Conformity Magazine - November 2007 - (Page 6)

Editor’s Note The Almighty Dollar? I n January 2002, a single U.S. dollar would get you 1.16 Euros on the commercial currency exchange. As I write this note in early October, 2007, that same dollar will get you only about .71 Euros, nearly 40% less than a little more than five years ago. If you’ve traveled outside of the United States recently, you already know that a devalued dollar means significantly higher prices for just about everything, from food and hotel rooms to entertainment and luxury goods. But if you’ve been staying home instead, you’d hardly notice the difference. In fact, the price of imported goods has reportedly risen by just a little more than 2% annually over the past three years. Why is that? Writing in a recent issue of The New Yorker, writer James Surowiecki, author of the bestselling book The Wisdom of Crowds, suggests that foreign companies are actually underwriting U.S. consumers’ taste for foreign goods by keeping their prices artificially low. Lower prices logically mean lower profits, especially when raw material and labor costs continue to climb. But lower profits are better than no profits, and the U.S. market is simply too important to most foreign producers to risk losing. Further, a weak dollar means that American-made goods are less expensive and more attractive to consumers outside of the United States. This puts additional pricing pressure on foreign producers in their home countries, making it even more important for them to maintain their market share in the U.S. at any cost. As Surowiecki writes, the short-term effects of this situation provide some clear benefits to the American consumer, who can continue to buy more with less. There are also clear benefits to American manufacturers, whose products are finally price-competitive in the international marketplace. However, the longer-term risks here are significant. For example, Americans who traveled overseas for business and pleasure used to be a major business for many European countries, and an important economic catalyst for lessdeveloped nations. With the value of the dollar shrinking, however, Americans are staying home in record numbers, with devastating effect on countries and small businesses who depend on tourism for their lifeblood. At the same time, foreign producers will eventually have to raise prices, which may increase profits but which will also result in less business. At some point, being inexorably squeezed on both sides of the financial equation becomes untenable for a business owner, and spending a day at the beach looks more appealing than running a business that can’t make money. Finally, American consumers may soon have to confront the reality that their money isn’t worth a whole lot more than the paper it’s printed on. As Surowiecki notes, the reason for the dollar’s decline in value has everything to do with our growing national deficit, and the looming social cost of caring for a generation of baby boomers, who will officially begin to retire in 2008. At some point, the cost of a European vacation will be the least of our worries. Bill von Achen Managing Editor 6 CONFORMITY NOVEMBER 2007 © Photographer: Jose antonio Nicoli | Agency: Dreamstime.com http://Dreamstime.com

Table of Contents Feed for the Digital Edition of Conformity Magazine - November 2007

Conformity - November 2007 Contents Editor’s Note Commission Sets Date, Terms for 700 MHz Auction FCC Reaffirms Roaming Obligations Commission Moves to Improve USF Management FCC Proposes Fines for Violations of E911 Handset Requirements Commission Levies $1 Million Plus Fines for Unsolicited Fax Advertisements GR-3150 - Lithium Battery Certification Levels Based on Criteria for General Product, Safety, and Performance, Part 2 ESD Open Forum Machinery Field Evaluation for the United States Validation, Verification, and Immunity Testing Techniques for EMC for Functional Safety Thermal/EMC Simulation Addresses New Mechanical Design Challenges Product Safety Equipment Buyer’s Guide FCC Releases Report on Telephone Numbering Resource Utilization Canada Still Has PCS Spectrum to Assign Updated Standards List for the EU’s Medical Devices Directive Updated Standards List for EU Directive on Active Implantable Medical Devices Call for Papers for the 2008 EOS/ESD Symposium Announced Mobile Phone Use in Hospitals May Be Dangerous CPSC Actions in the News IEC Standards Update UL Standards Update Telcordia Standards Update From Our “You Can’t Make This Stuff Up” Department Product Reviews Looking Back: Items from Past Issues of Conformity Upcoming Events Advertisers

Conformity Magazine - November 2007

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