The Nation's Financial Condition

[Farfromgeneva]

If the legal cats ever bother checking this board I drop so much into, thought this was interesting when cleaning up emails this weekend. If the plaintiff side were to prevail I think that would be profound for rental costs throughout the country.

https://www.bisnow.com/national/news/mu ... dium=email

DOJ: RealPage Pricing Algorithms Run Afoul Of Antitrust Laws, Sherman Act
NationalMultifamily
November 16, 2023 Bianca Barragán, Southern California
The Department of Justice delivered a boost to renters who allege real estate rental software company RealPage and the landlords who use it engaged in price-fixing.

In a filing Wednesday, attorneys for the department argued against dismissing an antitrust case against RealPage — something the company and other defendants, including many large REITs, had requested.

In its filing, the DOJ outlines the ways it says the RealPage algorithm is a high-tech spin on the age-old concept of price collusion.

“Antitrust law does not become obsolete simply because conspirators find new ways to act in concert,” the department’s filing says.

By outsourcing the decision-making on rent prices to a shared source, RealPage and its users were in violation of the Sherman Act, the federal law that prohibits monopolistic business practices such as price-fixing, the DOJ argued.

The plaintiffs claim that RealPage requires users to put in detailed information about their properties, including rents and vacancy, and uses that information to suggest pricing, which it then urges users to implement. Landlords using RealPage adopt its pricing recommendations 80% to 90% of the time, the filing says.

RealPage declined to comment when reached by Bisnow via email Thursday.

Not every use of an algorithm to set price is necessarily against the law, but it is “when, as alleged here, competitors knowingly combine their sensitive, nonpublic pricing and supply information in an algorithm that they rely upon in making pricing decisions, with the knowledge and expectation that other competitors will do the same,” the filing’s authors wrote.

It isn't unusual for the Justice Department to get involved in a case in this way, but it indicates that the DOJ sees this as more than “a garden-variety case,” New York University law professor Harry First told Bisnow.

The DOJ’s intervention here underscores the potentially far-reaching impact the case could have “not only on the way businesses use technology to drive profits but also on the marketplace consumers confront,” ProPublica wrote. ProPublica’s investigation in 2022 raised antitrust questions about the way RealPage’s algorithm operates.

While the DOJ's filing doesn't necessarily indicate that it believes the tenants should win, the department does argue against throwing the case out now, First said.

The rental software company was named in more than 30 lawsuits that were consolidated in Nashville federal court, representing renters from across the country.

Other jurisdictions have taken up the issue. Earlier this month in Washington, D.C., the attorney general filed a lawsuit against RealPage and 14 major landlords in the city alleging that they worked together to hike rents.

“We appreciate the DOJ has taken an interest in this important litigation,” Scott + Scott Attorneys at Law LLP’s Patrick Coughlin, co-counsel for the tenants in the consolidated case, told Law 360. “Family rents have been skyrocketing the last several years and we believe it is due to the alleged concerted action of landlords throughout the country.”

The Justice Department’s insight at this juncture serves as a boost to the renters’ case. The DOJ is a trusted expert on antitrust law, and its filing might help convince the judge that the plaintiffs' position is correct, First said.

“There’s a lot of distance between this and success, but the Justice Department is coming out and saying the plaintiffs have the right to go forward,” First said.

Contact Bianca Barragán at [email protected]
See Also: This Week's LA Deal Sheet
Related Topics: antitrust, Realpage

[Farfromgeneva]

Next 6mo of this charts development may be the biggest factor in the Fed decision making over the next few quarters - years.

https://www.newyorkfed.org/research/pol ... nteractive

[Farfromgeneva]

I’ve worked with some f’ed up business models but this is beyond whack. Funny thing is cross River Bank has a regulatory order slapped on them a few quarters back and this is what they are backing? I can’t even imagine the societal consequences of this catches broad adoption.and the cost to insure defaults for multifamily property owners can’t be low enough.

https://www.bankingdive.com/news/cross- ... ty/701765/

Cross River bolsters Best Egg relationship with $150M credit facility

Gabrielle Saulsbery
Cross River Bank extended a $150 million credit facility to personal lending fintech Best Egg to strengthen its Flexible Rent product, the bank announced Tuesday.

