[Republic of Michigan]

$1B investment in Jeep production to add 2,000 jobs in Michigan and Toledo | MLive.com

[Retroit]

That's funny, I thiught all the globalist free-traders said these jobs were gone forever? What changed?

(sarcasm, I know what changed)

[Geo-Aggie]

Originally Posted by Retroit

That's funny, I thiught all the globalist free-traders said these jobs were gone forever? What changed?

(sarcasm, I know what changed)

And this is one political perspective that we probably share some in common on. Globalism and free trade are great in theory, but greed and politics make them terrible in practice.

The populist movement on both sides of the aisle has been strong over the last 4 years and as much as I'd have preferred a certain unkempt septuagenarian from New Hampshire as leader of the nation, I'm open to the possibility that as much as I disagree with who we elected on many topics, he may still make expansion of solid blue collar work a priority - let us hope that those jobs come with wages which allow a comfortable life for the plant workers, and not only the major shareholders.

[magellan]

Originally Posted by Geo-Aggie

And this is one political perspective that we probably share some in common on. Globalism and free trade are great in theory, but greed and politics make them terrible in practice.

The populist movement on both sides of the aisle has been strong over the last 4 years and as much as I'd have preferred a certain unkempt septuagenarian from New Hampshire as leader of the nation, I'm open to the possibility that as much as I disagree with who we elected on many topics, he may still make expansion of solid blue collar work a priority - let us hope that those jobs come with wages which allow a comfortable life for the plant workers, and not only the major shareholders.

Returning to higher wages of the 70's and 80's for blue collar work will result in prices for goods that people will not pay. It's just that simple. People will stop buying, or at least, the decrease in consumer spending will be enough to tank the economy.

For the most part, open trade and free trade are good for economies. People like to hone in on the large companies that have taken advantage of free trade deals and shed thousands of jobs, but the great majority of companies in the U.S. who export goods out of the country are growing because of free trade, and adding jobs.

Of all the things that the President Elect has talked about during the campaign, his talk of trade wars has a lot of small businesses worried/concerned.

Economist asks: 'What is the next bubble and when?' | MLive.com

https://mibiz.com/item/24306-uncertainty-ahead

But this Jeep announcement right after the Ford Flat Rock announcement are good news for sure.

[Geo-Aggie]

Originally Posted by magellan

Returning to higher wages of the 70's and 80's for blue collar work will result in prices for goods that people will not pay. It's just that simple. People will stop buying, or at least, the decrease in consumer spending will be enough to tank the economy.

For the most part, open trade and free trade are good for economies. People like to hone in on the large companies that have taken advantage of free trade deals and shed thousands of jobs, but the great majority of companies in the U.S. who export goods out of the country are growing because of free trade, and adding jobs.

Of all the things that the President Elect has talked about during the campaign, his talk of trade wars has a lot of small businesses worried/concerned.

Economist asks: 'What is the next bubble and when?' | MLive.com

https://mibiz.com/item/24306-uncertainty-ahead

But this Jeep announcement right after the Ford Flat Rock announcement are good news for sure.

There's some truth to this, but what it ultimately comes down to for me is record corporate profits vs stagnant wages. I understand that this is a 2014 article while 2015 saw some modest wage growth, but this is something we'd previously not seen since 2007; meanwhile, my shares in Fortune 500s sure do see to be paying ever increasing dividends (unfortunately my very limited number of shares don't really amount to much, but if I owned thousands of shares they certainly would..).

My opinion is that free trade has given major manufacturers the ability to pit wages in Vietnam against wages in Michigan, and Michigan workers ended up out of jobs and then took the same jobs back at lower wages, because a crap job is better than no job. Then with those lower wages they quit buying the expensive Made in Michigan stuff and instead bought Made in Vietnam, because it was less expensive and the quality was good enough. This spirals and we end up where we are now, which is admittedly stable, even if not great for some.

This process freed some up to go to college and learn a new trade and for many this has been great. Based on my childhood, I would probably not be a scientist if solid blue-collar work was still around, but I could not find a blue collar job at 18 and was forced into various retail/service jobs, which sucked, and caused me to pursue higher education at 21, so overall it was a success. But higher education isn't for everyone. I think we all know this. There will always be those working in blue collar industries, but where 40 years ago they had a decent life doing so companies can outsource labor for higher profits today. And they do. Why wouldn't they? That is the goal of free market capitalism, no? It does improve the life of those in Vietnam, but it leaves behind a lot of good people in Michigan, Ohio, Illinois, etc. I agree that improvements won't be anywhere near what some are hanging their hats on, but I do expect to see some continued revitalization of manufacturing as the current populist focus (OWS, Bernie, Trump..) of the last few years continues.

As for small business, I get that Bloomberg is a conservative publication, but they don't make things up as you may see from Faux News and they're reporting significant optimism.

[magellan]

Originally Posted by Geo-Aggie

There's some truth to this, but what it ultimately comes down to for me is record corporate profits vs stagnant wages. I understand that this is a 2014 article while 2015 saw some modest wage growth, but this is something we'd previously not seen since 2007; meanwhile, my shares in Fortune 500s sure do see to be paying ever increasing dividends (unfortunately my very limited number of shares don't really amount to much, but if I owned thousands of shares they certainly would..).

