posting stripped to RCM only

"Too_Many_Tools" wrote in message
...
On Mar 27, 9:27 am, reinhardt wrote:
On Mar 24, 5:15 pm, Too_Many_Tools wrote:

The jury is out on this one....

What do you think?

TMT

Recession is a given. Can we avoid depression?

Why avoid one when that was desired goal to begin with?

Do you know how financially reasonable depression labor is?

Actually your comment does make sense.

No it doesn't.

If one wants to level the world labor market in respect to costs, one
must lower the United States labor costs to Third World levels.

No one wants to level the world market. They want the low-wage countries to
make the goods, and the high-wage countries to buy them. That's how one
makes the most profit.

--
Ed Huntress

On Apr 2, 9:53*pm, "Ed Huntress" wrote:
posting stripped to RCM only

"Too_Many_Tools" wrote in message

...
On Mar 27, 9:27 am, reinhardt wrote:

On Mar 24, 5:15 pm, Too_Many_Tools wrote:

The jury is out on this one....

What do you think?

TMT

Recession is a given. Can we avoid depression?

Why avoid one when that was desired goal to begin with?

Do you know how financially reasonable depression labor is?
Actually your comment does make sense.

No it doesn't.

If one wants to level the world labor market in respect to costs, one
must lower the United States labor costs to Third World levels.

No one wants to level the world market. They want the low-wage countries to
make the goods, and the high-wage countries to buy them. That's how one
makes the most profit.

--
Ed Huntress

There are other countries that will buy goods...have you noticed how
companies are falling over each other to sell to China?

The United States is quickly running out of money...and credit.

No money or credit...no buying of goods.

The United States is becoming the cheapest place to produce.

TMT

"Too_Many_Tools" wrote in message
...
On Apr 2, 9:53 pm, "Ed Huntress" wrote:
posting stripped to RCM only

"Too_Many_Tools" wrote in message

...
On Mar 27, 9:27 am, reinhardt wrote:

On Mar 24, 5:15 pm, Too_Many_Tools wrote:

The jury is out on this one....

What do you think?

TMT

Recession is a given. Can we avoid depression?

Why avoid one when that was desired goal to begin with?

Do you know how financially reasonable depression labor is?
Actually your comment does make sense.

No it doesn't.

If one wants to level the world labor market in respect to costs, one
must lower the United States labor costs to Third World levels.

No one wants to level the world market. They want the low-wage countries
to
make the goods, and the high-wage countries to buy them. That's how one
makes the most profit.

--
Ed Huntress

There are other countries that will buy goods...have you noticed how
companies are falling over each other to sell to China?

There are a lot of people in China, a tiny percentage of which can buy
expensive goods. But even a tiny percentage of 1.2 billion people is a lot
of customers. This is what businesses have been anticipating for a long
time. Meanwhile, the West is China's export market, and its entire economy
still hinges on exports.

The United States is quickly running out of money...and credit.

Really? I think you're engaging in wishful thinking and some confused
conclusions from the current financial troubles here, TMT. You're sounding
like the flip side of the right-wing nutbags. The US will continue to be a
large market for low-wage countries.

No money or credit...no buying of goods.

The United States is becoming the cheapest place to produce.

Having covered this topic for some decades as a magazine reporter, I can
tell you that the US was the cheapest place to produce advanced machine
tools, for example, as far back as the early '90s. It's also been the
cheapest place to produce top-tier cars (ones that meet Western quality
standards) for about the same length of time. (Korea probably holds that
title now.) That's because we have the most productive manufacturing economy
in the world. As of five years ago (I haven't checked current figures), we
were roughly ten times as productive as China, for example.

Before you drink the Kool-Aid with the Chicken Little brigade, you should
spend more time with the numbers, and less time with the doomsday stories
written by fairly ignorant reporters in the general press.

--
Ed Huntress

On Thu, 03 Apr 2008 09:56:33 -0600, with neither quill nor qualm, F.
George McDuffee quickly quoth:

On Thu, 3 Apr 2008 07:13:09 -0400, "Ed Huntress"
wrote:
snip
Having covered this topic for some decades as a magazine reporter, I can
tell you that the US was the cheapest place to produce advanced machine
tools, for example, as far back as the early '90s. It's also been the
cheapest place to produce top-tier cars (ones that meet Western quality
standards) for about the same length of time. (Korea probably holds that
title now.) That's because we have the most productive manufacturing economy
in the world. As of five years ago (I haven't checked current figures), we
were roughly ten times as productive as China, for example.
snip
====================
Thanks for verifying data I had collected on the micro level some
time back [early to mid 90s], at several companies/divisions
making truck/automotive components. I thought that what I
observed and heard in the staff meetings was an isolated
aberration.

As incredible as it may seem, it appears that much of the job
outsourcing/off-shoring was not so much to save money as efforts
by "management" to "get back at" their workers [in my three
cases, 1 union and 2 non-union shops] for making too much money,
for causing problems by filing wage/OT and discrimination claims,
etc.

That's another reason I just love unions. They, and/or the employees,
turn into the tyrants they're trying to get out from under.


FWIW -- the 3 companies/divisions with which I was directly
involved nearly went bankrupt after major off-shoring [mainly
quality/deliver and warranty issues] and were "saved" only when
their major competitor purchased them. Within 3 years the major
competitor filed chapter 11, and is still in the process of
reorganization.

Interesting!


The "management" is now on the street [or
working at Walmart] along with the displaced workers.

It's too bad we can't say that of the union officials.

