American manufacturing

[PandaBear]

Originally Posted By: Tempest

Quote:

the same reason China doesn't spend excessively to boost productivity, because they don't always make the return on investment.

Exactly as I stated. I'm not sure why you say I'm not dealing with reality when you are agreeing with me?

You claimed that lower tax would change that, and manufacturing would abandon china and start moving back to the US.

 

[OVERKILL]

Originally Posted By: kb01

Originally Posted By: OVERK1LL

So, you'd rather outsource your medical care to India because your current system "costs too much"??????? I got a physical about 8 months ago. It didn't cost me anything but the gas to drive to my Dr's office. And nothing had to be outsourced to India to have it happen. Maybe you should be looking north, rather than east. Or maybe that sucking sound needs to get louder........

How did it not cost you anything? Was it some kind of special promotion? I should look north, like to Minnesota or Vermont? Health care is cheaper up there? And yes, it did cost me $400 which actually wasn't too bad. It was the $1,000/month for health insurance which is the painful part. The average cost for a family policy in the USA is $14,000/year. Something must be done to control costs and if that means I need to teleconference with a doctor in India or Pakistan, then so be it. I'm not happy about it but in a few years when it's $18,000 or $20,000 I really don't see any alternative.

Ummmm, I live in Canada sir.... You know, the GWN.... ABOVE you, hence the "North" comment. Think outside the USA (yes, this site has an audience that isn't American) but not India this time Our system isn't perfect, but it is sure a heck of a lot better than 14K a year in health insurance bills, holy rectal pain batman!

 

[Tempest]

Originally Posted By: PandaBear

You claimed that lower tax would change that, and manufacturing would abandon china and start moving back to the US.

The reason companies are going overseas is due to lower costs. The more you lower costs here, the more likely companies are to stay here.

 

[Spyder7]

Originally Posted By: Tempest

Originally Posted By: PandaBear

You claimed that lower tax would change that, and manufacturing would abandon china and start moving back to the US.

The reason companies are going overseas is due to lower costs. The more you lower costs here, the more likely companies are to stay here.

So the solution is to race them to bottom? Ultimately does it not stand to reason that competing with them at their level, through total deregulation and 19th century level wage and working conditions, is less than the ideal way to go? That's what it would take. And the problem is, nobody is going to do that because nobody can survive on those wages today. People will turn to crime, black marketing will become rampant, and then you have created a whole quagmire of new problems. One is how to crack down on the rampant crime that would develop, and where to put them. Police and prisons are not cheap. And government, because of the loss of revenue from increased traffic of black market goods, then has to raise taxes in other areas to generate the same revenue stream. Obviously taxing business is out in this model, and therefore you are left with one alternative: increased personal taxation. But then how does one pay more taxes when they aren't even making a sustainable wage? This is no solution. Not only is it impossible to realize, but even if it could be, it would create so many problems that the rationale driving it would be totally unequipped to handle them while trying to sustain it. Result: collapse and failure, with the US and the Western countries whose economies are so closely tied to it all coming to resemble the 3rd world. No thank you. -Spyder

 

[Tempest]

Quote:

People will turn to crime, black marketing will become rampant, and then you have created a whole quagmire of new problems.

That's why crime has been going down in the US and Canada the last 2 decades right? Even as manufacturing jobs have been going down?

Quote:

So the solution is to race them to bottom?

Again, you ignore productivity. And I would be worried about Canadian productivity: http://www.cbc.ca/news/business/story/2010/09/14/canada-productivity-economy.html

 

[Spyder7]

Originally Posted By: Tempest

Quote:

People will turn to crime, black marketing will become rampant, and then you have created a whole quagmire of new problems.

That's why crime has been going down in the US and Canada the last 2 decades right? Even as manufacturing jobs have been going down?

Quote:

So the solution is to race them to bottom?

Again, you ignore productivity. And I would be worried about Canadian productivity: http://www.cbc.ca/news/business/story/2010/09/14/canada-productivity-economy.html

