Difficult or Impossible to Work in Manufacturing in the USA?

[MitchJi]

Hi,

I'm hoping for a civil discussion but I won't be surprised if this gets moved to Toxic Discussions .

http://www.huffingtonpost.com/2011/01/18/industrial_policy_hu_visit_n_810582.html

Hu Visit A Reminder Of One Way China Leaves U.S. In The Dust

As Chinese President Hu Jintao visits the United States, much of the domestic commentary is focused on how his country should be more like the United States -- how it should properly value its currency, improve its human-rights record, open its borders to free trade, consume more and save less.

But as the leaders of the two biggest economies meet, it's hard to overlook the fact that one is lagging and the other is booming. That raises the question: Are there ways that the United States should be more like China?

And the answer is: Maybe one.

China, after all, has one heck of an industrial policy. Its government is actively involved in growing its manufacturing base, using vast government subsidies, tariffs and incentives to make sure more and more of its citizens have jobs making things.

By contrast, the United States doesn't have an industrial policy at all.

What is an industrial policy, exactly? In the United States, it would entail a sustained program to encourage homegrown industry. It would include a more assertive trade policy (you block our goods, we'll block yours), but also such things as chartering a national development bank, ending the favorable treatment of foreign investments, creating new tax credits for research and development, and actively discouraging offshoring, for starters.

Leo Hindery, a former CEO who heads the US Economy/Smart Globalization Initiative at the New America Foundation, is one of the foremost advocates of a U.S. industrial policy.

"I think you have to start with the premise that a country as big as ours -- the largest of the developed economies -- can't survive with less than 8 percent of its men and women making something," Hindery told HuffPost.

According to the latest figures, about 7.6 percent of the workforce is currently engaged in manufacturing.

"It needs to be 20 to 25 percent," Hindery said, "and it needs to be 20 to 25 percent of GDP, otherwise the gap that you have to fill is achieved only through consumer credit."

The problem is simple, he said: If we aren't making enough ourselves, then we buy it elsewhere, and "you're left with this crushing perpetual trade deficit."

One of Hindery's greatest frustrations is that, contrary to the rhetoric of the 2008 presidential campaign, the Obama administration doesn't seem to appreciate the particular value of manufacturing jobs.

"What happened was he dropped in the [Robert] Rubin team, and [Larry] Summers," Hindery said.

The Economist magazine last year credited Obama with a sort of accidental industrial policy, in the form of his massive bailouts of financial institutions and car companies.

But Hindery scoffed at such an argument, noting that the bailouts didn't come with the right conditions. Obama could have insisted that GM and Chrysler keep manufacturing jobs in the U.S. as part of the deal, he said. Instead, they actually made big investments overseas.

"Next bailout, have them promise that the next plant expansion will be in Flint," Hindery said.

Sen. Sherrod Brown (D-Ohio), is among the many other proponents of an industrial policy. In a blog post on HuffPost, Brown wrote:

To realize our full potential, we must stop ignoring the challenges that manufacturing faces. We need a national plan -- a national manufacturing policy -- that aligns federal actions with the goal of strengthening our manufacturing sector.

One feature he suggested:

There should be a coordinated federal response when a community experiences massive job loss.... The federal government has a strategy to assist communities hit by a natural disaster. We must follow the same protocol when a community is devastated by a major plant closing.

Author and editor Robert Kuttner recently wrote in The American Prospect about his conclusion:

[T]hat trade policy and industrial policy are inextricably linked; that we need a radically different approach to trade, so that the global trading system has a single set of rules rather than a maze of double standards; and that we need standards to differentiate legitimate development policy from predation, as well as buffers to protect our legitimate interests when other nations pursue predatory policies. And just as we need to drop the fantasy that other nations admire our fantasy of laissez-faire, we need to jettison the delusion that industrial policy doesn't work. Judging by the success of Japan, Korea, China, Brazil, Taiwan, and the U.S. at an earlier stage of our history, it works just fine. All that remains to accomplish this is to wrest control of policy-making from Wall Street, so that Main Street can have healthy industries once more.

