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5 Dumbest Things on Wall Street This Week: May 10

2. 3 Cheers for Charney

Take a deep breath Dumbest fans. We're going to give Dov his due.

We've been pretty rough on American Apparel (APP) CEO Dov Charney in columns past and in most cases deservedly so. We won't revisit the exact episodes, but long time readers are well aware of Charney's penchant for saying and doing ridiculous things, including being a party to a slew of sexual harassment lawsuits.

What can we do? That's just Charney being Charney.

That said, in the wake of last month's supremely stupid Bangladesh garment factory collapse which killed more than 800 workers, we'd feel remiss if we didn't highlight some of the sensible things Dov said this week on the company's Web site.

Self-promotional, yes. This is Dov we're talking about. But sensible nonetheless.

"The apparel industry's relentless and blind pursuit of the lowest possible wages cannot be sustained over time, ethically or fiscally," wrote Charney, highlighting American Apparel's decision to produce all its garments domestically, despite the higher labor costs. "As labor and transportation costs increase worldwide, exploitation will not only be morally offensive and dated, it will not even be financially viable."

Employees at American Apparel's downtown Los Angeles garment factory earn an average of $12 an hour plus medical other benefits, according to Charney. Of course, many of those workers are here illegally. The U.S. Immigration and Customs Enforcement Agency found three years ago that nearly one-third of the company's workers may not have had proper documentation for U.S. employment.

Nevertheless, workers at the fateful Bangladesh sweatshop made the national minimum wage of approximately $38 per month while toiling in monstrously unsafe conditions.

As much as we like our goods cheap, and a much as we try not to dwell on the unappetizing origins of the products we buy, we can't approve that in good conscience.

Let's face it. Dov's doing it right. Or at least he's trying to.

It hasn't helped his bottom line much. American Apparel stock is barely $2 bucks a share, down 75% over the past five years. And with over 13% of the shares sold short, a lot of traders are betting the heavily indebted firm will file for bankruptcy.

Still, against all odds, Dov's doing it right. And that's not dumb at all.
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