Obama seems to subscribe to the "Undepants Gnome" school of economics...
Mark
Posted on 09/11/2009 7:17:37 PM PDT by Orange1998
President Barack Obama on Friday slapped punitive tariffs on all car and light truck tires entering the United States from China in a decision that could anger the strategically important Asian powerhouse but placate union supporters important to his health care push at home.
Obama had until Sept. 17 -- next week -- to accept, reject or modify a U.S. International Trade Commission ruling that a rising tide of Chinese tires into the U.S. hurts American producers. A powerful union, United Steelworkers, blames the increase for the loss of thousands of American jobs.
(Excerpt) Read more at finance.yahoo.com ...
It is high-school government day in the White house - for 4 years
China isn’t going anywhere. They can weather a thousand times the economic turmoil than us. Our gov’t has put us in this position, not the citizens. And they keep offering themselves as the cure, but it keeps getting worse. That should say something...
While I'm considered a good salesman*, I just can't find a pricing level to where I can sell anything to unemployed folks. (Construction contractors don't take food stamp ya know)
*I closed 65 to 75% of the time where I submitted a bid. At my price.
Yes! More people need to understand that. China doesn't built crap just to build crap; they build crap when they're told to build crap. It's amazing how capitalistic this society is, and how communistic the US society has become...
In China, there's tremendous competition up-and-down the supplier chain. You get bad quality from one source? You go to the next. That hurts the first, rewards the second. You will get the quality you want, if it can be done for the price you want to pay...
Negotiations usually revolve around costs of QC and shipping and storage, rarely labor or raw materials. Higher QC costs more - more people, more equipment, more rejects. And it's often where companies cut corners.
I tell my clients I will design and source and QC exactly what you want; you want cheap junk? You'll get cheap junk. You want the best possible bar none? Then you get the best possible bar none. And anywhere in between. The client is always right, they get what they want.
And I tell all my clients there are three parts to any product: design, manufacturing, and QC. You have to "own" at least two to get the product you want. If you do not own two, then you will not get what you want - guaranteed.
Given the current economic and Governmental position in the US, it does not make fiscal sense to often do the manufacturing in the US. So own the engineering and the QC. If you do that, then you will get the product you want.
If you outsource QC or engineering, you're up the proverbial creek without a paddle...
Build it ALL here? Can you imagine how much a car would cost if it had to use parts that were all made in union shops? How ‘bout a cell phone? Add all those union wages to all those parts to all those products and see what we get.
In fact, trade (exports and imports), especially from the PacRim countries other than China, have fallen off more than trade fell off as a result of Smoot-Hawley.
Like much of what passes for “facts” in economics, it now appears that we cannot say positively that Smoot-Hawley caused the collapse of trade in the 30’s when we’ve had “free trade” in this economic collapse and an even worse decline in trade.
See “Figure 3:”
http://www.voxeu.org/index.php?q=node/3421
Probably a closer mark to the truth is this: trade collapsed in the 30’s for the same reason trade collapsed now: consumers slammed their wallets shut. Banks withdrew credit and lending, which forced businesses to withdraw orders for as-yet-undelivered inputs. Consumers were (and are) not able to get new credit easily, so their rate of spending contracts. Things got so dire last October that banks were not honoring letters of credit. If you’ve got a shipload of goods ready to go and the seller calls you and says he’s placing a hold on the shipment because his bank won’t honor your bank’s LOC, I don’t care what the trade policy is, trade is going to be affected.
At this point, it is difficult to see what a “trade war” would do. Decrease trade more from current levels? Let’s pretend that could happen, since much of what China exports here is consumer schlock and dreck, and the US consumer is withdrawing their spending even as I write this.
So we slap on tariffs. OK, so what? Guess what decreasing imports from China will do to our GDP? (answer: Decreasing imports raises GDP). What will decreasing imports do to the dollar? (Answer: Since decreasing imports would improve our current account balance, the dollar would likely become stronger). Sounds like a win:win from here.
I’m sorry... I’m must be getting senile in my old age... what was the problem again?
They must have a patent on that bead around a Michelin. We had old set of tires on rims so we used a grinder to remove them. Up comes the Goodyear, sliced right in two. Next comes the Firestone, same results. Then the Michelin, I tried and tried to get through the bead. Even had a hold my beer event and they too gave up. Now we all use Michelin.
Obama only wants one thing, for America to be destroyed, split apart, invaded, take your pick, he is manufacturing a situation of infuriating China, and that is NOT a good idea.
Mark
You’re teaching some great lessons here. Here’s some more anecdotal info: One of the big wigs at my company was telling us that what often happens is that the country folk from China come to work at our plant for 5 years or so, live fairly spartan existence, and save up money to go back to their home turf and start their own businesses. Everyone wins! You can hardly think that way in the States. It takes most of your life just learning all the regulations, much less figuring out how to weave through them. Hats off to you and anyone who manages to make their own way in this climate!
Historically that has not been the case. China is always trying to fly apart. It's not really one nation you know. Anymore than the Russian Empire/Soviet Union/Russian Federation is.Although perhaps they are more so now than anytime in the recent past, like the last millennium or so.
The reason Sun Tsu was such a great military philosopher was that *he had lots of observations*, mostly of Chinese fighting other Chinese.
Israel.
Heck, Obama is trying to become the first President to make Israel free of Jews! He's demanding that Israel make Jerusalem, "The City of David," Israel's capital, a "Jew free zone." No Jews allowed!
