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Actually a devalued dollar is likely to bring MORE manufacturing jobs here - as it makes the price of the produced product LOWER relative to other currencies. This is the strategy China has been using for quite some time with their currency - much to the irritation of European manufacturing rivals who's much stronger (until just recently) Euro has been costing them business.
Ken
Ken,
I agree that it can help, but it has also hurt since everything is costing more
think about this:
the average home (about 1500sf) in 1969 was $20,000
the average midsize car in 1969 cost $2200
today that same size home is 200,000 or more
today that a mid size car is over 20,000 or more
why....not because the house or car has changed much (still basicly the same).......nope...because the value of the dollar is in the crapper
it goes the same for business,, taxes are up because costs are up, because prices are up
I cant be expected to keep a workforce and sell my product for $5 of it cost me $6 to make....but IF I move (either to antoher state, or to another country) and I can have a work force and make the product for less than $4, then yes I can sell it for $5
Last edited by workingclasshero; 01-28-2010 at 12:34 PM..
I agree that it can help, but it has also hurt since everything is costing more
think about this:
the average home (about 1500sf) in 1969 was $20,000
the average midsize car in 1969 cost $2200
today that same size home is 200,000 or more
today that a mid size car is over 20,000 or more
why....not because the house or car has changed much (still basicly the same).......nope...because the value of the dollar is in the crapper
it goes the same for business,, taxes are up because costs are up, because prices are up
I cant be expected to keep a workforce and sell my product for $5 of it cost me $6 to make....but IF I move (either to antoher state, or to another country) and I can have a work force and make the product for less than $4, then yes I can sell it for $5
A weaker dollar typically helps your business if your primary customers are overseas.
A weaker dollar typically hurts your business if your primary suppliers are overseas.
In your Opinion, what got the ball rolling for our Industrial manufacturing base and jobs, to leave America.
Who is at fault for the start of the exit?
Who is at fault for the start of the exit?
[1] government - taxation, especially socialist taxation
[2] government - regulation
[3] government - litigation
[4] usury - inflated costs, devalued debt-credit "dollar bills"
[5] all of the above
If you want to repatriate American jobs and industries, then eliminate all taxes on producers and laborers. Eliminate all regulation. Reduce the cost for litigation - when adjudicating actual claims for injury, and not abusive litigation. (If a plaintiff loses, he pays for the defendant and his costs.)
When it takes 2 dollars to make the worth of what one dollar was. It is going to take 2 dollars to by what is really only worth a dollar.
How's that working for you? Are you going to get a raise in pay, double what you were making?
When you are talking about strengths of currencies - what's important is NOT what your currency is worth now compared to what it USED to be worth. What's important is what your currency is worth NOW compared to OTHER currencies NOW. Everything is always in motion. Our currency is in motion and OTHER COUNTRIES currencies are in motion. We have OUR inflation and they have THEIR inflation. EVERYTHING is relative.
If it costs you 2 dollars to make what what used to cost 1 dollar to make but you are now able to undercut your foreign competition because your cheaper currency makes YOUR product cheaper to buy overseas than those of your foreign competition then YOU get the sale and your competition doesn't.
You seem to think that ONLY America experiences inflation. ALL countries experience inflation. Inflation affects the value of the dollar but it's not the sole determinant of the value of the dollar when compared to other currencies. The ratio of the US dollar vs British Pound is roughly 1.6 to 1 - which is not all that different than what it was worth (roughly 2 to 1) when I was kid living in Europe back in the late 1960's and early 1970's - even though prices of everything here have risen dramatically in that time (as your pointed out).
Currency valuations and inflation are RELATED - but that relationship is fluid, not fixed, for the simple reasons that:
1) Inflation is just ONE factor that affects currency values
2) ALL nations are experiencing varying degrees of inflations ALL THE TIME.
This means that EVERYTHING is in motion at the same time and currency valuations are a RELATIVE THING.