--
That man is the richest whose pleasures are the cheapest.
-- Henry David Thoreau

On Thu, 3 Apr 2008 07:13:09 -0400, "Ed Huntress"
wrote:
snip
Having covered this topic for some decades as a magazine reporter, I can
tell you that the US was the cheapest place to produce advanced machine
tools, for example, as far back as the early '90s. It's also been the
cheapest place to produce top-tier cars (ones that meet Western quality
standards) for about the same length of time. (Korea probably holds that
title now.) That's because we have the most productive manufacturing economy
in the world. As of five years ago (I haven't checked current figures), we
were roughly ten times as productive as China, for example.
snip
====================
Thanks for verifying data I had collected on the micro level some
time back [early to mid 90s], at several companies/divisions
making truck/automotive components. I thought that what I
observed and heard in the staff meetings was an isolated
aberration.

As incredible as it may seem, it appears that much of the job
outsourcing/off-shoring was not so much to save money as efforts
by "management" to "get back at" their workers [in my three
cases, 1 union and 2 non-union shops] for making too much money,
for causing problems by filing wage/OT and discrimination claims,
etc.

FWIW -- the 3 companies/divisions with which I was directly
involved nearly went bankrupt after major off-shoring [mainly
quality/deliver and warranty issues] and were "saved" only when
their major competitor purchased them. Within 3 years the major
competitor filed chapter 11, and is still in the process of
reorganization. The "management" is now on the street [or
working at Walmart] along with the displaced workers.


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).

"F. George McDuffee" wrote in message
...
On Thu, 3 Apr 2008 07:13:09 -0400, "Ed Huntress"
wrote:
snip
Having covered this topic for some decades as a magazine reporter, I can
tell you that the US was the cheapest place to produce advanced machine
tools, for example, as far back as the early '90s. It's also been the
cheapest place to produce top-tier cars (ones that meet Western quality
standards) for about the same length of time. (Korea probably holds that
title now.) That's because we have the most productive manufacturing
economy
in the world. As of five years ago (I haven't checked current figures), we
were roughly ten times as productive as China, for example.
snip
====================
Thanks for verifying data I had collected on the micro level some
time back [early to mid 90s], at several companies/divisions
making truck/automotive components. I thought that what I
observed and heard in the staff meetings was an isolated
aberration.

As incredible as it may seem, it appears that much of the job
outsourcing/off-shoring was not so much to save money as efforts
by "management" to "get back at" their workers [in my three
cases, 1 union and 2 non-union shops] for making too much money,
for causing problems by filing wage/OT and discrimination claims,
etc.

I suspect this varies by industry and perhaps by company, George. It's clear
that many of the offshoring operations are intended to save money -- often
lots of money -- by using cheap labor, low embedded supply costs, and a
freewheeling, largely uncontrolled attitude towards environmental costs.

To say that China has 1/10 the productivity as the US means that they use 10
times as many labor hours to produce a given value of product. This is
partly a legacy of the outrageous practices of the state-run businesses that
preceded the current crop of private ones; one way to keep unemployment down
is to hire 10 times as many people as you need, and that seems to have been
the pattern. The tradition dies hard. And, of course, low labor costs and a
legacy of poor capital development has left China with an overhang of poor
productivity. Productivity, first, depends on having productive machinery
and equipment. Finally, their productivity figure suffers because the output
is measured in dollars of goods or services sold. They make cheaper
products, so they wind up with a lower productivity figure.

But even with 10 times as much labor used for each dollar value of output,
total production costs in China are still extremely low. We talk about that
$0.80/hour wage -- I contributed to selecting that average in a series of
articles I wrote around five years ago -- but the fact is that
shoe-assemblers in China's interior were then making $0.17/hour. And the
official minimum wage, widely ignored, was then (2003) $0.32/hour.

Some of the early offshoring was a product of companies not wanting to miss
the ship that everyone thought was sailing for good. So there was an
overexuberance of offshoring, some of which has been pulled back.
Nonetheless, China remains the low-cost producer. Their costs are climbing
fast but so is their productivity.

FWIW -- the 3 companies/divisions with which I was directly
involved nearly went bankrupt after major off-shoring [mainly
quality/deliver and warranty issues] and were "saved" only when
their major competitor purchased them. Within 3 years the major
competitor filed chapter 11, and is still in the process of
reorganization. The "management" is now on the street [or
working at Walmart] along with the displaced workers.

Globalization sometime bites the hand that feeds it. g

--
Ed Huntress

On Thu, 3 Apr 2008 12:04:15 -0400, "Ed Huntress"
wrote:


"F. George McDuffee" wrote in message
.. .
On Thu, 3 Apr 2008 07:13:09 -0400, "Ed Huntress"
wrote:
snip
Having covered this topic for some decades as a magazine reporter, I can
tell you that the US was the cheapest place to produce advanced machine
tools, for example, as far back as the early '90s. It's also been the
cheapest place to produce top-tier cars (ones that meet Western quality
standards) for about the same length of time. (Korea probably holds that
title now.) That's because we have the most productive manufacturing
economy
in the world. As of five years ago (I haven't checked current figures), we
were roughly ten times as productive as China, for example.
snip
====================
Thanks for verifying data I had collected on the micro level some
time back [early to mid 90s], at several companies/divisions
making truck/automotive components. I thought that what I
observed and heard in the staff meetings was an isolated
aberration.

As incredible as it may seem, it appears that much of the job
outsourcing/off-shoring was not so much to save money as efforts
by "management" to "get back at" their workers [in my three
cases, 1 union and 2 non-union shops] for making too much money,
for causing problems by filing wage/OT and discrimination claims,
etc.

