Reply With QuoteAmerican companies were not facing shrinking profits when they decided to go overseas.Originally Posted by Cyclone Ranger
What happened was many companies were driven out of business when they shipped jobs overseas.
News flash: we already are facing long term unemployment for millions.
Long term unemployment reaches record high.
Your argument is invalidated.
American companies were not facing shrinking profits when they decided to go overseas.
What happened was many companies were driven out of business when they shipped jobs overseas.
Another untruth.
http://latimesblogs.latimes.com/mone...ing-to-92.html
Table A-15/U-6: National Unemployment Rate: 16.5%
Up 1.6%
They're always facing shrinking profits, due to the tendency of the rate of profit to fall.
Evidence?What happened was many companies were driven out of business when they shipped jobs overseas.
The seasonally adjusted BLS unemployment rate is 9.1%, unchanged from August.
The currently unemployed may be facing continued unemployment -although the economy produced double the number of new jobs in September that your cite predicted - but that doesn't mean the jobless rate is actually increasing.
1/2 of those "produced jobs" was striking Verizon employees going back to work. LOL.
If we had tariffs, the economy would be stationing, making profits increasingly difficult to obtain.
Uh, yes we do. A trade deficit simply means our industries buy more abroad than they sell abroad. Wiping out $91 billion in sales would crush our already faltering industries.Uh, no we do not. We are running a massive trade deficit.
If we cut off trade to China we would, one, lose $100 billion in sales; and, two, lose money paying for stuff that's more expensive than what we used to import.If we cut off trade to China we would gain, because we'd erase the negative export problem.
Thanks to the magic of comparative advantage, negative exports aren't a problem.
Still no evidence on your part. Most Chinese farmers are employed and live in homes, so working class status in China does not mean being unemployed or homeless.No thinking on your part. It also means having a job and not being homeless. A job in China (or anywhere, in fact) beats being homeless here.
Nope. Protectionism = lost profits. That's not speculation; it's a fact.No evidence on your part, just speculation.
Irrelevant. Losing $100 billion in sales annually, on top of paying higher prices for all our formerly imported goods, would quickly accelerate the recession and job loss.We don't have millions of people doing jobs that export goods to China. More of your claims that lack in evidence.
You really do not understand the concepts of trade or comparative advantage. The fact that we run a trade deficit with China does NOT mean we lost $300 billion in revenues.We run a $300 billion trade deficit with China. That means we import more than we export. So if we cut off trade with China, we have nothing to lose. In fact, we have a big NEGATIVE to lose.
We would still have to buy the products we imported somewhere - at significantly higher cost - and we'd lose the $100 billion in sales of our products. Not trading with China would mean losing vast amounts of profits we can't afford to lose.
Because China has a billion workers willing to sell their labor-power for a $1 a day, which is not the case in the United States. China is not a parallel to America.While raising wages domestically, which lifts demand. History clearly states that this worked for China.
Of course they were. Protectionism after WWI led directly to the Depression, which was characterized by wage and asset depreciationlProfit margins were not down when America did have tariffs in the past, nor were they down when we made everything here in the USA.
Yes, it does. You simply don't understand history or economics.In short: all you're doing here is speculating, and history does not back you up.
More evidence you don't understand what a trade deficit means. Hint: a trade deficit does not mean you lose profits.News flash: we are not competing against them in foreign markets now. We're being wiped out across the board. Worse than that, we have trade deficits with almost every nation.
Total horseshit. Businesses manufacture abroad because they're forced to by market dynamics. Manufacturing domestically is always preferable, because shipping costs are therefore minimized.Untrue as usual. Businesses manufacture abroad because they can, in the short run, make more profit than they made here.
It's a lot more expensive to ship completed product from Minneapolis to warehouse than from Singapore.
Evidence? Let's see a graph of their profit per unit over time.They were already making big profits here before they made that move overseas
True, but the international markets are more consequentialDo you not study history? Now with so many Americans having no money to spend, these businesses are losing their domestic customer base.
Yes, they did, because of phenomena like declining returns to scale and the tendency of the rate of profit to fall.Profit margins did not decline.
That's what drives remedies like globalization of production and illegal immigration that keep profit margins high through cheaper labor costs
That's the most bullshit thing you've said yet.Now you are lying. Our population is larger but it's nothing compared to the size of China, yet protectionism works for them. Do you just make these things up as you go along?