Best Egg’s Flexible Rent product is a loan that integrates with property management systems to give renters point-of-payment flexibility, at no cost to property managers. The product allows renters to break up their rent into smaller chunks aligned with their cashflow, which according to Best Egg “ensures on-time payments and reduces bad debt.”

The credit facility bolsters an existing relationship between the two entities that began in 2013, when Best Egg was known as Marlette Funding, with Cross River originating the fintech’s core loan products.

David Sullivan, managing director of Best Egg Flexible Rent product, said that the product now has the capacity to serve more than 10 million homes – or 20% of the rental housing market.

“At Best Egg, we aim to provide flexible solutions to our customers, especially those with limited savings, and help them navigate their everyday financial lives,” Sullivan said. “The expansion of our credit facility with Cross River, a partner that genuinely identifies with our business goals, will allow Best Egg to provide millions of renters nationwide with more flexibility in their finances and help them to be money confident.”

Sullivan told Banking Dive that he is often reminded of the “true value” of the Flexible Rent product through customer feedback that it’s helped them “feel powerful and secure.”

“Flexible Rent is unique in that it allows renters to avoid taking a significant financial hit on the first of the month, aids them in feeling more confident with their financial position, and builds their credit, all while ensuring landlords can collect rent on time,” he said. “This extended credit facility with Cross River will allow Best Egg to provide Flexible Rent to more users than ever and empower renters nationwide to be money confident.”

Cross River has long made a name for itself as a fintech-friendly bank.

The $9 billion-asset bank is one of the largest banking-as-a-service providers, providing the underlying banking services for a large portfolio of payments, fintech and crypto firms, including lending platform Upstart and neobank Upgrade.

One of its former executives, Phil Goldfeder, is even now president of the American Fintech Council.

The $150 million credit facility extended to Best Egg is in line with previous credit facilities extended to its fintech partners, according to Tuesday’s announcement.

“This past year (2023) was a tremendous year for our direct lending team adding positions across [asset-backed securities] Sectors,” a Cross River spokesperson told Banking Dive. “Cross River’s ability to also provide a credit facility to support the program through well-protected investment structures, supports our partner’s needs at a time when others are pulling back.”

[Farfromgeneva]

Jobs report source at 8:30

https://www.bls.gov/home.htm

[NattyBohChamps04]

The biggest study of ‘greedflation’ yet looked at 1,300 corporations to find many of them were lying to you about inflation

While this obviously contributed to rising prices, the report finds that company profits increased at a much faster rate than costs did, in a process often dubbed “greedflation.”

Profits for companies in some of the world’s largest economies rose by 30% between 2019 and 2022, significantly outpacing inflation, according to the group’s research of 1,350 firms across the U.S., the U.K., Europe, Brazil, and South Africa.

Unsurprising. But apparently Trump is gonna fix the economy according to those Louisiana voters linked in the other thread.

[youthathletics]

The biggest study of ‘greedflation’ yet looked at 1,300 corporations to find many of them were lying to you about inflation

While this obviously contributed to rising prices, the report finds that company profits increased at a much faster rate than costs did, in a process often dubbed “greedflation.”

Profits for companies in some of the world’s largest economies rose by 30% between 2019 and 2022, significantly outpacing inflation, according to the group’s research of 1,350 firms across the U.S., the U.K., Europe, Brazil, and South Africa.

Unsurprising. But apparently Trump is gonna fix the economy according to those Louisiana voters linked in the other thread.

Had this conversation with MDLAX a couple weeks ago....viewtopic.php?f=66&t=380&p=501449&hilit ... cs#p501449

[Farfromgeneva]

Here’s the final slides from a rep of IMF study…while the term can be value neutral the way I keep reading the third and fourth bullets sure looks like a solution looking for a problem. Like he met his goal but isn’t questioning how he met it. Also feels like he’s leaning on historical data to support the extreme relationship between real wages and prices which I find to be problematic but happy to hear from the quant and modeling crowd if you feel differently. The use of quotations marks around heterodox implies she thinks they’ve come up with some great out of the box insight which is obviously goofy when far less rigorous Katie Porter was putting on a dog and pony show on this topic 6+ months ago.

