"Tom Gardner" wrote in message
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"Ed Huntress" wrote in message
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Blame? Hell, I want to THANK someone! Until somewhat recently the
technology payback was too far out. I'd love to see my business have
nothing but an office and a shipping clerk.
Of course! And that's the reason manufacturing jobs are now paying
$0.80/hour -- in China. All the people who were paying wages in the US
never really wanted to, anyway, and now they've found a good reason not
to. So what's your gripe? You got what you asked for, right?
If you put your life savings and every way to make a living into a bank,
would you put it in the bank that offers 3% interest or the one that
offers %? ---assuming all other factors are the same and assuming you
have to feed, clothe, shelter and entertain yourself for the rest of your
life.
Perhaps there is some connection in your mind between the paragraph I wrote
and the one you wrote in response. If so, I don't have the slightest idea of
what it is.
I'm getting old now and I just don't have the energy or the will to go 90
miles an hour day after day anymore. Do I have some duty to give away my
assets? Like the assets I DIDN'T spend on a new wide-screen or a new car
or expensive food and such? Is it my fault that most of the population
knows nothing about hard work and money management so they end up spending
faster than they make then expect a gov. bail-out or support?
Here I could repeat the paragraph above, and then add that a spending
population is what keeps you in business, directly and indirectly. What,
specifically, are you complaining about? Why is it you aren't making as much
money as you would like? Is it because some foreign competitors are
undercutting your prices? If so, welcome to the new economy of
globalization. Or is it because you're really competitive except for some
combination of high wages and taxes? If so, I'll ask again: Who are these
competitors who are keeping you from charging enough to make money? Are they
foreign or domestic? Because if they're foreign, and these foreign
competitors are in low-wage countries, you have no chance of competing
against them directly unless you move to the third world. If they're
domestic, why are they able to hold their costs down while you can't?
The other consideration is that US corporate taxes are 35%!!! Why do
anything under those rates when it's much more attractive overseas?
When are you moving? d8-)
Patriotic duty? ...a good way to get crushed. Why should anybody
invest in the US?
The Europeans are flipping over the low cost of manufacturing in the US
and they're buying up all of the manufacturing here they can get their
hands on. Why are you having a problem?
Just who is it you're competing with, anyway?
The biggest competitor in hardware wire wheels is the Spanish prison
system, the rest is China.
And how do you propose to compete with prison labor? Do you expect your
employees to work for prison wages just so you can compete? As for China,
forget it. They can buy the same technology you have and they pay
$0.80/hour. You have no chance of competing with them head-to-head. You need
a different niche, if there is one. In any case, you'd better figure out of
there's a place for you in the global economy, because that's the economy
we've got.
The Europeans are investing here because of the cultural similarities and
Europe is socialist...no good for business.
Europe has been doing very well without us, thank you very much. There was
an analysis of European versus US businesses in one of the major
publications recently and it appears they're doing about the same as we are
or slightly better overall. Socialism, which they have less of today than
you appear to think, has nothing to do with it. As with China, their
businesses are private enterprise, competing more effectively than we are on
world markets even outside of Europe, and they have about an equal number of
advantages and disadvantages versus the US.
The reasons they're buying up US manufacturing properties are twofold:
First, the euro/dollar exchange makes our investments relatively cheap.
Second, our operating costs are quite low compared to theirs, partly because
of the exchange rate and partly because US manufacturing has very high
productivity on a worldwide scale. Our labor rates, especially in non-union
regions, are a downright bargain. Our energy prices are ridiculously low.
There was a story in a West Virginia newspaper a couple of days ago about a
German company that bought a group of supply-chain companies in the region
and is now exporting manufactured parts to Germany from the US, because of
the low prices resulting from low manufacturing costs.
Comparing what's going on in Europe, China, and the US obviously is not as
simplistic as we make it out to be here. But in the upper echelons of
globalized manufacturing, China is the low-priced supplier with many
business, political, and logistical problems, and the US is now the
low-priced advanced manufacturing company with easy access and trade.
As I said a few years ago, all American manufacturing needs to be
competitive on world markets is a cheaper dollar. The dollar has been 'way
overpriced for nearly two decades, which has crippled our exports. Now it's
one of our assets. If the cheap dollar doesn't kill us with inflation or a
liquidity crisis first, it could turn out to be a solid boost for US
manufacturing. But it won't solve the problems we have with China. When the
competitor is a very low-wage country, what one has to do is outmaneuver
them, by moving upmarket, by focusing on a niche or niches that aren't large
enough for them, by adding services they can't, or by some other means.
I hope you get to go along for the ride.
There seems to be a move to punish anybody that could create jobs and
wealth. I think it's a conspiracy concocted by the dairy industry to
mandate that the Government has to give everybody a block of cheese
every month.
Tom, the US has the lowest taxes, or the second-lowest taxes overall, of
any country in the OECD (developed countries). I think you've picked the
wrong target.
So, the US should raise corporate taxes? Taxing a corporation at all is
wrong! It's just another way to collect hidden taxes from consumers and
hurt exports.
Corporations are taxed all over the world. If you want to see what the
relative rates are, this is some older info from OECD, but the ratios still
hold pretty much. China isn't an OECD country but its corporate tax rates
are similar to ours:
http://www.oecdwash.org/DATA/STATS/taxsystems.pdf
You'll note that taxes for our major trading partners are in line with ours,
with one BIG exception: The US has no value-added tax, which runs up to 20%
or more in some countries. That's on TOP of the taxes that are similar to
ours, minus our sales taxes, which are always a small fraction of other
trading partners' VATs.
We've discussed all of this before, yet you persist in saying that corporate
taxes are part of your competitiveness problem, when they're demonstrably
not. Labor rates are demonstrably not a competitive issue versus Europe.
As for the brushes made with prison labor in Spain, where did you get this
information? If I understand the GATT/WTO agreements correctly, countries
can refuse to accept goods made with prison labor. Have you spoken to your
congressman about it?
If you're just butting your head against China, you'd might as well be
butting your head against the Great Wall. If Spanish prison labor is the
problem, it's time to talk to your congressman. The WTO specifically does
not allow competition from prison labor that's priced under the home
country's normal cost of production. And I'd be surprised if you couldn't
compete with Spain's private industry. Actually, I'd be surprised if they
tried to sell in the industrial niches of the US market for brushes at all.
--
Ed Huntress