My opinion is that free trade has given major manufacturers the ability to pit wages in Vietnam against wages in Michigan, and Michigan workers ended up out of jobs and then took the same jobs back at lower wages, because a crap job is better than no job. Then with those lower wages they quit buying the expensive Made in Michigan stuff and instead bought Made in Vietnam, because it was less expensive and the quality was good enough. This spirals and we end up where we are now, which is admittedly stable, even if not great for some.

This process freed some up to go to college and learn a new trade and for many this has been great. Based on my childhood, I would probably not be a scientist if solid blue-collar work was still around, but I could not find a blue collar job at 18 and was forced into various retail/service jobs, which sucked, and caused me to pursue higher education at 21, so overall it was a success. But higher education isn't for everyone. I think we all know this. There will always be those working in blue collar industries, but where 40 years ago they had a decent life doing so companies can outsource labor for higher profits today. And they do. Why wouldn't they? That is the goal of free market capitalism, no? It does improve the life of those in Vietnam, but it leaves behind a lot of good people in Michigan, Ohio, Illinois, etc. I agree that improvements won't be anywhere near what some are hanging their hats on, but I do expect to see some continued revitalization of manufacturing as the current populist focus (OWS, Bernie, Trump..) of the last few years continues.

As for small business, I get that Bloomberg is a conservative publication, but they don't make things up as you may see from Faux News and they're reporting significant optimism.

It's mostly manufacturers that are concerned, because they would be the most affected by trade wars.

Trade war is Wall Street's top Trump fear - Dec. 28, 2016

Service providers in the U.S. generally don't export their services abroad. Since service providers now make up about 70% of the economy, a survey of small business owners will skew heavily toward service providers.

In a State that relies heavily on the auto industry, manufacturers here are particularly concerned. At an Econ Club meeting just last week in Grand Rapids (Econ Club is VERY conservative), the economist who spoke had to allay fears by saying there's a good change Trump won't get re-elected due to the recession that we're due in 2018/19.

The title of the article belies what the guy actually said:
The economy 'doesn't really care who's president,' economist says | MLive.com

[Retroit]

Henry Ford taught us a valuable lesson: If you increase employee wages ($5/day at the time), they will go out and buy more. That fuels the economy.

Thank you, Henry.

[Indentured Servant]

Originally Posted by magellan;46800236[B

]Returning to higher wages of the 70's and 80's for blue collar work will result in prices for goods that people will not pay. It's just that simple. People will stop buying, or at least, the decrease in consumer spending will be enough to tank the economy. [/b]

For the most part, open trade and free trade are good for economies. People like to hone in on the large companies that have taken advantage of free trade deals and shed thousands of jobs, but the great majority of companies in the U.S. who export goods out of the country are growing because of free trade, and adding jobs.

Of all the things that the President Elect has talked about during the campaign, his talk of trade wars has a lot of small businesses worried/concerned.

Economist asks: 'What is the next bubble and when?' | MLive.com

https://mibiz.com/item/24306-uncertainty-ahead

But this Jeep announcement right after the Ford Flat Rock announcement are good news for sure.

Its a zero sum game. Higher wages, in theory, creates more disposable income for spending. Hence, higher wages for blue collar workers means more revenues (from their consumption) for other businesses. However, if those cost of higher wages are past on to the consumer there will be a reduction in demand for those products produced by blue collar workers....which might result in layoffs. So you are really damned if you do damned in you don't....in a closed economy. We, though, do not have a closed economy and what happens is that paying Americans higher wages, or doing economic stimulus packages or tax cuts.....leaks out the nation due to the trade deficit. In other words, when we take our extra earnings and buy foreign goods or services.....it goes to create revenues and jobs in other countries.

I think for the longest we have followed the theory of "competitive advantage" in regards to trade policy. That is, let the country who can produce a good or service more efficiently produce that good or service and let other nations who produce it less efficiently import the good or service. Well, the problem with that is the cheap labor becomes a comparative advantage....especially when we export know how and technology to cheap labor countries for the synergy. Furthermore, artificial intelligence creates a comparative advantage......which is an era that is about to explode on us that will eliminate millions of jobs.

I think we have to be careful of thinking something is working and going "well" when the benefit of the action or policy comes way ahead of the cost. That is what is what has been going on in America for a while. We keep pushing the consequences of our policies out into the future......and remember that debt is simply a claim on future earnings......meaning that when those claims have to be paid......there will not be much left for consumption and 2/3rds of GDP comes from consumer consumption.

[Indentured Servant]

Originally Posted by Retroit

Henry Ford taught us a valuable lesson: If you increase employee wages ($5/day at the time), they will go out and buy more. That fuels the economy.

Thank you, Henry.

I totally agree.....but the problem is that they will be buying many foreign goods and services.....which is why we have such a big trade deficit.

Its important to get money in the hands of the middle class and poor, though, more so than the rich. Why? Because the middle class and poor spends the vast majority of their earnings, while the super wealthy invest their monies, which have less stimulative impact on the economy given that 2/3rds of GDP comes from consumer consumption.

[VM1138]

Originally Posted by Retroit

That's funny, I thiught all the globalist free-traders said these jobs were gone forever? What changed?

(sarcasm, I know what changed)

Well, I don't know about this particular case but in general it's becoming more expensive to make and ship products overseas, and robots are making labor costs less important (gradually). I guarantee most of these plants have plans already in place to automate production within a short amount of years.