On Tue, 07 Jun 2005 07:35:17 -0700, Frank Gilliland
wrote:

On Fri, 03 Jun 2005 10:15:11 -0400, Dave Hall
wrote in :

On Fri, 03 Jun 2005 02:44:07 -0700, Frank Gilliland
wrote:

Did you miss this post, too, Dave?

Frank, I'll choose which posts I wish to respond to and which ones I
won't . Trying to bury me under a pile of nonsense is not going to
work Frank.


No, -you- don't work, Dave.

You keep saying that. Maybe someday you'll convince yourself.

You can't accept the fact that you are
wrong,

Sure I can, when it's true.


and when I post facts that you can't spin or obfuscate you
simply ignore those posts and pick the posts that you feel you can
work to your advantage.

When are you going to post any facts?

It's a bonehead tactic and you are too
ignorant to see that it works to -my- advantange, not your's.

Seeing that you seem to be the only one who cares enough to respond to
me on these topics, the only "advantage" you seem to have is contained
largely within your own mind.

Now, I'll address your valid points below......


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.


Wrong.

No, right. If you are going to claim that I am "wrong", protocol
dictates that you provide corroborating evidence to back it up. Simply
claiming that I'm wrong based on little more than your own ignorance
of economics is not going to be seriously considered.

And I'm still waiting for that evidence..........


Import tariffs drive up the cost of -imported- products, which
in turn encourages -domestic- production and manufacturing. The prices
will go up, as will the wages;

Which translates to....... INFLATION!


Inflation occurs when the costs increase faster than the wages (an
explanation simplified for someone with your level of education).

Evidently too complex for someone of your education.

I prefer to reference such sources as:

http://inflationdata.com/Inflation/A...efinitions.asp

In essence inflation is the devaluation of currency due to a sharp
rise in the amount of it in circulation. Since the value of the
currency drops, the individual prices must rise to compensate.


Import tariffs actually -reduce- inflation for the very simple reason
that the export deficits are reduced and more American money stays in
America.

Tariffs have nothing to do with inflation directly. But it can
stimulate it by initiating price increases.

As I showed before, placing tariffs on imported goods will often
result in retaliatory actions from other countries, and we'll have
accomplished nothing.


If you want to pay $500 again for a VCR or DVD player, and $400 again
for a decent CB (Like it was in the 70's not even accounting for
inflation) then maybe this might appeal to you.


VCRs and CBs were expensive because of their popularity at the time,
not because of inflation.

No, they were expensive because the cost to manufacture them was much
higher. Both advances in technology and in manufacturing as well as
finding cheaper sources of labor have resulted in price reductions.


But the problem is
that the American public has become adjusted to receiving high
American wages, while paying for cheaper imported goods. If the price
of goods increases substantially, then the wages of the workers will
have to jump to cover it.


You are assuming the premises that 1) the cost of imported products
will "increase substantially", and 2) that there are no domestic
substitutes for those products.

And that's mostly true, despite your inability to acknowledge it.

Both are wrong:

So you say, but I have yet to see any facts to back it up.


The price of -any- product relies upon the laws of supply and demand.

That's true to an extent.

If you have a hammer made in China and a hammer made in the USA, the
price is going to be the same because the market dictates the price.

Right, and when a hammer can be made cheaper in China, it forces the
American company to lower its price (Often resulting in sharp
reductions in overhead to keep a reasonable profit margin). At some
point the American company will no longer be able to compete. The
price is set by the lowest price that someone is will to sell it for.
That is why competition is so important for a free market economy. If
there is only one source for a popular product, they can set
practically any price, and if a consumer wants it bad enough, they'll
cough up the money. Look as gasoline. We all bitch about the high cost
of gasoline. But we still pay it, because we need it.


That's why it's called a "free-market economy". Imposing import
tariffs increases the costs to the manufacturers of the hammers from
China, but the price remains the same because the demand hasn't
changed.

That is where YOU are wrong. The tariff cost is added to the selling
price, in order to give the American competitor some relief. If the
Chinese manufacturer ate the cost, and kept the lower price, the
American company would not be able to compete at that level. The whole
point of tariffs is to RAISE the price of cheaper foreign imports in
order to stimulate domestic competition. Remember the price is set by
the lowest bidder. People will buy the cheaper goods, all other
factors being equal. Without those (tariff imposed) higher prices,
the American company doesn't have a chance, baring American workers
suddenly becoming willing to work for 25 cents an hour.



But because of the increased cost to China the supply from
China will be smaller.
That reduction in supply is met with an
increased supply of hammers from the US manufacturers, who are now
relieved of some of the foreign competition.

They will only be relieved and offered a chance to increase supply if
their price now becomes competitive. And that will only happen if the
imported good's price rises from the tariff.