But Robert Borosage, co-director of the Campaign for America's Future, warns that the opposition to any such move would be fierce:

Just as the insurance companies impede sensible reforms in health care, and big oil and coal block vital changes in energy, and Wall Street guts vital reform of finance, global corporations and banks will spend a lot of money to defend the unsustainable trade policies of the old economy.

Writing in The American Prospect, Richard McCormack summed up the long decline of American manufacturing this way:

Americans stopped making the products they continued to buy: clothing, computers, consumer electronics, flat-screen TVs, household items, and millions of automobiles.

And while Wall Street financiers and the offshoring multinationals who finance the U.S. Chamber of Commerce are dead-set against government intervention on behalf of local industry and American workers, that doesn't mean the rest of the business community agrees.

Andy Grove, the co-founder of Intel, made news last summer by writing that "while free markets beat planned economies, there may be room for a modification that is even better." He explained:

Today, manufacturing employment in the U.S. computer industry is about 166,000 -- lower than it was before the first personal computer, the MITS Altair 2800, was assembled in 1975. Meanwhile, a very effective computer-manufacturing industry has emerged in Asia, employing about 1.5 million workers -- factory employees, engineers and managers. ...

The first task is to rebuild our industrial commons. We should develop a system of financial incentives: Levy an extra tax on the product of offshored labor. (If the result is a trade war, treat it like other wars -- fight to win.) Keep that money separate. Deposit it in the coffers of what we might call the Scaling Bank of the U.S. and make these sums available to companies that will scale their American operations. Such a system would be a daily reminder that while pursuing our company goals, all of us in business have a responsibility to maintain the industrial base on which we depend and the society whose adaptability -- and stability -- we may have taken for granted.

One example (excerpts below):
http://www.nytimes.com/2011/01/15/business/energy-environment/15solar.html

Solar Panel Maker Moves Work to China

BEIJING — Aided by at least $43 million in assistance from the government of Massachusetts and an innovative solar energy technology, Evergreen Solar emerged in the last three years as the third-largest maker of solar panels in the United States.

But now the company is closing its main American factory, laying off the 800 workers by the end of March and shifting production to a joint venture with a Chinese company in central China. Evergreen cited the much higher government support available in China.

...Although solar energy still accounts for only a tiny fraction of American power production, declining prices and concerns about global warming give solar power a prominent place in United States plans for a clean energy future — even if critics say the federal government is still not doing enough to foster its adoption.

Beyond the issues of trade and jobs, solar power experts see broader implications. They say that after many years of relying on unstable governments in the Middle East for oil, the United States now looks likely to rely on China to tap energy from the sun.

Evergreen, in announcing its move to China, was unusually candid about its motives. Michael El-Hillow, the chief executive, said in a statement that his company had decided to close the Massachusetts factory in response to plunging prices for solar panels. World prices have fallen as much as two-thirds in the last three years — including a drop of 10 percent during last year’s fourth quarter alone.

Chinese manufacturers, Mr. El-Hillow said in the statement, have been able to push prices down sharply because they receive considerable help from the Chinese government and state-owned banks, and because manufacturing costs are generally lower in China.

“While the United States and other Western industrial economies are beneficiaries of rapidly declining installation costs of solar energy, we expect the United States will continue to be at a disadvantage from a manufacturing standpoint,” he said.

Even though Evergreen opened its Devens plant, with all new equipment, only in 2008, it began talks with Chinese companies in early 2009. In September 2010, the company opened its factory in Wuhan, China, and will now rely on that operation...

Ian A. Bowles, the former energy and environment chief for Gov. Deval L. Patrick, a Democrat who pushed for the solar panel factory to be located in Massachusetts, said the federal government had not helped the American industry enough or done enough to challenge Chinese government subsidies for its industry. Evergreen has received no federal money.

“The federal government has brought a knife to a gun fight,” Mr. Bowles said. “Its support is completely out of proportion to the support displayed by China — and even to that in Europe.” ...

