OT - Jobs Lost

You don't know what you're asking for. Once you get those folks involved it'll be more than the camel's nose in the tent. A

*lot* more. Your plan *will* have federal control of schools in about ten years. This is fine by your lights right now, but imagine just for a fleeting instant that you have a DEMOCRAT in the oval office, and likewise controlling in the legislature. What're you gonna do when they start demanding all the programs that you despise? Too late then.

Jim

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Reply to
jim rozen
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Geeze, Ed, I figured an old commie like you would pick right up on the line from Marx.

Gary

Reply to
Gary Coffman

I do. First, it's not "all this outsourcing", because there's really just a tiny little bit of it. You have to look at the right products, and you have to consider that sometimes the imported item is only a part of the final product.

I recently purchased a Chinese 7x12 mini-lathe, branded as a British product, and supported by the British company. Two and a half times the price I paid is approximately what I would have paid for a similar product that was made in Europe, so I guess your calculation isn't so far off. ;-)

-tih

Reply to
Tom Ivar Helbekkmo

I think you're opinion is at odds with Ed's opinion. He says that the habit that US corporations are getting into - sending jobs overseas for cheap labor rates - is so widespread and important, that if it were to be directly regulated, you would cause a large number of those companies to go bankrupt.

Jim

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Reply to
jim rozen

corporations

They did do fine before overseas manufacture existed. Now they don't. If your competitor is doing it, you *have* to do it.

In the financial services industry, some segments now operate with 30% offshoring employment. Try running a competing company with none. You'll never get off the ground.

That's free-market economics for you.

If you can. But there are few ways to do that without engaging in outright protectionism. And that will create one hell of a backlash. Witness the situation we just went through with steel.

There are WTO provisions that allow a country to protect its industries under extreme circumstances. But they're limited, and they were never designed to cope with the size or velocity of displacements we're experiencing now.

They have a different scale of time and, in some cases, opposite views of the consequences of displacement. If you read my "China Conundrum" article, you may recall that I broke the economic interests influencing and reacting to trade into five groups. Economists are mostly in category 1: people who are looking at big pictures. We're mostly in category 5: people who are worried about their jobs and businesses. The world looks different from the two ends of the telescope.

My job is your "displacement." My lifetime of work and my career are things upon which I base my security and my definition of myself. To you, they're circumstantial issues that can be solved if I just move someplace else and get myself retrained. As for my loss of capital when I have to sell my shop into a depressed market, that's just my lack of foresight, and the luck of the draw. Too bad, they say, it's time to move on and get over it.

Reinvent yourself, they say. I'm for that. I'm going to invent myself as the son of someone with a big piece in the oil patch.

Your options are limited.

If your companies are competing in world markets and you limit their ability to offshore, you've just signed their death warrant. Or, more likely, you've just moved them to Bermuda.

Yeah, I know what you're saying. I still think that the net effect of what you're proposing will be very limited in the positive direction, with a high risk of trouble in the negative direction.

Reply to
Ed Huntress

Which things? I bought some 6,000 Btu air conditioners last year at Sears for $88/each. We bought one of the same size from Sears in 1965, and, IIRC, it cost around $150. If you want to do the inflation adjustment, according to the DoC inflators, that means the air conditioner I bought in 1965 would cost $789 today.

Ed Huntress

Reply to
Ed Huntress

If I said that, bite me on the ankle.

If you take out the word "widespread," I think you're close to what I said. Numbers of jobs offshored is a hard piece of data to come up with, unless you want to spend $16,000 for a marketing firm's analysis that's available, but it's probably on the order of 1 million over the past decade. That's equivalent to four months worth of net new jobs created in the US during the '90s.

However, in some industries, it's been a revolution. It depends on which end of the telescope you're looking through. If you're suggesting that all of our jobs are being offshored (1M is around 0.7% of current employment), then it isn't true. If you're saying that it's affecting many individual industry segments and that many of those effects are large, within those industries, then it is true.

If you stopped offshoring at those companies, particularly the ones that compete in world markets, you'd drive them bankrupt -- or offshore -- in a hearbeat.

Reply to
Ed Huntress

Right, but none of those candidates are currently in office. The white house, the judiciary, and the legislature are run by conservatives. This is why you want them to take over the schooling issue.

