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Forum Post: Is outsourcing always, universally and unconditionally bad? Hear me out...

Posted 2 years ago on Feb. 11, 2012, 2:58 p.m. EST by craigdangit (326)
This content is user submitted and not an official statement

I work for a small business (this is a true story). We make manufactured goods in the US. We currently need a piece of equipment to make more things here. I priced having the equipment made in China and brought here for production. The cost with shipping is $38,000. If we take this option, we create American jobs, from the person to run the machine to the person to sweep the floor.... endless. And people here in America get a good product at a good price.

Option 2: We have the equipment made in the US. I priced this at ~$105,000. If outsourcing were banned, like I hear some people speaking of on this site, this would be our only option. We do not have the money to pay for it, so I don't get a job, the guy running the machine doesn't get a job, the truck driver doesn't get a job... and of course, the consumers don't get any product. How does this sound?

145 Comments

145 Comments


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[-] 3 points by PandoraK (1678) 2 years ago

I don't think anyone is saying outsourcing is bad, but rather 'over done'. So much of our manufacturing base has been allowed to relocate that the options today to buy 'local' are severely limited. We've (nationally) allowed our competition to become international. Good for some, better for some and worse for us, in so many ways.

Back in the day...yeah another old timer story...we didn't call it outsourcing, we called it jobbing out. We didn't buy all the equipment and machinery to make our products, we actually had other guys doing some of it. If we needed washers for our product, we jobbed them out, if we needed specialty items we jobbed it out. It worked for a heck of a long time, and worked very well.

Lots of small companies had mutually beneficial arrangements, each of those companies had a guy who swept the floors, a few guys who ran the machines and a couple of guys who maintained them.

It's like the small farmer, the family farm. For decades family farms fed not only a nation, but a good portion of the world. Those family farms were over whelmed when corporate farming began to undersell them, so they sold out when they could no long hold out.

The small businesses that had the mutually beneficial arrangements, well, lots of them were doing fine until someone figured out that they could undersell and the small businesses couldn't hold out either.

We've lost so much, we gain a lot, but I'm not sure the balance sheet is very equal.

[-] 1 points by notaneoliberal (2269) 2 years ago

Well, sorry, but yes I am saying outsourcing is bad. I'm not talking about other companies within the country, what you call jobbing out, but rather international outsourcing, or off shoring. No, the balance sheet is NOT equal. The balance sheet is the balance of trade. Minus 558 billion for 2011 alone.

[-] -1 points by PretendHitGirI (13) 2 years ago

Of course it is evil, especially when done with communist nations who have ZERO regard for even basic human rights or an inkling of respect for our planet.

[-] 1 points by notaneoliberal (2269) 2 years ago

Thank you. Well said. (you sound a lot like the real hitgirl).

[-] 0 points by PretendHitGirI (13) 2 years ago

There is not much real about her, if you ask me.

"HitGirl" my ass, I promise you it's never even killed a rabbit, much less a person for money or any other compensation.

[-] 1 points by notaneoliberal (2269) 2 years ago

So you don't like Hitgirl? Why not?

[-] 0 points by PretendHitGirI (13) 2 years ago

Best I can tell, she's just another Dem blowing bi-party myth perp. Just like ZD and GF.

Anyone who still types as if they believe this system of money ruling the US is not badly broken, so vote Dem or vote Repub, is no more than persona non-grata, if you ask me.

Both side are corrupt and the system is badly broken, as well as far beyond out of control.

It cannot be fixed and the original system of governance is our nation's only hope as long as the vulgarly wealthy and corrupt globalist can be kept out of it.

[-] 1 points by notaneoliberal (2269) 2 years ago

You have a point. I agree, both sides are corrupt. The best I can say for the Dems. is I still think they're microscopically better. As Iv'e said before, our choice now is right wing or far crazy fascist right wing.

[-] 0 points by PretendHitGirI (13) 2 years ago

Are those the choices?

I suppose you've never read the supreme court ruling which concurs that our original form of democratic republic governance still exists although the seats are empty.

It's not easy to find, but, it does exist.

[-] 1 points by notaneoliberal (2269) 2 years ago

Those seem to be the choices in terms of the so called main stream parties. I'd like to read the ruling you're referring to . Do you have a link?

[-] 0 points by PretendHitGirI (13) 2 years ago

I do. I'll post it later from a different machine.

However, you may find the path searching for it, interesting.

To accept it requires complete shattering of most all widely held acceptance about our governance no longer functions, and once did indeed function.

[-] 1 points by notaneoliberal (2269) 2 years ago

When did the change occur?

[-] -1 points by PretendHitGirI (13) 2 years ago

Before FDR and certainly finalized with his blessing/complicity.

Lincoln set the stage, very well, spending far more than our nation has yet to repay to fight his alleged war against slavery.

You may find the passages of which congress clearly states, during FDR's term, they are now the de facto trustees for the bankruptcy of the united states to be revealing.

It sure seems plausible today when it is clear they, and all of DC, are serving somebody besides The People.

[-] 2 points by notaneoliberal (2269) 2 years ago

I look forward to your full post on the subject.

[-] -1 points by PretendHitGirI (13) 2 years ago

Well, don't get too close to the edge of your seat waiting for any such full disclosures. Those posts exist here, and all over the internet, in spades, along with the majority rejection of any such common sense and very logical explanations of why big money truly owns "our government".

[-] 1 points by notaneoliberal (2269) 2 years ago

Reply to; Well, don't get too close..." You said previously, I will post it later from a different machine." Change your mind?

[-] -1 points by PretendHitGirI (13) 2 years ago

You went from requesting a simple link to a "full post on the subject".

I remain hopeful you will seek and find it before I am sitting elsewhere and easily able to do it for you.

I'm reasonably sure the trail and info is already here, unless the agenda driven controllers of this forum have already vaporized it.

[-] 1 points by freehorseman (267) from Miles City, Mt 2 years ago

I will say it outsourcing is Bad for Americans.

[-] 1 points by craigdangit (326) 2 years ago

Without exceptions? What about the example I outlined above?

[-] 0 points by XenuLives (1645) from Charlotte, NC 2 years ago

There are some details missing that may make the issue clearer with your story.

  • Why is the American version 3 times as much as the Chinese one? I assume the American and Chinese companies gave you a reason why their machines cost as much as they do?

