1 We'd get killed in the WTO.

2 I think they would try but as I understand it European countries are taking similar steps.

3 No union=no Democrat money and manpower=no mas nothing to see here move along

4 This is full of terrible ideas.  A-.

5 me no likey

6 O/T:  Anyone watching O'Really?  they are talking to people who wrote a book about Sarah Palin and McCain is looking worse and worse as the interview goes on.  Never ever liked him,  Sarah Palin made him bearable and he was so jealous of the fact that she turned around his campaign that he was willing to hand the election over to BO, which he did.  The book is "Sarah from Alaska".   And you wonder why some people think you are crazy to let his fat blond stupid daughter decide what is good for your party.

7 @4

It may be but like I said I can't see it doing worse than the plan we are currently following.

8 So, how do we get the jobs back onshore? The old stand-by TAX INCENTIVES.

--No, you start by ceasing to protect/prop up non-competitive industries so that Americans have more disposable income and competitive industries perform even better.

One example: Agriculture.  Do we really, really need all our produce to come from places like the Central Valley where it is expensive and destructive to the environment when much of that food can be imported more cheaply?  (Cheap subsidized water and externalities provided by illegal labor keep this industry going.)  It would benefit America by not importing Mexico's peasantry, and benefit poorer countries better than foreign aid by developing their export agriculture.

9 Yeah sure let wage depressing, small business destroying Walmart take over to "fix" things. Yeah thats the ticket wingers, what a good idea. You should take this to the public so you can get worse poll numbers than bush.

10 @6

Did you see the military guy (retired general? Colonel? I don't remember) who just went off about how Fort Dix was a terrorist attack committed by an Islamic terrorist, and that it will never be called that because Muslims are a protected group in the US?

I liked the guy. He made sense.

11 Tariffs and subsidies are not the way to prosperity, even if they were not obvious violations of a free trade treaty which we signed. If these violations somehow survived the WTO process, which they would not, then our trading partners would retaliate, and we'd be right back in the trade wars.

And it would all come with similar timing to the Smoot-Hawley tariff, which no doubt occurred to other idea men for similar reasons.

Bad, bad idea.

12 Posted by: shibumi at November 06, 2009 08:40 PM (OKZrE)

I didn't catch his name either but wow did he make O'Really uncomfortable and I love to watch when guests make O'Really uncomfortable.  He si pulling out all the stops tonight, covering all his bases...bernie, geraldo and he has to have Beck in any form even if the guy is recovering from surgery, he has to have him so he "put together a bunch of clips".   And then O'Really actually thinks the ratings are because of him....no way, they are becasue of Beck and Bernie and Denis and probably even Geraldo

13 I hate the hand of the government interfering with the proper functioning of the free market, plain and simple.

I don't trust anyone in government to apply these sorts of things fairly and equitably, and without corruption, no matter which party was in power. Even if we had the most ethical people involved, the system is too complex to be controlled properly.

And who is hurt by the government's interference? The American consumer, who both will end up paying more for a good made here than the same good from abroad. And to add insult to injury, his/her taxes go to supporting those same underperforming American companies.

It's a horrendous idea.

14 The problem at heart is that it is just proposing another government-intrusive idea to replace the bad ones already in place --and it may fare even worse.

As we have seen in other areas, monopolies/oligarchies/category-killer businesses act more like the state than they do Adam Smith.

15 There are so many things wrong with that I don't know where to start.

16 And then O'Really actually thinks the ratings are because of him....no way, they are becasue of Beck and Bernie and Denis and probably even Geraldo

ding ding ding!
We have a winner!

17 I'm confused.

18 --No, you start by ceasing to protect/prop up non-competitive industries so that Americans have more disposable income and competitive industries perform even better.

Word.  We should not be in the sock business, or apparently, the automobile business.  We should do what we do best, grow corn and invent medical devices, as well as conquer lesser nations.

Perhaps we should get into the plunder trade.

19
Sounds awesome chad. Unfortunately any proposal such as yours would probably fall on deaf ears since this administration despises Wal Mart and the free market.

20 Wally mart is changing their business model and going into urban areas.  Greed.  Hope they get creamed.  K mart and Target are coming back fighting.  They have nice clean stores and great computer programs that allow you to bring things back without receipts and they have courteous happy people, the same people every day, working there.

21

How about we invade China, make it the 51st state, and then declare that all Chinese-made goods are Made in the US?

Damn, I'm good.

22 Yeah sure let wage depressing, small business destroying Walmart take over to "fix" things. Yeah thats the ticket wingers, what a good idea. You should take this to the public so you can get worse poll numbers than bush.

Yep. Everyone hates Walmart. That's why people shop there. They are masochistic. Sorta like the people who read the slop that you write.

23 I'd just add that the Russian singer is hot though. I'll give you that.

24 You completely ignore why those jobs no longer exist in the US and why they have moved abroad.  Other countries can manufacture those goods more efficiently than we can here, in other words they have a comparative advantage.  We are better off producing goods/services that we have a comparative advantage in and trading with other countries for their goods/services.  Trying to force production of goods through tax incentives here will create some local employment, but at the cost of the rest of our economy.  Consumers will see prices increase, tax burdens will be higher on everyone else due to subsidizing these business, we will have less goods to trade overseas, and our factories and workers will have been retooled at great expense to produce goods we shouldn't be producing here.

Also, what impact would this have after the economy recovers.  If the tax incentives disappear, the industry cannot compete once again and dies off once again.  This results in unemployment for the workers that were hired in that sector as they have to then find new work and factories that once again must be retooled.  All this would do would be to magnify economic problems for our country.  Protectionism makes a country less prosperous.

25 Posted by: Sjg at November 06, 2009 08:47 PM (qTk+g)

Are you Dealbreaker's brilliant Siz?

26 FairTax

27 Wal Mart isn't the largest pubically traded company in the world -- It's the third, behind Exxon-Mobil (ticker: XOM) and Petrochina (ticker: PTR).

Also, tariffs on imports is a terrible idea, it would skyrocket prices and mitigate any benefit.

If you want to make the US competitive to China you need to make our stuff more appealing, either cheaper or better. We can't be cheaper as our standard of living is far higher, and we earn more than the Chinese worker does, but we can make our goods better than them. We can go into high value goods like the world's number exporter does (Germany).

We can do this by eliminating uncooperative unions. If the union refusing to help keep our companies competitive, they ought to be removed. If the union is being reasonable and only asking for reasonable things like health insurance (no, not Obamacare), wages on par with the rest of the industry, and good conditions, then they are a service and should stay if they are voted in by a private ballot. If unions are being ridiculous by not allowing companies to lay off redundant workers, or threatening strikes if the company doesn't give completely ridiculous concessions like life time employment, then they ought to be decertified by the government.

The way to prosperity isn't by regulating the economy as your editorial suggests in part, it's to allow it to grow unfettered.

You have some good ideas, but if it's a paper on proven economically Conservative principles, it falls short.

Keep working on it, you are on to something for sure.

28 Your idea won't work because no matter what "incentives" and etc. Wal-Mart is offered, they won't be able to offer cheap, reliable products as they do now, because American industry workers always strike themselves out of the market with unreasonable demands. The items will be more expensive and less reliable. The beauty of the fact we import all this stuff is a poor person can now afford a DVD player, a GPS, toys for their kids, a wide/flat screen teevee, etc. etc. and it's because of cheap chinese labor.

America is in a post-industrial society. Nothing is going to bring it back- NOTHING. Get over it. All the people with manufacturing jobs are going the way of the buggy whip makers and icemen delivering ice door to door. And that's as it should be. Developing countries need the jobs and will do it cheaper and better than Americans. Sorry, thems the facts. We gain with cheap, reliable goods that anyone can afford. We move on to a service/tech economy, and that's fine and better for all of us.

If you have a manufacturing job, get some training on the computer or other tech service. If not, you'll spend a lot of time in bitter resentment of the fact time, and our economy, has passed you by.

