Forum Post: Please help me understand how tariffs will create jobs in the USA while also not causing massive inflation
Posted 13 years ago on Nov. 2, 2011, 7:02 p.m. EST by VladimirMayakovsky
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I am not sure I understand.
Because if ows say it will, it must. The government is corrupt, but we need more of it, more rules and regulations, more taxes. It's the one stop solution to fix everything.
CEO's that move American jobs off shore and endorse Slave and child labor in countries like China and India all in the name of profits should be found and tried before a court for their crimes . These CEO's should be held accountable and tried under child protection laws and industrial workplace laws.http://video.google.com/videoplay?docid=-6733564947664645042 In america these CEO's would be tried and jailed under these laws for the misery they have handed the chinese people
How could we charge CEO's with anything if they are operating in another nation and abiding by their rules. Again, the problem starts with the government. When we enact trade deals with nations that have no such protections, we ensure that our workers will lose while the corporations move operations to those countries to be able to maximize profits. Don't blame a business or CEO for playing the hand the government dealt them.
Laws surrounding profiting from child labor in other countries, if that company is found to employ child labor internationally then the company should be fined and the CEO's charged with criminal offences. Its not that the Government allows it, its the practices employed by corporations chasing bigger profits from peoples misery, its just wrong, but many things about American Society are wrong eg. The Glorification of Criminals 2. The entrenched gun culture 3. The consuming of Oil and other fuels that severly harm the environment 4. The Publics acceptance of Warmongering dating back to Vietnam and many others
Is that how the Chinese think about these CEOs?
Im not sure but if i worked 15 hours a day before the age of 15 making Mickey Mouse Dolls For Disneyland i would not only hate the CEO's of american business but the American people to.
What if the alternative was to starve to death? Have you ever gone hungry for months, even years?
Then that is a problem that they have created for themselves, no I have not gone hungry because my forefathers didnt breed like rats
The Chinese actually have a 1 child policy but I understand that Americans are not taught much about the rest of the world. Anyway, what do you now think of the Chinese child's point of view when it comes to American corporations?
Yes they have the policy and have for quite some time but obviously it is not working, No Americans are quite selfish people and absorb more than 30% of the worlds resources, if i was a Chinese child i would be very dissapointed with my own people and the Western worlds views
Yet you want Americans to keep consuming 30% of the world's resources, right? And not share anything with a Chinese child? Even if the outsourced job is what lies between that child and death from malnutrition? It's the problem of the Chinese, so who cares. Americans need two houses, four cars, and 8 humongous TVs at home, right? And no savings, i forgot about that - no savings, just speculation in the stock market or taking equity out of the home.
Straw man argument Vlad, The solution is for the Chinese to pay their workers a decent wage, thereby creating their own consumer market.
They do already compared to the Chinese standard of living. Just because Americans believe in living in McMansions doesn't mean the world world has to. that's why America is losing jobs and China is gaining. You want Chinese to make the same mistake as Americans?
Incidentally there is a huge consumer market in China.
No, the Chinese are smarter than we have been, they don't want a trade deficit. You're mixing apples and oranges when you start with the McMansions. Stupid and wasteful? Agreed. Nothing to do with why jobs are being lost. Your moral judgement is not connected to economics. I could bring up the issue of the wastefulness of burning 16 tons per hour of bunker fuel it takes to needlessly transport goods that could be manufactured here,to send a cargo ship across the Pacific,not to mention the horrendous pollution those ships produce, but those are separate issues.
Everything to do with it. If Americans looked around the globe and adjusted their standard of living then they would accpet a far lower wage and keep their jobs. If shoveling shit in one country means you live in a hut, and the job is transportable, they is no way shoveling shit in another country will allow for a nice suburban life with 3.2 dogs and 6.8 kids in a minivan and a half in another country. It is not a moral judgment, it is a practical one. As for the cost of shipping, perhaps Americans should stop going everywhere in a car, all by themselves, because they complain about pollution caused by sea freight?
That is excactly the problem with their society, Im Australian and we have the same problem we consume so much, personally i grow my own vegetables, hunt my own deer for meat and also fish, i keep plenty of cash in the bank and do not owe any banks or anyone any money. I personally was bought to tears by watching a documentary on child labor in India and would jump at the chance to give them a better life but the world has gone to far just like the chinese population there is no regulating it.
