Addressing US competitiveness

[First]

Originally posted by: WhipperSnapper

Originally posted by: Evan

Originally posted by: WhipperSnapper
but completely fail to address the core problems of global labor arbitrage.

Hard to address a problem that hasn't been empirically proven because, well, it doesn't exist.

I'll leave it to the readers to decide for themselves whether or not supply-and-demand curves and price points exist and whether a huge increase in supply relative to demand lowers the price point.

An influx of foreign workers lowers wages, yes, all else equal. It also reduces consumer prices, all else equal, since businesses have less overhead. It's not that hard to understand.

 

[0marTheZealot]

Originally posted by: BoberFett

Originally posted by: TheoPetro
http://fora.tv/2009/01/30/Advi...etitiveness#chapter_05

Interesting video on the core problems with the US economy. What would you say are the top 3-5 major issues with the US economy? Any ideas on how to solve them?

I will give mine in a bit.

1. Debt
2. Debt
3. Debt
4. Debt
5. Debt

We're a debt based economy. Saving is discouraged. Even the slightest downturn causes monstrous ripples because there's no room for error when every individual, city, state and the feds are living paycheck to paycheck, and just barely able to pay off their debts.

 

[WhipperSnapper]

Originally posted by: EvanAn influx of foreign workers lowers wages, yes, all else equal. It also reduces consumer prices, all else equal, since businesses have less overhead. It's not that hard to understand.

You're assuming that the businesses will pass those labor-cost savings onto consumers instead of trying to pocket them as profit and that new jobs will open up to replace the ones that were lost so that those people who were laid off might partake of the now lower prices. What happens if the supply of labor increases almost overnight relative to capital? What if the invisible back-end costs (increased unemployment, increased underemployment, more need for government-provided health care, less tax revenue) outweigh the front-end benefits of lower prices?

Now that our nation is more integrated with the global economy, why haven't Americans seen the alleged benefits? Why does there seem to be a generalized correlation between our having fewer barriers to international trade (foreign outsourcing, H-1B and L-1 visas, and mass immigration) and a decrease in the middle and lower classes' standard of living? Shouldn't we be rolling in economic prosperity right now and have more than enough wealth to offset the housing bubble and credit crisis?

Also, doesn't supply and demand dictate that if we merge our labor market with the rest of the world's impoverished labor market without a commensurate increase in the amount of capital and demand for labor worldwide that the American standard of living will also merge with that of the rest of the world?

 

[nobodyknows]

Originally posted by: ericlp

Originally posted by: Red Dawn
Our economy is a service economy, a bunch of highly educated Houseboys we've become.

and you probably voted for ronald reagen too eh?

That was his moto and I've never bought it. How does a service economy afford 250K dollar homes?

It can't and that's why we have to bail out the banks.

 

[nobodyknows]

Originally posted by: Evan

Originally posted by: WhipperSnapper

Originally posted by: Evan

Originally posted by: WhipperSnapper
but completely fail to address the core problems of global labor arbitrage.

Hard to address a problem that hasn't been empirically proven because, well, it doesn't exist.

I'll leave it to the readers to decide for themselves whether or not supply-and-demand curves and price points exist and whether a huge increase in supply relative to demand lowers the price point.

An influx of foreign workers lowers wages, yes, all else equal. It also reduces consumer prices, all else equal, since businesses have less overhead. It's not that hard to understand.

Like the business overhead has anything to do with what they charge for their product.

How much do those Nike's made in chinese sweat shops cost?

 

[BoberFett]

Originally posted by: WhipperSnapper

Originally posted by: Evan

Originally posted by: WhipperSnapper
but completely fail to address the core problems of global labor arbitrage.

Hard to address a problem that hasn't been empirically proven because, well, it doesn't exist.

I'll leave it to the readers to decide for themselves whether or not supply-and-demand curves and price points exist and whether a huge increase in supply relative to demand lowers the price point.

You'll have to forgive Evan, they don't learn about things like supply and demand in Help Desk School.

 

[Zebo]

1. The people. We have fundamental problems like too many deadbeats, too many fools, too many shysters (controlling K street and Banks) which are all social ills throwing money at does nothing to fix. The deadbeats, usually rude and obnoxious to boot with their false pride instead of having any accomplishments to speak of, are breed by schools and parents telling them how wonderful they are and could not fail for decades. The fools are of same sub-group but extends to University graduates who know nothing upon graduation and are victims of decades long grade inflation. The shysters is everyone breed by the get rich quick promises society and politicians harvest and a promotion of material things in popular culture. Bottom line is we are generally uncompetitive with others from Mexican manual labor to engineers working at M$, where best workers are foreign.

2. Lack of professionalism in the trades. Other countries train trades people from construction workers to hair dressers and it's not looked at as a job 'of last resort' but rather a skilled trade which should be compensated accordingly and the end products quality is much much higher.

3. Gimmick investment rules. From allowing betting to lose in things like short-selling to wild instruments like derivatives have destroyed value investing and plenty of sound companies along with it. And your 401K ...but that's another thread.

4. High corporate taxes, expensive tax compliance and punishing regulation. Self explanatory.

5. US infrastructure is in poor shape. Money spent on deadbeats above and foreign avarice has crippled business parks and R&D facilities.

