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Old 06-19-2009, 11:24 PM
 
Location: Ottawa, Canada
609 posts, read 1,043,362 times
Reputation: 173

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Apparently, the high prices of oil, and its expected increase, will soon make importing "cheap" products not so cheap. this, they predict, will lead to a return of the manufacturing industry and a deglobalization of the world economy. This should be good for countries like the US and Canada, which already have the raw materials and are simply shipping them to other countries who produce them cheaply. lets pray this happens
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Old 06-20-2009, 02:41 AM
 
Location: San Diego
2,311 posts, read 2,456,043 times
Reputation: 881
Quote:
Originally Posted by oberon_1 View Post
Such as? In what fields is the US a "leader" in manufacturing?
Food, pharmaceuticals, aerospace, chemicals, medical devices, weapons, etc...

Well we may not be the top in everything, there are still several areas that we thrive in.

Just because a couple of states depended too heavily on a single industry that has been out-competed doesn't mean that the whole market ceases to exist. You can go buy a Subaru that was made in Indiana by americans, or a hyundai designed in California and assembled in Arkansas, or toyotas or hondas; but the domestic car maker has been using assembly plants in Canada or Mexico. Is manufacturing that has been outsourced in reverse still not US manufacturing?
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Old 06-20-2009, 03:35 AM
 
Location: Prepperland
13,116 posts, read 9,202,467 times
Reputation: 8988
Quote:
Originally Posted by DrJoey View Post
Food, pharmaceuticals, aerospace, chemicals, medical devices, weapons, etc...

Well we may not be the top in everything, there are still several areas that we thrive in.

Just because a couple of states depended too heavily on a single industry that has been out-competed doesn't mean that the whole market ceases to exist. You can go buy a Subaru that was made in Indiana by americans, or a hyundai designed in California and assembled in Arkansas, or toyotas or hondas; but the domestic car maker has been using assembly plants in Canada or Mexico. Is manufacturing that has been outsourced in reverse still not US manufacturing?
That's not quite accurate.
The federal law mandating 60% local content is often bent like a pretzel. But the bottom line is that the profits depart our shores.

The United States leads the world as the premier producer and exporter of services. As the largest component of the U.S. economy, the services sector includes all economic activity other than agriculture, mining and manufacturing. The service sector accounts for about 80 percent of GDP and private nonfarm employment (over 81 million jobs).

Out of that 80%, 55% is the service sector , the remainder are involved in retailing. In other words, 'making' goods is not longer the dominant activity in the USA. Performing services is now the dominant activity, followed by retailing. (And you wondered why "Convenience Stores" were everywhere...) Buying and selling goods made by other people IS how many make their money today. The proliferation and distribution of points of sale have created an enormous liability. At some point, it will become obvious that we don't really get prosperous endlessly selling back and forth, without producing new products, ourselves.

As the economy contracts, and retailers scale down, or close down, it's obvious that as the service sector contracts, there is NO PLACE for the displaced workers.
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Old 06-20-2009, 05:29 AM
 
Location: San Diego
2,311 posts, read 2,456,043 times
Reputation: 881
Quote:
Originally Posted by jetgraphics View Post
That's not quite accurate.
The federal law mandating 60% local content is often bent like a pretzel. But the bottom line is that the profits depart our shores.

The United States leads the world as the premier producer and exporter of services. As the largest component of the U.S. economy, the services sector includes all economic activity other than agriculture, mining and manufacturing. The service sector accounts for about 80 percent of GDP and private nonfarm employment (over 81 million jobs).

Out of that 80%, 55% is the service sector , the remainder are involved in retailing. In other words, 'making' goods is not longer the dominant activity in the USA. Performing services is now the dominant activity, followed by retailing. (And you wondered why "Convenience Stores" were everywhere...) Buying and selling goods made by other people IS how many make their money today. The proliferation and distribution of points of sale have created an enormous liability. At some point, it will become obvious that we don't really get prosperous endlessly selling back and forth, without producing new products, ourselves.

As the economy contracts, and retailers scale down, or close down, it's obvious that as the service sector contracts, there is NO PLACE for the displaced workers.
Whats not quite accurate?

