Posted on 01/02/2014 7:05:10 AM PST by SeekAndFind
A friend recently got stuck when he tried to explain to his son, who was struggling to find a job, how our economy got to be the way it is. He asked my help since I am a well-known crank on the matter. I offered him three short anecdotes:
Last summer I was in a Home Depot standing in front of a veritable mountain of new air conditioners. They were all from China, which was no surprise. But to be annoying I asked a passing clerk where they were made. He was a young man, hired more for the spring in his step than his knowledge of international sourcing. We both looked at the boxes, piled in a pyramid, eight levels high. The boxes didn't say anything about China. But they did say "Made in PRC."
"Are these from China?" I asked.
He paused a moment. "No, they're from Puerto Rico."
Or consider this example from last month: A textile factory in Italy caught fire and seven workers were killed. They were all imported Chinese nationals working for Chinese companies operating in Italy so they could put a "Made in Italy" label on their cloth.
A third example: The city of New York decreed a few years ago that each bedroom in the city must have a carbon monoxide detector. There are roughly 11 million bedrooms in New York City, so the law created a huge market.
Further, the devices have a life of five years, after which they must be replaced, so the continuing market was also guaranteed. A manufacturing enterprise could hardly find a surer customer base.
(Excerpt) Read more at latimes.com ...
RE: Called AT&T customer service and it was in Mexico.
How was their English?
I think you & Donald Trump are singing the same song on this subject! :-) People laugh when “China” is the second word out of his mouth, but he (and you) would be correct.
“The power to tax is the power to destroy”.
We have to adjust our tax system to recognize the changes in the global economy. Currently we punish domestic productivity through income taxes, and encourage consumption of foreign-made products through relatively low sales taxes. Income taxes also provide an excuse for a corrupt government to interfere in economic activity at every level, through sale of exemptions and manipulative regulation. For the economy to flourish, all this must stop.
1. Eliminate all income taxes by constitutional amendment. Abolish 98% of the IRS. Replace with taxes on consumption, specifically on products that mostly enrich foreign producers and provide jobs/expertise overseas. Do not tax domestically produced energy, materials, and food.
2. Rebalance federalism to restore power to the States. Get the federal government out of most functions: Education, HUD, HHS, Labor, OSHA, mortgage finance, intrastate crime, etc. Have the States collect the consumption tax revenue, and pass on some to the federal government, as they agree is necessary for defense, foreign relations, and anything else of truly “national” scope.
Obviously the chances of these things passing are nil. What are really needed are things citizens can do despite the government. Buy local. Invent things.
"Bringing back manufacturing to America" would result in Chinese laborers being replaced by American robots.
My local supermarket has people with Downs syndrome doing sweeping, helping bag groceries, and putting the shopping cards where they should be.
If we got rid of illegal immigrants, the low-IQ population could go back to their traditional jobs: lawn work, cleaning (both in business and in homes), etc.
They could also stop having 10 kids per low-IQ woman.
It’s not China who is screwing American workers; it is US policy. It is not Free Trade, but financial and regulatory regulation. When companies are privately held, they do not offshore manufacturing, but publically held corporations do it as a matter of course.
The stockholders are the ones selling America and often those who own the majority of the stock are the very workers losing their jobs. They are also the first ones to complain when their 401Ks are losing value. The CEOs and large investors, looking only for short-term profit, don’t care about long-term consequences and the workers and products suffer agonizing deaths.
The overall financial impact of offshoring is generally negative, but the immediate profits can build a hell of a parachute and the small stakeholders are happy to see the increase in their portfolios. Unfortunately they invariably lose any of hte appreciation because the big boys bail out before the palne crashes. It’s all part of the Esau Generation outlook: I will have mine now!
Not only is Chinese manufacturing owned by China, the PLA owns most of the companies and there isn’t even an attempt toward copy or trade rights enforcement. Every company who offshores to China has effectively given up all rights to their products.
There is only one long-term solution: eliminate the multi-generational underclass.