In the process, more
Americans are hired to make those hammers,

Sorry, we can automate that process. And we can outsource customer
support and logistics to India.


which, in turn, improves
the economic status of not only the company that manufactures the
hammers, but also of the community that benefits from the jobs and the
government that benefits from the taxes. Everybody wins except China.

I think you need to go back to school. You don't quite have a complete
grasp of global economics and the dynamics of the free market and the
effects of competition on the selling price. Demand causes the price
to rise. Competition causes the price to fall.

When that happens the cost of corporate
direct labor and overhead goes up, and they have to raise the price of
manufactured goods to cover it. And the cycle of inflation repeats.
Part of the reason why the rate of inflation has been so low for the
last several years is due to the fact that the cost of goods had
actually dropped as corporations tighten their belts and outsource
more of their labor. Demand for higher wages has fallen, and inflation
remains in check.


Wrong again.

Proof?


Inflation has been held in check by interference by the
Federal Reserve.

Yea, that's why they had been lowering the interest rate to just
around 1%. Only recently has there been any action on the part of the
FED to raise that rate. Over the last few years, companies have been
worried about DEFLATION.



Greenspan sets the prime interest rate to control
lending (which puts money into the economy), and with the buying and
selling of T-bills.

And imagine that, the mortgage rates, which are tied to the 10 year
T-Bill has been the lowest in over 40 years.


Despite this, inflation -does- occur because the
major inflationary indicators are not perfect and the calculations are
usually flawed to some extent.

If you are trying to say that we can't really control inflation as
well as some might like to believe, then I agree with you.



But because of this interference, there
is no longer a free-market economy, and free-market economic models no
longer apply.

No ****. But things like tariffs are also interfering with the free
market. Outsourcing, free and open trade, and elimination of
protectionist tariffs support the free market. If you favor tariffs,
limits on trade, and penalties for outsourcing, then you don't support
a free market.



So it's possible to have inflation and recession at the
same time,

No kidding. The two aren't necessarily joined at the hip. Just look at
the Carter years. We had both then.

or have two or three economic markets operating independent
of each other. Regardless of it's unnatural complexity, the economy is
manipulated to the advantage of those that wield power over the
Federal Reserve. And regardless of the economic impact of import
tariffs, the Federal Reserve will control any inflation (to the extent
that it can be controlled), with the added benefit that the country
stops bleeding from huge export deficits.

There are some thing the government can do. But they are small. They
can give tax incentives to companies who maintain a large percentage
of it's workforce here. But beyond that and you risk altering the free
market, as well as drawing the fire of the EU and the WTO for what
they will perceive as "protectionists" tactics. Remember, what's good
for us, is bad for them, so they will fight any effort to apply
tariffs.


but the overall effect is that the
domestic economy is stimulated, which more than compensates for any
short-term dips. And for the record, it also reduces the amount paid
for welfare since more people are working.

I'm not sure where to start since you have such a myopic view of
global economics. This isn't the USA solely owning it's own
corporations any more. Practically all large corporations are
multi-national to some degree. They compete in many markets of which
the US is but one consumer. Tariffs will only help the domestic
market. It will do little to help the corporation in the international
market share.


Find me one American that's willing to stand in the unemployment line
so someone from India or China or Venezuela can have their job.

And just what relevance does this have to the big picture? No one said
that outsourcing is good for the american factory worker. But hiding
your head in the sand as to the reasons why it happens will not make
it go away.

Make it harder for American companies to do business here (And
abroad), and it's a small matter to move to Bermuda or the Bahamas or
any other country with little trade restrictions. Congratulations! Not
only have you outsourced the manufacturing, you've now driven away the
management as well.


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.


Wrong on both counts. American innovation and technology is, and has
always been, one of the primary exports of this country.

You blindly assume that Americans are the only ones who can master
this area. Have you spent any time in the Pacific Rim lately? We're
about to be eclipsed by Japan (If not already), and many other
countries (such as India) are also closing in on us in technology
related fields.


Then we better get some better policies started pretty soon, huh?

Sort of like handing Captain Smith a bucket as the bow of the Titanic
slipped under the waves?

Speaking of policy, when do you suppose Bush is going to make good on
his promise to unite the parties and do away with partisan politics?

I suppose it has a lot to do with the democrats opposing anything that
a republican does. It's a two way street. The democrats are obligated
to be uniters as well. But like you can lead a horse to water but not
make him drink, we can sit politicians into a room, but we can't make
them cooperate. They have to do that on their own. And with nutcases
like Howard Dean trashing republicans in public speeches, it's doing
nothing more than driving a wedge into the crack.


Stimulate the
industrial base and you stimulate people and businesses to be more
innovative (instead of using the word as an advertising gimmick).