  • Are there better parts on the American machine? Does it have better reviews? Maybe the American company is pricing their product incorrectly, and another company (still in America) will undercut them?

Maybe contact the other company with the Chinese invoice and say "look, your price is not competitive. Can you work something out so that I'm not forced to buy this product at a third of your price from China?"

With all else being equal (quality of machine, lack of competition) then, yes, buy the cheaper machine. A 300% markup over the Chinese-made machine is ridiculous, and I doubt that anyone would take that kind of hit on merely an ideal. If the difference was < $10,000 for both machines, then I would rather pony up a little extra and get the locally-produced version instead.

[-] 1 points by TheIndependentMan102 (3) 2 years ago

DUMP FREE TRADE, save America from the Communists. Wall St. created millions of jobs, made in China. Support made in America. America's product is made better, supports American workers, pays taxes, pays for health care and benefits and keeps money outta CEO's pockets.

[-] -1 points by Kite (79) 2 years ago

It isn't bad. Our standard of living is higher because the costs of goods and services is lower.

[-] 1 points by debndan (1145) 2 years ago

this is fully untrue, the average standard of living has gone down dramatically over the past 12 years as we've outsourced more and more, and poverty is at a generational high.

Unless, of course, when you say 'our' that you mean the top 1%, then yes I would agree, with outsourcing the top 1%'s standard of living has never been better.

But when your talking millions more children and families in poverty, without insurance, and many living in tents. Then turn and see a crumbling post office, public education, infrastructure and fragmenting communities......

Then maybe you can see that these 'cheap' goods have way too high a cost.

[-] 1 points by Kite (79) 2 years ago

I don't subscribe to the misguided notion that Americans are superior and more entitled to a job as compared to a worker in Bangalore or the Phillipines. Americans don't know poverty like the rest of the world does.

Millions of Americans stand in line to spend disposable income on Apple products. None of which are needed. The company with the largest market capitalization and the biggest pile of cash has separated that cash from people for a bauble, a trinket, a fun, but ultimately unnecessary and disposable product.

Communities and infrastructure aren't crumbling because of outsourcing. The neglect began long before technology made it possible for call centers to operate 24/7 in Mumbai.

[-] 1 points by craigdangit (326) 2 years ago

Thank you for your reply.

[-] 2 points by theshade (5) 2 years ago

I do not think you purchasing machinery made in China is akin to outsourcing. Outsourcing is when you call Bank of America and get transferred to about three different countries and they all repeat the same thing - " I am sorry to here that and then end it with did I resolve your issue today". This is a prime example of taking jobs away form the American people. However, make sure you have a good warranty on the machine.

[-] 1 points by craigdangit (326) 2 years ago

No, I really think it is a prime example. There is about eight weeks worth of skilled machinist labor involved in the production of this equipment. It will allow me to produce things for US consumers at a lower price, or in my case, since I don't have enough money for the american version, it will allow me to do it at all.

[-] 2 points by jrhirsch (4714) from Sun City, CA 2 years ago

If we continue to outsource jobs, will there be any employed Americans left to buy those products?

[-] 1 points by craigdangit (326) 2 years ago

That's what I'm trying to figure out. I do know If I cannot outsource any jobs, there will be no products for the consumers to buy in my case, and no american jobs created by me.

[-] 1 points by notaneoliberal (2269) 2 years ago

This may surprise you coming from me, but of course the only rational business decision for your individual business is to buy the import. Businesses have to compete within the structure that exists. As to the question of whether it's good for the overall economy in this country, the answer is no it's not. I must say though, that that much of a price difference is very hard to explain. This though, is a prime example of where free market ideology breaks down. An individual business will almost always choose what is best for their profitability but not necessarily what is good for the domestic economy. In fact, that tends to be necessary for the survival of that company. This is precisely why trade policy should not be in the hands of corporate interests. One possible explanation of that large price difference may very well be due to the fact that many US industries have lost the advantage of "economy of scale" as a result of decades of losing market share to other countries.

[-] 1 points by arturo (3169) from Shanghai, Shanghai 2 years ago

Instead of stopping outsourcing, I think that for now, we can redevelop our manufacturing sector, not by competing with the Chinese on low cost, but rather by the making high technology items that they are not capable of making yet.

Here's one article on a special kind of airplane that the US can now sell to China, due to the US waving its ban:

http://news.xinhuanet.com/english2010/china/2010-10/15/c_13559600.htm

Here's one on removing trade restrictions as opposed to revaluing the yuan:

http://news.xinhuanet.com/english2010/china/2010-10/15/c_13559600.htm

[-] 1 points by craigdangit (326) 2 years ago

Well, I know why the price difference is so great, as you do, because in China there are no labor unions, and there is free-market wage negotiation, so people can live okay on ~$2/hour. My equipment is an injection mold, which will require about eight weeks of skilled machinist labor to produce.

What I'm not settled on, is the idea that imports hurt the economy. I am open to the idea, I just don't quite understand. What more information do you have on that in particular? This graph indicates that US imports have increased 10,000% in the last half decade.

http://www.forecast-chart.com/graph-us-imports.html

Clearly, the economy did not suffer until recently, so I can't conclude it is because of imports. What gives? I agree wholeheartedly that trade policy should not be in the hands of corporations.

[-] 1 points by notaneoliberal (2269) 2 years ago

Again, what you are faced with is a conflict between the good of your company vs the good of the overall economy. This should not be a battle that you, or your company should have to fight alone, It would not be fair for you to have to pay that much more (even if you could) than another competitor. I myself am sometimes compelled by economics to buy Chinese products in the operation of my own company. You can't be the one company that pays more than all your competitors and remain competitive. When I do so though, I can't fool myself into thinking it doesn't hurt the US economy. As to to your statement "the economy did not suffer until recently", I have to take issue with that. The trend of sending manufacturing out of the country has been going on since the 70s. The issue of protectionism was one of the major issues that started the civil war. http://economyincrisis.org/ http://en.wikipedia.org/wiki/Nullification_Crisis

[-] 2 points by nomdeguerre (1775) from Brooklyn, NY 2 years ago

This is not a matter to be left to business owners. Owners will always choose the path of the greatest profit, that is their job.

We, the people, and the government that governs in our name (once we take it back) need to set the rules. And the rules need to be designed to maintain a middle class lifestyle as the norm for Americans. The people are sovereign and that is our choice.

