These days, competition is an illusion; manufacturers and retailers have grown into large international companies with interests and plants overseas. It should come as no surprise that iPhones and BlackBerries are made in the same factories, or more often than not, by the same companies. A report by Gizmodo cites the cost of a traditional iPhone as 250$ (per unit) here: http://gizmodo.com/229664/iphone-only-c ... f-price-is... The newer iPhone (reportedly) even costs less to make: http://www.theinquirer.net/inquirer/new ... t-usd18751
So with a lowered cost of business in producing mobile devices, along with streamlined materials and processes, why are iPhones selling for 400 dollars? Because of CAPITALISM. Don't get me wrong, I'm all about free markets, but citing the current state of the US economy, its not hard to see how the rich (Who are at the helm of some of the largest and most profitable companies ever) keep getting richer and cornering the physical wealth in the current US economy.
I'm not just citing the iPhone, but it is quite an easy target citing that the company that makes it (Apple) at the time of this article holds more money than the US treasury. SOURCE: http://globalpublicsquare.blogs.cnn.com ... as-more-ca...
We can cite many other cases of high price margins in fuel refining prices, which are determined by OPEC, driven to historic highs, quadrupling in a mere matter of a few years. We can also cite the price of milk, produce, and grains, which are dramatically increasing at an unprecedented case despite revolutionary cost cutting methods that were instituted years ago. "Organic" is now synonymous with "more expensive" when it comes to the modern grocery shopping experience. When it comes to food and basic necessities, price fixing and artificial inflation impacts the second and third world countries on our planet in a devastating manner. The current cost of consumer goods are contributing to a rise in poverty in the US greatly, ensuring that lower income families go hungry, and without basic needs, on a greater scale each day. Health care has become a luxury, for the wealthy and a huge unexpected expense for lower and middle class residents in the US that can totally devastate a person while they're already crippled with unemployment. For a perfect-paying homeowner in the midst of a mortgage, a single bout with unemployment can provide a lifetime setback which cannot be comprehended by anyone who can offer them any sort of real help.
Its horrible when the classes are so far apart financially that they can't realistically envision the suffering that the poor class faces. Now a lot of the problems poorer classes had in the 90s are problems of the middle class today. We have gated communities that put up walls to keep the negative impressions that suffering creates out. Now in the age of the super rich, the idea of a person with 100 million dollars in their bank account ever seeing a genuinely homeless person in their lifetime, much less helping a homeless person is really slim. Television is often the only thing that gives impressions to us about people we don't know.
Television paints pretty pictures of life, and they're often outside of the constraints that most people live in life. A person can only get a true idea of the bleak reality that lower income groups face by seeking out information about it. With the change in the current economic dynamic of the US as a country, middle and lower income families and individuals are not at the forefront of politicians minds. They no longer represent the primary contributors to political campaigns. Though they have power to vote, its money that drives winning, so we're all seeing an increasing spin on candidates based on "tax cuts for the wealthy" and new legislation to de-regulate or bend rules for big business operations. When it comes to laws that impact lives of the majority, they often get mired in arguments until they fizzle out, or they are repealed into oblivion. This is the case with the 2011 Jobs Bill and Health Care Reform. The majority is taking a back seat in this society, and its been going on ever since wealth shifted. I'm about to tell you my philosophy on the "cause" of the wealth shift, then I'll elaborate on how balance can be restored.
I have a theory, and yes its possibly controversial. I believe that the world, through buying high priced fuel, has been funding the building of Dubai... For those that don't know, Dubai is an all modern city deemed part of the United Arab Emirates. The revolutionary city is indeed impressive, with a lot of development funded by Saudi Arabia and Dutch investors though the primary resource fueling its growth has been oil exports. SOURCE: http://en.wikipedia.org/wiki/Dubai . In order to build a country of this magnitude quickly, great wealth is required, but also a continual cash flow; There is nothing better to "fuel" this growth than oil.
It wasn't until after the Gulf War of 1990 that Dubai began to surge as an impressive all new infrastructure city, isolated by vast stretches of desert, a plan emerged to build some of the worlds largest, most opulent, and tallest buildings for the wealthy elite to live in. Saudi princes, already rich on years of oil trade invested tons of money they had made into building this new isolated city as a haven for business and pleasure in the region, governed by the U.A.E. Some rules are strict by Western standards, but it was no coincidence that just after 1990 that gas prices began to rise in countries they exported to, with a huge surge occurring in the more recent years to now. The days of dollar-per-gallon gas disappeared in the late 90s and then soared into the oblivion of $4.50 per gallon in 2009, which was mysteriously in sync with the beginning of THE WORST ECONOMY EVER (since the Great Depression) in the US.
