What happened?

[gemstone]

Doc's arguments keep making my points. It shows just how much DOC is missing my point. It is not just the frame boards. Judging from the price of the tuperware type products in walmart, they must give them away in China, with no shipping cost.


In the US when we were providing food and housing and paying workers 800 RMD, the employers often went to jail. They made movies about how bad is was and likened it to SLAVE LOBOR. If Optiboard is read and believed, walmart just closed a large lab in Ohio in order to move lens manufacturing to Mexico.* (Something the large lens companies did many years ago.) I predict that the Mexican walmart lab will be their largest plant very soon.


My guess is to save taxes and get cheaper help, at a pay many Americans would not get out of bed for. Many Americans would consider Slave Labor wages. The people of South and Central America, (like the Chinese, just my opinion) are happy to get. I have discussed the wages of these countries with people from these countries. Many things are cheaper in these countries. I remember them saying things like ribeyes are much higher.


Explain this to the average walmart lens buyer and he will look at you like you are crazy and state that they were much higher at the eye doctors. Seems I am picking on walmart and eyeglasses. They are just the most visible example. It is everywhere and on most products.


My experience in this matter is hiring young American lab workers. They would often show up late the first day, leave at lunch and not come back. We started entry OJTs at something more than minimum wage. You ask many lab workers to learn a new skill and they ask how much more you are going to pay them.


I may be wrong about what is the answer for the people of the U.S. I do know the answer is not for the government to use tax dollars to subsidize union pay for companies that can not compete with off shore manufacturing. It is also not to make grand statements like 'Buy US' or 'Buy union'. It did not work in the 1970s, and it will not work now. I say again, if the American workers are not willing to work for much less, it will continue to go as it is.


DOC wishes to insult me be saying Lincoln would call me a fool; still not getting my point. My discussions with DOC are soon to be over.

Not the fastest horse can catch a word spoken in anger. ~Chinese Proverb

*

Lo siento si he ofendido a ningún mexicanos. He tenido estas conversaciones con muchos de mis amigos mexicanos. Todos somos conscientes de cómo la American perezoso trabajador, y cómo el trabajo duro Spanish people. La gente no debe ser insultado por ser llamado duro trabajadores

[DragonLensmanWV]

Looks like your main complaint is you can't find the right workers for your lab. It's not DOC's fault that American workers will only work for high pay and low hours with big spiffs for learning a new simple skill.
I guess you could place some blame on American unions who demand higher pay and benefits, thus placing the financial burden of their products on the consumers, who are pinched themselves.
Did you miss the part about how the workers there get a low (for US, not them) salary BUT have their other needs taken care of so their pay is essentially spendable.
Try this on your next hire:
Offer them minimum wage but pay their rent, insurance and pension. See how that works.

[DocInChina]

Doc's arguments keep making my points. It shows just how much DOC is missing my point.

I am missing your point. It is easier to listen to someone when offensive remarks are omitted.

It is not just the frame boards. Judging from the price of the tuperware type products in walmart, they must give them away in China, with no shipping cost.

Almost true. Manufacturing in China is geared for enormous output, not small output. All factories must reach near capacity so that a profit can be realized. The per bowl cost to make 1000 tuperware bowls (for example) is more than the per bowl cost for 10,000 bowls. When companies order large quantities they can afford to "give" them away.

In the US when we were providing food and housing and paying workers 800 RMD, the employers often went to jail.

Again, you do not understand the purchasing power of the RMB which explains our circuitous conversation. Additionally, the employees have health insurance and retirement benefits as well as housing and food. Again that 800RMB figure is minimum wage which does not mean EVERY worker's salary is minimum wage.

My guess is to save taxes and get cheaper help, at a pay many Americans would not get out of bed for. Many Americans would consider Slave Labor wages. The people of South and Central America, (like the Chinese, just my opinion) are happy to get.

Companies move their production overseas for many reasons. The end result though is lower cost for consumer goods which increases the quality of life for consumers.

In my experience in both the US and Asia, most unemployed people are happy to find work.

