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Although this thread does not function under the same strict guidelines as the USPMT, it is still a general practice on TL to provide a source with an explanation on why it is relevant and what purpose it adds to the discussion. Failure to do so will result in a mod action. |
On April 14 2015 02:09 WhiteDog wrote:
This is absurd.
1) The US protected its car industry, most notably through various restrictions on exports directly negociated with the firms in question.
2) that an industry is intensive or not in labor is IRRELEVANT to the point at hand : the phone industry is light on labor, but apple still produce in china. Even a small advantage can be huge in a competitive market. By the way, it's usually the opposite : field heavy on labor cannot delocalize or use social dumping this heavily because usually field intensive on labor require competent and educated workers and thus decent pay.
3) your exemple is not very relevant to the subject, because you're talking about localized competition with foreign investment, and not competition through exports.
I just want you to know: Yes the USA protected its car industry, and that resulted in it going from the best in the world ~WWII to terribly sclerotic and getting dumpstered in the 90s/00s by companies that still were facing large protectionist tarrifs who had to do complicated work-arounds by locating factories in strategic areas of the United States.
Then the taxpayers of the United States had to pump 20 Billion dollars into those companies to prevent their collapse PLUS they interfered with established bankruptcy law (secured loans to politically connected companies will never be looked at in the same way again in this country) in order to prevent millions of retirees and future retirees from going under themselves.
Not exactly a pristine example.
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The euro zone sources told the paper that Greece's creditors do not believe this is the case and that it would be a domestic political issue if Athens is unable to fully pay salaries and pensions.
Lol. Yeah who cares if government pays its employees, just as long as creditors get a couple extra billion before the end - and to hell with the other ~300bn. Who writes this stuff?
This article has since been refuted by the Greek govt which referenced EWG minutes as proof that allegations are wrong (where can one get minutes from such a working group~? I found many on fishing, health care and such, nothing on economy).
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On April 14 2015 04:46 cLutZ wrote:Show nested quote +On April 14 2015 02:09 WhiteDog wrote:
This is absurd.
1) The US protected its car industry, most notably through various restrictions on exports directly negociated with the firms in question.
2) that an industry is intensive or not in labor is IRRELEVANT to the point at hand : the phone industry is light on labor, but apple still produce in china. Even a small advantage can be huge in a competitive market. By the way, it's usually the opposite : field heavy on labor cannot delocalize or use social dumping this heavily because usually field intensive on labor require competent and educated workers and thus decent pay.
3) your exemple is not very relevant to the subject, because you're talking about localized competition with foreign investment, and not competition through exports. I just want you to know: Yes the USA protected its car industry, and that resulted in it going from the best in the world ~WWII to terribly sclerotic and getting dumpstered in the 90s/00s by companies that still were facing large protectionist tarrifs who had to do complicated work-arounds by locating factories in strategic areas of the United States. Then the taxpayers of the United States had to pump 20 Billion dollars into those companies to prevent their collapse PLUS they interfered with established bankruptcy law (secured loans to politically connected companies will never be looked at in the same way again in this country) in order to prevent millions of retirees and future retirees from going under themselves. Not exactly a pristine example.
It saved tons of jobs and permitted this industry to flourish today (and it gave back the money it took from the government I believe ?). And the link you made between the US car industry poor results and the help from the government is religious more than anything. There are none, the poor result of the US car industry comes from Japanese better product, period. It's competition that put the weakest producer in danger, not the help from the government.
Anyway, I didn't thought it was an exemple, I just responded to Jonny saying the US car industry benefitted from competition.
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Why did the Japanese have a better product then?
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On April 14 2015 05:25 warding wrote:
Why did the Japanese have a better product then?
Innovations in the production process ?
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The influx of Japanese/German automakers outcompeting US firms followed, like I said, small loosenings of trade policy. So, before, American consumers were paying higher prices for shittier cars. It didn't "save" jobs, those jobs were almost lost because of the bad policies. I mean, I suppose we could have never relaxed trade restrictions and just kept paying 30% markups on cars that were worse than foreign competitors, but that is a net negative for the American people.
That is what you don't seem to understand. Employing 1 million people for an extra couple dollars is not worth your whole country paying inflated prices for inferior goods.