6. Debt load - 30% , and getting worse, of taxes collected today are used to pay for past episodes of #5 above.

 

[Zebo]

dp

 

[KlokWyze]

Originally posted by: Skoorb
It's the misuse of debt, just like food is necessary, so is debt to an optimal economy, but too much food and you have a fat person, too much debt and you have a person straining to cover their responsibilities. Too much food and too much debt and you have America.

LMAO :clap;

 

[Acanthus]

Originally posted by: WhipperSnapper
It's hard to compete against $1/hour and few environmental regulations, few OSHA-type regulations, few labor regulations, and lower corporate taxes, especially when the competition has almost the exact same capital that you do.

Not really, a protectionism doctrine that uses a formula based on the quality of life of the average citizen.

Give massive trade tarriffs with nations who have slavery, or poor work regulations, or low worker pay, or an oppressive government.

That would be bad for Walmart though...

 

[piasabird]

Maybe cars are just so overpriced they are not worth purchasing.

 

[heyheybooboo]

What would you say are the top 3-5 major issues with the US economy?

We need more cowbell.

The economy is sick because of our over-dependence on consumption.

We didn't get here over night - it took about 60 years - and along the way there were major screw-ups. And let's face it, a great deal of it is self-inflicted.

We are too opulent and inefficient. We are lazy, impractical dependents who are far removed from self-reliance.

As we have moved from manufacturing to service based employment we left behind what was most critical for our future well-being - pensions and health care.

We've gone from a living wage (with benefits) to minimum subsistence at the edge of society. Twenty percent (and growing) of this country has zero or negative net worth. There is a huge concentration of wealth at the top end and the 2/3's of us in the middle are facing a declining quality of life.

I don't begrudge those of exceptional wealth - only the ways by which many have acquired it.

I do begrudge the gov't for getting us in this mess. Don't get me started with VooDoo Economics.

We need to blow the whole thing up - starting with the tax structure. The gov't clearly cannot sustain itself with taxes on the income of its citizens and domestic corporations given its propensity for corporate welfare and special interests. So ...

1) Reduce the domestic corporate tax rate, slash the corporate welfare and ditch the special interest tax credits. You can keep your sky boxes, naming rights and tickets to ball games but the taxpayer in the US will no longer subsidize them. Entertain on your own 'dime'. When you close an American factory, establish your overseas operations and attempt to 'repatriate' your profits, you will pay taxes.

(I know you guys will love this next one)

2) The mortgage interest deduction must be capped and indexed. Real estate and construction has been subsidized much too long.

3) If we are going to have a service based economy, those 'services' have to start paying taxes (let's start with the lawyers and CPAs). As our income tax structure is progressive so shall be 'consumption' taxes. The more energy you guzzle the more you pay. Go Green or Go Home (to your costly McMansion and 9 MPG Hummer).

(and one close to everyone's heart)

4) For the US to succeed globally we have to do something about preventative health and long-term care. However that burden is lifted I'll let the usual suspects argue about it. I have no problem requiring individuals to maintain private insurance with over-riding public catastrophic coverage.

5) Tear down the military-industrial complex. Invest in infrastructure.

 

[First]

Originally posted by: WhipperSnapper

You're assuming that the businesses will pass those labor-cost savings onto consumers instead of trying to pocket them as profit and that new jobs will open up to replace the ones that were lost so that those people who were laid off might partake of the now lower prices.

They do pass on the savings, this is indisputable. Consumer prices for these goods have gone down on an inflation-adjusted level for decades, especially when you consider bang for your buck. It isn't even close.

What happens if the supply of labor increases almost overnight relative to capital? What if the invisible back-end costs (increased unemployment, increased underemployment, more need for government-provided health care, less tax revenue) outweigh the front-end benefits of lower prices?

There's no reason to believe any of this has happened considering employment is still at 93% and there's massive demand in all sorts of fields, even during this recession.

Now that our nation is more integrated with the global economy, why haven't Americans seen the alleged benefits? Why does there seem to be a generalized correlation between our having fewer barriers to international trade (foreign outsourcing, H-1B and L-1 visas, and mass immigration) and a decrease in the middle and lower classes' standard of living? Shouldn't we be rolling in economic prosperity right now and have more than enough wealth to offset the housing bubble and credit crisis?

I don't see what your point is when this wasn't the case as recently as October 2007. What we're currently going through is a severe recession, and it's part of every business cycle.

Also, doesn't supply and demand dictate that if we merge our labor market with the rest of the world's impoverished labor market without a commensurate increase in the amount of capital and demand for labor worldwide that the American standard of living will also merge with that of the rest of the world?

That's not what's happening, I'm afraid to tell you.

 

[First]

Originally posted by: BoberFett

Originally posted by: WhipperSnapper

Originally posted by: Evan

Originally posted by: WhipperSnapper
but completely fail to address the core problems of global labor arbitrage.

Hard to address a problem that hasn't been empirically proven because, well, it doesn't exist.

I'll leave it to the readers to decide for themselves whether or not supply-and-demand curves and price points exist and whether a huge increase in supply relative to demand lowers the price point.

You'll have to forgive Evan, they don't learn about things like supply and demand in Help Desk School.

Oh look, my e-stalker computer salesman is back to wimp out on another thread.

 

[bamacre]

Originally posted by: nobodyknows
How much do those Nike's made in chinese sweat shops cost?

Do you own a pair of Nike's?

Originally posted by: WhipperSnapper
You're assuming that the businesses will pass those labor-cost savings onto consumers instead of trying to pocket them as profit

As long as there is competition, one company will lower their price to stay competitive and increase revenue.