NORMANDY, France – We needed a pair of good work boots; on weekends we’re fixing up an 18th-century farmhouse.
We’ve never found a French-made boot that fits well. So we went online to see if we could get a pair of American boots delivered.
To our great delight, an old favorite – Red Wing – has stores in several cities in Europe; it ships to France. They were absurdly expensive – $299 – but we figured we would have them for the rest of our lives.
The boots arrived on Saturday and were just like the ones we bought 40 years ago. Same stiff, solid construction. Same rich smell of leather and last. Same Minnesota simplicity.
But something was different. In with the boots was a magazine celebrating the history of the company. It was a stylish advertising piece; we wouldn’t have expected it from such a sweaty, shop-floor boot company.
Even more remarkable were the photos. They showed young people in various chic urban settings: Brooklyn. San Francisco. Berlin. They were all hipsters!
Not a single picture shows a man lifting, toting, turning, hammering, or cutting – the things you’re supposed to do in boots like these.
Instead, now, they are for hanging out… going to bars… and looking cool. They’ve become a fashion item.
A Manufacturing Recession
How come America’s premier work boots are no longer pitched at America’s working men?
One reason: America’s working men don’t need them…
Here’s the latest from Alan Tonelson at RealityChek:
The headline job growth [the aforementioned 271,000 jobs] was overstated due to extraordinary and unreported seasonal adjustment factors.
Also suspect (or at least interesting) is the report that virtually all the job gains were accounted for by workers aged 55 and over. Since 2007, the BLS reports workers 55 and older have gained more than 7.5 million jobs, while workers younger than 55 have lost a total of 4.8 million jobs.
But Red Wing has deeper problems…
First, buyers can get boots cheaper elsewhere. Foreign made, with man-made materials, the new boots are probably just as good and much less expensive.
Second, American workers may not be able to afford American-made work boots.
In real terms, the typical man of working age in the U.S. earns less today than he did in 1975 – 40 years ago.
Also, the “labor participation rate” – which measures the number of people employed or actively looking for work – is back to where it was in 1967.
Back then, it reflected that women were much less likely to have jobs. They stayed at home and looked after families. Now, it’s the men who are more likely to be jobless. What they are doing is not clear. But they don’t need American-made work boots to do it.
Under the circumstances, Red Wing seems to have made a good move…
Like Harley-Davidson, it has positioned its products as American fashion artifacts – relics of past glories, not modern footwear.
Further Reading: To hear more of what Bill’s old friend Jim Davidson thinks about the current state of affairs in America, check out his video. In Jim’s startling presentation, he’ll prove that our elected officials ignored the Founding Fathers’ warnings and have unleashed an unforgiving curse on our economy… one that makes another massive collapse inevitable.
But he’ll also explain what he is personally doing to protect his family’s wealth and prosperity. Watch it here.
[Editor’s Note: Jeff Brown is getting ready to launch a new investment advisory, Exponential Tech Investor. It will help you profit from new, game-changing breakthroughs in technology. Here’s an example of the kind of ideas hes’s tracking.]
You might remember in early 2011 when IBM’s Watson supercomputer crushed the best human Jeopardy champions.
Fortunately, Watson is now being put to much better use than competing on game shows.
The world famous Memorial Sloan Kettering Cancer Center (MSKCC) in New York began using Watson in 2013 to assist with oncology – the diagnosis and treatment of cancer. MSKCC estimates that for a physician to keep up with the latest medical literature, it would take as much as 160 hours per week. That would leave about eight hours a week for a physician to eat, sleep, and work… forget about time off and playing golf on Wednesdays.
That’s where Watson comes in.
MSKCC uses Watson’s artificial intelligence to “read” and analyze all of this medical data. Watson then puts it all to use, giving suggestions to support physicians’ diagnoses and treatments. According to one study, Watson’s successful diagnosis rate for lung cancer was 90%. This compares to a 50% success rate for human physicians.
Enlitic, established in 2014, is another company working on technology to improve the accuracy of disease diagnosis. Enlitic is using artificial intelligence and “deep learning,” which is designed to process information in the same way as the human brain.
Technology like Enlitic’s can scan for thousands of diseases, recommend personalized treatments, and dramatically improve diagnostic accuracy.
P.S. If you want to be among the first to learn about my top picks for breakthrough tech stocks on the verge of huge gains, follow this link.
Did You Know Cancer Was Cured 90 Years Ago?
The bureaucrats in Washington have been covering it up since 1925. But there’s a way to cure every type of cancer with no scorching radiation or agonizing chemo…
How Amateur Investors Can Beat the Pros
Making money as an investor is a lot simpler than most folks make it. And contrary to popular belief, individual investors have a lot of important advantages over the pros. Here’s how to beat the pros at their own game.
Five Essential Habits to Become a 401(k) Millionaire
According to a new study by Fidelity, one of America’s largest retirement account administrators, their top savers all have five essential habits of wealth. The first is obvious: Save a lot. The other four might surprise you.
In today’s mailbag… a comment on interest rates that requires some clarification.
In today’s Diary Bill is confusing the fed funds rate with the rate the Fed pays on banks’ reserves. It’s the fed funds rate that they’ve been talking about raising. The fed funds rate is the rate banks charge each other for overnight loans of reserves.
– Reynolds G.
Chris comment: Just like you or I have checking accounts with commercial banks, commercial banks have checking accounts with the Fed. These are called reserve accounts.
Normally, the fed funds rate is the rate banks charge each other for overnight loans from their reserve accounts. The Fed sets this rate by adjusting the quantity of reserves in the system. More reserves mean a lower price for loans – and a lower interest rate. And vice versa.
Paying interest on reserves is just the Fed’s new way of setting interest rates. Because in a world of excess reserves there’s no demand anymore for overnight loans.
If the Fed unwound QE – if it drained reserves back out of the system in exchange for all the bonds on its balance sheet – it could go back to setting rates by adjusting the quantity of reserves in the system. Supply and demand for overnight loans would then set the rate again.
Until then… it sets the fed funds rate by paying interest on reserve accounts. If the Fed wants a higher rate, it will pay higher interest.
In Case You Missed It…
There’s been an extraordinary amount of interest in Saturday’s note about the 54 prominent U.S. politicians who have been taking their money out of America’s banks and financial services firms. If you haven’t read it yet, you should check it now.