P.S. That they paid back their bailout is a myth. The car companies paid back the "loan" portion, which was less than a quarter of the total sum. The total automaker bailout, including TARP money given to Chrysler, CBO estimates, will cost taxpayers about $34 billion.
http://www.factcheck.org/2010/05/general-motors-debt/
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And why would you care buying little more expensive cars if the money doesn't get out of the country and is reinvested, through wage, consumption and state taxation ? Sure if you're an individualist, but as a policy maker, it's obvious there are no problems.
Employing 1 million people for an extra couple dollars is not worth your whole country paying inflated prices for inferior goods.
Yes it is worth, absolutly. I prefer a country with no unemployment and cheap Fords, rather than a country with high unemployment and top quality BMW and Toyota. By far.
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The trade-off is not cheap Fords and low unemployment vs expensive BMWs and unemployment.
What you lose in employment in the car industry from increased competition you can gain in greater proportion from:
1- Employment in export oriented industries. The Japanese don't want dollars for the sake of them, they want them to buy american goods;
2- Employment in other domestic industries that benefit from the savings of consumers that are now able to buy cars of similar quality for cheaper.
The point is that you want to pick the scenario that is both more efficient and produces the outcome with the highest overall well-being.
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On April 14 2015 06:02 WhiteDog wrote:And why would you care buying little more expensive cars if the money doesn't get out of the country and is reinvested, through wage, consumption and state taxation ? Sure if you're an individualist, but as a policy maker, it's obvious there are no problems. Show nested quote +Employing 1 million people for an extra couple dollars is not worth your whole country paying inflated prices for inferior goods. Yes it is worth, absolutly. I prefer a country with no unemployment and cheap Fords, rather than a country with high unemployment and top quality BMW and Toyota. By far.
1. That's an obvious broken window fallacy.
2. They weren't cheap, they were expensive and bad.
3. The companies actually can compete and employ people, as they have shown, so long as they don't engage in the reckless practices enabled by the previous tariff regime. So with a free trade system, we get cheap and good cars with the auto industry employing millions of people in America.
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On April 14 2015 06:32 cLutZ wrote:Show nested quote +On April 14 2015 06:02 WhiteDog wrote:And why would you care buying little more expensive cars if the money doesn't get out of the country and is reinvested, through wage, consumption and state taxation ? Sure if you're an individualist, but as a policy maker, it's obvious there are no problems. Employing 1 million people for an extra couple dollars is not worth your whole country paying inflated prices for inferior goods. Yes it is worth, absolutly. I prefer a country with no unemployment and cheap Fords, rather than a country with high unemployment and top quality BMW and Toyota. By far. 1. That's an obvious broken window fallacy. 2. They weren't cheap, they were expensive and bad. 3. The companies actually can compete and employ people, as they have shown, so long as they don't engage in the reckless practices enabled by the previous tariff regime. So with a free trade system, we get cheap and good cars with the auto industry employing millions of people in America.
A free trade system, with state protection and state investment lol.
1. no that's economy.
The Japanese don't want dollars for the sake of them, they want them to buy american goods;
Here we go again, trade imbalances don't exist, the world is perfect, and all this rubbish.
P.S. That they paid back their bailout is a myth. The car companies paid back the "loan" portion, which was less than a quarter of the total sum.
Same as banks, except you saved unqualified jobs.
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well this 300th discussion of the topic only proved:
- individualists will never understand aggregate measures..
- principialists will never understand empirics
- young white afluent males think, less rules for everybody will make everybody have a priviledged shot at life
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On April 14 2015 02:09 WhiteDog wrote:
This is absurd.
1) The US protected its car industry, most notably through various restrictions on exports directly negociated with the firms in question.
2) that an industry is intensive or not in labor is IRRELEVANT to the point at hand : the phone industry is light on labor, but apple still produce in china. Even a small advantage can be huge in a competitive market. By the way, it's usually the opposite : field heavy on labor cannot delocalize or use social dumping this heavily because usually field intensive on labor require competent and educated workers and thus decent pay.
3) your exemple is not very relevant to the subject, because you're talking about localized competition with foreign investment, and not competition through exports.
