Absolutely correct. No goods or goods components made here anymore.
Posted on 02/28/2005 11:54:16 PM PST by beyond the sea
The U.S. economy is headed toward crisis, and the political leadership of the country – if it can be called leadership – is preoccupied with nonexistent weapons of mass destruction in the Middle East.
The U.S. economy is failing. The afflictions are serious. They could be fatal even if diagnosed and treated. America is losing the purchasing power of its currency and its ability to create middle-class jobs. Story Continues Below
The dollar's sharp decline and projections of continuing trade and budgetary red ink are undermining the dollar's role as reserve currency. A number of central banks have announced that they will be diversifying their currency holdings and will not be buying dollars at the same rate as in the past. This will put more pressure on the dollar. At some point, the flight will begin. Instead of buying fewer dollars, central banks will sell dollars, hoping to get out before the dollar hits bottom.
Suddenly, the advantage of being the reserve currency becomes a nightmare, as the world's accumulations of dollars are brought to market. An enormous supply and weak demand mean a very low exchange rate for the once almighty U.S. dollar.
Overnight, those cheap goods in Wal-Mart, which are the no-think economist's facile justification for Wal-Mart's decimation of communities, small businesses and employment, shoot up in price.
(Excerpt) Read more at newsmax.com ...
Well, as a consumer with a limited supply of money, I can tell you that lower priced products are good for America and her people. Also, there is a limited supply of native grown coffee, bananas and Kiwi fruit in America. Do you need more examples.
Why should you care if I shut up or not?
After a while, whining gives me a headache.
Absolutely correct. No goods or goods components made here anymore.
I don't think you get it. Let's go back to simple basics.
In a country there are a lot of people. These people need to have certain things to live in some quality of life: clothing, footwear, transportation, food, shelter. They also want certain things to improve their quality of life: entertainment, creative outlets like hobbies, specific forms of the above 5 that are slicker and nicer than the dirt basic forms of those things.
In order to get these things, the people have to produce them, either make them themselves for their own use (spin flax and weave it into cloth, make foot wrappings out of a tough material like leather, build a wagon and train a draft animal to pull it or engineer an alternative vehicle, grow gardens and hunt, build a house or log cabin), or dedicate their time to making lots of one thing and trade to others for something the other devote their time to making.
In that process, everybody has what they need to live pleasantly because they can trade what they make with others who make something they need. All of this can occur within the confines of one country, and only some raw materials not in that country need be imported from other places.
In America, we can make anything our people need to live comfortably and entertain themselves. We have done it, with some minor exceptions like fruits and cute design of other things we may like to have that is not necessary to life here. We trade these things back and forth and have a high quality of life.
The whole point of trade is to get these things for ourselves, the people of the country. To make the process more efficient we use a medium of exchange that is easy to carry around and give to one another. So, instead of trading 20 chickens for a cow, we can sell the twenty chickens and buy a cow.
Prices don't matter because if you make plenty of compensation for making a thing that others need, you have no problem paying the price that others charge for the things they make that you need. Market forces stabilize that process.
Why have we moved from this very stable process to a world stage? Give me some reasoning. 
I get it fine, but let's go back to basics.
In a country there are a lot of people. These people need to have certain things to live in some quality of life: clothing, footwear, transportation, food, shelter....snip.... So, instead of trading 20 chickens for a cow, we can sell the twenty chickens and buy a cow.
Agree with everything you said so far.
Prices don't matter
Bzzztt, you go a little bit off the tracks here.
because if you make plenty of compensation for making a thing that others need, you have no problem paying the price that others charge for the things they make that you need.
OK, who decides what plenty of compensation is? What about those who don't make plenty? They should be forced to pay higher prices?
Market forces stabilize that process.
Won't market forces stabilize the current trading process? China has a big scary pile of dollars, right? What can they use them for? They can save them, spend them or eat them. Which of their choices is bad for America?
This chart says that in the 1960's less actual goods were made in the US than today. In the 60's most everything I saw had "Made in America" on it. Also, while more "goods" may be made in 2000, they will be made of foreign produced components.
Please try to understand, "Made in America" means nothing in terms of the stability and self-sufficiency of our economy and society if it is dependent on foreign production.
At any time, forces can cause the low prices for foreign made goods, and American "made" goods, to raise to that of real American made goods, but the income level won't be there to absorb them, like in a true and protected pro-sumer economy.
The chart makes perfect sense. The unit of measure is % of GDP. Using dollars would make less sense because they would have to be adjusted.
This chart says that in the 1960's less actual goods were made in the US than today.
Of course less actual goods were made in the US in 1960. Do a little homework, find out how many cars were built in 1960. How many airplanes. Compare that to 2004.
Also, while more "goods" may be made in 2000, they will be made of foreign produced components.
So, if I can import $2 worth of components to make a $10 good, that's bad for the economy? How exactly?
At any time, forces can cause the low prices for foreign made goods, and American "made" goods, to raise to that of real American made goods, but the income level won't be there to absorb them,
Are you afraid China will raise their prices? Do you think America's income level is dropping?
like in a true and protected pro-sumer economy.
Like Argentina? They're protected. Are they doing ok? Cuba doesn't import much. How about France? They like to block American products. Would you trade our economy for theirs?
"Plenty of compensation" is where you can afford to purchase. If you make high dollar trading your wares within a pro-sumer economy, you can afford the prices others charge for their's. Those who don't make "plenty" really do. The comparative prices/wages in such an economy remains at or above the proportions we have now, with cheap, foreign made goods.