In other words, all that modeling backed into the FRB St Louis chart on slide ten…

https://www.imf.org/-/media/Files/News/ ... ayana.ashx

Wrap-Up
• I’ve described an MPL-anchored version of Lorenzoni-Werning’s conflict model.
– Key: “mechanistic” wage-setting tracks MPL.
• I’ve applied the model to recent US inflationary experience.
• The analysis attributes the unusually high inflation to unusu-
ally low firm aspirations for the real wage.
• In this way, it formalizes the role of greedflation as an in- flation driver.
11

Questions
• There are important residual questions for this basic framing.
– What factors/forces give rise to coordination in aspira-
tions among firms and/or workers?
– Relatedly, what factors/forces blunt competition from eroding the impact of aspirations?
– What are the best policy tools with which to manage coordinated aspirations and their underlying drivers?
• So, these papers leave us with big questions to pursue. • But that’s what truly great research does!

[Farfromgeneva]

If we’re looking into pricing power look into software and cloud computing services (hard or SAAS) as much as consumer products in the grocery store (which fundamentally is stripped out of core inflation anyways ironically because measuring commodity vol in a time series is worthless)

To me this is more a story of concentration of industry, with tech continuing to get mostly a free pass on this because, China….lack of slack in operating systems and processes of businesses, forced to be tight by absurd monetary policy for a decade plus which is forced to do dumb ish because fiscal policy hasn’t been policy in forever but reactionary populism. Not the evil CEOs conspiring, they are cogs in this machine not the change agents many believe them to be.

Tossing up on of my preferred channels (Financial Times, along w The Economist and Greg Ip) on macro/finance hybrid topics:

https://www.ft.com/content/be35d554-b52 ... 53ba07da32

The ‘greedflation’ question: what have we learnt?

A quest for evidence supporting this theory has had mixed success

Ann Kiernan illustration of the silhouette of a woman taking cash out of her purse against the outline of a shopping trolly
© Ann Kiernan
As prices surged, some pointed the finger at profiteers. Cue a heated debate, which along with inflation has mercifully now cooled. With the benefit of time and data, what have we learnt about “greedflation”?

Naysayers maintain that it is enough to point to the pandemic, the war in Ukraine and government support if we want to explain price increases. We don’t need a story about villainous monopolists amassing power, then suddenly gouging unsuspecting customers. But it’s a bit more constructive to try to understand what the more careful greedflationists were arguing — which is not that the mismatch between demand and supply was irrelevant to inflation, but that corporate power helped to embed it.

For example, Isabella Weber and Evan Wasner of the University of Massachusetts Amherst suggest that supply chain bottlenecks crimp competition by leaving some firms unable to service demand. Those who can get inputs then hoick up prices. And when people understand inflation is generally high, they spend less effort on bargain hunting. That means firms find it easier to try it on.

The quest for evidence supporting this theory has had mixed success. Explorations of the national accounts show something happening. Jonathan Haskel of the Bank of England calculated in May that rising “unit capital costs” contributed about two-thirds of economy-wide inflation (not just consumer prices) over 2022 in the UK and the eurozone, and about a quarter in the US. But he warned that such capital costs include more than pure profits.

A note from September by Bernardino Palazzo of the Federal Reserve board found that American profits as measured in the national accounts were boosted by plunging interest rate costs during the pandemic, as well as government support for businesses. That muddies any other analysis of whether market power mattered.

Profits in the national accounts are distinct from those described for investors in corporate accounts. A new note from the Bank of England studies those in the UK and eurozone and finds that yes, profits rose a lot in nominal terms. But so did costs. And so they conclude that other than in oil, gas and mining, profits up to 2022 behaved pretty normally.