I suspect this varies by industry and perhaps by company, George. It's clear
that many of the offshoring operations are intended to save money -- often
lots of money -- by using cheap labor, low embedded supply costs, and a
freewheeling, largely uncontrolled attitude towards environmental costs.

To say that China has 1/10 the productivity as the US means that they use 10
times as many labor hours to produce a given value of product. This is
partly a legacy of the outrageous practices of the state-run businesses that
preceded the current crop of private ones; one way to keep unemployment down
is to hire 10 times as many people as you need, and that seems to have been
the pattern. The tradition dies hard. And, of course, low labor costs and a
legacy of poor capital development has left China with an overhang of poor
productivity. Productivity, first, depends on having productive machinery
and equipment. Finally, their productivity figure suffers because the output
is measured in dollars of goods or services sold. They make cheaper
products, so they wind up with a lower productivity figure.

But even with 10 times as much labor used for each dollar value of output,
total production costs in China are still extremely low. We talk about that
$0.80/hour wage -- I contributed to selecting that average in a series of
articles I wrote around five years ago -- but the fact is that
shoe-assemblers in China's interior were then making $0.17/hour. And the
official minimum wage, widely ignored, was then (2003) $0.32/hour.

Some of the early offshoring was a product of companies not wanting to miss
the ship that everyone thought was sailing for good. So there was an
overexuberance of offshoring, some of which has been pulled back.
Nonetheless, China remains the low-cost producer. Their costs are climbing
fast but so is their productivity.

I asked the owner of a company with head office in HK (costs 10x that
of China, more expensive than most of the US) how the productivity of
his China workers (factory near Shanghai) compared with HK workers. He
said it was *higher*-- in terms of parts per hour, not dollars per
hour. That's the equation for a business owner looking to outsource,
not the macroeconomic numbers.
Best regards,
Spehro Pefhany
--
"it's the network..." "The Journey is the reward"
Info for manufacturers: http://www.trexon.com
Embedded software/hardware/analog Info for designers: http://www.speff.com

"Spehro Pefhany" wrote in message
...


I asked the owner of a company with head office in HK (costs 10x that
of China, more expensive than most of the US) how the productivity of
his China workers (factory near Shanghai) compared with HK workers. He
said it was *higher*-- in terms of parts per hour, not dollars per
hour. That's the equation for a business owner looking to outsource,
not the macroeconomic numbers.
Best regards,
Spehro Pefhany

I don't know anything about workers in Hong Kong, but I've been led to
believe they're hard-working. If that's his experience, then that's his
experience. It doesn't agree with the two dozen or so I've spoken to, mostly
a few years ago. And our old friend Hamei, who managed an aluminum
wheel-making plant in China and who I used to talk to regularly by phone,
often said that Chinese workers weren't very good.

But the degree to which workers work hard has little to do with
productivity, in any case. That's mostly a matter of the productivity of the
tools and machinery they work with. Assuming there's no conscious
over-employment of labor, of course, with which China is still hampered.

The companies operating in China with Western (or maybe Hong Kong)
management do much better. Like people in most of the world, Chinese workers
no doubt adapt to the environment they're working in.

--
Ed Huntress

"Hawke" wrote in message
...

"Ed Huntress" wrote in message
...
posting stripped to RCM only

"Too_Many_Tools" wrote in message
...
On Mar 27, 9:27 am, reinhardt wrote:
On Mar 24, 5:15 pm, Too_Many_Tools wrote:

The jury is out on this one....

What do you think?

TMT

Recession is a given. Can we avoid depression?

Why avoid one when that was desired goal to begin with?

Do you know how financially reasonable depression labor is?

Actually your comment does make sense.

No it doesn't.

If one wants to level the world labor market in respect to costs, one
must lower the United States labor costs to Third World levels.

No one wants to level the world market. They want the low-wage countries
to
make the goods, and the high-wage countries to buy them. That's how one
makes the most profit.

--
Ed Huntress


That's good thinking until the "high-wage" countries no longer have the
money to buy products due to no longer having high wage jobs, which went
overseas and are now done by low-wage workers. Who also aren't paid enough
money to buy the products. At that point it's uh oh, who's going to buy
all
this stuff?


Hawke

Somebody else. The Chinese are looking around as we speak, but I doubt if
anyone will exceed the size of the US market for at least another decade.
Except, perhaps, the Chinese themselves. That will be a good thing when it
happens.

--
Ed Huntress

"Ed Huntress" wrote in message
...
posting stripped to RCM only

"Too_Many_Tools" wrote in message
...
On Mar 27, 9:27 am, reinhardt wrote:
On Mar 24, 5:15 pm, Too_Many_Tools wrote:

The jury is out on this one....

What do you think?

TMT

Recession is a given. Can we avoid depression?

Why avoid one when that was desired goal to begin with?

Do you know how financially reasonable depression labor is?

Actually your comment does make sense.

No it doesn't.

If one wants to level the world labor market in respect to costs, one
must lower the United States labor costs to Third World levels.

No one wants to level the world market. They want the low-wage countries
to
make the goods, and the high-wage countries to buy them. That's how one
makes the most profit.

--
Ed Huntress


That's good thinking until the "high-wage" countries no longer have the
money to buy products due to no longer having high wage jobs, which went
overseas and are now done by low-wage workers. Who also aren't paid enough
money to buy the products. At that point it's uh oh, who's going to buy all
this stuff?