1) We'd be better off if we hadn't protected the auto industry as much as we had. Still, US automakers can open up a car factory in China if they want to, in some cases they already have. It's pretty common for US brands to use Canada and Mexico for parts and assembly.
2) Untrue. Apple does not produce anything in China. Chinese contract manufacturers make things in China. That's where the electronic industry is strong, and a fair bit of the work is labor intensive.
3) Asian and European automakers export to the US all the time. They first got their products here by exporting to us, than opened up shops locally later on. And as I already mentioned, Canada and Mexico are large sources of auto imports.
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1) We'd be better off if we hadn't protected the auto industry as much as we had. Still, US automakers can open up a car factory in China if they want to, in some cases they already have. It's pretty common for US brands to use Canada and Mexico for parts and assembly.
"What if". All I see is your car industry is in better spot than Italian car industry (slowly being sold to the chinese), Swedish (almost entirely sold to the chinese) or french one (half sold to the chinese).
2) Untrue. Apple does not produce anything in China. Chinese contract manufacturers make things in China. That's where the electronic industry is strong, and a fair bit of the work is labor intensive.
This doesn't change anything. Sure if you cut the entirety of the production of the apple and just measure putting two chips together it's labor intensive. Fact is, on the total cost of the product, labor is almost nothing, and Apple still goes to china (or contract chinese manufacturers - WHICH IS THE SAME) for costs reasons, not for the quality of their labor.
3) Asian and European automakers export to the US all the time. They first got their products here by exporting to us, than opened up shops locally later on. And as I already mentioned, Canada and Mexico are large sources of auto imports.
You change the subject ? You said toyota helped americans to learn how to produce better car, if this was possible, it was thanks to production on site, and not exports.
On April 14 2015 06:50 puerk wrote:
well this 300th discussion of the topic only proved:
- individualists will never understand aggregate measures..
- principialists will never understand empirics
- young white afluent males think, less rules for everybody will make everybody have a priviledged shot at life
- some people could twist words, nitpick facts and ideas until everything finally match their preconceived ideas.
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On April 14 2015 07:02 WhiteDog wrote:Show nested quote +1) We'd be better off if we hadn't protected the auto industry as much as we had. Still, US automakers can open up a car factory in China if they want to, in some cases they already have. It's pretty common for US brands to use Canada and Mexico for parts and assembly. "What if". All I see is your car industry is in better spot than Italian car industry (slowly being sold to the chinese), Swedish (almost entirely sold to the chinese) or french one (half sold to the chinese). Show nested quote +2) Untrue. Apple does not produce anything in China. Chinese contract manufacturers make things in China. That's where the electronic industry is strong, and a fair bit of the work is labor intensive. This doesn't change anything. Sure if you cut the entirety of the production of the apple and just measure putting two chips together it's labor intensive. Fact is, on the total cost of the product, labor is almost nothing, and Apple still goes to china (or contract chinese manufacturers - WHICH IS THE SAME) for costs reasons, not for the quality of their labor. Show nested quote +3) Asian and European automakers export to the US all the time. They first got their products here by exporting to us, than opened up shops locally later on. And as I already mentioned, Canada and Mexico are large sources of auto imports. You change the subject ? You said toyota helped americans to learn how to produce better car, if this was possible, it was thanks to production on site, and not exports. Show nested quote +On April 14 2015 06:50 puerk wrote:
well this 300th discussion of the topic only proved:
- individualists will never understand aggregate measures..
- principialists will never understand empirics
- young white afluent males think, less rules for everybody will make everybody have a priviledged shot at life
- some people could twist words, nitpick facts and ideas until everything finally match their preconceived ideas.
seriously? phil.ipp said germans huge trade balance surplus was only possible through low wages and would take a hit from minimum wage, i said that thats not likely as most manufacturing jobs for the export market pay pretty decent, and then you come in with 1 group of jobs from one sector compromising a tiny fraction of exports, somehow thinking that "some people in x get paid much too low wages" (which i ofc agree with) refutes "most people in x get paid decent wages"
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On April 14 2015 07:02 WhiteDog wrote:Show nested quote +1) We'd be better off if we hadn't protected the auto industry as much as we had. Still, US automakers can open up a car factory in China if they want to, in some cases they already have. It's pretty common for US brands to use Canada and Mexico for parts and assembly. "What if". All I see is your car industry is in better spot than Italian car industry (slowly being sold to the chinese), Swedish (almost entirely sold to the chinese) or french one (half sold to the chinese).