When you are talking about strengths of currencies - what's important is NOT what your currency is worth now compared to what it USED to be worth. What's important is what your currency is worth NOW compared to OTHER currencies NOW. Everything is always in motion. Our currency is in motion and OTHER COUNTRIES currencies are in motion. We have OUR inflation and they have THEIR inflation. EVERYTHING is relative.
Ya, how is that good for the American consumer.... Who didn't get a raise in pay. It is a pay reduction that is hidden.
That is what I'm getting at and you made my point for me.
Ya, how is that good for the American consumer.... Who didn't get a raise in pay. It is a pay reduction that is hidden.
That is what I'm getting at and you made my point for me.
If the US dollar is LOWER then YES IMPORTS ARE more expensive - and that's bad for the American CONSUMER - but it also means that US EXPORTS are cheaper for foreigners to buy - which is GOOD for American workers. It means that jobs are less likely to go overseas because the cost to produce those products overseas is now HIGHER than it was (compared to producing the products here) and it means that production here is likely to INCREASE (meaning more jobs for workers here) because of export sales INCREASE.
As I said, it's a double-edged sword - some good things about a weak dollar and some bad things about weak dollar. Same is true with a strong dollar - you can buy a lot more with a stronger dollar - and that's good for US comsumers (imports become cheaper) but it's BAD for US workers because the cost of our EXPORTS rises - making them less desirable and likely decreasing sales and thus likely leading to more job losses.
In the final analysis, if you want to be able to buy a lot of stuff from overseas cheap then your want a strong currency - but if you want to sell a lot of YOUR stuff overseas and encourage manufacturing jobs here at home, you want a weak currency.
In your Opinion, what got the ball rolling for our Industrial manufacturing base and jobs, to leave America.
Who is at fault for the start of the exit?
High taxes (The U.S. has the highest Capital Gains rate in the world).
Over regulation (Too much damn government interference in the private sector).
Unions (If you want to talk about "greed", a word the liberals love to throw around when talking about corporations, look to the Unions. There is the greed. Unreasonable demands for pay and benefits).
If the US dollar is LOWER then YES IMPORTS ARE more expensive - and that's bad for the American CONSUMER - but it also means that US EXPORTS are cheaper for foreigners to buy - which is GOOD for American workers. It means that jobs are less likely to go overseas because the cost to produce those products overseas is now HIGHER than it was (compared to producing the products here) and it means that production here is likely to INCREASE (meaning more jobs for workers here) because of export sales INCREASE.
As I said, it's a double-edged sword - some good things about a weak dollar and some bad things about weak dollar. Same is true with a strong dollar - you can buy a lot more with a stronger dollar - and that's good for US comsumers (imports become cheaper) but it's BAD for US workers because the cost of our EXPORTS rises - making them less desirable and likely decreasing sales and thus likely leading to more job losses.
In the final analysis, if you want to be able to buy a lot of stuff from overseas cheap then your want a strong currency - but if you want to sell a lot of YOUR stuff overseas and encourage manufacturing jobs here at home, you want a weak currency.
Ken
You keep talking Imports and Exports blah, blah blah. Move away from the trees so you can see the forest!!!
I'm talking about a gallon of milk. A loaf of bread, Einstein.
You keep talking Imports and Exports blah, blah blah. Move away from the trees so you can see the forest!!!
I'm talking about a gallon of milk. A loaf of bread, Einstein.
They're all related. Microeconomics is not separate from macroeconomics. Microeconomics is the snapshot of the big picture. If you think of the snapshots, the gallon of milk, the loaf of bread, the annual raise, and then think of the snapshots as pieces of the puzzle, then everything fits together. It's like a gazillion piece puzzle instead of a 1000 piece puzzle, but as hard as it is to put the 1000 piece puzzle together without an idea of the big picture, it's many, many times more difficult to put the gazillion piece puzzle together without an idea of the big picture.
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