Hawke

On Apr 3, 5:13*am, "Ed Huntress" wrote:
"Too_Many_Tools" wrote in message

...
On Apr 2, 9:53 pm, "Ed Huntress" wrote:





posting stripped to RCM only

"Too_Many_Tools" wrote in message

...
On Mar 27, 9:27 am, reinhardt wrote:

On Mar 24, 5:15 pm, Too_Many_Tools wrote:

The jury is out on this one....

What do you think?

TMT

Recession is a given. Can we avoid depression?

Why avoid one when that was desired goal to begin with?

Do you know how financially reasonable depression labor is?
Actually your comment does make sense.

No it doesn't.

If one wants to level the world labor market in respect to costs, one
must lower the United States labor costs to Third World levels.

No one wants to level the world market. They want the low-wage countries
to
make the goods, and the high-wage countries to buy them. That's how one
makes the most profit.

--
Ed Huntress
There are other countries that will buy goods...have you noticed how
companies are falling over each other to sell to China?

There are a lot of people in China, a tiny percentage of which can buy
expensive goods. But even a tiny percentage of 1.2 billion people is a lot
of customers. This is what businesses have been anticipating for a long
time. Meanwhile, the West is China's export market, and its entire economy
still hinges on exports.

The United States is quickly running out of money...and credit.

Really? I think you're engaging in wishful thinking and some confused
conclusions from the current financial troubles here, TMT. You're sounding
like the flip side of the right-wing nutbags. The US will continue to be a
large market for low-wage countries.

No money or credit...no buying of goods.
The United States is becoming the cheapest place to produce.

Having covered this topic for some decades as a magazine reporter, I can
tell you that the US was the cheapest place to produce advanced machine
tools, for example, as far back as the early '90s. It's also been the
cheapest place to produce top-tier cars (ones that meet Western quality
standards) for about the same length of time. (Korea probably holds that
title now.) That's because we have the most productive manufacturing economy
in the world. As of five years ago (I haven't checked current figures), we
were roughly ten times as productive as China, for example.

Before you drink the Kool-Aid with the Chicken Little brigade, you should
spend more time with the numbers, and less time with the doomsday stories
written by fairly ignorant reporters in the general press.

--
Ed Huntress- Hide quoted text -

- Show quoted text -

I disagree Ed.

If we are so productive, then why are the jobs leaving the country?

If we are so productive, then why has so much of our manufacturing
infrastructure been moved offshore?

I would suggest looking at the national debt, the rate of lending that
the Feds doing and the loss of housing equity and then get back to me
as to how much money/credit this country still has.

TMT

On Apr 3, 3:12*pm, "Ed Huntress" wrote:
"Hawke" wrote in message

...







"Ed Huntress" wrote in message
...
posting stripped to RCM only

"Too_Many_Tools" wrote in message
....
On Mar 27, 9:27 am, reinhardt wrote:
On Mar 24, 5:15 pm, Too_Many_Tools wrote:

The jury is out on this one....

What do you think?

TMT

Recession is a given. Can we avoid depression?

Why avoid one when that was desired goal to begin with?

Do you know how financially reasonable depression labor is?

Actually your comment does make sense.

No it doesn't.

If one wants to level the world labor market in respect to costs, one
must lower the United States labor costs to Third World levels.

No one wants to level the world market. They want the low-wage countries
to
make the goods, and the high-wage countries to buy them. That's how one
makes the most profit.

--
Ed Huntress

That's good thinking until the "high-wage" countries no longer have the
money to buy products due to no longer having high wage jobs, which went
overseas and are now done by low-wage workers. Who also aren't paid enough
money to buy the products. At that point it's uh oh, who's going to buy
all
this stuff?

Hawke

Somebody else. The Chinese are looking around as we speak, but I doubt if
anyone will exceed the size of the US market for at least another decade.
Except, perhaps, the Chinese themselves. That will be a good thing when it
happens.

--
Ed Huntress- Hide quoted text -

- Show quoted text -

The Euro is in demand for a reason.

The United States is the consumer it once was.

It likely will not be ever again...we have bills to pay and more
coming due.

TMT

"Too_Many_Tools" wrote in message
...
On Apr 3, 5:13 am, "Ed Huntress" wrote:
"Too_Many_Tools" wrote in message

...
On Apr 2, 9:53 pm, "Ed Huntress" wrote:





posting stripped to RCM only

"Too_Many_Tools" wrote in message

...
On Mar 27, 9:27 am, reinhardt wrote:

On Mar 24, 5:15 pm, Too_Many_Tools wrote:

The jury is out on this one....

What do you think?

TMT

Recession is a given. Can we avoid depression?

Why avoid one when that was desired goal to begin with?

Do you know how financially reasonable depression labor is?
Actually your comment does make sense.

No it doesn't.

If one wants to level the world labor market in respect to costs, one
must lower the United States labor costs to Third World levels.

No one wants to level the world market. They want the low-wage countries
to
make the goods, and the high-wage countries to buy them. That's how one
makes the most profit.

--
Ed Huntress
There are other countries that will buy goods...have you noticed how
companies are falling over each other to sell to China?

There are a lot of people in China, a tiny percentage of which can buy
expensive goods. But even a tiny percentage of 1.2 billion people is a lot
of customers. This is what businesses have been anticipating for a long
time. Meanwhile, the West is China's export market, and its entire economy
still hinges on exports.

The United States is quickly running out of money...and credit.

Really? I think you're engaging in wishful thinking and some confused
conclusions from the current financial troubles here, TMT. You're sounding
like the flip side of the right-wing nutbags. The US will continue to be a
large market for low-wage countries.

No money or credit...no buying of goods.
The United States is becoming the cheapest place to produce.

