On Wed, 25 May 2005 07:14:41 -0700, Frank Gilliland
wrote:

On Thu, 26 May 2005 07:57:10 -0400, Dave Hall
wrote in :

snip
So, here we have a double edged sword. We live in a world economy,
with companies from all over the world competing for market share. So,
what's a U.S. based corporation to do? Should it:

A. Keep its U.S. work force in order to altruistically keep the
American work force employed?

B. Outsource to a foreign country where labor and overhead is much
cheaper?


The answer is A because loyalty must be earned, and American's have a
very good long-term memory.

Even if the American company is forced out of business by cheaper
foreign competitors?


Considering that other countries have no objection to using cheap
foreign labor, and producing products cheaper, the U.S. company is now
at a competitive disadvantage with those products which they are in
direct competition from foreign companies.


American workers could be easily protected with import tariffs; but
Bush's butt has been kissed (and licked, sucked, wiped and powdered)
by corporations seeking cheap labor, so he is pushing for open-border
trade agreements with third-world countries.

Tariffs are an overly naive and simplistic answer, which will not
help. I'll tell you why. First off, the import tariff will raise the
price of imported goods which drive up the costs that the American
consumer pays. Then the worker will demand more in raises to
compensate, and you now have inflation. Secondly, the U.S. is but ONE
consumer of goods. American companies trying to compete in foreign
markets will not have the protection of the tariff and they will
wither under strong foreign competition which they will not be able to
match. Also, other countries do not like tariff policies and would
likely impose tariffs on our goods in retaliation to our tariffs on
theirs. Surely you can figure out what would happen then.


Tell me, would you pay 50 - 100% more for a TV or some other product
just to keep the U.S. company here? Considering that the government is
squeezing more and more money out of us in the form of taxes, and the
costs of things like fuel are skyrocketing, we look for the best
bargains in everything we buy.


Because the taxes are on the Americans, not on the import corporations
(e.g, Walmart, aka 'China Inc.') where they should be.

See above.



And that doesn't cover the foreign market. Would a European pay more
for a U.S. made product over a foreign made product?


Depends on where that 'foreign' product was made.

Does it matter? If it's cheaper, they will buy it.



What ultimately happens to a U.S. corporation who loses a competitive
edge?


Any US corp that chooses to cut American jobs instead of lobbying for
import tariffs against foreign competitors is, in the most tactful of
terms, economically nearsighted.

So, then, you would rather an American company keep it's American
workforce in a patriotic corporate suicide attempt, as it folds under
unmatchable competition from abroad? What if all US companies fold or
move their corporate headquarters offshore? Then what?


What happens when there are no more cheap labor countries like China?
Can you spell double digit inflation??? How about 20% per yr for about
ten yrs. Maybe even longer or higher inflation rates.

Yes, inflation is a very real fear.


No, it's not. It's a hope. Inflation, in a free market economy, is an
'equalizer' -- it's an effect of a surplus of cash in circulation,
which usually ends up in the hands of those who need it the most.
Historically, inflation hurts the rich and benefits the poor, which is
something you never hear from the "left-wing, liberally biased media".

Well that's true to an extent. Those who invest their money in fixed
rate securities (retired people) will earn more interest, while those
seeking to borrow, will pay more. But the rich are who generally
create the jobs that the rest of us work at. If inflation cuts into
their costs too much, they will have to reduce the workforce or make
other cuts (outsource?) to keep the margins.


But when the standard of living
equalizes, then there will be no further incentive to manufacture
overseas. Then factors such as shipping costs will make domestic
manufacturing attractive again for the U.S. market. Inflation may also
be mitigated by market pressures. If people cannot afford to buy as
much, demand goes down. When demand goes down, so does the price.
That's free market 101.


You obviously failed Economics 101, and probably never took Macro- or
Micro-Economics.

Sigh. You can't get through a post without an insult can you Mr
Bartender?


Cheap labor will always be available in any country that's poor in
natural resources. There are many, and that's not going to change
anytime soon. The fact that Iraq's new "government" refused to allow
labor unions (a law imposed by Saddam) should be a good indication as
to where the next market for cheap labor will be found.

But Iraq is not poor in natural resources.

You can't get something for nothing.

You don't know just how much truth there is in that statement.


Damn straight. Freedom isn't free. Other people paid for your
freedoms, Dave. Maybe you should take the time to try and understand
why.

I know that freedom is not unlimited.


In time the US will suffer. Prepare for
China owning more an dmore of teh US debt and consequently the US'
economy .

Ok, We pretty much agree that the road ahead will be a bit bumpy. So
what do we do about it? Can we do anything about it?


Push your elected officials to do their job -- make them understand
that they are lobbyists for their constituents, not the constituents
of lobbyists for special interest groups or corporations.

Well then we need to outlaw all corporate election contributions.

Dave
"Sandbagger"