Tchotchkenomics

Bernie Sanders is a smart guy, who in person is very nice. This I know.

I also know, at least generally, how press releases are signed off on in politics, given my experience in campaigning. It typically falls into one of three categories, and depends on the member:

  • Some people don’t look at any of them. They trust their staff completely (bad.)
  • Some review them in a cursory manner, but like some aspect of control (better.)
  • Some trust their staff, but are completely involved in writing and editing anything attached to their name (best.)

I do not know how his press operation works. But today’s press release his office posted, befuddles me. Of course, things could be worse, at least he didn’t refer to the leader of China as a “dictator.” But I don’t agree with his presser on it. Before I explain why, let’s look at it.

The press release says this:

American Presidents Made in China

January 19, 2011

BURLINGTON, Vt., Jan. 19 – As Chinese President Hu Jintao arrived in Washington, D.C., for a state visit, Sen. Bernie Sanders (I-Vt.) questioned why the Smithsonian’s National Museum of American History gift shop sells busts of American presidents that are made in China.

Sanders called the symbolism both “extraordinary” and “pretty pathetic.”

“It appears that a museum owned by the people of the United States, celebrating the history of the United States, cannot find companies in this country employing American workers that are able to manufacture statues of our founding fathers, or our current president,” Sanders wrote in a letter to Brent D. Glass, the history museum director.

The museum sells bronze-colored, made-in-China busts of U.S. presidents from George Washington to Barack Obama.

“Given the state of the American economy, I would urge the National Museum of American History to do its very best to find American companies to manufacture the products that it sells,” Sanders said.

He called himself a fan of the world-class Smithsonian museums and singled out for praise the National Museum of American History, saying it “does a great job.” But the senator said the history museum and others could set a better example if the gift shops stocked more merchandise made in America.

“As a nation, we have all got to be aware that one of the major reasons that the unemployment rate in this country is so high is because it is increasingly difficult to find products

in our nation’s stores that are manufactured in this country.  Our national museum should do its best to be a model in helping us address that crisis situation,” the senator wrote.

Some 42,000 U.S. factories shut down since 2001, and more than 5.4 million good-paying manufacturing jobs were lost in this country,

Sanders noted. “In fact, today, the United States currently has fewer manufacturing jobs than it did in April of 1941, about eight months before the attack on Pearl Harbor.  This clearly is one of the factors contributing to the substantial shrinking of the middle class that we have been seeing in the last several decades,” Sanders said in the letter.

So what’s up with the Sanders press release? Why even discuss it?

First, one should take issue with the following:

“It appears that a museum owned by the people of the United States, celebrating the history of the United States, cannot find companies in this country employing American workers that are able to manufacture statues of our founding fathers, or our current president,” Sanders wrote in a letter to Brent D. Glass, the history museum director.

The museum sells bronze-colored, made-in-China busts of U.S. presidents from George Washington to Barack Obama.

I know very well the history of the Smithsonian, as a former tour guide in Washington, D.C. — yes, we own the museums, but without a better understanding of their history, to suggest that they’re an American institution is deceiving.

According to Wikipedia, which some doubt as a credible source:

The Smithsonian Institution was founded for the “increase and diffusion” of knowledge from a bequest to the United States by the British scientist James Smithson (1765–1829), who never visited the new nation. In Smithson’s will, he stated that should his nephew, Henry James Hungerford, die without heirs, the Smithson estate would go to the government of the United States for creating an “Establishment for the increase & diffusion of Knowledge among men”. After the nephew died without heirs in 1835, President Andrew Jackson informed Congress of the bequest, which amounted to 104,960 gold sovereigns, or US $500,000 ($10,100,997 in 2008 U.S. dollars after inflation.)

Of course, we can’t really bring this up because Bernie Sanders is a huge proponent of the estate tax. Bringing up that the Smithsonian, while an American Institution, was virtually created by the estate of a wealthy British guy who’d never been to America distracts from the narrative. If Britian had implemented Bernie Sanders’ view of taxation, the Smithsonian would probably not exist as we know it today. But, that’s not the point to make here, as ironic as it is.

Wikipedia continues:

The money was invested in shaky state bonds, which quickly defaulted. After heated debate in Congress, former President John Quincy Adams successfully argued to restore the lost funds with interest.[2] Congress also debated whether the federal government had the authority to accept the gift. Congress accepted the legacy bequeathed to the nation and pledged the faith of the United States to the charitable trust on July 1, 1836.[3] Many of the Institution’s buildings are historical and architectural landmarks. When the Detroit philanthropist Charles Lang Freer donated his private collection to the Smithsonian and funds to build the museum to hold it (which was named the Freer Gallery), it was among the Smithsonian’s first major donations from a private individual.

This paragraph is kind of hilarious. The U.S. accepts the money, and then pisses it away. Kind of sounds like of the 1900s take on entitlement programs. So, another rich guy donates his money to fund the creation of the museum. Ironic, yes. Let’s put the irony aside for now and get to the point: Isn’t it horrible that the gifts in the gift shop are made in China, Sanders ponders.

