Why U.S. Manufacturing Won't Die

What role will U.S. manufacturing play in the national and global economies in the coming years? What jobs will be left for American workers?

It's more than an academic question for many company owners. Stan Donnelly, who owns Donnelly Custom Manufacturing Co. in Minnesota, is studying Mandarin in case he has to move his machines to China. Already, he buys molds from China to make his custom-designed plastic parts. To date, Mr. Donnelly has been able to keep production of those parts in the U.S. But as his customers increasingly demand lower prices, he wonders if he will one day need to move production to Asia as well.

In some instances with some manufacturers the type of partnership would result in the "write 'em a check" type thing. I will definately concede that. I've been exposed to instances where the purchasers refused a tour of the actual facilities because they didn't want to be held accountable if they saw something bad going on. In other words "just deliver"...

With a lot of those types of operations (say textiles for example) many of the corporations don't care one bit about management in China. They just put in the order from a supplier. That absolutely happens.

Who needs an American expat to manage that kind of operation?

In those instances (which now that you revealed that it was manufacturing it makes more sense) there are a lot of abuses.

In other instances where there is Joint Ventures like with GM or something its not even like that.

Especially in industries like the hotel and tourism industry they have lots of 'foreign experts' on the job. Many Chinese prefer working in that type of environment because it pays a lot better and the conditions are better.

And to boot the paychecks will have Marriott or Holiday Inn stamped on the face of them.

In China where you have direct foreign management (or at least foreign participation in management) (say for example people that ensure quality for higher end products) there are exponentially less problems. Motorola would be one example. What are they going to do? Outsource the management and quality control to the Chinese govt? No way.

On the other hand though for low tech things (like shoes or clothes, what is a foreigner going to do? Teach the Chinese how to run a sewing machine?

People do all kinds of stupid things in China :0) Sounds like he needed to hire someone like me to take care of his frustrations.

Even in the big boys JVs they fight like cats and dogs when it comes to management. In the end some of them designate their work as "Joint Adventures"...

Many foreign corporations as a result go in as WOFE status. (wholly owned foreign enterprise) That way they don't have to deal with that crap. WOFE is an entirely different status of corporation in China tax and otherwise.

Doing business in the PRC can be a taxing affair.

"There is no place in this proposal to restrict access to these zones to some companies and not others."

Didn't you restrict these zones to companies with policies you prefer? Aren't you picking and choosing?

"Since there is no tax subsidy involved merely a tax benefit fiven to anyone who makes the free choice to invest in these zones and follow the initial rules if they can not produce a product economically for a price they can get in the free market I presume they will go out of business."

And, if they still can't compete, would you then enact protective tarriffs? Who would pay these tarriffs?

Didn't you restrict these zones to companies with policies you prefer? Aren't you picking and choosing?

Thew only picking and choosing is the picking and choosing some companies will do on their own. Other than that it is interfereing far less in the marketplavce than the present system or any other reasonbable system. Unless you consider socialism of the Chinese style a beneficient policy. It certainly does not interfere as much as any of teh EPA rules but then again if you like the present system you object to anything which changes teh status quo. If one is loyal to say the PRC then there is a very good reason to object to anything that means less rules and regulations.

"Since there is no tax subsidy involved merely a tax benefit fiven to anyone who makes the free choice to invest in these zones and follow the initial rules if they can not produce a product economically for a price they can get in the free market I presume they will go out of business."

And, if they still can't compete, would you then enact protective tarriffs? Who would pay these tarriffs?

IF it is decided that protective tarriffs are enacted then those who import goods subject to tarriffs will pay for them. The choice is maintain the standard of living of America or face violence (no threat merely prediction). If the standard of living is not maintained by tarriffs it will be maintained by socialism which if one likes socialism one will be appalled at anything that vrelies on entrepenuerialism as these programs would.

However, most of this is moot we have not even gitten rid of the subsidies for capital going offshore. Let us ghet that done first.

Now maybe you like all the EPA, IRS, and other regulations but I tend to think they are a drag on the economy. We can debate your support of government regulation and confiscatory taxes later. Since it is obvious you don't seem to like anything that would decrease income taxes for anyone as this clearly would at least mnaybe we can agree to get rid of teh subsidies to those nations that are potential enemies of America.

"Thew only picking and choosing is the picking and choosing some companies will do on their own."

No, the majority of the "picking and choosing" will be done by those who establish the rules for admission to these zones. IOW, the politicians. Democrats will "pick and choose" companies they prefer, ie, high union percentages in highly democratic states. The Repubicans will have their own lists. It remains "picking and choosing".

"IF it is decided that protective tarriffs are enacted then those who import goods subject to tarriffs will pay for them."