Mark
Recent article talking about China manufacturing. It explained the real negotiations did not start until after the contract was signed. The product would be done right the first few times and overnight change the formula with cheaper products without telling you. Promising to make it up next time. It tells of how they would be the low cost provider all the while they stole the formula and selling the same product under different names.
Very true. I sometimes think that the reason they’re doing so well is that the gov’t is too busy fighting with itself to pay much attention to governing the people, so they just let them go and they prosper. Unfortunately our gov’t seems to think that the best way to keep itself together is by forcing more rules on the governed.
OK, here’s how it works in real industry:
Let’s take steel quality. US steel is tested for conformance to ASTM standards - by the steel companies. US engineers have, for quite some time, been able to assume that steel of “specification XYZ” meets the ASTM standards for that material when it is sourced from US steel companies that adhere to ASTM standards and testing. The steel company is doing the testing - not the customer. The customer is making the selection of steel, knowing that it meets the standards for the type of steel being marketed.
Not so with Chinese steel. The Chinese steel companies take your position - it is the customer’s responsibility to perform QC.
And at that point, I call bullcrap. Most customers are not in a position to set up a materials testing lab, nor are they going to be in a position for time or money to test every lot of steel coming out of a Chinese plant.
For myself, I refuse to buy or use Chinese steel in anything I make or use where I need it to last or my ass is on the line. I’ve seen Chinese steel fail again and again in farm and construction applications, and the more specialized the steel (eg, bearing or bolt steel), the greater the tendency to failure.
When I call up a US outfit like, oh, Lawson or similar vendor for bolts, I don’t need to send their grade-8 bolts off to a lab with a question “Is this really grade 8 bolt steel?”
If you’re using grade 8’s from China, you’d better test every lot you buy.
False. I live and work in both countries, in the same industry that is about manufacturing (consumer electronics, specifically acoustics).
The US still makes more than China; our manufacturing base is shrinking not because of China, but because our Government and our populace have decided that "manufacturing is evil" and that "profit is bad".
We can stay ahead of China indefinitely, if we had the political willpower to do so. And you don't get that by cutting your nose off to spite your face.
Every other adversary America has ever faced, could be out-innovated and out-produced.
We still do - we out produce AND out-innovate China, Japan, Singapore, and Taiwan. US and EU engineers thrive in Asia because they earn MORE than they could in their home countries; the companies in Asia will pay more because they want the culture and personality that is REQUIRED for innovation.
You CANNOT teach innovation; it is inherent, it is cultural. You know why Japan took 40 years to get to a decent level of innovation (and still lags the US)? Because of the Asian culture of "never question your superior". You cannot question your boss, or even your peers. That is not accepted.
Innovation and creation comes from conflict between people. Problems are identified, discussed, argued about, solutions raised and trashed. It is a creative, contentious process.
THAT culture simply does not exist in any meaningful state in Japan, South Korea, China, Taiwan, Hong Kong, Singapore, Malaysia, Indonesia, Thailand. The countries in Asia that manufacture. It's not here. And neither is innovation.
China is (as you know) four times our size.
IN people, yes. In terms of resources and land mass, no. In terms of economy or innovation, not even close.
We have now made the monumental mistake of sending what used to be the Arsenal of Democracy to COMMUNISTS.
Here's a hint: China's NOT Communist. How about you tell me what you think is Communist about China, what policies are here that are Communist.
I can tell you - directly - that China's about as Communist as the US, and while the US is getting more Communist, China is getting less so.
China will not give any of that back.
Do you blame them? Should we give back all that we gained from other nations? NO! Keep what you have, and try to get more.
And try to innovate and create faster than the next guy.
If you build something, and sell it, then you have already given your competitors - whether they be individuals or companies or countries - your ideas and innovation. They can take it apart, study it, learn from it. You've let the cat out of the bag.
The ONLY way to continue to win is to out-innovate your competition. And that is EXACTLY what the US Government and populace are fighting against. Penalizing success, belittling the engineers and creators, stifling new businesses.
Our failures are not because of China; they are because of ourselves.
So we should just stop importing and build it all again here.
Fine. You first. What cell phone will you get next? What computer? TV? Any consumer electronics. Cars. Tires. Clothes. Medical supplies.
Because I hate to break it to you, we import ALL those, and in many cases we have NO CHOICE but to import because we simply do not have the natural resources here.
The current situation will destroy America.
I agree, but the issue isn't importing product from China; the issue is stifling our own domestic production base, and eliminating the US populace's desire to innovate and work.
Our government is in a position to force its way on Americans, because we sent our jobs out of the country.
Every single person who lost a job to outsourcing, became an Obama voter.
That’s the part of the equation nobody things about.
“Free trade” caused this.
Well, Obama is a (closet) Muslim, so attacking Jews comes as no surprise to me.
He isn’t the anti-Christ, but he certainly acts as if he is ushering in the coming of the 12th Imam.
If the anti-Christ is to unite the vast majority of the world, he will have to be Muslim. They (Muslims) would only follow a fellow Muslim, and it’s clear much of the world will cower before the Islamo-Nazi zealots.
That’s a bit different than what we’ve been talking about. I’ve dealt with Chinese suppliers and it’s true that they certainly have some quality issues. On the other hand, most of the companies I’ve worked for have plants in China and their quality is at least on par with ours. If the Chinese-owned companies get their quality ship in order, which is almost inevitable, we’re in big trouble.
Obama seems to subscribe to the "Undepants Gnome" school of economics...
Mark
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