I may be wrong about what is the answer for the people of the U.S. I do know the answer is not for the government to use tax dollars to subsidize union pay for companies that can not compete with off shore manufacturing. It is also not to make grand statements like 'Buy US' or 'Buy union'. It did not work in the 1970s, and it will not work now. I say again, if the American workers are not willing to work for much less, it will continue to go as it is.

This we are in 100% agreement. There is hope for us yet.

DOC wishes to insult me be saying Lincoln would call me a fool; still not getting my point. My discussions with DOC are soon to be over.

I do not think you are a fool. With regards to comments you have made or implied about China, businesses and workers I would say you are highly misinformed. I am only living here 8 years but China has become my adopted home. If I take exception to comments you wrote here, then imagine how Chinese nationals who are members of this board feel from your words.

My soft quote from Lincoln was mild compared to your comments regarding slave labor and slave wages which directed at an entire country.

Obviously this is a stalemate issue for us so I will hold up the surrender flag and let you have the last word.

[gemstone]

Looks like your main complaint is you can't find the right workers for your lab. It's not DOC's fault that American workers will only work for high pay and low hours with big spiffs for learning a new simple skill.
I guess you could place some blame on American unions who demand higher pay and benefits, thus placing the financial burden of their products on the consumers, who are pinched themselves.
Did you miss the part about how the workers there get a low (for US, not them) salary BUT have their other needs taken care of so their pay is essentially spendable.
Try this on your next hire:
Offer them minimum wage but pay their rent, insurance and pension. See how that works.

Blame falls where the facts indicate. I am not trying to place blame. There is very little opinion in my statements here.

[HarryChiling]

We're living in a fantasy world, in the 50's our country had 7.7 manufacturing position for every 1 financial position, today we have roughly 1.6 manufacturing positions for every 1 financial position. We have more people speculating than actually being productive in our country. For the longest time people were using their assets like banks and cashing out as much money from their homes as possible. There are a lot of places to spread the blame.

Doc,

I don't blame China but our addiction to cheap products produced in your country only equalizes our nations, since the US has traditionally been the more wealthy the equalization will hurt this country and favor your country. So even though 800RMB buys a lot in your country it doesn't do much here. Our country needs to start producing products again, if our government wants to help stop taxing the public and businesses and start taxing the products that are coming in from other countries more heavily, take away tax breaks from companies that export jobs. Just like we tax cigarettes lets tax what's not good for the country as a whole and stop taxing the small business and the ones that are operating ethically and trying to live the dream.

[DocInChina]

Harry,

No developed country can afford to manufacture low technology products. This has been proven since the beginning of the industrial revolution. As higher margin products developed, lower margin products were moved to rural areas or developing countries where it makes economic sense to still produce. Higher value products were continuously developed as were higher technology products to replace the low end production.

Your idea of becoming economically isolated cannot work in a global economy. For higher value products from developed countries to have a world market, under developed countries have to earn revenue to purchase more advanced products.

The US, IMHO, has been a technology leader for more than a century. What happened in the last 25 years? Explain to me how an autoworker can earn 50,000-75,000USD per year plus benefits in a country whose actual driving population (guesstimate) is 1/3? It cannot happen and the proof is in the news for the past year about the demise of the auto industry. 30 years ago, Japan starting introducing inexpensive automobiles into the US market. Today Japanese companies have captured a large market share in the US.

Unions, in the US, had a benefit at one time. That benefit ceased to exist sometime ago. Unions have made businesses hostages and can dictate what a business can do. Salaries and benefits were forced higher at the same time raw materials prices were increasing and foreign competition entered the domestic market. Will a US consumer, for example, pay twice as much for a Made in USA product? To do so, they will require a dramatic increase in their salaries to maintain a normal lifestyle. The world is a market economy, and supply/demand will dictate the price.

When my great grandparents moved to the US, they opened a small grocery/fruit/vegetable store in a building they eventually purchased. When I asked my grandfather (40 years ago) why we did not still own the grocery. He explained new immigrants purchase businesses which they can operate despite having language or cultural differences from the population. As they prosper and become absorbed into the native population, new immigrant replacing the former. The former typically moved on to higher projects.

