Posted on 02/09/2011 11:32:17 PM PST by iowamark
Rush is dead wrong here. The market isn’t speaking, greed is. No one in the US with our standard of living, taxes, and regulation can compete with a nation that does not have those things. That is not a fair market. It is not fair we American businesses must compete with Chinese businesses.
America is a country, not a business. We have our own economic system. If China wants to compete within our markets they must play within our system.
Get rid of the income tax. Nothing else would even come close to that in helping America manufacturing.
“What he is saying is that the amount of total manufacturing has stayed the same”
Only in dollar amounts and only when compared to decades ago. The number of items, the tonnage, and percentage of GDP has been shrinking year after year. They also play loose with the numbers in that Apple will say the iPhone is an American product and take credit for the entire amount of sales as an Amrican produced item when clearly the majority of the phone is produced outside the US.
Excellent post. Apple makes plenty of prift such as to be able to assemble in the US but they want that extra $12.
For the sake of factual accuracy, I would point out that German employers do indeed contribute to their employee's healthcare coverage. The difference is that rather than the employer paying into a managed, private health plan, the employer pays their portion of the employee premiums into a government run health-plan (for almost all employees). It is true, however, that the employer insurance premium contributions in Germany are generally much lower than the contributions paid by their American competitors.
He says the Iphone is really made in America and then lists all the places that the parts are produced. A contradictory statement. Rush is wrong about manufacturing, anyone who has lived as long as I have can see we have lost a huge base of manufacturing and only some of it can be laid to automation.
He says the iphone is really made in America and then lists all the places that the parts are produced. A contradictory statement. Rush is wrong about manufacturing, anyone who has lived as long as I have can see we have lost a huge base of manufacturing and only some of it can be laid to automation.
Actually, that's probably not accurate. They wouldn't be sold for $10 here, they'd probably be sold at a price point that is 10-15% less than the American made price point. So, if the price point for the American coffee pot is $30, then the Chinese version would be (roughly) $26-27, even though it only cost $5 to make. That's why companies move to China - there's exponentially more profit potential there.
As several others have pointed out, the Apple products are a great example of this. For what Apple charges (and gets) for the iPhone, they could still make money hand over fist even if the entire phone was built and assembled in the US. But, they can make exponentially more money if they produce in China, instead. The iPhone costs somewhere between $6-15 (depending on published report) to manufacturer in China. That same phone would cost about 7-8, times that. BUT, the iPhone is sold at a multiple between 40-50. See the difference?
It would help, but it's not a panacea. The onerous regulatory burdens placed on manufacturing create costs not incurred in foreign assembly plants. Taxes are applied to profits, not revenue. The problem is, to make something in the US at a price point that is competitive in the market place, it is (sometimes) even difficult to to turn a profit, let alone worry about the taxes on that profit.
Back to the iPhone example that seems to be popular on this thread, most electronic components aren't made in the US for two primary reason. One is labor, and the other is hazardous waste disposal. There are dozens, sometimes hundreds of hazardous waste materials generated as a bi-product of making those components. In America, that increases costs dramatically. In China, it doesn't. That goes straight to the bottom line, and it's not a little number.
Yes, our tax structure hurts us, but we have regulated our way out of the manufacturing business as well.
If, as apparently many people of this forum believe, success is measured by how many Americans work in factories as different from how much the manufacturing sector produces, then we are going downhill. But we’ve been losing people in manufacturing jobs for decades. We have to look at the total picture. The key question: is the U.S. still a country where a person can expect to succeed and have an excellent standard of living? The answer is yes, but we have to drive out all the libs and far-left radicals currently running things. Left in charge, Obama and his pals will have us looking like a third-world country in no time flat.
I had this very conversation with a Plant Manager in Mexico - this was 10-12 years ago, right at the height of shipping stuff over there.
He told me that if you pay Americans $9-10/hour, they get P.O.'d and quit on you. He said that where he was (and at that time) they paid the local labor pool $9-10 / day, plus benefit,s and they were thrilled because they were making three times what they could doing the same thing elsewhere. And working inside, with medical care, and so on.
It was an eye-opener, to be sure.
Completely ignored the point of my post. Not surprised.
Sunday Reflection: Does America have a lawyer problem, or a law problem?
http://www.freerepublic.com/focus/f-news/2669639/posts
EEOC now claims obesity is a disability under ADAAA
http://www.freerepublic.com/focus/f-bloggers/2647980/posts
Environmentalists Are Killing Jobs And The Economy
http://www.freerepublic.com/focus/f-news/2670413/posts
A License to Shampoo: Jobs Needing State Approval Rise
http://www.freerepublic.com/focus/f-news/2669925/posts
...and we wonder why we can’t compete.
Certainly regulation is part of the problem, no doubt.
But it isn’t just the tax burden. It’s the costs of compliance. It’s the burden placed on capital, which is one of the most important ingredients in any business enterprise.
Regulatory reform is structural repair. Eliminating the income tax and everything that goes with it would be a refurbishing and reinforcing of the foundations of our national prosperity.
My eye opener was when I visited China on business.
I went on several tours of Chinese factories. There were huge rooms of workers bustin their butts to make electrical switches by hand. Our company had a machine back in the US that made the same switch but could make 100 times more than each of the workers on that Chinese production line. Final cost of the switches ended up being similar.
With labor costs so cheap there is no real drive to innovate more efficient ways of production. They just figure the cost of the machine is too high to justify. They will just add more people.
Driving on a 4 lane freeway under construction we noticed no large equipment. They were only using shovels and wheelbarrows. There were at least a thousand workers.
The inefficiency is startling. The workers are busting their butts for measly wages. But somebody is making huge profits. I think they are ripe for a revolt in the future.
“42% income tax on incomes over $39k
19% Sales Tax
Employee Health Insurance: 15.5% of employee’s gross earnings”
This is an ICV look at the product and doesn’t account for the $ spent on development. As an example for a $100M in sales site our material costs are $40M, our labor&overhead are $10M which translates to a profit of 50M except that we spend 20M on engineering and another 5-10 to develop and implemnet a new product. These type of analysis are incomplete and do not account for the investment aspect of business which is all done up front and not in the ICV calculation.
those jobs STAYED IN AMERICA, that is the difference!
I dont think it is education.
We had a thread like this 4 years ago, I bookmarked it on why free trade was never the answer
It aint education, and it isn’t just the sending of jobs overseas, it does have some profit motive with greed, but much has to do with corporate survival to compete against those who went overseas while you sayed here to remain patriotic, only to move yourself overseas to keep your corporation afloat!
I’ll give you that one, particularly now in the obama era, but the rest of the answers to me on this thread are just plain stupid.
They are so obsessed with Americans making money, that it is OK to screw them over. Well OK then...
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.