Every wanted to see a Chinese production facility?

Canadian per capita GDP-PPP is $25,179 (US). United States per capita GDP-PPP is $33,872 (US)

GDP-PPP is the income figure corrected for a market basket of local commodities. In other words, it is a measure of the average purchasing power of that money in that locality. As such, it gauges how well you can live on the median wage in a given area.

Gary

Reply to
Gary Coffman
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Lets look:

bottle of beer $2.30

6 slices of bread $2.00 Butter 200g $3.10 Coke $1.20 pack cigarettes $2.50 Big Mac $2.80 Oranges (6) $5.00 Dominos Pizza $30.00 Rice 5 kg bag $17.50 Movie ticket $18.00 Gasoline liter $1.00

In economics, you're always balancing capital costs against labor costs and raw materials costs to achieve the most efficient combination. When labor it cheap, its usage is maximized while the others are minimized. That's efficient use of available resources.

Indeed, as I said, "net movement of value from the less efficient nations to the more efficient ones." Of course that means the dollar will drop in value. It also means we won't be able to afford as many Chinese products. That'll knock that old trade deficit right down.

Despite what nation states may try to do, the multinational corporations are opening up the world to free trade, by the back door if not the front.

Well, the US Army says it will need 1.2 million recruits over the next two years to fill the losses of retention due to the invasions and occupations of Iraq and Afganistan (probably Syria and Iran too by then). So they could join the Army. The People's Army is where those Chinese workers would be if they couldn't get jobs making things for export.

Well, I'll tell them one thing they won't be doing if they sit around wringing their hands. That's buying a new car. So the Chinese won't be selling any cars to them. The Chinese will have to look elsewhere for customers.

If the gloom and doom you and Jim have been spouting is right, no one in the US will be able to buy a new car. But somehow I doubt that will be the case. So those workers will just have to retrain to get jobs like those of people who *can* afford a new car. For example, they could become product liability lawyers. There's always room for another multimillion dollar class action law suit.

Gary

Reply to
Gary Coffman

I have a lot of problems believing that the Chinese are that good except in a few very isolated cases because it took the Japanese a long, long time to get their productivity and quality up to U.S. levels, and Japan started out being way ahead of China. Even Taiwan still has quality problems, and look how advanced they are. There are always exceptions, but usually even identical factories will almost always be quite a bit more productive in the First World than in China, mostly because low-wage workers just aren't valued as much by management.

Japan always reserves its best factories for Japan, no matter what they want people in the U.S. to think. I don't know of a single exception, and the company I work for has studied this like crazy since the early 1980s, when we first entered Japan (no Chinese presense, due to the "no dictatorship" rule, which also forced us to quit Taiwan). The immediate reason Japan is building cars in China is for political purposes because most countries require domestic production as a condition for sales (why so many countries have small-scale kit factories).

It takes something like only 35-40% as many workers to produce the same number of cars as 20-30 years ago, and this isn't going to slow down. There simply isn't going to be any large scale mass production in the U.S. in 5 years except where each worker's output is at least $300K-$500K a year.

Reply to
R. Anton Rave

World GDP (2001 US dollars) $47,000,000,000,000 US GDP (2001 US dollars) $10,400,000,000,000

Gary

Reply to
Gary Coffman

This tells me what? That we are making 20% of the goods for the entire planet and are using 30% of its resources to do so?

Break it down so that a poor ignorant cowboy can understand it, will ya?

How much of that 30% of the worlds hard resources, is returned to the rest of the world, in hard goods and services, directly and indirectly, outside of the US, is a good start in your explaination.

Gunner

"You cannot invade the mainland United States. There would be a rifle behind each blade of grass." --Japanese Admiral Isoroku Yamamoto

Reply to
Gunner

Well heck I can answer that one.

They're gonna fire somebody for themselves.

Like whatever sitting president happens to be in the white house at the time.

Jim

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Reply to
jim rozen

On Mon, 13 Oct 2003 14:46:54 GMT, "Ed Huntress" wrote something ......and in reply I say!:

Ed. I tend to agree with most of what you say. You have certainly studied it. I am going to dig up a couple of your articles. But....

Given that Carl seems to think only in economic terms, I agree that such an imbalance as Gary mentions could possibly be maintained, and I certainly do not have the figures to argue. But Gary's actual comment carries more weight when you take the whole picture.

"Fuzzball philosophy"...it's "not fair" that 5% of the population should use 30% of the resources, or that probably 20% of the population uses 70%, or whatever, if we look wider and not just at the US. I realise that Oz certainly has a very high impact per capita on the environment. I feel (and as with most, spend a lot of my time simply ignoring) the "unfairness".

Human nature. As more and more people become _aware_ of what is happening, and in fact do rather get it shoved in their faces day after day by radio/TV, the net, and ads, they will do anything to get the goodies. At the very least this means offering all sorts of incentives to manufactureres from high-income countries to bring work to the lower income countries.

****************************************************************************************** Whenever you have to prove to yourself that you are not something, you probably are.

