U.S. companies are no longer investing in much new capacity at home,
and the ranks of U.S. engineers are thinning. In contrast, China is
emerging as the most competitive manufacturing platform ever. Chief
among its formidable assets is its cheap labor, from $120-a-month
production workers to $2,000-a-month chip designers. Even in
sophisticated electronics industries, where direct labor is less than
10% of costs, China's low wages are reflected in the entire supply
chain -- components, office workers, cargo handling -- you name it.
For sure and there are only three things that make "wealth" in this
world and those are...
Your neighbors (not in MY back yard!) and gov't busy-bodies
have done their best to screw up all three!
You younguns out there... have fun in the future, you here? ;)
Alvin in AZ
The "family farm" was on its way out from the first day the first
subsidy check was cashed.
Just wish Neil Young would sing about that instead of blaming the
No, I sure as heck didn't. ;)
Only moves it from one pocket to another.
Mining, manufacturing and agriculture...
three things and only three things...
Got it, CA? :)
"it's only worth what someone is willing to pay for it"
Alvin in AZ (libertarian)
On Mar 10, 4:56 pm, snipped-for-privacy@Example.com wrote:
There are even those who would limit the creation of
"new" wealth to mining and agriculture ONLY.
Manufacturing companies must first "purchase" the
raw materials they use, from agricultural or mining
sources, using money already "created"; this does
not "make-wealth" and instead is merely "value
p.s. Love that ZDP-189 blade.
That doesn't make much sense as your description describes mining well
enough. Kind of hard to dig all that ore and smelt it without an
investment of money already created, don't you think?
And if it isn't "created money" what you call value added? If you add
value, that value must have been created or you couldn't have added
(correct email address for reply)
No one would deny people will pay money for "value added"
but, again, this is only a matter of moving money and re-
sources around and not the creation of "new" wealth. The
companies which produce autos or t-shirts must rely on
the efforts of miners and farmers for their raw product.
Farmers and miners who supply the new product will use
money for gasoline, seed, fertilizer, etc. (money from
previous product created) but, watch closehere, they are
"not" supplying reworked products but new product taken
from the earth through labor. These products are new,
not previously available for the use of man, created through
the efforts of miner or farmer.
Nothing wrong with "value added" as without this we'd all
be eating bark but this does not create "new" wealth.
I have been following this OT discussion and have been waiting for someone
to correct the basic assumption about new wealth being discussed, but so far
no one has hit upon it yet, so I will try to shed some light on it.
Mining, and mining only, used to be the only way to create "new wealth," but
no longer, nor does agriculture, or any other non mining economic activity.
The important word being "create." New wealth is created today by the Fed to
bolster or slow the economy by adjusting the Federal discount rate up or
down. When we were on the gold standard, and there was $1 of gold backing
each dollar in the money supply, in paper or on paper, it required new gold
to be added to the Nation's treasury to allow more money to be added to the
Nation's money supply, and therefore "create new wealth," and expand the
economy. At that time banks could not lend money they did not physically
have in their assets, but all that has changed.
It used to be a one to one relationship, gold to dollars, and it hamstrung
the economy. Fortunately, just when the American economy most needed to
expand its available capital, the gold rush in the Western U.S. and Alaska
occurred providing the needed new wealth to fund the developing industrial
revolution. But once we went off the metal standards, both gold and silver,
and the money supply could be adjusted at will by the Fed, the "new wealth"
concept no longer applied. Wealth became nothing but numbers in ledgers, and
later on hard drives, that could be manipulated at will by the Fed. But
always keep in mind that underpinning the standard of living is more than
simple numbers...there must be material resources available to make the
necessities and luxuries of life. If the Fed were to suddenly double the
money supply, it would not result in an increase in our standard of living,
but instead, runaway inflation and a reduction in our standard of living
Today, the most important industry for almost any nation is manufacturing
and export. I said "almost" because some nations are living off the sale of
their raw natural resources, especially oil, and that is non sustainable
over time if they don't invest the income in sustainable industry for the
Export brings us wealth from other countries that is multiplied within our
own economy. Without export being greater than import, the economy of a
country has to decline over time, and we are now experiencing just the tip
of that iceberg. Service industries gain us little or nothing, only
manufacturing and export gain us an increase in our true cumulative wealth
and standard of living. A country can increase its wealth more quickly if
its industry can be supplied by its own raw materials resources, but that
isn't necessary to sustain economic growth....the possible exception being
energy. Cheap energy is critical, and without it the system may come to a
grinding halt no matter how well capitalized. It is possible that the
anti-nuclear movement that killed all new nuclear reactor production may
have killed a lot more than that...time will tell. BTW, the standard of
living in the U.S. has declined for the last four consecutive years, and I
doubt that overall trend will be reversed in my lifetime.
There is a new wrinkle now that is totally changing, or has changed, the
world. Despite NAFTA, and other free trade agreements, which are often
blamed for our troubles, those changes would almost certainly all have
happened on their own due to the medium you are using to receive this email.