To me, it’s just as bad as charging people for the Constitutions their elected members give away for free that were funded by their tax dollars in the first place. Yes. From time to time, Congress appropriates funds to print pocket Constitutions. Your Senators or House Members can send you them. But we charge for them in the gift shop. Charging you a dollar or two to pay for things your taxes funded years ago. But I digress.

Sanders’ Press Release continues:

“Given the state of the American economy, I would urge the National Museum of American History to do its very best to find American companies to manufacture the products that it sells,” Sanders said.

He called himself a fan of the world-class Smithsonian museums and singled out for praise the National Museum of American History, saying it “does a great job.” But the senator said the history museum and others could set a better example if the gift shops stocked more merchandise made in America.

Let’s get to the economics of this. First, for the first time in 13 years, U.S. factories are adding more jobs than they are losing. Say what!?!? Second, we’re the world’s third largest exporter. For real. Better yet, third, we’re the world’s largest manufacturer.

Yet, Sanders continues:

“As a nation, we have all got to be aware that one of the major reasons that the unemployment rate in this country is so high is because it is increasingly difficult to find products in our nation’s stores that are manufactured in this country.  Our national museum should do its best to be a model in helping us address that crisis situation,” the senator wrote.Some 42,000 U.S. factories shut down since 2001, and more than 5.4 million good-paying manufacturing jobs were lost in this country,” Sanders noted.

OK, so we’re the world’s largest manufacturer and the world’s third largest exporter. Let those two facts sink in. If we’re the world’s largest manufacturer, but not the world’s largest exporter, does that mean we consume a lot of the goods we make domestically? YES. Now we’re getting somewhere. What about factories lost? I’ll take the Senator’s word on 42,000 factories (regardless of size) lost, but what’s the balance. Were more created than lost? He doesn’t tell us!

What about jobs? Jobs are lost all of the time in any industry because of advancements in technology. But the way the presser is worded, you’d think all of them went to China. Wrong.  As I blogged earlier, agriculture was the dominant industry in America in the early 1900s, when 79 percent of Americans worked in that sector in 1820. GMU Economics Professor Don Boudreaux writes:

This number, however, was progressively reduced by improvements in technology.  Chemical fertilizers and pesticides; mechanized planting and harvesting equipment; refrigeration; improved veterinary medicine; better irrigation; faster transportation; and improved packaging for produce – along with more food imports made possible, in part, by motorized sea and air travel – all “destroyed” millions of agricultural jobs.

Right, so you’d trade lower food prices and technological advancement for higher prices and greater overall industry employment? Before you answer, consider what I posted in the very same post:

Do we really want to eliminate EZ-Pass so we can have more toll-booth operators employed? Are we willing to pay higher taxes to pay their salaries, benefits, pensions, and overtime? Or are we cool with EZ-Pass? I think we’re OK making that change. More bluntly, are we willing to forgo advances in technology that save money so more people can have jobs? If you’re supportive of this idea, I have a cart and buggy especially for you. And a quill.

Most people would rather have EZ-Pass than higher taxes. Just as most people would rather have lower priced goods instead of more people employed unnecessarily to make the products they buy.

Which is why when Sanders concludes:

“In fact, today, the United States currently has fewer manufacturing jobs than it did in April of 1941, about eight months before the attack on Pearl Harbor.  This clearly is one of the factors contributing to the substantial shrinking of the middle class that we have been seeing in the last several decades,” Sanders said in the letter.

I get skeptical. In 1941, our population was about 133 million. Today, it’s 308 million. Yet, somehow, we can produce more than the rest of the countries on earth with a lower percentage (I don’t know what metric he uses) than in 1941. That is a good thing. As I posted earlier:

Our share of the world’s manufacturing output is equal to that of Brazil, Russia, India, and China (yes, China) combined.

Now that may change soon, and it’s not the end of the world the combined output of four very large countries could soon produce more than we do. Come on, their combined population is eight times the size of ours, and yet we currently produce slightly more than they do?

Given these facts, is it a really big deal if a museum now funded largely by your taxes tries to earn as much as they can off of selling metal busts of Presidents? No. Facts aside, I’d still support them being built anywhere, Ohio, Oman, doesn’t matter. Odds are, the better margins they make, the less likely we are having to be pressured into paying more tax dollars to these museums.

Given the choice, I’d rather have tchotchkes at museums made at the lowest cost, regardless of location, because if political pressures require them to be made at higher cost, and thus, higher prices — odds are, ticket prices and tchotchke prices go up. I don’t like that.

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2 Thoughts on “Tchotchkenomics

  1. I acknowledge that virtually all of Smithsonian museums are “free” in the regard that they do not charge admission. But my conclusion was inferring to other museums, many of which are beneficiares of government funds.

  2. Pingback: JimSwift.net » Blog Archive » This movie looks taxing

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