You should write motivational slogans. Empty, hollow, and meaningless
words designed to make us feel good, but carry absolutely no weight.


There are plenty of people doing that already. Most of them work for
auto manufacturers, insurance corporations, Bank of America, and
political campaign organizations.

And in various bars.

But since you cannot provide substance for your claims, allow me to
provide it for mine:

http://web.infoweb.ne.jp/fairtradec/new/b031107.pdf

This report outlines, among other things, what happens when a global
organization, such as the WTO, reacts negatively to what they perceive
as "protectionist" tactics such as tariffs. So tell me again how I am
"wrong" about potential retaliation for any tariffs we may place on
foreign made goods.


Sure. Go to college and take Macro- and Micro-Economics. And since you
are so gullible, try to avoid those neocon and WTO proxy websites.

So you deny that the EU was about to pass retaliatory measures to
counter the steel tariffs? You refuse to acknowledge the influence of
the WTO on global business practices? Are you one of those slackers
who was protesting the WTO in Seattle the other year, when all that
violence occurred?

Facts only please.


I guess that's why Mercedes, Jags and BMW's sell so well, huh? Didn't
you learn anything in our discussion about how a quality education is
often preferred over a lesser degree? If you did, what part of your
brain is unable to apply the underlying concept to other situations?

So you posit that a Ford is on equal standing, quality wise, with a
Mercedes? People will sometimes pay more for something if they
perceive a greater value for it.


Oh, you mean like if an employer sees a greater value in a better
education?

Not the same thing. A Mercedes earned it's pedigree and reputation and
that pedigree and name recognition is worth money alone. On the other
hand, if you went to a 4 year school, over a 2 year school, unless you
worse a shirt that said "I went to a 4 years college, hire me", you
would have to prove your pedigree. I agree that the intrinsic value is
there. But the public perception isn't necessarily there as well.



So I ask again, is the relative value
of a Ford the same as that of a Mercedes? Would the Ford be able to
compete on a price basis with a Mercedes? If not for the cheaper price
of the domestic car, would they not lose all market share to those
foreign companies if they were forced to compete on a purely quality
basis?


Finally, you see the light! Now hit the archives from a couple months
ago and see how you flip-flopped on the issue.

How have I flip flopped? You can't make an apples and oranges
comparison and apply the same rules.


Besides the obvious pedigree and prestige that names like Mercedes
bring to the table, there is also the issue of status. That's why
idiots will pay thousands more for a Lexus, which is little more than
a Toyota with a few superficial frills and a different emblem badge.


I have to agree with you on that one.

Wow! A banner day.


Why do you think sales of imported cars have become such a threat
here? GM, Ford, and Mopar are all feeling the pinch. It used to be
that the foreign cars were significantly more expensive (Mostly due to
import tariffs), and the domestic product sold well because it was
cheaper. Now, since the prices are fairly close, the perception of
better quality that comes with the Japanese cars, has convinced people
to abandon the "Buy American" motif, in favor of their own bottom
line.


The price difference in the past had little to do with import tariffs
and much more to do with raw materials.

There were import tariffs on Japanese cars (But not trucks). I bought
a new Suzuki Samurai in 1988 and the dealer had to add the back seat
since without the back seat, it could be classified as a truck and
avoid the tariff on cars.


That's why nowdays we cut down
our own trees, ship them off to foreign countries to be made into
plywood, which is shipped back and sold in the US for ridiculous
prices.

That's also why I used to pay taxes and subsidized the cost of
building a nearby nuke plant which, now that it's operating, sells its
electric to New York, and rather than the electric bills dropping as
first promised, we're strapped with the cost, while seeing none of the
benefit.


This is a direct result of "free trade" with foreign
countries, not high labor costs in the US as many claim. Because of
these free-trade agreements, restrictions were lifted for raw
materials being exported but -not- for raw materials being used for
domestic manufacturing.

If true, that's an oversight that should be corrected. We should not
penalize domestic manufacture. But Ross Perot was right. NAFTA did
result in a large sucking noise, as jobs moved south of the border.


Same deal with imported products. If you are
going to invoke the WTO to support your arguments then at least learn
something about the dirty deals the US has made in its benefit. I'm
suprised you haven't because Clinton made a few of those dirty deals.

I consider NAFTA a dirty deal for this country. But the WTO is the
economic equivalent of the U.N. It represents the economic interests
of many countries. For a global market to work fairly for everyone,
such an organization is needed. But just like the U.N. it can be
corrupted by the allure of money.


This example also speaks to your assumption of "superior American
technology" and ingenuity. Don't look now, but we've been beaten at
our own game.


That's because you are ignoring the fact that technology is exported
just as easily as wood.