No, the tarriffs will be paid by those consumers who purchase the goods. Remember, corporate taxes are passed on to consumers. Therefore the standard of living of those paying those tarriffs will be reduced. The standard of living of those workers in industries protected by the tarriffs will be increased. Don't you think this is an income transfer scheme?

"Now maybe you like all the EPA, IRS, and other regulations but I tend to think they are a drag on the economy. We can debate your support of government regulation and confiscatory taxes later."

I've not gone on record supporting regulations or "confiscatory" taxes. If anything, I'm on record opposing the income transfer schemes benefiting politically segments of the population that seem to be popular among the "Fair Trade" crowd.

No, the tarriffs will be paid by those consumers who purchase the goods. Remember, corporate taxes are passed on to consumers. Therefore the standard of living of those paying those tarriffs will be reduced. The standard of living of those workers in industries protected by the tarriffs will be increased. Don't you think this is an income transfer scheme?

Since there will be American made goods and services and additional economic opportunity for everyone I do NOT consider this an unfair transfer payment scheme. You seem to like the idea of no tarriffs and no changes to the current system. However the problem is we as a nation will rapidly go the Argentinian route if we do not change policies. Now you claim that the political reality will be politicians putting their pet industries in any economic development zone. This may be the political reality but that is NOT part of what is proposed. I am most interested in hearing your solutions to teh problems which do exist or perhaps you do not admit a problem exists. Now if you are going to argue for abolishing some government regulations or for "free trade," please include the political reality in those arguments. I've not gone on record supporting regulations or "confiscatory" taxes. If anything, I'm on record opposing the income transfer schemes benefiting politically segments of the population that seem to be popular among the "Fair Trade" crowd.

Well you seem to like the idea of the current system quite a lot. You like the idea of places like the PRC becoming industruialized by American investment subsidized by tax dollars.

"Since there will be American made goods and services and additional economic opportunity for everyone I do NOT consider this an unfair transfer payment scheme."

Could you clarify this? Is it that you don't consider it to be an income transfer scheme or that don't consider it to be unfair?

"You seem to like the idea of no tarriffs and no changes to the current system."

No, I dislike the idea of forcing me to pay higher prices so someone else can be paid a higher wage.

"However the problem is we as a nation will rapidly go the Argentinian route if we do not change policies."

Considering the history of Argentia, that is a highly debatable opinion.

"Now you claim that the political reality will be politicians putting their pet industries in any economic development zone. This may be the political reality but that is NOT part of what is proposed."

One must always consider the "unintended consequences" of any proposal. I do not support giving policians the ability to determine what is a "fair wage". Surely, you see that is implicit in any protectionist proposal?

"I am most interested in hearing your solutions to teh problems which do exist or perhaps you do not admit a problem exists. Now if you are going to argue for abolishing some government regulations or for "free trade," please include the political reality in those arguments."

Do you not see the "political reality" that it is wrong to force one wage earner to support another?

"Well you seem to like the idea of the current system quite a lot."

Not necessarily, but I can see that protectionism isn't the best solution.

"You like the idea of places like the PRC becoming industruialized by American investment subsidized by tax dollars."

Not particularly. We've discussed that before and then I said that if you wanted to oppose that on constitutional grounds then I would support that but I see no reason to support it on the grounds of protecting jobs. I don't believe the government should be in the business of "creating" or "protecting" jobs except in the most limited areas of critical or military technologies.

After reading your last reply it seems that you are unwilling to state where you stand and think that the US government should be in business just to give you the lowest prices for what you wish to buy which is a "transfer payment to you" and you accuse every reasonable proposal to guarantee a prosperous economy with markets that are closer to being free and unregulated within the USA as being a transfer payment to others. Your statement that you agree to oppose subsidies on Constitutional grounds but not because it causes economic harm indicates that you are perfectly fine with teh government picking winners and losers as long as it picks you. I am tired of trying to discuss reasonably economic issues which you are unwilling to discuss honestly.

Could you clarify this? Is it that you don't consider it to be an income transfer scheme or that don't consider it to be unfair?

Clearly it is neither and your comment is diseingenuos to say the least. It is not a transfer payment in any way shape or form.

No, I dislike the idea of forcing me to pay higher prices so someone else can be paid a higher wage.

Because you feel yourself entitled to benefit from slavery is no reason for anyone else to permit you to reap thiose benefits.

One must always consider the "unintended consequences" of any proposal. I do not support giving policians the ability to determine what is a "fair wage". Surely, you see that is implicit in any protectionist proposal?