An out of control degenerate capitalism will result in third world status for the United States. A world of Mexico Cities and Rios -- oases of vast wealth surrounded by teeming dirt eaters desperate for any crumbs thrown their way.

Wall St. wants a world of Sky People and Mud People (or at any rate rewards through stock prices companies working towards that goal, such as Apple re Foxxconn). Guess which we would be?

[-] 1 points by craigdangit (326) 2 years ago

What if, as under Socialism, my fellow employees owned the means of production, and they set the rules? Why not let us decide which option to take?

[-] 2 points by nomdeguerre (1775) from Brooklyn, NY 2 years ago

Doesn't make any difference. There is no such thing as a looting economy. They only go downhill.

Outsourcing/offshoring is an absolute attack on the American economy and the American worker. Anyone who defends it is a traitor to the American way of life, i.e., the vast majority being middle class.

The path to globalism, the NWO runs through the American middle class (and the other 1st world middle classes). That cannot be allowed.

[-] 1 points by craigdangit (326) 2 years ago

Do you have additional information on why importation is bad for the economy? Importation has increased 10,000% since around 1950, and average incomes have done nothing but go up. What gives?

http://visualizingeconomics.com/2008/05/04/average-income-in-the-united-states-1913-2006/

[-] 1 points by JesseHeffran (3903) 2 years ago

First off whenever you are talking about average income and you don't mention whether it is the median, mean or mode, the data is to be automatically disavowed. Also your data does not use constant dollars so your chart paints an obfuscated picture. You should take a class in statistics and stay away from staticulation.

[-] 1 points by craigdangit (326) 2 years ago

It doesn't matter which method you use. If the government were doing its job and flattening the wealth curve in this country, we would still all benefit from importation.

[Removed]

[-] 1 points by 1sealyon (434) 2 years ago

How much stuff do we actually out-source?

The answer for 2010:

Total imports: $ 2.3 trillion

Total Exports: $ 1.8 trillion

Total GDP: $15 trillion

So we only import about 15% of the stuff that we use. We produce domestically 85% of all of the goods and services that we use in the US or sell abroad.

[-] 1 points by RedJazz43 (2757) 2 years ago

If a job was outsourced from a nonunion, below prevailing wage scab shop in the US to a strong union shop in say Sweden or Germany, I'd consider that good outsourcing.

[-] 1 points by TrevorMnemonic (5827) 2 years ago

It is wrong if they violate American labor laws and utilize poor working conditions and take advantage of employees. Otherwise it's a free country. I don't like outsourcing but as long as it's legit, nothing can really be done about it.

I would say that it potentially weakens the country. Say if we had a ton of stuff made in China and a ton of jobs were outsourced there and China stopped dealing with the US. We would lose all of that industry and could do nothing about it. Now that most likely wouldn't happen, but this world is a crazy place.

[-] 1 points by nomdeguerre (1775) from Brooklyn, NY 2 years ago

From COINTELPRO techniques post, http://occupywallst.org/forum/repost-cointelpro-techniques-for-dilution-misdirec/ :

We got a Technique #2 - 'CONSENSUS CRACKING' -- Craigdangit, http://occupywallst.org/forum/is-outsourcing-always-universally-and-unconditiona/ . He seems so reasonable, until you realize he actually is an anti-American-jobs, anti-middle-class-way-of-life POS.

[-] 1 points by craigdangit (326) 2 years ago

Ah, thanks for calling names. Makes it obvious you have nothing to say. Actually, what I am doing, is trying to solve a moral dilemma that I have encountered at my place of work, a small business trying to do the right thing. What you are trying to do, is form a rigid idea of what the consensus is, to convince other members of the site to not consider what I am asking. You obviously do not have the faintest idea what I am asking or why I am asking it, so you merely see a conspiracy to bring down OWS at every post. I would ask you to take your tin foil hat off, if it wasn't so amusing to watch your paranoid and incoherent ramblings. This is part of the attitude that is bringing down OWS, and I can imagine your fellow trolls would be happy. Please, stop making supporters of this movement look like moonbat whackos that see conspiracies and attacks at every turn.

[-] 1 points by TheIndependentMan102 (3) 2 years ago

DID YOU HEAR cHINA IS GOING TO START CHARGING TARIFFS ON AMERICAN MADE CARS? FREE TRADE HAS BEEN A DISASTER ON AMERICAN JOBS. Our politicians have sold us out to Wall St., and these CEO's, who's made trillions selling out American jobs overseas. Our top export is American jobs. This is what Wall St. has done for America. What do you think of Mitt Romney now? All our politicians are in cahoots with Wall St. who are now sleeping with the communists in China. When Capitolism and Communism are in bed together, this is hideous for American jobs.

They sold us out for cheap products, who is made by paying slave wages and conditions. Not to mention China adds antifreeze to baby formula and toothpaste, and likes to add lead to everything.

So OWS I challenge you to having a central agenda, against Wall St. and free trade. This central agenda should get the middle class curious about protectionism and American jobs. Appeal to the patriotic side of America, American jobs. This movement should be in the middle of the GOP and Dems. Read up on Teddy Roosevelt and Ross Perot. Give the middle class something to think about. Wall St. would love that. Most important to the movement is to vote.

[-] 1 points by go99ers (31) 2 years ago

It's interesting whenever i read about outsourcing it's always focused on manufacturing. We can talk about that til we are blue but manufacturing has been dead in this country for years. We need to think about all the other jobs that can be outsourced, why do you think you are having such a hard time finding a job? Corporations are outsourcing anything that isn't service related. This includes computers and IT, xray and test diagnosis, you name it. If it isn't restauraunts and nursing and retail clerks it's gone baby.

[-] 1 points by TheIndependentMan102 (3) 2 years ago

See outsourcing is bad for America. It started in the 1980's during the Reagan era. CEO's made millions outsourcing jobs to Japan, while CEO's got huge bonuses and mega stock options. Wall St. flourished, but millions of American jobs were lost. I didn't get too excited, because I worked in the defense industry, job security right. Wrong, the defense industry tanked in the 90's and I got axed. Then China got special free trade status and CEO's and Wall St. made millions again. Dump free trade, before their coming for your job next.

