 days. (The company is now insolvent and under investigation by the SEC and the FBI. [Update: The site is also blocked now too. It went from a full-blown business site, to a consumer forum to discuss the good points of 12dailypro, to being totally blocked after the SEC’s probe found that 95% of the payments were being made with new-member fees, and not by their “genius business model” of automated web surfing, meaning it was almost a pure Ponzi scheme.)

Some of the best commonsense advice I’ve seen for investing comes from Jonathan Clements of the Wall Street Journal. Some highlights: (more…)

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