Our post-industrial work force is not made up of a billion former farm workers willing to labor for a $1 a day, unlike the case of unindustrialized China.
China doesn't need to outsource its production to countries with cheaper labor, because the cheap labor lives in China. Consequently, tariffs have little impact on China's profit margins, but would wipe us out - unless you want to input millions of low-wage Mexicans and South American laborers.
Nope. Real compensation is increasing:1) Total real compensation is increasing? Wrong. Real wages are declining and have been declining since before the big crash.
Real wages have declined, but real compensation has steadily grown, about 25% since 1990.
Wages - that is, straight salary - are not the only measure of compensation, however. Real compensation, real household income, and real benefits have all increased - while the average worker is working less hours.Wages are not keeping up with inflation.
Doubtful.
http://www.bls.gov/news.release/empsit.tn.htmPeople are also counted as employed if they were temporarily absent from their jobs because of illness, bad
weather, vacation, labor-management disputes, or personal reasons.
The rest are low paying jobs that pay far less than what the jobs they replaced used to pay.
He's talking about the U6 measurement of unemployment. You don't even know which unemployment measurement that you're referring to.
Are you like the DA debate slumpbuster or something? Your arguments are as ignorant as they come.
Freedom&Liberty (10-10-2011)
This does not happen when protectionism is in place. You simply cannot come up with examples of this actually happening because it doesn't.
Show us an example.
No it wouldn't. It would mean Americans would make these products in America. It would mean more jobs, higher wages, and more demand.Uh, yes we do. A trade deficit simply means our industries buy more abroad than they sell abroad. Wiping out $91 billion in sales would crush our already faltering industries.
But we would offset that with the savings from not having as much welfare, unemployment or lost American income.If we cut off trade to China we would, one, lose $100 billion in sales; and, two, lose money paying for stuff that's more expensive than what we used to import.
Proof that, once again, you do not understand what comparative advantage is.Thanks to the magic of comparative advantage, negative exports aren't a problem.
Proof of your lack of reading comprehension. I said that the Chinese have jobs, which makes them better off than Americans who do not have jobs.Still no evidence on your part. Most Chinese farmers are employed and live in homes, so working class status in China does not mean being unemployed or homeless.
In whose mind? Where is your evidence?Nope. Protectionism = lost profits. That's not speculation; it's a fact.
It is totally relevant. You just live in denial.Irrelevant.
Making the products in America would raise American wages, creating higher demand and lower taxes because we wouldn't need as much welfare or unemployment support.Losing $100 billion in sales annually, on top of paying higher prices for all our formerly imported goods, would quickly accelerate the recession and job loss.
It means that the nation itself goes into debt by another $300 billion. It devalues our currency. Again, you clearly show you do not get Comparative Advantage. You haven't even read it.You really do not understand the concepts of trade or comparative advantage. The fact that we run a trade deficit with China does NOT mean we lost $300 billion in revenues.
Untrue. We would sell to Americans who would buy because more Americans would have jobs and higher wages to boot.We would still have to buy the products we imported somewhere - at significantly higher cost - and we'd lose the $100 billion in sales of our products.
Untrue. Those profits would be made here.Not trading with China would mean losing vast amounts of profits we can't afford to lose.
Their wage levels do not decide whether they're parallel to us or not. Whether you are making $1 a day or $100 a day, protectionism is protectionism, and it works. Any country that forces their goods to be made domestically, will see the growth of their middle class.Because China has a billion workers willing to sell their labor-power for a $1 a day, which is not the case in the United States. China is not a parallel to America.
Protectionism was what made America great in the first place.
You are uninformed as usual. The Smoot-Hawley trade disaster is nothing more than a fairy tale.Of course they were. Protectionism after WWI led directly to the Depression, which was characterized by wage and asset depreciationl
http://unlawflcombatnt.proboards.com...ay&thread=2528
Funny, I am the one who backs up my claims with cites.Yes, it does. You simply don't understand history or economics.
You just make nothing but unsupported assertions.
I say you are speculating and that's the end of that, until you can show proof. Which you can't, because you're an idiot.
