CHINA and KUWAIT : believe it involves ...

[Gary Allan]

Quote:

The only alternative is to reduce our wages and standard of living to the point that we can compete with countries like China. Imagine what the United States would look like if we allow that to happen....

A fundamental Capitalist is fully willing to accept those consequences. Poverty, crime, collapse of various systems. They aren't Americans except by accident of birth. They're not patriotic beyond sustaining this nation's continued availability to provide a good harvest. When we're wrung dry ..then it's time to move on. For them being a citizen here is nature's way of saying you make too much money. They are more than willing to correct that fault.

 

[Tornado Red]

Originally Posted By: Gary Allan

Quote:

The solution to the problem of disappearing jobs... lies not in trade sanctions against competing nations, but in a total overhaul of the government's taxing and regulatory policies.

I don't see it that way. While it's "true" ..the rationale behind it is not quite right. The regulations aren't there because someone decided to pull something out of their behind. Their origins are based in just cause. I don't think we want to "go back" to the fond "good old days" of child chimney sweeps and "company town" coal mines (some beg for the return to such "mastery") with their patch towns. Do we want to return to the unchecked pollution ..etc..etc. ... Figure it out, the wages of sin is government intervention. Figure a way to breed a more sensible greedy person ..or instead of throwing an award banquet and cheering them along for pulling the best coup, give them the death penalty.

You want more jobs, but you don't want to change the rules that destroy jobs. You want more manufacturing, but you keep piling more burdens on manufacturers -- and what's worse, the current administration keeps promising a whole lot more burdens. You speak of "breeding" a different kind of human -- Stalin had the same idea, he wanted to create the New Soviet Man. Of course it required eliminating all of those who did not fit in his new society. Mao and Pol Pot had the same idea. Human nature does not change, if you doubt me then consult the Hebrew bible, or the writings of Confucius or Aristotle. The society you desire, where people react differently to incentives and disincentives, might be realized by a different species on a different planet, but it does not exist here and you cannot change people to make them do what their human nature tells them not to do.

 

[Tornado Red]

Originally Posted By: Lyondellic

Again, I think that it is time for the United States to protect jobs here at home. If this means imposing tariffs and quotas on goods produced in other countries, then so be it. Corporations will only manufacture and sell their products in the United States when the economics make it worthwhile for them to do so. The only alternative is to reduce our wages and standard of living to the point that we can compete with countries like China. Imagine what the United States would look like if we allow that to happen....

It is actually possible to imagine such an eventuality. Wrong policies can turn a prosperous nation into a laggard, such as happened in Argentina in the mid-20th century. It was once one of the ten richest countries in the world as measured by per capita incomes. Then it adopted policies of high wages, high taxes, onerous regulations, an unstable currency, and tariffs to protect local manufacture from foreign competition. What happened, of course, is that manufacturing exports dried up, and the relatively small domestic market was not enough to encourage innovation, modernization, or expansion. So Argentina was no longer able to compete in the world. Real wages fell, year after year and decade after decade, and the deteriorating currency eliminated household savings. Ultimately Argentina had nothing left to sell to the world except unprocessed agricultural products, and then it put an export tariff on them because the government was broke! Want to know what Obama's up to? Just study Peronist Argentina and Mussolini's Italy. The only thing that saved Italy from Argentina's fate was the defeat of the fascist regime in WWII.

 

[Tornado Red]

Originally Posted By: Gary Allan

A fundamental Capitalist is fully willing to accept those consequences. Poverty, crime, collapse of various systems. They aren't Americans except by accident of birth. They're not patriotic beyond sustaining this nation's continued availability to provide a good harvest. When we're wrung dry ..then it's time to move on. For them being a citizen here is nature's way of saying you make too much money. They are more than willing to correct that fault.

You assume that a capitalist is one kind of person and everyone else is some different kind of person. Nope, a capitalist is just someone who's better at getting and hanging onto money, than other people who would prefer to consume instead of save. As for patriotism, I don't see much difference there either, between people who save and invest and those who don't.

 

[Lyondellic]

Originally Posted By: Tornado Red

Originally Posted By: Gary Allan

Quote:

The solution to the problem of disappearing jobs... lies not in trade sanctions against competing nations, but in a total overhaul of the government's taxing and regulatory policies.

