Forum Post: Another outsourcing thread...Please offer opinions...
Posted 12 years ago on Feb. 12, 2012, 5:44 p.m. EST by craigdangit
(326)
This content is user submitted and not an official statement
Hello all. First of all, I'd like to thank everyone who offered their opinions in the other outsourcing thread I wrote. Secondly, this thread is not a provocation but a request for opinions.
What if New York City decided to ban importation and declared that all goods had to be manufactured within city limits to combat joblessness? How is this any different than banning goods brought in from other countries? How is it different on this small scale than on the scale of a country? Please offer opinions.
the difference would be that nyc doesnt have the resources .. if america did not have the resources this wouldnt be a question. america has all the resources necessary to sustain itself without trading with anyone. if nyc had enough resources then it wouldnt matter.. they could absolutely get by without trade from anywhere and probably improve the living standard in the process.
But the thing is, if we didn't trade with anyone, we would basically not have any Neodymium, Lithium, or oil. the price of these things would go through the clouds.
We have rare earth deposits in the US. Lithium is quite abundant. Oil is a problem, and we will be importing oil as long as that is the primary fuel for transportation. All the more reason not to add to the trade deficit with imported manufactured goods. http://www.pcworld.com/businesscenter/article/242892/supply_of_critical_rareearth_elements_about_to_expand.html
We should be converting to electric cars anyway in order to reduce our dependance on foreign oil.
We have some of the smartest minds in the world. Surely these people can come up with ways to build technological equipment that uses materials found in the US instead of those that have to be mined out of Sierra Leone.
We might not even NEED new raw materials. There are more than enough old computers sitting in landfills, that, if someone figured out how to recycle efficiently, would provide us with the materials that we need to build many new machines before turning to imports.
Perhaps there is a way to efficiently recycle all of those things. Perhaps there is a way to make clean burning liquid fuel out of dog vomit. But if we slam the door on importation, won't that put us in a crisis until these options come along? I don't believe that Americans are smarter than any other race of people, as a whole.
Not Americans smarter, per se, but democrats, yes.
What we need to do is to drill right here in the U.S. for oil and gas on a much more expansive basis, but take a percentage of the profits made and invest in alternative energy research and development. We can't cut off the oil for a very long time,and we shouldn't wait until it has completely been exhausted.
The difference is twofold; first, that on a small scale places like New York tend to be so dense that there are way too many consumers and not enough producers to make a scheme like that work. Second, there are major differences in general standards of living, common law, and so on across national borders that would not exist across city or most state lines. A living wage in New York City is higher than a living wage in rural Arkansas, but the two are generally in the same ballpark. New York City and Arkansas share a common system of government, many common labor and product safety laws, many common laws in general, almost identical human rights, and so on. Thus, free trade across state lines is fine because market imbalances on that level are several orders of magnitude less severe than market imbalances across national borders.
If we were talking about free trade between the US and most of Western and Central Europe I'd have no problem with that at all, because product quality and working conditions are the same to better over there than they are over here, so it would be not much different than trade between states and it would be possible to maintain a healthy balance of trade on all sides. However, when you can import goods made in needlessly hazardous conditions with no real oversight made by people who make in a year what a working-class American makes in a week or a month, then the market imbalances are so great that we are unable to sustain reasonable rates of employment and production.
Thank you for your reply. I am having trouble with your first statement, but everything else seemed well thought out. You said there are too many producers and not enough consumers for this to work in New York. But first of all, that is becoming the case for the entire country. We are producing less and less, just as New York does. Why has it not put them into poverty and unemployment? Secondly, just because there is little production in New York now, only means that the costs are too high for people to invest in New York factories. But the demand is so great, that if the only goods consumed there had to be produced there, people would build factories in New York and start making stuff there. It would just drive prices through the roof like tariffs would, right? My main question is, If importing things from poorer countries is hurting the US as a nation, why isn't importing things from poorer cities and states hurting New York?
Here's the thing; it is perfectly acceptable for different parts of a country to handle different sectors of the economy and exist at somewhat different levels of prosperity because in most fully developed countries the income differences are small enough that they're not particularly important. An Iowan can (or at least used to) be able to afford the same car as a New Yorker can, so you have different parts of the country producing different things but the entirety of the country is gainfully employed and capable of buying what they make.