Make it no longer workable for an unemployable single woman to have children. Eliminate welfare entirely.
America used to have a lot of competitive advantages. Good infrastructure, educated workforce, huge natural resources, the English language, rule of law and (moreover) the Common Law.
The last five are currently being suppressed by Alinskyite politics. But they are not gone. If America brings them back (kicking out the EPA would be a good start) then it will regain and retain industries.
A new factor is that America now has the enormous bonus of 'Eagle Diesel'. That is beginning to make a huge difference. If Government intervention in Fracking can be avoided, industry will begin to return to America - if only to get at the cheap energy.
Here’s how you do it:
Reduce the minimum wage to 15 cents an hour.
Make organizing or belonging to a union a capital offense.
Eliminate OSHA, FDA, EPA, DOE and other impediments to production.
Take all DOD contractors, and make them wholly owned subsidiaries of the military, with complete control over production.
Make all intellectual property rights property of the government.
Make all foreign intellectual property open to copying or theft.
Bring back forced prison labor, and sell labor to preferred companies.
Bring back debtors prisons, and sell labor to preferred companies.
Bring back indentured servitude, and set the bar too high to escape.
Let the government be a major stakeholder in all businesses.
Do not allow foreign businesses own any real property.
Allow only a minority stake in a business for all foreign businesses.
Discourage any imports other than intellectual property and capital.
Encourage foreign investment and technology transfer in return for record profits.
If you can implement these ideas here, then you may just be able to get those jobs back from china and mexico. That’s how the competition plays the game, and that’s why we’ll lose in the end. Get in bed with communists, and don’t compain when you lose all you have.
Absolutely. Not entirely, but in at least a large percentage and quite possibly a majority.
What few conservatives want to think about, and I don’t blame them, is the distinct possibility that the workings of the free market, via computers and automation, just may be in the throes of eliminating more and more people from the chance of a productive and decent job.
Look at the vaunted and praised “increases in productivity.” We’ll assume we can measure this accurately, which is quite an assumption. :)
Productivity is the amount of output relative to input, capital and labor. It seems pretty clear to me that even while today productivity has gone up, the ratio of capital to labor input has probably increased even more. IOW, we’re shifting from human to machine input.
This is a good thing, in general, as the remaining labor has higher value. But what about those people quite literally displaced, for whom there IS little and decreasing demand, in an economic sense.
Extend these two trends upwards indefinitely, and you will reach a point at which infinite goods are produced with zero labor input. That point will of course never (quite) be reached, but as it is approached a LOT of stuff will be produced with VERY LITTLE human input.
Only a few people will be employed, in any meaningful sense of being needed by the economy to keep operating.
What does everybody else do?
Such a society will have immense wealth, but since all human societies to date have been based on the need to incentivize humans to produce, once that need no longer exists, what will replace it?
The free market has been very good for humanity over the last few centuries, on net. There is unfortunately no guarantee this will continue to be the case in the next century and even the next few decades.
Among other things, get rid of big government and its buddy crony capitalism with their attendant regulations designed to suppress competition from small business and start ups.
Better than the Indian accent.
Here’s how you do it:
“Reduce the minimum wage to 15 cents an hour.
Make organizing or belonging to a union a capital offense.
Eliminate OSHA, FDA, EPA, DOE and other impediments to production.
Take all DOD contractors, and make them wholly owned subsidiaries of the military, with complete control over production.
Make all intellectual property rights property of the government.
Make all foreign intellectual property open to copying or theft.
Bring back forced prison labor, and sell labor to preferred companies.
Bring back debtors prisons, and sell labor to preferred companies.
Bring back indentured servitude, and set the bar too high to escape.
Let the government be a major stakeholder in all businesses.
Do not allow foreign businesses own any real property.
Allow only a minority stake in a business for all foreign businesses.
Discourage any imports other than intellectual property and capital.
Encourage foreign investment and technology transfer in return for record profits.
