December 30 2024

1. A $12.98 T-Shirt Is Made in America—at a Profit
2. MAGA Movement Split Over H-1B Visa Program
3. US Homelessness Hits Record High, Up 18%
4. Credit Card Defaults Soar to 14-Year High
5. Inside a Mexican fentanyl lab: “This is what makes us rich”
December 30, 1922: USSR established

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1. A $12.98 T-Shirt Is Made in America—at a Profit

Walmart aisles are piled high with goods this holiday season, but one item sticks out: cotton T-shirts that were made in America and cost $12.98.  The U.S. is awash in a sea of cheap imports that has destroyed much of the domestic apparel industry. In 2023, less than 4% of the apparel purchased in America was made here.  Seeking to turn the tide, Donald Trump imposed tariffs in 2018 on Chinese imports during his first term as president and has proposed additional tariffs on all imports in his second term, including items from neighboring Canada and Mexico.  But it wasn’t tariffs that made the $12.98 shirt economically feasible, says Bayard Winthrop, the chief executive and founder of American Giant, the U.S. apparel company producing them. It was Walmart’s heft—and guaranteed orders. The country’s biggest retailer—and importer of consumer goods—pledged in 2013 to buy more items that were made, grown or assembled in the U.S. In 2021, Walmart increased its goal and promised to spend billions more each year through 2030. More than half of Walmart’s sales come from groceries, most of which are produced domestically.  Winthrop said that without Walmart acting as a backstop by committing to buy a predetermined number of shirts over time, American Giant’s suppliers wouldn’t have had the confidence to make the investments in automation and other upgrades that drove down production costs. A Walmart spokesman confirmed that the retailer essentially signed noncancelable purchase orders

Article Source: WSJ

2. MAGA Movement Split Over H-1B Visa Program

H-1B is…a visa program intended to allow American companies to hire temporary skilled workers from abroad—emphasis on skilled. The H-1B program, which goes to some 65,000 people a year, most from countries like India and China, is beloved by tech companies because they can bring in highly educated, technically proficient engineers, and pay them less than they would pay an American doing the same job. Its supporters—the techno-libertarian wing of the MAGA movement, led by Elon Musk, Vivek Ramaswamy, and other DOGE proponents—say that it provides American companies with the kind of talented employees they simply can’t get here. As Musk put it on X, “The reason I’m in America with so many critical people who built Space X, Tesla and hundreds of other companies that made America strong is because of H1B.” Its detractors point to a series of ways the program has been abused over the years. The good-faith ones include Nicole Shanahan, Robert F. Kennedy Jr.’s former vice-presidential candidate, a Silicon Valley lawyer, and, notably in this case, Sergey Brin’s ex-wife. “The system we’ve constructed with H-1B visas, whether we like it or not, incentivizes people to come here and serve as essentially indentured servants for Big Tech, taking on the tough, grueling jobs that few here in America are excited to perform at the current suppressed salaries.” she wrote on X. The program, she concluded, needed to be overhauled. Another criticism, coming from Eric Weinstein, the mathematician and managing director of Thiel Capital, described the H-1B visa program as an anti-labor device. Its original aim, he wrote on X, “was to weaken American workers’ bargaining positions so much that they would be ‘forced’ to mitigate their wage demands at your bargaining table. It’s a wage tampering program.”

Article Source: The Free Press

3. US Homelessness Hits Record High, Up 18%

Homelessness soared to the highest level on record this year, driven by forces that included high rents, stagnant wages and a surge in migrants seeking asylum, the federal government reported on Friday. The number of people experiencing homelessness topped 770,000, an increase of 18 percent over last year and the largest annual jump since the count began in 2007. The report, released by the Department of Housing and Urban Development, showed that homelessness rose by a third in the past two years, after declining modestly over the previous decade.

Article Source: NYT

4. Credit Card Defaults Soar to 14-Year High

Defaults on US credit card loans have hit the highest level since the wake of the 2008 financial crisis, in a sign that lower-income consumers’ financial health is waning after years of high inflation. Credit card lenders wrote off $46bn in seriously delinquent loan balances in the first nine months of 2024, up 50 per cent from the same period in the year prior and the highest level in 14 years, according to industry data collated by BankRegData. Write-offs, which occur when lenders decide it is unlikely a borrower will make good on their debts, are a closely watched measure of significant loan distress. “High-income households are fine, but the bottom third of US consumers are tapped out,” said Mark Zandi, the head of Moody’s Analytics. “Their savings rate right now is zero.”

Article Source: FT

5. Inside a Mexican fentanyl lab: “This is what makes us rich”

We had just walked into the fentanyl lab when the cook poured a white powder into a stockpot full of liquid. He began mixing it with an immersion blender and fumes rose from the pot, filling the small kitchen. We wore gas masks and hazmat suits, but the cook had on only a surgical mask. He and his partner had rushed here to fulfill an order for 10 kilograms of fentanyl. While one sniff of the toxic chemicals could kill us, they explained, they had built up a tolerance to the lethal drug. In September, a war broke out within Mexico’s Sinaloa cartel. Fighting between the rival factions has terrorized the northwestern state of Sinaloa in the months since, leaving hundreds dead and causing a billion dollars in economic damage, business leaders say. The Mexican government responded by sending in a swarm of soldiers and making a slew of arrests. After President-elect Donald J. Trump threatened tariffs if the country didn’t stop drugs from crossing the border, Mexico’s security forces announced their largest seizure of fentanyl ever this month: 20 million doses of the drug. Criminal groups have had to adjust to the new conditions on the ground. Fearing law enforcement raids or attacks by their rivals, they say they’re moving their labs around more often than usual and producing drugs in new locations. And yet, even in the middle of all-out war and intense government pressure, Mexico’s cartels are still doing a swift business. In the last five years, illicit fentanyl, a synthetic opioid, became the leading cause of death for young adults in the United States. We — two New York Times reporters and one photographer — had been trying for months to get access to a fentanyl lab run by the Sinaloa cartel, which the U.S. government says is responsible for much of the product flooding into the United States. The main cook had started working for the cartel at 16, he said, cooking methamphetamine and later fentanyl. While teaching himself how to run a drug lab, he stayed in school, studying oral medicine. The would-be dentist never took up the trade. In the years since fentanyl took off in the United States, he said, he has made millions of dollars running several drug labs. Two U.S. Embassy officials who monitor fentanyl production said these earnings were expected for someone at the main cook’s level in the criminal organization. He said he bought himself sports cars, houses and ranches. His crew acquired a helicopter and a small plane, he said. He blamed Americans for the overdose epidemic, saying that users were the ones deciding to take such a lethal drug. He snorted in disbelief when asked whether pressure from the United States or his own Mexican government would put an end to the fentanyl industrial complex. “This is what makes us rich,” he said. “Drug trafficking is the main economy here.”

Article Source: NYT

December 30, 1922: USSR established

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Sources

2. https://www.wsj.com/business/retail/america-made-shirts-american-giant-6fb4ae70?st=AQRhN4&reflink=article_copyURL_share

3. https://open.substack.com/pub/bariweiss/p/civil-war-in-maga-world-the-front-page?r=d9vo5&utm_medium=ios

4. https://www.nytimes.com/2024/12/27/us/homelessness-hit-record-level-in-2024.html?smid=nytcore-ios-share&referringSource=articleShare

5. https://on.ft.com/4gQcxRo

6. https://www.nytimes.com/2024/12/29/world/americas/inside-fentanyl-lab-mexico.html?smid=nytcore-ios-share&referringSource=articleShare