1st, we aren't anywhere close to the 19th century working conditions, regulations and wages I stated we'd need to go to if we are to compete with them at their level. Therefore your pointing out our falling crime rates is a fallacy, since that data can show nothing to disprove or undermine the point I made. As to our superior productivity you repeatedly point out as being our savior, you do realize that productivity - as its measured in GDP - shows China already in a close 3rd place position to the US, and is forecasted to pass it by 2020. So much for our supposed superiority in productivity. You conveniently ignore the fact that our narrow lead is due mainly to automation (which, by the way, tends to displace as many or more jobs than it creates - another fallacy in your reasoning), and that we do not possess any kind of inherent monopoly on it. Business will produce goods by whatever means is cheapest. In a global economy like ours, its become apparent - by the reality rather than unquantified terms like 'productivity' loosely tossed around - that they will use whatever mode of production is cheapest, wherever its cheapest. As things stand, its still cheaper to employ minimal technology and use much more labor intensive means overseas simply because the bottom line is that the labor is the cheaper method. As their economies strengthen they too will adopt more of our technology and combine it with their cheap labor, to beat us at more and more of what we do now and further displace our manufacturing sector from here to there. And as many elements of the service sector as imagination and technology enables as well. Our narrow lead in productivity is not enough, and trying to turn back the clock by deregulation and slashing wages is not only undesirable - by any standard - but also not feasible on a level that would allow us to compete at theirs. And if the globalists had been upfront with us and told us that this would be the price we would pay for it, it would have been categorically rejected. We were sold a bill of sale that, no matter how you tally it, doesn't add up to any kind of a win for us. Unless the 'us' is the 1% that has been reaping the huge windfall profits it has created, at the expense of everyone else who is losing out. And many have already lost out, or simply dropped out. The only question is, how many more have to lose before the momentum changes, and will that change come in time to head of the race to the bottom we are engaged in. -Spyder

 

[Tempest]

Quote:

you do realize that productivity - as its measured in GDP

Productivity is not measured in GDP. GDP is an absolute value (estimate actually). It is very easy for a country with more than 4 times as many people to have a higher GDP. The fact that they don't, and haven't for a long time says much about their system. In a simple measure of productivity, China will be about 1/4 as productive per person once their GDP reaches parody with the US. Productivity = wealth and free time. That's why only about 2% of the population are farmers. Or would you rather be working in a field rather than what you are doing?

 

[ZZman]

Originally Posted By: Tempest

Quote:

People will turn to crime, black marketing will become rampant, and then you have created a whole quagmire of new problems.

That's why crime has been going down in the US and Canada the last 2 decades right? Even as manufacturing jobs have been going down?

We have huge numbers of people locked up in jails and prisons. Since most people commit multiple crimes it makes sense. Crime numbers are also only as accurate as the info received. But thankfully government locked these criminals up right "T"?

 

[ZZman]

Our greed thru all society has caused our manufacturing decline. We want as much profit as possible. We want the cheapest goods. We have all caused it. As I have gotten older I can clearly see how this has occurred and how I didn't much care then as long as I was benefiting.

 

[Shannow]

Originally Posted By: Tempest

China will be about 1/4 as productive per person once their GDP reaches parody with the US.

LOL, Freudian slip there ?

Originally Posted By: Tempest

Productivity = wealth and free time. That's why only about 2% of the population are farmers. Or would you rather be working in a field rather than what you are doing?

Your equation is seriously flawed... Productivity makes someone wealthy, but the people that it gives free time to oft can't become consumers, nor enjoy their free time because they don't have an income.

 

[ZZman]

Other countries do not have the costs we do here. Head to head we can not really compete. They have lower taxes Lower wages Lower or no health insurance No retirement costs None or very little environmental costs or regulations No social security costs No workman comp Our people willing to pay extra for American goods would make the difference.

 

[Mr Nice]

ZZman, You forgot labor unions and rust belt states not giving manufactuers a tax break to remain in the USA.

Quote:

As I have gotten older I can clearly see how this has occurred and how I didn't much care then as long as I was benefiting

How old are you ?

 

[PandaBear]

Originally Posted By: Tempest

Productivity = wealth and free time. That's why only about 2% of the population are farmers. Or would you rather be working in a field rather than what you are doing?

Productivity = unpaid overtime and increased workload per employee. Read economy data during the beginning recession and the end of recession, and you'll find that it is because employers laid off the less productive employees and less productive employers go out of business. When economy recover, they have no choice but to hire more people even if they are not as productive ,but would increase profit even at less productivity. I did not make this up: http://www.usatoday.com/money/economy/2011-04-04-us-economy-jobs.htm

Originally Posted By: Tempest

Originally Posted By: PandaBear

You claimed that lower tax would change that, and manufacturing would abandon china and start moving back to the US.

The reason companies are going overseas is due to lower costs. The more you lower costs here, the more likely companies are to stay here.

How do you lower your cost to your competitor's (Chinese labors) level when your tax is no where close to the labor cost difference in between? You are trying to switch the subject. The only way you will see US labor cost x US productivity to be equal to Chinese labor cost x Chinese productivity is if the spread is so great (i.e. we are 5x to 10x as productive as I challenge above), or if tax is eliminated it would be. But 1) Even if tax is eliminated US labor x US productivity would still be too expensive when compare to China, and 2) US vs China productivity is no where close to 5x to 10x when the same manufacturing technologies are involved.

