Crony Capitalism

New Balance Lobbies to Become the Military's Official Sneaker Supplier

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Congressmen, Pentagon officials, and footwear manufacturers have been working for months to ensure that when we put boots on the ground, they'll be American-made athletic shoes. From Tim Mak of The Daily Beast comes this tawdry tale of American patriotism, cronyism, and job creation(ism):

The shoes American soldiers wear when they train for combat may soon be all American made—creating a possible monetary boon for New Balance, a shoe company that has long lobbied for the change.

The so-called Berry Amendment requires that the Department of Defense only procure such sundries as food and clothing from American manufacturers whenever possible. But with one key exception:

One of the exceptions the Pentagon has made to this rule is on physical training shoes: In past years, completely American-made running wear has not been available—but the Department of Defense indicated this spring that it was moving toward offering them.

Under the old system, recruits were given a voucher to buy whatever athletic shoes they wished. But according to a Boston Magazine piece published earlier this year, the footwear-exception created a loophole through which recruits had been able to slip foreign-made shoes:

Since 2002…the Department of Defense has spent roughly $180 million on a cash allowance program for military recruits entering boot camp to buy their own training shoes to fit their various needs, leading to purchases of foreign-made products.

The policy changes require the Department of Defense to monitor the market for Berry Amendment-compliant footwear. Should a model come to market that is of comparable durability and affordability to foreign-made shoes, the American shoe will become mandatory for recruits.

Unsurprisingly, the two companies most keen for this change are the only two shoe manufacturers currently capable of producing Berry Amendment–compliant shoes: New Balance and Wolverine Worldwide, the former having spent about $500,000 on a lobbying campaign, according to Mak. New Balance can expect to earn a pretty penny from the new policy in recompense for its expensive efforts:

For running shoe manufacturers capable of producing an entirely American-sourced shoe, the policy shift could be big money; being chosen to provide military recruits with shoes could bring in millions of dollars every year. The Air Force spends $2.25 million on sneakers annually, while the Army spends $5.25 million on athletic shoes, according to one report.

While it's conceivable that recruits purchased foreign-made New Balance with their vouchers—the patriotic company manufactures 75 percent of its shoes outside the U.S.—the new policy gives the company a remarkable advantage by virtually eliminating the competition.

New Balance claims that it's not in it for the money, while neglecting to explain why it spent so much money fighting for the policy change in the first place:

"We're not doing it out of charity, but this is not strictly a money play," [Matt LeBretton] said. "The bottom line is that there are other ways for us: If we wanted to squeeze every [cent of] profit, this would not be what we'd be doing."

Even though taxpayer-funded vouchers don't reflect a free market, the choices that recruits made did reflect individual preferences—which happened to be for foreign-made shoes. If companies like New Balance are as innovative and good at creating quality goods as their supporters in Congress claim, then why couldn't they get a bigger slice of the government-voucher pie without special privileges? 

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  1. American go-fasters for me.

  2. Job creationism: the belief that employment isn’t a naturally emergent phenomenon, but that it must be the product of central planning.

    I love it.

    1. After googling “job creationism,” it’s evident McMahon isn’t the first to use the term (nor am I for trying to define it).

      But it’s used to describe how backward and illiterate free market types are for believing that businessmen create jobs. For example:

      In the beginning, there was a CEO. And he said, “Let there be jobs.” Because he wanted to be a Job Creator, since he had heard that Job Creators get all kinds of public praise and respect, not to mention some significant perks, like being able to flash the Job Creator ID card whenever anyone threatens to raise your taxes.

      The derp is strong with this one.

      1. Who creates jobs? What is a businessman? I hope you’re still in high school, or you’re a devote Krugman follower. That’s the only explanation for thinking that “derp” is an appropriate ad hominem attack, assuming ad hominem attacks are effective for getting ones point across. I recommend sticking with your clueless, jobless, and under educated college graduates over at Salon.

  3. Well, they do make a pretty fair boot (OTB). Love my desert lite’s

  4. Under the old system, recruits were given a voucher to buy whatever athletic shoes they wished.

    Let’s keep in mind that this, while great for New Balance, will only affect *recruits*.

    Once you’re out in the fleet you don’t get that voucher and replacement tennis come out of your own pocket. There’s no requirement to purchase these things from any particular supplier.

    1. And unless things have changed, the voucher (in RTC) was used to buy the shoes you were told to buy – and they were the same shoes everyone else in the unit had.

      If you had a patient unit leader then he’d let the unit choose which shoe to buy, but everyone got the same one.

