Every wanted to see a Chinese production facility?

Economic prosperity is based on 3 legs, labor, capital, and raw materials. China and India have a large advantage in terms of labor. They're the two most populous nations on Earth. Up until recently, they haven't had access to large amounts of capital. But that's changing as the multi- nationals (companies and banks) compete to invest in those countries. Raw materials have become a global commodity, so having abundant local supplies (which was a huge advantage of the US in an earlier era) is no longer a critical factor.

Russia is a paradox. They have vast natural resources. They have a well educated work force. But they lack capital, and the work ethic to utilize it efficiently. Their government still wants to obstruct rather than promote investment. That could change, but until it does, Russia won't be a major world player.

Absolutely.

Note that the US is also contemplating returning to a capsule type design. Wings on spaceships never made a lot of sense.

Probably most of the world will yawn. Support for space exploration has declined sharply since the Apollo Moon landings. Most people don't see the benefits of space exploration and exploitation. If the Chinese start turning a *profit* on it, though, people will begin to sit up and take notice.

The military advantages of being able to operate from the top of the gravity well are enormous. It is an old military maxim that one should take and hold the high ground. But that's thinking in terms of conventional warfare. In the 21st century, I suspect that most warfare will be carried out by unconventional means (guerilla war, economic war, information war, etc). So conventional military thinking is of less value than in the past.

Gary

What did I 'claim', Ed?

-Carl

Interesting article on Bloomberg today, although I disagree with the "spin", (I believe it's the old inefficient state-owned enterprises that are shedding jobs, and for very good reason) the overall statistics are interesting:-

if that doesn't work, just go to it from

So Who's Stealing China's Manufacturing Jobs?: Caroline Baum Oct. 14 (Bloomberg) -- You know all those U.S. manufacturing jobs that have been high-tailing it to China? China sure is doing a lousy job of holding on to them.

China lost 16 million manufacturing jobs, a decline of 15 percent, between 1995 and 2002, according to a study of manufacturing jobs in the 20 largest economies by Joe Carson, director of economic research at Alliance Capital Management. In that same time, U.S. factory employment shrank by 2 million, or 11 percent.

Best regards, Spehro Pefhany

On Tue, 14 Oct 2003 20:44:23 +0800, Old Nick wrote something ......and in reply I say!:

Started to feel a bit like Jeffery Goines (sp)of Twelve Monkeys for a while there...back on the meds now. It's all OK.

But I may back away anyway.

****************************************************************************************** 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 !!

Ok, here's the breakdown for fiscal year 2001. all figures are in billions of dollars.

Pay $72.1 Operating and Maintenance Costs $110.2 Weapon Purchases $52.7 Weapon Research $38.0 Construction $8.9 Other $3.1 Department of Defense Subtotal $284.9

Department of Energy (Military) $13.4 Other $0.8

National Defense total $299.1

MILITARY-RELATED Fiscal Year 2001

Foreign Military Aid $7.1 International Peacekeeping $1.1 Space (Military) $2.6 Military Retirement Pay $34.2 Veterans? Benefits $45.4 Interest Attributable to Past Military Spending $94.8

Military and Military-Related Grand Total $484.3

Now you can see that the bulk of military spending is for pay and retirement benefits, O&M costs, and a big chunk due to interest on money borrowed in previous years to pay for it all.

Foreign costs would fall in the Foreign Military Aid category (mostly to Israel), International Peacekeeping, and a bit of the construction and O&M money for foreign bases.

Now it is true that other nations benefit from being under our military umbrella. Japan immediately leaps to mind. But don't forget that we're there primarily for our benefit, not theirs. It isn't really to our security advantage to have allies (who may be enemies once again some day) building up large military forces. Better that only we have the big stick.

Well much of the R&D results are patented, so other nations have to *pay* to make use of them. Spinoffs are not inconsequential, but they're usually no bargain either. Almost always, the money would have been better spent directly pursuing those things than depending on them to incidently fall out from other expensive programs of dubious value.

Knowledge is important, and our universities are the main source for training technologists from most of the world. Many decide to stay in the US, however, so this isn't as large a benefit to their home countries as it may at first seem.

Well, GDP isn't really a good indicator of consumption of the world's resources. Those resources are *raw materials* for the most part, and there is very little value added in raw materials. The GDP mostly reflects value added operations. We really would have to look at raw tonnage figures to see how much of the Earth's resources we're using on a per capita basis, ie how much iron, coal, oil, biomass, water, etc, etc, etc. Without posting detailed figures, I'll only say that our per capita consumption of those resources is extremely larger than for most other nations of the world.

Gary

Where did they go? They were eliminated due to increased productivity.

Here's the important meat of the article with respect to what's happening in the US job market.

``Real manufacturing output has risen 77 percent even though the number of manufacturing workers has fallen 22 percent since the

1979 peak,'' Wieting says. [Steve Wieting, Citigroup economist]

Similarly, real farm output rose 96 percent since 1979 with

31 percent fewer agricultural workers.

