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?

On 11/2/2010 10:18 AM, D. Peter Maus wrote:

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.

Robust? On this we differ. HUNDREDS of THOUSANDS of manufacturing jobs
lost in this country and still going in the wrong direction. Virtually
the entire tool & die industry gone (maybe because there is no
manufacturing here to support it?) It seems almost -everything-, from
brake pads to bed pans, is "Made in China". I would respectfully
disagree with your definition of "robust".

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.

Maybe some plants are being built here, but all the published literature
I've seen says we are playing second fiddle to Toyota, Korea and China.

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.

Huh? "Conserve our prosperity"? Is that why our middle class is rapidly
disappearing? Why tens of millions of people are without work? THAT
"prosperity"? I think the MBAs dropped the ball on this one.

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.

Again, I have to say "Huh?" I believe American manufacturers are
receiving quite generous tax BREAKS for moving overseas, not your 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.

That is a fair statement. Wal Mart, the Master of Cheap, claims that 85%
of the items on their shelves are from China.

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.

Again, we differ on the meaning of a word -- 'ownership'. It is common
knowledge that no foreigner can "own" a plant or business in China;
rather, they have to partner with the Chinese government.

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.

Amen! and Amen!!! again.

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.

Yes, I guess we could start up the American manufacturing economy
tomorrow, but per my original contention, it may not be economically
viable. Labor costs go from pennies per hour to dollars per hour, health
costs, virtually zero in China, are a very expensive item here,
environmental controls, a large and expensive issue here, are virtually
nil in China, ditto for pension liabilities, the tax breaks for going
overseas would be lost. Why would any manufacturer in their right mind
want to start producing here again given the issues above?

Of course, what the overseas manufactures seem to be failing to realize
is that, if you don't have a job, it ultimately will make no difference
how cheap a product is.