[-] 1 points by Faithntruth (997) 2 years ago

Your argument relies on the idea of production, which is not the case for things like public libraries, prisons, or office work.

There is no product that is being sold for profit. Private business exists for making profit. So how do you make profit? By cutting expenses. Where does that money come from? Your neighbors pockets in one form or another (decreased pay or benefits, or job cuts). Where does it go to? In many cases it goes out of your community or even out of your state....perhaps even out of the country, as is the case for the company running services at yellowstone national park (japanese company owned it...dont know if they still do).

So how is outsourcing actually good for helping?

[-] 1 points by craigdangit (326) 2 years ago

I didn't say it was good. I am asking if it is always bad. You seem to think I am trying to start an argument here, by provoking people. I want nothing of the sort, only to further discourse and learn.

Secondly, if by cutting costs at my business, you say the money is coming "out of my neighbor's pockets" by not paying them as much. Does this mean that my neighbors have a right to everything I own to begin with, so by not giving it to them I am taking something away from them? I'm trying to understand.

[-] 1 points by Faithntruth (997) 2 years ago

Your theory is flawed. The pot of money changes by a small fraction: the current story in the news is putting it at a seven percent savings to the public coffer. It does not address that that money goes back into your community through income tax, sales tax, sales of products or services. The private company puts that widespread money into the hands of a few who may not be in your community, state, or country, thus taking what may well be more than what is claimed as savings out of play.

Think of it like a monoply game where there is an invisible player who does nothing to change the board, but takes money from players.

And your neighbor argument is both twisted and simplistic to the point of ridiculous. I am sure you realize that I am writing of people in your community who are working and earning a fair wage that has been negotiated betwenn them and their employers.

Finally, to win a bid, companies often underbid, then find ways to make up the difference so their bottom line does not suffer, and that often affects quality of the services provided.

[-] 0 points by JuanFenito (847) 2 years ago

If I were you, I would stop arguing with this idiot. He obviously cannot see that not giving someone money is the same as taking it away from them. He is only here to disrupt with ridiculous stories about, for all we know, fictional equipment that costs less in China. I have worked in business for a long time, and I have seen firsthand the cost difference between foreign and domestic equipment and it's not even close to that amount. If he is under the delusion that people should be free to buy goods and services from whoever they feel like, such ridiculous fallacy cannot even be argued with, as it has no shred of realism to begin with.

[-] 1 points by Faithntruth (997) 2 years ago

This is something I feel strongly about...I sincerely believe some government services should not be privatized and I really do want to persuade people to think about what it costs them and their communities. But you are correct that there comes a time to drop a conversation. Please dont name call, though: you're better than that...

[-] 0 points by JuanFenito (847) 2 years ago

You're right, I shouldn't call names like that. I just get so angry when these people come on here with their absurd predetermined conclusions about things and their closed minds. I had someone here tell me that union sign-up should be voluntary, and that is mild compared to some of the things I've heard. Someone claimed it was "fair" to let businesses and employees negotiate wages with each other-with no oversight of regulation.

[-] 1 points by Faithntruth (997) 2 years ago

It depends on the company which are not created equally.... One I worked for had negotiated with employees not to unionize and workers had gone with that. In return they had been promised quite a few things and the company honored the promises. I found them to be very generous and they had a management that recognized their employees were people with lives and families...it turned out win/win, but not all companies are run like that, which is why I do support the need for unions. It keeps the power balanced. Im horrified by the people who are brainwashed? Stupid? Ignorant? Gullible? Enough to blame unions for the slew of problems they throw out there. Especially when unions are willing to negitiate and management is raking in exhoritant pay and bonuses...

[-] 1 points by JesseHeffran (3903) 2 years ago

I'd say instead of subsidizing bigger corporations our gov't subsidize companies that would make that $105,000 figure somewhere closer to $38,000. I'd also be willing to wager that that $38.000 figure is subsidized somewhere along the supply chain, though I don't know.

[-] 1 points by untold (24) 2 years ago

You can't say "the act of outsourcing is bad in every situation." It's a case by case situation. For smaller businesses, not outsourcing might mean the death of your business.

[-] 1 points by arturo (3169) from Shanghai, Shanghai 2 years ago

At this point, instead of outsourcing, we could revive our manufacturing capacity by making and selling to the Chinese, and other third world countries, the things they want to buy and can't make for themselves. This would be more high tech products such as machine tools.

The problem is, our government classifies these kinds of technologies as "dual use" meaning they can have both civilian and military applications and therefore, won't sell them to China. But the Chinese have never fought an aggressive war with any western country.

War is against Confucian philosophy, which is still the primary way Chinese people think, despite communism and capitalism. I think we need to start building better relationships with the Chinese so that we can trust them to buy these kinds of technologies from us.

[-] 1 points by brightonsage (4494) 2 years ago

All I would suggest is go over and follow the supply chain and watch it built and then add any facts you consider relevant. Project members of your family doing those jobs and then post ::Option 3.

[-] 1 points by craigdangit (326) 2 years ago

What is option 3?

[-] 1 points by brightonsage (4494) 2 years ago

I am sure that when you have all of the facts, first hand, that you will, as an intelligent individual, have the best answer. That would be Option 3.

Having traveled and visited many manufacturing operations world wide and having outsourced and repatriated product's to US manufacture, I have learned that every situation is unique and scenarios that seem obvious, superficially, often look very different with a thorough understanding.

In this case, I know I don't know enough to concede either Option 1 or 2, to be optimal. Doesn't sound as if you do either.

[-] 1 points by Quark (236) 2 years ago

If the world was one with one government there could be no such thing as outsourcing because we are all one.

[-] 1 points by Mooks (1985) 2 years ago

Yes. One big country with lots of civil wars.

[-] 1 points by Quark (236) 2 years ago

Yeah, only if little minded people rule and create little minded followers. The world is one. We need to come together as one. One government, one world, one people. World Revolution. Solidarity.

It's an idea ahead of it's time, but we can make it now if we all work as one.

[-] 1 points by notaneoliberal (2269) 2 years ago

Think Roman empire, British Empire, then rethink your statement.

[-] 1 points by Quark (236) 2 years ago

Just because they failed does not mean a New Single World Order would fail. Do you believe that something new can never happen?

[-] 1 points by notaneoliberal (2269) 2 years ago

It's more that I don't think it is new. More concentrated, centralized power is the last thing I would like to see.