Accounting profits can be pushed around by all sorts of things. The measure of companies squeezing consumers that economists usually prefer is different, and defined as the mark-up charged over marginal cost. If inflation was driven by companies exercising market power, one might expect to see a correlation between price increases and rising mark-ups.

Awkwardly, mark-ups have been moving all over the place. A study from the Bank of Italy estimated that in Germany they were constant in industry and manufacturing in 2022, but rose in construction, retail, accommodation and transport. In Italy, they returned to pre-pandemic levels pretty quickly. Another from the IMF studying the eurozone concluded that “limited available data does not point to a widespread increase in mark-ups”.

A paper by Christopher Conlon of New York University and Nathan Miller, Tsolmon Otgon and Yi Yao of Georgetown University found no correlation between mark-ups and price increases between 2018 and the third quarter of 2022 in the US. A different study from the Kansas City Fed found that mark-ups in the US surged in 2021 but then dipped during the first two quarters of 2022 despite high inflation. That looks like companies raising prices in anticipation of their future costs going up, not price gouging.

The riposte to this assortment of correlations and trends is that they are not really a test of whether market power matters. If companies can defend their profit margins in the face of rising costs, that could still be a sign they are exercising power. Absence of evidence is not the same as evidence of absence.

There are some interesting efforts to go further. A working paper published in October compares industries and countries within the eurozone, and finds that those with more pre-pandemic pricing power and facing high demand did find it particularly easy to raise prices amid the supply chain disruption. These powerful companies also found it easier to raise prices once inflation expectations were elevated, even if they didn’t face any supply bottlenecks at all.

This sort of result speaks to the better (boring) version of the greedflation story, which is that in trying to maximise profits some companies helped a cost shock to propagate through the system. Something to watch, not dismiss out of hand.

[email protected]

[Farfromgeneva]

This is the biggest driver of inflation as housing is 40% ish of folks income. They use a metric called owners equivalent rent to convert homeownership costs to renting.

Concessions are just real estate being dishonest in their marketing once again. Same with Tenant Improvements. The net rent is what matters but you only see gross rental rates.

Btw the only way a 23yr old designer is renting a 750sqft corner unit is called @the bank of daddy” and I would presume the credit she gets for “waiting it out comes from him”. Now given NYC has a healthy cohort of “adopted uncles to not women” like Miami said Daddy could be biological or just her keeper.

https://www.wsj.com/real-estate/renters ... 58?mod=mhp

Renters Are Starting to Get Concessions From Landlords Again

After years of double-digit rent increases, owners are vying to fill new buildings by offering a month free, gift cards and other perks

Will Parker

Some are getting more creative. In suburban Atlanta, landlords renting houses are pledging free lawn care or housekeeping services. Tenants at certain buildings in Chicago can spin a wheel and win gift cards to local businesses.

Concessions have been especially prevalent in the most overbuilt Sunbelt markets, but they are on the rise in the majority of major metro areas. About one-third of apartment and home-rental listings this October included some type of markdown, according to an analysis of rental listings by real-estate firm Zillow. This was the highest rate since February 2021, Zillow said.

Advertisement - Scroll to Continue

Property-data firm CoStar Group, meanwhile, found three times more apartment-rental buildings offered concessions this October than did so during the same month two years ago.

“Tenants are starting to expect concessions,” said Adrian Savino, managing director at the Living New York real-estate brokerage in New York.

That calculation represents a reversal from last year, when renters in several U.S. cities had resigned themselves to competing in bidding wars to lock down a rental home or apartment. Now, landlords are vying with each other to keep tenants, especially at new buildings.

Advertisement - Scroll to Continue

The deepest discounting is happening in the South and other Sunbelt markets, in cities such as Charlotte, N.C., and Dallas, where there has been more construction than in the rest of the country. Mid-America Apartment Communities, a publicly traded company focused on Sunbelt cities, said in an October earnings call that widespread use of concessions by developers was weighing on how much rent it could charge.

