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 ...
1) Bring back data processing/helpdesk/customer service jobs (and reduce identity theft as a bonus):
Proposal:
- pass a law that ensures that personal data cannot be held / viewed overseas.
Results:
- credit card / banking / phone, etc help desk activities would need to be ‘on-shored’
- data centers / application support would need to be in US (which means application development would most likely move with it)
2) lower the cost of energy.
Proposal:
-build more refineries to lower the cost of gasoline
-build more pipelines to lower the cost of moving fuel (raw or refined) around the country
- reduce/eliminate environmental regulations that have no benefit and restrict our access/production of cheaper energy
Results:
- Energy is a major raw material cost in most manufacturing ... lowering energy costs will make the US more attractive as a manufacturing base
- Energy is a significant portion of the cost of growing/processing/packaging/transporting food. Lowering the costs of food production allows us to export more and import less. Since food is a major budgetary item in most households, lower cost of food puts more disposable income in every household
- Energy cost (manufacturing and transportation of goods) is embedded in the price that a consumer pays for an item. Lowering energy costs will reduce the costs of goods, putting more disposable income in the hands of consumers
- Similarly, lowering the cost of fuel at the pump, or reducing the gas/electric bill puts more $$$ in the hands of consumers
I’ll think of more
You want America to return to dominance in the world in jobs and manufacturing?
Build a time machine and go back to the 1950s.
Not going to happen. For this to work, as a people we would have to quite literally be willing to watch women and children die in the streets. If a government willing to do this were to come to power, the American people would quickly provide the rough equivalent of today’s welfare by private charity. That government would also be voted out at the next election.
And I doubt even many conservatives would be willing to carry this logic, and it is logical, to the extreme necessary to make it work. And that’s a damn good thing, IMO.
We’re only a little ways past Christmas, and here you’re approvingly paraphrasing Scrooge, “If they would rather die,’ said Scrooge, `they had better do it, and decrease the surplus population.”
Your #4 contradicts your #1.
Many of the manufacturing jobs lost in America were lost because American workers (1) refused to work for less and (2) refused to embrace new technologies which would allow a reduced number of workers to manufacture the same number of goods and (3) refused to obtain the skills required for the care, maintenance, and set up of automated manufacturing lines, jobs which tend to pay excellent wage but which require KNOWLEDGE and INTELLIGENCE.
American workers found themselves trying to compete with workers who had the same skills they did but who worked for maybe twenty percent of American wages. The Americans who rapidly found themselves unemployed because they produced on a good day maybe twenty percent of the output of the five foreign workers who could be hired for their wages simply could not compete in that environment.
The liberal politicians then extended all sorts of benefits (not the least of which was unemployment pay for just under two years) which kept the unemployed idle for just under two years.
I used to live in a state (The People’s Republic of Mass{hole}achusetts) with a terrible business climate and high unemployment. While I was working, my wife (a military wife) was upgrading her knowledge based, honing her skills, and developing new abilities. My wife would tell me about the people in her classes. Most of the students were over the age of 25 and fell into two categories. The first category were those students who did not attend college immediately after high school and realized that working at a fast food restaurant or at a department store was unlikely to be a satisfying career path. The second much small class were those people both men and women in their late forties and above who had lost their jobs to foreign competition. Those people were motivated to learn as much as they could to qualify for high tech jobs in the medical care, pharmaceutical, robotics, and other industries.
While we were living behind mini-Obama’s (Duval Patrick’s) rusting Iron Curtain, I would stop at a McDonald’s for a breakfast burrito on the way to work each morning. I saw three types of people there over the five years I was there. The first type were the managers. The second type were the high school and college students who considered the job a part time job that would help them pay their bills. The third type were the people who were older than high school and college students who had been serving up food for ten or more years wondering why they are making minimum wage. The latter group had a lot of nice people in it, but I doubt a one of them realized that they were making minimum wage because just about any 16 year old could do their job as well as they did their job with a week of on the job training. In short, they were competing with a never ending pool of unskilled labor.
Unfortunately, many of the people who have lost their manufacturing jobs because of foreign competition, have skills that can be easily taught to unskilled foreign labor and that low skilled foreign labor is often (for items like air conditioners) working in higher tech factories than those in America which closed.
Before I retired and escaped from behind the rusting Iron Curtain, one of the newspapers ran a story about recent college graduates who were unable to find a job other than at a fast food restaurant or a retail store. One of those students went to Colby, a rather pricy private college, and majored in comparative religions. She seemed to be a fairly bright individual but did not seem to understand that few employers had use for someone who has studied and compared religious thought through the ages and around the globe. Most of the other unemployed recent graduates had worthless degrees. Only one of those profiled, a young man, had a degree that fell outside the fru-fru category.
The young man had an engineering degree and had planed to pursue a masters degree in engineering. He realized he could not afford to do so right after college so he moved in with his parents and took a job working at McDonald’s while he looked for engineering jobs. He found two part time engineering jobs writing software. (Two twenty-eight hour a week part-time jobs. Where have we heard that number before?) He began paying off his student debts and then moved into an apartment with two other recent engineering graduates who were working two part time jobs. What did this young man (and his two roommates) realize? First, they needed to launch their careers. Second, they understood basic personal finances. Third, they wanted to be self-sufficient. Fourth, they dealt with reality rather than assuming their fantasies should be made reality by other people. (Note that the young girl (not woman) who majored in comparative religions had none of those traits.)