29

Who sponsored the contest?

30 Part two, we add a tax on foreign made products assessed on the retailer. This tax would be 105% of the sales price and would be assessed after the sale. That way the retailer can’t simply pass the price on to the customer. The more he charges the more he pays.

I'm  confused.  Does this mean that if the retailer sells me a foreign made trinket for $100, the retailer has to pay the government $105?  I.e., the retailer has to lose money on every single sale of a foreign product?  It would be easier just to ban all imports.

31 Impose huge tariffs on everything!

32 Smoot, that's brilliant!

33 This is a joke post, right? You can't be serious about what your wrote.

Even if we rebuilt the factories and labor to make the cheap products in Walmart,  which would cost billions of dollars and a few years to build, start up operations, hire and train labor and management, you would be paying an extra 50 to 100% on most of the cheap consumer products sold at Walmart. The USA just doesn't have the base to manufacture many mass consumer products anymore. The best performance based textiles and resin based products come from Asia now. Plus, as surely others have noted, it violates the WTO rules to which we are bound.

 The only sustainable solution is low taxes on invested capital so people make investments in businesses that create the real jobs.

34 The Keurig is a prime example I think of a very successful expensive German product.

35 weird Russian pop music my ass. That shit rocked. It was like ABBA doing soft-core pron on acid.

36 OT  Speaking of smart military blogs
War by proxy: Tehran caught arming terrorists (again)

37 I would not go so far as to say that manufacturing jobs are out of the question in America.  American labor is, in the aggregate, expensive but also the most productive in the world.  In the big, Henry Ford economies-of-scale sense, America will not compete, but in other ways it can.  For example compare the experience of the dinosaur protected steel mills Bush tried to shore up versus the mini-mills around the country.

38 "Posted by: guy what sleeps in the alley behind MSNBC studios at November 06, 2009 08:54 PM (JL3qV)"

Keith?

39

"Greed.  Hope they get creamed. "

 

huh?

40 I've been reading Milton Friedman lately, and he says it won't work.  He says it would only serve to weaken the dollar.  Free market trade is the always the best answer.

41 it would never fly with the story of stuff no-growth liberals.

42 Really - targeted tax cuts don't work?  Then explain why Boeing moved the second 787 line from Washington to South Carolina.  (Answer cheap labor and tax incentives).  Ordinarily I wouldn't suggest the tax on imported goods but because of the way that the Chinese artifically keep their currency low and subsidized their industries it isn't really a market environment so counting on market forces to work isn't going to do it.

43 Um, Americans unionized and didn't work anymore, while requiring bigger pensions. That is why those manufacturing jobs went overseas.

Oh, and O'Reilly has more viewers by far than any other show. He is helping drive FOX's Ratings

44
...so people make investments in businesses that create the real jobs.

Doing what?

45 "Posted by: The Great Satan's Ghost at November 06, 2009 08:55 PM (wIxNd)"

don't like wally mart, refuse to shop there.  hope when they go into urban areas they will find out it's not so easy to wipe those businesses out.

46 Beyond stupid.

47 Posted by: T at November 06, 2009 08:56 PM (z9Awt)

doesn't Beck beat him?

48

And the reason WalMart jobs are held by chicom robots is because chicom robots work way cheaper than US union workers. Even with the cost of shipping cheap plastic crap back from China, WalMart still comes out ahead.

I hate buying Chinese made crap, but I see no way around it at present. Take it up with the CPCWofA (Cheap Plastic Crap Workers of America.)

49 #48 is me- I couldn't get my sock off fast enough

50 Just let me do my job.

51 Ordinarily I wouldn't suggest the tax on imported goods but because of the way that the Chinese artifically keep their currency low and subsidized their industries it isn't really a market environment so counting on market forces to work isn't going to do it.

Posted by: chad at November 06, 2009 08:56 PM (WNcvq)

--This is like the softwood lumber dispute between the USA and Canada.  Like you cite China doing through other mechanisms, Canada was accused of subsidizing its lumber exports and that is why a tax was slapped on its lumber.  The government was taking a smi-bad situation and making it worse.

In other words, even if the accusations about Canada subsidizing that wood are true, hell, what's wrong with foreign taxpayers paying for a discout to be enjoyed by American consumers?

52

Russian girl make you warm in lower place, no?

Make me von to, how you say....

fap, fap, fap. 

53 Good grief, somehow that last post got posted before I was done.  Yeesh.

54 I've been tried and found wanting.

55 If they locked the republicans out of talks about some of the bills then they have probably also locked them out of submitting suggestions about the economy, therefore, they locked out the brains.

56 I think you get disqualified if you submit or post your "thoughts" elsewhere but to the Post.

57
The key to this genius proposal is to use domestic child labor. Pay them in Miley bucks. Education after the 4th grade is over rated, ask Cartman.

58 I've been tried and found wanting.

Posted by: Corn Laws at November 06, 2009 09:02 PM (PD1tk)

--Join the club!

59 russian pop singer is being, how you say, çàٌٍàâëےهٍ ىîè ÷àٌٍè ىàëü÷èêà ïîêàëûâàٍü

60 What you suggest may create domestic jobs, but it will make the cost of the resultant goods higher.  Ergo, we can't buy as many of them, and our standard of living, on average, goes down even though some people are helped.  Seems to me a pale cousin of socialism.

The fact is, the cheap offshore labor allows us to have things we couldn't otherwise afford.  As others said already, we need to compete in areas that we are competitive--we will not be able to beat them on wages, so labor intensive manufacturing is not an option for us.

61 And the reason WalMart jobs are held by chicom robots is because chicom robots work way cheaper than US union workers. Even with the cost of shipping cheap plastic crap back from China, WalMart still comes out ahead.

-Part one, we allow manufacturers to write off the difference between wages paid to foreign workers and American workers. This should go a long way to eliminating the competitive advantage that Chinese industries currently have.-

I was attempting to address that issue.

In my last job I had to deal with Chinese and Malaysian manufacturers everyday.  The idea that they were more productive and cheaper is a canard.  Once shipping, tariffs, export licensing, etc. was all added in the cost difference was negligble.  In some cases we could actually produce cheaper on-shore.  Our big cost savings actually were in Eastern European plants but they were horribly inefficient. 

62 _{damn- that failed}

63 Forget Wal-Mart.

That Russian music video makes me wonder: what kind of crap are the Ruskies drinking these days by way of Vodka, anyway?

Jeesh.

Nice udders on those cows, by the way...

64 America is in a post-industrial society.

America is in a post (20th Century style) industrial society. There are emerging other forms of industrial product and production where the final product isn't weighed by the ton or train boxcar.  These are of course products that are "IP heavy" rather than poundage heavy. 

The good news is they'll require some fairly skilled and educated people to design and manufacture them.  The bad news is, the plants won't be too large or hire too many people.  The good news is there will probably be thousands of these little "micro plants" scattered all over he country and they'll all have very "light" commercial footprints that will make getting permits and such easy.  Many will be small enough to fit into an old closed down gas station's service bays. 

Uhhh...I guess I just gave away our manufacturing plan, eh?

65 hey I never said I was an economist

66 Oh, and... well, protectionism dressed up anyway you'd like is still... protectionism.

But I'll be the first to admit, I kind of wonder if the REAL reason behind the seeming sudden financial implosion wasn't because that giant sucking sound we heard for the last 20 years or so was the hollowing out of our economy to China?

67 All this would do would be to magnify economic problems for our country.  Protectionism makes a country less prosperous.
Posted by: Sjg

I believe welfare has done more damage than protectionism will ever do. And wait till we see the carnage caused carbon trading. Who said it earlier? Government intervention is wrecking western civilization.

68 64 America is in a post-industrial society.


Right, but here's the thing: Ireland traditionally had the classic "service economy." You would wash your neighbor's laundry for $10, and for $10 they would wash your laundry.

Said transaction added $20 to the Irish GDP.