No, it means that your country is losing jobs. And your currency is devaluing, too.More evidence you don't understand what a trade deficit means. Hint: a trade deficit does not mean you lose profits.
So you deny that businesses were making money hand over fist by producing goods domestically? Are you really that dumb?Total horseshit. Businesses manufacture abroad because they're forced to by market dynamics. Manufacturing domestically is always preferable, because shipping costs are therefore minimized.
First you show us evidence that "We would have lost millions of jobs by eliminating profit margins. Businesses don't manufacture abroad unless it's impossible to make a profit otherwise."Evidence? Let's see a graph of their profit per unit over time.
Show us evidence that it was impossible to make a profit if American businesses did not move overseas.
Then let them move out of the United States completely. Go live in China and build and sell to China.True, but the international markets are more consequential
Let America build companies that will build here what they sell here.
You have absolutely no evidence to say that this cannot be done. It has been done in the past.
Evidence? You seem to have nothing to back up anything you say.Yes, they did, because of phenomena like declining returns to scale and the tendency of the rate of profit to fall.
Globalization of production is nothing more than pure labor arbitrage.That's what drives remedies like globalization of production and illegal immigration that keep profit margins high through cheaper labor costs
Corporations would go for free slave labor if they could. And in China, they actually do.
How can American workers compete against slave labor? And why do you keep running away from me when I point out to you that Americans cannot afford Chinese goods when they have no job? Anyone else notice how Cylone Ranger keeps fleeing from this issue?
Only in your mind.That's the most bullshit thing you've said yet.
Again, this does not support your claim that protectionism is good for China and bad for us. Show me a link to something that shows how protectionism is good for $1 a day workers but not good for $100 a day workers.Our post-industrial work force is not made up of a billion former farm workers willing to labor for a $1 a day, unlike the case of unindustrialized China.
You are engaging in fantasy now.
You have no evidence that tariffs would wipe us out.China doesn't need to outsource its production to countries with cheaper labor, because the cheap labor lives in China. Consequently, tariffs have little impact on China's profit margins, but would wipe us out - unless you want to input millions of low-wage Mexicans and South American laborers.
But most of that compensation has gone to the upper 1% of the population. It has declined for everyone else.Nope. Real compensation is increasing:
Real wages have declined, but real compensation has steadily grown, about 25% since 1990.
Worse yet, your chart's numbers aren't even adjusted for inflation.
No they haven't. Against inflation they have declined.Wages - that is, straight salary - are not the only measure of compensation, however. Real compensation, real household income, and real benefits have all increased - while the average worker is working less hours.
Plus most Americans don't get any other significant compensation besides wages. Most Americans who have 401K's don't even have much in 401k's.
So basically, your 'real compensation' argument is a load of horseshit. Wages are what count for most Americans.
Here's the biggest and most fatal mistake you made about "real compensation".
According to your chart, real compensation has gone up 300% from 1940 to 2010.
However, when you chart inflation from 1940 to 2010, inflation has gone up 1500% in that time period.
At this point I'm not sure whether your problem is that you're a poor debater or that you are a scheister.
CR's arrogance keeps him from realizing his foolishness.
When will the world learn that a million men are of no importance compared with one man? [Henry David Thoreau]
Neither is true.
Strikers are not counted as "unemployed"'; and real compensation is increasing.
It happens all over the place, even with free trade. See, for example: http://ideas.repec.org/p/ums/papers/2010-04.html
In your delusional fantasy world, maybe, but in reality, American labor is far too expensive to turn a profit. Nor could we replace the $100 billion in sales domestically.No it wouldn't. It would mean Americans would make these products in America. It would mean more jobs, higher wages, and more demand.
Welfare, unemployment, and lost income would skyrocket as businesses declared bankruptcy left and right.But we would offset that with the savings from not having as much welfare, unemployment or lost American income.
Nope, that's EXACTLY what comparative advantage is, your total ignorance notwithstanding: Increased real national income via trade.Proof that, once again, you do not understand what comparative advantage is.
When the trade stops, the increased real income via specialization does too.
That's only if you think being paid .53 an hour is better than 9% unemployment, which most would not.Proof of your lack of reading comprehension. I said that the Chinese have jobs, which makes them better off than Americans who do not have jobs.
