What does the word outsourcing mean to you?

[HempKat]

I agree with Blueshark. (Blueshark, don't faint, lol.)

I wish we could find balance where labor-intensive business needs us as much as we need them. Allow execs to get ahead so they can help take care of labor (who help take care of execs.)

My American company was taken over by a European outfit in the 90s. I had the opportunity to work for German execs. I get the impression that European execs don't squeeze the workforce for profits like Americans. These guys didn't live lavish lifestyles either. And they laid off American execs and managers that had previously lavished themselves with perks at the company's expense.

Is 400x enough or is it just a step to the next plateau?

Definately that would be a start to fix why American made can't compete. There is no justifiable reason why these Executives should be making Millions per year with bonuses and salary and with a guarentee of payment regardless of performance to boot. The President of the United States only makes around $400,000 per year and a fair arguement can be made that the responsibility of running a Super Power is one of if not the toughest executive jobs in the world. Compensation should be based proportionately from that based on job difficulty in comparrison. I figure based on that the average CEO deserves no more then 100K per year and middle management no more then 50K. Perhaps if compensation was more reasonably uniform then corporations would be more in touch with the needs and abilities of consumers to be consumers?

 

[Greensub]

IMO, our exports are exclusive. Example Caterpillar, Boeing, etc. Otherwise we're priced out of some markets. Also my opinion, demand for American made was primarily by Americans (or Chinese Buick fans, lol.)

Interesting you mention caterpillar... I remember seeing that they're outsourcing production to china too.

Caterpillar to Increase Excavator Production in China
Once excavator expansion plans are completed in 2014, Caterpillar will have
increased its China-based excavator capacity by 400 percent

http://www.cat.com/cda/files/225880...to Increase Excavator Production in China.pdf

Why can’t Caterpillar make a profit exporting mini-excavators to China? The answer is simple: China has a 30% tariff on all excavators. In fact it has a similar high tariff on just about every vehicle, be it a Ford car, a GMC truck, a Harley Davidson motorcycle, or a giant mining machine made by Bucyrus International.

http://www.americanthinker.com/2010/10/wto_helping_china_loot_caterpi_1.html

 

[Greensub]

Definately that would be a start to fix why American made can't compete. There is no justifiable reason why these Executives should be making Millions per year with bonuses and salary and with a guarentee of payment regardless of performance to boot. The President of the United States only makes around $400,000 per year and a fair arguement can be made that the responsibility of running a Super Power is one of if not the toughest executive jobs in the world. Compensation should be based proportionately from that based on job difficulty in comparrison. I figure based on that the average CEO deserves no more then 100K per year and middle management no more then 50K. Perhaps if compensation was more reasonably uniform then corporations would be more in touch with the needs and abilities of consumers to be consumers?

This I think is the whole argument for progressive tax rates. (the related arguments as a whole not just your quote) I've always been confused by the argument that lower taxes on business owners personal income equals more investment in jobs...

It seems to me that if corporate tax rates are low & the high income individual rate is high, that it would encourage executives to keep the money in the business for re-investment in the company... thus leading to expansion & growth & wealth of the company (and thereby producing more jobs)... rather than taking it out of the business and giving it to executives as higher pay/bonuses to do whatever they do with it.

While correlation is not causation in epidemiological studies... there is a correlation between lower upper rates & climbing executive pay. I don't think we need to argue that if executives are taking more money out of the businesses in pay that it results in less money for the business to re-invest and grow than it would otherwise have had.

 

[HempKat]

This I think is the whole argument for progressive tax rates. (the related arguments as a whole not just your quote) I've always been confused by the argument that lower taxes on business owners personal income equals more investment in jobs...

It seems to me that if corporate tax rates are low & the high income individual rate is high, that it would encourage executives to keep the money in the business for re-investment in the company... thus leading to expansion & growth & wealth of the company (and thereby producing more jobs)... rather than taking it out of the business and giving it to executives as higher pay/bonuses to do whatever they do with it.

While correlation in not causation in epidemiological studies... there is a correlation between lower upper rates & climbing executive pay. I don't think we need to argue that if executives are taking more money out of the businesses in pay that it results in less money for the business to re-invest and grow than it would otherwise have had.