Having covered this topic for some decades as a magazine reporter, I can
tell you that the US was the cheapest place to produce advanced machine
tools, for example, as far back as the early '90s. It's also been the
cheapest place to produce top-tier cars (ones that meet Western quality
standards) for about the same length of time. (Korea probably holds that
title now.) That's because we have the most productive manufacturing
economy
in the world. As of five years ago (I haven't checked current figures), we
were roughly ten times as productive as China, for example.

Before you drink the Kool-Aid with the Chicken Little brigade, you should
spend more time with the numbers, and less time with the doomsday stories
written by fairly ignorant reporters in the general press.

--
Ed Huntress- Hide quoted text -

- Show quoted text -

I disagree Ed.

If we are so productive, then why are the jobs leaving the country?

Because we may be the most productive, but we aren't the cheapest. They are
two different things. Productivity is a measure of the dollar (or other
currency) value of output per labor hour. Cheapness is a measure of how much
one has to pay to get something made. If you're Reebock and you can get
running shoes assembled in the interior of China for $0.17/hour, you don't
care if they only get 1/10th the productivity of US workers, or even 1/20th.

If we are so productive, then why has so much of our manufacturing
infrastructure been moved offshore?

See above.

I would suggest looking at the national debt, the rate of lending that
the Feds doing and the loss of housing equity and then get back to me
as to how much money/credit this country still has.


You can't draw a conclusion about how much money or credit we have from that
information, TMT. As for our national debt, as a percentage of our GDP it is
less than that of Japan, Canada, Norway, Sweden, Switzerland, France,
Germany, and about 60 other countries. You'll have to define what
constitutes "lending," in your view, by the Fed before we can address that
question. Regarding housing equity, the bubble of exuberance is getting a
haircut and probably will decline to something closer to housing's true
replacement value.

--
Ed Huntress

"Too_Many_Tools" wrote in message
...
On Apr 3, 3:12 pm, "Ed Huntress" wrote:
"Hawke" wrote in message

...







"Ed Huntress" wrote in message
...
posting stripped to RCM only

"Too_Many_Tools" wrote in message
...
On Mar 27, 9:27 am, reinhardt wrote:
On Mar 24, 5:15 pm, Too_Many_Tools wrote:

The jury is out on this one....

What do you think?

TMT

Recession is a given. Can we avoid depression?

Why avoid one when that was desired goal to begin with?

Do you know how financially reasonable depression labor is?

Actually your comment does make sense.

No it doesn't.

If one wants to level the world labor market in respect to costs, one
must lower the United States labor costs to Third World levels.

No one wants to level the world market. They want the low-wage
countries
to
make the goods, and the high-wage countries to buy them. That's how one
makes the most profit.

--
Ed Huntress

That's good thinking until the "high-wage" countries no longer have the
money to buy products due to no longer having high wage jobs, which went
overseas and are now done by low-wage workers. Who also aren't paid
enough
money to buy the products. At that point it's uh oh, who's going to buy
all
this stuff?

Hawke

Somebody else. The Chinese are looking around as we speak, but I doubt if
anyone will exceed the size of the US market for at least another decade.
Except, perhaps, the Chinese themselves. That will be a good thing when it
happens.

--
Ed Huntress- Hide quoted text -

- Show quoted text -

The Euro is in demand for a reason.

Yup. It's riding high right now.

The United States is the consumer it once was.

You probably mean "isn't the consumer it once was." Unfortunately, that
isn't true, but it would be a good thing if it were.

It likely will not be ever again...we have bills to pay and more coming
due.

Dr. Gloom and Doom, we will get through it.

--
Ed Huntress

On Apr 3, 10:49*pm, "Ed Huntress" wrote:
"Too_Many_Tools" wrote in message

...
On Apr 3, 5:13 am, "Ed Huntress" wrote:





"Too_Many_Tools" wrote in message

...
On Apr 2, 9:53 pm, "Ed Huntress" wrote:

posting stripped to RCM only

"Too_Many_Tools" wrote in message

....
On Mar 27, 9:27 am, reinhardt wrote:

On Mar 24, 5:15 pm, Too_Many_Tools wrote:

The jury is out on this one....

What do you think?

TMT

Recession is a given. Can we avoid depression?

Why avoid one when that was desired goal to begin with?

Do you know how financially reasonable depression labor is?
Actually your comment does make sense.

No it doesn't.

If one wants to level the world labor market in respect to costs, one
must lower the United States labor costs to Third World levels.

No one wants to level the world market. They want the low-wage countries
to
make the goods, and the high-wage countries to buy them. That's how one
makes the most profit.

--
Ed Huntress
There are other countries that will buy goods...have you noticed how
companies are falling over each other to sell to China?

There are a lot of people in China, a tiny percentage of which can buy
expensive goods. But even a tiny percentage of 1.2 billion people is a lot
of customers. This is what businesses have been anticipating for a long
time. Meanwhile, the West is China's export market, and its entire economy
still hinges on exports.

The United States is quickly running out of money...and credit.

Really? I think you're engaging in wishful thinking and some confused
conclusions from the current financial troubles here, TMT. You're sounding
like the flip side of the right-wing nutbags. The US will continue to be a
large market for low-wage countries.

No money or credit...no buying of goods.
The United States is becoming the cheapest place to produce.

Having covered this topic for some decades as a magazine reporter, I can
tell you that the US was the cheapest place to produce advanced machine
tools, for example, as far back as the early '90s. It's also been the
cheapest place to produce top-tier cars (ones that meet Western quality
standards) for about the same length of time. (Korea probably holds that
title now.) That's because we have the most productive manufacturing
economy
in the world. As of five years ago (I haven't checked current figures), we
were roughly ten times as productive as China, for example.