It's simply an established fact. See, for example: http://ideas.repec.org/a/eee/jeborg/...3p497-500.htmlIn whose mind? Where is your evidence?
It's not even beginning to be relevant. You just live in ignorance.It is totally relevant. You just live in denial.
The products can't be made in America because American labor is vastly more expensive and profit margins can't support it. Either the manufacturing would move to some other low-wage country, or the manufacturers would stop producing.Making the products in America would raise American wages, creating higher demand and lower taxes because we wouldn't need as much welfare or unemployment support.
No, it does not mean the nation goes into debt. The fact we import more than we sell does not imply net loss.It means that the nation itself goes into debt by another $300 billion. It devalues our currency. Again, you clearly show you do not get Comparative Advantage. You haven't even read it.
Nor, for that matter, do you understand what comparative advantage means. The reason we import less than we export is because it's more profit for us to do so than making everything ourselves. THAT'S what comparative advantage means.
Untrue. We would sell to Americans who would buy because more Americans would have jobs and higher wages to boot.
On top of the fact that it's impossible to make a profit, or even stay in business, by replacing cheap international labor with vastly more expensive domestic labor, the idea that we could replace the foreign markets with increased domestic purchasing is even more loony.
If that were true, no one would do business abroad.
No, they wouldn't be.Untrue. Those profits would be made here.
Yes, it does.Their wage levels do not decide whether they're parallel to us or not.
Nope, let me make it simple for you:Whether you are making $1 a day or $100 a day, protectionism is protectionism, and it works. Any country that forces their goods to be made domestically, will see the growth of their middle class.
China: has a reserve pool of 1,000,000,000+ laborers willing to work for $1 a day, so it doesn't need to outsource its production to keep profit margins high. Therefore, tariffs have no impact on profit margins, because wages can be decreased easily.
America: does NOT have a vast reserve pool of cheap labor to offset the impact of declining profits, so its industries must either export their work to countries with cheaper wages or import cheaper labor.
Consequently, tariffs - which eliminate the first option - result in massive immigration of cheap labor (which depresses wages), massive relocation to other low-wage nations, or massive waves of bankruptcy of American industries. None of the above is desirable.
Protectionism is out of touch with reality, and will fuck up the economy and our nation irrevocably if some asshole is ever able to enact it.Protectionism was what made America great in the first place.
Free trade is what will keep our country great in the future. Full stop.
As always, your sources do not support your claims. The research from Dumenil and Levy indicates that the rate of profit has steadily declined during the period they studied. I quoted it above.You are uninformed as usual. The Smoot-Hawley trade disaster is nothing more than a fairy tale.
lhttp://ideas.repec.org/a/eee/jeborg...3p497-500.html
You do nothing but cite sources that fail to support your inane drivel, as seen above.Funny, I am the one who backs up my claims with cites.
You just make nothing but unsupported assertions.
Jobs are a long-term game, and free trade builds them in the long run. The currently depressed job market is a temporary consequence of an economic crisis caused by bad federal oversight of lending, not historically depressed employment.No, it means that your country is losing jobs. And your currency is devaluing, too.
It means that the declining rate of profit made domestic manufacturing impossible, so cheaper foreign labor was necessary, despite the short-term outlay of cash for capital investment and shipping expenses required.So you deny that businesses were making money hand over fist by producing goods domestically? Are you really that dumb?
Simple logic: businesses would not outlay the capital required to manufacture internationally and pay the increased cost of shipping products from Southeast Asia unless the positive impact of cheaper labor on the bottom line made it necessary.First you show us evidence that "We would have lost millions of jobs by eliminating profit margins. Businesses don't manufacture abroad unless it's impossible to make a profit otherwise."
Manufacturers could not even conceivably pay an increased $40, $50 or more on average per hour by using domestic labor and still stay in business.