[-] 1 points by Quark (236) 2 years ago

If the power is good it would be more efficient and capable. Centralized power can have a system of checks & balances. It seems centralized systems have a stigma that most people can't overcome. I think this much is obvious. Also. you took "new" out of context. I meant new as a Good United World of all People government, something the world has never seen. Believe me this is NEW because it has never been. That is the definition of new.

[-] 1 points by notaneoliberal (2269) 2 years ago

Yes, I understood what you meant by "new", But your Utopian dream is what conquerors have promised throughout history. If there was one world government, who or what would be powerful enough to check it?

[-] 1 points by Quark (236) 2 years ago

The people would just like any other revolution. I feel we have exhausted this and are going in circles. I can see your point but it seems you can not see mine. I will leave it at that.

[-] 1 points by Mooks (1985) 2 years ago

I don't know man. Groups of people have waged war against each other basically since the dawn of civilization. I don't see any reason why that would change, as nice as it would be. The world has a lot of problems that we as Americans are isolated from. We are probably better off keeping it that way.

[-] 1 points by Quark (236) 2 years ago

Well, you have great points that I can't really argue with. But I am happy that you think it would be nice. If we could pull it off, I think we could solve world problems much faster & efficiently.

[-] 0 points by JuanFenito (847) 2 years ago

Hopefully, it would end with a great solution of some sort to the problem of rich people. The ones that end up running the show will point the way.

[-] 0 points by JuanFenito (847) 2 years ago

I agree. Government only functions at a higher level of efficiency the larger it is. We can get more things done with a large multinational police force. What should we name it?

[-] 1 points by gestopomillyy (1695) 2 years ago

someone else with more money would be able to afford.. not you perhaps but someone.. then. not only did the people that built the machine but the people that use the machine all make money.. right here in america you cant take it personal. in the mean time.. you would pay the people to do the work of the machine.. everyone wins

[-] 1 points by craigdangit (326) 2 years ago

First of all, I cannot pay my workers to do the work of the machine. It is an injection mold for plastic parts. Unless asking my workers to shape 600 degree polyethylene by hand is an option, there is no way to get people to do the work.

Second of all, you're saying that I should step aside and let someone with more money take this opportunity? A corporation? Here I am, working for a very small business, barely having the $38,000 to pay for the Chinese mold, and you're telling me I should ignore an opportunity to get ahead and let some corporation with a fortune already make even more instead of my small business?

[-] 1 points by gestopomillyy (1695) 2 years ago

no im saying there are other small businessmen with more money not corporations..

[-] 1 points by craigdangit (326) 2 years ago

Sure, there are, but they are still "big businesses" compared to mine. Is it wrong for me to try to create local jobs with imported equipment and grow my business?

[-] 1 points by epa1nter (4650) from Rutherford, NJ 2 years ago

I am against outsourcing in principle, but you have a unique case. Buy the machine and create jobs here. The net gain in jobs will be long lasting, whereas the single machine is one capital outlay alone.

THe point about objecting to outsourcing is not about people like you, trying to create a product and jobs here. It is about a large-scale policy that has moved the machine maker to China in the first place, forcing you to buy it from them. One reason for the expense here for your machine is that the domestic machine maker has no satellite infrastructure around him. He has to source HIS components overseas, too.

For many companies, the cost of labor is minimal compared with the expense of buying parts and managing supply chains that bring together components and services from hundreds of companies. It's not simply one manufacturer undercutting prices, it is that China has an entire ecosystem of manufacturers who can produce a wide variety of products quickly. That supply chain infrastructure is gone here in the states, with the exception of the automotive industry. (That's why Obama was right to bail out GM, etc. It wasn't simply GM at risk , but all the other smaller companies around it that made up the ecosystem. And once they would be gone, it would be forever.)

The Larger solution is building a new ecosystem in new areas here. That's what Obama is trying to do with the investment in green energy. And he is attacked from the right for doing so, using a single failure - Solydra - to undermine an entire program for new manufacturing in the country.

As for you, rest easy. Your conscience can be clear. Buy the cheaper machine and use it to make jobs here.

[-] 1 points by craigdangit (326) 2 years ago

Okay, thanks for your reply. I do have a few notes, though:

-I am glad you see reason when it comes to importing some items. I've heard people say that all importation should be banned, which is ridiculous, for a variety of reasons, not the least of which is my case.

-The auto bailout. To say that GM's suppliers would have gone down with them, is to say that the demand for domestic cars would have gone down. Did it? I think Ford and the carmakers that were doing okay would have picked up the slack and needed additional parts made, and would have bought just as many parts from the suppliers as GM did. What gives?

-Solyndra is a lone example? CBS news found 11 other companies that recieved risky loans, and those companies were not even up to "junk bond" status, totalling $6.4 billion dollars. What gives? I don't know about everyone else, but I say the people deserve their money back. After all, these companies got raided, and the rich execs took it all.

[-] 2 points by epa1nter (4650) from Rutherford, NJ 2 years ago

The auto bailout saved hundreds of thousands of jobs. The money has been mostly paid back from it, so the taxpayer lost nothing. And GM is now the largest auto company in the world again. Demand for domestic cars DID in fact go down for a while: demand for everything did. There was this little thing called the recession. And GM was not the only company that needed help.

So far, Solyndra (which was initially targeted for investment by Bush) is being used as a poster child for government ineptitude. It represents less that 1% of of the government's investment portfolio. And its failure had to do with a host of things - not the least of which was Chinese subsidies for competing technology, designed specifically to kill competition from all the Solyndras of the world - not a bad business model. In terms of any investment portfolio, Wall street would be thrilled with a 1% failure rate. It would be thrilled with a 30% failure rate, as long as the overall portfolio did well. But this government is being excoriated for 1%, and potentially as much as 5% with the "risky" loans you mention. The WHOLE POINT of government investment is that it does so in areas where the private sector won't or can't. The WHOLE POINT is that it takes on greater, not smaller risk, for the sake of creating new industries. It is not about short term profit above all else; it is not Wall Street. It is about investing in promising industries for America. That's what it did in the space program, that's what it did in terms of computers and the internet, and so on.