Just what the heck will you do if the tide turns, aside from calling 'big bad gummint interference in local matters' an abomination?

Jim

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Reply to
jim rozen

Tom says it's "a little bit." You say it's a lot - in the industries where it's, um, likely to occur.

Which sounds like Tom is incorrect - if you look at those industries that we've been focussing on.

Either it matters, or it doesn't. If it doesn't matter because it's so miniscule, the problem can be effectively regulated, because nobody (or very few companies) will go bankrupt.

If large sections of important industries are relying on this labor rate break to survive, then it's hardly a 'tiny' issue.

Jim

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Reply to
jim rozen

Hmm. So competition really *has* brought the factor of nearly 20 home? Time to buy some A/Cs while I still have a job!

Jim

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Reply to
jim rozen

The furniture thing with China is interesting. Apparently US furniture manufacturers outsourced some furniture mfg., showing the Chinese factories how to make good enough furniture in popular styles. They then had a few good years buying and selling at a massive markup, without all that messy business of running factories and paying workers directly. Then the Sam's Clubs of the world went looking (as they always do), found the original manufacturers and began importing them and selling at 1/2 price retail, cutting out the middlemen. The US funiture "manufacturers" cried "foul", demanded and got massive tariffs against the Chinese furniture. The mind boggles at this sort of thing- what's actually being protected? The right to buy a $1200 US leather/wood chair made in China (with a US name on it) rather than a $600 one (without the name)? At least that's the claim, I have not researched it myself. I do see almost identical chairs as described above, selling for half the price in Sam's Club vs. the name ones in a retail store.

Best regards, Spehro Pefhany

Reply to
Spehro Pefhany

I'm not sure what you mean here. Is it a little bit? The results of offshoring amount to no more than 0.7% of employment. Is that a little bit? The percentage in dollar volume of offshoring, as a percentage of GDP, is probably about the same, possibly as much as 1.2% or so, but it's not likely that high.

The hard part here is separating expatriate, offshore sourcing from simple imports from foreign producers. The two together, taking the net of imports minus exports of goods and services, is around $489 billion, out of $11 trillion total GDP. In other words, net imports of all types amount to less than 5% of our domestic economy. Is that a little bit?

Or maybe you want to relate the dollar value of goods we import to the value of the ones we make here. The amount we import is roughly 1/4 of total goods consumed in the US.

There are three points to all of this. First, the state of our employment in this country has almost nothing to do with offshoring that's happened in the past. But the state several industries are in is beginning to reflect a tide of jobs moving away -- in those specific industries. Manufacturing will continue to take the brunt of it. But manufacturing is only 14% of our economy now, and it was declining anyway, long before offshoring started to produce countable numbers.

Second, if the economy grows at any reasonable rate, and if the dollar finds a more realistic trading value (lower, in other words), the number of new jobs created should swamp the number of jobs being lost. The industries that are starting to offshore in a big way are already goners, because they have to seek low wages to compete internationally. If you know of a way to restrict that competition in a way that would help, without undermining the fact that we're also the world's largest *exporter*, everyone is listening.

Third, these economic trends tend to be self-limiting rather than precipitous. The first increments of change are easy; it gets harder to sustain an advantage as competing economies balance themselves against each other. The problem we face, though, is twofold; first, it's happening too fast for our economy and society to adjust; and it's possible that a new equilibrium will be struck at a lower level of personal income and standards of living, before the world's economy begins to grow again in lockstep.

There are a lot of low-wage workers around the world to absorb into the system. The trick is to allow them to grow with their economies without depressing our own. Standard trade theory, whether it's the straight "neoliberal" flavor or "New Trade Theory," says there's no reason our economy should become depressed in the process. Quite the opposite, in fact. The trouble with these theories, though, is that they have never been tested with the volume or velocity of low-cost imports that we're dealing with now. Although the numbers aren't nearly as bad as most people think they are, the trend remains alarming, because the potential for much more, high-velocity changes, from outsourcing to ordinary imports, remains very large and looks like it will for a long time to come.

Enough? Are we done yet?

Ed Huntress

Reply to
Ed Huntress

Amazing to read your comments Ed. There seems to be a great deal of experience behind them - in an area where I have absolutely no training.

