Post in 'The Green Room' started by webbie, Jun 8, 2006.
Actually, your wrong.
Its the American Investor.
Helpful Sponsor Ads!
Investors are consumers, and if consumers paid better attention to what they were consuming and what the real cost of saving a couple bucks was things might be different. I'm not saying I am not guilty, and since I am guilty obviously I'm a hypocrite. The consumer drives the market, what get's consumed is what get's invested in.
When I was a kid, it was illegal to import anything from China. Our govenment didn't like their politics.
Since then, we've decided that free trade is a better approach. For better or worse, that's the root of the problem.
You can't blame consumers for shopping price, I don't think. And you can't blame corporations for doing it, either. You can blame a country's politicians for allowing jobs to be exported if you like, and you can blame the voters for electing those politicians.
If all consumers voted, then Shane would be right.
So, IMO, it's the American voter's fault.
But wasn't the idea and implementation of free trade driven by the American consumers appetite for less expensive products? And it's undeniable that if consumer demand for foreign made products dried up it wouldn't matter if it were legal or not to trade with China. If the American consumer base as a whole truly did not want foreign products they wouldn't exist in the market place. There is nothing manufactured today, that I can think of, that we are incapable of manufacturing right here in America.
I think our politicians decided that it was better (maybe better for them) to have low inflation and a shrinking manufacturing base than the alternative, which would have been inflation and an abundance of decent blue-collar jobs. Given the growth our economy has seen in recent decades, maybe they were right.
My point was simply that trade policy is driven by political concerns and politicians. There are benefits to protectionism (jobs) and benefits to free trade (low prices). Apparently, you can't have both at the same time.
If we truly lived in a democracy, then you would be right to lay it all at the feet of the consumer. I think it's a little more complicated than that, and I think the consumer is being manipulated by politicians and corporations.
Allowing oneself to be manipulated by politicians is still not the core cause of the problem. I'm not one of those people who doens't believe in shades of gray, every situation is intricatley tied to and affected by the next. And I agree we cannot have protectionism in conjunction with free trade. But we as consumers drive the market, whether we choose to think for ourselves or allow others to think for us is still a choice made by every single individual in this country countless times per day. Politicians are consumers too, and I think that your point and my point are one in the same. We have chosen low inflation for a shrinking manufacturing base. In my opinion there is no "they" only "us" or "we". What I mean by that is people are always blaming they who are "they" but a piece of your community. A major contributor to our problems are that the majority no longer rules in this country.
Well, as a whole perhaps.....
Two little stories/examples:
1. The electric miter box - In 1976 I purchased a nice Makita box (made in Japan - high wages, etc.) for about $250. - It was a really nice piece compared to the craftsman.
I would expect a tool of comparable quality to sell for $400+ these days and I would pay that if I was a carpenter. But instead, similar tools are available for $150 - a price that means a LOT more people buy them. But I would not say that the customers demanded this - rather it was made available, and a larger market opened.
2. Copperfield Chimney - here is a a US company that waved the flag for 20+ years and built their business on almost 100% US made products. They were alway profitable. BUT, for the founder to sell out for the most money, they had to hire a "hatchet man" who pumped up the value of the company by moving as much as possible to China. The consumers and dealers who buy from them got no break (with a few exceptions). The idea was just for the company to make more money. Of course, it worked and the company was sold for big bucks.
Neither one had to happen and neither was created by the customers or masses. It was the system itself that rewarded the behaviors. As some radicals like to say "a corporation is NOT a person".
Consumers are at the bottom of the food chain. Sure, quality matters and all that....but the big fish eat the little ones. You should hear some of the tales from my Inventors club speakers about Lowes, Home Depot, etc. and the pressure they exert on the manufacturers....really scary and when you hear it you will no doubt decide you don't want to get involved in that game. But the problem is that it becomes the only game in town!
I suppose we could remove all our money from the stock market, but then our banks would invest in the same ventures with our savings accounts and CD's.