...Evergreen was selling solar panels made in Devens for $3.39 a watt at the end of 2008 and planned to cut its costs to $2 a watt by the end of last year — a target it met. But Evergreen found that by the end of the fourth quarter, it could fetch only $1.90 a watt for its Devens-made solar panels. Chinese manufacturers were selling them for as little as $1.60 a watt after reducing their costs to as little as $1.35 or less per watt....

In a telephone interview in August, Mr. El-Hillow said that he was desperate to avoid layoffs at the Devens factory. But he said Chinese state-owned banks and municipal governments were offering unbeatable assistance to Chinese solar panel companies.

Factory labor is cheap in China, where monthly wages average less than $300. That compares to a statewide average of more than $5,400 a month for Massachusetts factory workers. But labor is a tiny share of the cost of running a high-tech solar panel factory, Mr. El-Hillow said. China’s real advantage lies in the ability of solar panel companies to form partnerships with local governments and then obtain loans at very low interest rates from state-owned banks.

Evergreen, with help from its partners — the Wuhan municipal government and the Hubei provincial government — borrowed two-thirds of the cost of its Wuhan factory from two Chinese banks, at an interest rate that under certain conditions could go as low as 4.8 percent, Mr. El-Hillow said in August. Best of all, no principal payments or interest payments will be due until the end of the loan in 2015.

By contrast, a $21 million grant from Massachusetts covered 5 percent of the cost of the Devens factory, and the company had to borrow the rest from banks, Mr. El-Hillow said.

Banks in the United States were reluctant to provide the rest of the money even at double-digit interest rates, partly because of the financial crisis. “Therein lies the hidden advantage of being in China,” Mr. El-Hillow said.

 

[Lessss]

The people with the money in the US use that money to manufacture things in China pretending to be a Chinese factory then ship it into the US to sell in their stores in the US. Policy is exactly as they want it. Economic slaves like you and I don't have a say in that.

 

[Jeremy Harris]

This isn't a problem specific to the US, over here we've gone through a massive downsizing of our manufacturing industry, too. There are whole swathes of the country that used to be centres for industries like engineering, steel making, car manufacturing, cotton and wool milling etc that are now effectively dead zones, with relatively high unemployment and migration of working age people to other areas, where there are still service sector jobs.

The problem western governments have is that they are, whether we like it or not, more influenced by established large corporations than by voters. This inevitably leads to a reluctance to support new ventures or smaller businesses, particularly if those may become competitors for the big lobby group companies. I don't know about the US, but I do know that trying to start a new business here is extremely expensive and difficult. Banks won't give affordable finance, the government is more interested in taxing businesses than supporting them and the proliferation of regulations governing staff employment, compulsory redundancy rules etc all make it very hard for anyone to start a business that needs to employ staff making things from the start.

We've seen the support that governments have for big business first hand with EVs, where, despite supposed government enthusiasm for alternative energy, the car and oil industry have been able to suppress and restrict the activities of new, smaller, companies bringing useful technologies to market, delaying the release of key enabling technologies, like batteries, for example. The Chinese, with their lack of respect for IP, have bulldozed through this corporate blocking, and are now the market leaders in the world with regard to EV components. Our governments could have released this block, by better supporting small, new technology endeavours and actively preventing big companies from blocking developments for reasons of corporate greed.

We can blame the Chinese for our woes in the west, but my view is that they have just seen a market opportunity and are taking advantage of it, much the same as western oil and mineral exploitation companies have done in other countries around the world in the past. I don't think we have anyone to blame but ourselves, for allowing our governments to become corrupted by corporate influence and ignore the needs of the people.

Jeremy

 

[spinningmagnets]

Politically, the average US citizen is starting to lean slightly left, whether they realize it or not. One of the basic precepts of a socialistic view is that it is "unfair" for a small portion of the population to become fabulously wealthy, while the rest toil in the middle class. (even if doing so creates more jobs)

To help businesses boom, you must create a business friendly environment, then jobs will follow. We want lots of jobs available to choose from, we just hate it when we see someone who runs a successful company and becomes a multi-millionaire. China has a lot of freshly-minted billionaires running the booming corporations that are building everything under the sun.