But tenants are taking advantage of concessions in big and expensive Northern cities, too. The effective rents of one-bedroom units in professionally managed, high-rise buildings in Chicago’s West Loop neighborhood were 14% lower at the end of November compared with that month last year due to concessions, said Sophie Morrison, a real-estate broker at Downtown Apartment Co.

Andie Melendez, a 28-year-old behavior analyst, is moving into a one-bedroom in a downtown Chicago high-rise that offered her two months free rent. The building is stocked with amenities like an indoor swimming pool, gym and a roof deck.

“I upgraded places and decreased in price,” said Melendez, who now has an in-unit washer and dryer after living without them at her previous apartment.

In New York, Lil Alvarez, a 23-year-old designer, waited out the market by subletting this fall, in hopes of finding a discount on a longer-term lease. This month, she found a 750-square-foot corner unit in a doorman building near Union Square that offered two months free.

Advertisement - Scroll to Continue

Brian Hourigan, a senior managing director at the Bond New York brokerage firm, expects concessions in New York to get so deep this winter that some tenants will try to break their lease to move to a heavily discounted building, even if it means paying a penalty.

Renters of suburban houses are also seeing more deals, and landlords are more likely to accept renters with sub-optimal credit, said Torrence Ford, a Re/Max Premier real-estate agent in Atlanta.

Property owners are also more willing to address issues that tenants spot before move-in, like broken window blinds or carpet stains, as a condition for signing. “Last year, people weren’t demanding anything cosmetic,” Ford said.

Concessions don’t always reflect a great deal. Some landlords might offer discounts only on rent that was unusually high to begin with. Landlords dangling concessions also often ask tenants to sign 18-month leases. That means units leased in fall or winter months come up for renewal in the spring or summer, when landlords tend to have more pricing power. Tenants could end up paying much higher rents down the line.

Advertisement - Scroll to Continue

The concession trend might also prove short-lived. Permits for new buildings are falling, amid a financing crunch that makes it difficult for developers to put stakes in the ground.

And a for-sale market that remains inaccessible to so many could also prop up rents long term and cut into all the freebies. Coats, the Virginia Beach renter, was readying to buy a home until interest rates shot up last year and prices hovered near all-time highs.

“It’s just impossible to buy now,” she said.

Write to Will Parker at [email protected]

Advertisement - Scroll to Continue

[cradleandshoot]

34 trillion in debt and heading strait up...don't worry, be happy.....

[Seacoaster(1)]

34 trillion in debt and heading strait up...don't worry, be happy.....

And still, we appear to be the envy of the industrialized world for the robustness of our economy.

[cradleandshoot]

34 trillion in debt and heading strait up...don't worry, be happy.....

And still, we appear to be the envy of the industrialized world for the robustness of our economy.

Who are we paying all of those billions of dollars to maintain the debt? I'm not sure we are the envy of any nation that recalls how the Roman Empire finally crashed and burned.

[NattyBohChamps04]

34 trillion in debt and heading strait up...don't worry, be happy.....

And still, we appear to be the envy of the industrialized world for the robustness of our economy.

Who are we paying all of those billions of dollars to maintain the debt? I'm not sure we are the envy of any nation that recalls how the Roman Empire finally crashed and burned.

Are you realizing after a few decades that you're the problem? Cutting taxes and expanding spending is your whole thing the past two decades on LP and now here unfortunately.

I'm sure Trump will cut spending next time he's in office.

[cradleandshoot]

34 trillion in debt and heading strait up...don't worry, be happy.....

And still, we appear to be the envy of the industrialized world for the robustness of our economy.

Who are we paying all of those billions of dollars to maintain the debt? I'm not sure we are the envy of any nation that recalls how the Roman Empire finally crashed and burned.

Are you realizing after a few decades that you're the problem? Cutting taxes and expanding spending is your whole thing the past two decades on LP and now here unfortunately.

I'm sure Trump will cut spending next time he's in office.