A rising supply of food and consumer goods caused prices to rise more slowly than per-capita income, giving consumers more income to spend on other things -- on services that didn't previously exist.

[I'd add that marketers like Walmart have also helped to cause prices to rise slower than per capita income, thus promoting the creation of new types of jobs.]

``While manufacturing and farm employment has fallen by

22 percent and 33 percent, respectively, since 1979, total U.S. employment still managed to grow 41 percent,'' Wieting says.

Now this latter statistic probably won't ease the fears of Jim, who thinks all those new jobs are at Walmart or Mcdonalds. But US GDP-PPP growth over the same period should set those fears to rest.

In other words, median incomes were rising at the same time that all those old economy jobs were lost and new jobs created. So the "displacement" appears to have been successful, at least for the work force as a whole. Individual workers may not have fared so well, depending on their abilities to transition to another sort of work.

A statement made by an educator not too long ago strikes me at this point. He said that workers entering the job market today can expect to change careers five times before they retire. Old jobs are going away, new jobs are being created, and a worker has to have the flexibility to move with the changes. Those who can't may find themselves chronically unemployed.

Gary

Thanks for the figures. Im not sure if they are telling the tale yet, but I think it would be hard to figure out.

I keep hearing that 30% figure, and everytime someone uses it, its to lead one to believe that its all going into swimming pools, and new shoes for your kids etc etc.

I rather suspect that a fair chunk of that 30% is being returned to the rest of the planet in the form of aid, goods and services and other associated bennies.

At one time, the US was the worlds foremost user of the worlds aluminum, but I recall seeing that a very large chunk of it was returned to the rest of the planet as finished goods and raw metals. Given that the US is no longer the biggest manufacturing state, it would seem that might purchase a big chunk of finished goods, but the money is being given to the actual resource users, whom make the goods.

Im having a hard time quantifying what Im trying to say here, dammit.

Gunner

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

So Ed, I keep hearing all the blame go to places like China. Our Trade Deficit with them is growing at a fast clip. But the reality is that China itself does not have any real total trade surplus to speak of. They import as much as they export. This tells me that they are buying goods, just not from the USA. Are we not producing the goods that China wants or needs competitively? Obviously so. So this places the onus on ourselves. How do we overcome that?

I think these are the real questions we need to ask ourselves. Placing blame on China's currency valuation is a farce. I know you are still looking for that "other" system to base trade on, but in the meantime, we have to look inward to solve our problems. Not place blame.

What does China do with the foreign reserves they get? They buy US Treasuries, our debt. They are currently the second largest buyer of our debt in the world today. without their purchases, interest rates would rise like crazy and the dollars value would sink. They didnt create the debt, we did. GWB's finger pointing to Japan and China for manipulating currency is a joke. Historically we have done the same numerous times. China merely ties their currency, while Japan actually moves mountains to balance theirs (8-10 billion per month of dollar/treasury buying).

ed, what do you think we should be focusing on? what moves do you think we should make in the USA?

BG

The median value would be more indicative than the average (per capita) value, which is distorted by a relatively small number of extremely wealthy people in the US. Or even something that cuts at other than 50%, but incorporates a substantial part of the population. It would be interesting to see what the income is in the middle

60%~80% (throw out the bottom and top 10 or 20% of people).

After all, if there are 1,000,000 people in a city and 100 of them each make a billion dollars per year and the rest get only $10K, the per capita is a healthy $110,000 but only 0.01% of the people make more than $10K.

Best regards, Spehro Pefhany

It's 11:24 AM here in HK, and the Shenzhou V lift-off was covered almost-live on Chinese state TV a couple of hours ago (presumably they waited to be sure it didn't explode before they ran the tape). The HK take on the US reaction is that it would be split between the yawn, "been there, done that 40 years ago" reaction and the fear about future military exploitation. IOW, not very positive. ;-) They ran tape of the launch of the first satellite in 1970 with the control room erupting into a "spontaneous" display of affection for the Great Helmsman himself with their little re(a)d books. How times have changed. They mentioned that Chinese success in launching commercial satellites had been hindered by US opposition using export control laws. The TV here has taken a small but very definite turn toward reporting things from the Beijing perspective. I suspect national pride issues will be much more in evidence north of the border (it isn't that big a deal here)- I have to pop over for a day or two before coming back and will see what people are saying.

I suppose people are all in favor of it if they don't have to pay for it, but the public interest was beginning to flag during the Apollo missions- the TV networks didn't want to pre-empt all their programming and so on, until Apollo 13 jolted us back into realization that what they were doing was far from routine and riskless.

At least China got their shot in before private American companies managed to do it. ;-) It would have been really embarassing if a nation of 1.3bn couldn't do that.