Nor is my intent to argue that point. I'm just pointing out that you seldom if ever hear about executive compensation. Sure we heard it alot recently because it was on the Taxpayers dime. A dime intended to keep companies from folding, not to allow executives to lavish themselves with obscene amounts of wealth. Typically you don't hear about it though because secretly most people hope they might one day get there. The reason for outsourcing is simply to lower cost. You can lower cost by using inferior products but then you run afoul of saftey/health inspectors and you risk losing customers. Another way is to lower what you pay people but here in America you got minimum wage, unemployment insurance and other expenses to have a legal employee. So you can only lower pay so much. Which leaves you with cutting executive pay vs outsourcing cheaper labor in less regulated countries desperate to grow stronger. It's obvious which choice was made.

Bottomline is it is pure greed because all those millions in compensation to the execs could easily offset the high cost of employment but it would mean sacrificing some of what they already keep for themselves. So obviously you can't have them regulate themselves but you can't have the government regulate them either because like I said, most everyone hopes to get to a point of getting more then they deserve so nobody wants government to dictate what's fair and what isn't. Plus people trust the government about the same or less then they do corporations.

 

[Greensub]

Nor is my intent to argue that point. I'm just pointing out that you seldom if ever hear about executive compensation. Sure we heard it alot recently because it was on the Taxpayers dime. A dime intended to keep companies from folding, not to allow executives to lavish themselves with obscene amounts of wealth. Typically you don't hear about it though because secretly most people hope they might one day get there. The reason for outsourcing is simply to lower cost. You can lower cost by using inferior products but then you run afoul of saftey/health inspectors and you risk losing customers. Another way is to lower what you pay people but here in America you got minimum wage, unemployment insurance and other expenses to have a legal employee. So you can only lower pay so much. Which leaves you with cutting executive pay vs outsourcing cheaper labor in less regulated countries desperate to grow stronger. It's obvious which choice was made.

Bottomline is it is pure greed because all those millions in compensation to the execs could easily offset the high cost of employment but it would mean sacrificing some of what they already keep for themselves. So obviously you can't have them regulate themselves but you can't have the government regulate them either because like I said, most everyone hopes to get to a point of getting more then they deserve so nobody wants government to dictate what's fair and what isn't. Plus people trust the government about the same or less then they do corporations.

I agree with the greed... but I think quite a few would be for a higher upper rate, maybe not 91% like in the past... maybe not at the dividing line of $250,000 dollars.

The current argument is to go to 39% rate above $250,000... personally that's doable for me... I want to pay more taxes in that class... that's where I would want to be, rather than where I'm at. I would even go for a different structure... say 50% on income earned above $1,000,000, that wouldn't stop me from wanting to make over a million a year. I'd be less likely to write myself that check though... I'd probably prefer to leave it in the business and have it taxed as income at a corporate rate, and take a little less home, it would still be my money if it's my corporation (it's just in my business rather than in my pocket). Still... I wish I was in a higher tax category.

(these scenarios are based on the idea of only the portion over the threshold is taxed at a higher rate)...

But still I'm just going off on a tangent... I was talking with Blueshark & Disco Biscuit the other day and I think we all had similar views on Tax Credits... it might be that the only spending we need to cut is on Tax Credit Expenditures (I won't argue that for sure, I haven't seen the math... plus it's another tangent)

 

[OsWiZzLe]

It means kids in America should stop playing video games and sharpen up their Math/Science Skillz...Shit turn the TV off and Go Read

 

[Greensub]

And it still does lead the world in innovation and invention. Or were you under the impression that the most advanced airliners, ships, machining equipment, software, nuclear reactors, medical equipment, spacecraft, etc, etc, etc, etc, etc, etc, are designed and manufactured in China?

Recently China told foreign car companies that are already manufacturing in China that they will have to share any electric car technologies that they develop with their Chinese competitors! Just how much will car companies spend on developing more efficient vehicles when they know that they will have to “share” whatever they develop?

China’s self-created trade imbalances have given it a 10% growth rate while its victims’ economies stagnate (exports stimulate growth). China is now using its rapid growth as a lever for demanding that high tech and pharmaceutical companies move their R&D laboratories and patents to China in order to continue selling to China’s growing market.

