More downward pressure on global wages could backfire...

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BoberFett

Lifer
Oct 9, 1999
37,563
9
81
Africa has hundreds of millions of people that beg to differ (the next big thing after the other big things).
I'm glad you at least understand the problem. People like Produhgy do not. He chooses to squawk as loudly and annoyingly as possible, hoping that if he is shrill enough that his completely incorrect understanding of the world will become truth.

Of course this is the guy who believes that without lots of presents, Christmas is ruined. The poster child for greed calling others greedy. How quaint.
 

DucatiMonster696

Diamond Member
Aug 13, 2009
4,269
1
71
HEY!!! Someone got it right. What I have been sayong all along and coincides right with the start of our massive trade deficits.



I think it really is this simple, quit buying foreign crap. Keep the money here in the US. Our massive trade deficits are the equivalent of trying to pour water into a bucket at 1 gallon per minute while the bucket has a hole in the bottom that leaks 1.2 gallons per minute.
Or better yet don't devalue the purchasing power of Americans by over using the printing press.
 

Jhhnn

IN MEMORIAM
Nov 11, 1999
62,365
14,675
136
I love how Righties cling to their beliefs, even in the face of abject failure of their own policy & ideology.

It's all tied up in our concepts of ownership & obligation to each other. On the Right, the contention is and always has been that ownership entails no societal obligations at all, and we're seeing the results of that, plain & simple.

As trickledown Reaganomics has unfolded, cover for it has been provided by extending credit at every level. Instead of better wages & benefits, working people got a bigger line of credit & extended payment options. Instead of govt taking what it needed in taxes, it borrowed from the financial elite, who conveniently had the money to lend because they weren't paying it in taxes. Instead of offshoring & automation benefiting everybody, it mostly benefits those who actually own the business entities involved.

In order to benefit in the system, you must own, and if you don't, well, there you are.

It's been a rather masterful exercise in deception, but that's wearing thin, because we're reaching the end game of debt as a substitute for earnings, and we're reaching the end game of the way we look at work & employment.

The system doesn't need for Americans to work 40 hrs/wk to support the financial elite, but Americans need to have decent jobs to pay their bills & participate in the economy. Very few of us understood that it would come to this when the public responded favorably to the metaphor that a rising tide lifts all boats, some 30 years ago. We didn't realize what would happen, but we had our values, our beliefs, and faith in our leaders, particularly Reagan.

It's only a problem within the paradigm we accept about the role of business & govt in our lives. That paradigm is driven by innumerable right wing think tanks & institutes, talking heads & pundits. It's the headset that accepts the Job Creator meme, and accepts the idea that our vast military actually protects the country rather than the interests of American business overseas. It's the headset that firmly believes in work, a good thing, really, even in the absence of enough of it to go around. That's why we have offshoring & automation- to reduce the amount of work we need to do. We just need to realize that we need to find better ways to spread that benefit around, and our concepts of ownership w/o societal obligation can't & won't accomplish that.

What's crept up on us is the fact that the ownership class no longer has as much labor overhead as they once did, and that labor overhead is really everybody else's livelihood. So we need to bring that overhead back up, one way or another, as an act of economic self defense. If we can't accomplish that through wages, and I don't think we can, then we need to find & accept other ways of doing so. Just so long as we treat our ownership class as well as the rest of the first world treats their own, we should be able to do that.
 

Pr0d1gy

Diamond Member
Jan 30, 2005
7,775
0
76
I love how Righties cling to their beliefs, even in the face of abject failure of their own policy & ideology.

It's all tied up in our concepts of ownership & obligation to each other. On the Right, the contention is and always has been that ownership entails no societal obligations at all, and we're seeing the results of that, plain & simple.

As trickledown Reaganomics has unfolded, cover for it has been provided by extending credit at every level. Instead of better wages & benefits, working people got a bigger line of credit & extended payment options. Instead of govt taking what it needed in taxes, it borrowed from the financial elite, who conveniently had the money to lend because they weren't paying it in taxes. Instead of offshoring & automation benefiting everybody, it mostly benefits those who actually own the business entities involved.

In order to benefit in the system, you must own, and if you don't, well, there you are.