We have many people now that don't make "plenty" enough, and can barely afford the low-priced foreign goods. In a pro-sumer economy, they will stay in the same fix, neither more nor less able to afford the American made goods. But our economy will not depend on the good will of other countries, many of which don't like the US very much anyway.
A "higher price" means nothing in the face of higher renumeration.
I don't know what this means.
A "higher price" means nothing in the face of higher renumeration.
Then all you need to do is show that less trade equals higher renumeration. Go back to when all cars used here were made here. Show that incomes have fallen since we started importing huge numbers of cars. Then I'll agree with your idea.
Try finding things you need - particularly electrical items - that are made in the USA.
So, you are telling me that in the 40's, when America's factories were suppling a world at war, factory output as a percentage of GDP was less then today? And you expect me to believe it? hahahahaha.
We aren't just talking about cars. What does it matter if more of the items you mention are assembled in America from foreign made components. We are dependent on the foreign made components, which make the final assembly here meaningless.
You do not wisely build your house on sand. It shifts. In the '60s, less cars may have been assembled, but they were assembled from American made components, and the component made in turn employed many Americans, and the wealth made in that circular process stayed in the country, not bled off to foreign countries in the process of the amount of money people paid for a car went to those countries to pay for the components.
This is not to even mention that we are propping up some pretty brutal regimes with that wealth, as merely a moral consideration.
So, if I can import $2 worth of components to make a $10 good, that's bad for the economy? How exactly?
See above.
So, if I can import $2 worth of components to make a $10 good, that's bad for the economy? How exactly?
See above.
Like Argentina? They're protected. Are they doing ok? Cuba doesn't import much. How about France? They like to block American products. Would you trade our economy for theirs?
These countries are not organized to make it work. America is, and it has worked very well here.
Anyone with ties to Lew Rockwell should be instantly placed into the kook category and ignored until the end of time.
If you make a modern adjusted income of $400 a week, you can afford an $800 computer. If you make a modern adjusted income of $600 a week, you can afford a $2000 computer. The $600 a weeks comes from ubiquitous domestic manufacturing and the resultant demand in labor versus the labor supply, and the $2000 comes from the cost of making a domestic computer in that supply/demand situation.
The upside of the latter is that foreign countries who do not like us cannot maneuver around to put pressure on us, expressed politically or economically.
We've done this before and it worked out well. This growing total dependence on "free" world trade is experimental. Why abandon something that works for an experiment, unless you're a liberal, trying to engineer a global government, or both?
I'm not telling you anything, the US Commerce Department chart is. It should be simple, even for one as simple as you, to prove that the chart is wrong. And learn to read, it didn't say "factory output" it said "goods production". Hahahahaha.
Breathlessly awaiting your factual rebuttal.
Yikes. Back to the 40's. Honestly, what sort of a person thinks that we "produced more" back then?
I realize we are talking about more than cars. You said in post# 505 "This chart says that in the 1960's less actual goods were made in the US than today." I think we make more cars now than in 1960. And actually the chart says a larger % of GDP is goods production than in 1960.
As far as foreign made components making final assembly here meaningless, what's the salary paid to American workers by GM, Chrysler, Ford, IBM, Dell? They all use foreign parts and still manage to pay American workers billions in salary and benefits. Meaningless? Hardly.
You do not wisely build your house on sand. It shifts. In the '60s, less cars may have been assembled, but they were assembled from American made components, and the component made in turn employed many Americans, and the wealth made in that circular process stayed in the country, not bled off to foreign countries in the process of the amount of money people paid for a car went to those countries to pay for the components.
Agreed, 100% American made components would be preferred. But you agree they are more expensive? You agree that the higher expense would cause jobs and production to be lost on the margin?
This is not to even mention that we are propping up some pretty brutal regimes with that wealth, as merely a moral consideration.
Agreed. Tell you what, if China hasn't gone thru some major political reform in the next 10 years then I will shut up.
So, if I can import $2 worth of components to make a $10 good, that's bad for the economy? How exactly?
See above.
Fine, let's talk about jobs created at the margins. In my example I import the $2 components to make my $10 widget. I pay salaries, rent, American suppliers, property taxes, Social Security taxes, insurance and when all is said and done I have a $1 profit. Now all I have to do is pay State taxes, Federal taxes and, oh yeah, me.
I already said that 100% American made components would be preferred, but they cost $3. So if I used them my profit would be zero. Not much point in paying all those costs like salaries, rent, American suppliers, property taxes, Social Security taxes, insurance etc. when my final profit is zero. But at least I had the satisfaction of using all American parts. Oh, wait, no business, no parts. Never mind.
These countries are not organized to make it work. America is, and it has worked very well here.
Yes, it worked very well for America. Now, all you have to do is show that its not working very well for America now. You can't, yet. If in the future you can show that our economy is failing and that the fault is with all this trade, then I'll agree you're correct. But we ain't there yet. You said in 5 years we will be. You gonna shut up if we're not?
A simple one.
You sure you want to use those numbers? In the first example, $400 and $800, it takes 2 weeks to afford a new computer, in your second example, $600 and $2,000 it takes 3.33 weeks.
This is the perfect example for me. You would increase our costs by 150% in order to increase our salaries by 50%. I suggest we put it to a vote. All in favor, stand next to William, all opposed, stand next to Todd.
yea, you guys never talk about manurfacturing/capital goods yall lump farming, mining, paper, printing and lumber (suppling raw materials to the more advanced manurfacturing nations) into one "goods" catagory hoping to mislead everyone. Maybe you are happy with an economy that can only produce 2x4s, and tomato soup but that just doesn't seem like a secure future to me.
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