I don't see it that way. While it's "true" ..the rationale behind it is not quite right. The regulations aren't there because someone decided to pull something out of their behind. Their origins are based in just cause. I don't think we want to "go back" to the fond "good old days" of child chimney sweeps and "company town" coal mines (some beg for the return to such "mastery") with their patch towns. Do we want to return to the unchecked pollution ..etc..etc. ... Figure it out, the wages of sin is government intervention. Figure a way to breed a more sensible greedy person ..or instead of throwing an award banquet and cheering them along for pulling the best coup, give them the death penalty.

You want more jobs, but you don't want to change the rules that destroy jobs. You want more manufacturing, but you keep piling more burdens on manufacturers -- and what's worse, the current administration keeps promising a whole lot more burdens. You speak of "breeding" a different kind of human -- Stalin had the same idea, he wanted to create the New Soviet Man. Of course it required eliminating all of those who did not fit in his new society. Mao and Pol Pot had the same idea. Human nature does not change, if you doubt me then consult the Hebrew bible, or the writings of Confucius or Aristotle. The society you desire, where people react differently to incentives and disincentives, might be realized by a different species on a different planet, but it does not exist here and you cannot change people to make them do what their human nature tells them not to do.

I can tell you my opinion, but there are a lot of smart folks out there that have given this complex issue much more thought than I have. The main hurdle is to identify which laws and regulations are preventing the retention of existing jobs, as well as the creation of new jobs. I think we can all agree that the tax burden is too high, but the U.S. has been living on the proverbial credit card too long and now it's up to John Q. Taxpayer to pay the bill. I think that everyone, including companies and wealthy individuals should be taxed at the same rate. As for welfare and food-stamp recipients, they should work within their local communities before receiving such benefits. Some could clean buildings, others could pick up trash or watch the children of those working to earn their welfare checks. These are just a few examples of jobs that welfare recipients could perform. Only the mentally ill and truly disabled, especially our veterans, should be exempt. Relaxing air quality standards and environmental permitting requirements will drive industrial growth. Who wants more pollution in their community though? Relaxing standards for various toxic substances in our drinking water will prevent the need to purchase expensive equipment, but who wants their children to consume more lead or benzene? On the other hand, does it make sense to manufacture vehicles in Mexico (i.e. Volkswagon) and then transport and sell them in the United States without tariffs or quotas? Volkswagon can't afford to drop out of the U.S. market, which means that tariffs and quotas could be used to encourage them to produce vehicles in the United States. They will continue to produce vehicles in Mexico as long as the economics support them doing so. We cannot compete with the availability of cheap labor and lax governmental oversight that exists south of the border. Utilizing protectionism to safeguard domestic jobs and industry doesn't have to equate to isolationism. I would rather have a smaller, healthy economy than a large economy with an ever increasing deficit. Again, this is not a matter of political affiliation because neither party seems to understand what the term Balanced Budget truly means. Millions of Americans have been learning first-hand about the consequences of living on credit, but they don't have the luxury of printing more money or borrowing from China. This leads one to ponder the question of how Canada, England, France, Germany and other European nations are able to prosper despite government provided healthcare and high tax rates. Last time I checked the Euro was doing better than the Dollar.....

 

[Tornado Red]

Originally Posted By: Lyondellic

I think we can all agree that the tax burden is too high, but the U.S. has been living on the proverbial credit card too long and now it's up to John Q. Taxpayer to pay the bill. I think that everyone, including companies and wealthy individuals should be taxed at the same rate.

I agree about the need for a flat tax, though I think it should be applied to ALL income, not just to what is now defined as taxable income. Rates could be lower if so much income was not tax exempt. The solution lies in shrinking the government. When the federal government was 20% of GDP, not very many years ago, then I was calling to a gradual shrinking to 15% and eventually around 12% -- enough to cover essential functions but nothing like the current welfare state which is unsustainable. This year federal spending is around 25% of GDP, it might go higher, and President Obama WANTS it to go higher. This is a recipe for economic stagnation.

Quote:

... does it make sense to manufacture vehicles in Mexico (i.e. Volkswagon) and then transport and sell them in the United States without tariffs or quotas? Volkswagon can't afford to drop out of the U.S. market, which means that tariffs and quotas could be used to encourage them to produce vehicles in the United States. They will continue to produce vehicles in Mexico as long as the economics support them doing so. We cannot compete with the availability of cheap labor and lax governmental oversight that exists south of the border. Utilizing protectionism to safeguard domestic jobs and industry doesn't have to equate to isolationism. I would rather have a smaller, healthy economy than a large economy with an ever increasing deficit.