Anybody want to raise their hand and explain what was lacking in that picture?

69 @64

Lots of those little manufacturers in the NW (3 of them within walking distance of my apartment).  I am really looking forward to print on demand circuit boards.

70 What does "hollowing out" mean? Are only manufacturing jobs real jobs?

71 In my last job I had to deal with Chinese and Malaysian manufacturers everyday.  The idea that they were more productive and cheaper is a canard.  Once shipping, tariffs, export licensing, etc. was all added in the cost difference was negligble.  In some cases we could actually produce cheaper on-shore.  Our big cost savings actually were in Eastern European plants but they were horribly inefficient. 

Posted by: chad at November 06, 2009 09:05 PM (WNcvq)

--And surely, if transportation costs for example become prohibitive, some of that industry will be located closer.  When oil prices rise again, I think (if they ever emerge from their kleptocratic/crony capitalistic malaise) that will be Mexico's opportunity to take advantage of geography.  Still, those decisions should be made on the basis of as transparent a market as possible, and not because of government meddling.

72 I agree with the tax incentive part but have a prob with what is actually a tariff part. I think tax incentive alone could make it work. Too bad this will never happen.

73 Let's not jump to conclusions.  I want to be clear, now.  Let me be perfectly clear.  As I have said before, some say it's a socialist mop, and that I'm not mopping up after the last administration right.  But if we brought the mop industry back to this country, then it wouldn't be a socialist mop at all, and I don't think that's what anybody wants, here in America. 

74 Wal-Mart would laugh at your ass and go "So, you want to buy those Twinkies, or what? You're holding up the line."

75 Bottom line: failing businesses need to fail for the good of better businesses.

76 I don't know if we need "protectionism," but I think abolishing the bullshit Master of Business Administration would be a nice start to revive our economy.

Honestly, all the MBA's did was fire tens of thousands of people, give themselves huge bonuses for doing it, and ship jobs off to China.

At the end of the day: America MUST start to manufacture again. It's ridiculous that America can't even have a vibrant car industry anymore. Maybe instead of financial gurus, we should have had engineering and quality control gurus?

77 @70

I wouldn't say that, but the loss of manufacturing jobs lead to the loss of lots of service industry jobs kind of a feeder effect.

78 Let's not jump to conclusions.  I want to be clear, now.  Let me be perfectly clear.  As I have said before, some say it's a socialist mop, and that I'm not mopping up after the last administration right.  But if we brought the mop industry back to this country, then it wouldn't be a socialist mop at all, and I don't think that's what anybody wants, here in America. 

Posted by: Barack Obama at November 06, 2009 09:12 PM (XH/G

--You forgot to say you are "deeply concerned."

79 Bottom line: failing businesses need to fail for the good of better businesses.

Posted by: toby928 at November 06, 2009 09:13 PM (PD1tk)

--Someone's listening!

80 I have to nitpick on the fact that you want to try to cut down on our trade deficit. It's a good thing that we're importing more than we're exporting. It might sound weird because we always hear about how horrible it is that we have a trade deficit but that's because people don't think things completely through.

In 2005 imports exceeded exports by 782 billion dollars. What does that mean? We're getting more imports for our exports. That's a good thing. Let's put it in terms everyone can understand. Would you rather pay 5 dollars for 20 dollars worth of valu-rite, or 20 dollars for 5 dollars worth?

Milton Friedman was a genius.

81 @76

I have advocated that too. 

82 not a fan of tariffs and subsidies... basically what you are suggesting chad.  as for the chinese, while it may appear that they are creating a competitive advantage that way, what they are ultimately doing is having the chinese people pay for part of our purchase.  Pretty sweet gig for us IMO, as long as it isn't toxic crap.

As for the guy on O'Reilly, his name is Ralph Peters.  Columnist for NYPost, and frequent commenter on FNC.  Former Army Officer, rank LTC.

83 What?  No mention of Unicorns or Skittles?  What kind of crazy talk is this?

Next.

84 70 What does "hollowing out" mean? Are only manufacturing jobs real jobs?
Posted by: Waterhouse at November 06, 2009 09:11 PM (xYBCo)

No, they're not. But without an industrial base... there's not much need for any of the others, is there?

The argument for a service economy was supposed to be that Americans were so much smarter and better educated than the rest of the world, we would be the world's software providers and hi-tech providers and intellectual services providers and financial services providers, on and on.

Well, our kids can barely read, never mind write. The Asians dance circles around them in math ability, the Indians have moved into software big time, China is developing aerospace and computer industries.

So what the hell kind of "Service" does that leave for our kids to provide the rest of the world? Rikshaw operators and hookers?

85 Perhaps we should get into the plunder trade.

Posted by: toby928 at November 06, 2009 08:46 PM (PD1tk)

Awesome, where do I sign up? My libtard neighbor has a few things I'm seriously coveting at the moment.

86 that will be Mexico's opportunity to take advantage of geography.
Posted by: lgprof

Mexico has its issues. There are several failed attempts by American firms to do better down there. There must be a critical mass required to get through all the corruption in order to have enough profit to make it worthwhile.

87 Mexico has its issues. There are several failed attempts by American firms to do better down there. There must be a critical mass required to get through all the corruption in order to have enough profit to make it worthwhile.

Posted by: sTevo at November 06, 2009 09:20 PM (eA3tl)

--Exactly.  One problem with countenancing so much illegal immigration from there is moral hazrd, in the sense that it lets Mexico's leaders off the hook by passing along a big chunk of their social ills to the USA (and getting paid for it through remittances).

88 That's a a nice presentation, chad, and omelette you finish, but Woolworth's had the best business model of all time!

89 52
Russian girl make you warm in lower place, no?

Make me von to, how you say....

fap, fap, fap.

Posted by: Boris Badenoff at November 06, 2009 09:01 PM (Poe30)

Ivana...

Ivana... Humpalot!

90 Trade restrictions are always a bad idea.  It is not a good idea to pay $2 for something made in the US that we could buy for $1 if imported from China.  That is because that extra $1 we save DOES get spent. "Buying American" feels emotionally satisfying but if you go through the math, it is basically just a tax.  It removes money from the economy that would have been spent on other things.

It is better to buy cheaper those things that can be made cheaper someplace else.  You allow the most efficient manufacturer to produce the goods.  I also disagree with the notion that WalMart, by buying overseas "cost" 1.5 million jobs in the US.  Most of the things we buy in China would be made by machine here in the states, not by humans.  In fact, Chinese labor isn't all that cheap anymore.  You can't just open a factory and have workers flock to you. You have to hire them away from another factory and so wages are rising there.

And it isn't just that cheap lighter that is "Made in China".  That Cisco router or that Sun server are likely made in China.  Pretty soon that GM auto will be a Chinese import, too.  That isn't what is costing Americans jobs.  If we can't be competitive in the world marketplace, then we aren't going to sell goods to anyone.  Americans buying American goods isn't good enough because it is a global market and the US represents a decreasing portion of that world market as other countries grow their economy.  iPhone?  Made in China.

Labor unions, idiotic environmental regulations, taxes, all conspire to make the US non-competitive.  Our labor has priced itself out of the market.  US has the second highest corporate tax in the world.  It takes YEARS to build a new factory now due to "environmental impact" studies and environmentalist "lawfare".    Forcing us to buy American would simply force us to subsidize that idiocy.

Allow the market to route around inefficiency and put places with poor policies out of business (and that means us, if we implement poor policies).

91 But without an industrial base... there's not much need for any of the others, is there?

Why not? As a percentage of the economy, the US industrial base has been shrinking, and the service sector growing, for decades. This all while the economy as a whole has grown. So maybe they're not as linked as you think they are.

92 Warren Buffet disagrees. 

93 There's no such thing as a free lunch. Some way or another, if you coaxed Wal-Mart to buy American by force or subsidy, someone's going to be left holding the bag. Probably it would be the taxpayers, financed out of a deficit that would crowd out private investment and lead to less jobs in general even while you gain a few in the manufacturing sector. In other words, you get to pay a bunch of money to ... accomplish nothing.

