Wednesday, August 17, 2011

How "Free" is the Free Market?

I've noticed that a lot of the people who think that an unregulated Free Market will fix the economy are also among the first people to bitch at you when you buy an imported product.

Hey, that's the Free Market at its best, isn't it? Why should I buy an inferior product for more money, just because it's American made? Let's take motorcycles as an example. A few years ago I owned a Harley Davidson. On one of the many, many occasions which I had to take it in to get it fixed, I noticed a sign in the service department advertising what it would take to get into the "100 hp Club". Basically, for about $2000 - $3000 in parts and labor, you could get a hundred horsepower out of your Harley. Of course, this is on top of the $15,000 - $20,000 or more that you paid for the bike. (I had a Sportster, nowhere near this price range, but also not compatible with the parts advertised.) I later traded my Harley in for a Suzuki. This Suzuki was used, $5999, 1000cc (about 2/3 the displacement of the bikes targeted at the H-D dealership), and mechanically stock except for the exhaust. Had I bought the exhaust, it would have cost me only a few hundred dollars. I later had it tested on a dynomometer. It was putting out 101 horsepower. For six grand - about a third of the cost of a 100 hp Harley Davidson. Also, it gets 42 mpg. It weighs just over 400 pounds. So ... it's lighter, more powerful, more fuel efficient, and it costs less. Free Trade philosophy would dictate it as the logical choice.

I saw a friend post this morning on facebook about Obama touring in a new foreign made tour bus while talking about creating/saving American jobs. My friend called it irony. How convenient for him. He also talks about cutting spending. A lot. Now, I haven't researched and compared what the President is riding around in with a comparable domestic model. However, I'm sure that if buses are consistent with cars and motorcycles, the import probably costs less to purchase and maintain, and gets better gas mileage, too. Plus, he did support the American employees who imported the bus, prepped the bus, sold the bus and that will maintain it. I said it was convenient for my friend, because had Obama bought an American made bus, he would have left himself open to accusations of wasteful and extravagant spending for buying an overpriced gas hog and flaunting it on the American Highways.

Now, I'm sure this friend would also say that American products are more expensive because of unions. He would say the only reason the imports are cheaper is because they don't have labor unions jacking up the price of labor. Yes, payroll is cheaper in other countries, but guess what? It's management who gets paid less, not labor. So, if you want to blame greed in the U.S. for driving up the price of domestic products, look at management and executives. Companies try to hide it, too. They give their top level execs a "modest" salary, but then their contract guarantees them bonuses. Excuse me, but isn't a bonus something you get when you excel? I've always believed that a bonus is thanks for doing more or better than expected, not something to be assumed. When it's assumed and guaranteed, it becomes pay.

Just random thoughts.


  1. Thanks. Glad you liked it. There will be more. Oh - you'll definitely like my next one. Stay tuned.

  2. As a guy whose living depends upon selling a superior, foreign-made product (an American with a job, go figure), I say "Bravo!"

    I think it's also interesting that Free Marketeers are usually the most anti-immigrant. You would think they would want the unregulated market to decide who provides the low-wage labor. Then there would likely be more factories and more profitable farming in the US.

  3. Very well said. I wish I'd thought of that and included it.