Your arguments are based on a false premise -- you think taxing imports will make companies want to make more products domestically. What if they can't make them profitably? then those products would simply disappear from the consumption habits of most Americans. If higher import tariffs eliminated $15k and $20k cars, will the Americans who can only afford $15k and $20k cars decide to pay $30k? No... they will simply stop buying new cars altogether. I don't want a smaller economy, I want a great big booming bustling growing-in-leaps-and-bounds economy. Raising taxes has never created such an economy and it never will. Tariffs are paid by consumers, not producers. I assume you picked VW because I drive a VW. My Golf was built in Brazil, though a year or two later VWoA stopped sourcing them in Brazil because the Brazilian currency had appreciated and this made goods from Brazil too expensive. The idea of NAFTA was to benefit the US, Canada and Mexico by encouraging trade within these countries instead of buying so much stuff from Asia. This goal has been achieved, so some extent, but more could be done. There needs to be MORE integration of trade between the US and Mexico, not less. BTW, Volkswagen is spending $1 billion on a new vehicle manufacturing complex near Chattanooga TN, because it cannot make money on vehicles assembled in Europe.

Quote:

Millions of Americans have been learning first-hand about the consequences of living on credit, but they don't have the luxury of printing more money or borrowing from China.

Baloney, most Americans are still living on credit even if they don't realize it. They probably think their retirement plans are covered by Social Security and Medicare. I am 58 years old and expect to live long enough to see both those agencies go bankrupt. And there won't be any bailout like Fannie Mae and Freddie Mac or AIG.

Quote:

This leads one to ponder the question of how Canada, England, France, Germany and other European nations are able to prosper despite government provided healthcare and high tax rates. Last time I checked the Euro was doing better than the Dollar.....

They are NOT prospering. The Euro is stronger than the Dollar because interest rates in the US are barely 0% and rates in Europe are slightly higher.

 

[Gary Allan]

Originally Posted By: Tornado Red

Originally Posted By: Gary Allan

Quote:

The solution to the problem of disappearing jobs... lies not in trade sanctions against competing nations, but in a total overhaul of the government's taxing and regulatory policies.

I don't see it that way. While it's "true" ..the rationale behind it is not quite right. The regulations aren't there because someone decided to pull something out of their behind. Their origins are based in just cause. I don't think we want to "go back" to the fond "good old days" of child chimney sweeps and "company town" coal mines (some beg for the return to such "mastery") with their patch towns. Do we want to return to the unchecked pollution ..etc..etc. ... Figure it out, the wages of sin is government intervention. Figure a way to breed a more sensible greedy person ..or instead of throwing an award banquet and cheering them along for pulling the best coup, give them the death penalty.

You want more jobs, but you don't want to change the rules that destroy jobs. You want more manufacturing, but you keep piling more burdens on manufacturers -- and what's worse, the current administration keeps promising a whole lot more burdens. You speak of "breeding" a different kind of human -- Stalin had the same idea, he wanted to create the New Soviet Man. Of course it required eliminating all of those who did not fit in his new society. Mao and Pol Pot had the same idea. Human nature does not change, if you doubt me then consult the Hebrew bible, or the writings of Confucius or Aristotle. The society you desire, where people react differently to incentives and disincentives, might be realized by a different species on a different planet, but it does not exist here and you cannot change people to make them do what their human nature tells them not to do.

Your mythos is wrapped around the false notion that wealth provides jobs. Jobs are perhaps a byproduct of the acquisition of wealth, but there's no mandate that it occurs. People don't build factories to create jobs. They build them due to demand. I will show you "job creation" of the past decade. I make $6M/year. I take a paycheck to cover my 2 mansions with the debt service ..so that I pay NO TAX. I then defer/invest my $4M in a chain of franchises that employ people that pay NO TAXES since they're lower income. I don't even care if they make a dime. I've just expanded my wealth $4M and got a WHOPPING 35% BONUS in avoided taxes. The acquisition of wealth needs help. Right. Again, offer something other than "If you don't let me do it too you HARD ..the other guys will do it HARDER. What a sales pitch. Try and promote it in a 100% honest and "full disclosure" manner. I really think only the minority wealthy will be on your cheering squad. It would be a laughable event.

 

[Shannow]

Originally Posted By: Tornado Red

I don't want a smaller economy, I want a great big booming bustling growing-in-leaps-and-bounds economy. Raising taxes has never created such an economy and it never will. Tariffs are paid by consumers, not producers.

Surely you can acknowledge that a perpetually expanding economy is an impossibility, when we have a finte pool of resources...where is the limit applied ?