It's been a rather masterful exercise in deception, but that's wearing thin, because we're reaching the end game of debt as a substitute for earnings, and we're reaching the end game of the way we look at work & employment.

The system doesn't need for Americans to work 40 hrs/wk to support the financial elite, but Americans need to have decent jobs to pay their bills & participate in the economy. Very few of us understood that it would come to this when the public responded favorably to the metaphor that a rising tide lifts all boats, some 30 years ago. We didn't realize what would happen, but we had our values, our beliefs, and faith in our leaders, particularly Reagan.

It's only a problem within the paradigm we accept about the role of business & govt in our lives. That paradigm is driven by innumerable right wing think tanks & institutes, talking heads & pundits. It's the headset that accepts the Job Creator meme, and accepts the idea that our vast military actually protects the country rather than the interests of American business overseas. It's the headset that firmly believes in work, a good thing, really, even in the absence of enough of it to go around. That's why we have offshoring & automation- to reduce the amount of work we need to do. We just need to realize that we need to find better ways to spread that benefit around, and our concepts of ownership w/o societal obligation can't & won't accomplish that.

What's crept up on us is the fact that the ownership class no longer has as much labor overhead as they once did, and that labor overhead is really everybody else's livelihood. So we need to bring that overhead back up, one way or another, as an act of economic self defense. If we can't accomplish that through wages, and I don't think we can, then we need to find & accept other ways of doing so. Just so long as we treat our ownership class as well as the rest of the first world treats their own, we should be able to do that.
Excellent post, and very true. It really does make you wonder what the endgame will be once you see things for what they are, though.
 

dmcowen674

No Lifer
Oct 13, 1999
54,894
46
91
www.alienbabeltech.com
I love how Righties cling to their beliefs, even in the face of abject failure of their own policy & ideology.

As trickledown Reaganomics has unfolded, cover for it has been provided by extending credit at every level. Instead of better wages & benefits, working people got a bigger line of credit & extended payment options. Instead of govt taking what it needed in taxes, it borrowed from the financial elite, who conveniently had the money to lend because they weren't paying it in taxes. Instead of offshoring & automation benefiting everybody, it mostly benefits those who actually own the business entities involved.

In order to benefit in the system, you must own, and if you don't, well, there you are.

It's been a rather masterful exercise in deception, but that's wearing thin, because we're reaching the end game of debt as a substitute for earnings, and we're reaching the end game of the way we look at work & employment.
This is probably one of the top 5 posts if not the number one post ever in this P&N forum since it started at the beginning of the Iraq war in 2003 10 years ago.

Well said.

I've got some trickle down for you Rightie Reagonomic nuts, it's my piss.
 
Oct 30, 2004
11,436
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We live in a global economy. We have to deal with globalized labor. It is imo out of our hands. Erecting a wall around the country will only be a barrier to being a competitive economy long term. It will raise prices for not only goods but also labor. Eventually that would bite us right in the ass worse than this issue of having our unskilled workers competing with foreign unskilled workers.
Why do we need to be competitive with a third world standard of living?

Why do you think that free trade allows us to magically consume more wealth than we produce (long-term)?

We have 310 million people in this country, that's enough to sustain having a large division of labor. Why do you think that we couldn't be self sufficient and produce the wealth that we want to consume on our own without outside help? Why do you think that we would suffer if we allowed international trade while enforcing a zero-dollar trade deficit and forbid the sale of our capital assets?
 
Oct 30, 2004
11,436
32
91
Want to keep your wages up and protect your job, buy more american goods and support the people that support you.
The government has to force people to buy American through the use of tariffs and import bans or else you'll end up with a situation akin to the Tragedy of the Commons and/or a Free Rider problem.
 
Oct 30, 2004
11,436
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A 95% service economy (or higher) is the end game. Technology will see to that. Bringing manufacturing back to the US is a bandaid on a long term problem. You had better figure out how to keep people busy when the production of the entire world's physical goods can be produced by a relatively tiny number of people with fully automated factories. It's not as far away as you think.
This is an interesting issue.