If you ask a member of OPEC why the global price of fuel skyrocketed, they'd possibly tell you about market speculators driving the price, but the people who pocket the money will tell you all of their production costs have gone up. On the other hand, paper records will show that gas companies are having their most profitable years ever in a bad economy, even despite a major Gulf Oil Spill "suffered" by BP. This alone is de-facto evidence that capitalism has been turned on its head. You may have Exxon, Shell, Hess, BP, and as many other gasoline retailers as you want, which creates a sense of free-market competition, but their suppliers are the same source, and that source is fixed at a high price by oil exporting countries, your highly dependent model of Capitalism fails, and you're hiding and harboring a veiled Monopoly, which goes against the core principles of true Capitalism. In order for Capitalism to thrive, you must foster true competition, to drive innovation, and cost-cutting measures that add positively to good reputation and sales for all companies involved.
The reason why pretty much every consumer good that requires transport (at any point) has skyrocketed is first because this rising cost of fuel. This we already know but, in order to make a car, parts need to be shipped to a plant, then they are assembled into a car, then the car is shipped to a sales point. In that equation, there are at least 2 points where fuel impacts the cost of doing business. I know, big deal right?!? The fact is that even for employees to get to work, for the food they eat, for fuel to bring coal or supplies to the power plant that drives the factory you work in, fuel prices increase almost all costs of doing business dramatically.
A company that manufacturers goods, a store, or distributor; all of these entities need to make a profit or they cannot thrive. I acknowledge and respect an individuals right to make a profit in a Capitalist system its fundamentally fair; Where I have a problem is when companies, realizing that they are a sole source for a good or service, seek to capitalize on profiteering by creating large profit margins. Yes, markets and investors drive this hunger, its currently out of control, and it needs to be brought to a sustainable level in order to bring the US economy back into stability.
There is a balance between making a profit and adding value to the lives of consumers. Consumers can be considered as a limited resource in any business, just like oil or money, if companies tap their pool of eligible consumers for all of their money, and deplete their ability to earn and spend, companies also suffer as a result. This concept is "Environmental Preservation" for 2011. Understanding the impacts of cornering financial markets, and earning large amounts of wealth without accountability creates a void in the natural flow of the US economy, which fosters all of us. Being "Eco Friendly" from a business perspective shouldn't just involve installing smelly waterless urinals and low-impact fluorescent lights. The concept should involve profit sharing. A company should never seek to be a monopoly because this kind of behavior is destructive to the very principles that Capitalism relies on, as part of a working economic environment. As an individual or company Investors and C.E.O.s need to take deep stock in reducing overall profit expectations to new (more reasonable) levels that allow consumers to be a continual resource for years to come. Wall street needs to reconstruct its expectations and to stop reaching for goals beyond normal means, and "get rich quick" schemes.
When companies evaluate expenditures, costs, and losses, executives need to consider costs and benefits of their products and services to their consumers, and then pass savings and value to customers along with appeasing shareholders. As an executive, providing high value goods and services at a reasonably chosen price, you ensure that your company will survive into the future, and you'll gain success and wealth over time, along with a solid reputation. Don't forget your customers in lieu of investors. This is a key point in making the ideal of capitalism work. A large problem with the now, is the amount of traders and investors that seek immediate earnings, immediate reward, and immediate success, with these expectations, its no wonder why the cost of goods and necessities in the US are spiking. This is also the same reason that tax payer funded services are declining and why social programs are shrinking. Companies that are wealthy and individuals that have money to invest are not spending, even to improve their own companies or to make laws and business better for everyone.
Its important in the formation of the "Occupy" movement that we also acknowledge the rising cost of consumer goods, and how its reducing our ability to make ends meet. We've managed to achieve great feats of innovation which were sold to us based on the benefits and costs savings they'd bring to our lives, but many companies have forgot the "cost saving" component and are passing every increase in cost on directly to consumers along with the cost of heavy profit margins for goods they sell.
So how do we get to a point where an iPhone costs 420 dollars and a gallon of gasoline costs 4 dollars? Lets look deeply at how much goods and services cost to produce, then look at the people who profit massively from it being overpriced. Lets stop feeding those who gain large amounts of wealth by not buying over priced goods and legislating fairness and sharpening consumer protection. Lets stop supporting and lauding businesses and people who don't operate in accountable and reasonable manner to contribute to a healthy economy. Lets remove our personal expectations and admiration of "being the richest person ever", and replace it with being financially comfortable, coexisting, and allowing everyone the same opportunities that we had.