94 weird Russian pop music my ass. That shit rocked. It was like ABBA doing soft-core pron on acid.

Posted by: guy what sleeps in the alley behind MSNBC studios Olbermann's Most Recent Date at November 06, 2009 08:54 PM (JL3qV)

FTFY

95 heh "Secretary of State Hillary Clinton is next, worth an estimated $21 million. President Barack Obama is the sixth-wealthiest, worth about an estimated $4 million. Vice President Joe Biden has often tagged himself as an original blue collar man. The CRP backs him up, putting his net worth at just $27,000."

96 Don't let the government pick winner and losers at all.  99.9% of the time, it will pick .. poorly.

97 oops,,forgot to shed da sock.

even more heh - "A number of lawmakers are estimated to have suffered double-digit percentage lossed in their net worth from 2007 to 2008. The biggest losers include Kerry, who lost a whopping $127.4 million;"

Can you frikken imagine?  I can't......

98 91 But without an industrial base... there's not much need for any of the others, is there?

Why not? As a percentage of the economy, the US industrial base has been shrinking, and the service sector growing, for decades. This all while the economy as a whole has grown. So maybe they're not as linked as you think they are.
Posted by: Waterhouse at November 06, 2009 09:23 PM (xYBCo)


The percentage that was service-related could keep growing so long as the manufacturing sector kept becoming more productive. If 2 people could manufacture as much as 10 used, 8 could go off to service sector jobs.

Nothing wrong with that... as long as at the end of the day, someone out there was still making wealth. Creating goods is wealth. Even if the goods are, say, sofware, because that software could make the manufacturing sector even more productive.

But giving a haircut or even - as I do - auditing does NOT "create wealth." It is an expenditure of wealth.

What I wonder is: what happens when we send off the two remaining manufacturing jobs to China? I mean, what do we pay the Chinese WITH? Haircuts?

Somehow, at the end of the day... we gotta actually MAKE something.

99 I am really looking forward to print on demand circuit boards.

I am looking forward to fab on demand CPU's and electronic devices that can go from design to working unit in an hour using a fab device no larger than a commercial copier that doesn't require a clean room or special environment.

Its not our main thrust at the moment, but all the raw IP is there to do it a few years down the road after we've bootstrapped some cash up with more mundane cash cow products.

100 The biggest losers include Kerry

among others

101

Jeez, come on ONT, this blog is on life support now.

102 You are all wrong, I have a foolproof plan to bring jobs back to America.  First, I will pump trillions of dollars into the economy while keeping interest rates at zero. I will keep this gravy train rolling even while the dollar begins to collapse in value, because it will be more popular than cutting my spending plans.  And then even when the dollar collapses completely, I will still keep pumping out the paper. 

When the dollar has collapsed completely, suddenly all imported goods will be impossible to buy - it will take a whole wheelbarrow full of $100 dollar bills to buy a single Chinese TV.  And Voila!  All of a sudden jobs will return!  You will HAVE to buy American, because you'll all be too broke to buy anything else!  This plan is BRILLIANT!!!!

and you probably think I'm kidding....

103 The "stick" part means trade warfare with the entire world, like Smoot-Hawley on crank.    

104 so what's the difference between the proposal above and any and every other proposal/bill the Democrats have passed?  It's more government interference in the marketplace with the government picking and choosing the winners.  No congresscritter is going to get ahold of a bill like that and not twiddle with it.  More tax incentives to their cousins, fewer tax incentives to their political opponents.  Walmart can't get their refund check unless they name at least one store for every crook in Washington.  Talking about completely missing the point.

Grade F-.

Try this one.
1) 15% flat tax.  No incentives.  No disincentives.
2) Get the government out of the financing business.  Get the government out of the financial industry.  The purpose of regulation is to stabilize the industry and provide security for customers, not direct money to politically privileged classes.
3) Open the nation's territory for energy exploration.  These are high paying jobs, not tax subsidized jobs.  One rule.  You mess it up.  You clean it up.
4) 13% flat tax.
5)  Massive build up of nuclear energy.  More really high paying jobs.
6) Rationalize (depoliticize) environmental rules. There is no Anthropogenic Global Climate anything. CO2 is plant food and makes things grow better.  Most so called Green Initiatives are more harmful than traditional enterprises.  However, Rule 3 still applies.  You mess it up, you clean it up.
7) 10% flat tax.

Grade please

105 I don't see how this avoids a nasty trade war. Also, in that war wouldn't we eventually lose Japanese auto manufacturers who have plants here in the U.S. or should we just be consistent and tell them to leave?

106 OTOH, I welcome our new Russian overlords.  

107 A customs union with Canada would be nice too.

Now, time to watch some Sarah Connor Chronicles.

108 @chad

Please stop trying to defend this loser of an idea. It might fly on a site that caters to people who believe in Big Government. But here? Not so much.

p.s. Gotta love your argument that foreign made goods are actually more expensive because of licensing and tariff costs ... and then you propose to lean on the scale even more.

109 My economic plan:
1.  Drill for domestic oil.  Reduces the cost of everything and frees up consumer spending.
2.  Build nuke plants.  See above.
3.  Reduce corporate tax rate.  Ours is higher than the world average.
4.  Keep Bush personal tax cuts.
5.  Make government smaller (somehow, bucking the century-long trend and ignoring the fact it's politically impossible). 

Bam!  Economic renaissance.  Can't happen so watch the death spiral into bureaucratic hell and a planned economy leading to another revolution at some point in the distant future.    

110 Chad, you've gone off the deep end.

Paying the difference between US and foreign wages out of the public treasury is not a tax cut. It is an entitlement for manufacturing workers, pure and simple. You have us picking up the tab for the difference. That means big taxes to pay and consumers having less money with which to buy these goods. Goods which are almost certainly going to be more expensive.

The solution here is the same as the solution for overpopulation: wealth. People generally have less kids as they become wealthier. People also become less competitive as makers of cheap stuff like socks as they become wealthier. As the average Chinese citizen comes to expect a higher standard of living the less his labor can be cheaply exploited. This is why spreading our way of life around the world benefits ourselves even as it creates greater competition in the marketplace, as it also creates vastly more shoppers.

The Chinese manufacturing boom cannot be sustained. They are already seeing the effects of increased wealth there. More importantly, manufacturing jobs are only going to decrease on the global level. Robotics is only going to increase the range of tasks performed more effectively by automation that runs 24/7, doesn't unionize, and can be shut down at a moments notice without the Department of Labor having a hissy fit.

Manufacturing jobs were important because they provided a good living for those on the left side of the Bell Curve but those are the folks most readily replaced by automation. I once had a factory job installing wiring harnesses on big Burroughs storage system back when such thing were refrigerator sized. I lasted about three weeks before being canned because the stultifying dullness of the work was driving me insane. The factory for that product's current equivalent would employ a fraction of the people Burroughs used back then, because so many of the tasks are eliminated by integration or can now be handed off to robots. Remeber when almost every chip on a PC motherboard was socketed and had been inserted by a human? Looong gone. Ain't coming back.

Keep in mind the big revolution in manufacturing hasn't even happened yet. There are technologies currently looking to reach deployment within ten years that could eliminate millions of factory jobs.

111 104
...
1) 15% flat tax.  No incentives.  No disincentives.
2) Get the government out of the financing business.  Get the government out of the financial industry.  The purpose of regulation is to stabilize the industry and provide security for customers, not direct money to politically privileged classes.
3) Open the nation's territory for energy exploration.  These are high paying jobs, not tax subsidized jobs.  One rule.  You mess it up.  You clean it up.
4) 13% flat tax.
5)  Massive build up of nuclear energy.  More really high paying jobs.
6) Rationalize (depoliticize) environmental rules. There is no Anthropogenic Global Climate anything. CO2 is plant food and makes things grow better.  Most so called Green Initiatives are more harmful than traditional enterprises.  However, Rule 3 still applies.  You mess it up, you clean it up.
7) 10% flat tax.

