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Old 02-10-2019, 01:31 PM
 
1,230 posts, read 636,550 times
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Quote:
Originally Posted by oldtrader View Post
To understand manufacturing, we have to look at the facts:

United States total production has been #1 or #3 of all countries in the entire world.

However the number of employees has decreased due to automation.

https://www.brookings.edu/research/g...other-nations/

US is investing abroad, and at same time foreign money is being invested in increasing amounts.

https://www.bea.gov/news/2018/direct...-industry-2017Manufacturing in the USA is still on of the highest levels in the entire world. But automation has reduced the number of workers in manufacturing.
OldTrader, I'm among the proponents of USA adopting the trade policy described by Wikipedia's Import Certificates article. Differences between various industries, their numbers of employees, currencies rates of exchange, are all matters better dealt with by the discipline of free competitive markets. The proposal is explicitly not applicable to specifically listed scarce or precious mineral materials integral to globally traded goods.

Annual trade deficits indicate their nation has purchased more products than it has produced.
If that nation was not effectively “fully employed”, its production and its numbers of jobs, and the purchasing powers of its payrolls were all in aggregate less than otherwise.
Excluding specifically listed mineral materials, a nation's Import Certificate policy will not tolerate chronic annual trade deficits of goods.

Last edited by Supposn; 02-10-2019 at 01:44 PM..
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Old 02-10-2019, 04:08 PM
 
8,723 posts, read 7,702,836 times
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What would happen if such a policy was adapted.

1: Costs of low priced consumer goods requiring a lot of low value consumer goods, used everyday, would soar, if they had to be made in this country. A lot of hand labor high priced goods, would be cut off from import, and prices would soar. Example high end designer clothes, that are now made in places like Bangladesh, Philippines, etc. would cease to exist, as there are not enough people wanting to do minimum wage hand labor to make clothes, and wages would be so much higher, that industry would be in problems.

I remember back in my childhood during the economic depression of the 30s, looking at the country of origin such as Japan, on my toys. This country has always imported low priced goods made where labor is a lot less than in this country, and that includes the depression years of the 1930s.

2: Other countries would retaliate, and they would quit allowing us to sell high priced items, from airplanes on down, that are our big high wage job suppliers. It would eliminate huge numbers of jobs in this country, and would cause another financial collapse, eliminating another huge number of jobs.

Automation is eliminating more factory jobs in this country than you can even imagine. Actual production of goods in manufacturing companies in this country is at all times high, but the number of employees is far lower than in the past.


https://www.youtube.com/watch?v=wZkZb9I-g3s

One of the most automated factories in the world, watch the video and learn.


https://www.youtube.com/watch?v=8_lfxPI5ObM

We are still #2 in total manufacturing in the world, but it takes so many less employees to do the work, it just sounds like manufacturing is going down hill.

Factories are leaving high priced states where it cost too much to operate, and moving to other states to cut their costs so they can afford to build products in this country. That is why a lot of hurt and factory closings in the so called rust belt states.

Quote:
Originally Posted by Supposn View Post
OldTrader, I'm among the proponents of USA adopting the trade policy described by Wikipedia's Import Certificates article. Differences between various industries, their numbers of employees, currencies rates of exchange, are all matters better dealt with by the discipline of free competitive markets. The proposal is explicitly not applicable to specifically listed scarce or precious mineral materials integral to globally traded goods.

Annual trade deficits indicate their nation has purchased more products than it has produced.
If that nation was not effectively “fully employed”, its production and its numbers of jobs, and the purchasing powers of its payrolls were all in aggregate less than otherwise.
Excluding specifically listed mineral materials, a nation's Import Certificate policy will not tolerate chronic annual trade deficits of goods.
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Old 02-10-2019, 06:58 PM
 
1,230 posts, read 636,550 times
Reputation: 344
Quote:
Originally Posted by oldtrader View Post
What would happen if such a policy was adapted.

1: Costs of low priced consumer goods requiring a lot of low value consumer goods, used everyday, would soar, if they had to be made in this country. A lot of hand labor high priced goods, would be cut off from import, and prices would soar. Example high end designer clothes, that are now made in places like Bangladesh, Philippines, etc. would cease to exist, as there are not enough people wanting to do minimum wage hand labor to make clothes, and wages would be so much higher, that industry would be in problems.

I remember back in my childhood during the economic depression of the 30s, looking at the country of origin such as Japan, on my toys. This country has always imported low priced goods made where labor is a lot less than in this country, and that includes the depression years of the 1930s.

2: Other countries would retaliate, and they would quit allowing us to sell high priced items, from airplanes on down, that are our big high wage job suppliers. It would eliminate huge numbers of jobs in this country, and would cause another financial collapse, eliminating another huge number of jobs. ...
OldTrader, of course Import Certificate, (IC) policy increases the prices of foreign goods to sold to USA purchasers. There is no reason to believe that they would particularly “soar” unless you have no confidence in the behavior of independent participants competitively functioning within both USA and foreign marketplaces.

The policy itself cannot prevent any item from being imported into the USA if there's an effective demand for the item. Simply wanting a Rolls Royce is not “effective demand”. Effective demand is willingness to pay the market price and ability to accept delivery of the item at that price. Due to Import Certificate policy, the market price will have increased for USA purchasers of foreign goods.