    2. I know it was a long time ago (25 years) and things may have changed since then. But, when I went to boot camp, those “vouchers” where deducted from my first pay check (along with the cost of all the uniforms that I received). So, unless things have changed, and the DoD is now providing our recruits footwear, I don’t see where the Berry Amendment applies. I’m no lawyer, but it seems to me that the Berry Amendment bars the DoD from spending funds on non-us made textiles. I don’t really see where it bars employees of the DoD from spending their money on any damn thing they want.

      1. Same experience here too.

        And to Agammamon above, this isn’t just for recruits. The plan is to make these part of the official PT uniforms for the services and you’ll have to buy these shoes (or ones that meet regs, which will change from the loose standards now) just like any other piece of uniform in your clothing bag.

        1. The second para should have the disclaimer, according to the rumor sources.

  5. Maybe I just had rotten luck, but after several pairs of NB, quality is not a word that comes to mind.

    1. Same here. They’re crap. Expensive crap.

  6. New Balance is also responsible for a hefty tariff on foreign made shoes.

    All in the name of preserving American jerbs, poor people must pay more of their meager budgets to buy shoes for their kids this time of year when they go back to school. Money that could be spent on, I dunno, food or something.

    But, but, but…. JERBS!

    1. But it’s vital to our country that we have domestic shoe manufacturing. In war time, we might run out of shoes and not be able to make any.

      /sarc

      1. Many years ago this was a thriving, happy planet – people, cities, shops, a normal world. Except that on the high streets of these cities there were slightly more shoe shops than one might have thought necessary. And slowly, insidiously, the number of the shoe shops were increasing. It’s a well-known economic phenomenon but tragic to see it in operation, for the more shoe shops there were, the more shoes they had to make and the worse and more unwearable they became. And the worse they were to wear, the more people had to buy to keep themselves shod, and the more the shops proliferated, until the whole economy of the place passed what I believe is termed the Shoe Event Horizon, and it became no longer economically possible to build anything other than shoe shops. Result – collapse, ruin and famine. Most of the population died out. Those few who had the right kind of genetic instability mutated into birds who cursed their feet, cursed the ground and vowed that no one should walk on it again.

        – Douglas Adams

    2. All in the name of preserving American jerbs, poor people must pay more of their meager budgets to buy shoes for their kids this time of year when they go back to school.

      I understand your snark, but Payless is still pretty cheap. I get my work shoes from them all the time. If parents can’t afford to spend $20 on a pair of sneaks for their kid, they have bigger problems than not being able to move them up to Kiddie Air Jordans.

    3. The queen did declare, let them eat shoes.

  7. I spent a few years in the Footwear dept @ REI, which at the time (being in the city) sold more ‘Soft Goods’ (read: sports clothes) than mountain climbing gear…

    so, anyway, the angle was that we competed with the ‘serious’ sporting goods places as well. We did custom insoles/Orthotics for marathon runners, and did deals where they’d get discounts every 6months/300 miles or so on replacements. we served lots of sports teams, etc.

    On the running shoes/performance cleats tip, one thing I learned was that no one shoe worked for everyone. They needed to be matched to the shape of people’s feet and fit with their stride/style in terms of stiffness or cushioning. Forcing everyone in the military to wear One Shoe seems kind of idiotic. At least a recipe for more injuries than necessary.

    New Balance were notable in the industry (at the time) for being the one company that offered double-wide sizes for runners. They really had like 5-6 different widths or something. Don’t know if this is still the case, but it was distinctive at the time. Consequently we sold a lot of them to Fat People. True!

    On the ‘durability’ side, the simplest models were notoriously long-lasting (*and extremely popular with Hippies for some reason), while the fancier models fell apart in weeks. although all makers had models with bad rubber-glue combos from time to time.

    And yes, Footwear is where they stick you when you’re at the absolute bottom of the employee social-ladder.

    1. Footwear employees get commission in department stores like Macy’s. Not bottom of the ladder there. (Or at least they used to when I worked in retail.)

      I agree that the model of shoe for the individual is super important if you’re doing any significant amount of running. Are you a heel striker, over-pronator…? And even though NB comes in many various sizes, it still may not fit – and you can’t tailor a shoe to fit like you can a uniform.

      1. the only people who got commish @ REI were the Bike Dept/Hardgoods who sold shit like Kayaks and Skis etc. Might be different now. I was only like 16 so maybe i wasn’t even paid the way other people were. I know that I got the jobs none of the other full-timers wanted.

    2. New Balance were notable in the industry (at the time) for being the one company that offered double-wide sizes for runners.

      That’s the reason I gravitate towards NB more than anything else. They’re the only readily-available shoe maker with shoes wide enough for my feet.

  8. I seem to recall that when we did PT, we did it in combat boots. What’s the use of learning to run a mile in sneakers when you have to use the boots in the field?

    These kids these days.

    /get off my lawn

    … Hobbit

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