Why don't you send your cash in the bank to some child laborers in India?
Because I have 2 children of my own to support, i give what i can 10$ a week to the Red Cross for Australian children that are homeless to provide them with Breakfast. Costs in my country are very high now and i am finding it increasingly hard to survive and provide. Also i dont think it is my responsibility to provide for children that i did not make. Now a question for you , Why are white western countries responsible for the failure of these countries to provide for the children of their country ?
You never answered my question
I thought you would jump at a chance to give those poor Indian kids a better life. I guess not.
You're a right wing diversion on the board. Go finger Ann Coulter.
most countries have some protectionist laws for decades - and we have let them get away with it - sucking jobs and money out of America. Those economies have survived. If China can make a TV for $50 less and pollute the world with their toxic garbage, should we subsidize their attack on our planet? We refuse to subsidize terrorist countries. Is destroying the planet terrorism? Is a cleaner planet worth $50?
Right now it appears they are very busy dumping product and this is the flip side of China; but it's American corporations that are doing us in.
gordon was right! G I G
So what do you propose we do? If people want that big screen TV to watch SuperBowl and can only afford to spend $2000 on their credit card, do you really have the heart to tell them that the price is now up to $3000 because of environmental protection laws and they have to watch SuperBowl on a smaller TV? How would that help them live the American dream?
We cannot complain about the lack of jobs in the U.S. when we continue to purchase Chinese and other foreign products. The only way to reverse the trend and bring tax dollars back is to BUY MADE IN USA products
“How do I do that when everything is Chinese?” Answer: Most individual items DO have Made in USA available; Avoid big box stores, search online, and contact the manufacturer if you are not sure
“But Made in USA products are too expensive.” Answer: Not true. While the initial cost may be more (in some cases), over the life of the product it is actually less expensive due to repair and/or replacement costs. It is cheaper to buy quality than quantity. Don't you remember your parents and grandparents fixing things rather than buying new replacements?
Facts:
Everytime you buy a foreign product you are sending a large portion of that money into foreign hands; money that used to stay here and provide good paying jobs and tax revenue for your Local, State, and Federal government. China's economy is booming while we are in recession.
Everytime you buy a foreign product you are giving the corporation more reason to continue the outsourcing trend
Everytime you buy a foreign product you are eliminating a U.S. job. This job could be your relative or neighbors.
Everytime you buy a foreign product you are lowering your wage. It gives companies and opportunistic politicians the opportunity to call for “streamlining” “lower wages” “lower health-care benefits” “lower taxes for the rich” “lower Social Security” “lower government/the peoples services”
Everytime you buy a foreign product you are probably purchasing an inferior/cheap product that will most likely fail making it a waste of money. You may have to replace the product several times making it more expensive than the American made equivalent.
Everytime you buy a foreign product you could be putting yourself and your children at risk by exposure to lead, cadmium, and other toxic materials. Foreign products DO NOT get tested nor is there any consumer protections for these products.
Everytime you buy a foreign product you are destroying the middle class and their/your neighborhoods. The loss of wages and ultimately their homes provides a decrease in tax revenue and invites rich slumlords to take over once working class areas turning them into neglected slums. Local services such as snow plowing and street paving decline and taxes go up.
Everytime you buy a foreign product you are helping the rich get richer. Fact is that while the ranks of the middle class dwindle, the rich are gaining complete influence and controlling the direction of Federal and State governments. We have no say when these people are in control. We are losing our voice. Money is #1 to certain individuals/entities. Re-gain control and reverse the trend by using your purchasing power and buy/demand products Made in USA!!!
Support Buddy Roemer http://www.huffingtonpost.com/ian-fletcher/gov-buddy-roemer-free-trade_b_1026078.html
You don't seem to want do understand. Vlad.For those that would like to see if wages can go up without inflation being a problem. Try history. You too Vlad. http://homepages.gac.edu/~jcullip/workexamples/mea.html
I fully agree that wages can go up without inflation, when labor becomes more productive and value add is more. But I don't understand how wages can go up when nothing else changed but taxation. Sounds like voodoo economics to me.