Chinas attitude towards the worker is that If you don't like something about your job, look for a different one, its not the governments responsibility. I know manufacturing jobs are boring, so...I guess the government should force companies to make manufacturing jobs enjoyable?

In the link above they said when GM got a bail-out, there should have been a condition that they expand in Flint Michigan (instead of overseas),...how about expanding into non-union Tennessee? How about a car assembly-line job where the guy that only has a high-school education gets $15/hr instead of $28/hr and a massive retirement package, whether the company will later need to file bankruptcy or not?

If you believe that it is the governments job to force companies to pay a wage where you can afford to buy a house that you like...your voting habits are the reason jobs are leaving the US. The kids working at McDonalds are getting over $7/hr now, even if they are lousy workers with bad attitudes.

The UAW (I was in the UAW four years) said they'd go on strike and shut Ford down if they tried to cut wages on the assembly line. Ford agreed to the new contract...and then built a brand new assembly line in Brazil filled with shiney new robots. THANKS UAW!! thats the last time they try to cut MY wages to $22/hr,...boy, we sure taught THEM a lesson...

 

[MitchJi]

Hi,

In the link above they said when GM got a bail-out, there should have been a condition that they expand in Flint Michigan (instead of overseas),...how about expanding into non-union Tennessee? How about a car assembly-line job where the guy that only has a high-school education gets $15/hr instead of $28/hr and a massive retirement package, whether the company will later need to file bankruptcy or not?

How about anywhere in the U.S.?

If you believe that it is the governments job to force companies to pay a wage where you can afford to buy a house that you like...your voting habits are the reason jobs are leaving the US. The kids working at McDonalds are getting over $7/hr now, even if they are lousy workers with bad attitudes.

Factory labor is cheap in China, where monthly wages average less than $300. That compares to a statewide average of more than $5,400 a month for Massachusetts factory workers. But labor is a tiny share of the cost of running a high-tech solar panel factory, Mr. El-Hillow said. China’s real advantage lies in the ability of solar panel companies to form partnerships with local governments and then obtain loans at very low interest rates from state-owned banks.

Does China give those loans for plants in MI or TN?

We can blame the Chinese for our woes in the west, but my view is that they have just seen a market opportunity and are taking advantage of it, much the same as western oil and mineral exploitation companies have done in other countries around the world in the past. I don't think we have anyone to blame but ourselves, for allowing our governments to become corrupted by corporate influence and ignore the needs of the people.

I agree with blaming ourselves (P.T. Barnum "Nobody ever went broke underestimating the American public"). But in addition to that the corruption has gotten out of hand so some of the blame falls on politicians and corrupt business leaders (more than enough blame to go around).

 

[John in CR]

Blame is just a waste of keystrokes. There's a problem. It won't go away if we ignore it. In fact, it will only get worse if we continue to do so. The question is, what are we going to do about it?

 

[Drunkskunk]

Blame is just a waste of keystrokes. There's a problem. It won't go away if we ignore it. In fact, it will only get worse if we continue to do so. The question is, what are we going to do about it?

+1

 

[bigmoose]

I'm and ol' guy (tm)... I was born in the early 1950's... the industrial planning that China is doing today reminds me of the forward thinking, planning and implementation that the US and key allies did in the 50's and 60's. Forward thinking that ended with the Vietnam war of the 70's in general.

We have stifled creativity, production and entrepreneurship with rules and regulations that throttle the productive folks to redistribute, frankly to the government and government interests. "We the people" are being exploited by "we the government elite" at the current time.

That said, the equation truly has been complicated by the now reasonable quality and very low prices of finished components from China. I have an informal policy to buy from western sources as much as possible, but when I can source quality electrical connectors from China for less than 1/10 of USA suppliers, and get delivery in a week; I am forced to source China. Scale that experience up, and you see the hard facts of our current dilemma.

I do not have the answer... and I am getting more worried with each year.