The Internet has created a "flat" world without boarders so far as the
economy is concerned. It, and not NAFTA, is the cause of a developing one
world economy. NAFTA just speeded it up. And because of the Internet, and
other factors, our unions have now become their own worst enemies.
You can't expect a company to use union labor at $25 an hour to manufacture
widgets when it can simply make an order for those same widgets from India
or China, via the Internet, and have them made using labor at $5 a day. The
Internet, and not NAFTA, or the government, has created a flat playing field
for all countries, like it or not. That is good for the third world
countries, but for countries like the U.S., it is a huge problem.
The Internet has leveled the playing field, which means the world will
theoretically move toward an economic balance, the poor countries gaining in
their standard of living, and the wealthy countries decreasing in theirs.
There are only so many widgets to go around, no matter how many dollars
there are in the money supply. It is easy to blame our companies for going
outside the U.S. to buy, or to manufacture goods, but they are not
responsible to their employees, only to their stock holders. Liberals, and
unions, like to think that a company is ultimately responsible to its
employees. That is only true if the employees own the company. A company has
to be profitable to exist long term, so it has to do whatever is required of
it to insure its profitability and return to investors. If this bothers you,
become an investor and get your piece of the pie.
So how will it play out in the long term, I don't know, and neither does
anyone else. Not only is the playing field now becoming level, it is a
totally new playing field that no one on earth has previous experience with.
The new laws of economics are only now being discovered. There is one thing
I think that can be said with some assurance of being correct, if you are a
younger generation American, you better get a lot of education because you
won't be making a living in the blue collar industries we used to depend on.
A high school diploma isn't even a beginning. A four year degree, or
equivalent in a trade school, is only a starting point. The blue collar jobs
are fading from the scene, and with them will go the unions....unless unions
are able to adapt as the economic environment they work within changes.
For more information I suggest you investigate the free economic
presentations available on the MIT server in its free public education
series. They have had some wonderful video presentations in the past, and
will again in the future.
On 3/12/08 10:08 AM, in article
Yeah it is a little OT isn't it, but its an unmoderated group, so all's
fair... I guess.
I think I can back you up a little here, new wealth can be created
electronically also, a decimal point typed in incorrectly can change
$29.95 to $2995 (yes this did happen to me once, and I picked it up 6
months later, by that time there was noting to be done and the error had
Ronald Reil wrote:
Nah. You're off base. Oh, don't get me wrong, your political
agenda certainly has value, and in an OT subject you don't
have to follow any set form, but this isn't what we were talking
If you'd like to respond to the subject at hand I'd like to discuss
it with you, but if you'd rather talk politics, kindly leave me out.
Sorry, Ron, that's just "playing with numbers" not "weatlh
Take me for an example, I was a dumb railroader.
At any given time there were cars full of stuff being shipped.
Yep CA, even finished films inside the UPS "piggybacks" no doubt. :)
Everybody can attempt to argue this out, I'm not smart enough to
defend it... all I know is, those three are the results of others
arguing it out in details we can't begin to type out here.
See them as the "answer to the question" and see "why they are the
only ones" as opposed to going at it the other way.
It'll soon be clear to you why those three are "the only ones". :)
"no need for a railroad without those three"
"no need for a Walmart without those three"
Even tho I was directly involved in moving that "crap;)" from point
A to point B the railroad ain't part of "the three".
See "why" that is... on your own... and you'll understand it.
Value added during "manufacture/processing" creates "wealth"
(or could call it... an increase in real value).
That's why manufacturing is included.
When you see this in your head, fitting-together, you'll see the
Union's role in certain problems... fixed and/or worsened... but
many times you'll read/hear the news and go "bullshit :/".
Alvin in AZ
ps- "a blacksmithing NG" is for "blacksmiths" to talk
pps- if other blacksmiths don't like the topic... just say so :)
ppps- we'll take it as a suggestion ;)
pppps- the new IRS "money back" thing is the same sort of crap
FDR did that prolonged and worsened the depression! :(
ppppps- be ready to have yourselves some fun out there, hear? ;)
No, not correct. It isn't just playing with numbers. No matter how much gold
we pull out of the ground today it doesn't create new wealth, it only
accumulates it for those mining the gold, and there is a very big
difference. When you pull a lump of gold out of the ground worth $200, there
isn't 200 new dollars suddenly added to the money supply...."new wealth." If
the miners took out a loan to help them finance the mining operation, a
portion of that loan will be new wealth due to the discount rate the bank
uses when making the loan, if the bank is making loans beyond the capital
resources they have, which is what the discount rate allows and regulates.
You could make the same argument that mining oil creates new wealth, but it
doesn't, it just moves wealth from those countries without oil to those that
produce it....redistribution. The money supply doesn't increase because of
new oil in the system unless there is financing involved, and of course
there is. The same can be said for new homes. The creation of wealth by
mining was true in the classic economic system when we had gold backing the
money supply. Any 100 level economics class covers that in the opening
quarter when they discuss classical economics of the 1800's. It is funny how
many people know how the classic system worked but have no idea how things
work today. Perhaps that is why we are in such a pickle today.
On 3/16/08 6:31 PM, in article frke45$26$ email@example.com,
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