AG 2011 12 19 - Laserfiche WebLink

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Draft 1.1 -- Not for Distribution or Circulation to home -based businesses. A family looking for a tennis instructor will have even less reason to drag their daughter long distances for her lessons. And common practices in today's economy, such as Walmart contracting with manufacturers to produce cheap consumer goods in low -wage places like China and shipping them five thousand miles to stores in North America, will no longer be tenable. To understand the long -term impacts of rising oil prices, we need only look at the U.S. trade deficit, which has ballooned in recent years. This has occurred not because of rising imports in general —we're running a trade surplus in services —but because of rising imports specifically of foreign goods. Of this, only about a quarter of the goods are "durable ". These cars, appliances, gadgets, DVDs, computers, toys, housewares —all the stuff that is increasingly manufactured abroad —only constitute about a tenth of our total consumer spending. Most of our expenditures on goods are for "nondurables" (goods that tend to be used or consumed quickly) like food, building materials, wood, textiles, clothing, office supplies, and paper products. The distinction on durability is critical, because imports of nondurable goods are particularly vulnerable to rising oil prices. Compared with, say, durables like microchips, the nondurable goods tend to weigh more and contain less value per pound. As energy prices and shipping costs rise, nondurable imports will be the first casualties. This means that local production of food and clothing, coupled with local distribution, will once again be competitive against Walmart's cheap imported goods as rising transportation costs swamp long - shrinking labor costs. We could see a renaissance of local manufacturing of nondurable goods worldwide. The emergence of the "local food" phenomenon not only in the United States but in places like Paraguay, Zambia, Sri Lanka, and Nepal suggests that in some sectors local businesses are already becoming more competitive. All of the anticipated major new job producers associated with goods are linked with heavy, low -value durable products like plastics, food, wood, and metal products. The one exception, motor vehicle parts, already exists in Cabarrus County. 34 Attachment number 1 1 -4 Page 336