 

[Drunkskunk]

I haven't got an answer. I think I do, but I'm smart enough to know that I'm an idiot. If I had an answer that would work, others would have thought of it by now too.


I predict we will be China's cheap source of labor in 50 years.
Actualy, not realy. thats a highly egocentric view of the US, and we likely won't be a factor at all. Other countries like Brazil, India, and Japan who activly work to promote their countrie's industry will be the new sources of manufacturing in the global economy. the U.S. will become another Russia, Nigeria, or Mexico. Crime riddled, corrupt, unorganized.

I see China taking us over in 50 years. Not politicaly, as such, But finacialy. China is already buying up our biggest companies. And we have what they need as well. Space, and good agracultural land. They'll be buying up our farms, farming companies, and grain production. They'll be buying into our realestate, our companies. Eventualy, every dollar we spend will be in part, going to China.

 

[mdd0127]

Blame is just a waste of keystrokes. There's a problem. It won't go away if we ignore it. In fact, it will only get worse if we continue to do so. The question is, what are we going to do about it?

Follow the advice in my signature every chance you get. Find out who your money and labor is going to and make sure they're good people....no matter what country they're from. It seems pretty simple but we're in so deep that we will have to make compromises daily. At this point, some things are just not being made by good people which is very sad. I'm making a list of things that I've basically been forced to buy from companies I could nuke without remorse and it's getting long.

Also, the comment about the reasonable quality items coming from overseas make me throw up in my mouth a little. Lets be realistic, a very large percentage of it is disposable junk that barely functions for the term of it's warranty. That's my experience at least.

Another thing that is scary to me is that these people are suggesting MORE government intervention into business. THE GOVERNMENT HAS NOOOOOO PLACE INTERVENING IN BUSINESS. Governments that do play with the private sector should be boycotted for market manipulation. Only a free market is a free market. The whole problem we're having is that putting control of business financing in the hands of government results in unfair handouts to those closely associated with the government. I as a taxpayer DO NOT want to support ANY industry with my taxes. I can directly support any business I want by purchasing things from them directly instead of getting things from someone else. This is the way the free market should function. Consumers should actively buy products from companies whose ideals they support. This way everything will balance out.

We can start by boycotting Evergreen Solar. Finks.

And to the comment about McDonalds employees making a whopping $7 an hour. $7 an hour isn't even enough to maintain a car to get to work and maintain insurance on it. Anyone that will work for less than a living wage, which is around $30 an hour if you want to exist like a human and keep up with today's unavoidable "paper costs", needs to get their priorities straight or disappear. If were are no mooks willing to waste their lives working for a big corporation for NOTHING, the big corporations that greedily thrive on cheap ignorant labor would have to change their business models. If a CEO thinks it's OK to pay people making his companies products $300 per month, HE SHOULD BE BURNED AT THE STAKE PUBLICLY.

So maybe we should just start making it hell on people that work for crappy companies for peanuts. Then the people working for nothing but making ceo's richer will reassess their positions in the world, learn some real skills and get jobs with reputable companies. Think about it. If you worked at Taco Bell, which I have, and fifty people per day came in, screamed at you, ordered a whole bunch of stuff, then drove off without paying or taking their orders, you'd consider a different line of employment, maybe go to school and learn something useful. It sounds horrible. Those poor people aren't even making enough to survive and I'm talking about making their lives harder...... They way I see it is that people that are willing to work for substandard wages and for companies with no respect for the environment are leeches on our race. I think that they deserve a little trouble for their lack of motivation and ethics.

I see all of these posts pointing out these problems and finding people to blame but I have never seen anyone offer a SOLUTION. It's in my sig. Read it. Think about it. Use your money and labor like a tool to turn the world back into a respectable, sustainable place. It is TOTALLY possible.

I hope I didn't toxic things out too much. :wink:

 

[gogo]

Does this remind anybody of the talk that went on about Japan in the 80's? Japan boomed and then tanked in the 90's due to government interference causing misallocation of capital. I wonder if there are any parallels to be drawn?