American manufacturing has been hemorrhaging jobs for decades. The government is doing exactly what it should be in trying to create new manufacturing sectors. It should be doing so precisely in areas that are risk averse to pirvate equity. And green energy is a sector that makes infinite sense, since it would not only create new jobs, but help the environment, start doing something about climate change, and get the US off of foreign dependency of oil. The government should quadruple its investments, not pull them back because of fraction of failures. It is investing in America's future, not trying to make a profit.

You can't complain that your either your conscience or wallet would be hurt regarding importing machinery if you also object to government investment in the future of manufacturing.

[-] 1 points by craigdangit (326) 2 years ago

GM and Chrysler were the only two domestic automakers that needed help. And, as you said, not all of the money has been paid back yet. So until then, the taxpayers have lost... for now anyway. Now Ford has to compete on an unlevel playing field, because their competition has been given money for free.

If Chinese competition is what put Solyndra under, then the politicians should be put in jail for risking taxpayer money without preventing the chinese from undercutting them.

If you want to invest in solar energy, rather than giving money to specific corporations, why not just increase tax breaks and subsidies for individuals that purchase solar products that are made in the US? It wouldn't matter where they got them from, so all of the solar companies would be on a level playing field. If one of them failed, due to poor management, so what, none of the taxpayer's money is at risk. How is this scenario a problem? It would also have the advantage of making sure China couldn't undercut the solar market. What am I missing?

[-] 1 points by epa1nter (4650) from Rutherford, NJ 2 years ago

GM and Chrysler represented 2/3 of the auto industry. Ford is enjoying an advantage in the market since it s not burdened with debt. They were offered a bailout and declined for that reason.

The Chinese can't be prevented from undercutting anyone. They own most of the rare earth metal mines in the world use for solar panel components. The subsidize that industry heavily as we do the oil industry here. Solyndra was a foray into subsidizing new green technology here. It was done before the bottom dropped out on prices worldwide, and the investment stopped before Solyndra had a change to create savings due to scale. Because it could never scale up, it couldn't bring costs down. Same as you domestic mold injected machine.

Tax beaks are not anywhere close to capital investment. Tax breaks are effective in already established businesses that are already making money. Loans allow them to buy machinary, build factories, hire employees and train them. Loans are what's needed to start up a business. And the way the investment capital is structured today, every dollar of government investment generates another in private capital. Tax breaks don't do that, either.

A 1% failure rate is something any private venture capital firm would KILL for. All that's need in terms of an overall portfolio is a 51% success rate, or a 49% failure rate. The government is currently on track, even with the riskier loans, to a 90% success rate. That's AMAZING!

And historically for every dollar the Government has invested in inustry in the past, it has added depending on who you talk to, between 3 and 10 dollars to the economy. So by the most conservative estimate, the government needs only to fail less that 67% of the time to break even. it has so far failed at less than 1%.

It has been government investment that created most of the new technologies we enjoy today. When these investments were made, no private firm in their right mind would have taken the risk in unknown and untested technology that the government did. That why it's necessary for government to keep doing it. and in fact to pick up the pace. It is investing far less today than it ever has since WWII.

[-] 1 points by JuanFenito (847) 2 years ago

I dream of a day in which 100% of the investments in this country are initiated by THE PEOPLE. The economic downturn was caused by right wing economic policies that took investment decisions out of the hands of people who knew better and put them in the hands of people with self-interests. THE PRIVATE SECTOR is what ran the economy into the ground, if you look back at the nation's history, the economy did not grow at all until the public started making wise and collective decisions.

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[-] 1 points by BradB (2693) from Washington, DC 2 years ago

it sounds real

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[-] 0 points by SteveKJR (-497) 2 years ago

The issue is this.

Do you have the resorces to spend $105,000 on the part or not? If the answer is no then it will have to be imported.

This is an example of what the vast majority of people in this country don't understand.

They claim that companies are making billions and billions in profits - that may be true with a fraction (<0.01%) of companies but not with all.

[-] 1 points by craigdangit (326) 2 years ago

As stated in the OP, I barely have the $38,000. So, the american made version is not an option.

[-] 0 points by betuadollar (-313) 2 years ago

Outsourcing is always bad, yes. Rethink your entire statement, reevaluate your present business acumen, and I'm quite certain you will finally see the light.

[-] 1 points by Quark (236) 2 years ago

You can't outsource if the world is one and we have one government with one country. We need to unite the world as one. Solidarity.

[-] 1 points by arturo (3169) from Shanghai, Shanghai 2 years ago

Governments are meant to represent people though, how can one government represent so many different kinds of people as we have in the world? I think the nation is still the best representative for "language cultures". Then we can establish treaties between nations.

Instead of competing on low priced goods, the US should do what it does best, which is to produce high technologies that other countries can't make for themselves.

FDR was going to do this after WW2, until he died. He planned to sell high tech to third world countries on credit, and then as the new technologies were introduced into the economies, the economic gains would be used to pay off the credit on the high tech goods.

[-] 1 points by Quark (236) 2 years ago

Each area would have elected governors like the Unites States but they would be under one president chosen by the World.

[-] 1 points by arturo (3169) from Shanghai, Shanghai 2 years ago

I can understand how you might think this way, but are you aware of all the critiques of world government and the idea that elites are behind this?

[-] 1 points by Quark (236) 2 years ago

Yes, I am only dreaming out loud about a United Earth. I don't mean to antagonistic but it seems unavoidable when I dream out loud.

[-] 0 points by betuadollar (-313) 2 years ago

Sure. Did it ever occur to you that people in other parts of the world might not want to be American? Because that is what you're suggesting - a world that sees everything exactly as you do.

[-] 0 points by JuanFenito (847) 2 years ago

It doesn't matter if they "don't want to be American". It's just like, if you don't want to join a union in a state that has decided the best thing is if everyone joins a union. Some things are for the better, some people will lose their "civil rights". So what, get over it. If we are going to function as a great world society, some people will have to suffer for the greater good.

[-] 0 points by betuadollar (-313) 2 years ago

Nah... it ain't happening. If we were united as of one familial tribe, of the same religion, possessed of the same vision for the future, as for example the Germans are, it might be possible. But it'll never work here in the US; geographically it's too expansive; there are too many demographic enclaves, too many regional economies... there are too many competing and totally incompatible interests. All of which would rather fight than switch.

It makes me laugh when people talk of Globalism as the end of nationalism because it's a personal, more or less American vision they seek. And other people do not share your vision at all.