Even easier. The internet makes it as easy to access computers in
India, as it does to access the servers in the next room. I am hardly
ignoring it. I am WELL aware of it. I can telecommute, video
conference, and speed dial offices in Taiwan, Mexico, the U.K, India,
and Argentina as well as all over this country. Other than not being
able to shake hands, the transactions are the same. Physical borders
mean nothing in cyberspace.


What if all US companies lobbied for import tariffs?

What if there really were a man in the moon?


It's more likely than your "mass corporate suicide" scenario.

You don't understand. Corporations operate in a global marketplace. If
they don't make profits here, they'll make them elsewhere. The bottom
like is making money and enhancing shareholder value. The last thing
they want to do is rock the boat and risk alienating their foreign
business partners.


Wrong. The failure of Reaganomics proved that people create their own
jobs when the rich get too greedy. They do so out of necessity.

Reagonomics was far from a failure.


LOL!


It is what stimulated the last 2
decades of economic growth, especially in the tech sector which was
heavily made up of small, face-paced startup companies. You know, like
Microsoft.


And Enron, Worldcom, numerous Savings & Loans, etc, etc.

They were all successful. It only took the greed of a few top dogs to
bring them down. Long after Reagan was president.

If inflation cuts into
their costs too much, they will have to reduce the workforce or make
other cuts (outsource?) to keep the margins.


It really doesn't matter since the US is no longer a free-market
economy -- the Federal Reserve has tight (and probably illegal)
control over the money supply and keeps the inflation rate down
artificially.

Adding tariffs only exacerbates that problem.


The Fed only controls the rate at which money is borrowed.


Wrong. They also buy and sell T-bills, which either injects or removes
money from the economy, respectively.

That's pretty much what I said.


Regardless, the prime interest
rate controls the amount of money that is borrowed, and the amount of
money borrowed has a direct effect on the amount of money circulating
in the economy, even much more so than the buying and selling of
T-bills.

And the amount of money circulating affects the valuation of currency
which is a prime factor of inflation.


Any time the government mucks with the market, it upsets the balance
of the free market. Why do you think healthcare costs are so high?


Insurance companies. Probably the biggest legalized racket since
organized religion.

Insurance is a concept that has grown to a big green monster.
Healthcare insurance is a perfect example of what happens when you
artificially increase demand, without capping the supply side. Like
you said before, the price of any good or service is ultimate set to
what people are willing to pay for it. As long as insurance allows
people to afford care that they would otherwise not be able to afford,
the incentive is there to raise the price of those services. And
that's exactly what has happened.


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.


I'm still waiting for something more significant than just your
opposing opinion to substantiate that.


Sounds like I need to make another list here pretty soon.....

Please do. Simply saying "You're wrong" without providing backup data,
only shows your slanted opinion.


But Iraq's natural resources are only partially owned and controlled
by Iraq. They were fully owned by Iraq under Saddam, but after his
overthrow many international conglomerates (mostly US and UK oil
companies, most of which include the Bush family as stockholders)
invoked claims that existed prior to Saddam. The people of Iraq are
going to see hardly any of the money that comes from their own
resources -- instead it's going right into the pockets of oil company
fat-cats.

I suppose I'm grasping at straws to ask that you back that up with
something official.


US/UK ownership and control of Iraq's oil prior to Saddam (Iraqi Oil
Company, later known as Shell Oil) is well documented.

Yea, so?

Try Funk &
Wagnall's. The fact that Saddam reclaimed Iraq's oil was not only
documented by Western civilization but used as propaganda by Saddam.
He even tried to reclaim oil fields that were stolen from Iraq by
international charter long before Saddam took power (see Funk &
Wagnall's for the history of Kuwait).

So you are now attempting to justify Saddam's invasion of Kuwait in
1990?

Only one month after the US
invasion, Philip Carroll, the former CEO of Shell Oil USA, took
control of Iraq's oil production for the US Government.

Temporarily.

By January
2004, a "state-owned" oil company was created by James Baker (former
Secretary of State, now an attorney representing Exxon-Mobil) that
favoured the US oil industry. Shell Oil (as well as several other US
oil companies) quickly established exclusive contracts with this new
Iraqi oil company.

This is an interim arrangement and only supposed to be in place until
the Iraqi government becomes stable enough to take over for
themselves.


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.


Well gee, Dave, what a novel idea.

Now try to get it passed eh?


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.....
.....hmmmm, seems I've said all this before.....

You do have a penchant for redundancy and repetition.


Getting the picture yet?


Are you getting the picture that the government is supposed to work
for the people?


Key word: "supposed". Reality it works for those who cry the loudest.
Large amounts of money seem to amplify those cries.......

Once again, you talk idealistically. I talk realistically.

Dave
"Sandbagger"
http://home/ptd.net/~n3cvj