Before you drink the Kool-Aid with the Chicken Little brigade, you should
spend more time with the numbers, and less time with the doomsday stories
written by fairly ignorant reporters in the general press.

--
Ed Huntress- Hide quoted text -

- Show quoted text -
I disagree Ed.
If we are so productive, then why are the jobs leaving the country?

Because we may be the most productive, but we aren't the cheapest. They are
two different things. Productivity is a measure of the dollar (or other
currency) value of output per labor hour. Cheapness is a measure of how much
one has to pay to get something made. If you're Reebock and you can get
running shoes assembled in the interior of China for $0.17/hour, you don't
care if they only get 1/10th the productivity of US workers, or even 1/20th.

If we are so productive, then why has so much of our manufacturing
infrastructure been moved offshore?

See above.

I would suggest looking at the national debt, the rate of lending that
the Feds doing and the loss of housing equity and then get back to me
as to how much money/credit this country still has.

You can't draw a conclusion about how much money or credit we have from that
information, TMT. As for our national debt, as a percentage of our GDP it is
less than that of Japan, Canada, Norway, Sweden, Switzerland, France,
Germany, and about 60 other countries. You'll have to define what
constitutes "lending," in your view, by the Fed before we can address that
question. Regarding housing equity, the bubble of exuberance is getting a
haircut and probably will decline to something closer to housing's true
replacement value.

--
Ed Huntress- Hide quoted text -

- Show quoted text -


You can't draw a conclusion about how much money or credit we have from that
information, TMT.

Yes you can...we have less...much less.

Please note where the American dollar compares to the other world
currencies...that is the measure of trust the rest of the world (who
makes most of what we use and holds the markers to our debt).

It doesn't matter what the rest of the world is doing in regards to
debt...we don't owe that debt.

As for symatics, it matters little.

What matters is that the United States is a debtor nation, with a
significant amount of its manufacturing base offshore, significantly
dependent on foreign energy and its assets devaluing substantially.

This has happened under this Administration. and from every poll I
have seen the American people will be going to the polls in November
with change on their mind.

TMT

"Too_Many_Tools" wrote in message
...
On Apr 3, 10:49 pm, "Ed Huntress" wrote:
"Too_Many_Tools" wrote in message

...
On Apr 3, 5:13 am, "Ed Huntress" wrote:





"Too_Many_Tools" wrote in message

...
On Apr 2, 9:53 pm, "Ed Huntress" wrote:

posting stripped to RCM only

"Too_Many_Tools" wrote in message

...
On Mar 27, 9:27 am, reinhardt wrote:

On Mar 24, 5:15 pm, Too_Many_Tools wrote:

The jury is out on this one....

What do you think?

TMT

Recession is a given. Can we avoid depression?

Why avoid one when that was desired goal to begin with?

Do you know how financially reasonable depression labor is?
Actually your comment does make sense.

No it doesn't.

If one wants to level the world labor market in respect to costs, one
must lower the United States labor costs to Third World levels.

No one wants to level the world market. They want the low-wage
countries
to
make the goods, and the high-wage countries to buy them. That's how
one
makes the most profit.

--
Ed Huntress
There are other countries that will buy goods...have you noticed how
companies are falling over each other to sell to China?

There are a lot of people in China, a tiny percentage of which can buy
expensive goods. But even a tiny percentage of 1.2 billion people is a
lot
of customers. This is what businesses have been anticipating for a long
time. Meanwhile, the West is China's export market, and its entire
economy
still hinges on exports.

The United States is quickly running out of money...and credit.

Really? I think you're engaging in wishful thinking and some confused
conclusions from the current financial troubles here, TMT. You're
sounding
like the flip side of the right-wing nutbags. The US will continue to be
a
large market for low-wage countries.

No money or credit...no buying of goods.
The United States is becoming the cheapest place to produce.

Having covered this topic for some decades as a magazine reporter, I can
tell you that the US was the cheapest place to produce advanced machine
tools, for example, as far back as the early '90s. It's also been the
cheapest place to produce top-tier cars (ones that meet Western quality
standards) for about the same length of time. (Korea probably holds that
title now.) That's because we have the most productive manufacturing
economy
in the world. As of five years ago (I haven't checked current figures),
we
were roughly ten times as productive as China, for example.

Before you drink the Kool-Aid with the Chicken Little brigade, you
should
spend more time with the numbers, and less time with the doomsday
stories
written by fairly ignorant reporters in the general press.

--
Ed Huntress- Hide quoted text -

- Show quoted text -
I disagree Ed.
If we are so productive, then why are the jobs leaving the country?

Because we may be the most productive, but we aren't the cheapest. They
are
two different things. Productivity is a measure of the dollar (or other
currency) value of output per labor hour. Cheapness is a measure of how
much
one has to pay to get something made. If you're Reebock and you can get
running shoes assembled in the interior of China for $0.17/hour, you don't
care if they only get 1/10th the productivity of US workers, or even
1/20th.

If we are so productive, then why has so much of our manufacturing
infrastructure been moved offshore?

See above.

I would suggest looking at the national debt, the rate of lending that
the Feds doing and the loss of housing equity and then get back to me
as to how much money/credit this country still has.

You can't draw a conclusion about how much money or credit we have from
that
information, TMT. As for our national debt, as a percentage of our GDP it
is
less than that of Japan, Canada, Norway, Sweden, Switzerland, France,
Germany, and about 60 other countries. You'll have to define what
constitutes "lending," in your view, by the Fed before we can address that
question. Regarding housing equity, the bubble of exuberance is getting a
haircut and probably will decline to something closer to housing's true
replacement value.