You are the only one who proposed allowing politicians to determine a fair wage at now place in my proposal was there anything but free market wages proposed. It is the guest worker and offshore investments that are subsidized by teh government that are short circuiting the free market wages that would be coming to Americans. But by the nature of your comments about lower cost products available to you you do not care. I note that if one buys stolen property it is usually at a lower cost for the same quality by the nature of your comments you seem to think that any such enforcement of property laws would be a harm to you. Oh well so be it if you are harmed you can obey the damn law.

"After reading your last reply it seems that you are unwilling to state where you stand and think that the US government should be in business just to give you the lowest prices for what you wish to buy which is a "transfer payment to you" and you accuse every reasonable proposal to guarantee a prosperous economy with markets that are closer to being free and unregulated within the USA as being a transfer payment to others. Your statement that you agree to oppose subsidies on Constitutional grounds but not because it causes economic harm indicates that you are perfectly fine with teh government picking winners and losers as long as it picks you. I am tired of trying to discuss reasonably economic issues which you are unwilling to discuss honestly."

My position always has been that the US government should not be in the business of ensuring anyone a living.

"Because you feel yourself entitled to benefit from slavery is no reason for anyone else to permit you to reap thiose benefits."

No, you are the one proposing slavery when you propose tarriffs to artifically raise the price of goods and services then you are saying that you have the right to enslave your fellow Americans.

"You are the only one who proposed allowing politicians to determine a fair wage at now place in my proposal was there anything but free market wages proposed."

Advocating tarriffs to boost prices and wages is not a free martket. When you empower politicians to set tarriffs to protect wages, you have empowered those politicians to determine the wage levels to be protected, ie, to determine a fair wage.

"It is the guest worker and offshore investments that are subsidized by teh government that are short circuiting the free market wages that would be coming to Americans."

We've already established that I'm against government subsidies. But, I am equally against using the power of government to artifically maintain prices and wages. That too is a subsidy.

"But by the nature of your comments about lower cost products available to you you do not care. I note that if one buys stolen property it is usually at a lower cost for the same quality by the nature of your comments you seem to think that any such enforcement of property laws would be a harm to you."

Once again, you're the one proposing using the power of government to establish protective tarriffs that steal my propery and income in order to maintain the living standard of another individual. That, Sir, is theft.

No, you are the one proposing slavery when you propose tarriffs to artifically raise the price of goods and services then you are saying that you have the right to enslave your fellow Americans

Calling a consumption tax which has been in effect since the first Congress under the Constitution slavery is insane.

Advocating tarriffs to boost prices and wages is not a free martket. When you empower politicians to set tarriffs to protect wages, you have empowered those politicians to determine the wage levels to be protected, ie, to determine a fair wage.

Even John C. Calhoun was not as radically against tarriffs as you seem to be. Aprotedtive tarriff was in place since the Presidency of John Adams revenue tarriffs even longer. Setting tarriffs is one of the powers of Congress they are so empowered by teh Constitution of the USA which I am certain you do not like or support based upon this statement about politicians. Excise taxes and tarriffs have been arround since George Washington was president. Actually several of teh Colonies had these taxes as a means of support prior to the adoption of the Constitution. You are alone in calling this type of tax imposing slavery on my fellow Americans.

I am sorry you can not see that an internally free market is created behind national tarriffs and that such can lead to economic development. I suggest you read some American History. I further note that imported goods are not your property to have and to hold in the USA until they come through customs and any tarriffs are paid. likewise production of alcohol may be subject to an excise tax and you will pay it or face the wrath of the Federal government. George Washington brought out the Federal troops to put down Shea's rebellion. Smuggling has been a crime since John Jay was Chief Justice of the Supreme Court. So do not accuse someone of theft unless and until you have actually purchased that property and if foreign manufactured it has been lawfully imported to the USA otherwise it quite Constitutionally is subject to seizure.

Yes, tarriffs were authorized by the Constitution from the beginning to fund the federal government. Yes, slavery was also authorized by the Constitution from the beginning. Just because something was enacted by the founders does not necessarily justify it's existance.

You go beyond funding the federal government by consumption taxes when you state your intention is to protect jobs, not fund the government. Forcing someone to buy the product of another when other cheaper products are available is a form of slavery regardless of how many former presidents advocated it.

The issue of when imported goods become my property is irrelevent. The issue is the money I make within the US. It is always my property and when you tell me how I can spend it, you have appropriated my property and my labor. That, sir, is slavery.

The issue of when imported goods become my property is irrelevent. The issue is the money I make within the US. It is always my property and when you tell me how I can spend it, you have appropriated my property and my labor. That, sir, is slavery.

No more than any other tax since a strong economy is necessary for national defense and since a protective tarriff helps provide that strong economy your disagreement with the means to that end because you dislike that some others may reap some benefit is unreasonable. No it is nowhere near being slavery any more than state property taxes are slavery.

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