In other words, the means of production for different types of goods are centered in different places, but wealth differences between those places are fairly small (at least in theory; that's not always completely true in practice) to the degree that the vast majority of the people can afford at least one full standard basket comprised of different quantities of those goods that we would consider necessary for a sustainable, prosperous lifestyle. That would ideally lead to 90-95% of the population being able to hold gainful employment and maintain at minimum a solid working- to middle-class lifestyle with the government mostly staying in the background, and there would be enough left over for widows, orphans, the physically and mentally handicapped, and those who are just down on their luck to get by through support from their community and federal funding where needed.
Imports from other countries where the difference in wealth is as extreme as it is between the developed and the developing world are going to throw that dynamic completely out of whack, because the differences in wealth are so extreme that unregulated free trade can decimate large chunks of the manufacturing sector. When a company realizes that it can pay a factory worker in Mexico or China less than 10% of what it would have to pay an American, sell the resulting goods in the US at 33% off the market price of a similar product made in America, and pocket the profits what do you think will happen? From a corporate perspective it's an incredible windfall, but from an ordinary American's perspective it's hell on wheels.
Once large multinationals undercut local markets and manufacturers by that kind of a margin, there is truly nothing that American manufacturers are able to do to protect themselves. They basically find themselves relegated to those parts of the manufacturing sector that as of right now can't really be exported to China, which tends to be largely comprised of luxury and/or niche markets, and as you discovered when you tried to buy the injection molding equipment, that then leaves entrepreneurs farther down the supply chain with no choice but to go Chinese or Vietnamese or Mexican. The result is a pretty much eviscerated manufacturing sector and an incredible dependence both on large multinational corporations and on the climate of whatever country they happen to be in right now.
I would like to change your premise to the following, why is it ethical to overtax small businesses and then use part of those funds to fund city and state pension funds that then invest that money on wall street, who in turn invests that money offshore, and then those offshore investments over time create offshore businesses that put out a less expense (and usually poorer quality) product than can be made in america.
Demand that ALL U.S. Pension funds ONLY invest within the United States, or, not at all.
A profit Cap would reduce outsourcing.
Here is how :
If the cap is ten percent allowable markup on sales , than an item brought in from china at $40 dollars would profit the retailer $4. But if the same item was produced domestically at $400 than the profit market up would be $40.. there fore the salesman would prefer to sell domestic made products because.. the profit would be higher on each sale.
Lets say the retailer sells furniture. and the table from china costs $200 plus tenpercent markup .. would than sell for $220 . at @0 profit for the retailer.
If the retailer buys the table domestically produced at $2000 with ten percent profit it would sell for $2200. this is a $200 dollar profit for the retailer.. with marketing tachniques the retailer will attempt to sell to the customer the item which makes the retailer the most profit.
With out the cap, the retailer buys the table from china for $200 and reslls it for $750 making $550 profit or 275% profit..
What we need to understand is the items brought in from china may be cheap but they make huge profits for the retailer , because the domestic competition is so highly priced the retailer can add on as much profit as he wants on the china product and still sell it less than the domestic product .. and his incentive is the huge profit he makes on the china product .. but withthe cap on profits his iincentive suddenly changes to selling domestic as I already explained.
Um, I run a retail business, and no business can survive on 10% markup. That would maybe pay the utilities, and maybe the rent. Second of all, if there is enough market for the things being sold, the business will just try to sell ten times more of them, at lower profit.
would they really..?
Guess they could harvest trees from Central Park for lumber. Point is that NYC does not have all the resources within it to do all things necessary.
Right, and neither does the US. If importation were banned, neodymium and lithium prices would go through the clouds, making electric cars and computers even more expensive.
We are in a world economy. It is all linked. Hopefully, the U.S. will reinvent itself to be strong in services, technology and humanities. Good to have a strong back, but that back is even stronger with a strong mind.
I will say two things. The tide is turning with China, their wages and benefits are going up (no thanks to the Chamber of Commerce who lobby them to keep them unconscionably low) and more products are being repatriated to save the transportation costs
Second, tariffs are a bit more sophisticated than outright bans. The free trade agreements we have put in place have us in a bind in using tariffs.