My final comments are that while I do not agree with much of what the author of the article apparently believes, I do agree that most of what passes for education from pre-K through grade 12 (and much of what passes for education in college) is not only worthless, it is often false. The idea that one can receive a degree in gay studies, women’s studies, African-American studies, etc., from an Ivy League college makes me wonder about the quality of other programs. (I graduated from an Ivy League college with dual bachelor’s degrees in mathematics and physics. I was an undergraduate there when these nonsense studies and then degree programs were started. The only good I have seen come from those programs as the comic relief some of the graduates and professors supply when they yap on FNC.)
The other comment I agree with is that the father should be the one involved in educating the son not some third party. Perhaps that is the real problem here. The pre-K programs I mentioned above rarely prepare the students for kindergarten which is supposed to prepare those students for grade school. Most of those pre-K programs are little more than babysitting programs where the taxpayers rather than the parents pay for that service. Rather than boost young brains, the pre-K programs have tended to drag down the rest of the system. Most of our schools do not help students develop the knowledge they need to succeed in the modern world. At best schools socialize students. Unfortunately, school turn too many students into socialists who are incapable of recognizing they should be responsible for themselves.
Not necessarily.
Let's say we just passed legislation which said that
(A) if a current recipient of means-tested assistance has an additional child, that the benefits level would not be increased as a result, and
(B) Medicaid would provide free long-term birth control (IUD, Norplant, etc) and free sterilization to any Medicaid recipient.
Changing the rules so that there is no benefit to be gained by having a child on welfare IS NOT the same as making people die on the streets.
It is when they go ahead and have the children anyway.
What is left out of your equations is the fact that people in the underclass, to a considerable extent by definition, do not organize their present activities around long-term perspectives. As is shown by their lifestyle.
So while such a policy would reduce births to unmarried and perhaps unemployable mothers to some extent, it might not reduce it all that much. And when a mother of five isn’t able to feed her children, we’re back to starving in the streets.
Number 4 is a consumption based tax, does not contradict anything.
Eliminate business taxes. Eliminate capital gains taxes. Eliminate idiotic regulations. Establish tariffs on imported items to equalize wages between nations. Make right to work the national standard. This will fix the problem in general and bring business back to the US.
What other choice is there? Otherwise our workers are going to be paid the prevailing international wage. If that is say five dollars per day then that is what American workers will be paid. Shanty towns will be the norm not the exception and a two-hundred fifty foot apartment will be a palace for the average worker. Is that what we want? I don’t think so. Besides, there is really no free trade. China and Japan for example don’t allow our products in unfettered. However they get their stuff into our country freely and our workers suffer. Heck their dumping and government support for their industries have put whole sections of our nation out of business. I used to be an avid free trader but not any more. We don’t have free trade we have looter trade.
Don't disagree. But in the long run what do you think will allow our workers to maintain a standard far above that? We can't just legislate wealth into existence. And people, even Americans, aren't going to invest capital in a country that insists on paying its workers well above what they are worth, if they have a choice.
So it seems to me trying to maintain an artificially high standard of living for Americans can only be achieved, for a time, by constantly increasing government coercion on Americans. And in the long run even that won't work.
Is that price you are willing to pay?
If you buy a car in a State without sales tax, your State of residence will charge a compensating use tax. The answer is a compensating use tax on imports. No free rides for imports.
Excellent comments.
Would like to point out that a large percentage of the unemployed and underclass do not have the intellectual horsepower needed to follow the paths to success you lay out.
OK, so PAY underclass women to be reproductively responsible.
Any woman on medicaid who elects to get implanted with an IUD gets $500 cash (only payable once every 5 years, or however long an IUD lasts).
Any woman on Medicaid who elects to get sterilized gets $2000. $10,000 if done before she has had any children.
Think the typical underclass teenager will pass up $10K, cash in hand?
I used to tell people who were looking for high-tech industries to drive about 30 miles north of town and look at a soybean field. The traditional measures of high-tech industry are R&D as a percentage of sales, investment per worker, and value added per worker. Agriculture in the US is high on all three measures. Our agricultural exports go a long way to offset our manufactured imports. Granted, to some extent we're giving away those agricultural exports because we subsidize farmers to sell them at below their proper costs. However, we can quit doing that. All those people out there in the world have to eat. We can't sell them food if they can't pay for it. They can't pay for if they can't sell things to us. We need to look for things we can export, things where we have a comparative advantage. High intellectual content is one area where we can have a comparative advantage. That means getting our school system to work again, getting rid of the strangling regulations, and cutting taxes. And, while we're at it, getting rid of crony capitalism, which is simply another term for subsidizing inefficient firms.
It's time to stop looking only at imports and start looking at both halves of international trade.
Well I advocate limited G’ment. Start by eliminating Nixon’s federal Dept. of Education.
Once the FEDs are no longer imposing dictatorial control of local education we may be able to re-establish a valid education for the “Chilren”
OK, that would work.
Not politically feasible, unfortunately, due to cries of genocide.
All of which gets back to the fact that it is likely none of the options that could get us out of this mess are politically feasible.
Which, unfortunately, means things will have to get a LOT worse, and possibly all the way to catastrophic before necessary actions are possible. And, of course, by that point the earlier range of effective policy options will have diminished greatly.
Get rid of labor unions and control the EPA.
These threads tend to depress me. How can so many conservatives be so ignorant on how an economy works? Tariffs are not the answer. Tariffs are a tax. Do we need more taxes? Why punish the American consumer?
I’ll offer up one big solution. Eliminate all income taxes on business and individuals.
Also;
Regulations need serious review and paring down.
Get rid of Obamacare and employer supplied health insurance, worker’s compensation and unemployment insurance. If you want it, you pay for it.
Cue the “tariffs, tariffs, tariffs” crowd. Won’t work.
Here’s the biggest problem with why business moves:
http://www.cnbc.com/id/101302181
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