What the eff are you talking about? You need to spin these stereotypes that are randomly roaming around inside your noodle to a different azimuth. You obviously weren't in the room the hundred other times I have explained this on this forum. I'm a fiscal conservative who has believed all of my life to live within my means. In my obsolete way of thinking our government lives within it's means just like my family does. You ever heard of a balanced federal budget? You shouldn't feel guilty nobody in charge in DC today is familiar with the concept either. Who cares when your spending other peoples money?

[NattyBohChamps04]

What the eff are you talking about? You need to spin these stereotypes that are randomly roaming around inside your noodle to a different azimuth. You obviously weren't in the room the hundred other times I have explained this on this forum. I'm a fiscal conservative who has believed all of my life to live within my means. In my obsolete way of thinking our government lives within it's means just like my family does. You ever heard of a balanced federal budget? You shouldn't feel guilty nobody in charge in DC today is familiar with the concept either. Who cares when your spending other peoples money?

LOL. Keep wringing your hands and blaming the FLPs. And when the guys you prefer get voted in and increase the deficit way more than the FLPs? Feel free to continue to not care.

[cradleandshoot]

What the eff are you talking about? You need to spin these stereotypes that are randomly roaming around inside your noodle to a different azimuth. You obviously weren't in the room the hundred other times I have explained this on this forum. I'm a fiscal conservative who has believed all of my life to live within my means. In my obsolete way of thinking our government lives within it's means just like my family does. You ever heard of a balanced federal budget? You shouldn't feel guilty nobody in charge in DC today is familiar with the concept either. Who cares when your spending other peoples money?

LOL. Keep wringing your hands and blaming the FLPs. And when the guys you prefer get voted in and increase the deficit way more than the FLPs? Feel free to continue to not care.

I'm in good company with you. America is 34 trillion dollars in debt and paying in maintenance almost as much as our defense budget. There is blame to go around for both parties. The Republicans also love spending other peoples money

[Seacoaster(1)]

Interesting article in the Times this AM:

https://www.nytimes.com/2024/01/05/opin ... thing.html

"Growing up, my parents drove my brothers and me around in lumbering Fords and ungainly Oldsmobiles until one fateful day in the summer of 1980, when my dad showed up in a brand new, all-beige VW Rabbit. It was a completely foreign thing, something from the future, a compact — perish the thought — German automobile. Buying a European car was now OK, my dad made a point of telling us, because this one was made in the U.S.A.

I inherited my father’s “made in the U.S.A.” credo, obsessively hunting for labels, flipping over plates and chairs and turning clothes inside out to find a country of origin. Which is how, over the ensuing decades, I became exquisitely aware that much of the stuff I bought was no longer made in the U.S.A. Everything from my Gap sweatshirts in the ’90s to my clunky desktop in the early aughts, and eventually to my refrigerator and dishwasher, was made elsewhere.

What happened to manufacturing in America and the environmental and economic consequences of offshoring — companies sending their manufacturing abroad — is a story we think we know. The demise of American production seems inevitable, the result of the rise of globalization and free trade. But now we are learning that the precipitous decline was the result of a steady, concerted, decades-long effort among power brokers to wrest the economy from a worker-dependent model to one where skilled workers are expendable. Corporate executives sold free trade to policymakers as a way to lower consumer pricing, but the human and political costs of offshoring were high.

By 2020, bringing back manufacturing to America seemed pointless, like investing in rotary phones. But when Covid shut down the country in March of that year, Americans were confronted by empty supermarket shelves. Later, the larger, more chronic impact of the pandemic was deeply felt in industries that relied on expansive, complex international supply chains.

That summer, I met Ben and Whitney Waxman, husband-and-wife co-founders of American Roots, who had been making all-U.S.-sourced clothing like hoodies and quarter-zips in Westbrook, just outside of Portland, Maine, since 2015. When the country hit pause, the Waxmans worried that demand for their wares would dry up. Without revenue to pay the rent on their factory space and their workers’ salaries, they knew that they’d lose their company in a few months.

To avoid that fate, they could make things the country desperately needed: masks and face shields. So the Waxmans asked their workers if they would be willing to return if they did all they could to make the factory safe. It was a big ask — vaccines were still a year away and information about how the virus spread was limited. In spite of the risks, every single employee said yes, energized by the idea that they could make a real difference at a moment of crisis.