Nick White --- HEAD:Hertz Music Please remove ns from my header address to reply via email !!

Reply to
Old Nick

On Mon, 13 Oct 2003 15:42:03 -0400, Gary Coffman wrote something ......and in reply I say!:

That is my point, actually. It's called inflation, caused by profit. I mean profit as in the workers want to be paid more than they have to actually work for, and the companies want to get more for the product than they had to pay for it. I am fighting Carl's contention that removing one half of the equation will solve the problem. It will not work for many reasons.

In the end they will have none. But it will sure bite hard in the meantime. And in the end I believe we will all have a "standard of living" somewhere in between. Quality of life? I shudder to think.

hmmmmmmmm....here we really go head to head.

Firstly, I do not describe what I was talking about as jingoism overriding good sense, although there is an element of this. Companies believed in their product, saw the long haul, and realised that their best bet at prosperity and good feeling (which they valued then) was by making the place (town, state, country) in which they were based, and in which the huge majority of their "power men" lived, prosper along with them. The majority of their "power men" were directly tied up in the processes that the company carried out. They believed in the product to at least some extent. While not in any way egalitarian, it also maintained a moderately contented and relatively stable situation in many places around the world. It was not equality, but resentment was kept controllable, and many people were more than content to largely ignore the inequality, on both sides. Others, not so well off, were envious and more or less resentful, but they saw little enough of it that it was not important to either side to really worry about it.

Secondly, unless that corporation is that evil of evils, a straight out trader in companies and shares, the purpose of a corporation is _not_ to earn value for its shareholders. The purpose of a corporation is to carry out its job well. To do its job, it needs to sustain profit _only_ enough to keep trading _in its product_ healthily. It could in effect be non profit, still pay lots of people good money, some a lot more than others, and be a sound, successful company. It could also profit enough pay shareholders a reasonable rate of return for their help, in the form of dividends. This rate of return can be agreed upon before shares are bought, and reviewed as needed or possible. It should never override the core business of the company.

I agree with the share system. It has allowed many companies to things they could not have done otherwise. But I disagree with _trading_ in shares because: - a share trade, between parties totally disconnected from the shares' "owners" (the company) does absolutely nothing for the core business, or productivity of the company - in fact, come to think of it, it achieves nothing! _ the fact that dividends are often not paid because it would affect the share price is crazy. - the idea that shareholders, who have _no_ interest in the company's business as such, should account for vastly more than the actual value of what the company produces, or is any way worth, is crazy. - the idea that shareholders are the _only_ reason that a company exists is crazy. - the fact that a 5% downward blip in a company's capabilities can cause the company to collapse in "value" to 1/10th of its former "value" because of shareholder panic, while another company that is borrowing from its own funds in order to keep trading can be showing strong growth according to the total share value, is crazy. - I am not sure, because I am not a shares man more than the "mom and pop" Telstra type share owner. But I think the Australian Stock Exchange is listed on itself, and trades there! Sorry, they lost me there somewhere.

ran _on_ (crikey! they all say)

("Leaving Lepidoptera (please don't touch the displays little boy, oh cute), we come to Arachnida, the spiders, our finest collection...") thanks and any needed apologies to Alice Cooper.) hrrrmph! Sorry.

It is automation and human nature that are causing the current unrest. But AFAICS, people look at automation as the robot that displaces the worker. I reckon there's a far more important automation, and that is the computer; the simple PC on the desk, netted up. It allows such rapid flows and processing of information "without consequence" that we can easily abuse it, have no idea of what we are doing either in the short or long term, and _do not have to care_ as far as we can see. I press a button, and there are no apparent consequences! It also allows; no, _forces_ information to get to vast numbers of people who never had it before. Elitist though it may be, ignorance can be bliss and certainly makes things easier.

rant off

****************************************************************************************** Whenever you have to prove to yourself that you are not something, you probably are.

Nick White --- HEAD:Hertz Music Please remove ns from my header address to reply via email !!

Reply to
Old Nick

On Mon, 13 Oct 2003 22:36:10 GMT, Carl Byrns wrote something ......and in reply I say!:

OK. I will accept those statements. You somewhat had me fooled, I have to admit.

****************************************************************************************** Whenever you have to prove to yourself that you are not something, you probably are.

Nick White --- HEAD:Hertz Music Please remove ns from my header address to reply via email !!

Reply to
Old Nick

Fairness is another issue, Nick. We aren't arguing about fairness. What Gary and Carl are saying is that there is an *economic* reason for their claims. I don't know of any, and no one has presented one here except in fuzzy, qualitative terms.

A lot of these fuzzy ideas break down when you look at actual numbers and actual patterns of economic events. This subject can't be discussed in real terms without a lot of solid numbers to prove or disprove one idea or the other. Gathering them is very hard work. Even finding them can be hard work. That's the hard work on which I've spent so much of my time lately, and it makes me skeptical about these off-the-cuff and anecdotal "theories." They often collapse when you look at the numbers.

Ed Huntress

Reply to
Ed Huntress

By that logic, if they gave us all their labor for free, we would be even worse off.