 

[Tornado Red]

Originally Posted By: Gary Allan

Your mythos is wrapped around the false notion that wealth provides jobs. Jobs are perhaps a byproduct of the acquisition of wealth, but there's no mandate that it occurs. People don't build factories to create jobs. They build them due to demand.

Actually, the wish to obtain wealth creates a need to hire workers to produce goods or provide services. The individual who wants to become wealthy has an idea but he cannot do everything himself, he does not have enough time. People build factories because they expect to make bigger profits. They anticipate hiring workers to operate the factory, so you are correct that the creation of jobs is not the purpose.

Quote:

I will show you "job creation" of the past decade. I make $6M/year.... The acquisition of wealth needs help. Right.

You are doing okay, why are you wasting your time arguing with me?

 

[Gary Allan]

Quote:

Actually, the wish to obtain wealth creates a need to hire workers to produce goods or provide services.

Not at all. It merely has to figure out how to fulfill the wish. Jobs may be a byproduct or not. Speculators provided very few jobs for the wealth that they attained. The took that revenue from the collective pool of others investments ..and turned it into their own. The same revenue was already employing people as it was already being held and filtered in SOMEONE'S hands. Credit is the only method of expansion ..and that requires debt. For you to attain wealth ..on average, you've got to have others borrow it for you ..and give it to you. For the past 20+ years, capitalists have just figured out how to take it. First it started with the pensions...then the home equity. Now we're broke and you see the same destroyers of wealth as some savior? As a friend once said, if fleas could talk they would attempt to convince you that they're there to benefit the dog.

 

[Tornado Red]

Originally Posted By: Gary Allan

Quote:

Actually, the wish to obtain wealth creates a need to hire workers to produce goods or provide services.

Not at all. It merely has to figure out how to fulfill the wish. Jobs may be a byproduct or not. Speculators provided very few jobs for the wealth that they attained. The took that revenue from the collective pool of others investments ..and turned it into their own. The same revenue was already employing people as it was already being held and filtered in SOMEONE'S hands.

Speculators are not the bad guys here, they take risks that others do not want. The farmer with a field of corn or wheat can wait until harvest to sell his crop... but then he risks a sharp drop in prices, turning a profitable year into a disaster. So he sells his risk to the speculator who thinks the farmer is wrong. In this kind of trade, someone gains and someone loses, but at each instant the price reflects an equal number of traders thinking prices will go up or down. You say the speculator does not provide an economic benefit, but I have shown in this thread and a dozen others that they do.

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Credit is the only method of expansion ..and that requires debt. For you to attain wealth ..on average, you've got to have others borrow it for you ..and give it to you.

Debt or equity, those are the choices. If you need money to expand your business, you can borrow or you can sell shares. The person who is willing to lend to you wants security, the person who is willing to take an interest in your business runs a bigger risk but expects a bigger return.

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First it started with the pensions...then the home equity. Now we're broke and you see the same destroyers of wealth as some savior?

I see the Congress as the biggest destroyer of wealth. They're the ones who told lenders to issue mortgages to people who could not afford to make the payments. And they're the ones who created agencies like Fannie Mae which would guarantee these loans with the full faith and credit of the US government. So we are all less wealthy, but the culprits are not who you think they are.

 

[Gary Allan]

Quote:

You say the speculator does not provide an economic benefit, but I have shown in this thread and a dozen others that they do.

Aww...TR...disingenuous assignment of words Naughty. I said that the speculator doesn't produce employment (of merit). He produces nothing. He brokers all that has worth.

Quote:

Debt or equity, those are the choices. If you need money to expand your business, you can borrow or you can sell shares. The person who is willing to lend to you wants security, the person who is willing to take an interest in your business runs a bigger risk but expects a bigger return.

That wasn't my point. The economy runs on credit. If Joe Sixpack (or JQ Blue Label for that matter) doesn't expand their debt, the commerce sector ..the leaches on Wall St. ..just don't make money. Our monetary system requires it for "false inflation of apparent economic pressure". It's that false differential that provides the exchange of wealth. People can spend because new money is created upon the obligation to pay later. It always falls flat when the credit runs out. The leeches and fleas are the beneficiaries. They DO provide something for the advancement, but it has no lasting value (historically speaking) ..but the debt lingers on and increases ...to feed the needy (wealth needs help, remember?) when they need to wet their beaks and fill their bellies.

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I see the Congress as the biggest destroyer of wealth. They're the ones who told lenders to issue mortgages to people who could not afford to make the payments.

I agree. And the gun manufacturers pull the triggers at every murder too. Shameful conduct.

