Heck it's a lot less than that already. Even the Shale Oil might be producible for $10 to $20 a barrel...versus the current foreign market price of $75/bbl
Posted on 08/09/2006 8:54:06 AM PDT by Incorrigible
Umm . . . that was before he learned that our tariff-rate on imported tires ranges from 3.4 to 30 percent.
I am a "reformed" free-trader that believes China needs to float it's currency, enact certain minimum human rights regarding child/slave labor (to level the playing field) and stop threatening Taiwan.
Until then, tariff the sh** out of them and stop the flow of funds to their military.
You miss a very important point in your lengthy (and informative, too) post. Under what circumstances would oil cost $300 per barrel, and how would that relate to the information you posted?
I contend that oil is far more likely to cost $300 per barrel if all of it is produced here in the U.S. than if we import 100% of it from foreign sources. Just think about that for a second, and ask yourself why importing large quantities of oil is such a bad thing for us.
Dollar drops in value. (Demand for dollars falls).
We have huge quantities of untapped resources from Alaska to the OCS, and the Shale Oil deposits in the Western Slope of the Rockies. Are you saying that our oil companies if allowed to fully exploit those resources would suddenly feel free to charge more per barrel for new discoveries over and beyond the prices of their current domestic production?
I think it more likely as our production as against our demand shrinks, we lose bargaining leverage in the global market, particularly as against coercive players in that market, such as OPEC, and China etc. If we could ramp up production that would lower their ability to dictate terms, and hence a lower equilibrium price would result.
No, they wouldn't. My point is that nobody is going to produce oil in the U.S. for $25 per barrel -- mainly because the cost of doing business in the U.S. makes it impractical to do that. If 100% of the oil we used came from domestic sources, the price of oil is far more likely to be $300 per barrel than $25 per barrel -- just as the cost of anything is substantially higher if it is produced here in the U.S. than overseas.
Quite true. And that is why this policy...which is promoted by any number of folks on your side as the "free trade solution" to balance things, btw, is simply disaster. In effect, by doing so, it will be price inflation of all tangibles, with a collapse of wages: "Let's diminish the U.S., the value of all wages in it, then we can be competitive again." This is the "solution". Some solution.
And there is no guarantee that it will even succeed as against the Chi-Comms...who can simply react by doing whatever they need to keep things pegged...as they do today.
Heck it's a lot less than that already. Even the Shale Oil might be producible for $10 to $20 a barrel...versus the current foreign market price of $75/bbl
Well, then the Americans will have to return to public transportation like trains, tramways, buses, subways etc as they used to have in the past.
And to give up Mac Mansions and sprawled suburbs. Can be done. Horses in rural areas will not hurt either :)
I don't know what you mean by "my side."
And there is no guarantee that it will even succeed as against the Chi-Comms...who can simply react by doing whatever they need to keep things pegged...as they do today.
Having the yuan pegged to the dollar won't be such a smart idea under a scenario in which the value of the dollar collapses. Sure, China would still maintain a "competitive edge" agains the U.S. for those few economic elements that they have in abundance (i.e., labor). But the Chinese economy would collapse because the cost they'll have to pay for all those things they don't have in abundance (which is just about everything else) would spiral out of control.
It hasn't so far. They will just, at worst, stay "even" on those things vis-a-vis U.S. manufacturers.
Labor arbitrage ping.
Then maybe you can explain why, over a 24 year period from 1980-1993, our GDP, manufacturing output and employment increased at the highest rate when the current account deficit was also increasing.
Right. But they'll become increasingly less competitive in every other export market in the world. And if the U.S. dollar collapses, we will become a much smaller market than we are now.
The national dissavings represented in all that, which is Bernenke and Greenspan's own recognition of the situation...will hit the wall when we run out of national assets to mortgage.
No. They will be even more competitive if they lower their wages to stay below us.
And if the U.S. dollar collapses, we will become a much smaller market than we are now.
Yes. That clearly doesn't worry them in the slightest. In fact, they are likely counting on it. And then they could also just reverse roles. Jack the price of the yuan up, and then be the Hyper Power, playing "dollar diplomacy" with the economy we gave them. And abetting Communist interests. Meanwhile, the U.S. winds up being a sad, deluded, basket-case debtor nation, with no chance to recover back as against China, which will keep its 5-to-1 trade imbalance barriers [ Shields to Maximum, Mr. Sulu! ] trying scrape up any foreign exchange to repay the massive debts owed to...China etc.
Let me preface my remarks by saying my dad just hit 35 years at a former Kelly-Springfield plant, and Goodyear paid for my undergraduate education (directly and indirectly).
First off, unions are killing the tire business. There was a strike in 1997. Instead of ~3500 daily workers, my dad's plant dropped to ~500 non-union and salary workers. By the end of the strike, the plant was at 20% normal productivity, and was curing rubber at 100% of the normal rate.
Another factor is the cost of oil. Petroleum products make up 75% of a tire. If the price of oil doubles, the cost of raw materials will nearly double.
Finally, the plants are getting old. In some cases, the companies are expending the capital equipment to upgrade facilities, but in other cases they've decided it's just not worth the hassle.
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