If you can implement these ideas here, then you may just be able to get those jobs back from china and mexico. That’s how the competition plays the game, and that’s why we’ll lose in the end. Get in bed with communists, and don’t compain when you lose all you have.”
Absolutely a true to-the-point account and my nominee for Post of the Day!
Thanks for the thoughtful reply, but I disagree that China holds an absolute advantage, and that it is anything but transitory. The BCG research I referenced is the best collection of evidence that supports this belief. In fact, the migration of low-tech assembly work from China to other parts of southeast Asia has even made China the victim of it’s own stragegy, as has the reshoring of even things like call center functions, due to a variety of issues that go beyond the “absolute” cost advantage they enjoy.
It’s a fair debate, but I’ll leave it on this note: the essence of competitive (and comparative) advantage lies in understanding the source of VALUE in the eyes of the customer. Value elements often include much more than direct labor cost, and again the BCG research highlights which ones are significant in specific industries. And part of the value equation includes factors we CAN control, such as the regulatory environment, productivity, and business friendliness. Those who understand the new sources of opportunity will seek to do business in those states or regions that allow them to prosper and those who are not competitive will be blaming China for their problems 20 years from now.
A famous Freemason, C. Edwards Deming, laid the groundwork for the answer of ‘how’ (see http://www.ritholtz.com/blog/2013/09/w-edwards-deming-14-points-for-management ). To adapt his action plan to America’s circumstances we should consider this. Place an income sur-tax of 30%, 45%, 60% on incomes that exceed 30, 45, and 60 times the lowest paid employee, contractor, or sub-contractor of any product protected by U.S. patents, copyrights, or treaty, regardless of place of employment or manufacture.
Make this point a part of the TPP.
Revise all our NAFTA, CAFTA, and other SHAFTA to include this point.
Back in the 1950+ era, I was a student of Prof Deming at NYU Grad School. He was consulting in Japan at that time but never missed our class in Sampling. Very good teacher. He was writing a book ‘Some theory of Sampling’, I think that was to be the title. Interesting that you should mention him. Regards,
Has anyone seen the movie Death By China?
It just became available on multiple venues - Netflix Streaming, Amazon Prime, iTunes (though I am sure Apple would be relieved if you ignored it).
Here’s the website:
http://deathbychina.com/
The movie immediately and permanently changed my mind. Turns out the Chinese Govt. declared war on us the same year Al Qaeda declared war on us – this has all happened since year 2001! But our attention went to the Middle East. The Chinese had the willing/fawning assistance of Democrat President Clinton and Tom Delay’s Pubbie controlled House. And now the Chinese have the assistance of our entire population because we no longer have much choice but to buy Chinese and help fund our own demise.
We need trade reform, obviously. I remember Mitt Romney several times talking about putting a halt to China’s currency manipulation and trade violations... China has never for a milli-second abided by the rules, or ever intended to.
What can I do personally? Big gulp. We’ve stopped shopping at WalMart which hurts. We canceled a planned purchase of $3,000+ from Apple computer, and I declined the gift of an iPad mini retina from my husband. That really hurt, I am so spoiled and such an Apple fan girl. We are determined to reduce our Chinese addiction to as close to zero as possible.
The two things that most compel me: 1. the grotesque human rights violations against vast numbers of blameless, suffering Chinese people and 2. the sudden realization that my dollars are financing China’s military buildup. We are at war, and my new mindset is to think about my consuming habits as if we are in combat, and products made in China might as well be bullets aimed at U.S. soldiers and U.S. citizens.
Another thing I can do is talk to people and post the info as I am doing here. The issue goes far, far beyond anything partisan or ideological. Matter of fact, I think the China Onslaught and Obamacare might be the two issues which could unite a majority of Americans, since we are all being universally and equally deceived and directly imperiled on both counts.
So please watch the movie and spread the word if you agree that it’s a powerful, quick (80 minutes long) and stunningly effective education. Then do whatever you can in your own household to repel the invaders and apply pressure to elected officials to enact immediate reforms.
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