Thoughts on Christmas, Neiman Marcus, and Western Civilization
Walking around Union Square in San Francisco on a gorgeous winter day, no one would guess there is anything wrong with our economy. But behind the curtain, behind almost every purchase, is a product made in China.
And in the high-end luxury retail stores that comprise our lovely Union Square, people are paying a fortune for brands that still hold European caché, even though many are all now mass manufactured in China.
Over the past two hundred years or so, Europe, and especially France, has created caché around the idea of hand-made, high-end luxury goods. The goods were sold in luxury stores with a low ratio of goods to floor space, for one reason: because the goods were rare. Now, branded luxury goods are often no longer hand-made by tailors and cobblers in France and Italy, and they are no longer rare. These items with recognizable logos and labels of are mass-produced in China and sold chockablock in “luxury retail stores” crammed with goods.
What has happened to American and European manufacturing bases? A merry-go-round of short-sighted thinking that the way to make money is through leveraged buyouts, which puts retail in a position of taking on lots of debt and needing to maximize profit per square foot.
This kind of leveraging is highly profitable to the hedge funds that finance this new economy, but doesn’t create jobs or a stable economy.
Losing manufacturing jobs extends a lot farther than we may suspect.