Ideally, and perhaps as a matter of economics, people would work less. Free time would become increasingly valuable as the marginal value of working additional hours decreases. If you could have everything you wanted by working 10 hours/week and live comfortably, then why would you want to sacrifice 40 hours/week of free time to work 50 hours/week?

If people worked 70 hours/week now then employment in this nation could, in theory, be cut in half, but people don't seem to want to do that.

The other issue is that there will always be something that people want. If only 1% of the populace is needed to produce physical wealth, the other 99% will end up employed producing services that people want to enjoys and the physical wealth created by the 1% that works in manufacturing will get spread around.

I really don't fear technology, innovation, and real productivity gains (driven not by increased human effort and longer hours, but by innovation). It will all balance out. At one time 95% of the people worked producing food and today only a small percentage of people do, but we're not all out of work--instead those who aren't producing food are producing other goods and services that we want.
 
Oct 30, 2004
11,436
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In a couple of decades most of the world will be middle class,if something major doesn`t rock the boat.
Nations on the top now will be most affected but there is little anyone can do about it.
It's a touchy-feely thought. Sadly, realistically, there probably aren't enough resources on the planet needed to sustain that when you have a worldwide population of 7 billion people, at least not anytime in the foreseeable future (next 200 years). Perhaps if we had been able to keep from reproducing like rabbits and had a mere population of 2 billion it would be possible. It's an inescapable Malthusian problem.
 
Oct 30, 2004
11,436
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We "got our lunches ate" because the idiots running companies in this country started cutting corners to increase profit.
You're blaming the wrong people.

Businessmen just do what they can (hopefully within the law) to earn a profit. If it makes sense to send the jobs to China or to hire foreigners on H-1B visas, then that's what has to be done. It isn't a businessman's job to worry about the nation's greater good or the general welfare of the public. It isn't a businessman's job to address broad societal problems like externalities, the tragedy of the commons, or free rider problems.

So who deserves the blame?

Is there...could there be an institution in our society whose job it is to worry about the general welfare of the public and the nation's greater good? Is there an institution that can address issues such as externalities, tragedies of the commons, and free rider problems?

It's the government and our politicians.

They deserve the blame. On a broader scale, the American public deserves the blame for having elected them. ("I have seen the enemy and he is us.") The American public deserves blame for not having a stronger sense of national identity and for being collectively foolish and short-sighted and for succumbing to free market dogma.

It's the government's job to regulate international trade and issues of global labor arbitrage and not that of private businessmen. Put the blame where it belongs--on our politicians, past and present, and on the American people themselves for having elected them.
 
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Oct 30, 2004
11,436
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Maybe with countries like China and India getting better wages and growing the way they are we will start to see things in the USA start to turn around.
It's an argument that the free marketers might make. Sadly, as a practical matter, it will take decades if not centuries for all of the poor nations to increase their standards of living to American levels--which will decrease to average out with them.

Perhaps one day, 200 years from now, global labor arbitrage will no longer be an issue (hopefully we'll all maintain our current middle class standard of living and not be equally third world poor). However, you and your children will be long dead by that time. We need economic policies to work for us during our lifetimes, not 200 years from now.
 

Doppel

Lifer
Feb 5, 2011
13,306
3
0
So many people in this thread would understand the world more if they understood what this means:

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

In economics, the tragedy of the commons is the depletion of a shared resource by individuals, acting independently and rationally according to each one's self-interest, despite their understanding that depleting the common resource is contrary to their long-term best interests.
Among other things it explains why it makes no sense for an individual to willingly pay more for a product than they need to even though they feel that as a group everybody paying for cheap imported products is a problem.
 

werepossum

Elite Member
Jul 10, 2006
29,873
462
126
Whose fault is this? People retire poor because they take a 30+ year mortgage on a bigger house than they can afford. Even if they are only paying 4%.... not good in terms of savings.

Now you can scrimp and save to put 20% down on a house. Buy something more reasonable and have it paid off in 10-15 years. After its paid off... you can pay yourself the mortgage the remaining 15 years.

After 30 years who is better off? Same with any other type of purchase on credit. Who is to blame? The creditor who puts the offer out there or the consumer who doesn't mind giving their hard earned cash to the creditors.
Well said. Too many people today want whatever they want and want to find someone else to pay for it.