--
Ed Huntress- Hide quoted text -

- Show quoted text -


You can't draw a conclusion about how much money or credit we have from
that
information, TMT.

Yes you can...we have less...much less.

This is a "narrow money/broad money" question that can't be answered unless
and until you define what kind of money you're talking about. Any of the
usual indicators, including the standard M1+M2+M3, right at this moment,
probably would show that the "amount" of money the US has now is the highest
in history. In fact, at a more sophisticated level of discussion, one of us
might take up the side that the problem is that we have *too much* money.

Regarding credit, what do you mean by "how much credit this country has"?
Are you talking about how many Treasury bonds we can sell? We could sell a
lot more if we raised interest rates. But not at the low interest rates
we've been selling bonds for the last decade or so. That's probably
surpassed its peak. We shouldn't be tapping into that vein anymore, anyway.
We've already dug pretty deep and we'd be better off if we stopped. But, in
any case, we sell most of those bonds to US citizens, not to foreign
citizens or governments.

Please note where the American dollar compares to the other world
currencies...that is the measure of trust the rest of the world (who
makes most of what we use and holds the markers to our debt).

The value of the dollar, most importantly and to a dominant degree, is based
on what currency traders think about the relationship between the number of
dollars in circulation and the productive output they represent -- in other
words, what you *should* be able to buy with a dollar. The markets have
judged that we've been getting too much for a dollar, and they're right. The
dollar has been overvalued and it's now going through an adjustment, a part
of which is the result of being in a recessionary period, if not an outright
recession.

After that there are many other factors, ranging from the interest rates we
pay on government bonds (want to see the US dollar's value climb in a hurry?
Raise the interest rate by two or three percent and watch it soar.) to the
state of our economy. This is too deep a question for anything we could
possibly discuss here. But if you want to correct some of your
misapprehensions, plenty of good analysis is out there.

Here's something, for example, from an article in last week's _The
Economist_:

"Indeed, the main cause of the dollar's recent slide has been the ECB's
refusal to cut interest rates (because of its inflation concerns) while the
Fed is slashing rates to support growth. Or to put it another way, the weak
dollar is consistent with the economic fundamentals, namely that America is
in recession whereas the euro zone is still growing. The ECB will want to
see inflation easing and more evidence that growth is slowing before it cuts
rates. There is also little chance right now that the American government
would join in any action to push up the dollar, because the cheap currency
is giving a helpful boost to exports.
"On the other hand, the euro is now looking extremely over-valued-and thus
ripe for intervention (see chart).

http://www.economist.com/finance/dis...ry_id=10924165

It doesn't matter what the rest of the world is doing in regards to
debt...we don't owe that debt.

Yeah, it matters. What it tells you is that our deficit, as a static number,
is not the answer to why the US economy is not doing well relative to those
European countries that have much higher debt/GDP ratios. It tells you
you're looking in the wrong place for an answer.

As for symatics, it matters little.

Sematics means "the meaning of words." If it doesn't matter to you what
words mean, then this is going to be a very short discussion. d8-)

What matters is that the United States is a debtor nation, with a
significant amount of its manufacturing base offshore, significantly
dependent on foreign energy and its assets devaluing substantially.

No, no, no, and that's a mixed bag. The fact that we're a debtor nation does
not explain the recession, as you should recognize from the information
about debt/GDP relationships posted above. As for how much of our
manufacturing "base" is offshore, you'll find it illuminating to actually
look up the numbers (not to mention that it's an excellent discipline for
holding intelligent discussions.). Our foreign energy dependence is far less
than that of other countries that are doing well. As for our assets -- which
ones are you talking about that weren't ridiculously inflated to begin with?

This has happened under this Administration. and from every poll I
have seen the American people will be going to the polls in November
with change on their mind.

That appears to be likely, but it will be based more on erasing the memory
of George Bush, his attitudes, and his policies, than on accurate
evaluations of where we stand economically.

--
Ed Huntress

"Hawke" wrote in message
...

I disagree Ed.

If we are so productive, then why are the jobs leaving the country?

Because we may be the most productive, but we aren't the cheapest. They
are
two different things. Productivity is a measure of the dollar (or other
currency) value of output per labor hour. Cheapness is a measure of how
much
one has to pay to get something made. If you're Reebock and you can get
running shoes assembled in the interior of China for $0.17/hour, you
don't
care if they only get 1/10th the productivity of US workers, or even
1/20th.

If we are so productive, then why has so much of our manufacturing
infrastructure been moved offshore?

See above.

I would suggest looking at the national debt, the rate of lending that
the Feds doing and the loss of housing equity and then get back to me
as to how much money/credit this country still has.


You can't draw a conclusion about how much money or credit we have from
that
information, TMT. As for our national debt, as a percentage of our GDP it
is
less than that of Japan, Canada, Norway, Sweden, Switzerland, France,
Germany, and about 60 other countries. You'll have to define what
constitutes "lending," in your view, by the Fed before we can address
that
question. Regarding housing equity, the bubble of exuberance is getting a
haircut and probably will decline to something closer to housing's true
replacement value.

--
Ed Huntress


It's also not a fair comparison to simply look at debt as a percentage of
GDP. You have to look at what a country is going into debt for. Has a
country made major inventments in the future or in its infrastructure? Has
it borrowed to make the country better? Or has it borrowed and gotten
nothing for it, like us. We have borrowed the entire cost of the Iraq war.
We have paid for none of it. That's bad debt. We owe a lot of money but
have
nothing to show for it. So tell us what the other countries with higher
debt
than the US went into hock for because one thing is for sure they didn't
go
into debt for a war of choice.