Let's take a brief look at the numbers:Show us evidence that it was impossible to make a profit if American businesses did not move overseas.
http://www.manufacturingnews.com/news/06/0502/art1.htmlAn average Chinese wage of $0.57 per hour -- or $104 per month -- is about 3 percent of the average U.S. manufacturing worker's wage, according to data collected by Banister. "Equally as striking, regional competitors in the newly industrialized economies of Asia had, on average, manufacturing labor costs more than 10 times those for China's manufacturing workers, and Mexico and Brazil had manufacturing labor costs about four times those for China's manufacturing employees."[/B]
So the only way to maintain current profit margins by manufacturing with domestic labor would essentially require shifting other fixed costs down about 93%. Note that current manufacturing profit margins aren't very high; semiconductors, for example, have a profit margin of only about 12%. http://www.p360.org/dataset.aspx?Data_Set_Id=994
Given the historical inelasticity of fixed costs, it's inconceivable that the additional costs of domestic labor and domestic taxes wouldn't reduce profits to nothing.
Then the USA would lose the profits and labor productivity, which is not an acceptable outcome.Then let them move out of the United States completely. Go live in China and build and sell to China.
Which would decimate whole industries and our economy.Let America build companies that will build here what they sell here.
No, the available evidence indicates that it would be a mega-disaster. What happened in the past has no applicability to today's vastly different economy.You have absolutely no evidence to say that this cannot be done. It has been done in the past.
Your own source - Dumenil & Levy - backs it up. The average rate of profit has steadily declined since the Fifties.Evidence? You seem to have nothing to back up anything you say.
So what?Globalization of production is nothing more than pure labor arbitrage.
Perhaps. So what?Corporations would go for free slave labor if they could. And in China, they actually do.
They can't. They'll have to shift to new industries that will ultimately be financed with the profits from Chinese labor productivity. Say's law proves it will happen.How can American workers compete against slave labor?
While that's certainly true, unemployment won't be high forever. Unemployment is over the long run self-correcting.And why do you keep running away from me when I point out to you that Americans cannot afford Chinese goods when they have no job? Anyone else notice how Cylone Ranger keeps fleeing from this issue?
Of course it does.Again, this does not support your claim that protectionism is good for China and bad for us.
One, you're again guilty of the fallacy that economics is all about what's good for workers.Show me a link to something that shows how protectionism is good for $1 a day workers but not good for $100 a day workers.
Two, many commentators have noted the same. See, for example, the Washington Post's examination of the (non-)effect of tariffs on jobs:
http://www.washingtonpost.com/world/...l9G_story.htmlThe only Americans getting more work as a result of the tariffs are Washington lawyers, who have been hired by both U.S. and Chinese companies. Their work includes haggling each year over private “settlement” payments that Chinese manufacturers denounce as a “protection racket.”
Fearful of having their tariff rates jacked up, many Chinese furniture makers pay cash to their American competitors, who have the right to ask the Commerce Department to review the duties of individual companies. Those who cough up get dropped from the review list
Yep, I've already given plenty.You have no evidence that tariffs would wipe us out.
Bullshit.But most of that compensation has gone to the upper 1% of the population. It has declined for everyone else.
There is no evidence on God's Earth that real benefits have only increased for the upper 1%, and declined for everyone else. As always, you just pulled that out of your ass.
Bullshit, they aren't.Worse yet, your chart's numbers aren't even adjusted for inflation.
If they weren't adjusted for inflation, they'd be called "compensation per hour" and not REAL compensation per hour.
Nope, they've increased around 25%, inflation included.No they haven't. Against inflation they have declined.
Nonsense. They get benefits, retirement pensions, profit-sharing, dental insurance, etc.Plus most Americans don't get any other significant compensation besides wages.
Buy a brain. Real compensation, like real wages, means "adjusted for inflation."However, when you chart inflation from 1940 to 2010,inflation has gone up 1500% in that time period.
Just to clarify the above point:
The chart is adjusted for inflation as follows:In other words, the figures are presented in constant dollars indexed to 2005.Index 2005=100
Last edited by Cyclone Ranger; 10-11-2011 at 02:53 AM.
articleProfits of China’s industrial enterprises rose 34.3 percent year on year to 645.5 billion yuan (about 97.8 billion U.S. dollars) in the first two months this year, the National Bureau of Statistics (NBS) said Sunday.
I know exactly which index he's referring to. I simply don't consider the U6 measure the "national unemployment rate," and neither does the BLS.
People who can afford to stop looking for work after six months are looking for a position, not employment.
We're not China. Our workers can't live on .57 an hour and, nor for that matter, do we have 200 million displaced former agricultural workers sitting around looking for a low-paying manufacturing job.
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