In 1987 I went to work for a certain welding shop. At the time, the top pay was 3.23 times minimum wage.

In 2004, that same welding shop had a top pay of around 1.87 times minimum wage.

In 1987 dollars, that would have been like taking a $3 an hour cut in pay, but the cut in pay was spread out over 17 years.

Once you figure in inflation, those workers are making about half today, as compared to what they were making in the late 1980 and early 1990s.

But yet somehow we are supposed to be in a recovery?

The US will not be in a full recovery until free trade comes to an end and our factories come back.
I think you are correct. There are three factors driving down wages: outsourcing and illegal immigration, both of which create a glut of labor, and automation. We can't (and shouldn't) stop automation, but as more and more jobs can profitably replaced by automation, fewer and fewer workers are needed to produce the same amount of product. It would help immensely to end or severely hamper outsourcing, but increased population and automation will still exert downward pressure on wages.

Have we gone so far now that you cannot find the products. Entire industries have now been wiped out and will not be able to return because nobody here knows the process well enough to simply bring it back. Free trade wouldn't be an issue if it were truly "Fair Trade" but it's not and it isn't going to be.

To those that say simply suck it up and it's a global economy....just remember that when you complain about the 47% not paying federal taxes or asking for more government services (welfare, healthcare, etc). It all stems from the wage loss of previous decades that continues to drive us ALL down, and if you think you're immune to it, you would be wrong. When the general wage base goes down, it effects you and most of you don't even realize it.

As Zebo says....cheap is more expensive.
Well said. We removed virtually all technology transfer prohibitions, so we have no technological advantage, and we'll never be able to compete with nations without environmental and worker protections unless we drop our own - in which case, what's the point of being able to compete?

I'd love to see importation barriers and stiff tariffs so that if we don't have the jobs, at least the imports can fund our government. We'll be lowering our own living standards, but we're pretty much doing that already with free trade. Better by far to be a nation that produces more than it consumes, even if we have less stuff, that to be a nation where the majority of people are unnecessary and survive only by empowering government to seize and redistribute wealth.
 

Doppel

Lifer
Feb 5, 2011
13,306
3
0
we'll never be able to compete with nations without environmental and worker protections unless we drop our own
This is exactly right. We either drop US standards OR limit their access to US markets. Protectionism can be destructive, but the US does have on its side the most powerful economy in the world. If any nation can pull it off it's this one.

China, as an example, is destroying its environment to attract business. And I personally think there should be some illegality to a US based company making this decision, as many have done:

"Well, to hire more workers for this machine it's $13/hour, since we need to pay for their social security, taxes that pay OSHA, etc. So instead, let's skip that sh*t and just hire a guy out at $3/hour, way below minimum wage here, in some other country that defines its workers as little more than trash."

Should the border alone let an employer skirt every single labor law in the US? Because that's what outsourcing does. The only way around it is to jack up the import cost such that it's no longer attractive for a company that had a manufacturing machine in Iowa ship that machine to Beijing and hire a cheap worker to do the same thing and then ship that product back to the US.

A company selling product to China cannot be competitive with US-based production costs, so they are likely to want to produce in China, too. That's fine and reasonable, but if you want to sell in the US there should be a strong incentive to use US labor to create the product.

We all know this argument is moot, though. The bought politicians who are the top economic tier are doing fine with all the outsourcing, and they'll be able to sell to their lower-class constituents the argument that "With times so tough as it is this guy wants to raise import costs so now a $10 kettle is $18! You can't afford that! He wants to cripple the economy!"
 

cwjerome

Diamond Member
Sep 30, 2004
4,346
24
81
I love how Righties cling to their beliefs, even in the face of abject failure of their own policy & ideology.
Much like Lefties. Our situation is entirely the result of both parties, but neither side can see that.