We have invoked the dumping penalty provisions re tires and some steel and a few other things, in these agreements. But they still leave us at a disadvantage and should be abrogated or renegotiated.
If you banned everything not manufactured inside NYC you would begin to starve and be unable to wipe you butt in about three days. Other than that, it sounds like a great idea, ....for a movie.
I have to disagree that the tide is turning. The isolated instances of companies returning is what I would call "happy talk". Here are some facts that say off-shoring is accelerating. http://management.about.com/cs/people/a/offshoring104.htm http://www.usnews.com/opinion/mzuckerman/articles/2011/02/11/the-great-jobs-recession-goes-on
I don't have a link but I think it was in the Financial Times. Clearly more could and should be done to accelerate it. But the facts are there that China's costs are rising, they have stopped their stimulus. Their cities have spent to the max and 25% of their city debt is maturing this year, 17% next year and 11% the year after.This is adversely affecting their housing bubble. So their factors are there for the change that I describe. It isn't just happy talk, nor is it a switch that was being thrown last week.
The trouble is,places like Vietnam, Korea and Columbia are the next destination for even cheaper labor. I agree, China has a dangerous bubble.
But of course there is always a cheap labor place, so this cycle repeats and repeats. But in the beginning of each, the skills are lacking so they can't build everything but they take on more and more and get experience and training. But the workers of the world depend on us and, hopefully, those like us to demand fair trade because that improves their working conditions at the same time as their skills are growing. But it remains our challenge to be the top of the education ladder, the apex of the skills heap, to be able to build the latest and the best. That is what we used to do, innovate in design and process, and quality to lead. We can't do that without paying our dues. That is the lesson that we must learn, to win you have to work to stay on top. And that takes investment.
There is a more central concept which is often left out of discussions around outsourcing. This concept makes itself apparent in the following question: "Who has the legitimate authority (the right) to determine with whom others may trade?"
Congress.The U.S. Constitution of 1789 gave the federal government authority to tax, stating that Congress has the power to "... lay and collect taxes, duties, imposts and excises, pay the debts and provide for the common defense and general welfare of the United States." Tariffs between states is prohibited by the U.S. Constitution and all domestically made products can be imported or shipped to another state tax free.
The concept of a Republican form of government, in which government derives its powers from those delegated to it (but still retained) by the sovereign people of the nation, would prohibit government from having the legitimate authority to lay and collect taxes, etc. The principle of a republican form of government is that government can have no power that the individual people of the nation do not have; that it exists merely to carry out the tasks delegated to it by those who hold the rights to delegate such tasks. To suggest that government has the legitimate authority to lay and collect taxes would imply that the sovereigns of this nation have the power to lay and collect taxes. Obviously this is false as this would result in a situation in which anyone could go to his neighbor and demand his "rightful" share of what his neighbor has produced.
I know that what you quoted is in the constitution, but the constitution is a whole document. There are many contradictions in it which cannot be resolved simply by looking only at one part of it. That's as preposterous as Christians picking and choosing verses out of the bible they agree with while considering the rest to be immaterial. Article 4, Section 4 states: "The United States shall guarantee to every State in this Union a Republican Form of Government..."
From the Bouvier Law Dictionary (which is the official dictionary of the Constitution), under GOVERNMENT: "...Governments are also divided into monarchical and republican; among the monarchical states may be classed empires, kingdoms, and others; in these the sovereignty resides in, a single individual. There are some monarchical states under the name of duchies, counties, and the like. Republican states are those where the sovereignty is in several persons. These are subdivided into aristocracies, where the power is exercised by a few persons of the first rank in the state; and democracies, which are those governments where the common people may exercise the highest powers...."
Given that this country was created by a congress of delegates chosen to exercise only specific powers considered to be the right of the citizens of this country, they could not lawfully have established a form of government in which elected officials had any legitimate authority not possessed by the people who granted authority to the delegates who established it in the first place! If they did grant to officials powers not posessed by right by the common people, they would have overstepped the authority granted to them and the government would not be lawful.
