Posted on 03/02/2016 12:29:52 PM PST by central_va
It is hard to fight stupidity but when it comes from the premier conservative radio talk show host is it really stupidity or deception?
So here we go again another example of Rush defending his buds at Apple. He said iPhones could never be built in the USA. On the surface my reaction was what: is there a force field keeping Apple from building a factory in the USA? Joking aside his hobnobbing friends have brain washed him into believing the Free Traitor™ lie.
Here is the actual on air whopper: and I paraphrase; If Apple were to build iPhones in the USA instead of costing $190 dollars they would cost $2,500 dollars because of the difference in labor. If you take him at his word then you are part of the problem. You've bought the Free Trade lie.
So don't get me wrong I am not saying iPhones wouldn't cost marginally more if made in the USA but would they would 4 times as much?
In case you wanted to know the truth:
Labor per iPhone is almost the smallest cost item per phone that there is.
I would guess the total man hours to make an iPhone is less that 2 man hours. Heck a mid size sedan only takes 30 man hours to make.
Asymco analyst Horace Dediu used the "Nightline" report to estimate that Apple pays labor costs of between $12.50 and $30 for every iPhone it makes, which represents just 2-5% of the iPhone's sale price.
Ok let's multiple labor by factor of 10 assuming labor is 10 times more expensive in the USA ( I doubt that but lets go with that ).
So if Asian labor is $12.50 per phone then ten times that is $125.50 per hypothetical US made iPhone. Now tell us Mr. Limbaugh how do you get to $2,500 per iPhone retail?
Protectionism is the way to go, eh? Everyone knows how great the Smoot/Hartley tarrif worked out in ushering in the Great Depression.
Which parts? Processors? Screen? Both require rare earth materials that are more expensive to buy outside of China, by a margin of nearly ten times. That’s not counting the EPA compliance costs once it touches US soil.
So let’s say you import the parts and assemble here. Unless Apple keeps it in house (not happening), you need a company that will hire and manage the workforce as well as construct the factory. Who will make that gamble?
You are making a factory that must be retooled every 12 months, at a greater cost than making it in China, with land prices which are significantly greater than China. You’ll be unionized within months if not before opening the door, and Apple will only pay you 3 months after you deliver the finished product with a .03 percent defect rate.
Only way that’s happening is corral the EPA, put tariffs on finished goods, and make material parts nearly free from duties.
Either way, nothing is stopping anyone from making said factory. Go ahead and pony up the money.
You're the economic idiot.
“Respectfully?” Arrogant just a little, ain’t ya.
You sound like a knee-jerk globalist who couldn’t give a rat’s ass about the American working class. The kind of person who knows the price of everything and the value of nothing. The kind of person who has destroyed the idea of “conservatism” for a generation if not forever.
Another multi-millionaire earning his money pretending to be one of the folks.
Turn it off, cancel the subscriptions, send a message.
I want the government to charge an import tariff and not tell them anything but pay up. It they build the factory here then they don't have to pay the tariff. Is it that hard?
It isn’t just the labor costs.
In Asia, Apple doesn’t have to pay for ridiculous (if any) levels of health insurance. They don’t pay social security, medicare, worker’s comp...etc. They don’t have to give paid vacations or worry about workers who just “don’t feel like coming in” that day. Or workers who need a safe space or a time out. Or workers who become HR problems and file multiple complaints and lawsuits. Or many other things that cause HR departments at US companies to become bloated cost-centers that suck the life blood out of decent companies. They don’t have to play for compliance departments, or diversity departments...
Also, there’s about a 90% chance that where they choose to open a manufacturing plant in the US, they will have to deal with union labor. Union rules, union dues, mandatory overtime...etc. And all of the legal wrangling around that.
Never mind the differences in taxation levels.
There is a cost for all of these things - and it’s not reflected in the “labor costs” you’re talking about. Those costs - along with costs for building and maintaining the factories, utilities like power, water, and gas, and labor for upkeep on systems, HR, compliance departments...etc - can and will be passed on to the consumer and like it or not, in the end the costs of an iPhone will go up drastically.
Currently, the cash price for an iPhone 6s (non-plus) - purchased outright - is $650. If you add in the additional “costs of doing business in the US” I can easily see that quadrupling the cash price - which would make the phone $2500, but it would depreciate as soon as you bought it...
There is a reason why when you buy a new car and drive it off the lot, that action results in a loss of 30% of it’s value in most cases. You’re paying for the bloat.
The US government - and it’s myriad rules, regulations, laws, and off-the-books bribes it requires of US businesses - along with their enabling of every lawsuit under the sun for those who feel somehow “wronged” by their employer, has virtually choked the life out of manufacturing in the continental US.
Is there a solution? Yes - get government out of the way.
Or you can pass tariffs and make the phone cost as much coming from Asia as it would coming from the US.
As those who are supposedly looking for smaller government - I would think the former solution would be the one most of us supported.
Although I will admit I found it interesting that Marco Rubio - alleged small-government type - was raking Donald over the coals for not having a “replacement” for Obamacare. Why replace it? Dismantle both it, and the federal prohibition on the sale of health insurance on the open market across state lines, and get the hell out of the way.
No. But the cost of the 2x4 determines the price he bids for a house. My point was that you just can't look at the labor cost of the builders of the house. You need to look at the cost of all the component parts.
And government is just the entity to create the level playing field. After all, government is more responsible, capable and reliable than hundreds of millions of people making billions of transactions every day that are in their best interest. Willing sellers and buyers coming together and making choices where they mutually benefit, while not breaking the law is bad? Government manages everything else so well, why not let them manage trade even more than they already do? Corrupt crony bureaucrats picking winners and losers....what could possibly go wrong?
Yet many Apple products are astoundingly still Made in the USA. How is that possible?
Domo arigato! Or should I say it in our Master’s tongue: xiè xie!
Those cell phones are made by robots. The only active labor is in testing and packaging. If they were made in the USA then the packaging would be done by illegal aliens and the testing would be done by H1B visa employees.
A business contact of mine has a client who owns a manufacturing plant in a small town about 70 miles from here.
There #1 problem is finding people to hire who can pass the drug test. The failure rate is apparently 68%.
Hey did the UN end you a new blue helmet? I thought all citizens of the world and haters of the USA got one free.
I like some of the things a smartphone can do. But, I get along just fine without any smartphone.
I like some of the things Rush Limbaugh says. But, I can get along just fine not listening to him. He didn’t make me the conservative that I am.
Economics isn't magic. Doesn't mean you have to like supporting the Chi-coms. Unless you get rid of the minimum wage, the EPA, OSHA, the IRS, Obama care and a host of other parasitic government regulators; you will never get the cost of production in America to be as cheap as it is overseas. You can't magic that away.
I don’t care what your argument is about... THAT WAS OUT OF LINE!!
It's virtually a given that an individual's IQ rises in proportion to their bank balance. I saw that phenomenon in tax work I did for some very successful clients. You just learned to roll with the punches.
Too bad you don't want to eliminate regulations, reduce taxes and put the trial lawyers in a cage, which makes government smaller and less intrusive, as a means for getting factories to return to the US. Your beloved big government won't bring anything back, but a smaller government will. Is that hard to understand?
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