It's all tied up in our concepts of ownership & obligation to each other. On the Right, the contention is and always has been that ownership entails no societal obligations at all, and we're seeing the results of that, plain & simple.
No, that's the libfantasy of the day. The idea of ownership is simple... people who own a house and stock and things like that tend to have more interest in a successful society and will generally act more responsible than those that have no real vested interest in society. The basic idea is that getting more people into the economic mix and tethering them to the future will have beneficial outcomes because people will have a higher interest in the stakes. It's just the owner vs renter principle write large. People who own tend to take care of their property more and are forced into responsibility on some level because of credit issues and such, and renters tend to have less interest in maintaining their property and don't have as much economic responsibility.

There is nothing terribly wrong with this and it's not the reason why our economic situation is jacked up. There's nothing inherently wrong with trying to get more people involved and vested. Our current failures are mainly the result of the same two things that are affecting most "first world" nations... a rather pitiful managing of the reality of globalization and extreme budgetary failures resulting in enormous deficits and debt. The issues are complex, nuanced, and blame-spreading, so they don't lend themselves well to your watered down talking points and partisan memes. For political warriors fighting the team sport such as yourself, reality is ignored or misunderstood in favor of cheap shots and one-upmanship. Granted, most of the Right does this too and as long as all these retards keep fighting the partisan battle in front of their nose while disregarding what's important we'll keep getting what we're getting- worse. One of my favorite expressions is "The right answers to the wrong questions are the wrong answers to the right questions." We keep chasing our tails searching for the right answers to the wrong questions because we are geared and programed to fight the meaningless partisan war. If more people can removed themselves from the fakery and trivial nature of Right vs Left politics and start with a fresh look at policy then maybe we can start asking the right questions and actually fix some shit.

As trickledown Reaganomics has unfolded, cover for it has been provided by extending credit at every level. Instead of better wages & benefits, working people got a bigger line of credit & extended payment options. Instead of govt taking what it needed in taxes, it borrowed from the financial elite, who conveniently had the money to lend because they weren't paying it in taxes. Instead of offshoring & automation benefiting everybody, it mostly benefits those who actually own the business entities involved.
More failed Leftwing revisionism. The Left and the Right has turned Reagan into a mythic figure of either demonic or angelic proportions and neither are correct. Reagan was definitely not of the "deficits don't matter" school that exists now with many people, he was a typical member of the old guard who, like Bush the 1st, regarded high deficits are a major problem and tried to combat them. People like Dick Cheney may have said Reagan proved deficits don't matter but he was wrong, Reagan (and the first Bush) thought they mattered and they do matter. The peace dividend, semi-reasonable budgeting, and dot com bubble temporarily faked us out in the 90s, but our thinking problem only grew. Republicans learned the wrong lessons from Reagan and Democrats just continued being dumb.
It's been a rather masterful exercise in deception, but that's wearing thin, because we're reaching the end game of debt as a substitute for earnings, and we're reaching the end game of the way we look at work & employment.
False. There has been practically no deception at all from the Republicans. They have been very open and honest in their economic beliefs and plans and because of major miscalculations, bad luck, and political gamesmanship, those beliefs and plans generally sucked. The worst part is, the Democratic beliefs and plans were no better. Here's the thing: Everybody from Milton Friedman to Ronald Reagan to most people everywhere, including those on the left, thought that after dropping gold in 1971, the government would be constrained by the market to act responsibly. The only problem, one that nobody really foresaw, was some countries -notably China- became very happy to buy unheard of amounts of Tbills to finance our irresponsible gluttony... which became wildly outrageous as the nation took leave of its senses during Bush 43 and basically stopped trying to pay for anything. Tax cuts skewed towards the rich and social programs skewed towards the poor and a couple wars going on... it didn't matter!

The discipline of the free currency markets after 1971 failed because of this totally unexpected windfall of easily being able to finance massive deficits by borrowing from other countries. Instead of a sharp devaluation in the dollar which would force the government to take the bitter pill of responsibility with some tax hikes and some spending cuts, we found a drug dealer in China would lend us money on a previously unheard of scale. China's strategy of export-led growth fit this perfectly since they could support our massive consumption habit and buy their shit while keeping their exports affordable by buying dollars to keep the dollar strong in relation to their yuan. Nobody knew that a global free market of currency wouldn’t really exist because countries like Japan and China would manipulate their currencies to support the export growth model and their export model tunred out to support our consumption model perfectly. This is what allowed us to over-borrow and over-consume (and allowed countries like China to develop far more rapidly than they would have otherwise. Thanks to China, what everyone feared about deficits was no longer true… or so we thought. Republicans AND democrats were perfectly happy to gorge because it was relatively pain free.