US workers are more productive than they have ever been. The issue of adding value is what I was trying to point out with the specific area of manufacturing. The value is being added when items are manufactured in China but it is going to create billionaires, or into US treasuries that we can't pay the interest on. Meanwhile, the consumer markets in ths US and Europe are dwindling. Money in treasuries or gold or investment accounts of billionaires has no where to go. It is an unsustainable situation. I think the thing to be recognized is that it is actually workers who create wealth. Workers never receive all of that wealth. The owners of capital always take a cut. When that cut gets to big, they shoot themselves in the foot, killing the the consumerism on which their income depends.
But vast new markets are opening up in China and India and Brazil and Russia. These markets don;t buy American or European goods because such goods are too expensive, because wages are too high in America or Europe. But they buy Chinese and other low cost country made goods a lot because those are expensive, as people don't demand unsustainable wages. So the wold economy and the companies as doing fine. Only those countries like the USA who demand unsustainable wages are not doing so well.
The world economy is not doing fine. When China's markets in the US and Europe can't buy their goods, they won't be fine. They are already creating a real estate bubble to compensate for loss of exports. We have seen how housing bubbles work out. American,and European high wages worked fine as long as they produced what they consumed. It began to decline with the Reagan-Thatcher years, but was obscured with financial slight of hand, derivatives, mortgage backed securities etc. Imaginary wealth. Actually some of it started at Bretton Woods in 1942, but the Reagan-Thatcher duo sent the neoliberal trend into hyper-drive.
So Americans should be OK with a standard of living that measures up to the 50's and 60's?
One wage earner could support a family, low inflation, increasing middle class wages, maximum unemployment in the 50s and most of the 60s, 6%, and as low as 3%. So yes I think that sounds pretty good. I was there for most of it, and it was good.
Smaller houses. One car in the family. No big screen TVs. No iPads. No lavish family vacations.
All good.
True, no iPads ,not even color tvs in the 50s. Cars? In a family with three children,and not wealthy,at least by the 60s 2 cars.
We are in agreement then. Lower standardof living and cost of living and get jobs back.
One of the American Ivies? How about just tell us which economic philosophy you subscribe to. I think I could guess even if you don't tell us.
This is a reply to; I think smaller houses are affordable...no reply tab was provided. 25% of average wage of about 40,000 (which is now dropping) is about 800 month. Not easy to get a house for that. Even harder if you have no job at all. Women working within the economy would (do) increase the amount of capital flowing through the economy, thus creating more demand more jobs. Money sent to China is effectively removed from this flow. Not helpful. I;m curios . I noticed in a response you made to someone below that you have an economics degree. Would you care to divulge what school of economic thought was featured? Milton Friedman? Keynes?
800/month gets a great house in many parts of the country. Not in NYC, but then there is more to America than NYC.
I went to one of the American Ivies. I will leave it at that.
I don't think it was a lower standard of living. Being able to afford a house, virtually no unemployment and rising pay rates do not amount to a lower standard to my way of thinking. There was also much less income disparity. Smaller houses, yes, but typically affordable on 25% of house hold income.
I think smaller houses are affordable today as well. But people want bigger houses. Unemployment was low because women didn't work by and large. Of course pay rates were rising because there was more jobs than workers, as women didn't work.
I am not sure why income disparity is bad. Please educate me.
Anyway, do we want to go back to the times where women had no real employment opportunities outside of teaching or nursing? surely unemployment will drop then as women will just have to stay at home.
didnt work very well in the great depression
watch Thom Hartmann at RT.com, he explains this stuff very well every day... an old concept taken over by the rest of the world with great success.
I actually have an economics degree from a decent school. They didn't teach it there. That's why I am keen to learn.
Its meant to make the imports more expensive, and spur competition within the country to beat the outsiders.
Unfortunately, we are actively trading with child labor countries, so no tariff can make that level.
How will it spur competition if the pressure to compete recedes as tariffs are put in place?
The reason low cost countries are competing better than the USA is not that they use child labor, which they indeed do. It is that the people there expect a lower standard of living and are happy to be paid less. If Americans expect to live a far wealthier lifestyle doing low skill work, that's a problem, no?
Its all relative. People in Africa would kill to get some shit ass job in China. The very fact that we trade with countries who support this is disturbing at best, criminal at worst.