Yes, the US has to start manufacturing again and encourage new technology with tax breaks, affordable educational, fair market salaries. Assuming this happens, EPA laws would need to be addressed which also financially hamstring manufacturers.

Encouraging development of new products and technology will solve the shortage of manufacturing in the US long term. Becoming a card carrying member of a union, IMHO, will not create new technologies, encourage investment or preserve jobs.

I hope the above is clearly organized..too much coffee yesterday robbed me of my 8 hours.

Doc

[HarryChiling]

Harry,

No developed country can afford to manufacture low technology products. This has been proven since the beginning of the industrial revolution. As higher margin products developed, lower margin products were moved to rural areas or developing countries where it makes economic sense to still produce. Higher value products were continuously developed as were higher technology products to replace the low end production.

Your idea of becoming economically isolated cannot work in a global economy. For higher value products from developed countries to have a world market, under developed countries have to earn revenue to purchase more advanced products.

The US, IMHO, has been a technology leader for more than a century. What happened in the last 25 years? Explain to me how an autoworker can earn 50,000-75,000USD per year plus benefits in a country whose actual driving population (guesstimate) is 1/3? It cannot happen and the proof is in the news for the past year about the demise of the auto industry. 30 years ago, Japan starting introducing inexpensive automobiles into the US market. Today Japanese companies have captured a large market share in the US.

Unions, in the US, had a benefit at one time. That benefit ceased to exist sometime ago. Unions have made businesses hostages and can dictate what a business can do. Salaries and benefits were forced higher at the same time raw materials prices were increasing and foreign competition entered the domestic market. Will a US consumer, for example, pay twice as much for a Made in USA product? To do so, they will require a dramatic increase in their salaries to maintain a normal lifestyle. The world is a market economy, and supply/demand will dictate the price.

When my great grandparents moved to the US, they opened a small grocery/fruit/vegetable store in a building they eventually purchased. When I asked my grandfather (40 years ago) why we did not still own the grocery. He explained new immigrants purchase businesses which they can operate despite having language or cultural differences from the population. As they prosper and become absorbed into the native population, new immigrant replacing the former. The former typically moved on to higher projects.

Yes, the US has to start manufacturing again and encourage new technology with tax breaks, affordable educational, fair market salaries. Assuming this happens, EPA laws would need to be addressed which also financially hamstring manufacturers.

Encouraging development of new products and technology will solve the shortage of manufacturing in the US long term. Becoming a card carrying member of a union, IMHO, will not create new technologies, encourage investment or preserve jobs.

I hope the above is clearly organized..too much coffee yesterday robbed me of my 8 hours.

Doc

Very clearly organized and well stated, nothing I don't agree with except the means to the end. Sure we could start manufacturing new technologies and move forward with reasonable incomes for some jobs, but at the same time we need to address the fact that the cost to operate in this country is far different that the cost to operate in your country and this disparity is going to lead to a loss of jobs in the US unless it is addressed. Let's face it consumers are price sensitive to a degree, they are willing to purchase made in the USA, maybe not for 200% the cost, but their is a figure. We face two issues right now like you mentioned the government seems to be taxing the heck out of the US based businesses that manufacture in the states since their are too many laws that have to be meet, but at the same time these laws protect our vital resources like clean water. If our national businesses are being taxed to maintain a level of cleanliness then our international products should be taxed as well to maintain these same quality standards. This would level the playing field to a degree and allow more manufacturing jobs to come back to the US.

I like your idea with new technology, however China has never really had any respect for patents and new technology the minute a manufacturer is contracted to make a product it seems almost immediately the black market product is also being produced. Couple this phenomenon with the fact that most US companies are looking to create the new product then pawn off the manufacturing almost immediately to China for mass production and the problem becomes apparent, it just is that much cheaper to produce products over there, but like I mentioned their has to be equilibrium and this means that our country will lose wealth and China will gain wealth. It's not a bad thing China is providing a service that we have utilized for many years now with great prosperity, however; we have reached a tipping point where the reality of our actions are sinking in, it does come at a cost.