I really was unaware that the overall picture, for the entire economy, had offshore job flight at that low a level. Will the pace pick up? I would guess so. Will other industries follow suit? They already are.

I think your 1/20th number is still driving the bus though. :)

Jim

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Reply to
jim rozen

Well that's "free" trade for you. They're 'free' to jack up their profits. On one hand we're told that they _need_ to outsource jobs like that, to stay competitive in a global market. The reality sounds somethat different. Similar to the drug thing already mentioned.

Jim

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Reply to
jim rozen

Their sales would go to hell *if* the 23% sales tax was imposed

*on top of* all current taxes. But that's not the proposal. The sales tax would *replace* all other taxes. That's a completely different situation.

Consumers start out with more money since they aren't having income tax, social security tax, etc, etc taken out of their incomes, and aren't being hit with property taxes, excise taxes, etc, etc after they get their money home. Manufacturers have more margin because they aren't being burdened with passing through corporate taxes to the consumer.

That means consumers can pay the sales tax, because they have more money, and the manufacturers can lower prices to stimulate sales, because they have more margin. After the sales tax bite, everything works out revenue neutral for the government, consumers, and businesses.

Yes, I do. I've just finished my taxes for the year, and I do have my financial figures in front of me.

Now I might be a slightly unusual case because I don't carry any debt, hence I can't take some of the deductions most people do. I am a firm believer in deferring gratification until I can pay cash. That way, my money *earns* interest until I'm ready to spend it rather than my having to *pay* interest on money I'd have to borrow to have instant gratification.

But I'd suggest that if most people carefully looked at *all* the taxes they pay, they might find themselves much closer to my situation than they think.

Gary

Reply to
Gary Coffman

Yeah, even starving Ethiopians won't eat canned lawyer.

Indeed they are, which is why we have to be very firm about absolutely no exemptions from the sales tax. If even one exemption is allowed, that's the camel's nose under the tent, and the whole system would quickly become as corrupted as the present system.

Gary

Reply to
Gary Coffman

incomes...

Yes, we've heard this proposal for over 30 years now. It ignores the psychology of taxation and all of the caveats you'd have to toss on to make it work, such as exceptions for investments of various types and so on. What in fact looks simple would distort cost relationships in ways that would make a modern economy unworkable. And, as we've said, it makes a lot of conjectures about how people react to specific taxes, which is anything but the kind of rationality you can demonstrate in a working paper.

So, you have paid over 50% of your gross in taxes, and you have the figures in front of you? Then you're unique, Gary. It's all but impossible, unless you do it intentionally to make a point.

I look at all my taxes. I was self-employed for 16 years and I got very good at it, including tracking virtually every nickel of state sales tax we paid, back when it was deductable. I don't see how one could wind up paying 50% of their gross in taxes unless they do some very foolish things or unless they're stretched out to the limit of their means with highly-taxed real estate.

Ed Huntress

Reply to
Ed Huntress

A city wide blackout at Tue, 02 Mar 2004 02:59:41 GMT did not prevent Gunner from posting to rec.crafts.metalworking the following:

A Republic has a vested interest in an Educated electorate. that is not the same as saying the Government has to provide said education.

Even if your product exceeds the UL standards. Case in point, in order to install a new lathe at the tech school, it was going to require a UL rating, or other certification by a Licensed Inspector. $1500 plus., But the inspectors came out and said, off the record, what you do is put a plug on the machine, and a receptacle for it to plug into, and we can come back ,sign off on the receptacle, and you can plug in the machine, all for less than 500 bucks. See, permanently wired machines are under one section of the code, while "appliances" are under another.

tschus pyotr

Reply to
pyotr filipivich

In our building the kids (the ones the electrical instructor trusts) come down, wire up the new machine, the instructor comes down to the shop and inspects what his kids have done and we fire it up.

Haven't had anyone fried yet although there has been the occasional spectacular blue/white flash.

Errol Groff Instructor, Machine Tool Department H.H. Ellis Tech

613 Upper Maple Street Danielson, CT 06239

860 774 8511 x1811

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Reply to
Errol Groff

So just when is Tax Day? The day when the average person has worked enough to pay all the taxes they pay. I think it is in May, which would mean that the AVERAGE person pays about 40% of their gross in taxes.

Dan

Reply to
Dan Caster

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