In manufacturing, labor is by far the biggest cost.
I think your heart is in the right place, but no, labor is not the biggest cost. Even in the US, with higher labor cost. labor in manufactured goods averages about 15% of final cost. Labor cost of US produced automobiles is about 10% of final price. The outsourcers just want those few extra nickels.
Percent of final and percent of costs are two totally different things. Autos get marked up around 40% after completion. Same for almost everything else.
That is true, but did you know we have had tariffs as high as 44%?
I didnt know that.
If we stop trading with China how will the lower class that survives hand to mouth by shopping at WalMart continue to live the American dream?
Shit isnt really that much cheaper than it was before we opened up the trading. Food and energy are more expensive from the printing, and the meaningless shit is a bit cheaper.
Manufacturers will be forced to reopen here. But they will have to charge about the same because the market wont bear a huge increase. So their profits will go down. Oh well.
And dont give me that shit about taxes/profits and hiring. Hiring is based on demand. I can raise my profit margines by 50%, but if there isnt more demand for what I want, why would I hire?
I wonder what drastically lower corporate profits will do to the stock market and in turn to the retirement portfolios of middle income Americans. I also wonder how fast the manufacturers will switch from people to machines.
Tariffs are a boon to domestic producers who now face reduced competition in their home market. The reduced competition causes prices to rise. The sales of domestic producers should also rise, all else being equal. The increased production and price causes domestic producers to hire more workers which causes consumer spending to rise. The tariffs also increase government revenues that can be used to the benefit of the economy.
This also causes cost of living to go up at a much faster rate than wages which negates the consumer spending. Factor in inflation and you have catastrophe.
Your lack of historical knowledge is astounding.
Enlighten me. Are you going to quote some facts about when we had high tariffs and high wages and ignore all other economic factors? Please do.
One should try to consider other economic factors, I agree. But the fact remains, the US achieved the status of the top manufacturer and the top economy, not to mention the wealthiest middle class, while maintaining high tariffs. High tariffs are not necessarily directly tied to high wages. That is a somewhat separate issue but the US had high tariffs throughout most of its' history. It was also a net exporter until fairly recent times.
Ok fair enough. I see where you are coming from but as an exporter, if the high tariff game was played against you how would it effect your business? When we had high tariffs here we also , for lack of a better term, had the world by the balls because we actually manufactured things here more cheaply than anywhere else while maintaining high wages and low corporate taxes. Problem was that environmental regulations among other things threw a wrench in that machine. I am sure you are aware of all of this and the other economic factors that created the situation we are currently in but while I see the correlation you are making and the possible effects locally, the imposition of high tariffs could easily backfire if other factors do not change with the higher tariffs. I think it's a delicate balancing act that might be dangerous to get involved in if there are other options.
I agree, we had a virtual monopoly in manufacturing coming out of WW2. Tax rates however, both corporate and personal were higher in the 50s and 60s than now.In fact, top marginal tax rate was 91%-92% As far as your question about how tariffs could affect an exporter, certainly it could have a negative effect, On the other hand, to pull out an example of a company that is an exporter, Caterpiller, if retaliation reduced their exports,a general tariff would tend to reduce Kubota, opening an additional market.
Either opening an additional market or a trade war. We all know what trade wars lead to.
Well considering our trade deficit, we'd have a hard time losing.
I suspect when you have nothing to lose and everything to gain it's hard to pass on but I think there are better ways to handle it long term.
Such as?
When Chinese people have the right to collective bargaining and are not met with tanks,(as in the Tiananmen Square indecent) then we can talk about that. of course, if Chinese workers were paid like US workers, there would no longer be any incentive to manufacture there plus pay the freight to transport across the pacific.
The exact opposite. No tariffs at all. Open and free trade with everyone. The problem with this is it would take an awful long time to pan out right which is why I said for the long term it's a solution.
So there is massive inflation when there are tariffs. Makes sense.
Take a look at Germany. High taxes, tariffs,strong unions, high wages. Best economy in Europe. They manufacture and they export.
What are the tariffs in Germany?
http://export.gov/germany/MarketResearchonGermany/CountryCommercialGuide/TradeRegulationsandStandards/index.asp#P12_310
So the Germans don;t want to buy from Americans? Doesn't that cause American job losses? How is that good?