Who cares who owns them? If the Japanese can run GM better than current management, so be it. We'd all benefit from that.
Show nested quote +2) Untrue. Apple does not produce anything in China. Chinese contract manufacturers make things in China. That's where the electronic industry is strong, and a fair bit of the work is labor intensive. This doesn't change shit. Sure if you cut the entirety of the production of the apple and just measure putting two chips together it's labor intensive. Fact is, on the total cost of the product, labor is almost nothing, and Apple still goes to china (or contract chinese manufacturers - WHICH IS THE SAME) for costs reasons, not for the quality of their labor.
You've missed the point. The work CMs do is labor intensive and exportable, and so it was moved to China. It's just like textiles: NYC still has a vibrant fashion industry, only it is mainly for design and marketing, rather than manufacture. Same goes for Apple, the labor intensive unskilled labor portion of making phones was exported.
Electronics manufacturing is also pretty cemented in China now. The quality of the labor has increased a lot, and firms are able to absorb large pay increases through rapidly increasing productivity. A lot of other Asian countries now have cheaper labor, but no one is expecting them to gain much market share any time soon.
Show nested quote +3) Asian and European automakers export to the US all the time. They first got their products here by exporting to us, than opened up shops locally later on. And as I already mentioned, Canada and Mexico are large sources of auto imports. You change the subject ? You said toyota helped americans to learn how to produce better car, if this was possible, it was thanks to production on site, and not exports.
That's part of it, sure, but not everything. When Japan was making inroads into the US market, US firms were very slow to react. As Japan became more and more successful, more people looked into the source of their success. Some from industry, some from academia went over to see how they operated. Eventually people were convinced that the Japanese were actually quite good at making cars and not just dumping, and efforts to learn from them lead to things like NUMMI; the joint venture between GM and Toyota (Tesla now owns the plant).
Also, Japan was interested in opening plants in the US because it exported to the US. Being close to your customers has advantages, both in terms of supply chain logistics, and getting better insight into what your customers want. A lot of companies that off-shored work out of the US were sad to find that their products ended up arriving slower to market, and / or inferior due to things like a disconnect between manufacturing and engineering. In other words, I doubt Toyota would be here if they hadn't exported here in the first place.
Also, opening up plants here is one way to account for trade imbalances. Like I said previously, current and capital accounts balance out. If Japan net exports to the US they have to net invest in the US. It's better for both parties if they build plants rather than just buy treasuries.
EDIT: You guys can see TARP fund repayments here - http://www.treasury.gov/initiatives/financial-stability/reports/Pages/TARP-Tracker.aspx#All
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Who cares who owns them? If the Japanese can run GM better than current management, so be it. We'd all benefit from that.
Here is why you don't understand the problem behind stable imbalance of the balance of payments.
You've missed the point. The work CMs do is labor intensive and exportable, and so it was moved to China. It's just like textiles: NYC still has a vibrant fashion industry, only it is mainly for design and marketing, rather than manufacture. Same goes for Apple, the labor intensive unskilled labor portion of making phones was exported.
Electronics manufacturing is also pretty cemented in China now. The quality of the labor has increased a lot, and firms are able to absorb large pay increases through rapidly increasing productivity. A lot of other Asian countries now have cheaper labor, but no one is expecting them to gain much market share any time soon.
I believe you are discussing some other topic : the point was that, atho in the total cost, labor is a small %, Apple still does it because it gain from it. It's really a simple fact, and it's the same exact thing for germany using cheap labor in the meat production, it's a question of cost, nothing else.
And it's not intensive in labor, what is intensive in labor is the part that has not been delocalised, design and marketing, because it needs educated and productive workers - they need to pay decent wage for decently educated and competent people.
That's part of it, sure, but not everything. When Japan was making inroads into the US market, US firms were very slow to react. As Japan became more and more successful, more people looked into the source of their success. Some from industry, some from academia went over to see how they operated. Eventually people were convinced that the Japanese were actually quite good at making cars and not just dumping, and efforts to learn from them lead to things like NUMMI; the joint venture between GM and Toyota (Tesla now owns the plant).
