Wednesday, September 21, 2016

Geography lesson

I keep my clothes so long, I have stuff in my closet, "Made in the U.S.A." But getting something new (for my birthday) is always an opportunity to study geography. Try it. Made in China is so yesterday.

Today's outfit (lavender, purple and beige print on white cotton) was made in Malaysia. What an interesting country--tiny, multi-ethnic and multi-cultural. About half are Malays, and the others, although citizens, are ethnically Chinese, Indians, and indigenous peoples. Its politics are race based. They have a British style government with both a king and a prime minister, and the state religion is Islam. It's been in its current configuration of various states since 1965. This tiny country has a GDP rate of 6.5% that makes us look like we're over regulated and run by socialists! It's the descendants of the Chinese and Indians that really drive the economy, although they aren't the "real" Malay (must be Muslim), and there's friction (Wikipedia).

I see nothing wrong with global companies, some based in the USA, to look for the best deal for their investors elsewhere. (Nor did Donald Trump when he had his clothing line.) The cotton may actually be grown in the U.S.--it travels all over the world. Same for the fabric dye. The machines may be American made, and possibly the ships and crews (although that's probably not the case anymore). The designers and marketers and retailers are probably Americans. If we could get the corporate tax rate under control (highest in the world making us non-competitive), the actual cutting and sewing of the shirt might come back.

According to 2014 data from the OECD, the combined federal and state statutory corporate tax rate for the United States is 39.1 percent. The average of the other 33 members of the OECD is 24.8 percent — 14.3 percentage points lower than the U.S. rate. (Forbes)

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