High-quality power tools are a perfect example. Wish the same were true of wood stoves and boilers, but they seem to be following the old American model of steadily rising prices. Maybe that's because they're made of iron and steel and have high shipping weights, but I was struck by your observation in another thread, Craig, that you're not getting a whole lot for your money (compared to other consumer products) when you buy a modern stove.
I wish the auto industry followed the consumer electronics pricing model. No matter how hard I try to get ahead of the game, I'm still commiting about a quarter of my gross annual income when I buy a new car. It was that way in 1980 and it's still the case. The only difference today is that the sales taxes have more than doubled (9.5 percent where I live).
Overall, I'd say that the free world market is a good thing for the haves in this world, but it's a raw deal for the have-nots. And it's a raw deal for the environment, any way you slice it.
CEO gets comped on the value of the company share.
Shares are worth more when profitability is high.
If it takes $10 dollars to make a widget in the US, and it takes $5 to make the same widget in China, including shipping, then viola! This is the "productivity" gain Greenspan has been talking about for the last decade.
Now that company has pricing power over the competition. Now others competing must follow step and manufacture in China to stay competitive, or their stock price will be hammered, and no fat CEO bonus.
Obviously oversimplified, but thats it in a nutshell.
DeWalt tools were manufactured in the US ten years ago. My last DeWalt circ saw must made in China. Porter Cable, Ryobi, etc made them do it.
Makitas are still made in Japan that is except chain saws made in Germany Dolmar Sacks (Makita bought them out)
I have a LS 12/12 which is a Makita 12" compound sliding miter saw Tilting both ways Flawless in opperation. I had a dewalt nice saw when it was running but spent too much time repairing it Calabraiting the miters that for some reason slipped from time to time.
I have the Home Crapo Ridgid Contractors Table saw. Nice saw. I came by it as two were being thrown out broken Using both, I pieced together a real decent saw at 0 cost. Ridgid power tools sold at home crapo made in China. What a way to bastardize the best name in plumbing tools. The Ridgid Home Crapo connection. So far Makita has not made a cheaper version of it tools for the Box stores. Most pros buy Makita and know what to expect. I have a lot of different brands. Wastefullness spills over even in contractor tools now. It breakes buy a new one but please give me the old one to fix. I still have many good working tools from the 70's my first Skill saw Turn it on and the ball bearings are still turning minutes later. I have framed over 100 homes using this saw (along with others) Yes I replaced brushes,cords,and switches, but It was built to last and has proven it. It's a bit heavy but no plastic anywhere. MacColuch 10 10 Chainsaw 1968, still working still cutting, no plastic parts either. ( no safety features and one of the loudest saws ever)
Im somewhat of a toilet connoiser (sp?)....Toto DOES rock!, and they have toilets in all ranges of prices, even several pressurized flush models! wow! just dont be sitting on the pot when you flush! :ahhh:
Thats what worries me about a local New England pellet mill...the ONLY New England one. They decide to expand, they need money, they bring in investors. Now, to their credit, these investors are there to MAKE MONEY, to GET A RETURN on their money. Fastforward to April, '06. The pellet co sends out their yearly pricing....its high, but the pellet co says price of energy is up, etc, and they DONT EXPECT TO RAISE THE PRICE ANYTIME SOON. Fastforward to June 5, '06. Along comes a letter in the mail, the pellet co is raising their price by $24.00/ton! in June! less than 2 months after they said it would remain stable! In my paranoid way of thinking, I think the Board of Directors have decided that they and the investors arent making enough return on their investment, so they are "tweaking" the price on the order of some 15%. I worry that the investors may be causing people to look elsewhere for product. If someone can bring pellets into NE effectively and competitively, theres a great opportunity for them here. It seems a bad idea to do this now, IMHO, when you will need to be relying on future business to pay for the new plant(s). my 2 cents
You gotta bear in mind that the price of everything is rising, so I don't know why pellets should be any different.
Pellet manufacturers buy sawmill residue when they can get it, since they don't have to process or dry it as much as when they buy logs or other roundwood. As the price of logs rises, the price of sawmill residue (when they can get it) goes up as well. They're competing with papermills and other secondary manufacturers for the same residue, so price and availability is always uncertain.