[-] 1 points by craigdangit (326) 2 years ago

there is no rethinking. This is math. Either I outsource, or I don't make any new jobs here. Plain as that. What light am I going to see, that you are thinking of specifically?

[-] 0 points by betuadollar (-313) 2 years ago

It really doesn't matter what we think. The world will seek its own economy; there are no impediments to trade that cannot be overcome. Where legislation and regulation serve as an impasse, all will be circumvented.

The problem is that we are an upside down economy now; we need to import wealth. And we cannot do that if we are exporting our manufacturing - we devalue labor all along the way; eventually there will be no one to buy your products.

[-] 0 points by JuanFenito (847) 2 years ago

A decrease in labor market value will not be offset by a decrease in the cost of goods. Don't believe the nonsense you hear from the babbling morons, price floors have nothing to do with unemployment.

[-] 0 points by betuadollar (-313) 2 years ago

We have a labor glut in this country now because we've exported far too may jobs. It would be better to employ people even if it meant that some products were unaffordable or required a greater frugality.

[-] 0 points by JuanFenito (847) 2 years ago

What if more people were employed but the wages were slightly lower and the cost of imported consumer goods was the same? The affect would be the same, wouldn't it?

[-] 0 points by betuadollar (-313) 2 years ago

Sure, of course. But if this trend continues eventually labor will be devalued to the point where we are working for a penny an hour, or a week, or a month. We will be the enslaved labor force for those who possess the ability to make and sell products. They alone will have the wealth to buy these products. These third world countries are a huge market, if only they can employ their people, grow their economy, raise the standard of living.

[-] 1 points by craigdangit (326) 2 years ago

If my wages were deflated to one penny per month, the value of that penny would be enough to buy a month worth of labor from any other person. You could buy a house for $1.25 in this scenario. The value of things is relative to the market value of other goods, labor being one of them.

[-] 0 points by betuadollar (-313) 2 years ago

Try telling that to a poor person.

[-] 1 points by craigdangit (326) 2 years ago

What? Are you trolling? I'm talking basic economics here, what does this have to do with the poor?

[-] 0 points by betuadollar (-313) 2 years ago

Your statement is false. The gap will just continue to grow between rich and poor; that house will grow more unaffordable - look at third world countries.

[-] 1 points by craigdangit (326) 2 years ago

It is not false. The value of labor is indeed tied to the value of finished goods.

-If my labor was devalued to one penny per month, as was the labor of all of my neighbors, and

-The value of housing, which is of course also tied to supply and demand, goes up beyond what I can afford, meaning there is a short supply of housing and a good demand, then,

-My neighbors and I will get together and build houses for people who can afford them and make a fortune for ourselves. Supply and demand. If there weren't richer people to buy these houses and competing for them, then the price would fall to where I could afford one.

[-] 0 points by betuadollar (-313) 2 years ago

No you won't. You'll wallow in poverty just as the rest of the world does.

[-] 0 points by JuanFenito (847) 2 years ago

I guess you're right. Every civilization, without the Helping Hand of government regulation, has just resulted in people working for free. It's a little known fact that, in ancient Israel, people would just work for free because they were starving.

[-] 0 points by betuadollar (-313) 2 years ago

Haha... did they fergit to tall ya? Ancient Israel had a slave population; the only difference between us and them is ten bucks an hour.

[-] 0 points by JuanFenito (847) 2 years ago

Yeah... I hate economics also, because it's so over my head.

[-] 0 points by betuadollar (-313) 2 years ago

He's talking service industries here; the market is now flooded with construction workers and guess what, they're working for far less, if they're working at all. Get real. That's what this forum is about: getting real.

[-] 0 points by JuanFenito (847) 2 years ago

...there is a floor on wages, though. The trend can't really keep going downhill forever, because no one will work for free in other countries.

[-] 0 points by betuadollar (-313) 2 years ago

If they get hungry enough they will. Manufacturers are moving from one country to the next in search of ever lower operating costs; all along the way they devalue labor.

[-] 0 points by JuanFenito (847) 2 years ago

If people get hungry enough, they will work for free? What incentive is there to work if no one is paying you to do it? You mean, if people get hungry enough they will work for food and nothing else?

[-] 1 points by MattLHolck (16833) from San Diego, CA 2 years ago

I don't think humans are so lazy that they would not "work" if the had food

indeed many spend hours constructing without the need for food

[-] 0 points by JuanFenito (847) 2 years ago

You realize how many people get disability payments because they are obese? I guess not. My bad.

[-] 1 points by MattLHolck (16833) from San Diego, CA 2 years ago

as a race,

I don't think humans sit still when there are sated

[-] 0 points by betuadollar (-313) 2 years ago

Absolutely. It's happening worldwide.

[-] 1 points by Mooks (1985) 2 years ago

Why would someone work for free unless they just loved doing the work?

[-] 0 points by betuadollar (-313) 2 years ago

Well why don't you ask them instead of asking me? They're hungry... it's called "survival," as in, "I would prefer to live." And I know, I know, if you're young and you live in America you have probably never experienced it.

[-] 1 points by Mooks (1985) 2 years ago

But if they are given food then they are not working for free.

[-] 0 points by betuadollar (-313) 2 years ago

Well, since there is minimal profit to self, therefore no purchase power, then either subsistence must be provided or there is a loss of investment; they die.

No slave is without investment, without maintenance, without cost to the Master. So it becomes a question of economics.

Lincoln defined slavery with these words: "You work, and I'll eat." By definition the African American of the South was not a true slave; he or she was either directly cared for or permitted enough time to provide for his or her own minimal subsistence.

I don't believe your argument is tenable; in a world of abundance only the slave, or those whom we would label a slave, "works" in exchange for food.

[-] 0 points by JuanFenito (847) 2 years ago

So, if that is true, why do the workers at FoxConn working for less than $2/hour have any savings to send back to their villages? Could it have something to do with competition driving the cost of living down?

[-] 0 points by betuadollar (-313) 2 years ago

I wouldn't say that too loudly... the walls have ears. If Foxcon discovers they'll move the gig to Bangladesh where they will pay significantly less.

And the local economy, now disconnected from its traditional economic logic, will literally fall into the cesspool of poverty and despair.

And that's exactly what will eventually happen at FoxCon.

