A Plan to Save American Manufacturing

TradeAlert.org ^ | Wednesday, December 31, 2003 | Kevin L. Kearns, Alan Tonelson, and William Hawkins

[XBob]

64 - "That number of 15% is true if you only look at the top tier of manufacturing for a product. That 15% is cascaded throughout the whole process of a product from the harvesting of the raw materials all the way up the stream through processing, shipping, manufacturing, marketing, distributing the finished goods, etc."

Excellent observation.

About 4 years ago, I did some work on our income tax system, and figured out that our true tax rate comes out to about 81% in the US, when you cascade it through the system, and apply the taxes on taxes on taxes at every level, just as you have figured out. And this was just income tax.

Unfortunately, a hard drive crash lost all my work.

And about 15 years ago my brother and another engineer did an analysis on our local unincorporated town and taxes and what it would cost to incorporate in additional taxes. They came up with this very interesting thing, (not unlike Alaska, where the state gives money back to every citizen every year rather than collecting taxes),

Anyway they figured out that if we collected/paid full taxes in for two years, without any spending (not hiring any personnel,etc), and invested the taxes, we could start hiring personnel slowly after the third year, and after 5 years, be up to full city government, and cancel all taxes, leaving the investments to pay for it.

[XBob]

91 - "I've moved on from technology. I'm doing something else that fits me. The bigger question is what should YOU do? I can't tell YOU what to do. YOU need to determine that. Meantime, I'm doing just fine $$$."

Ah - you took one of those infomercial courses and are now reposessing bankrupt properties from people whose jobs have been exported.

I knew it - it fits your personality, and your attitude and your training.

[XBob]

77- hey - you chicom marxist dummie - quit twisting the facts:

you said:"Marx IS what YOU are advocating - SOCIALISM and A PLANNED WORK ECONOMY that is PROTECTED. "

marx was a globalist free trader - against protectionism -


Marx's Speech, On the Question of Free Trade, Jan 9 1848.


http://www.marxists.org/archive/marx/works/1847/09/30.htm

"Is that to say that we are against Free Trade? No, we are for Free Trade, because by Free Trade all economical laws, with their most astounding contradictions, will act upon a larger scale, upon a greater extent of territory, upon the territory of the whole earth; and because from the uniting of all these contradictions into a single group, where they stand face to face, will result the struggle which will itself eventuate in the emancipation of the proletarians"

[XBob]

bump 163 on our marxist 'friend' nmh, who is trying to destroy us,

[XBob]

ah, batman chimes in in his anti-american way:

"Are you sure this wasn't written by Chicken Little?"

[XBob]

ping 163

[XBob]

http://www.marxists.org/archive/marx/works/1847/index.htm

“The slave frees himself when, of all the relations of private property, he abolishes only the relation of slavery and thereby becomes a proletarian; the proletarian can free himself only by abolishing private property in general. ” [Engels, Principles of Communism]

“under the freedom of trade the whole severity of the laws of political economy will be applied to the working classes. Is that to say that we are against Free Trade? No, we are for Free Trade, because by Free Trade all economical laws, with their most astounding contradictions, will act upon a larger scale, upon a greater extent of territory, upon the territory of the whole earth; and because from the uniting of all these contradictions into a single group, where they stand face to face, will result the struggle which will itself eventuate in the emancipation of the proletarians.”

[raybbr]

Comliance with regulations without purpose keep productivity down.

Which regulations actually do this?

More automated industries allow employees to seek employment in higher-skilled areas such as engineering, maintenance, etc.

It only takes a couple of engineers to design a plant and there is only about one maintenance worker for every 20 - 30 production workers. How does that replace the workforce?

Frankly, if your job is to pick up a nut and put it onto a bolt, you are a drag on our economy.

Nice sentiment to your fellow Americans.

By pushing for higher technology in industry, we will reduce worksite injuries, worker's compensations insurance rates, and allow for a workforce that can seek higher meaning in their lives than menial labor tasks.

All of this does nothing to help people find jobs. Have you been watching Star Trek looking forward to their utopian society where we are all one nation on this planet? Human nature is always such that there are people who cannot be engineers and doctors and lawyers and such. What will competent, yet less intelligent people do for a living? Are you willing to provied them a job?

[raybbr]

While most of us here understand this - there is no such thing as free trade - you apparently don't.

[RobFromGa]

I hereby resolve to make a ping list!

I'd suggest either the "Doom and Gloom" ping list or maybe the "Chicken Little" ping list as appropriate names for whatever you put together.

And, whatever else you do, you should keep the list on pen and paper and type it in each time you need it-- that way you'll ne using more good ol' American labor.

[RobFromGa]

many Americans are making a connection between the store that ran out all the competition in town and the shuttering of the manufacturing plant that was the town's big employer

Maybe they're making this connection while they're waiting in the expanding Wal-mart lines to purchase their lower cost stuff.

Or when they're looking in the mirror in the morning. Because it is not Wal-mart that is the cause if this, it is the consumer who wants more for less.

It is a natural human desire, to stretch one's resources as far as they will go to improve one's position in life.

