If you have never seen ABC’s Shark Tank show, here is what it is: entrepreneurs come on and pitch their business propositions to the “sharks” – five investors, the most famous of which is Mark Cuban. If the sharks like a business, they negotiate a deal with the entrepreneur.
When I first started watching this show, I was jarred by how the sharks insisted that production be done in China. Of course, I knew that sort of thing was going on, that venture capitalists had been asking entrepreneurs about their “China strategy” for many years now. But to see it on TV made it more real.
So, if a patriotic American came on the show and said that she wanted to manufacture her product in the USA, the sharks would not invest, and would make a lot of negative remarks about how being patriotic is “closed minded,” foolish, etc.
One such patriotic American was Donny McCall, who insisted on manufacturing his Invis-A-Rack product for pickup trucks in the USA. The sharks wanted nothing to do with him. That was on February 24, 2012 (episode #2 of season #3).
In recent episodes, I had noticed that the show had toned down its anti-American rhetoric, and I thought: “aha, just like Walmart and Apple paying lip service to creating jobs in the USA.” Then on February 15, 2013 (episode #16 of season #4), Shark Tank did an update on Donny McCall, who is now manufacturing his product in Iowa. It’s too early to tell if the product will be a success or not.
So, the moral of the story is that the sharks were wrong, right? Not so fast. Keep in mind that nothing has changed. The deck is still stacked in favor of China. The yuan is still pegged to the dollar, there are no protective tariffs to encourage domestic manufacturing, etc.
Even worse, if Invis-A-Rack is a success, Mr. McCall might soon have a Chinese man knocking on his door, offering to buy him out, or face having his product knocked-off, and made in China for a fraction of the cost. That happens. A Chinese man will literally knock on your door, and he will bring with him a sample of the product so that you can see that he is not joking and that the quality is comparable.
Or a large retailer will help a competitor set up in China. American retailers have a long history of undermining domestic manufacturing companies. Or maybe one of the sharks will go into business against McCall.
This, by the way, is the reason why bringing in “magical” immigrant entrepreneurs to create jobs for us knucklehead Americans has not worked, and will not ever work. It doesn’t matter who you are because when you go to raise investment capital, you will be asked the same question that the sharks asked McCall: “What is your China strategy?”
So, the moral of the story is: don’t hate the player, hate the game. But also, we should hate the architects of the game such as David Rockefeller, and Walmart, which campaigned hard for NAFTA, etc. We should also hate the players that uphold the game, and seek to perpetuate it.
If all of your competitors are undercutting you by manufacturing in China, by all means, move your plant to China and compete with them. But your political position should support policies that re-stack the deck in the USA’s favor so that you can one day bring your factory home.
And one last thing about Shark Tank: in the intro to the show, they describe shark Robert Herjavec as “the son of an immigrant factory worker.” They don’t say “mere factory worker” but it still rubs me the wrong way. As if his father was a liability because he was a blue-collar worker. It strikes me as condescending, and even insulting to a man whom I’m sure worked very hard to give his son every advantage within his power to give.
The big story is the trend where more-and-more companies and politicians are feeling the need to pay lip-service to creating jobs in the USA, because that is most-certainly not our policy today. Maybe one day this trend will turn into an actual policy shift, though I suspect that companies like Walmart are just trying to ride out the storm until the American people are distracted by something else, and patriotism is killed off for good.