The Waxmans shut down their factory to retool it for safe mask production. By that summer, they nearly quintupled their staff from 30 to 140-plus workers who were cranking out tens of thousands of American Roots’ custom-designed face masks for emergency workers and employees across the country.

Ben and Whitney had founded their company with a mission: to prove that capitalism and labor can work together to create community, good jobs and great products. They chose apparel making because it was fairly easy to get into and all components could be sourced domestically. All they needed was a few sewing machines and an army of workers willing to show up day after day. For these reasons, apparel manufacturing was one of the first industries to get offshored when tariffs were dropped following the signing of NAFTA in 1992. As a Maine native, Ben believed he was bringing back that lost industry — the state had once been a textile powerhouse — and through his mother, who had founded a locally sourced blanket and cape business, he had connections to get them started.

I needed to know how the Waxmans made the whole thing work. But first, their company had to survive the pandemic. I followed them through the fall of 2020, as demand for American-made masks dried up when imported masks began flooding in again. That year, they tripled their annual revenue, hitting $3.6 million. I was with them through 2021, as they returned to the hard work of rebuilding their hoodie business. They struggled to find buyers for their apparel in a wildly uncertain time, forced to shrink their labor force to 45 while just clearing $2 million in revenue.

I spent time on the shop floor and in the homes of their dedicated workers, many of whom are new Americans, who, with their families, had fled untenable, dangerous situations in the Democratic Republic of Congo, Iraq, Angola and other countries, and had found themselves in Maine, eager to build new lives there.

While I was learning about the ups and downs of the textile and apparel industry, I was also introduced to labor history. Ben Waxman had spent a decade at the A.F.L.-C.I.O., the largest federation of unions in the country, representing 12.5 million workers, working closely with President Richard Trumka. During that time, he witnessed the impact of offshoring with his own eyes, standing shoulder to shoulder with factory men and women as their livelihoods were shipped abroad and their pensions dwindled.

Haunted by what Ben had seen, he and Whitney made sure their employees were unionized from the get-go, that their workers earned a living wage, and received health insurance, vacation time, and sick leave to care for themselves and their families. “Our company’s economic philosophy is ‘Profit over greed,’ ” he told me. “We have to make a profit, but it will never be at the expense of our workers, our values or our products.” In that way, the Waxmans were well positioned to attract and retain a work force in a tight labor market.

Since founding American Roots, Ben and Whitney have helped to lift families out of poverty by offering a pathway to the middle class through manufacturing. And they’re not alone. Small manufacturing shops across the country are doing just that at this very moment.

What I learned, however, is that what the Waxmans are doing is almost impossible. The deck is stacked against them. Every day is a struggle. Sourcing American-made components — cotton fleece, zippers, drawstrings, buttons — is a constant issue, because the apparel industry has shrunk considerably. Finding and training workers requires a huge investment in time and resources. Like many business founders in America, the Waxmans are also constantly searching for the kind of deep-pocketed financing deal that will allow them to build enough inventory to relieve them from the stress of made-to-order manufacturing.

The good news is that there are still people making things in the United States. In fact, American-made goods account for 24 percent of the G.D.P. More than 15 million people worked in domestic manufacturing in 2022, many in small shops across the country, producing everything from zippers to socks to textiles to, well, anything you can imagine.

It has taken us a long time to fully absorb the loss of manufacturing on a cultural level. Fortunately, these days, “made in the U.S.A.,” which for so long felt like an archaic rallying cry, more cynical than a comprehensive movement, offers Americans much more than the return of manufacturing jobs. After years of ceding the actual making of the things we use to other countries, the self-sufficiency and innovation that could come with bringing production home cannot be overstated.

During this presidential election year, there will be a lot of talk about American-made. The administration’s four-year agenda has been geared toward rebuilding our capability to manufacture high-tech products, while Republicans are appealing to their base of disenfranchised voters whose lives were affected when manufacturing went overseas.

