Troubling precedent for 'Made in the USA'
California, like most other U.S. states, long had a requirement that the vaunted “Made in USA” brand reflected all aspects of products which carried this description meant what it said — produced in America’s 50 states and its territories. This long-standing interpretation was that this brand inscription meant produced in American facilities by U.S. workers, to specifications and domestic quality control.
This iron-clad rule became challenged with the onslaught of imports in the 1980s, and the shift of production overseas by many reputable U.S. corporations. This led to some “illegal” attempts by some importers to use American brandnames, implying their particular product was “U.S.-manufactured.” This got them into trouble with customs officials, the Federal Trade Commission and the Federal Bureau of Investigation. Subsequent punitive action often resulted.
A new California state law (SB633), signed in September by Gov. Jerry Brown, has stirred up controversy by changing this time-honored precedent to “mostly made in America.” The implication, but not necessarily mandated, requires a 90% content. This new legislation, promoted by a number of businesses active in the California market, had been lobbied by them. They felt the original law was particularly oppressive, since 100% compliance made it “impossible” to get all their components from within the United States.
While the loophole “virtually all” has been the standard laid down by the FTC, its restrictions had traditionally been strictly enforced. This was especially so since the consumer interpretation of “Made in the USA” carried with it the highest standards of quality, service and responsibility for the optimum functioning implied.
Richard Holober, executive director of the Consumer Federation of California, issued a statement indicating that manufacturers never had trouble in the past meeting the state’s “Made in America” rule. He believes the new state law “will open up Mexican digressions.”
He added that waiving the state’s 100% standard puts “those businesses which go the extra mile to keep jobs and manufacturing in the USA” at a disadvantage. It also gives those companies that “cut corners” with imported components a “distinct price advantage” over domestic equivalents.
This new, nebulous law, which will obviously instigate a flurry of “circumventions” due to its substantial lack of specificity, will likely encourage the greater use of imports, Holober stated, since it will now be much more difficult for the FTC to prove deception in the performance of their statutory requirements. His greater concern is such acceptance by California will soon spread to most other states, making future FTC restrictions increasingly unenforceable.
If overall U.S. electrical usage is indicative of economic growth over the past decade, it gives credence to the fact that America’s global-leading economy has essentially been flat this year in comparison with 2007. That was the last year before the Great Recession.
In 2007, the U.S. consumed roughly 3.8 trillion kilowatt hours of electricity, while sliding down to 3.72 trillion kWhr in 2009, a low of that crisis period. In 2014, it had climbed back to the 2007 level, according to the U.S. Energy Information Administration.
Although the working age population has expanded by 16 million in the past decade, those actually working full-time are likely less now than were active in 2007.
In examining these figures in greater depth, a significant 7% drop in industrial electricity consumption — from 1.02 trillion kilowatt hours in 2007 to 955.5 billion kWhr in 2014 — becomes readily apparent. This is due to the shrinkage of America’s industrial sector by moving overseas or closing up shop.
Analysts blame the de-industrialization which America is undergoing, speeded up by current government decrees putting greater emphasis on renewables, while regulations from the U.S. Environmental Protection Agency are making the use of conventional electric power more costly and less functional due to climatological restrictions.
By contrast, China’s industrial expansion, and its comparable electrical consumption, is estimated to have averaged 9.72% since the year 2000. In hindsight, some experts we contacted blamed the Washington, D.C., power structure in foregoing infrastructural upgrading and waging a war on coal as being responsible for the nation’s slower economic growth since the Depression years (1930-1939).
According to those contacted, the combination of putting health care and climatological purity ahead of commercial and industrial infrastructure rebuilding, and putting potential employees back to work, has put America into an economic bind, necessitating the election of a knowledgeable and powerful leader into the White House next year.
Energy firms cut 250,000+
With the worldwide price of oil ranging in the low 40s, cutbacks in exploration and production of oil and natural gas are proceeding apace.
While the nation’s media seems to dwell on the benefits derived to the millions of car owners “at the pump,” the damage done to the fossil fuels industry’s spectacular growth is hardly mentioned. The fact that the bulk of post-recession, well-paying jobs were based in major fracking development areas — such as North Dakota’s Bakken, West Texas’ Eagle Ford and the mid-Atlantic’s Marcellus shales — has barely been receiving notice.
While the world’s “petro states” — Russia, Saudi Arabia and Venezuela — have been hard-hit by the global oil glut, which is showing few signs of lessening, the budget deficits of Moscow and Caracas, in particular, have reached alarming proportions due to their almost total dependence on oil and natural gas revenues.
Under these circumstances, the multinational energy giants Exxon-Mobil, Conoco Phillips, Shell and BP, in addition to technological service providers such as Halliburton, Schlumberger and Baker Hughes, also have begun to feel the pinch. Although not as critically affected as the small-business fracking innovators and their regional banking support, the corporate giants’ highly publicized quarter annual profit reductions are being met with a massive employment dismissal and record capital expenditure cutbacks.
It’s anticipated that the impact on America’s oil and natural gas expansion, now in reverse, will substantially cut back the United States’ annualized 10 million barrels per day. This level, reached in 2014, may be reduced by as much as one-fourth by mid-year 2016, barring econo-political events or global developments, resulting in oil prices returning to the $60 to $80 per barrel range.
With America’s wildly successful energy development expansion, based on four years of $100 per barrel of oil funding this incomparable upward thrust, the simultaneous import downturn of the Chinese No. 1 world growth economy further lowered oil demand, as well as most other global commercial and industrial commodities.
While the aforementioned energy multinationals are not waiting for geopolitical developments to avoid currently planned cutbacks, such happenings could invert current circumstances of demand/supply in the ongoing transition to 2016.