Do you curse the sun for flooding us with cheap, imported light?

Reply to
Richard J Kinch

Yeah, we should shroud the earth until the sun agress to equal imports. The domestic power industry just can't compete with all that cheap imported heat and light.

Reply to
Richard J Kinch

The same thing the whalers and buggy-whip manufacturers did. Find something productive to do instead of ambushing us at the shipyard pier.

I'm in software. It's hard to compete with the furriners who give it away for free. We get "displaced" and "thrown out of work". I think we need to stop people from downloading software products from outside the country. I have a right to have government men with guns make you to buy my software instead of the cheaper imported stuff.

Reply to
Richard J Kinch

It has absolutely nothing to do with a union, the workmans comp system doesn't give two hoots as to weather a company is union or not. Neither does OSHA. To use your example of a light bulb that can only be reached by ladder, speaking for my little company, I would have to do it myself or have someone other than my office manager do it because we have her classified as" clerical " and pay the present clerical WC rate of .24% , these classifications are pretty well defined and clerical employees don't work from ladders. So, I change out the bulb, while paying 12.21% WC in a classification that indeed is expected to work at heights, in excavations and around and over water. Nothing union about it, your tax dollars at work. She also can't drive to a job site to bring me drawings (or coffee or anything else) without going from the clerical to the gas and oil pipeline welder classification. So I pay the same rate on her then as I do on a welder making a hot tie in on a 42" natural gas main line! This isn't rhetoric, this is reality to those of us trying to run a little business and employ a few folks. And it has nothing to do with union or non.

JTMcC.

>
Reply to
JTMcC

It's true that cheap imports can be a benefit, but that assumes our economy can grow fast enough to replace a lot of well-paying jobs lost to imports. When the trade deficit gets as large as it is today ($418 billion deficit, goods and services total; goods alone are around $460 billion deficit), it probably can't. The job-growth rate and average new-job wages would have to reach heights we've never seen, and which there is no indication we ever will.

Ed Huntress

Reply to
Ed Huntress

This is where the econonomics guys either do the sleight of hand thing to distract, or say, 'trust us it will work out.' My personal feeling is, they simply don't know. No clue.

That *one* issue (what happens to the US markets when the US companies shift operations overseas - and not just manufacturing, btw) is where the rubber meets the road. Can the markets continue as they are now, if the outsourcing causes massive US unemployment?

Wrong wrong wrong. You would never make it in the 'evil corporate boss' school. That is *exactly* the purported reason for corporations to exist. To provide ROI. Not any of the other touchy-feely crap. If they could provide ROI to the shareholders by running little old ladies through giant Waring blenders, they would do that. If they could provide ROI by throwing orphans and widows out in the streets in winter, they'd do *that*, too. This is the fundamental tenent of capitalism, which is: if we can boost the stock price somehow, even for a tiny bit, at the expense of long term benefit, we *have* to do this, or somebody else will, and eat our lunch.

They don't carry out jobs. They make money. There are plenty of corporations that don't do any real work at all and are wildly successful, because they keep the investors happy and keep their stock price up.

If you could change any of the above points, even *one* of them, then you would be halfway there to solving the 'china' problem. Because those points, deep down inside of it, are the cause of the 'china problem.'

Jim

================================================== please reply to: JRR(zero) at yktvmv (dot) vnet (dot) ibm (dot) com ==================================================

Reply to
jim rozen

Total value of US exports (2001) $731,000,000,000. Or put another way, about 7% of the US economic output is exported. The largest aggragate proportion of that is agricultural products, timber, and other raw materials. In other words, exports with very little value added by labor.

Gary

Reply to
Gary Coffman

I disagree. In general, each worker needs a car, but that's not necessarily so for each family member. And any family member not working outside the home isn't contributing to the purchase of those cars. In other words, their "per capita income" is all coming from the paychecks of the wage earners of the family.

Gary

Reply to
Gary Coffman

Ok, and how much of the "goods and services" are related to military protection of other nations, with money spent in those nations, plus that covered by the umbrella effect? A sizable fraction of our military expenditures are dollars spent in other nations on infrastructure alone. Do you have any figures for that? How about benefits other nations derive from our R&D expenditures, plus spin offs in medicine, space etc etc?

Not arguing, just wondering if the GDP really is an accurate indicator of how that alleged 30% of world resources is used solely for the good of Americans.

Gunner

"You cannot invade the mainland United States. There would be a rifle behind each blade of grass." --Japanese Admiral Isoroku Yamamoto

Reply to
Gunner

The purpose of government is to protect its citizens, but at least in non-socialist nations that doesn't include "protecting" them from choosing with whom they do business. In the US, we have the right to *pursue* happiness, we don't have a right to have it handed to us by government.

Now if you take the position that you have a right to a captive market, and government must crush all competitors for you to ensure that protectionist position, then you'd have a case for government stepping in and using coercive force on your behalf against foreign companies. I tend to disagree with that position.

Gary

Reply to
Gary Coffman

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