These are all areas that we lead in that are still valuable commodities. The market share in these industries is orders of magnitudes larger then those that provide your Nikes.

Better yet, even if we kept our manufacturing local, would that be the engine of our economy or would the design of what gets manufactured be valued?

Every industry I mentioned is high tech and relies on US IP rights and manufacturing. Would we be better off abandoning these for cogs in the industrial wheel?

Is our situation any different then that of the beginning of the 1900s? Automation led to much larger layoffs then and allowed us to advance to where we are now. Should we disregard these current achievements in order to maintain employees who may be end up as long term liabilities?
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Old 06-20-2009, 07:49 AM
 
9,960 posts, read 11,811,280 times
Reputation: 13278
Quote:
Originally Posted by jetgraphics View Post
The number one reason why American labor and production is more expensive is the government, or more succinctly, the socialist government.

Every product and service sold in the USA (and exported), has a hidden socialist tax overhead attached to the retail price.

snip
Regardless of how productive an American worker is he can not complete with $1.50 an hour labor in Mexico and China. The American worker can produce ten times as much yet he still would be unable to compete.

To bring manufacturing back the first thing we need to do is scrap the income tax in favor of a national sales tax.

Want to knock the heck out of foreign competition? Imagine the work and jobs created for America companies if they did not have built in taxes for products exported overseas. Selling Boeing airplanes to China... Boeing would knock the socks off Airbus on a competitive bid.

True, would mean less taxes to our federal and state government, meaning less first class private jet rides like she's a rock star for Speaker Pelosi, but I didn't think the American people were here to serve government but the government should serve the American people. If there are plenty of jobs what do we need the extensive government we have for?

Health insurance. We need to go with a national provided system (that's a different debate) lowering the cost for every American citizen. If Boeing does not have to pay health insurance ($1,000 a month for every family) their airplanes become even more competitive.

We would become more competitive by saving all the money we currently give to tax preparers and tax lawyers. Never happen though because this would really gum up the works for politicians an special interests.
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Old 06-20-2009, 09:05 AM
 
Location: Prepperland
13,116 posts, read 9,202,467 times
Reputation: 8988
Quote:
Originally Posted by nicet4 View Post
Regardless of how productive an American worker is he can not complete with $1.50 an hour labor in Mexico and China. The American worker can produce ten times as much yet he still would be unable to compete.

To bring manufacturing back the first thing we need to do is scrap the income tax in favor of a national sales tax.
In reverse order, NO, do not enact a national retail sales tax. I know this far too well, having written a book promoting the idea. Only after more research did I refute my own premise. (Embarrassment flag on).
What most Americans are unaware of is that ALL taxes are on privileges, not rights. The typical state retail sales tax is levied on the LICENSED BUSINESS. But the state allows the business to pass the tax on to the customer. BUT the law does not tax the consumer... (sarcasm flag off).
In another sense, since no one is using lawful money to PAY debt, we're charged a tax on the privilege to use funny munny to discharge debt.

The proponents of the flat sales tax trot out numbers like 17% would be enough. What they fail to account for is the massive deflation that will follow the repeal of income tax (if it happens). My simulations show a decrease on the order of 60 - 80% deflation, as the income tax inflation drains from the economy. With a GDP reduced by 2/3rds or more, the 17% will be inadequate to fund the budget. Believe it or not, the first year sales tax would have to be on the order of 50% to cover the bills. (That's equivalent to a 33% income tax rate).

In short, a national retail sales tax (excise tax) would be an unconstitutional intrusion into a state, a violation of the right to contract (transact business), and be misapplied. Don't even raise the VAT - OMG - what a disaster THAT is.
Bureaucratic nightmare x 1000.

Now, to the first argument that the American worker can't compete with foreign labor, paid $1.50 / hr.

Since there is no equitable reference to the local marketplace, it has ZERO applicability.

For example, if you were an American earning 4 Euros per hour, compared to a European worker earning 5 Euros per hour, are you being paid less?
WAIT - you're in America, you aren't paid in Euros! Likewise, those foreign workers are paid in local money. And you need to know how much that local money buys before you shrug and shake your head.

What does that foreign worker buy with his wages? What percentage of his income goes to shelter, food, clothing, entertainment, etc.