In Ayn Rand’s book Atlas Shrugged, looters seize control of the United States economy. They stifle economic growth by forcing creators to give up their inventions to the state. We are seeing just that sort of looting on a worldwide scale right now. China is looting western companies of their technology under cover of WTO rules that let them do it.

http://www.americanthinker.com/2010/10/wto_helping_china_loot_caterpi_1.html

China can manufacture and sell to us all of the curtains and shower rods they want. It certainly doesn't hurt my national pride to let them half ass attempt to manufacture said things, while we devote our attention and resources to doing the really cutting edge innovation.

Not really a lucid realization of what's going on...

You want some of that profit? You're free to invest in said companies.

You want the credit? Well then:

He shouldn't. He should start his own business and claim his large slice of the pie.

But that would require the balls to assume high levels of risk, ambition, intelligence, vision, and the drive to pull it off--which 98% of people lack.

With great risk comes great reward, but also great responsibility. Are you ready and willing to assume the risk and responsibility of borrowing millions of dollars to start and run your own manufacturing operation? Are you capable of doing that? Then by all means do so, there's nothing stopping you. Enjoy your just reward. But if you can't/won't do that, then please assume your position in the employment line, and shut the fuck up.

I mean what exactly have YOU done to deserve to make a lot of money and get lots of credit? Worked diligently in your 9-5 job? There's at least 150 million other people in this country just as average as you, and billions of others in the world doing the exact same thing, or willing to do the same thing if they had the opportunity...so how the fuck is this impressive?

I mean were you under the impression that money just magically appears out of thin air, and the government can just print it out and hand it out free to everyone and thus make everyone rich? LOL. Money is a liquid form of VALUE. There's only so much VALUE to go around. It's measured by our productive output. What VALUE are YOU contributing to society that is worth millions of dollars?

If you want to stand out from the crowd, then you have to fucking stand out. Sitting there on your ass whining about how unfair it is that big, bad, evil corporations are raking in money is pointless and stupid, and damn sure isn't getting you any closer to realizing any goals of your own. If you want great things to happen in your life, then YOU have to get off your ass and make it happen. I'll say it again: you aren't promised a fucking thing in this country except opportunity. And this country is FULL of opportunity. So what opportunities are YOU taking advantage of?

Welcome to America--a country full of whiny BITCHES with serious entitlement issues.

Geez... take it easy (being a jerk doesn't add to the conversation or prove anything)

 

[Blueshark]

Ginger, All this bitterness is getting old. Again (like in another forum that was unfortunately closed) you "quote" me and then get into a vulgarity laced rant. I know you are in telecommunications so please communicate without cursing lest this forum get closed as well.
Your point on taking a chance for greater reward is well founded...and MOST people either don't have it in them to take the chance OR borrow the money to ACT on an idea/product.
Most of us in the community (I would guess) have all they can handle with their home mortgages and may have had a tough time getting one. Both my wife and I have 10+ years at our present employ and had difficulty getting a home loan. Just how would most of us talk a bank into $whatever$ to start a company? You must have some powerful persuasion in your communications, my friend.

I do not feel 'entitled' either. In fact, I don't want anything 'given' to me...or did I state that somewhere? Also, you must have missed the link that explained where Caterpillar is "outsourcing" manufacturing to China? Ok, great, we have a handful of people designing it and some other country builds it..sounds great to me.

Ginger, I would be happy if you would just check yourself. Take a look at your rant and compare its 'flavor' compared to the last 10 or 200 posts. Then go back and re-learn how to communicate effectively....thanks

 

[ibjamming]

Wall Street is enabled by the FED (central bank). The FED is the root of the problem. It's Wall Street's bank. They are the dictators. Unless it is controlled everything else doesn't matter.

We must become a land of laws rather than men. Until the corrupt are held accountable we will continue to be exploited.

It won't happen...THEY make the rules.

I know I'm on the right track, too bad I can't seem to get you there. It wasn't the gas prices that crashed the market. It was all those adjustable loans suddenly adjusting upwards to rates even a rich person would be challenged to pay. The preditory lending that was going on were telling people not to worry, "just look how rates have been the past few years, they won't adjust up anytime soon." I know for a fact that was happening because I had a couple of people trying to talk me into buying a second home as an investment. Using that same pitch.