Grade please.

Looks good from here. The issue is not tinkering with the rules of big government. The issue is getting big government the hell out of the way. It's in the way all over the place these days.

Looks good from here

112 @110

Maybe I am just not explaining it right.  My goal isn't to have anything paid out of the public treasury. 

113 Texas Chainsaw Massacre crossed with Amadeus, Devo, and some crazy hot Russian girl.  Kind of disturbing when you put it all together really.  

114 I was going to say something, but then I watched that Russian hussy strutting around the stage and shaking what God gave her...

*watches video again*

I'm sorry, what was I was going to say?

115

I wouldn't buy anything from a country that voted for a piece of shit like Obama as its leader. They'd have to be too stupid to breath.

 

116

Just a little too much emphasis being made about the high cost of US labor being the motivator for off-loading of our manufacturing base.  As a rust-belt survivor, I saw what happened in the Midwest during the 70's first hand.  It wasn't JUST labor costs that closed down 100's of manufacturing plants.  It was energy costs, new EPA reg costs, replacement or improvement in equipment and plant, etc.  From the business POV, most of the costs were fixed or rising, and the only short term fix was to lower labor costs.  After all, new equipment and square footage would cost roughly the same in Atlanta or Bowling Green as in Cleveland or Detroit, but energy would be less, and the businesses could play one community against another for Tifs and infrastructure improvements.  Yes, unions did fuck the pooch by not giving real concessions to struggling companies.  It's almost as if they didn't realize that the union members worked for a company that needed to make a profit from their labor, no profit=no labor.  But labor cost was only a portion of the equation that went into manufacturing leaving the rust belt.

Just as it now.  Environmental regs is a huge part, as is risk exposure from a legal standpoint.  But now instead of moving from Detroit to Bowling Green, they are moving from US to Indonesia, Korea, bumfuck, where ever the economic grass is greener.

117 #98

So, what do they make in Luxembourg?

Seriously, we make tons of stuff. What we don't do so much of anymore is make tons of simple items that can come off an assembly line manned by a dozen high school dropouts.

This isn't a new development. Back in 1984, part of the media coverage of the Apple Macintosh debut was the oohing and aahing over their highly automated factory which had a fraction of the humans coming in contact with each Mac as the factory producing the Apple IIe just a couple of years earlier.

It's similar to the reason the USPS got oa reputation for rampaging employees. They went from a line of twenty people sorting mail to a sorting machine that needed just one human at each end to feed it and cart off the sorted mail. This made for a lot of redundant humans and management turning up the pressure to encourage them to quit. Bang.

118 Ochen khorosho, Anna Semenovich!

119 #116

That is true. The EPA would make it impossible to bring a lot of manufacturing back here.

120 Central planning is poor central planning.

121 What I wonder is: what happens when we send off the two remaining manufacturing jobs to China?

Relax. US share of world manufacturing has grown even as the evil Chinaman has stolen all of those awesome factory jobs, the only creator of wealth or whatever. (link to seekingalpha.com)

122 Maybe I am just not explaining it right.  My goal isn't to have anything paid out of the public treasury. 

Posted by: chad at November 06, 2009 09:49 PM (WNcvq)

Kind of like how most of the healthcare bill is an insurance mandate?

Or how the government forced banks to lend money to people with bad credit in the name of fairness?

The tax incentives are not an awful idea, but the tariffs are a very very bad one. I would argue that the Great Depression was caused by Smoot-Hawley and not the stock market crash or banking crisis. Trade is the the only thing that creates wealth, and international trade is the best kind of all. Countries that try to restrict free trade end up like Albania or North Korea.

123 112 @110

Maybe I am just not explaining it right.  My goal isn't to have anything paid out of the public treasury.

Look, I know you mean well. But you're going about it wrong. Read some Hayek (The Road to Serfdom would be read by every American if I had my way). Hayek points out that there's no way central planners can get all the information they need to make decisions even a tiny fraction as those in the economy can. Read post 116, and see all the factors you missed in the thing you're trying to tinker with. Here's another, one which this President would do well to acquaint himself with: companies thrive on being able to plan long term. Any incentive you can come up with, won't come with a way for a company to trust that it will continue for the next 15 years, so that they can count on it in their long term plans.

Part of the economic doldrums now is that companies have no idea what might be coming down the pike from this government. Would you commit your money to a long term plan, knowing that you might wind up as Nancy Pelosi's next financing source.

Statism breeds companies that are good at thriving in a statist environment. Entrepeneurs thrive in a free market. If we want prosperity, all we have to do is back the government off and let them have one. Really, that's all it takes. No intricate scheming necessary.

124 Oh, you explained it well enough, Chad. 

125 Govt intervention in the market place beyond protection of property rights (physical, intellectual, etc.) is almost always a bad idea.

15% Flat tax period on all income.  Theoretically a drop from 35% to 15% would create a 20% combination of increased employment and investment.  The govt should not pick winners and losers.

OTOH: if its for the Wash Post, only a govt intervention article will win.

126

Chad,

What you are proposing is illegal under WTO. Governments aren't allowed to subsidise manufacturers. It would also cause a trade war, while we import far more from China than we import China is out biggest export customer.

Your idea of tax reductions is good though. If we were to lower our corporate taxes from 35% to 15% or even 0% it would cause a huge boom in the US and WTO couldn't do anything about it. Manufacturing jobs would naturally increase because it would be less expensive for corporations to make their goods here when you include shipping. Consumers end up paying corporate tax anyway and the government could make up for it with a value added tax. With the value added tax the government could also eliminate Social Security tax which would make our labor cheaper by 13% and still make all goods consumed here whether imported or made here subject to the same tax. Right now goods produced in the US have a 13% surcharge because of Social Security

127 #112

How else can it possibly be made to work? Labor wages make up a massive portion of many manufacturing operations. Writing off the difference between US and foreign wage would result in many instances in a negative tax debt. Unless the tax rate were absurdly high, the government would owe these businesses money for the virtue of employing Americans. Ergo, it is an entitlement.

You'd also create incentive for a new variant on the phantom employee payroll scam. Create enough phantom employees and you've zeroed out your tax liability.

This is just bad news all around. Increased government involvement in telling the private sector how they must compensate their employees is just handing club to union thugs and other elements of organized crime. Don't we have enough of that already?

128

Posted by: Splunge at November 06, 2009 10:02 PM (9uwvY)

I agree with most of what you said, with the exception of companies thriving on long term planning.  Perhaps smart companies do, but a lot of corporations are fixed into 90 day planning, cutting costs and corners and taking undue risks trying to beat "analysts estimates" on earnings.  Sometimes, they appear to act like the steel ball in a pinball machine.  Sucks to work for one of them.

129 @104

I like those ideas. However the Brookings institute thinks a flat business tax is too open to abuse

As an aside CA was looking at the flat tax in July.  One of the reasons was to shift more of the tax burden onto the middle class and help reduce state revenue volatility because so much of the wealthys' income derive from capital gains which fluctuate wildly from year to year.

In CA some business were complaining about the idea because they would have to pay taxes even if they lost money.  It increases their tax burden.

130 You shouldn't have removed the part about tariffs.

Free traders are fools.

Epobirs is a classic example. In one sentence he predicts China's manufacturing boom is unsustainable- but then notes they are already getting wealthy!

They're getting wealthy because of the manufacturing now done there thanks to free trade policies that have devastated the US economy- unemployment now near 20%- and not because of  the magic of progress.

Yes, I know- a lot of jobs are obsolete and unions suck.  Thanks for the tip.

 But a lot more of these jobs are just done elsewhere- to the detriment of the US. Eventually this even hurts people the smart folks care about- like when teaches get laid off because their districts have no money to pay them.

Meanwhile- back in China- they've got the manufacturing jobs presently. Soon they'll get the jobs like insurance salesman and music teacher and others that are slowly disappearing from the US economy as it slowly disappears.