The system doesn't need for Americans to work 40 hrs/wk to support the financial elite, but Americans need to have decent jobs to pay their bills & participate in the economy. Very few of us understood that it would come to this when the public responded favorably to the metaphor that a rising tide lifts all boats, some 30 years ago. We didn't realize what would happen, but we had our values, our beliefs, and faith in our leaders, particularly Reagan.
More typical Reagan hate. There was a generational shift after the first Bush among many on the Right In 1981, traditional Reps supported tax cuts matched by spending cuts to offset the way inflation was pushing taxpayers into higher brackets and to spur investment. This was a fairly sound policy and it generally worked. Concerned with deficits, they rolled back almost half the tax cuts, especially once it came clear spending wasn't going to drop as much as they hoped, but inflation was crushed and the economy enjoyed a major resurgence in growth and productivity. Unemployment was low, profits were good. But a new cadre of Reps learned the wrong lesson and hooked the party on a delusion that the economy will outgrow the deficit if attacked with enough tax cuts. Tax cuts became an ideological pillar... tax cuts at all costs, no matter what. Never, ever, ever raise taxes (see the pledge and Grover N). All of this was done invoking an imaginary version of Reagan along with Democratic refusal to cut spending at all.

It's only a problem within the paradigm we accept about the role of business & govt in our lives. That paradigm is driven by innumerable right wing think tanks & institutes, talking heads & pundits. It's the headset that accepts the Job Creator meme, and accepts the idea that our vast military actually protects the country rather than the interests of American business overseas. It's the headset that firmly believes in work, a good thing, really, even in the absence of enough of it to go around. That's why we have offshoring & automation- to reduce the amount of work we need to do. We just need to realize that we need to find better ways to spread that benefit around, and our concepts of ownership w/o societal obligation can't & won't accomplish that.
Just more of the same, Right Wing bad blah blah., Left Wing good blah blah. No original thinking here whatsoever.

What's crept up on us is the fact that the ownership class no longer has as much labor overhead as they once did, and that labor overhead is really everybody else's livelihood. So we need to bring that overhead back up, one way or another, as an act of economic self defense. If we can't accomplish that through wages, and I don't think we can, then we need to find & accept other ways of doing so. Just so long as we treat our ownership class as well as the rest of the first world treats their own, we should be able to do that.
This just seems like a lukewarm attempt to make the usual “government can save us” and “we need to be more like Europe” argument and is pretty much regurgitated Krugman.

My overall point is that 1) Reagan is not a demon (or a tax-cutting God for the Right), 2) Dems and Reps fell for the budgeting failures equally, 3) most Reps have completely gone to shit since at least 2000, (most Dems have already been shit far longer), 4) the hyper-media-partisan-political game (which you are blissfully part of) and permanent campaign of Reps and Dems fuels the fires and only makes things worse, and finally a point I brought up but didn’t really discuss 5) many of our problems are also due to massive mismanagement of globalization to which Reps and Dems are equally part of.
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
This is exactly right. We either drop US standards OR limit their access to US markets. Protectionism can be destructive, but the US does have on its side the most powerful economy in the world. If any nation can pull it off it's this one.

China, as an example, is destroying its environment to attract business. And I personally think there should be some illegality to a US based company making this decision, as many have done:

"Well, to hire more workers for this machine it's $13/hour, since we need to pay for their social security, taxes that pay OSHA, etc. So instead, let's skip that sh*t and just hire a guy out at $3/hour, way below minimum wage here, in some other country that defines its workers as little more than trash."

Should the border alone let an employer skirt every single labor law in the US? Because that's what outsourcing does. The only way around it is to jack up the import cost such that it's no longer attractive for a company that had a manufacturing machine in Iowa ship that machine to Beijing and hire a cheap worker to do the same thing and then ship that product back to the US.

A company selling product to China cannot be competitive with US-based production costs, so they are likely to want to produce in China, too. That's fine and reasonable, but if you want to sell in the US there should be a strong incentive to use US labor to create the product.