When you got someone working a minimum wage job and you get them into a $300,000 ARM even a half percent increase is going to do them in. That's what happens though when you promote your company buy say, "No Job? No Money? No Credit? No Problem! What the gas prices did was insure that not only did all the toxic loans fail but some of the ones that were borderline normal loans also failed. As for the derivatives. It was something out of nothing, one because AIG issued them A+ ratings which meant they were safe loans but they did it with an insurance instrument that did not require the banks to have enough money on had to cover the derivatives if they did fail. So buyers of the derivatives were being told essentially these were safe guarenteed investments when they were not anything even remotely close to that. Further they bundle them up in a way where mortgages were spread over multiple derivatives rather then one entire mortgage being tied to one derivative. Thereby making a scenario where one mortgage foreclosing could cause multiple derivatives to fail.

What's so baffling to me is so many "Financial Experts" from around the world bought into the scam without recognizing the risk or at best thinking that somehow they would be able to avoid the risk. One would think the majority of them would have seen how unsafe these derivatives were.

As for Obama and his birth certificate well first of all multiple respectable sources from both sides of the political aisle have witnessed and confirmed Obama's birth certificate exists and is accurate and proves he is a citizen. The fact his father wasn't has absolutely zero meaning as it is a long standing policy that anyone born within the USA is automatically a naturalized citizen regardless of where their parents are from.

Sure...the resets HELPED...but it WAS the almost $5 a gallon gas that pushed them over the edge.

The government TOLD the banks that they HAD to lent to subprimes. Since you can'[t just lend to BLACK subprimes, it opened up a whole can of worms...EVERYONE started getting loans thay shouldn't have gotten. Because the governments said LOAN TO THE POOR.

Yes...AIG worked with the government who GUARANTEED those loans. THAT is why they WERE A+. The banks gave away money like candy with government blessing. Banks were COMPLETELY absolved from anything to do with those mortgage securities.

The Constitution REQUIRED a natural born citizen...is it so fucking hard than to put it on fucking TV so was can ALL see it? You distrust government...yet you believe them when they tell you they "saw it"?

Yup a lot of shady things going down. BTW I didn't loose my job to outsourcing "yet"... When I do get laid-off I have backup plans. I will survive! I have skills outside of the workforce.

For the record....I am American. My grandfather didn't do their job for Corporate America to sell us out down the road. They worked hard so we would have something "better" not for them to exploit us. So why do we diserve respect?...

WHO MADE THE BOMB FIRST!!!!!!!!!!!!!!!!
WE DID!!!!
WHO USED IT!!!!!
WE DID!!!! WHO STOLE OUR TOP SECRET INFORMATION so Soviets now have it and many others... Isralies thieves!

Talking with a friend of mine we have some ideas. One idea is to make it so that Corporations/Foundations cannot hide ownership. This is what they are best at.

So lets say BP has a disaster. Everyone says BP did it... Ok now go find me BP. You can't find BP cause BP is not a person. But really its controlled by someone. The guy who owns BP hides behind his Co front. We will never be able to get at him but we should. He should be responsible, and held accountable. This is your Co. now deal with it. If you can't put your ass on the line then you need to step off. This is one of many problems. These guys are untouchable.

Everyone needs to come together and do whats best for the people... not your stinking business and how much your greedy paws can rape from your neighbor. This is what we get from a corrupt monitary system. Gramps I'm with you bro. The FED must end.

He came here to help already rich people grow richer...

Not to "dis" you...but you along with most people here are ignorant. A corporation IS A PERSON...the Supreme Court said so. They did that just so the rich and powerful WOULDN'T be held responsible for what they do!!!

We caused it. We drove for miles to save a few dollars and killed the
guy on the corner. My biggest issue is monopolism. One company controls most markets with no major feared competition. Productivity and efficiency are false gods.
We must find a way to live pleasantly and peacefully.
Those of you who have gods to pray to, pray for a more sensible new year.
Respect to all.

Sorry...ain't gonna happen...there are too many of us to live that way. Tension will be the name of the game from now on.

outsourcing?

an attempt to keep up with cheap labor markets and still reap huge profits

less home grown production


anyone ever wonder why America hasn't come up with more products we can export? we import everything...What ever happened to the demand of "American Made"...can it brought back? what value can American Made bring?