It is hypocrisy that we demand worker and environmental protections of domestic industry, but not our trading partners. Something needs to be reconciled there.

Yes, as the post above points out, there are moral consequences to all actions. My problem is digging through the layers of any given situation. We live in a very complex world.

 

[John in CR]

While there may be some parallels that can be drawn wrt Japan, but any kind over overall comparison is invalid. Japan is only 10% the size China in terms of population, and China is not handicapped in terms of being decimated by war in the previous decade. China is also in a position of huge surplus, not huge debt like Japan was after WWII.

The US will never become China's next source of cheap labor. Africa is the untapped cheap labor source with a population of almost a billion people, and China is already laying the groundwork for that, but first they will strip Africa of its resources.

The US needs to forget about worrying about China, because there's not really anything of substance that the US can do, and China will do whatever China is going to do. China's internal growth will soon enable them to be self sustaining within their own borders. That means the concern should be what happens when China makes everything, and decides to keep it all for themselves. That's also when they unleash the exchange rate, and we won't be able to afford to buy their leftovers.

Instead, the US needs to worry about the US. If the US doesn't produce something the world needs, then the world won't need the US, and producing computer software won't get very far in the long run. Besides the government creating an environment not conducive to production of real goods in the US, the main problem is education. The US is educating its young to become lawyers, government employees, and service employees, with education in math and science is taking a back seat or at best equal to liberal arts. In the long run its math and science that help this world advance.

 

[Tom Tom]

2 words: federal reserve

 

[x88x]

The region where I live is rather unusual, I think, in that there are actually still a fair number of manufacturing jobs...they're just mostly for the defense industry, which really doesn't help the whole 'import/export' thing much. There are still manufacturing jobs in the US, but I think two big factors have been driving employees away from them. The first is the move from physical products to digital products (software, etc), though even there a lot of the industry is getting outsourced. The second is the refusal of people to work for less than what they deem a "reasonable wage"..which often has very little to do with what they actually need. How many people on welfare today in the US have turned down jobs because the salary wasn't high enough to meet their expectations? According to the latest BLS statistics, the unemployment rate in the DC-metropolitan area is at 6%...but every time I go out I see plenty of signs by companies looking for workers.

Like others, I don't have an answer to the problem, but I do, to a certain extent, agree with mdd0127 (god help me ). It's not a complete solution, but I think being responsible with who you buy products and services from does help the problem a lot.

Anyone that will work for less than a living wage, which is around $30 an hour if you want to exist like a human and keep up with today's unavoidable "paper costs", needs to get their priorities straight or disappear.

...so many places I could go with that... I make the equivalent of about $20 an hour and I'm doing just fine, thanks. I can't afford all the luxuries I might like, but I am definitely "existing like a human", as you put it. I've met plenty of people who make quite a bit less than I do that do just fine as well. Hell, most of the adults I grew up around didn't make more than $50k per year (per household!) and they were perfectly happy. Living costs are different in different areas (I actually live in a fairly high-cost area); what is "necessary" where you live is luxury in many parts of the country.

 

[John in CR]

2 words: federal reserve

??????????????? Tom Tom, The Fed is doing it's job with interest rates at historical lows while maintaining low inflation despite the inflationary pressures of greatly increased energy costs. Those low interest rates have the secondary benefit of keeping the servicing of the massive debt load of the US government from being a far greater drain on the overall economy. In fact, rates are currently so low that the US is getting a temporary pass for its past sins which buys some time to get its act together.

 

[Tom Tom]

??????????????? Tom Tom, The Fed is doing it's job with interest rates at historical lows while maintaining low inflation despite the inflationary pressures of greatly increased energy costs. Those low interest rates have the secondary benefit of keeping the servicing of the massive debt load of the US government from being a far greater drain on the overall economy. In fact, rates are currently so low that the US is getting a temporary pass for its past sins which buys some time to get its act together.

Now thats some funny sarcasm John........until I realized you are serious which makes it utterly sad.

The inflationary fed is devaluing every retirement dollar YOU have saved.

