I like your point, BG

Yes, China can and will kick our arse via low wages, currency
manipulations, etc. but we also need to look at the items HERE that are
killing business HERE. Control the things we can now and then move onto
the things that require "diplomacy" to repair.

Currently, I am being driven nuts by the state's tax systems (because of
sales in multiple states...and having to go inspet stuff within that
state). California is the worst because it actively pursues you for
having sold something there. Other states will probably follow their
lead because of high deficits.

For example, if I send a crew to CA for a day or two of repair on a
machine I built, I am supposed to pay California workman's comp on them,
California Income tax for them, I have to file all the California
paperwork to do this, and I have California "apportion" my sales to
collect california income tax on my business proceeds. All for a day
or two of work that may be my only job there this year. Texas is
similar with their franchise tax which is sticking it to some very large
businesses like Conagra.

It's like dealing with 50 different countries in many ways. Many of
the other people in this business have moved production to Mexico,
eliminated ALL travel and connections that give a nexus in other states,
and almost act like an internet sales company. No service...no equiment
inspection to see what's really going on, etc. Eliminate the tax
collectio hassles by eliminating part of your business.

Surely this is one area that hinders our ability to do cost effective
business. Yes, importers have the same problems but it is far easier to
float the costs when you are simply marking up someone elses goods.
Also importers tend to be more "retail" oriented which is a business
structure that lends itself to being like "50 business' in 50 countries".

Anyway, this is just one area where we screw ourselves in terms of
business realtive to imports. Name some others please.

Koz
bg wrote:

"Ed Huntress" wrote in message . net...


"Richard J Kinch" wrote in message
. ..


Carl Byrns writes:



If the labor rate in China really is 80 cents an hour, then it's game
over, the Chinese are the winners, and the rest of us better get
comfortable with being farmers because we will be the new peasants.


By that logic, if they gave us all their labor for free, we would be even
worse off.

Do you curse the sun for flooding us with cheap, imported light?


It's true that cheap imports can be a benefit, but that assumes our economy
can grow fast enough to replace a lot of well-paying jobs lost to imports.
When the trade deficit gets as large as it is today ($418 billion deficit,
goods and services total; goods alone are around $460 billion deficit), it
probably can't. The job-growth rate and average new-job wages would have to
reach heights we've never seen, and which there is no indication we ever
will.



So Ed, I keep hearing all the blame go to places like China. Our Trade
Deficit with them is growing at a fast clip. But the reality is that
China itself does not have any real total trade surplus to speak of.
They import as much as they export. This tells me that they are buying
goods, just not from the USA. Are we not producing the goods that
China wants or needs competitively? Obviously so. So this places the
onus on ourselves. How do we overcome that?

I think these are the real questions we need to ask ourselves. Placing
blame on China's currency valuation is a farce. I know you are still
looking for that "other" system to base trade on, but in the meantime,
we have to look inward to solve our problems. Not place blame.

What does China do with the foreign reserves they get? They buy US
Treasuries, our debt. They are currently the second largest buyer of
our debt in the world today. without their purchases, interest rates
would rise like crazy and the dollars value would sink. They didnt
create the debt, we did. GWB's finger pointing to Japan and China for
manipulating currency is a joke. Historically we have done the same
numerous times. China merely ties their currency, while Japan actually
moves mountains to balance theirs (8-10 billion per month of
dollar/treasury buying).

ed, what do you think we should be focusing on? what moves do you
think we should make in the USA?

BG


Ed Huntress