The US invasion of Iraq was heavily dependent on satellite technology, something they are keenly aware of.

Best regards, Spehro Pefhany

Our current national debt is $6,8 trillion dollars, 68% of our GDP. Your share is $23,359.45. When can we expect a check?

Gary

Hi Gary,

Got to point something out regarding "any family member not working outside the home ..." . More and more people work from their homes. I've been working from a home office since '97, and support a 5 person family. We run a multi million dollar contract just fine with employees who have no floor space in any of our corporate offices. I do still need a vehicle though, there are meetings at customer sites, and occasionally I swing by one of our data centers to check things out.

Cheers, Stan

The aim of every government is to perpetuate itself. Anything else is an extra.

I send my check in every year. The morons we elect dont know what to do with it. It goes to Turkey for loans, foreign aid, military bases that havent had purpose for 50 years, etc. Never a cut in expenses. So, the debt grows.

I like your point, BG

Yes, China can and will kick our arse via low wages, currency manipulations, etc. but we also need to look at the items HERE that are killing business HERE. Control the things we can now and then move onto the things that require "diplomacy" to repair.

Currently, I am being driven nuts by the state's tax systems (because of sales in multiple states...and having to go inspet stuff within that state). California is the worst because it actively pursues you for having sold something there. Other states will probably follow their lead because of high deficits.

For example, if I send a crew to CA for a day or two of repair on a machine I built, I am supposed to pay California workman's comp on them, California Income tax for them, I have to file all the California paperwork to do this, and I have California "apportion" my sales to collect california income tax on my business proceeds. All for a day or two of work that may be my only job there this year. Texas is similar with their franchise tax which is sticking it to some very large businesses like Conagra.

It's like dealing with 50 different countries in many ways. Many of the other people in this business have moved production to Mexico, eliminated ALL travel and connections that give a nexus in other states, and almost act like an internet sales company. No service...no equiment inspection to see what's really going on, etc. Eliminate the tax collectio hassles by eliminating part of your business.

Surely this is one area that hinders our ability to do cost effective business. Yes, importers have the same problems but it is far easier to float the costs when you are simply marking up someone elses goods. Also importers tend to be more "retail" oriented which is a business structure that lends itself to being like "50 business' in 50 countries".

Anyway, this is just >

On Tue, 14 Oct 2003 13:16:58 GMT, "Ed Huntress" wrote something ......and in reply I say!:

OK. Please excuse the grins and facetiousness. Please also forgive my playing with words. I enjoy it. I am taking this subject seriously. It affects all of us for good and bad, including the Chinese. But I often hide behind a smartarse exterior.

I hope those Chinese US$0.80 / hour workers are proud of the space shot. While I realise that we have to account for living costs when talking income, I bet that space shot did not cost only 1/50th of a shuttle launch..........hmmm....... I withdraw that bet. It _might_ have done! Man! Those Chinese astronauts are _brave_.

Wup! Hang on! A quote from Gary C....if I may, Gary.

Talking of China's budget........

"Their entire space program runs on a budget of under $1.5 billion per year. The US is spending $28 billion this year, "

So apparently China is spending 1/20th of the US space budget, while the workers get 1/50th of the pay. I was safe with that bet after all.

Damn!

Facts! You want facts? Sitting on the fence gives you splinters up the bum! I have counted mine. There are too many. I challenge anyone to prove me wrong! Funny you know? Maybe that's why sitting on the fence is always described as covering your arse! Fairness is another issue, Nick. We aren't arguing about fairness. What Gary

hmmm....I disagree that numbers, or economic as distinct from social events, provide all the answers. Regarding the fuzziness of the posts that prompted these between "you and I" , Gary was writing about the imbalance of the use of resources, and the impossibility of maintaining that imbalance in a stable way, AFAICS. Carl agreed. I am not sure whether they _were_ arguing economically, together or individually, but if they were, I agree that they have not presented facts.

On the other hand, human behaviour should be taken into serious account here. There have been just a _couple_ of events in history, causing enormous change, because of that exact situation.

..........the imbalance, that is. Carl's agreement, and even Gary's statements, may have caused some bobbles throughout time .

Gary may have been referring to that human behaviour angle.

Gary...Gary....chance to support me......errr hedge your bets..... here!

****************************************************************************************** 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 !!

Well... I can't speak for Gary, but I certainly hope I haven't done anything to cause eddies in the wash of space-time .

We haven't heard from Ed Huntress for a couple of days now...

-Carl

On Thu, 16 Oct 2003 02:49:53 GMT, Carl Byrns wrote something ......and in reply I say!:

meaning you want to use up some of Eddie's space time?

****************************************************************************************** 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 !!

Indeed, I stated explicitly that economics is more than just numbers, it is also psychology. Classic economic theory is about wants and needs, and the various methodologies for fullfilling those wants and needs (or not). It isn't just statistical analysis.

Gary