We all know this argument is moot, though. The bought politicians who are the top economic tier are doing fine with all the outsourcing, and they'll be able to sell to their lower-class constituents the argument that "With times so tough as it is this guy wants to raise import costs so now a $10 kettle is $18! You can't afford that! He wants to cripple the economy!"
Germany has done very well with protectionism.
 

cwjerome

Diamond Member
Sep 30, 2004
4,346
24
81
Germany has done very well with protectionism.
That's a strange thing to say considering Germany consistently ranks well among among the most open economies in the world, as are most European nations.

In fact: recent story

"After years of battling each other on trade issues, US and European officials are contemplating a dramatic change in direction: joining together in what could be the world's largest free-trade pact in an attempt to boost their struggling economies.

Discussions are in the most preliminary of stages and there would be significant obstacles to overcome, including sharp differences on agriculture, food safety and climate change legislation. Still, top European Union and US officials have said they want to see it happen. And America's main labor federation, often the biggest opponent to US trade pacts, says it wouldn't stand in the way."
 

werepossum

Elite Member
Jul 10, 2006
29,873
462
126
This is exactly right. We either drop US standards OR limit their access to US markets. Protectionism can be destructive, but the US does have on its side the most powerful economy in the world. If any nation can pull it off it's this one.

China, as an example, is destroying its environment to attract business. And I personally think there should be some illegality to a US based company making this decision, as many have done:

"Well, to hire more workers for this machine it's $13/hour, since we need to pay for their social security, taxes that pay OSHA, etc. So instead, let's skip that sh*t and just hire a guy out at $3/hour, way below minimum wage here, in some other country that defines its workers as little more than trash."

Should the border alone let an employer skirt every single labor law in the US? Because that's what outsourcing does. The only way around it is to jack up the import cost such that it's no longer attractive for a company that had a manufacturing machine in Iowa ship that machine to Beijing and hire a cheap worker to do the same thing and then ship that product back to the US.

A company selling product to China cannot be competitive with US-based production costs, so they are likely to want to produce in China, too. That's fine and reasonable, but if you want to sell in the US there should be a strong incentive to use US labor to create the product.

We all know this argument is moot, though. The bought politicians who are the top economic tier are doing fine with all the outsourcing, and they'll be able to sell to their lower-class constituents the argument that "With times so tough as it is this guy wants to raise import costs so now a $10 kettle is $18! You can't afford that! He wants to cripple the economy!"
I agree completely. We desperately need to fix this, and we won't. The right largely supports the right of capital owners to do as they please, and the left is making an end run with the SEIU. And even when we do try for fairness, we do not address regulatory burdens (doubly odd since air and water easily travel beyond nations' boundaries, so that pollution in Red China soon becomes pollution in India and eventually pollution in America.) And even when we do go after fairness, it's fairness defined completely by the other nation, so that Chinese companies are largely free to open facilities in our nation (including running their own customs & duties!) whereas any companies doing business in China must be at least half Chinese-owned.

I say screw fairness and concentrate on what's best for America. If it's to be fairly unrestricted free trade, then we need to accept that we cannot maintain a large middle class based on selling each other Chinese goods. We will inevitably be a nation with a very large lower class artificially propped up by a very large and powerful government redistributing wealth from a comparatively small wealthy class. (And considering the latter is also largely our political class, somehow I doubt that's going to turn out as well as some believe.) And we need to decide if we're going to sell Hawaii first, or Alaska first, to pay for our "cheap" imported merchandise.
 

LegendKiller

Lifer
Mar 5, 2001
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That's a strange thing to say considering Germany consistently ranks well among among the most open economies in the world, as are most European nations.

In fact: recent story

"After years of battling each other on trade issues, US and European officials are contemplating a dramatic change in direction: joining together in what could be the world's largest free-trade pact in an attempt to boost their struggling economies.

Discussions are in the most preliminary of stages and there would be significant obstacles to overcome, including sharp differences on agriculture, food safety and climate change legislation. Still, top European Union and US officials have said they want to see it happen. And America's main labor federation, often the biggest opponent to US trade pacts, says it wouldn't stand in the way."