Once you have that data, then you can make a cogent comparison.

At this time, under national socialism, the inequitable wages are diluted by the gruesome overhead that drags down our economy.

Remember, it's not the volume of money, but what that money will buy, that is important.

In 1914, the average annual income was $400. Today, the percapita average income is $40000. Is the average worker of 2009 really 100 times richer than his counterpart in 1914? Can he afford 100 times as much food, shelter, travel, entertainment?
Of course not.
The Federal Reserve Note has lost buying power with reference to the real dollars of 1914. By some estimates, and the Wholesale Price Index, the current "dollar bill" has the equivalent value of $0.01 of 1914.
In my estimation, it has dropped even more... but that's another essay.

To compound the problem, if you tried to hire yourself, you'd need to spend 3 to 4 times as much money, to cover the multiple layers of taxes, insurance, dues, hidden fees, and overhead expenses.

For example, if you were a plumber paid $20/hr. and worked for a company, your company might bill $70 - $90 / hr for your services to the customer. If you tried to hire yourself, you'd need 4 to 5 times as much as you're paid. That's the inequity caused by the layers of socialism.

Before socialism and the parasitical tax on labor and production, your plumbing company might only have to bill you at 10% over your wage. So when you hired yourself, it would be at a small penalty.

What all this boils down to - is that once socialism and income taxation are eradicated, there will be a deflation of retail prices for goods and services.

To illustrate, there's a 15% FICA tax associated with hiring. So tomorrow, the FICA tax is abolished, and all businesses can drop prices 15% without batting an eye. But remember, each business is consuming goods and services as part of its business. And if that overhead drops 15%, that decrease feeds forward allowing for an incremental price drop - say 5%. Now, this company has dropped its price 20% on the elimination of a 15% tax. And this 20% reduction allows other companies to drop their prices a bit more... and the deflationary spiral rapidly drains the tax shift inflation.

The problem is also compounded by the debt-credit Federal Reserve note, borrowed, at usury, into existence. Frankly, if we went back to "lawful money" (gold / silver coin) the limited supply of bullion would cause a deflation on the order of 4000:1 or more, to match bullion to the marketplace. So a 50000 FRN car would cost $12.50 in real money.

People would be working for "small change", and getting a lot of bang for it. A copper penny would be well worth picking up.

(Fort Knox gold depository has 147 million ounces of gold. If that was to be proportional to the 13 trillion "dollar" GDP, and retain the Coinage Act designation of one ounce = 20 dollars, then $2.9 billion : 13 trillion frn, or 4482:1 deflation)
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Old 06-20-2009, 09:18 AM
 
Location: Prepperland
13,116 posts, read 9,202,467 times
Reputation: 8988
Quote:
Originally Posted by DrJoey View Post
Whats not quite accurate?
The statement that "You can go buy a Subaru that was made in Indiana by americans, or a hyundai designed in California and assembled in Arkansas, or toyotas or hondas"

They are assembled by Americans, with "60% local content" (yeah, right) but most of the profit is leaving the shore.

Quote:
Originally Posted by DrJoey View Post
These are all areas that we lead in that are still valuable commodities. The market share in these industries is orders of magnitudes larger then those that provide your Nikes.
I didn't mention Nikes.
However, Endicott, NY once was the home of Endicott - Johnson shoe company. And thanks to national socialism, that industry was pretty much wiped out.

Quote:
Originally Posted by DrJoey View Post
Better yet, even if we kept our manufacturing local, would that be the engine of our economy or would the design of what gets manufactured be valued?
What's your point?
That we're better off scratching each other's back in a service economy instead of producing our necessities?

Quote:
Originally Posted by DrJoey View Post
Every industry I mentioned is high tech and relies on US IP rights and manufacturing. Would we be better off abandoning these for cogs in the industrial wheel?
"IP rights"?
"Cogs in the industrial wheel"?

Quote:
Originally Posted by DrJoey View Post
Is our situation any different then that of the beginning of the 1900s? Automation led to much larger layoffs then and allowed us to advance to where we are now. Should we disregard these current achievements in order to maintain employees who may be end up as long term liabilities?
You are missing the point. Thanks to automation, technology, tools and mass production, we can multiply the labor of a worker. So why do we have to work so much more to make ends meet?
Why aren't we enjoying the benefits of our vastly amplified labor?