[raybbr]

(Please forward to those I didn't get)

There is no such thing as free trade today on this planet. The only possible instance could be if you wanted your neighbor's lawn mower and he wanted your microwave. You would trade for it. However, even if you were use money to buy it from him the value of the money, since it is controlled by the govt., negates the notion of free trade. Since, in some way, everything that you purchase at a store, whether or not it is made in America, is controlled by some form of govt. Whether it is the feds taxing overseas commerce; the states imposing interstate taxes and regulations; the local govts. imposing taxes and regulations; the WTO imposing regulations, ad infinitum.

The concept of free trade is a fallacy. We are all struggling, even those companies in China, against insistent and persistent government control. The instant that a third party steps in and intervenes in any way, we lose free trade.

The free traders in this forum would have us believe that there is such a thing as free trade and we should sacrifice whatever needed to foster that notion. What they really are saying is they want whatever advantage they can glom in order to make the most money. While making money is admirable, making it at the expenses we are now seeing is destructive. Free traders would have us believe they are all noble hard-working people who have made it on their own. The even believe their own fallacy! While some may not be, most are greedy and do not see the harm their beliefs do to our economy.

[ninenot]

Your passing-comment that 'banks won't lend to mfgr's [just because] they are in manufacturing...as opposed to P&L/BalanceSheet issues' is VERY interesting.

Perhaps it's because there's some concern: an Illinois bank with Wisconsin operations has been severely scored by the examiners and is in trouble--the vast majority of its loans are to small/medium manufacturing concerns.

Interesting--another development in a developing story.

[ninenot]

This story is NOT based on a single example.

Another example which should be significant: the number of US-based castings houses has decreased from 1200 to 300 in the last 5 years.

Even conceding a priori and without quarreling that 33% of the castings industry was mis-managed and had inadequate markets, that would tell us that the reduction should have been to around 800. Castings, as you know, are a part of almost any manufactured product. They are in computers, cars, electrical goods, plumbing goods, appliances-- We can conclude that the CUSTOMERS of these casting houses are now in places other than the USA and have demanded that their casting-suppliers locate where the customers are. Is that a better example for you?

[ninenot]

Apparently you are attempting to join the Parasite DumbCluck crowd.

The argument here is NOT that other countries should not be democratic, or enjoy free enterprise.

The argument, if you actually can read, is that US businesses are NOT enjoying free enterprise--rather, that the chains placed on our exports by other countries, in combination with the predatory pricing techniques of certain foreign entities, and the willingness of Fortune 100 companies to co-operate with those 'predatory' States, has created a crisis.

Do you have a proposal, or only a few more names to call?

[ninenot]

You're getting the essence of "solidarnocz," a virtue, by the way.

The Decade of Greed (represented, ably, by the Clintons themselves) has infected many FreePers. Too bad.

[IronJack]

I'll consider your very cogent answer and respond later. I disagree with a couple of points, but I suspect we're pretty close in our concerns.

[gooleyman]

About 4 years ago, I did some work on our income tax system, and figured out that our true tax rate comes out to about 81% in the US, when you cascade it through the system, and apply the taxes on taxes on taxes at every level, just as you have figured out. And this was just income tax.

-----
Excellent. And that is why even a small increase in the income tax rate produces such a large swing in the prices of the goods and services we use everyday. I wondered about this years ago and like you, I sat down and put pencil to paper (there was no such thing as a personal computer with a hard drive back then) and figured out that the tax rate doesn't only affect the last level we see, but it cascades like you discussed. Conversely, that is why a small "decrease" in tax rates like George Bush just did creates such a large swing as we are seeing in the economy right now. I didn't expect to see the result in the economy as quickly as we have, but it makes sense now based on your and my calculations discussed here.

Could you imagine the surge we'd see if income taxes were REALLY cut....let's say, slashed in HALF....WOW!!! There'd be so many plants moved back stateside, our heads would spin like tops. Plus we'd shut up all these manufacturing-jobs-are-leaving-because-of-NAFTA-and-GATT people. I'd like to see that.

Problem is: Liberals of either parties won't let that happen. Heck, my own RINO Senator Voinovich (Ohio) forced the Republicans to scale back the last tax cut we had. With friends like him the DemocRATS jobs are just that much easier.

[Erik Latranyi]

Frankly, if your job can be done more cheaply in a foreign country, you are a drag on our economy

Not the same reasoning. The fact is that if you have a job that requires no skill, your job will be eliminated through automation or lower-cost overseas labor eventually. To protect those jobs is foolish an counterproductive.

Our economy has always evolved through innovation and cutting-edge technology, not protectionism of zero-skill labor.

[Erik Latranyi]

False assumption.

Automation is not a panacea.

The high investment cost of automating domestic manufacturing is undermined by imports in many ways.

The cost of automation is much, much lower than you think. I am in this industry and understand the cost/benefit studies showing how clearly factory automation is far, far more cost-effective than moving offshore.

In many instances, lower cost technology implemented offshore can match quality requirements.

This is not true since the skill of offshore labor is very, very low and training is costly. Quality cannot be obtained easily.

Automated technology can also be used offshore, undercutting the cost of skilled technicians, maintenance and support personnel required to operate it domesticly.

Yes, automation can be used offshore, but the only reason a company would do that is due to burdensome regulations, taxes and workforce we have in the US

In both of the above instances, additional investment in support technology necessary for safety and/or environmental compliance is unnecessary.

The safety record of manufacturing sites overseas is very high. The problem is that our safety and environmental laws are overly burdensome or outdated and inflict costs on industry that are unnecessary.