[-] 1 points by jdoggma (25) 2 years ago

Outsourcing is always bad? craigdangit has nothing to rethink. He is not expressing an opinion or putting a theory forward. He is stating the facts about a situation and asking for an opinion that considers those facts. My answer to him is that I am not sure, but in his case the outsourcing makes sense.

[-] 0 points by betuadollar (-313) 2 years ago

He stated that he needs a "piece of equipment to make more things." Why not simply employ more people to make those things? Or buy the equipment at 105 and raise the price? The point is we will all have a niche in society if and only if we end the outsourcing of jobs and the import of cheap product.

Under current practice virtually all of these economic niches, created by the very people who grow the market, and create that niche, are lost. Too many are unemployed and with a growing population of largely uneducated people it's not going to get any better.

[-] 2 points by Mooks (1985) 2 years ago

Our quality of life would likely suffer. How many people would be able to afford things like HDTVs and computers and smartphones without outsourcing. Even the price of things like underwear and socks will go up.

[-] 1 points by epa1nter (4650) from Rutherford, NJ 2 years ago

When people are either out of work due to outsourcing, or are forced into lower paying jobs to compete with foreign labor, the quality of life goes down.

Those employed at Walmart can only afford Walmart products, if that.

[-] 1 points by Mooks (1985) 2 years ago

But you fail to realize that certain products, like electronics, are not produced in the US. The prices we are accustomed to paying for these items are prices based on the price of labor in developing countries. If you start producing them in the US, the cost would increase so dramatically that it would not just be those working at WalMart that would suffer, but also the middle class and even upper middle class. Things like cell phones, computers, and TVs would become prohibitively expense.

[-] 1 points by epa1nter (4650) from Rutherford, NJ 2 years ago

Labor costs is the least of the issue. It has to do with supply chains, the manufacturing ecology of an industry. It has to do with the glass factory being nest door to the chip maker, which is next door to the injection molder, which is next door to......

That's where the savings and efficiency play out. If that supporting infrastructure, the business ecosystem were here, the prices for products were be comparable, regardless of the cost of labor. And more people would be employed here, too, allowing more people to actually buy the products and raising the quality of life for everyone.

[-] -1 points by JuanFenito (847) 2 years ago

Because of the rapacious policies at Wal-Mart, people are being deprived of their right to more expensive consumer goods.

[-] 1 points by epa1nter (4650) from Rutherford, NJ 2 years ago

Because of the rapacious policies at Wal-Mart, people are being deprived of their right to make a living.

[-] 0 points by JuanFenito (847) 2 years ago

That as well. All across the board, outsourcing has created poverty in this country, from Wal-Mart workers to everyone else in the economy. The Walton family has gotten filthy rich all the while treating their employees like dirt and shipping jobs out.

[-] 0 points by betuadollar (-313) 2 years ago

That's silly; the quality of life was much better without these products. To put this another way - homes, cars, clothing, jewelry... the possession of electronic gadgets may serve to pacify but they definitely do not fulfill.

And everyone in the entire world knows this.

[-] 1 points by craigdangit (326) 2 years ago

The equipment, if you must know, is an injection mold. There is no reasonable human-labor alternative, unless you consider asking my employees to shape 600 degree polyethylene by hand an option. And as I said in the post above, I barely have the $38,000 as it is to buy the Chineese mold. I cannot afford $105,000 for the mold, so the only two options are Chineese and nothing.

[-] 1 points by arturo (3169) from Shanghai, Shanghai 2 years ago

I don't think you should worry about buying the equipment from China, but as a country, we should wave the bans on many of the items the Chinese want to buy from us:

China welcomes U.S. intent to waive ban on C-130 aircraft export: official http://news.xinhuanet.com/english2010/china/2010-10/15/c_13559600.htm

Removing export restrictions better choice for U.S. than pressing China to revalue RMB: experts http://news.xinhuanet.com/english2010/china/2010-03/20/c_13218804.htm

[-] 0 points by betuadollar (-313) 2 years ago

Do the intelligent thing here... I mean you know yourself that a difference of 70,000 is something to shy away from as an invitation for future grief... and in the future do not turn to a bunch of online idiots to weigh business acumen.

[-] 0 points by JuanFenito (847) 2 years ago

He is a business owner. Don't expect too much from him. Trust me, the dumbest person here is smarter than he is, if he is the kind of loser who would even consider raping the american industrial economy with imported goods.

[-] 1 points by jdoggma (25) 2 years ago

Wealth creation of the kind that has increased the standard of living of nearly everyone is due to machines. Machines also free people from repetitious and dangerous work.

From what craigangit said, it seems the $105,000 machine would cause them to raise prices to the point where the product would not sell. Consider also that raising prices lowers the buying power, hence the effective labor value of the buyers of the product.

[-] 0 points by betuadollar (-313) 2 years ago

Actually you're wrong. The industrial revolution was preceded by an agricultural green revolution that generated enough wealth to allow manufacturing to go forward. It was the result of international trade.

And you're wrong about this machine: if the product is not profitable as produced by the 105 machine, do not consider the product, consider the market - the market simply is not there.

Slightly more expensive products are salable if cheap imports are restricted; more, they encourage frugality. And anyone who lived through the 50s knows this.

[-] -2 points by smartcapitalist (143) 2 years ago

Outsourcing is always unconditionally good :)

[-] 1 points by notaneoliberal (2269) 2 years ago

I found out I can get the services of an investment analyst much cheaper from India. Any thoughts?

[-] 1 points by craigdangit (326) 2 years ago

If you could not otherwise afford the services, and would go without them, as is the case with my business, I don't see how you are hurting anything by buying them in India.

[-] -1 points by smartcapitalist (143) 2 years ago

Actually you can't. The investment banking and trading salaries in India too are that much higher than the average Indian salaries. But if you were interested in investing in emerging economies, I would say you find someone from India. In fact this is the exact reason why most ibanks have opened by presence in Mumbai (India), Shanghai (China), Singapore and HK. So while a Indian investment analyst could give you great service for emerging markets, for North America you have to come here. Also the Indians that work here in Wall St are paid at par with Americans. Wall St is not about cheap labor, the work is very specialized and therefore requires really smart and hard working people who dont come cheap at all.

[-] 1 points by notaneoliberal (2269) 2 years ago

You never give up, do you.?