Here’s What Trump Doesn’t Get About American Manufacturing

Fortune ^ | 2017-01-14 | Bill George

[ConservativeMind]

That’s funny, because your understanding of economics and history shows you know little.

[ConservativeMind]

Ping to these later posts in the ongoing economic debate.

[arthurus]

You are a Keynesian, no?

[ConservativeMind]

Not at all. I am a Free Trader who is a realist.

[ConservativeMind]

Also, I’m a “practical libertarian.”

[central_va]

Why would being against Free Trade make someone a Keynesian?

[arthurus]

Not if you want tariffs on top of income taxes, you’re not. Libertarian is a neat sounding epithet but to be credible you have to talk like a libertarian.

[central_va]

Your pulling figures out of your a$$. A prodigious a$$ at that.

[central_va]

Rump head, the Great Depression started in 1929. You can try to rewriting history but you will have few believers of your BS.

[central_va]

Free Trade is a religion to these zealots. It is a belief system not an economic theory. It is hard to debate these Nazi because they will not even acknowledge their another pints of view. Fascist all.

[central_va]

Free Traitors™ always bring up the apparel industry which IS absolutely labor intensive and project that onto manufacturing in general which is not labor intensive at all.

It is one of their favorite tricks.

[ConservativeMind]

Every tax is a penalty. We have at our disposal a huge number of penalties to levy to pay for the benefit of government.

One could suppose that Free Traders wanted the penalty against income tax instead of imports to push more people into becoming destitute or dependent upon others. You certainly prefer the income tax to excise taxes, it appears. I don't.

Since the excise tax was greatly reduced to ostensibly help free trade proponents as the income tax came into being, we are now in a world with both taxes. Since we have both legally available, we should minimize the income tax and have parity with it in the excise tax, which should be levied across the board at the same rate as that of either the income and business tax. If we could reduce the income tax to 5%, the excise tax could be the same. If we had a National Sales Tax, we could get rid of the excise and income/business taxes, to the extent that our regulations did not put an added burden our our home industries and businesses over that of lesser regulated business products from other countries.

Eliminating what the federal government “provides” minimizes the tax burden.

Ideally, I would like the US to be more like Singapore or the former Hong Kong, but with an adequate defense. We should go all out being the capitalists we are bred to be and not the socialists we have become (ironically, since the income tax was passed to reduce the excise tax).

[riverdawg]

I refuse to descend to your level and call you the nitwit you are.

[central_va]

Oh man that hurt so much. Not sure I will recover.

[riverdawg]

Nazis. Fascists. Anyone who pulls the Nazi card obviously has nothing sensible to say.

[central_va]

What do you call someone that won't even acknowledge that the way the USA has off shored and conducted trade actually has created losers as well as some winners? In your mind nobody has lost at all in the globalization that has taken place. I know you too well.

So prove me wrong, so who has lost in the last 30 years due to Free Trade and globalization and off shoring for the cheapest labor rates possible and no tariff protections? Anyone?

[ConservativeMind]

Imagine if a country allowed businesses to import all needed labor at a fraction of what that country had required to have a decent living, then told its own replaced citizens to live broke, on welfare, with family, to turn to crime, or move to India and Mexico to take jobs the imported labor wouldn't even do for those wages? All of this while continuing to migrate jobs to India, Mexico, and Vietnam? And increasing regulations that only sped up offshoring of more jobs?

What would you have? Effectively, the US as it now stands.

[arthurus]

That is the sort of thing you have with government control and overtaxing and over regulation of business combined with no control of borders. Immigration should be ended totally for some period of time, 10 to 40 years or so. All the illegal aliens should be forced out of the country. So many freepers think the cure for government overtaxation and control is more government taxation and control. Conservatives supposedly believe in minimal government. I don't see much of that lately here. Many freepers obviously believe that Conservatism means intrusive government by our guys instead of the other side's guys.

[central_va]

Income taxes requires maximum intrusion and maximum control. It is very wasteful. Tariffs OTH, a consumption tax, requires no intrusion and no control. Our founders found them very useful. It is optional. Don't buy don't pay.

More tariffs and less income taxes.

[Paul R.]

If you, a manufacturer, can shave 5-8% off production cost you would have three choices to make:

1.Pass all of it to you customers.

2.Pass part of it on to your customers and keep some for profit.

3.Keep all of it as profit.

Well 1. wouldn't make sense. What would be the point of offshoring if your bottom line remains the same? If you are doing just to keep up with your competition and your bottom line profit remains the same then the whole offshoring experiment thing is simply a way of making Americans unemployed. Really sick sh+!.

That's not how it works.

If one is overpriced in the marketplace, all else being equal, sales will eventually shrink to a point where the business implodes. Been there, done that. Once one loses competitive scale of manufacture, unless some little "niche" can be found (sort of violating the "all else being equal" part), the death spiral accelerates.

If one already is competitive in the marketplace, then, again all else being equal, a "new" lower cost to customers gains one more customers. Profit per sale might not increase, but total profit will. Also, larger scale of manufacture in most cases improves profit (or competitive advantage) further. Been there, done that, too.

Of course, the above is greatly oversimplified vs. reality, in many instances. If what I've explained is "3d chess", compared to your "2d" analysis, then reality is often more like "4d". For example, "momentum" in the marketplace can be a very significant factor.