This is just dealing with the root of the problem, if we also look at who we're borrowing money from to buy those made in China products the picture becomes even more ugly. We are losing production jobs to a country that is funding our credit to purchase those product which has lead to record growth in our financial system to process that credit. The house of cards had to come toppling down sometime, better now than later.

[DocInChina]

Let's face it consumers are price sensitive to a degree, they are willing to purchase made in the USA, maybe not for 200% the cost, but their is a figure.

I agree. However, this is a theoretical debate. A corporation or a person has to calculate the costs to determine if they are willing to invest to make any given product. The trend is showing the US corporations are unwilling to do so because the cost to produce will be too high, the domestic market has too much competition and the net will be too low. On the export side: the export price will not find a market for low tech products because the price is too high.

We face two issues right now like you mentioned the government seems to be taxing the heck out of the US based businesses that manufacture in the states since their are too many laws that have to be meet, but at the same time these laws protect our vital resources like clean water. If our national businesses are being taxed to maintain a level of cleanliness then our international products should be taxed as well to maintain these same quality standards. This would level the playing field to a degree and allow more manufacturing jobs to come back to the US.

I assume you mean the US should tax the imports so that they do not have a price competitive advantage in the US market. Imports are taxed and we have a harmonizing code for every imported product. If you mean to increase the taxes to level the playing field I believe membership in the WTO precludes that from happening.

I like your idea with new technology, however China has never really had any respect for patents and new technology the minute a manufacturer is contracted to make a product it seems almost immediately the black market product is also being produced.

I think it would be more appropriate to say that some Chinese companies do not respect patents. China has a population of +1.3 billion people. I forget the figure but the number of workers for the Chinese government is a small fraction of that 1.3 billion. I don't excuse their diligence but I think it is a behemoth task trying to control this large a population.

Couple this phenomenon with the fact that most US companies are looking to create the new product then pawn off the manufacturing almost immediately to China for mass production and the problem becomes apparent, it just is that much cheaper to produce products over there, but like I mentioned their has to be equilibrium and this means that our country will lose wealth and China will gain wealth. It's not a bad thing China is providing a service that we have utilized for many years now with great prosperity, however; we have reached a tipping point where the reality of our actions are sinking in, it does come at a cost.

The answer is legislation, tax incentives and labor laws. Businesses cannot be taxed so heavy that it will not make fiscal sense for them to produce in the US. Real Estate tax needs to be reduced in industrial areas to levels going back 30 years or more. Unions need to be stripped of their power to control businesses and factory workers need to have realistic expectations for what a business can pay and what it cannot.

This is just dealing with the root of the problem, if we also look at who we're borrowing money from to buy those made in China products the picture becomes even more ugly. We are losing production jobs to a country that is funding our credit to purchase those product which has lead to record growth in our financial system to process that credit. The house of cards had to come toppling down sometime, better now than later.

The top 4 creditors of US debt are China (way in front), Japan, Germany and Saudi Arabia. All of these countries have a vested interest in the US maintaining its purchasing power.

The house of cards toppling down had many components: sub prime loans, relaxed standards for loans as well as increased US debt financing since 911.

[gemstone]

Now we are preparing to tax workers making meager wages to supplement the wages and benefits of workers making $50 and more per hour. It will be surprising if that does not set off a revolution of some sort.

[shanbaum]

Now we are preparing to tax workers making meager wages to supplement the wages and benefits of workers making $50 and more per hour. It will be surprising if that does not set off a revolution of some sort.

To what tax are you referring?

[gemstone]

To what tax are you referring?

Federal Income tax.

[Judy Canty]

Unless you're living completely off the grid, you benefit from those taxes.

[For-Life]

Now we are preparing to tax workers making meager wages to supplement the wages and benefits of workers making $50 and more per hour. It will be surprising if that does not set off a revolution of some sort.

What? That has never been a proposal. The proposal was an increase on taxes for those making over $200k, not under.

[shanbaum]

What? That has never been a proposal. The proposal was an increase on taxes for those making over $200k, not under.

Yes, that would be the point. I thnk gemstone has made several references in various posts to an imaginary tax increase on modest incomes.

