On 11/2/10 07:49 , Joe from Kokomo wrote:

On 11/1/2010 6:05 PM, Joe from Kokomo wrote:

...
Probably us falling into 'third world status' has nothing to do with
your 'guilt and deception'.

I think you are overlooking the obvious. The USA is just too expensive
any more. First to Mexico, now China and India and probably Africa after
that.

A race to the bottom. :-(

On 11/1/2010 11:55 PM, John Smith wrote:

You are simply telling me what my treasonous-criminal-public-servants
are doing ... yes, we are going to have to tell them NO! Put high
tariffs on all imports, bring jobs back to American...

In -theory-, you are absolutely correct. However, in actual practice,
tell me when the cheap Chinese labor and cheap Wal-Mart prices go away,
how long do you think it will be until the American consumer starts
rioting? (You do realze that when the 15 cent an hour Chinese labor goes
to $15 dollars an hour American labor, that prices WILL go up, waaay up.)

And yes, the public servants who think they have usurped power are
racing us towards the bottom and economic slavery ... I want them and
the banksters and wall street there ...

Also correct...but unfortunately, you are forgetting the "Golden Rule":

He who has the gold makes the rules.

Quite a conundrum. Any suggestions as to a solution?



Ooh..ooh...[waving hand}...Teacher!, I've got this one.

Yes. Actually, we need to rethink the nature of wealth, in THIS
country. Where the real root of wealth is. Over the last century,
well, 60 years of it, we've gone from a manufacturing economy, to a
merchant economy. Rather than building and selling, we've elected to
buy and resell. Shifting the liability of labor to other entities as
a cost saving measure. Even though we still have robust
manufacturing activity in this country. We still build most of the
world's cars, for instance. With more foreign plants being built on
American soil even as we discuss this.

But, it's HOW we use labor that renders the difference in how
we're ranked in the Global Economy.

In our own MBA driven business culture, we've attempted to
offload all costs to other entities, to drive up profits, and the
stock price. Because we've looked at labor as a liability. Rather
than an asset. Shifting the cost of labor to overseas manufacturers.
Attempting, as it were, to conserve our way to prosperity, by
eliminating most, if not all, production costs.

In this way, we've allowed other cultures to do our manufacturing
for us on their home soil, in plants owned by foreign companies. WE
simply place orders, buy commodities, and take a markup. Avoiding
labor, benefits and pension liabilities, and saving, often--though
not always--a huge tax burden.

Those same other nations, on the other hand, come to this country
for non-union labor, and build their own products, for sales and
export, in factories of THEY own. Saving some on labor, benefits and
pension costs, and snapping up huge tax incentives, but retaining
the true source and origination of wealth: The engine of production.
Because they view labor as an asset. The major car companies come to
this country and purchase our labor, but build in their own plants.
From raw materials, to end product. The finished product, in that
case, is owned by themselves. To be sold by themselves. With all
markups, handling fees, retained by the company. They have higher
costs, in that they have physical plant overhead, but, they have
control over the profit produced by the product at each stage of
handling.

In the US MBA driven model, only the cost of the commodity is
borne by the company. With profits controllable at stages between
purchase of the finished product and beyond. Where as the foreign
model, the profits begin with the acquisition of raw materials. And
along each stage of production. Further, labor at each stage
produces wages at each stage, which produces economic vigor that the
'merchant' economy does not.

What this means, is that we do have cheaper products on the
market, in many cases than could be produced by our own hands.
However, QC, and the enormous infrastructure of production, which
injects robust economic yield into our own GDP, belong to foreign
nationals.

Put in a single sentence: We purchase products. THEY purchase labor.

In the end, business people are business people, foreign or
domestic, and we still pay the infractucture costs of the foreign
manufacturer through wholesale prices, but we then, also pay for
costs of replacement (and rarely, repair) of inferior products,
while at the mercy of suppliers who may not be as interested in
meeting our demands as we are theirs.

An on-topic reference: The Lex-Tecs-Pass-dig-sahn line of Grundig
receivers. QC has often been dreadful. Repair is difficult to come
by. RNW's Tom Sundstrom's review of SAT 800 required how many units
to get to ONE that worked?

(Drake could have built the same radio for only a modest price
increase in their own plant in China, and avoided the QC issues.
Instead of Lextronix allowing Tecsun to not only build the radio,
but then steal the design and release it worldwide under their own
brand. Good decision, Lextronix. Go, team.)


But not all American companies work according to today's MBA
driven model. Aspen Pittman, of Groove Tubes fame, built his
products in China, with parts garnered from around the world, and
with subsystems built in the US, but in plants that he built, and he
retained ownership of. Purchasing local labor, as a raw material.
For Groove Tubes, the engine of production was retained by the
company, not subcontracted to a foreign partner. IN this way, Groove
Tubes retained QC, and all the profits along the way from
acquisition of raw materials to market sales. Granted, his products
were not dirt cheap. But they were better than competitively priced,
and they were of distinctively high quality.

But the key was that GT retained the engine of production. Labor
was of foreign hire. But the actual WORK done by labor, was
considered an asset, and that was retained in ownership by the company.

So, if we really wanted to end the race to the bottom/economic
slavery of today's American economy, we'll start putting a value on
labor, again. Because labor is the very foundation of wealth. We
need to see it as an asset. Not a liability.

Prices would rise, to be sure. But, but because we could still
build offshore but in American owned plants, prices would not rise
as cataclysmically as if we simply shut off the spigot of foreign
labor and built everything here.

Further, by building in American owned plants offshore, and
working, now, hand-in-glove as equal entities with foreign ownership
in the manufacturing realm, American companies would become more
competitive with domestically produced goods, and even, as Toyota
and GM had done for decades, build each other's products, wherever
the plant best equipped to do so was located.

So, to address your question, to begin the transition back to an
American manufacturing economy, which we could do tomorrow, if we
wished, the infrastructure is still in place, we'd simply have to
begin looking at labor as an asset, instead of a liability. Once
harnessed, that asset would drive what was to follow.