SHIFTING ECONOMIES

SHIFTING ECONOMIES

China continues to impact industries with predatory unsustainable pricing. A good example is printing.

Time and Newsweek Magazines are stopping their print editions. They will only run them about one more year. In the meantime they continue to ask their print provider for price concessions and to match predatory pricing from China.

It is difficult for even a rural printer to do this. As is the case, the rural printer will shrink to 1/10 of their current size or disappear in the next year. This will take with it over 1000 jobs. And that’s in rural Minnesota.

The Internet and China have changed the rules for paper publishing and other industries. The United States federal government has failed to provide adequate trade protection to domestic industry. Currently there is no level playing field and it’s been that way for the past several decades.

If one was to analyze employment in rural southeast Minnesota over the last 20 years it would go something like this: Years ago the respected, giant employers with all the power and perks were places like Hormel and Weyerhauser, Frontier Tel, Farmstead Foods, Brown Printing, NorWest Banks and 1st Bank Systems.

Hormel is now largely a low-wage immigrant worker employer; Weyerhauser runs a skeleton crew; Frontier is 1/10th their size and won’t last 5 more years; Farmstead took significant taxpayer money when they left; Norwest Banks merged into Wells Fargo; 1st Bank Systems merged into Wells Fargo who is open only by the grace of the Federal bailout. And Brown Printing, in southeast Minnesota, the company that recently lost the Time and Newsweek magazine print editions, will be a victim of societal change and be gone or shrunk to 1/10th of its size in a year.

The list of casualties is a lot longer.

But there is light at the end of the tunnel. As China’s economy slows down, their middle-class grows, there becomes a more level playing field. And Europe is going to continue to have financial struggles for decades to come. Where will it be safe to invest your money? The United States of America. It’s my belief significant amounts of money will be flowing into the US in the coming years. We are very bullish on the next 5 to 10 years and the opportunities that will be presented for domestic companies in the United States.

Companies that find niche products and can effectively utilize the Internet to market and sell those products will succeed. Companies that have unique approaches to human resources, outsourcing, finding the best talent, will do even better.

And if our government has our back and properly controls trade, small and medium-sized business will flourish.

 

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