That's also completly off topic.
Also, Japan was interested in opening plants in the US because it exported to the US. Being close to your customers has advantages, both in terms of supply chain logistics, and getting better insight into what your customers want. A lot of companies that off-shored work out of the US were sad to find that their products ended up arriving slower to market, and / or inferior due to things like a disconnect between manufacturing and engineering. In other words, I doubt Toyota would be here if they hadn't exported here in the first place. Also, opening up plants here is one way to account for trade imbalances. Like I said previously, current and capital accounts balance out. If Japan net exports to the US they have to net invest in the US. It's better for both parties if they build plants rather than just buy treasuries. EDIT: You guys can see TARP fund repayments here - http://www.treasury.gov/initiatives/financial-stability/reports/Pages/TARP-Tracker.aspx#All
You seriously don't seem to understand that buying capital (debt, investment in capital asset or whatever) is entirely different than selling good and DOESN T BALANCE OUT. I don't understand why you keep saying it balance out when everything shows it doesn't ? When you invest in capital assets you GAIN income from it and thus it does not balance out but it combine with exports and increase the excedent ?
It's the opposite that is true : the US invest in other countries rather than producing and then exporting, so their trading account is in deficit but their capital account is in surplus.
Take Germany ; they have a huge trading surplus, both for goods and services AND capital / finance. What they gain from goods and services, instead of investing it growing their own demand, they invested in spanish or greek debt, and gained more money through those capital assets.
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On April 14 2015 07:32 WhiteDog wrote:Show nested quote +Who cares who owns them? If the Japanese can run GM better than current management, so be it. We'd all benefit from that. Here is why you don't understand the problem behind stable imbalance of the balance of payments.
Lol
Show nested quote +You've missed the point. The work CMs do is labor intensive and exportable, and so it was moved to China. It's just like textiles: NYC still has a vibrant fashion industry, only it is mainly for design and marketing, rather than manufacture. Same goes for Apple, the labor intensive unskilled labor portion of making phones was exported.
Electronics manufacturing is also pretty cemented in China now. The quality of the labor has increased a lot, and firms are able to absorb large pay increases through rapidly increasing productivity. A lot of other Asian countries now have cheaper labor, but no one is expecting them to gain much market share any time soon. I believe you are discussing some other topic : the point was that, atho in the total cost, labor is a small %, Apple still does it because it gain from it. There is nothing to add to that, it's the same exact thing for germany using cheap labor in the meat production, it's a question of cost, nothing else. And it's not intensive in labor, what is intensive in labor it's the part that has not been delocalised, design and marketing, because it needs educated and productive workers - they can't follow a simple pattern and thus need to pay decent wage for decently educated and competent people.
Sorry, but you do not understand what you are talking about. Apple does not have manufacturing capacity so they did not decide to make phones in China vs the US to shave a couple bits off of their expenses. They went to China because that is where the industry is, and Apple wasn't willing to build an electronics industry from scratch to make some phones. Not long ago Apple was nearly dead and they would probably be dead if they went that crazy route.
Now, the industry exists in China because, for one thing, it is labor intensive. For MANY companies this is a big deal, even if it isn't a big deal for Apple's phones specifically. The industry does not exist strictly to build iPhones, and so you should not be analyzing the situation as if it did.
Edit: You seriously don't seem to understand that buying capital (debt, investment in capital asset or whatever) is entirely different than selling good and DOESN T BALANCE OUT. I don't understand why you keep saying it balance out when everything shows it doesn't ? When you invest in capital assets you GAIN income from it and thus it does not balance out but it combine with exports and increase the excedent ?
It's the opposite that is true : the US invest in other countries rather than producing and then exporting, so their trading account is in deficit but their capital account is in surplus.
http://www.newyorkfed.org/aboutthefed/fedpoint/fed40.html
aka BOP = CURRENT ACCOUNT + CAPITAL ACCOUNT = CREDITS - DEBITS = 0
Current account and capital account balance out. Not, the current account balances. The capital account balances. Geez, learn to read.
