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.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?
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. The drain off of American capital to the countries that make these foreign made parts is enormous. Every component on an "American made" car that is foreign made must be paid for from the amount a person pays for the car.
What percentage of the part used to make an "American made" car is foreign made? Near 100%, most like. Every one of those parts represent money that leaves the country, which means that when we buy a car nowadays a large percentage of the bucks we lay out for it is gone.
Gone? Well, not really, it comes back to purchase American land, companies, stock, debt and politicians. How do you factor those effects into your global free trade?
And all those billions paid to American auto workers likewise are drained off to places like China when they buy foreign made goods or "American made" goods with foreign made 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?
100% American made components are required. You miss the point of what I said. Within the our earlier pro-sumer economy, where we make all the things we use and make the components too, the higher expense was was not a higher expense. People that worked in other jobs made enough to easily afford them.
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?
It did indeed work very well for America. That system proved itself in a robust economy. This type of Global trade is experimental. The issue is not whether I can "prove" this global dog and pony show is failing the US.
The question is why would you advocate putting all out eggs in an experimental basket when we already had one that worked fine?
Why? For what purpose. Be clear and specific.
Incidently, that cute little chart you have been posting everywhere? This is the one
:
Another a poster on another thread check it out had this to say:
"The description on the NCPA site for your bar chart includes the following hint:
It is critical to adjust the figures for inflation in order to make a valid comparison. The price of many goods such as computers has fallen sharply. Since GDP data are calculated in money rather than volume terms, failure to account for price changes gives a distorted picture. For example, suppose the output of a product rose by 10 percent in terms of units while falling 10 percent in price due to higher productivity. Using nominal dollar figures makes it appear there was no increase in output. Using real data captures the increase.
What they have done, or proport to have done, is to do a GDP comparison based functionality and productivity. So if your home computer has the computing power of 1000 1940/50 era computers they have adjusted the numbers to make it equivalent to that much economic activity. The point is to say that if a 20 lbs electronic calculator sold for $100 (adjusted dollars - 2000) in 1940, then your HP scientific calculator which weighs only Ozs and does so much more may be worth $1500. We all know that in the real world the HP actually sells for ~$20 bucks (in 2000); but, that has never stopped some in our government from trying to adjust inflation for technology.
You've been busted.