But what do manufacturers really need to build a resilient domestic supply chain? Topping their wish list is universal health care, which would unburden small manufacturers of approximately $17,000 per worker with a family per year, allowing American companies to compete with foreign producers, especially the technologically advanced European factories which are attracting high-end brands looking to make quality products closer to home.

But we also need to talk about formulating a new industrial policy, just as Alexander Hamilton and George Washington did at the moment of the country’s founding. A manufacturing-first agenda, one not just focused on green energy production and chip manufacturing, would funnel government resources toward policies that manufacturers need to remain robust. That includes job-training programs, transportation infrastructure, research and development funding, sectorwide coordination and financing support in every industry. The policy would also take a hard look at tariffs and intellectual property laws to protect American innovation, and encompass broad, clear guidelines for collective bargaining and environmental standards.

Shifting this country back to making things requires cleareyed policy that would stimulate all kinds of production that would, in turn, lift up those abandoned by the new tech and service economy. But there are so many additional benefits. Manufacturing jobs pay better than average and require less education for entry than many other industries. Apprentices learn their craft by doing. Manufacturing also offers diverse opportunities for people who aren’t so inclined to sit in front of a computer eight hours a day. We’ll need programmers, machinists, inspectors, thinkers, inventors, tinkerers: people who enjoy building things and working closely with machines that move and learn.

Further, domestic manufacturing would stimulate innovation. Inventive thinking doesn’t happen in a vacuum. It usually comes after much trial and error, with designers and makers working side by side. In other words, proximity promotes innovation. Pharmaceuticals start with bench research in a lab. Polar fleece — a game-changing synthetic fabric designed to be lightweight yet warm, even when wet — was the result of a collaboration between Patagonia founder Yvon Chouinard, a Maine native, and a family-owned mill in Massachusetts. The first Apple Macintosh computer, with its user-friendly, intuitive operating system, was built by people experimenting with hardware and software until they arrived at something absolutely revolutionary.

And sometimes you don’t even know what you’re looking for until you’re deep in the process of making. While building equipment to launch Americans into space, NASA engineers contributed to the early development or invention of early LEDs, CAT scans, modern water purification systems, and the computer mouse.

In telling the American Roots story, I found that the most difficult part was finding an ending because manufacturing never ends, unless your company fails. In 2022, American Roots rebranded while the Waxmans hunted for deeper sources of financing that would help them scale up. They hit the $3 million mark in revenue that year and survived the highs and lows of 2023. As we step into 2024, Ben and Whitney Waxman and their team are still manufacturing rock-solid hoodies with heavy metal zippers — made in L.A. — big enough to grab with a pair of welders gloves.

And my dad? He now drives a Subaru Outback, proudly made in Lafayette, Ind."

[tech37]

Interesting article in the Times this AM:

https://www.nytimes.com/2024/01/05/opin ... thing.html

Agreed... interesting. And good peops, the Waxmans. Thanks for posting.

[youthathletics]

Interesting article in the Times this AM:

https://www.nytimes.com/2024/01/05/opin ... thing.html

Nice read. I had not heard of them and do not see them on the list of American Made Clothiers. It is a topic certainly worth further investing time and attention.....the prices are 2x to 3x more than their counterparts (overseas) products. It's really hard to fathom, without having a nose in the ledger sheet of two similar companies where one is entirely american made vs not.

https://toddshelton.com/blog/about-todd ... ing-brands

[Seacoaster(1)]

Interesting article in the Times this AM:

https://www.nytimes.com/2024/01/05/opin ... thing.html

Nice read. I had not heard of them and do not see them on the list of American Made Clothiers. It is a topic certainly worth further investing time and attention.....the prices are 2x to 3x more than their counterparts (overseas) products. It's really hard to fathom, without having a nose in the ledger sheet of two similar companies where one is entirely american made vs not.

https://toddshelton.com/blog/about-todd ... ing-brands

YA, thanks for posting this list. Nice resource, and a lot of nice apparel.

Tech, yeah, the Waxmans sure sound like deeply principled people. I'm going to find something to buy from them.