If they can't get sawmill residue, then they have to buy logs or whole-tree chips or some other form of inferior feed stock. The price on that stuff rises along with the sawmill residue, for many of the same reasons. Processing this material requires grinding and drying, both of which require large amounts of fuel, probably fossil fuel in most cases. Add all that to the cost of transportation (a huge expense) and I think you can understand why the price of pellets continues to rise, along with everything else.
That's part of the equation, anyway. I'm sure they're trying to make money like everyone else. And, I suspect they've figured out how high they can price their product without attracting competition from outside the region.
Think about it for a minute: Why would a company announce a "firm" price and then reneg on it two months later? Obviously, that's going to piss people off. Most likely, they were caught off-guard by an unexpected increase in their costs. I'd chalk that up to inexperience in an emerging market.
Bottom line, I don't think pure greed is the entire answer. Uncertain commodities pricing is just one of the realities of the free market. So is charging what the market will bear.
That's why I like heating with free firewood. Long-term, I don't think anyone saves much money burning pellets.
yup, the price of nearly everything IS rising....but the median fuel price is lower now than in April. The pellet co's also CONTRACT for raw product, setting their price AHEAD OF TIME, not in June. I was commenting more on the investor. Investment tends to drive many markets more than actual demand in many cases. Look at the futures market. It often isnt actual demand for product that is driving the price, but demand for INVESTMENT of the product.
I guess the market will determine whether or not you're right, Harry. If New England Wood Pellet is letting investor concerns govern its pricing policy, then they won't be in business for long--somebody else will come along and produce the same product for less money.
I know some of the people involved in NEWP and I believe they're in it for the long haul. But like I said, it will all get sorted out in the marketplace.
I burned pellets for 5 years and the price only went up 20/ton over that period. Relative to the leaky propane furnace in the crawlspace, the pellet stove saved me a lot of money. Due to it's very clean burning nature, I could run the stove during burn bans, some which lasted 2 weeks, during the coldest time of the year. And it gave me a convenience that I never experienced burning wood before. It burned 24/7, safely, even when I was at work. The stove sold for a good price. So the long-term for me was pretty good.
I agree, that one needs to look at all the costs involved in one's local region. But for many of us, firewood is anything but cheap and natural gas isn't available. In the right region with a stable market, pellets are a very affordable alternative to folks that don't have access to less expensive alternatives. 16% of Sweden now is burning biomass, mostly pellets, so they must have some economic value.
Those are good points, BG. What I should have said is that I believe the price of pellets will closely track the price of other fuels, including oil, coal, gas, electric and processed firewood. And with the exception of natural gas and electric, the smart energy consumer can shop around and stock up when the price dips.
Wow, that's some high sales tax!
I still think cars are the ultimate value - looking around for something new for my son and the 2006 Honda Civic, which starts stripped at 14K, feels like a large luxury car on the interior. Amazing amount of safety gear. When you consider the weight and the materials - every tiny part is speced out - it is ONLY because of competition and productivity that we are able to see such a low price.
He doesn't like the car - it feels too big for him! But it gets 30/40 MPG.
Yes, the car might cost you a big %, but I will bet that the average car is safer and will last longer. That is progress of some sort.
BTW, isn't it telling that these Hondas - probably the top brand in the world in price/performace, are made in the USA by people in Ohio and other relatively high wage areas? It works against most arguments that say you can't make it here!
I would say you can make things here, BUT they have to be large quantities and/or they have to be relatively advanced products. This does not include sewing T-Shirts, etc.
Oneida County, NY. I hate to fork over $2,000 every time I buy a car, but that's the deal.
Got my stock up 16 may be 20 cords, when it is finally processed and stacked. I have another full size pk truck with side tool boxes wortth to pick up tonight. Problem is I cut up all the easy 16" diameter and smaller. ITs 2 30" logs 16" long that is the real pain.