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On April 14 2015 07:21 puerk wrote:Show nested quote +On April 14 2015 07:02 WhiteDog wrote:1) We'd be better off if we hadn't protected the auto industry as much as we had. Still, US automakers can open up a car factory in China if they want to, in some cases they already have. It's pretty common for US brands to use Canada and Mexico for parts and assembly. "What if". All I see is your car industry is in better spot than Italian car industry (slowly being sold to the chinese), Swedish (almost entirely sold to the chinese) or french one (half sold to the chinese). 2) Untrue. Apple does not produce anything in China. Chinese contract manufacturers make things in China. That's where the electronic industry is strong, and a fair bit of the work is labor intensive. This doesn't change anything. Sure if you cut the entirety of the production of the apple and just measure putting two chips together it's labor intensive. Fact is, on the total cost of the product, labor is almost nothing, and Apple still goes to china (or contract chinese manufacturers - WHICH IS THE SAME) for costs reasons, not for the quality of their labor. 3) Asian and European automakers export to the US all the time. They first got their products here by exporting to us, than opened up shops locally later on. And as I already mentioned, Canada and Mexico are large sources of auto imports. You change the subject ? You said toyota helped americans to learn how to produce better car, if this was possible, it was thanks to production on site, and not exports. On April 14 2015 06:50 puerk wrote:
well this 300th discussion of the topic only proved:
- individualists will never understand aggregate measures..
- principialists will never understand empirics
- young white afluent males think, less rules for everybody will make everybody have a priviledged shot at life
- some people could twist words, nitpick facts and ideas until everything finally match their preconceived ideas. seriously? phil.ipp said germans huge trade balance surplus was only possible through low wages and would take a hit from minimum wage, i said that thats not likely as most manufacturing jobs for the export market pay pretty decent, and then you come in with 1 group of jobs from one sector compromising a tiny fraction of exports, somehow thinking that "some people in x get paid much too low wages" (which i ofc agree with) refutes "most people in x get paid decent wages"
Trade surplus WILL take a hit from wage growth, no matter which sector gets it, because consumption will rise even if everything about the main export sectors remains the same. This is why Germany is finally letting wages grow from 2015 onwards, after all, the surplus (and accompanying deficits of trade partners since trade is a zero sum game) is too damn high.
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I'm sorry Jonny, but you don't even seem to understand that capital investment is not the same as buying goods and services. When you buy capital, you gain capital income from it, so it does not balance anything. Chinese buying Italian and French industry means they will not only gain from exports, but also through the capital assets they own (assets that will give them part of the profit).
Also labor intensive ? ![[image loading]](http://s2.epi.org/files/2012/apple_iphone_cost.png.608)
seriously? phil.ipp said germans huge trade balance surplus was only possible through low wages and would take a hit from minimum wage, i said that thats not likely as most manufacturing jobs for the export market pay pretty decent, and then you come in with 1 group of jobs from one sector compromising a tiny fraction of exports, somehow thinking that "some people in x get paid much too low wages" (which i ofc agree with) refutes "most people in x get paid decent wages"
You said : - low wage are mostly services (which is wrong and I gave on exemple)
- export oriented are decently paid (which is wrong and I gave one exemple).
Not to mention services also play a huge role in the balance of trade even if they are not related to export sectors.
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On April 14 2015 07:45 WhiteDog wrote:+ Show Spoiler +I'm sorry Jonny, but you don't even seem to understand that capital investment is not the same as buying goods and services. When you buy capital, you gain capital income from it, so it does not balance anything. Chinese buying Italian and French industry means they will not only gain from exports, but also through the capital assets they own (assets that will give them part of the profit). Also labor intensive ? + Show Spoiler + seriously? phil.ipp said germans huge trade balance surplus was only possible through low wages and would take a hit from minimum wage, i said that thats not likely as most manufacturing jobs for the export market pay pretty decent, and then you come in with 1 group of jobs from one sector compromising a tiny fraction of exports, somehow thinking that "some people in x get paid much too low wages" (which i ofc agree with) refutes "most people in x get paid decent wages" You said : - low wage are mostly services (which is wrong and I gave on exemple) - export oriented are decently paid (which is wrong and I gave one exemple). Not to mention services also play a huge role in the balance of trade even if they are not related to export sectors.
Yes. Stop googling like a freshman and use your brain.
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EPT
