Why U.S. Manufacturing Won't Die

WSJ ^ | July 3, 2003 | CLARE ANSBERRY

[edsheppa]

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.

[harpseal]

Another point to consider is the fact that merely doing a revenue tarriff to be the primary source of funding for the Federal government would put the tarriff rates so high that merely a protective tarriff would seem a reduction. The federal government needs funding in order to maintain itself. At present the majority of that funding comes from the corporate and personal income tax structure. This would be far better replaced with sales tax and tarriff funding.

[Dat]

If you think justice is communism, you can keep it.

[LibKill]

I have a problem with the "information age service industry" economy.

We can't get rich selling burgers and (prison made) chinese goods to each other.

We need 'smokestack industries'.

SMOKE MEANS PROGRESS!!!

[ninenot]

If you think I endorsed Communism, you read funny.

[DugwayDuke]

No, it is not unreasonable to consider a tarriff enacted to protect jobs as a form of slavery. Consider this example.

Worker Paul decides his standard of living is too low because the price he can charge for his services a ceiling from overseas markets. Worker Paul meets with his CongressCritter Bill and proposes that Politician Bill enact a tarriff or Worker Paul will never, ever, vote for him again. Politician Bill enacts that tarriff raising the price of the ovrseas products and the ceiling Worker Paul can charge for his services and Worker Paul is very happy. He can now raise the price for his services and take that long deserved holiday to the Bahamas.

Now, prior to this tarriff, other Worker Peter bought the goods made by Paul from the overseas market since these goods were cheaper. Worker Peter was, therefore, able to buy more services or spend the money on services of another type. In fact, other Worker Peter usually took his family on vacation with the money he saved. But, now other Worker Peter has to pay a higher price for these goods and he no longer has enough money to take his family on vacation.

Now, the question is, should Polician Bill rob Peter so Paul can have a vacation in the Bahamas? And, what right does Politician Bill and Worker Paul have to take Peter's property? Is Peter a slave? If not, why not?

[DugwayDuke]

"This would be far better replaced with sales tax and tarriff funding."

Only a theoretical possibility at best.

[harpseal]

Your worker Paul scenario has absolutely nothing to do with reality. There is no form of slavery with protective tarriffs they are a totally legitimate form of raising revenue for the Federal government. Worker Paul is not earning a sufficient wage to start witrh because Peter has convonced hos congressman to tax Paul's endeavors via an income tax and other regulations.

[DugwayDuke]

Couple of questions for you.

If Paul and Peter are both worker level guys and are taxed at the same rate, how can there be a net transfer between them due to the income tax?

If your intent is to set the tarriffs at a rate that would protect jobs, then it is implicit in that rate that there would be no imports. Since no imports mean no tarriffs, why would you think there would be no income tax to fund the federal government? Don't you think that's rather wishful thinking on your part?

[harpseal]

If Paul and Peter are both worker level guys and are taxed at the same rate, how can there be a net transfer between them due to the income tax?

Naturally presuming that the person against tarriffs sees his income from the importing of goods from abroad and Paul is a working stiff who sees that the destruction of manufacturing and just about every other reasonable job that an American can perform is at stake or is in a job that depends on a large size middle class for his income. Anyone at that level would be someone who benefits from a protective tarriff. The only people who do not benefit are those with a vested interest in imports and those who are of the leisure class as the plantation owners of the Confederacy were.

If your intent is to set the tarriffs at a rate that would protect jobs, then it is implicit in that rate that there would be no imports. Since no imports mean no tarriffs, why would you think there would be no income tax to fund the federal government? Don't you think that's rather wishful thinking on your part?

A protective tarriff provides an incentive for capital investment in the USA to have full access to our markets . that is what protects job not a prohibitive tarriff that shuts out all imports.

[DugwayDuke]

"The only people who do not benefit are those with a vested interest in imports and those who are of the leisure class as the plantation owners of the Confederacy were."

No, the persons who do not benefit are those poor working class guys who will be forced to pay more for the very goods and services they need for their family.

Do you not see that protective tarriffs mean that everyone who buys goods and services have to pay more for them? Don't you see that means a decrease in their standard of living?

[harpseal]

No, the persons who do not benefit are those poor working class guys who will be forced to pay more for the very goods and services they need for their family.

Wrong the poor working class guys will be paid less as a result of the massive unemployment in the USA result from not having protective tarriffs in place. The simple fact is when there is widespread unemployment the working class suffers as a whole. This includes professionals now unlike prior times when they were insulated from this phenomonom. Look at what occurred in the depression to all wages for an example.

[DugwayDuke]

So, we would have avoided the Great Depression if only we had protective tarriffs?

[harpseal]

I did not say thatand while Milton Friedman does make a case that the Smoot Hawley tarriffs were the cause of the great depression coming to the USA I would make the case that the great depression was a result of the break up of four great empires at the end of WWI. The depression started before teh Smoot Hawley tarriffs were passed. It was a world wide depression that seemed to hit Germany and Austria first. The case ca also be made that the Smoot Hawley tarriffs mitigated the effects of the depression in the USA and thst the depression in the USA was caused by the Federal Reserve bank contracting the money supply too much.

[edsheppa]

The industrial output data is false. It accounts for products manufactured by American companies but foreign produced.

I was pretty sure you were full of shit when you posted this comment but I couldn't find the relevant documentation on the Fed site. So I emailed the author of the article and also asked via the Fed website whether their industrial production figures included non-US output of US firms. I received replies from both and the answer is that the figures are for US production only thereby confirming you are full of shit.

[PatrioticAmerican]

" you are full of shit."

A bit emotional about that are you?

First, WTF do you, SFB, know about business?? The government has no way of dividing out what a company says they produce domestic versus foreign. No way. Companies report final production assemblies, not parts. That minivan you drive is comprised of 97% Mexican produced plastics, yet, it will be counted as a domestic product if assembled in the US.

Now, go chew on that, Miss Dork.

[JustAnAmerican]

"At the founding of the country and as late as the beginning of the last century, almost everybody worked in agriculture. As agricultural productivity improved, people were freed up to work in manufacturing.

Do you bother to think about what you write first? Yes Americans moved more toward manufacturing as agricultural productivity improved, but we still grow the food here in the good ole US of A(even though greedy Anti-Americans decide Illegals are prefered over Americans for this type of work). Unlike manufacturing and high tech jobs which have been outsourced/moved to other countries.

Thankfully we live in the best place for agricultural production, because if these greedy SOB's even thought for a minute they could save a buck by growing everything in another country, they would kill agriculture in the US in a minute.

[edsheppa]

Emotional? Yeah, I hate liars and don't mind letting it show. As for knowing about business I ran my own. And you must also be an idiot if you think I'm going to bother refuting another of you POS "facts."