 

[John in CR]

??????????????? Tom Tom, The Fed is doing it's job with interest rates at historical lows while maintaining low inflation despite the inflationary pressures of greatly increased energy costs. Those low interest rates have the secondary benefit of keeping the servicing of the massive debt load of the US government from being a far greater drain on the overall economy. In fact, rates are currently so low that the US is getting a temporary pass for its past sins which buys some time to get its act together.

Now thats some funny sarcasm John........until I realized you are serious which makes it utterly sad.

The inflationary fed is devaluing every retirement dollar YOU have saved.

You might be able to fault Greenspan for missing that the economic growth since 9/11 was mostly driven by giving home loans to virtually anyone, but policing mortgage lending wasn't his job and you should really look to those who criminally conspired to profit from those practices. He did warn of housing bubble though, because intuitively he knew that housing prices were increasing too fast for too long. As far as I'm concerned the Fed has done a hell of a job for decades, and anyone who doesn't think so is either looking at some micro portion of what the Fed actually does or doesn't have an understanding of macro economics and how the limited tools of the Fed impact the economy.

It's government spending and regulation that are out of control and devaluing YOUR retirement dollars, not the Fed. The other big thing strangling US manufacturing are the lawyers and the resulting sky high costs of insurance. Serious tort reform is the single biggest thing the US could do to help manufacturing. Then the government can use the tried and true method of tax breaks to target specific industries to stimulate. If Obama is serious about alternative energy, then tax credits only for US made equipment, would kill 2 birds with one stone. I think it may be just lip service though, as evidenced by the BS giveaways in the stimulus package. Giving money away never does good AFAIC.

FWIW, since I was a teen in the 70's and saw a graphical explanation of the term "baby boomers", of which I am at the tail end, I haven't counted on a penny from Social Security when I retire. Back in 2007 I found out about what was going on with mortgage lending, so when oil was climbing crazily in the first half of '08 I knew that would ultimately be the corrective trigger. Despite serious arguments and some downright fights, by July of '08 I convinced everyone in my family to liquidate all of their real estate holdings along with all equities positions in their retirement accounts. As you can imagine we made out just fine, and my retirement investments are now sufficiently diversified that what happens with the US dollar is of little consequence, so find some sheep to worry about, not me and mine.

FWIW pt2, my latest push is to get all the kids learning Mandarin Chinese. My own children should enjoy a huge advantage if they are fluent in English, Spanish, and Mandarin.

 

[PedalingBiped]

Tariffs and duty's protected us for 200 years. we put in place safety rules so women wouldn't die when there was a fire and the doors were locked to prevent them from going to the bathroom. We put in rules to protect our air and water. We put in rules to protect our health.

China gives us toys with lead in the paint. I've seen pictures where it looks like smoke coming out of a pharmaceutical factory is actually flies!

China has no rules or protection of its people, look at the milk and honey poisoning.
China has tariffs to protect its industries, we have few.

Free trade means one way trade.
When Reagan came in, he sent commerce people to Mexico to give seminars to US companies on how to move there. We paid them to move our jobs away.

Corporations want no restrictions on what they do, whither it is polluting the air,water or soil. They move on then we have to clean it up, China doesn't even bother.

Corporations think of employees as liabilities, and the cheaper the wage the better.

Multinational Corporations have no loyalty to one nation. They will move to where their profits will be better. Most of our trade deficit is actually just companies moving trade from a Chinese affiliate to the USA. Black and Decker ships their drills here and Black and Decker sells them here. Most of the profit is transferred to China to avoid taxes.

We need to protect our own industries. We need to put tariffs in place to protect them from cheap foreign knock-offs.

 

[John in CR]

Import tariffs and duties won't stimulate anything. Increased taxes in any form depresses the economy, and just puts more money in the government's hand, which they are only to happy to spend. The effects are inflationary and the money to pay those taxes comes out of the pockets of consumers. OTOH targeted tax reductions and tax credits can stimulate investment in a big way, and to extent they are favorable enough to create tax shelters the investment money comes directly from the rich to create jobs for the everyday people.