And what will the free traders tell us the problem is?

Not enough free trade. No thanks.

. 


 

131 As far as I know, we are the only country that taxes it's exports via the corporate tax.  FairTax supporters' insistence that the 16th amendment first be repealed makes it a non starter.  But if we were to do something along the lines of it, say eliminate the payroll and corporate taxes for a consumption tax, that might pass.  It would end taxation on labor; call me crazy, but I think that is probably a good thing.  It would also mean the US is a massive tax haven for businesses (though I saw a study recently that suggested ~3/4 of the tax is borne by the employees).  As for some sort of VAT leading to big govt, that is hogwash; correlation does not imply causation.

132 Of course, it doesn't matter whether a company has a short term, middle term or long term thinking.  That should be their choice, not a strategy forced by the govt.

133 writing off the differential still won't make up the difference unless it can go negative - i.e. become a subsidy.  It is easier just to eliminate the corporate tax.

134 Posted by: Xennady at November 06, 2009 10:14 PM (BrJUt)

I find your ideas interesting and would like to subscribe to your newsletter.

135 Isn't the Brookings Institute a liberal think tank?

In CA some business were complaining about the idea because they would have to pay taxes even if they lost money.  It increases their tax burden.

Doesn't 15% X 0 = 0, unless I misunderstand your point.

136 Chad, this is embarrassing. Really.

137 128 I agree with most of what you said, with the exception of companies thriving on long term planning.  Perhaps smart companies do, but a lot of corporations are fixed into 90 day planning, cutting costs and corners and taking undue risks trying to beat "analysts estimates" on earnings.  Sometimes, they appear to act like the steel ball in a pinball machine.  Sucks to work for one of them

Yes, certainly, there's a lot of that -- but among large, mature companies that are simply mining the vein they've settled into, riding the small perturbations in the economy. I wouldn't much want to work for a place like that either.

But those are the fixtures of the economy, not the engines of growth. Look at how long venture capitalists wait to get their money back. How do their calculations change if they're not sure whether a tax change 4 years from the investment might wipe out their whole gain? Look at an oil company investing in speculative drilling that will not turn into oil for years, and consider how Al Gore might affect their decision to invest. Or with Obama, look at how anyone considering a small business might rethink the matter, since they've been branded "the rich" due to tax reporting ambiguities, and the designated milk cow of the health care effort. I'd opt out, wouldn't  you?

I know you see all that, and I don't mean to be argumentative given that you made a good and valid point. But with the currents of leftism in the mainstream media air, I wanted to counter any reader's inference that companies are all dull, short-term bureaucracies little different from government. What boldness exists  in companies, and especially among those individuals who are starting and growing new companies, is the true engine of our prosperity -- albeit one whose fragility in the face of rampant statism many do not appreciate.

138 132 Of course, it doesn't matter whether a company has a short term, middle term or long term thinking.  That should be their choice, not a strategy forced by the govt.

Nice. Excellent point.

139 Join this post with the global warming one, get Gore and co to ask the public to shun Chinese goods to save the planet (actually they wont do that as they know that CO2 is not a problem)

140 So the plan is to subsidize FOREVER a wage that the 'market' says is uncompetitive so that more people can be 'employed' in the USA ?
And the prices for the products produced by this crypto-autarky  would be  ----- what ?

My guess is unaffordable. Do we then have to subsidize the sellers so that people can actually afford to buy the stuff ? And what about constant wage increases ? Would not the 'workers' benefited by this protectionist system behave exactly like the UAW and milk the system for all they could no matter the cost to everyone else ? After all they would all be 'too important to fail'.

As was said ---- Me No Likey ! No Likey at all.

141

I don't know - what do you guys think.

I think you should expand it, now that you don't have a word limit.

 

 

142 Relax. US share of world manufacturing has grown even as the evil Chinaman has stolen all of those awesome factory jobs, the only creator of wealth or whatever. (link to seekingalpha.com)

Posted by: Waterhouse at November 06, 2009 09:57 PM

Well, I went to that site and at first blush all appears good. BUT, down in the comments section someone made a good point:


Chandler appears to be one of those ubiquitous "new world order," "new economy" types who keep spouting the same mantra about how trade deficits don't matter and the US is the world's "largest manufacturer." Poppycock. That manufacturing output figure includes the "manufacture" of electric power. A lot of the exports are really "re-exports" of goods or partially finished goods produced abroad.


I also noted that the main things we "manufacture," according to that site, are "metals, minerals, and chemicals." Well, I suppose chemicals are all well and good, but metals & minerals? I mean, that's mining, right?

143 Please stop trying to defend this loser of an idea. It might fly on a site that caters to people who believe in Big Government. But here? Not so much.  Posted by: Mister Tan

Excuse me but who the fuck are you?  I missed the part where you were appointed head capo.

144 I'm late to the party...

How does a freakin ignorant asshole like ths get "front page" at a "conservative" blog?

Chad is a Choad...

145

Posted by: Splunge at November 06, 2009 10:28 PM (9uwvY)

Understood.  My exceptions are just that, exceptions.  I will give you a "fer instance".  Ameritech over a period of years refused to upgrade its infrastructure and technology, and cut its' tech support.  Their short term goal was to beat analysts predictions of their earnings.  Their mid-term goal was to become attractive to a potential buyer.  They achieved those goals, and in the course of doing so, the senior management made serious coin cashing options, but the buyer, SBC, ended up investing heavily in those things Ameritech had deferred.  A lot of action and in the end, nothing achieved.  And the stories in the financial companies are truly crazy.  90 day plans are not the result of an entrepeneurial spirit. 

/end of my rather small slice of disagreement.

146 I'd like to give a shout out to whoever came up with this terrible idea.  I think it is worth a Nobel Peace prize, an A-, a Pelosi internship, a Paul Krugman column, worthy of an affirmative action admission to an Ivy league school and it should be written in crayon and put on your mom's fridge because she might be the only person proud of the idea.

Sorry, have to call em as I see em.

147 Where am I talking about telling companies how to compensate their employees or advocating central planning. 

I am definitely explaining this wrong if that's what you guys think I am talking about.  Tax incentives and tax penalties is how this started.  I removed the penalties so now all their is is tax incentives. 

Hayek isn't the end all be all -

Hayek - "Nothing has done so much harm to the (classic) liberal as the wooden insistence of some liberals on certain rules of thumb, above all the principle of laissez-faire capitalism."  pg 17 of my version

On page 37 he specifically approves of state involvement in the economy through regulation,

Hayek also approved of the welfare state and would probably approve of health care reform (pg 120)

I'm pretty sure that Hayek also says the state should make competition as equal as possible but I can't find the exact quote. Given that my plan could easily fit within Hayek's vision. 

148 И'д хит ит.

149 also noted that the main things we "manufacture," according to that site, are "metals, minerals, and chemicals." Well, I suppose chemicals are all well and good, but metals & minerals? I mean, that's mining, right?

Posted by: CoolCzech at November 06, 2009 10:49 PM (QECjC)

 

Yeah, I see your point.  The only value added is that we dig it out of the ground for someone else.  Gee, leftists used to claim America was despoiling the rest of the earth and exploiting the countries that did that for us.

150 off to the ONT

151 @guy fawkes

I don't know if Brookings is liberal or not.  They were involved in the development of Star Wars during the Reagan years, and pushed deregulation and welfare reform.  It doesn't make any real difference though I was agreeing with the flat tax idea.  I was just pointing out that others think there are problems with it. 

Re; CA and the flat tax.  The only way I can see for the businesses complaints to be true is if they taxed total value of transactions even if the business lost money almost like a sales tax.  It doesn't make that much sense to me either but again I was just pointing out that some people think it's flawed. 

Personally I like the idea of flat taxes but I am one of those whose tax burden would go down so maybe I am not a good measure.