As I said above, there are contradictions in the constitution, but they can be EASILY (although the Supreme Court doesn't want anyone to realize this) resolved by considering the constitution as a whole document; each clause acting on all the others to which it is related, with the rights of the sovereigns of this nation (who established as a republic it in the first place) being inalienable (as stated in the Declaration of Independence).
...Therefore, congress "does" have the authority to lay and collect taxes, however it cannot do so in a way which would violate property rights (which effectively renders any tax uncollectible, though (arguably) legitimately passed into law). I would argue that it would actually be unlawful for the United States to tax anything but the use of property or services owned by the United States. Article 9 of the Bill of Rights states that "The enumeration in the Constitution of certain rights shall not be construed to deny or disparage others retained by the people." This amendment would include property rights, thus preventing the United States from charging sovereigns for the use of their own property (which is what taxation is).
This is just some of what I've found in my recent studies of the history and law of this country.
An interesting argument. .So do I understand you correctly? In your opinion, the passages you quote countermand the specific statement that says Congress can levy taxes?
Not exactly. They can levy taxes, but only on goods and services which they own. They can not lawfully tax property that I legitimately own (land secured by a land patent, for instance). They can tax money earned through the use of a social security number though, since that is an instrument belonging to the United States.
handling of unemployment payments is now handled by Bank of America which is a privately owned international bank
Handling of unemployment payments used to be handled by the United States which is a privately owned international corporation.
ha
the government belongs to the people of the US
Oh yeah? Tell that to Lincoln. During the civil war congress adjourned sine die. They didn't set a date to reconvene. He declared a state of emergency and martial law. He then re-incorporated the District of Columbia as a PRIVATE municipal corporation (it had to be private because he did not have the legitimate authority to incorporate it as a part of the original jurisdiction government -- that would take an act of congress). The DoC went on to trademark the following terms: "USA", "United States of America", 'the United States", as well as several others which you may be familiar with. After the war the United States was broke, so they turned to foreign aristocrats to loan them some dough. When it came time to pay back their loans they couldn't afford to (no shit!?) and needed moar money to continue running the country. Thus, the Federal Reserve was created as an arm of the Central Bank and the United States treasury was declared to be the private drawing account of the Central Bank.
I don't think it would really work, on either scale. In your NYC example, it would create a problem for the working poor of NYC because all the goods they once bought from overseas are now going to cost much more. Even something as simple as a package of socks would all of a sudden cost more.
Also, those imported goods would probably still make there way into NYC via the black market. If a pair of jeans made in China costs $20 and a pair made in NYC costs $50, you better believe there will be people who are willing to risk the legal ramifications to take advantage of those different market prices.
Why are a lot of the working poor the working poor. In many cases, (millions in fact) they have traded higher paying manufacturing jobs,the ones that have been sent out of the country, for lower paying service jobs. You don't think it would work? Well, while not quite the same thing as a ban, (that would be called an embargo) but for most of US history, we maintained high tariffs, which tend to accomplish the same thing. Guess what. It did work.
Can't happen because they do not have the labor necessary nor the resources to do it. They can't mine steel in NYC for products made of steel. They can't drill for oil to produce products made of plastic or gasoline.
So if you said "What if NYC decided to ban importation and declared that all goods had to be manufacturered in New York that may be plausable to "combat joblessness".
Well, it's not that they can't do it, as much as that they won't. Consumption will go down, as prices rise, just as the city's economy will go down. But why won't this happen to a country that turns down less expensive imports? Won't consumption decrease?
"Won't consumption decrease?" Good question The answer is no,it will not decrease. It will increase. The main determinant.of consumption is the available income to purchase goods. Each time a job goes to China, or another country, that purchasing power is lost. Each time the rate of pay is decreased, due to foreign competition, that purchasing power is also lost.This is what Keynes would call a loss in aggregate demand.Craig, when is the last time you sold any of your product to a factory worker in China?
If you search Reddit Politics for "NDAA" or "National Defense Authorization Act", why doesn't this show up?
http://www.reddit.com/r/politics/comments/pm1i6/national_defense_authorization_act_protest/
So why do liberals "outsource" work to government so they dont have to?