Answer: the parasites of socialist bureaucracy, drones, paper pushers, administrative overhead, and so on, are diluting the prosperity that we should be enjoying.

Remember, prosperity is not measured in money tokens. Prosperity is based on the creation and trade of usable surplus goods and services, and the time to enjoy same.

But when you have a system that rewards consumption and penalizes production, you kill the "golden goose".
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Old 06-20-2009, 10:04 AM
 
5,532 posts, read 5,714,122 times
Reputation: 3146
Quote:
Originally Posted by jetgraphics View Post
That's not quite accurate.
The federal law mandating 60% local content is often bent like a pretzel. But the bottom line is that the profits depart our shores.

The United States leads the world as the premier producer and exporter of services. As the largest component of the U.S. economy, the services sector includes all economic activity other than agriculture, mining and manufacturing. The service sector accounts for about 80 percent of GDP and private nonfarm employment (over 81 million jobs).

Out of that 80%, 55% is the service sector , the remainder are involved in retailing. In other words, 'making' goods is not longer the dominant activity in the USA. Performing services is now the dominant activity, followed by retailing. (And you wondered why "Convenience Stores" were everywhere...) Buying and selling goods made by other people IS how many make their money today. The proliferation and distribution of points of sale have created an enormous liability. At some point, it will become obvious that we don't really get prosperous endlessly selling back and forth, without producing new products, ourselves.

As the economy contracts, and retailers scale down, or close down, it's obvious that as the service sector contracts, there is NO PLACE for the displaced workers.
Agreed!
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Old 06-20-2009, 10:14 AM
 
5,532 posts, read 5,714,122 times
Reputation: 3146
Quote:
Originally Posted by nicet4 View Post
Regardless of how productive an American worker is he can not complete with $1.50 an hour labor in Mexico and China. The American worker can produce ten times as much yet he still would be unable to compete.

To bring manufacturing back the first thing we need to do is scrap the income tax in favor of a national sales tax.

Want to knock the heck out of foreign competition? Imagine the work and jobs created for America companies if they did not have built in taxes for products exported overseas. Selling Boeing airplanes to China... Boeing would knock the socks off Airbus on a competitive bid.

True, would mean less taxes to our federal and state government, meaning less first class private jet rides like she's a rock star for Speaker Pelosi, but I didn't think the American people were here to serve government but the government should serve the American people. If there are plenty of jobs what do we need the extensive government we have for?

Health insurance. We need to go with a national provided system (that's a different debate) lowering the cost for every American citizen. If Boeing does not have to pay health insurance ($1,000 a month for every family) their airplanes become even more competitive.

We would become more competitive by saving all the money we currently give to tax preparers and tax lawyers. Never happen though because this would really gum up the works for politicians an special interests.
You start with a very interesting idea (replacing income tax with a national sales tax), then you slip-slide to Polosi, politics.... the old story...
The proposal sounds interesting, but since US is a consumer driven economy , don't you think that it may discourage consumption? People don't think deep and if they'll see high prices, it may deter them, although basically they sill have the same buying power?
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Old 06-20-2009, 10:19 AM
 
Location: Victoria TX
42,668 posts, read 71,538,289 times
Reputation: 35864
The auto industry could shut down completely and never make another car, nor import one, and we would still have enough vehicles for every family to have one 20 years from now. The number of passenger cars in the US now is 250-million. In recent years, new cars were being sold at a rate of 7-million a year, or 140-million over 20-years. Presumably they are wearing out at a slower rate than that (since the overall number increases) , but allowing for 140-million cars being scrapped, it would still leave 110-million serviceable cars for 110-million households, and everybody could still have a family car.

That could easily be expanded to 30 years, with such an incentive to properly maintain cars to increase their useful life. Then, in the year 2039, the national economy can be re-examined to see if there is a need for any more cars at that time. Total out of pocket savings for consumers = 4-trillion dollars, at $20,000 per car.

Last edited by jtur88; 06-20-2009 at 11:02 AM..
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