TMT was saying that our indebtedness is a cause of a decline in money and
credit. It probably has the *opposite* effect on money. As for credit, you
have to define in terms of credit for whom, by whom, and at what interest
rate.

Now you're saying it's "bad debt," and that the comparison therefore is not
"fair." I've never seen an analysis that says anything like that, and I
think your speculation is probably unconnected with reality.

The issue with debt is the trend and its relation to other economic trends,
not the static value at a point in time, including this point in time. I
doubt if anyone cares what we spend the money on. There are connected
factors that are related to our economy's health and growth potential, such
as infrastructure and invested capital, but those factors probably have
nothing whatever to do with the value of the dollar on world currency
markets right now, either.

What _The Economist_ said in that article is what it is: the value of the
dollar is measured relative to other currencies and those currencies with
central banks paying higher interest rates are the ones that are gaining
against the dollar. Relative to what a dollar is "worth," in terms of
purchasing power, the dollar was overvalued and will still decline somewhat
to reflect reality. But the gains that the euro have made because of their
central-bank policies versus ours are also illusory, as _The Economist_
points out, and it is now the euro that is, as they said, "extremely
over-valued."

The US could raise the value of the dollar, because China, Japan, and all of
Europe want it to rise, too, and would cooperate with bank interventions.
But the US doesn't really want it to rise right now. We want to see current
accounts move in a positive direction as a result of better trade balance.
We won't admit it, but that's the fact.

--
Ed Huntress

"Ed Huntress" wrote in message
...
posting stripped to RCM only

"Too_Many_Tools" wrote in message

...
On Mar 27, 9:27 am, reinhardt wrote:
On Mar 24, 5:15 pm, Too_Many_Tools
wrote:

The jury is out on this one....

What do you think?

TMT

Recession is a given. Can we avoid depression?

Why avoid one when that was desired goal to begin with?

Do you know how financially reasonable depression labor is?

Actually your comment does make sense.

No it doesn't.

If one wants to level the world labor market in respect to costs,
one
must lower the United States labor costs to Third World levels.

No one wants to level the world market. They want the low-wage
countries
to
make the goods, and the high-wage countries to buy them. That's how
one
makes the most profit.

--
Ed Huntress

That's good thinking until the "high-wage" countries no longer have
the
money to buy products due to no longer having high wage jobs, which
went
overseas and are now done by low-wage workers. Who also aren't paid
enough
money to buy the products. At that point it's uh oh, who's going to
buy
all
this stuff?

Hawke

Somebody else. The Chinese are looking around as we speak, but I doubt
if
anyone will exceed the size of the US market for at least another
decade.
Except, perhaps, the Chinese themselves. That will be a good thing when
it
happens.

--
Ed Huntress- Hide quoted text -

- Show quoted text -

The Euro is in demand for a reason.

Yup. It's riding high right now.

The United States is the consumer it once was.

You probably mean "isn't the consumer it once was." Unfortunately, that
isn't true, but it would be a good thing if it were.

It likely will not be ever again...we have bills to pay and more coming
due.

Dr. Gloom and Doom, we will get through it.


Yes, we probably will. But we'll never be the same again. The US still
accounts for about a third of the world's economic output. It's down from
the highs and it's on a downward trajectory. The rest of the world is
catching up and we're on our way down to meet them. 30 year old men now make
less than their fathers did. The US is a declining power. That's just the
facts. Take away our military and we're not that big a deal anymore. At this
point all the military is doing for us is costing us money. We have no
global military threat but still are spending half a trillion a year
defending against threats that aren't there. Simultaneously we are engaging
in a war that is estimated by Nobel winning economist Joe Stiglitz to be
costing us three trillion dollars...at least. No wonder we're off our game.

Hawke

I disagree Ed.

If we are so productive, then why are the jobs leaving the country?

Because we may be the most productive, but we aren't the cheapest. They
are
two different things. Productivity is a measure of the dollar (or other
currency) value of output per labor hour. Cheapness is a measure of how
much
one has to pay to get something made. If you're Reebock and you can get
running shoes assembled in the interior of China for $0.17/hour, you don't
care if they only get 1/10th the productivity of US workers, or even
1/20th.

If we are so productive, then why has so much of our manufacturing
infrastructure been moved offshore?

See above.

I would suggest looking at the national debt, the rate of lending that
the Feds doing and the loss of housing equity and then get back to me
as to how much money/credit this country still has.


You can't draw a conclusion about how much money or credit we have from
that
information, TMT. As for our national debt, as a percentage of our GDP it
is
less than that of Japan, Canada, Norway, Sweden, Switzerland, France,
Germany, and about 60 other countries. You'll have to define what
constitutes "lending," in your view, by the Fed before we can address that
question. Regarding housing equity, the bubble of exuberance is getting a
haircut and probably will decline to something closer to housing's true
replacement value.

--
Ed Huntress


It's also not a fair comparison to simply look at debt as a percentage of
GDP. You have to look at what a country is going into debt for. Has a
country made major inventments in the future or in its infrastructure? Has
it borrowed to make the country better? Or has it borrowed and gotten
nothing for it, like us. We have borrowed the entire cost of the Iraq war.
We have paid for none of it. That's bad debt. We owe a lot of money but have
nothing to show for it. So tell us what the other countries with higher debt
than the US went into hock for because one thing is for sure they didn't go
into debt for a war of choice.

Hawke