152 147

I concede that that was well done. You've partially disproved my implication about naivete, and proved that you have a copy of Hayek on your shelf. Having verified your references, even though the pages do not quite line up, I am forced to accept your point about Hayek not being the be all, end all. It was his breakthrough point about the fallacy of central planning that stayed with me, and you are correct that in the process of making it, he squishes at times.

Nonetheless, I don't see how you can support your argument that carefully structuring tax incentives to attempt to make uneconomic activity economic is not a form of central planning. The best tax systems are simple ones. Leave the decisions about what activities are economic to the market.

153

 I hate the hand of the government interfering with the proper functioning of the free market, plain and simple.

#13 nailed in in his first sentence.  Subsidizing this and that is like putting a finger in a hole  in a dike.  In this case the fingers are taxes.  Plug one hole and another appears.  The workers eventually run out of fingers(taxes) and the system collapses. 

I'm with Milton on this one.  Hands off.  Walmart is already doing what it can to save this country which is make a profit and provide  products or services.

154 Choad-

Hayek isn't the end all be all -

Of course not...

Hayek has dreams where he fills Van Mises' jock.

But, attributing you poor reasoning to Hayek only begins to describe your errors...

155 @152

I guess we have a different idea of what central planning is.  To me it is the state telling a person what to produce, when to produce it, how much of it to make, and what to charge.  I am not attempting to do any of that.  Returning to Hayek - the central component is equality (somewhere up in Who, Whom).  If certain manufacturers were being treated differently than others I think you would have a stronger case about central planning. 

About 75% of the comments would disagree with me and agree with you so it is very possible I am wrong I am just not 100% convinced yet.

One person up above did point out a big factor I had overlooked the long term nature of the subsidies.  I hadn't considered that enough. 

156 @154

Wow you can call me a name.  Way to bolster your argument.  I'm pretty sure I didn't insult you or call you names anywhere in this thread.  In fact I have been pretty freaking civil to everybody.  I guess it's to much to expect in return.

157 What the fu*ck are you talking about? What! What! What!

158

Chad,  One has to know, if you have spent any time here at all, the arguement you put forth essentially more government interference even with Walmarts help, wouldn't fly.  Personally, and I am serious,  I thought the article was tongue in cheek.

If you were called a name in this lion's den of depravity wear it as a badge of honor.  That's half the fun.  Generally, it is the trolls that start the name calling and that is like throwing raw meat to sharks while you are swimming.

I now know you were serious but, in the opinion of about every Moron and Moronette who dwell here, wrong.  Still you had the courage to defend your ideas and that is commendable.  It also seems you are open to opposing ideas and if you find them logical learn.  That I respect.  Now enough of this touchy feely bullshit. 

Someone call me a dick.  I dare you.

159 @Ohio Dan

Thanks

I admit the idea of the tax penalties was poorly thought out and also that I idn't give enough consideration to how long the tax incentives would have to remain in place, but I am going to stick with the idea that recouping manufacturing jobs in the US would be an overall good thing.

160 A tax break for the cost differential between foreign and domestic manufacturing is still a tariff on the foreign product.

Get the government out of the way. 

161

Not that it would ever happen but eliminating corporate tax period would be best.  Corporations are taxed as another entity but are infact a coalition of people being taxed as a legal entity prior to receiving the money so they can be taxed a second time.  I heard someplace the tax rate here is higher than in China.  I haven't fact checked that one but I can believe it.  Reagan once said, "The scariest words ever spoken are, I'm from the government and I'm here to help."  I just heard Obama say something about today's unemployment numbers and , I paraphrase, I and my team are going to keep working on it.  At that point I was screaming at the radio,  Dammit quit helping.

Had I the power I would cut congress by half.  Simply double the number of people for each Representative. Cut 80% of the funding for support staff of each Senator and Representative.  Cut their time in session to 2 months a year, unless a special session were called due to National emergency.  Cut the Executive branch funding a similar 80% and federal  agencies a similar 80%, with some exception like the Social Security Administration.  The SSA would be reduced  over the course of about 80 years until it is dismanteled.  I would make a balanced budget and the National debt be paid off over 30 years the law.   

Government's primary focus would be National Defense and infrastructure.  No student loans, grants, subsidized home loans except for veterans that served in foreign wars(I have a soft spot there).  PBS would be gone.  Unions would be allowed to form but closed shops outlawed.  Unions could only encourage workers to give to campaigns, no direct $ from the union.  Corporations, same thing.  A congressmancould only take money  directly from people he represents.  He that pays the piper calls the tune.

If any of this were to happen American jobs would return, including manufacturing. You made reference to our higher lifestyle making it hard to manufacture here.  I don't think that's the problem. 

None of this crap will ever happen but its nice to dream.

162 I'd like to thank Chad for an interesting post. At some point, and before it is too late, we need to address the loss of our manufacturing base and how to get it back. Chad started that discussion.

Perhaps missing from the discussion was the context. China and other exporter countries restrict access to their own markets in many ways. It's not free trade when goods cannot flow freely across borders. The only borders in which goods flow freely are the U.S. borders. That's one-sided disarmament in the global trade wars.

If the U.S. is to remain an economic powerhouse, the trade issue must be addressed and the manufacturing base of the country must be restored. As this latest financial crisis has shown, we can be the creators of exotic financial products but when those products fail, we largely bear the burden of the costs of the failure. Even though, we only shared in the profits. Building financial houses of vapor does not an economy make.

So, hopefully Chad will write a much more focused series on the issues of trade and manufacturing to provide the context for his proposed solutions.  Then perhaps he can follow-up the context posts with some well-thought solution posts.

Thanks for starting the discussion, Chad. I appreciate your effort.

163 #130,


Bite me. I said nothing contradictory. Thee fact that the standard of living for the average Chinese citizen has improved greatly in recent years has no bearing on whether their growth in manufacturing is sustainable.

Look at the US. Our standard of living has improved steadily since WWII. I'm relatively poor but enjoy luxuries unavailable to the wealthiest person on the planet just a few decades ago. Yet, our manufacturing sector, once regarded as the backbone of our economy, has changed radically in my lifetime and employs a far smaller portion of the populace. Going back farther, the same thing happened in agriculture. It was once the most common occupation of Americans but today employs a single digit percentage of the populace. Even so, more people have easy access to the products of agriculture.

You really have no idea what you're talking about in regard to the economy. The primary cause of our problems is government interference in commerce and finance. Companies have been severely damaged by the credit crunch and the current government has made it clear they want to implement some radical ideas. This causes a lot of uncertainty for business owner, you know, those people who create real gainful employment, and such uncertainty makes them wary of pursuing new ventures and minimizing their exposure to risk. This means big job losses.

164 chad @ 11.05

We're nowhere near lassiez-faire capitalism at this point.  Nobody is suggesting going back to children doing 8 AM - 10 PM in the coal mines and coughing themselves to sleep.  Whenever you read someone like Hayek you have to consider when he wrote (Road to Serfdom, 1944) -- pre-EPA, Clean Air Act, OSHA, and so on.  We could cut our government in half and have more social programs and regulation than we did in 1944.   

165 #155,

Chad, all you're describing there is the difference in how various -isms wield the club to beat their slave into submission.

A mega-billion dollar carrot is a ridiculous means to try to correct a situation we created in the first place. It's like having to wear armor soled slippers to grab a midnight snack because you'd rather not pick up the broken glass you left there.

Remember, those job went away because we sent them away.

Wily foreigners didn't trick business owners into dumping their American factory workers in favor of foreign laborers. We voted to make the business environment increasingly hostile. You may not remember seeing it on a ballot but it is effectively a thing we chose to do.

We gave the government the power to tell businesses they couldn't simply fire striking workers with ridiculous demands. Once upon a time there were legitimate demands made by organized workers. These usually had more to do with life and limb threatening conditions rather levels of payment. Depending on how much of a libertarian absolutist you are, safety standards being imposed is a reasonable thing. But there is no good reason a car maker shouldn't able to tell the UAW, "Screw you, it ain't happening. You're all fired. You can reapply for your jobs along with anyone else who is interested on Monday morning in the HR office."