In fact, even were all the Bush tax cuts allowed to expire, that would constitute a shift in the tax burden from the lower income earner to the higher - because the higher income earners received a larger reduction in the first place.

The actual proposal is as you state it, though the breakpoint is set at $250,000, not $200,000.

[gemstone]

Where did they get the money for the bailout of GM?

[DragonLensmanWV]

Don't know about you but with Obama's tax cut I'm taking home more now than I was last year.

[For-Life]

Where did they get the money for the bailout of GM?

not through taxing the lowest income earners while keeping the highest income earners at the present rate.

[shanbaum]

Where did they get the money for the bailout of GM?

Same two places they got the money for all the "bailouts" - partly an increase in debt, partly by creating it out of thin air - something the government can do. Although the latter tends to devalue the currency, inflation is the least of policymakers' worries at this point.

Regardless of "where they got it", either federal tax rates have been increased or they haven't been, and so far, they haven't been. The stated policy of the Administration is that federal income tax rates on persons making less than $250K will not be increased.

[gemstone]

Looks to me like they are using tax $$ (they get from you and me) to support payrolls of people that make much more that me, not just the greedy, thieving CEOs, but the $75 per hour Detroit autoworker.

[gemstone]

The stated policy of the Administration is that federal income tax rates on persons making less than $250K will not be increased.

I hope you are correct! I just be glad when I can go through a fast food drive thru and have the order given to me correctly! I am sure that was a campagne promise.:D

[For-Life]

Looks to me like they are using tax $$ (they get from you and me) to support payrolls of people that make much more that me, not just the greedy, thieving CEOs, but the $75 per hour Detroit autoworker.

So where is this tax increase?

[Johns]

So where is this tax increase?

Feldstein: The coming tax regime that will kill American productivity by Ed Morrissy