My Stihl farm boss only has a 16" bar and barely makes it threw from both sides. And it is laying on the ground next to each other so cutting from both sides is impossible. I am going to dig out in the middle and try my car jack to raise and move the logs then block them up. They are so heavy, that I have to cut only 1' rounds then roll them up a ramp into my truck. The deal was, I have to take them all. Usually I would not bother. But I already got 3 cords. This is the first time, in a long time ,I miss the 20 or 24" bar I had. I could use one of the modern Husky's or Sthils with the longer bar. High RPMS. Too much effort and cost to transport my backhoe to move the logs But I thought about it. I sold my trailer and soon the dump truck which is not registered and on the road.
At my age I winding down opperations hoping to be appointed a state inspector. I am also declining many roofing jobs. Takes a lot out of me great money, At lease no two story ones.
Have you tried a cant hook or a peavey, elk? Even a big iron bar might work. I'd loan you my peavey if you lived nearby. How about dragging them with the truck?
That's very true. I'll take free firewood anytime I can get it. No more than an hour after the last post my neighbor came over. His huge 80 yr. old big-leaf maple just calved off a huge chunk across the road. He plans on having the whole tree taken down and asked if I wanted some free wood. Big smiles here considering we'll be heating exclusively with wood and propane next winter.
Thanks Eric for the offer. Part of the problem is the thickness one can not watch the progress of the bar Especially helpfull when near the ground So much more resistance when the bar does not go threw the log. Well the roll away car jack, did its thing. I was able to raise the log and shift it around with a crow bar. After I raised I found it to be sitting on rocks I could not see. I went to Home Cheapo last night looking for a 20 or 24" bar No luck. I thought they sold Oregon ones but have Pro something brand . Time for another chain. Once you get less than 33% left it ows me nothing. Home Depot did have the correct 16" chain size $18. I know probably crap but where else can you get one at 9:00 at night? Most of what I cut is, what ever I can load in my truck. I'm not taking down lots of trees and clearing lots anymore. To me the perfect size is 4" to 12" rounds. I cut up to lengths and a lot is done with my cheapy electric saw. So far this year I have gathered up enough to replace the 6 cords I used last year. One bummer is one of my sources is gone. Due to budget cuts, the town closed the brush drop off area. That was good for at least 3 cords a year.
since the town closed the tree dump what do they do with the stuff they come up with during the year? trimming, tree falls across the road.
I guess the DPW can still dump the trees but it will be closed to the public. Really no plans or alternatives were mentioned.
Actually I was doing the town a favor, every log I picked up saved disposal cost. Everything is chipped up in a huge mobarker.
Just like everything else a few spoil it for the masses. ITs a brush drop off not common trash tvs bikes washers. ect. Now it has to be staffed and monitored. This is what they cut. Therefore due to past abuse it will be closed to the public. We had free dunpsters till hazzardeous Medical waste was found. Then we had recycle dumpsters glass, Paper, and Cardboard. Had to eliminate that practice, because people were disposing trash in them and when full, they just emptied out what ever they had on the near by ground.
Amazing from letters address were found identifing people in RI as far as 60 miles away. Found that most offenders were not town residents.
Other cost cutting measures were to limit trash pickup from 4 barrells per household to one but unlimited recycling. Additional bags could be purchased for $2 ea. This was to increase recyling. Seemed like a good idea BUT
We had a 5 year commitment to pay for x tonage of trash. IF we do not exceed the tonage we still have to pay for the x amount
Very little savings, although the recycle committee expounds our savings. Second it if you purchase extra bags nobody checks them for recycleables so it is common trash. To many they can't be bothered to recycle. I know it takes a few extra minutes.
When recycling started to prosper we exceeded our allowable tonage and were charged additional tonage. Making the pay per bag trash even more attractive. Mind you we still have to pay for x tonage till year 2008, Personally I make a decent effort to recycle. but many are too lazy to bother. We are a wastefull fuelish society. I do not know the answers to make everbody responsible. There will always be abusers scoffers that can't give a SH-- about being responsible
Separate names with a comma.