Posted on 02/09/2011 11:32:17 PM PST by iowamark
Exactly so. There is so much in the way of myth and “myth-understanding” in play here, it’s mind-boggling.
As for out textile industry ... well, Asia may be the textile giant TODAY, but as for all those deserted and shuttered textile mills that dot the New England landscape - all those firms re-located to the American South in the 1970’s and 1980’s. Why? Reduced tax burden and lower labor costs.
Take for example GM or Crysler. These companies are literally one product line from bankruptcy. They invest all their capital into a product and if that product line don’t become profitable, they’re screwed. Its good that Apple is making a lot of profit, so that they could experiment with various investments and not become one product line from bankruptcy
“There are three types of companies, 1) lowest cost-highest volume(low margin). 2) highest cost-lowest volume(High Margin) 3) everyone else in the middle.
When times get tough the two at the end survive and everyone in the middle loses.”
It works in most all markets and now it probably can be looked at by country. If governments get in the way it delays the inevitable, very inefficiently
For that absurd assertion, you need to come up with a falsifiable hypothesis, no matter how weak. I would be wiiling to entertain the notion that they don't want to strengthen American labor unions by building here for fear of rising costs down the line. Any ideas?
The story can be told through many industries (New England used to make a great many shoes, as well).
A good economist should be able to clearly lay out the reasons why an industry rises and falls in one area, only to rise up again in a different area. Perhaps the blind could be made to see.
I don't remember who wrote the editorial on high productivity and low employment, but it gave the example of gas station attendants. I (barely) remember when, if you pulled into a gas station, a small army would come out and get busy checking the tires, cleaning the windshield, checking the oil and filling the tank. Now? Who could afford to run a business like that? All self serve.
If to hire someone, I have to take on all of their medical costs and their retirement for the rest of their life, in addition to workman's comp, SS, etc. etc., plus deal with the paperwork, how much productivity do I need to get out of that person to make hiring them worth it?
And how did all of that become my responsibility when all I'm doing is paying them to help me build widgets? Has public education made us so stupid we can't take care of ourselves any more?
And, if I was wrong about them and this person absolutely sucks and is hurting my business, how much does it then cost me to make them go away, assuming I still can fire them? How much of a case do I need to build to avoid or win the lawsuit?
I'm exaggerating, but not by much and not for much longer since we seem to be embracing the progressive European model. It's no way to run a country unless you are trying to run off business and run the country into the ground.
The end result is a great mass of very unemployable people. No education, no skills, no work history, no work habits, no discipline. They have nothing to offer.
I see this as one of the biggest issues facing the country, but I don't see a lot of people talking about it.
Which is to say, record-high tariffs. Maybe Rush doesn't know this, but there were already tariffs in place before Smoot-Hawley. The problem with Smoot-Hawley was that it raised tariffs to record levels. It wasn't an either/or situation. Wouldn't surprise me at all if that were news to Rush.
It is not correct to say that whatever is not in the manufacturing costs is ‘profit’. Doesn’t Apple have thousands of employees in the US whose wages are paid by these products? Don’t they have rent, utilities, and taxes to pay?
What you say is true, but the bottom half was formerly much better educated than they are today, and was able to contribute more productively to society. The teachers they had back then, they whipped knowledge into even the thickest noggins.
I totally agree, I guess I am a Marxist too. God forbid we have a real war and had to actually replace the equipment lost in battle with no means of onshore production. Nobody thinks of that....
If you wish us to use obsolete, labor intensive equipment, might I suggest farming with horse drawn plows and hand held sickles, so that 90% of the country would be needed just to produce food to eat. We could also do away with gasoline engines, modern medicine, and electricity, and live like medieval peasants, or would that be a little too obsolete for you?
If you wish us to use obsolete, labor intensive equipment, might I suggest farming with horse drawn plows and hand held sickles, so that 90% of the country would be needed just to produce food to eat. We could also do away with gasoline engines, modern medicine, and electricity, and live like medieval peasants, or would that be a little too obsolete for you?
Instead of blaming the "decline of manufacturing," we need to blame the collapse of liberalism, particularly public education, in leaving behind a couple of generations of people who don't have the job skills to compete for the high-wage jobs in whatever field.
Economist never think about patriotism or when we have to fight a war of attrition. That is NEVER in the calculation.
Lies, damn lies and statistics.
The fact is, millions of jobs have been lost here and put elsewhere.
Sorry Rush, from your ivory tower, you can’t see the truth on this one.
People who have never worked in a manufacturing facility or assemby plant have absolutely no idea how automated they’ve become and what their capability is. With that necessary automation has come greater productivity but also the loss of jobs which will never be recovered.
Exactly. I think most people bemoaning the "decline" in US manufacturing are thinking smokestack factories and hordes of unskilled labor. Those days are long gone (but maybe an EMP away). Manufacturing will not be the salvation of the uneducated and unskilled.
I'm amazed at the crap being tossed at Rush for this segment he did.
First, I'm amazed at his grasp of the details when a caller brings up a subject like this. He goes on a 5 minute rant detailing the thesis pretty well before he even can put his hands on the article. And he makes the point that despite all the headlines, America remains a powerhouse as a manufacturer -- at least statistically in terms of output. And he's right again when he alludes to all of the improvements in productivity (and the change in "manufacturing") here in the US that supports those statistics.
Give the guy a break: he does 3 hours a day, largely off the cuff, and he rarely gets hardly any of the important points wrong. I'm frankly amazed. Daily.
Germany is very "employer friendly". German companies also do not provide healthcare for their employees, the govt. does..........However, an average German employee making over $40k a year will pay upwards of 70% of their gross income in taxes.
42% income tax on incomes over $39k
19% Sales Tax
Employee Health Insurance: 15.5% of employee's gross earnings
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