For a small country like here in Costa Rica where most products are imported, import duties/tariffs works quite well, which combined with the 13% sales tax pretty much replaces income tax. The sales tax provides a flat base tax, and then import duties vary by product. As a tax on the rich, the import duties are very high on luxury items, as much as 100% in some cases (ie it doubles the cost). Lead batteries are a different example, and due to their toxicity and higher cost for special recycling, have a 40% duty. Lithium batteries have only a 3% duty because they are more environmentally friendly. The US could go to a similar and quite fair system, but it would require a total overhaul to the tax system. It also won't make as much sense, because not everything is imported.

 

[MikeFairbanks]

I worked in American manufacturing for two years before going to college to become a teacher (a service industry). I was proud of my work, and much of it is still out there.

This is the company for which I worked http://carvin.com , and to this day they are still making their guitars and amplifiers right here in the USA.

And nobody (I mean NOBODY...including Gibson) makes guitars with the kind of quality you get in a Carvin. I was a cabinet maker (for speakers and amplifiers), but worked next to the guitar shop. Those guys let nothing leave the shop until it was perfect.

Anytime I messed up on my end of something (making cabinets), a supervisor would bring it to me and ask, "do you want to buy this?" It only took a couple of times (them asking me that) to get it. I realized that I didn't want to buy something that wasn't done right, so I did things right. When I messed up I fixed it right or took it apart.

We destroyed a lot of good guitars....cut them up in the bandsaw and threw them out. Why throw away perfectly good guitars?

Because good wasn't our goal. Perfection was.

http://carvin.com

IF YOU ARE SERIOUS ABOUT SAVING THE USA's manufacturing, read every single label in every single store.

Yesterday I was at Wal-Mart looking for zipties (we all use them like toothpaste around here). I found a plastic can filled with a variety of them. The label said "Made in the USA."

On the wall next to it hung a pack of black zipties that said "Made in China."

I don't give a flyin' flip how much more it costs, I'm buying American. They can charge three times the price....I'm buying American.

If I want to buy something Chinese, it better be unique to China and not available from US manufacturers. Then I'll buy it.

Too many people say, "you can't find anything made in the USA anymore."

Baloney

It's everywhere, but we often look at the price and never at the label. At Home Depot there are dozens of tape measures. You and I know that the five-dollar one is from China and the thirty-dollar one is made in the USA.

Buy the thirty-dollar one and take good care of it.

 

[x88x]

At Home Depot there are dozens of tape measures. You and I know that the five-dollar one is from China and the thirty-dollar one is made in the USA.

Buy the thirty-dollar one and take good care of it.

Funny story. My tape measure that I use all the time is actually one I found by the side of the road, oh, probably 15 years ago, while out on a bike ride. 25' Starrett Precision Tape. The label says american made, and I believe it. It's in about the same shape it was in when I found it...well, after I got it home and hosed it down hosed it down..


The one that gets me is Kobalt's line of hickory-handled hammers. Emblazoned down the handle in HUGE letters it says "American Hickory" ...and then in little tiny letters on the tag it says "Made in China".

 

[wineboyrider]

2 words: federal reserve

Ditto! As long as the US dollar is the reserve currency of the world then the US can continue to consume Chinese crap! As long as the world continues to accept the fiat Dollar all is well. Fiat empires usually end with a massive war of some type.

 

[jimw1960]

Take heart. All is not lost. Not yet anyway. The Gross Domestic Product (GDP) for all of China was just over $6T in 2010, compared to the US GDP of over $14T. China's manufacturing output only just last year exceeded that of the US for the first time (which came as a surprise to me--I had assumed the exceeded us years ago). When you divide that by population, we still have much higher output per capita. So, obviously we still make stuff, but it isn't consumer goods that you see every day. It's high-end stuff like airplanes, jet engines, turbine generators, and of course the whole military weapons industry. In any event, the trend is not good and we need to working to reverse it NOW. Here is a link to a good article that summarizes where we stand and the challenges we face. http://www.jimpinto.com/writings/chinachallenge.html