 

[Tempest]

Originally Posted By: Shannow

Originally Posted By: Tornado Red

I don't want a smaller economy, I want a great big booming bustling growing-in-leaps-and-bounds economy. Raising taxes has never created such an economy and it never will. Tariffs are paid by consumers, not producers.

Surely you can acknowledge that a perpetually expanding economy is an impossibility, when we have a finte pool of resources...where is the limit applied ?

http://en.wikipedia.org/wiki/The_Population_Bomb

 

[Shannow]

Tempest, is the Earth a finite globe ? If you agree that it's finite, then does growth (population, economic, whatever) stop at the point at which it is sustainable (i.e. within the input stream of solar radiation and some space dust) ? How does the market send signals and stop overextension ? On a finite globe, perpetual growth is an absolute impossibility.

 

[Tempest]

Everything is finite. What is the ultimate limit on population? I don't know. I know a lot of predictions in the past by "experts" have been laughably wrong.

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How does the market send signals and stop overextension ?

Cost. The fact that you have to ask this shows that you don't have even a basic understand as to how markets work. If you say the free market, people making decisions for themselves, doesn't work...and some here are...then you have to ask what entity will apportion resources and limit population. You then have to ask, how efficient that entity has been in the past at apportioning resources and what methods of population control it has instituted. RSP rules most likely will not permit flushing this out further.

 

[Gary Allan]

Quote:

If you say the free market, people making decisions for themselves, doesn't work...and some here are...then you have to ask what entity will apportion resources and limit population.

If you say that the free market managed Yankee whaling in a perfect manner, then I doubt your understanding of the free market. That is, no system is perfect. Don't pretend that "free market" has done a perfect job ..nor that it ever can. You can't play the liabilities of other systems and ONLY expound on the advantages of the alternatives. That's just being "one eye blind". Capitalism is the fairest distribution system going. Where supply and demand are totally self regulating. What you totally fail to account for ..acknowledge ..admit ..concede is that there are absolute limits to resources and, currently, no ceiling to demand. The market's ability to foresee these inevitable ..immutable ..and assured collision with these limits is REAL. To ignore it ..pretend it doesn't have REAL meaning ..is just ..well, it's IGNOR(E)ant. Tell us of the market's ability to provide unlimited resources for a population that has yet to show a peak in numbers. You can't ..all you can state is that "the market" will distribute what's left to those who can pay. We've managed to compress many lifetimes of consumption into very few generations. Giving the false impression that this could in anyway continue as it has been ..for all time ..well, that's just foolish in belief, or disingenuous in truth (in terms of "full and honest disclosure) of the philosophy. Telling how the shinny side shoe lands ..and "pretending" that the naught, nasty, untidy reality shoe, that must follow ..never lands.

 

[Tempest]

Quote:

That is, no system is perfect.

That is correct. That's why you take the best one.

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We've managed to compress many lifetimes of consumption into very few generations.

Based on what? Please state the year we will run out of oil.

 

[Shannow]

Originally Posted By: Tempest

The fact that you have to ask this shows that you don't have even a basic understand as to how markets work.

You've purposely avoided the crux of my question. With an exponential system, how does the market send/recieve a timely response that it's time to pull it's head in ? Exponential growth means that the last half of the resources are consumed in a single doubling period... with 3% "perpetual" growth, the market has 20 years to realise a problem, and change it's course entirely when a restricting factor is realised. Targetting an exponential expansion is ridiculous in a finite bubble.

 

[Tempest]

Quote:

With an exponential system, how does the market send/recieve a timely response that it's time to pull it's head in ?

How does the free market alternative do it? The free market does it with "evil" speculators. Please tell me what year we will run out of oil. ETA:

Quote:

The world's current (overall as well as natural) growth rate is about 1.14%, representing a doubling time of 61 years. We can expect the world's population of 6.5 billion to become 13 billion by 2067 if current growth continues. The world's growth rate peaked in the 1960s at 2% and a doubling time of 35 years.

http://geography.about.com/od/populationgeography/a/populationgrow.htm

 

[Gary Allan]

Quote:

How does the free market alternative do it? The free market does it with "evil" speculators.

..and speculators are thinking toward 2050 and beyond? I doubt it. The alternatives have a few sensible givens: 1) You want a functional society. 2) You want housing, food, clothing, heat, education, and employment for your members. 3) That #1 and #2 are not possible without limits on demand. (...and ..NO- you don't get to escape just by saying, "So who sets the limits" - not acceptable).