A really big part of what went wrong with the US auto sector goes back to employers having control over who they can hire and fire wrested away by the government at the behest of unions. (Failing to properly explore new markets and configurations was another big part of it. Japan won those new model type  markets simply by showing up with product.)

We imposed an array of environmental rules that especially affected the manufacturing sector. These weren't necessarily all bad rules but many of them were worthless in their lack of benefit while still imposing great costs. Even if you're a staunch environmentalist, you still have to recognize this is a choice we made as a nation.

The market for the products remained, though, and so the jobs still needed to be performed at a reasonable wage, in a location that didn't impose too much regulatory cost.

So the jobs went away. It isn't like we didn't get anything in return. Those who support organized labor got their payoff or just a sense of smug satisfaction if nothing else. Environmentalist saw a lot of improvement to severely blighted areas of our nation. We got what we told our politician we wanted. Along with all of the consequences that entailed.

We can bring manufacturing back any time we want. All we have to do is get rid of government interference in employer/labor relations and be smarter about our environmental regulations. And we can do that for free with no new laws. We just get rid of or amend some existing laws. A few government bureaucrats might lose their jobs but we get a bunch of manufacturing back on our soil. And for cheap!

I'm not holding my breath. And not not going to support a new corruption to correct the effects of an old corruption.

166 Chad, go back to your history books and read about Smoot-Hawley.  It comes right at the start of the Great Depression for a reason.

I'm sure you are too young to remember when there were only American Motors, Chrysler, GM and Ford cars for sale and they were all unreliable crap.

Let me tell you about my in-laws.  They are Japanese, and survived WWII.  They remember not having enough to eat, vividly.  My sister-in-law, born during the war, is quite small due to malnutrition.  This situation didn't improve much until the 1950s, because there were few jobs, no capital, and no domestic markets because nobody had money to buy things.  That is the classic description of a third world country.

Japan was able to rebuild itself largely through exports.  Had that not happened, I'm sure the next generation could have found some enterprising leader ready to avenge the loss of WWII, probably  with atomic weapons.  It took about 20 years for Germany to rearm and follow Hitler after losing WWI and having their economy destroyed by the treaty forced on them after they lost.

Smart people make mistakes, but they don't make the same mistakes.

167 @MarkD

Now that I have removed the tax penalty, which I admitted was ill-concieved, I don't see this resembling Smoot-Hawley.  I also don't understand your point about automakers as most "foreign cars" are in fact produced domestically by American workers so nothing about this would apply to them. 

Your following paragraph about Japan and Germany makes my point not the point I think you are trying to make.

@Beagle - What's your point?  Hayek was thrown up as an example of why there should be no government involvement in the economy.  All I did was point out that isn't what he said. 

Look - You guys have almost convinced me that I am completely wrong on this but when I am almost there I always come back to the fact that the economies of manufacturing countries (China, India, Germany) are growing and service economies are shrinking.  That then leads to the fact that both China and India are in many ways closed markets and in the case of China they artificially keep labor and production costs low.  I don't want to close markets I want the US to compete in a fair free market.  In free market terms I don't want our barrier to entry in foreign markets to be higher than other countries because they subsidize their manufacturers by artificially keeping exchange rates low.  I chose tax policy as what I thought would be the most effective way of addressing that issue.  It is targeted, it applies equally to everyone and it doesn't require government intervention in the actually operation of the business.   

Others are arguing for a general decrease in business taxes.  I don't see theses as mutually exclusive.  In general I like the idea of a flat tax like California is proposing but as I pointed out above some business leaders are concerned about that approach.

168 Thanks for the many smart things said ... I'm no expert.

We don't really have free and fair trade, most nations find a way to "cheat" whether through subsidy, currency, polluting, slavery, technology theft, false reporting, etc.  The US is still the big dog, but is pretty sick, and seems to be a major target. 

Remove union coercion and control, remove oppressive and worthless EPA mandates (on manufacturing and restrictions on land development), remove bureaucracy at many levels, ... ummm ... lots of "REMOVE gov' imposed dead weight" is my point.

The service dominant economy could function as long as we remain top dogs in many areas, which, considering the attack on our educational system, seems highly unlikely.  With our president acting as president lord of the world, our wages and standard of living would almost certainly decline to match the rest of the world, if they get their way.

It seems we have to produce something, or what does the less educated population do for a living?  There will always be some production, but China has learned to steal our technologies, so they become the efficient producers with slave labor and stolen US engineering.

Our capitalism is our biggest asset in maintaining dominance ... it is even motivating people in China (from what I hear) ... but the progressive movement wants to neuter it.  Bush wanted to spread democracy, Obama wants to give away our wealth and increase "thugocracy", even here.

Obama is on a path of wealth destruction and confiscation ... almost certainly that is deliberate.  He may remove some wealthy capitalists, but it may well be at enormous cost to society and civilization. 

Advancements in technology may make our "enslavement" more tolerable than old Russia, but it will make masters of tyrants and their gangs, while those wishing to achieve the old "American Dream" will be driven through the swamp of bureaucracy.

Government has a role, but statism sucks. 


one last random thought ... buying something from China for $1, instead of $2 from US, makes sense if we have balanced trade.  But the $2 cycled nine times through our economy rather than China's can also make sense.  Do we really want to wait till we are at China wages to correct the trade imbalance? 

We need trade credits, not carbon credits.  Foreign goods would be bought with a coupon good for purchase of only US goods and services. ha

(Oh ... and kill all two thirds of the lawyers, and all dishonest politicians)

169 I worked for Wally-World from '77 to '89. Sam was still alive then. Mr. Sam at that time had a 'buy American' mindset. His stated policy was that if an American supplier could come within 5% of the foreign supplier then we bought American.

Sam Walton is dead now. Wally-World is a multi-national that happens to be headquartered in Bentonville, Ar. The stated goal now is to provide the lowest possible priced goods for their customers regardless of the nation of origin.

So you see furniture from Vietnam, clothes from Honduras, lots of stuff from China, etc. The only buying philosophy is buy it cheap and sell it at a profit.

It is almost Capitalistic.

170 Sorry. That should have been '77 to '80. Fingers don't all point exactly straight anymore.

The moral of that is never let your right hand come between the bull's horn and the side of the chute.

171

As I'm currently funemployed after 40+ in manufacturing, I'd like to weigh in.

We've priced ourselves out of the market. CEO's who control their own salary and pay themselves millions are just as much to blame as unions who disregard a company's profit and insist on ever-increasing wages all the time, every time. Needless environmental regulations add a significant cost to business, as does the legal industry and its ever-present threat of a lawsuit, which adds again to the cost of doing business. Of course, Washington gets its cut by imposing stifling taxes. Now we also have outdated trade agreements that seemed reasonable when they were enacted, but situations have now changed. Don't get me started on Congresscritters who've never worked in a real business who are now dictating economic policy.

Modern life requires modern technology. People need things like cars and computers. Someone needs to make these things, it may as well be our neighbors as opposed to someone halfway across the world. Cultural differences negate the positives of global trade. Ask yourself just how concerned China is about quality control in the face of all their recalled products just in the past three years. Do you really want something made by someone who considers you an enemy?

BTW, there is another aspect of moving American manufacturing offshore that hasn't been addressed as yet: how will we make war implements if we don't have the means in place to produce them? Ask China nicely?

172 Why not?  Because Walmart supports socialized medicine and affirmative action.  That is why.

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174

In the immortal words of Donald Rumsfeld, "You are entitled to your own opinion.  You are not entitled to your own facts."

Take a class on economics or - better yet - read Adam Smith's Wealth of Nations (or, at least, at several hundred fewer pages, Leonard Read's classic essay, "I, Pencil") before jumping in with the policy ideas.

Your cooperation in this matter will be greatly appreciated.

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