Duh (I)

"Made in China: Suspect Imports Raise Questions About the Real Value of Getting Lowest Price"—Headline, USA Today, 0703.07.

I'm delighted, at a personal level, to pay less rather than more than expected for an item—stiffed by lost baggage, I was greatly pleased with the $4 underwear I acquired at midnight in Eugene, OR, at Wal*Mart. But I'm also old enough to believe (hangs in there with the Golden Rule) that "Things that are too good to be true are too good to be true."

I have long argued pigheadedly that low-cost producers will eventually get hammered. (It seems to be happening to Dell and Wal*Mart as we speak—or write.) I believe that business's most likely winning hand, especially in the mid- to long-term, is to live near the top of the price-value heap. In short, as I see it, the low-cost producer has little to fall back on when competitors invariably catch up—that is, a shriveled Culture of Innovation; a high-value producer has only stayed there via constant innovation, big and small. Needless to say, I feel exactly the same way about vendors and every other member of the supply chain.

China will rally, I have no doubt of it. But when they do, they won't offer the same "unbelievable" cost advantage. "If it's unbelievable ... "

(Corollary plea: Please, with a few exceptions related to health, let the market take care of this—not my dear fellow Vermonter, Senator Bernie Sanders, and his pals.)