It's good for Germans.
Yet the Germans pushed hard for the Euro Zone which removed tariffs. Wonder why. The official story is that they wanted to be a powerful EU to act as a counterbalance to the USA.
Yeah, they might have to rethink that one.
They are, the moment they realized they have to support the poorer countries. Imagine that! You would think socialist Germans to actually care for poor people in their neighborhood. Instead they acted just like American corporations.
So it seems. Most of the world has adopted globalist,neoliberalism. Even what I assume to be your country of origin, Russia. They are mostly the same ideas,minus the some of the globalism, that brought about the great depression.
Squeezing the money supply, agreed. Protectionism, not agreed.
The Great Depression was brought about by protectionism and squeezing the money supply in unwise times.
I see, so your preference is that US workers start working for 3 cents a day. We just need to "expect a lower standard of living and be happy to be paid less."
You can set an example and be the first one to work for 3 cents a day. I can hire you for the next 4500 years!
I actually have a very well paid job. I was talking about those that can't find a job.
But you're asking other people who are trained workers to live with a job that pays 3 cents a day. What happens when you lose your job, Vladimir, and now you can't get a job for more than a dollar an hour? That's the kind of economy you're supporting. Don't you think that your job can be replaced?
Besides that, what would the value be of a job that pays 3 cents a day when milk costs 2.95 a gallon and gas costs 4.00 a gallon? You would still be destitute. It would be little better than slavery.
Prices are as elastic as demand. If no one is selling milk because 2.95 a gallon is too much the price has to drop or no one is making money.
I have lost a job before from downsizing and I took the job that I could get at the salary it was offering. I am asking everyone to do the same. If we hold out for high paying jobs that do not exist, then we will all be out of jobs forever.
And you can keep being downsized as Globalization continues until you're being paid what you would make in China. The prices of goods would still stay the same because demand is elastic. Then you can make $800 a month, pay $900 for rent and $1000 for food. The rest can go on your credit cards! Sound good? Instead of your ideas, how about we work towards an economic system that doesn't concentrate more than 80% of the national wealth in 20% of the population?
Well, 5% of the world population lives in the USA, yet the USA consumes 25% of the world's resources. Why are Americans fine with that? Wouldn't it be a better world if everyone everywhere had the same standard of living?
I'll do it if the wealthy do it. I will take a 12,000 a year salary if that's what the CEO of Citigroup gets to make.
Why should you accept the same salary as the CEO of CitiGroup? Why not more or less?
Technically I should make more than the CEO of Citigroup - I design medical drugs. I do more good than he does everyday. But I'll take the same salary as everyone else if I must. There should not be vast sums of money in the hands of very few; it's the same argument you're making above.
Because it will give American manufacturers an advantage against foreign competition. American Manufactures cannot compete with child labor and sweat shops. You must own a share of Wal-Mart.
I don't own a share in Wal-Mart and I don't shop there. But millions of low and middle income Americans do. You would be screwing them majorly if you are advocating a massive price increase.
It's a very simple equation - runaway inflation is caused by the desire to buy before the increase; raise them gradually in cases where American industry no longer exists and substantially where there is a need to preserve existing industry. The problem is that we are battling our own corporations who are intent on outsourcing labor and importing product. .
If we stop expecting profits from "our" corporations and become cool with drop in our retirement accounts, then I am pretty sure corporations will let us as well. But as long as we demand 15% increases annually in our stock market portfolio so that we can buy that big screen TV to watch SuperBowl with our friends while savings a negative 5% every year (since market gains will provide for our retirement), corporations don't really have a choice but to chase profits.
Vladimir you never answered my question ? You just tried to make me feel as if I am part of the problem . I cant understand the idea that Western Countries are to be held responsible for Asian and Middle Eastern Countries inability to feed their people ?
I don't think Western countries should be held responsible at all. I also think that Western countries shouldn't worry about how other countries run their business.
???
Disposable income... it's all about prosperity and increased disposable income. WE are fueling Wall Street. And I like it...
I think the easiest way to increase your disposable income is to work in Wall Street.
Yea... you should consider that.
I am happy with my current job and income.
Cool.