Martin Feldstein doesn’t exactly sugar-coat this peek into a bleak future of high unemployment, loss of American competitiveness, and essentially all the worst parts of the 1970s and 1930s in American economics. The former Reagan advisor and now Harvard professor says that Barack Obama has learned all the wrong lessons from history. While Obama’s tax cuts are mainly illusory, the tax hikes are very real, and will kill any hope of a recovery this year, and perhaps ever:
Mr. Obama’s biggest proposed tax increase is the cap-and-trade system of requiring businesses to buy carbon dioxide emission permits. The nonpartisan Congressional Budget Office (CBO) estimates that the proposed permit auctions would raise about $80 billion a year and that these extra taxes would be passed along in higher prices to consumers. Anyone who drives a car, uses public transportation, consumes electricity or buys any product that involves creating CO2 in its production would face higher prices. CBO Director Douglas Elmendorf testified before the Senate Finance Committee on May 7 that the cap-and-trade price increases resulting from a 15% cut in CO2 emissions would cost the average household roughly $1,600 a year, ranging from $700 in the lowest-income quintile to $2,200 in the highest-income quintile. Since the amount of cap-and-trade tax rises with income, the cap-and-trade tax has the same kind of adverse work incentives as the income tax. And since the purpose of the cap-and-trade plan is to discourage the consumption of CO2-intensive products, energy or means of transportation by raising their cost to consumers, the consumer-price increases would be the same for a 15% reduction in C02 even if the government decides to give away some of the CO2 emissions permits. … The next-largest tax increase — with a projected rise in revenue of more than $300 billion between 2011 and 2019 — comes from increasing the tax rates on the very small number of taxpayers with incomes over $250,000. Because this revenue estimate doesn’t take into account the extent to which the higher marginal tax rates would cause those taxpayers to reduce their taxable incomes — by changing the way they are compensated, increasing deductible expenditures, or simply earning less — it overstates the resulting increase in revenue.
This is a recurring theme with Obama and tax policy. He and his advisors use static analysis to predict results from tax increase, ignoring the effect that tax changes have on revenue. He assumes that a 7% increase in the capital-gains tax, to use one example, will result in a 7% increase in revenue from the previous year, but that’s simply not the case. The tax hike will cause people to change behaviors to avoid paying higher taxes, either by cashing out this year (resulting in a loss of capital to the marketplace) or not selling off stakes in companies and investing the profit elsewhere. The effect of the change will itself limit revenues, probably more than the increased percentage will capture, making the policy a net loss to the government. Dynamic analysis predicts the behavior of the market in response to these changes, and usually provides a much more sound basis for analysis. It’s why, in the above example, that capital-gains rate cuts usually provide a boost in revenue, as investors gain confidence in the market and assume more risk. They are less likely to shelter income at the lower rates, or defer profit-taking, allowing for more opportunity for the government to realize revenue. Nowhere is this deficiency more apparent than with the next tax Feldstein discusses:
The third major tax increase is the plan to raise $220 billion over the next nine years by changing the taxation of foreign-source income. While some extra revenue could no doubt come from ending the tax avoidance gimmicks that use dummy corporations in the Caribbean, most of the projected revenue comes from disallowing corporations to pay lower tax rates on their earnings in countries like Germany, Britain and Ireland. The purpose of the tax change is not just to raise revenue but also to shift overseas production by American firms back to the U.S. by reducing the tax advantage of earning profits abroad. The administration is likely to be disappointed about its ability to achieve both goals. Bringing production back to be taxed at the higher U.S. tax rate would raise the cost of capital and make the products less competitive in global markets. American corporations would therefore have an incentive to sell their overseas subsidiaries to foreign firms. That would leave future profits overseas, denying the Treasury Department any claim on the resulting tax revenue. And new foreign owners would be more likely to use overseas suppliers than to rely on inputs from the U.S. The net result would be less revenue to the Treasury and fewer jobs in America. Earlier, I described this policy as Obama’s Smoot-Hawley, and Feldstein explains why in these two paragraphs. If Obama seriously wanted to create more jobs and more opportunities here in the US with this effort, he would pair it with a dramatic cut in the corporate tax rate, currently second-highest in the developed world at 35%. Instead, he’s forcing the US to carry a tax burden found nearly nowhere else in the global marketplace, ensuring a lack of competitiveness and higher prices for consumers of American products everywhere around the world, including here. Obamanomics is a disaster, and it couldn’t come at a worse time. Four years ago, the country may have been resilient enough to shake off the worst effects of Obama’s policies, but with our economy already reeling, his taxes will kill any chance at recovery. We will spend years running up massive deficits — which will prompt Obama to impose higher and broader taxes. Get ready for one of the most vicious of all vicious cycles.

[gemstone]

So where is this tax increase?

I did not say the money would come from an increase, just taxes (which I pay). If you want to talk about tax increases I will just say, our present administration makes no effort to hide the elimination to tax cuts made by the previous administration. I call that an increase. You and they may call it elimination of cuts. It's like the statement that cost ol' Harvey Gant his election. "I did not try to raise taxes, I just tried to raise revenue." I guess he still has not figured out what revenue is.

[shanbaum]

I did not say the money would come from an increase, just taxes (which I pay). If you want to talk about tax increases I will just say, our present administration makes no effort to hide the elimination to tax cuts made by the previous administration. I call that an increase. You and they may call it elimination of cuts. It's like the statement that cost ol' Harvey Gant his election. "I did not try to raise taxes, I just tried to raise revenue." I guess he still has not figured out what revenue is.

Which part of "over $250,000" do you not understand? Were you aware that the Bush tax cuts were scheduled to expire when passed (presumably so that their effect on debt over 10 years could be understated by including 2 years of taxation at the old rates)? The proposal is to restore rates only on persons making over $250K. Yes, it's reasonable to call that an increase, on such individuals. I favor that.

[shanbaum]

Feldstein: The coming tax regime that will kill American productivity by Ed Morrissy

It is not clear from your copy-and-paste that this is a mixture of comments by Feldstein and a right-wing blogger. It's easier to tell which is written by which by looking at the aptly-named source:

http://hotair.com/archives/2009/05/1...-productivity/

There have been plenty of responsible conservatives arguing for some kind of carbon tax for years. Of course, consumers will ultimately pay; or, hopefully, will not pay - the entire point of the exercise is to discourage use of fossil fuels by making them more expensive. You know, to try to save the planet.