 

[PandaBear]

I'll tell you one way we can race to the bottom with the Chinese labor rate without people losing jobs: devaluing your currency and let inflation take over. This would make your economy as a whole reduce in cost, people's mortgage, business loan, bad debt, trade balance, etc all tipping toward your favor. Of course, that'll also means we will not be as rich but nonetheless if you believe it is better to have inflation when you have a job, that suck less than unemployed. However, those who want jobs back and complain of government regulation and lower tax will find this equally offensive, because it will still take money out of their pockets.

 

[Spyder7]

Originally Posted By: Tempest

Productivity = wealth and free time.

Up until I read that statement, I assumed you had some level of education (formal or informal) in the economic banter you so readily engage in. Though I disagree with most of your opinions on economics, I'd taken it for granted - because you so enthusiastically espouse them - that they had some grounding in the fundamentals. That you could state that there is no relationship between GDP and productivity, and then go on to write that, just throws what I'd taken for granted out the window. I'm left to conclude that though you definitely do have strong opinions on economics that you are very assertive on, you lack any foundation level understanding from which to base those assertions. Productivity = wealth and free time?! By that measure, the most productive members of our society are the idle rich who are born into wealth and who fritter their days away at social and yacht clubs. After all, they have the most wealth and the most free time by virtue of it. And since your equation has a one-to-one corresponding relationship in the variables 'wealth' and 'free time,' I guess someone on the dole must be the next most productive, as they - like the wealthy socialites - have no shortage of free time and still enjoy some measure of 'wealth' (no matter how meager). Where exactly does that put the engine of the economy then? You know, the guys working 2 or 3 jobs and putting in 60 to 100 hours a week on minimum wage just to provide for themselves and their family? By your equation, they aren't terribly productive - about on par with the fellow on the dole, but nowhere as productive as the do-nothing wealthy socialite. Anyway, thanks for providing me with one of the more entertaining reads I've had in a while. I'm not even going to take a guess at what kind of fuzzy math you created to arrive at the 1/4 productivity measure that China will 'later' reach. -Spyder

 

[Spyder7]

Tempest, here is the simplest (and an accurate) definition of what productivity is:

Quote:

Productivity -- The ratio of output (goods and services) produced per unit of input (productive resources) over some period of time.

Taken from a source I looked for with you in mind: http://www.teachmefinance.com/Financial_Terms/productivity.html -Spyder

 

[ZZman]

Originally Posted By: LT4 Vette

ZZman, You forgot labor unions and rust belt states not giving manufactuers a tax break to remain in the USA.

Quote:

As I have gotten older I can clearly see how this has occurred and how I didn't much care then as long as I was benefiting

How old are you ?

50. True I forgot unions but they are what got most people decent wages and benefits. I am for some tax breaks for businesses but will it guarantee jobs will stay? Will it still swing costs in our favor? not really. The gap is still way too large. But don't worry. When other people in other countries like China start demanding the same wages and benefits we have they can just move jobs somewhere else. Africa?

 

[PandaBear]

Originally Posted By: ZZman

But don't worry. When other people in other countries like China start demanding the same wages and benefits we have they can just move jobs somewhere else. Africa?

Too unstable over there, you'll see them move to Latin America and South East Asia (Vietnam, Indonesia, Malaysia) and Eastern Europe before going Africa.

 

[dailydriver]

Originally Posted By: LT4 Vette

dailydriver, Was your remark 'free trade/open markets/global economy' in all of it's full glory and execution directed towards me ? It would be stupid, dumb and foolish not to accept the fact that manufacturing in the USA is dying. I hate seeing jobs lost here but there are many reasons for it. Take some time and read Daily Job Cuts . com to see the amount of jobs being lost in manufacturing. All this Pro USA talk is great but no need to ignore whats really happening in our country.

NO, it was NOT made to you directly, the "your" I'm referring to are those (especially those who WILDLY wave the green rattler on a yellow background flag) who would put those said 'principles' WAY above the lives of the (working class) citizens of this country. Just think, if everyone in this country was working, the taxes all of you soooo despise would be a NON-ISSUE!! Why we might even be able to NOT make all of the inhumane draconian cuts to EVERYTHING (which all of you drool about doing), but keep most of those services/'entitlements' AND still cut taxes (maybe even for the 'poor' billion/trillionaires all of you are soooo concerned about!).

 

[Tempest]

Quote:

Productivity makes someone wealthy, but the people that it gives free time to oft can't become consumers, nor enjoy their free time because they don't have an income.

And yet, we still have people employed. Less than 5% unemployment in 2005 with total compensation closely matching productivity. This should not be possible with your logic. Please explain as you are literally saying that making things less efficient is better for people.