Tuesday, October 18, 2016

Products too cheap, housing and other things too expensive in the West

Some wonderful things from electric cars to smartphones use lithium batteries. To some extent, this abundance is on the backs of harsh conditions that miners face in poor countries. They toil procuring the elements so we can have our devices. This segment of On Point Radio looks into the problem. Very informative.

Related, but not necessarily discussed in the show, I have my own thoughts about how inexpensive so many of these products are compared to some other things.

Personally, I would be willing to pay a bit more for many products to create a better world. We live in an economy that brings prices way down for lots of things. Harsh conditions for a lot of people working in these industries around the wold. At the same time, many folks, in USA, are struggling as well. Lots of Americans are close to the edge financially. This creates difficult politics for adding more cost to the products we consume; for instance the hard politics around carbon taxes as cheap energy is another bargain we enjoy.

When one thinks about it, the struggle of Americans doesn't relate to the price of products, it relates to things like the cost of healthcare, housing and education. I have a theory that the prosperity, created by things like cheap energy and inexpensive products, is a big part of what drives the high price of housing, for instance. Prosperity, built on the back of abundant and inexpensive products, goes into inflating the price of things like property values in the rich nations.

It may take more taxes on things like carbon emissions to improve the world. It may also take higher prices for elements used in, for instance lithium batteries, to improve the world. At the same time, this might cool runaway prices in other sectors of the economy; such as real estate where extra money, from the prosperity, drives inflation.

The prosperity has been good and I would not necessarily advocate shutting it off, like protectionism in trade could do. On the other hand we would do better if we could figure out how to pay a bit more for these inexpensive products and, possibly as a result, pay a little less for the things, such as real estate, medical care and education, that are experiencing the inflation driven by this prosperity.

On another somewhat related note, I plan to vote yes on Washington State Carbon Tax Initiative 732 in November 2016.

Photo from WBUR website.

In this April 10, 2004 file photo, a young man carries wet Cobalt on his back at the Shinkolobwe Cobalt mine, situated 35km from the town of Likasi, in the Democratic Republic of Congo. (Schalk van Zuydam/AP)

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