Germany has huge unions, heck, even the bankers have unions. They also underwent a huge program to make middle-size businesses proliferate, the program is called Mittlestand, most German banks were incentivized to lend huge amounts to these businesses at very low rates. Those banks were very localized (or were), such as WestLB or BLB until they decided to play with the big boys on the world stage.

This is why they are so "open" for their markets. They may allow you in but nobody buys it en masse. Instead, German's have a huge amount of national pride/responsibility in buying German first and supporting small German companies and German workers.

The biggest problem is Germany kept exporting all of this stuff to southern European countries with effectively trade financing. Look up Target2 payments.
 

Engineer

Elite Member
Oct 9, 1999
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700
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Not sure what Germany is doing but they must be doing something right. Over the last few years, it has actually been "CHEAPER" to buy German made industrial products than most made in China and the likes. I am now starting to see a few "Made in USA" industrial products show up and their prices are also as good as those of other countries. I push them where I can, customers permitting their use of course.
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
Not sure what Germany is doing but they must be doing something right. Over the last few years, it has actually been "CHEAPER" to buy German made industrial products than most made in China and the likes. I am now starting to see a few "Made in USA" industrial products show up and their prices are also as good as those of other countries. I push them where I can, customers permitting their use of course.
They protected their domestic industries and provided a safety net for their people. This came at the cost of less spectacular growth and potentially long-term negative effects (i.e. not having things like the .bombs) but their work-life balance is far better.

If socialism is that bad then maybe we need to take a long hard look at what we are becoming.
 

Phokus

Lifer
Nov 20, 1999
22,995
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That's a strange thing to say considering Germany consistently ranks well among among the most open economies in the world, as are most European nations.

In fact: recent story

"After years of battling each other on trade issues, US and European officials are contemplating a dramatic change in direction: joining together in what could be the world's largest free-trade pact in an attempt to boost their struggling economies.

Discussions are in the most preliminary of stages and there would be significant obstacles to overcome, including sharp differences on agriculture, food safety and climate change legislation. Still, top European Union and US officials have said they want to see it happen. And America's main labor federation, often the biggest opponent to US trade pacts, says it wouldn't stand in the way."
Uh, no in Germany, by law, unions get 50% Board of Director representation at mid to large size companies (33% at small ones). They have capital controls. And very high taxes (not only do they have a 45% tax rate, it's a very broad based rate and on top of that, they have VAT). They also have mandated 6 weeks of vacation. Also, their manufacturing workers make like $16 more an hour in wages and benefits than ours do.

Germany is the anti-thesis of idiotic rightwing policy.
 

Engineer

Elite Member
Oct 9, 1999
39,234
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They protected their domestic industries and provided a safety net for their people. This came at the cost of less spectacular growth and potentially long-term negative effects (i.e. not having things like the .bombs) but their work-life balance is far better.

If socialism is that bad then maybe we need to take a long hard look at what we are becoming.
It's hard to imagine that a country like Germany could surpass the US in exports. I agree with your statements above......we can either make stuff (under protection if necessary) and label ourselves socialists or we can do what we're doing now and borrow money to take care of the population without enough money to get by and call ourselves socialists.....all in my opinion of course.
 

Engineer

Elite Member
Oct 9, 1999
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http://www.theatlantic.com/magazine/archive/2012/12/the-insourcing-boom/309166/3/?single_page=true

Just an article about some tentative return of manufacturing to the US,now how many jobs will that bring is another matter...
from the article....

But a problem soon became apparent. GE hadn’t made a water heater in the United States in decades. In all the recent years the company had been tucking water heaters into American garages and basements, it had lost track of how to actually make them.
Just as I stated earlier. I'm so very happy that they stuck with it and brought it back, but will it continue? Is it worth it to "relearn" everything that was lost from decades of experience? I think so but there are CEO's to convince....

Have we gone so far now that you cannot find the products. Entire industries have now been wiped out and will not be able to return because nobody here knows the process well enough to simply bring it back. Free trade wouldn't be an issue if it were truly "Fair Trade" but it's not and it isn't going to be.
 

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