Regarding foreign trade retaliation, let's discuss our China trade as an example. China's a trade surplus nation; it would not consider enacting an IC policy but it certainly would consider retaliating to any USA IC policy by levying additional tariffs upon USA products. That would increase prices to Chinese purchasers of USA goods.
It would also induce USA purchasers to more favor imports from nations other than China, and may further reduce China's exports.

To any extent that China's tariffs reduced USA's global exports and increased our certificates global prices, it would increase the prices of foreign goods entering the USA and to some extent encourage increased USA production. Additionally, increased certificate prices behave as an indirect but effective price subsidy for USA exports.

All of this occurs regardless if the U.S. Government does, or does not choose to take any proactive steps. This is vital if at some time, (as it now is), our U.S. Congress cannot even mutually agree upon a federal infrastructure policy which generally both major parties want.

The fact that no government activity is necessary, does not mean that the U.S. Congress could not choose to enact additional temporary tariff against China. Additional to requiring importers from any foreign nation to surrender certificates covering the assessed valuation of their goods entering the USA, that would further reduce China's exports.
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Old 02-10-2019, 09:43 PM
 
1,230 posts, read 636,550 times
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Quote:
Originally Posted by oldtrader View Post
... Automation is eliminating more factory jobs in this country than you can even imagine. Actual production of goods in manufacturing companies in this country is at all times high, but the number of employees is far lower than in the past.

We are still #2 in total manufacturing in the world, but it takes so many less employees to do the work, it just sounds like manufacturing is going down hill.

Factories are leaving high priced states where it cost too much to operate, and moving to other states to cut their costs so they can afford to build products in this country. That is why a lot of hurt and factory closings in the so called rust belt states.
OldTrader, I suppose Import Certificate policy would be of greatest benefit to USA manufacturing industries, but it's no less applicable to ranching agriculture or any other USA industry competing with foreign tangible products. To the extent that increased prices of certificates serve as indirect but effective price subsidies for USA exports, among the biggest beneficiaries of this policy would be enterprises such as Douglass and Boeing aircraft and aircraft parts manufacturers.

It's hard to conceive of any goods producer not requiring production support from other enterprises, and a good portion of that production supporting goods and services, are supporting products produced within their own nation. When a product is no longer produced in the USA. Its producers no longer require USA infrastructure, or USA production lines, or USA engineers and technicians to maintain and update those production lines, or accountants, carpenters, janitors, and numerous other's that are necessary for even the most automated of production lines. All of that is being done beyond our nation's borders.

When a product is no longer produced in the USA, it reduces the sales volumes of other USA production supporting good and service producers. Due to economies of scale often being lost, such reduced production often increases the supporting producer's remaining cost per unit; which in turn often results in cascading reductions and/or eliminations of those supporting producers and/or of other USA producers who they service.

Often reduced or eliminated USA production of goods' detrimental effects upon other less related USA enterprises such as restaurant or beauty salons reduced sales are apparent, but I suppose no less often they're not even recognized.

The entire economic differences between similar imported or a domestic produced items occur prior to the items reaching the shipping platform of its domestic producer, or prior to the foreign items being under the importing nation's jurisdiction and handled by the importing nation's laborers. Beyond those points of places and times, there's no economic difference between a foreign or domestic vehicle being serviced, or repaired, or marketed in the USA by USA labor.
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Old Yesterday, 02:07 PM
 
Location: Bellingham, WA
625 posts, read 1,035,731 times
Reputation: 708
I work in management for a mid-sized fabrication shop, and once our backlog of work ended from the period prior to the "great recession", we were a skeleton crew and work was pretty much hand to mouth until late 2017. Often our crew was working part time and on un-employment 1/3rd to 1/2 of the year. Even with the huge demand and growth for housing/apartments/buildings in a nearby large city, the only handful of projects moving forward were funded by foreign investors seeking EB-5 Visa's. US corporations just were not financially motivated to invest within the USA, it's just that simple. The corporate tax cuts and incentives for investment made this viable and in 2018 the work came rolling in. Our workforce in the shop tripled, the tax incentives allowed us to invest in equipment to produce more and be more efficient. Our workers received pay raises, more vacation, and even with the increase in crew size we still ran overtime hours for a good portion of the year. Our workers are having kids, purchasing new vehicles, and are playing their part of the American consumer instead of scrapping by on half their earnings and unemployment benefits. Also, we did so much more volume that even after the tax cuts and incentives, the company still paid far more taxes than before, making the whole thing a triple win for the company, the workers, and uncle sam. The indirect effects also must be considered from the equipment manufacturers to the vendors and manufacturers of the goods consumed by our workers. After decades of bad policy from BOTH parties having basically pulled the plug on US manufacturing and walked away, I have to say things are finally going in the right direction.
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Old Today, 01:08 PM
 
Location: Grosse Ile Michigan
25,606 posts, read 61,076,404 times
Reputation: 28590
Our company builds factories. We are still building them all over the US and heavily in Michigan and Ohio. However we are also building a lot of them in Mexico for American companies.

At the same time, we are removing some factories and replacing them or converting them into tech centers. It seems like we are moving more and more into the design business and somewhat out of the manufacturing business.

A lot of time we simply re-tool and/or expand existing factories. One engine plant we doubled its size, but only added about 5% more jobs because of automation.
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