NEVER make anything that you can buy cheaper. That is why we do what we do. That's the philosophy they follow.

I will say this, if the economy DOES crash, we won't be able to afford to import ANYTHING. Then, perhaps, we will once again start making things here instead of 'outsourcing' all.

This country used to lead the world in innovation and invention. Is it any wonder we fall behind? What incentive is there when a Corporation gets most of the credit and practically all the profit from the above. Why would/should the little guy work his proverbial ass off for someone else's profit/benefit?

Sadly, that is the system we now have in place.

We still do...then we send it out for someone else to make.

We are rapidly becoming a third world nation. High levels of debt to other countries, and a serious lack of manufacturing capacity. Yeah we still make cars, a couple of names left, not like when I was a kid and we made a hell of a lot more cars than now. We don't make much of anything any longer. Saw where BMW was going to open a plant in So. Carolina cause they could pay the U.S. auto maker $15 an hour where the German autoworker was getting $30 an hour. We have fallen a long way and we can thank the large mega corps and banks for buying the best government they could. Thirty years ago America was the worlds largest lending nation, we are now the world largest debtor nation. And with the current political climate we are going to be really screwed, if your one of the top 2% you'll be ok everyone else watch out.

Are you kidding? Americans...even our poorest...live better than most "regular" citizens of other countries...

We MAY become third world...but we're far from it now. you have no clue WHAT third world is!

It means kids in America should stop playing video games and sharpen up their Math/Science Skillz...Shit turn the TV off and Go Read

Yup...but it won't happen...we're too spoiled.

Definately that would be a start to fix why American made can't compete. There is no justifiable reason why these Executives should be making Millions per year with bonuses and salary and with a guarentee of payment regardless of performance to boot. The President of the United States only makes around $400,000 per year and a fair arguement can be made that the responsibility of running a Super Power is one of if not the toughest executive jobs in the world. Compensation should be based proportionately from that based on job difficulty in comparrison. I figure based on that the average CEO deserves no more then 100K per year and middle management no more then 50K. Perhaps if compensation was more reasonably uniform then corporations would be more in touch with the needs and abilities of consumers to be consumers?

The reason is...THEY run things. It's GOOD to be the king!

You're a dreamer...good luck with that!

 

[DiscoBiscuit]

The government TOLD the banks that they HAD to lent to subprimes.

WRONG...

Gov told lenders to stop discriminating based on minority status and inner-city demographics. Gov also asked lenders to devise loans that didn't require substantial down payment. The idea was intended for folks that could make a mortgage payment but couldn't amass the typical, old-school down payment.

Lenders were supposed to lend according to credit-worthiness. Lenders still had to perform due diligence to make sure loans were payable. But there was no incentive because most lenders sell their loans, making more money. Lenders who don't hold the note don't care if their loans default. They still get their fees, regardless. Seller fees, not buyer fees. Lenders didn't care who they loaned to.

Since you can'[t just lend to BLACK subprimes, it opened up a whole can of worms...EVERYONE started getting loans thay shouldn't have gotten. Because the governments said LOAN TO THE POOR.

Wrong and wronger. The bust had nothing to do with 12% of the country. Sub-prime was the trash that lending institutions devised when their lending standards were relaxed by bank execs. Gov didn't say, "make loans that people can't pay back." Gov said, "don't discriminate" and "relax or wave down payments if the borrower can make the monthly mortgage payment." It's up to the banks to determine whether terms can be met, not gov.

Yes...AIG worked with the government who GUARANTEED those loans.

Wrongest. AIG sold insurance policies on CDOs (for profit.) They sold so many they didn't have the necessary collateral to pay out. Gov had to make some loans good to protect the banking system. Lots of individuals, groups and municipalities lost money.

Get a newspaper, read it. Do it daily. Stop watching and listening to crap journalism.

There was no guarantee from government. CDO buyers knew they had a win/win scenario. Their (AIG) insurance paid off when their CDOs didn't, at least until the housing bust

THAT is why they WERE A+. The banks gave away money like candy with government blessing.

Wrong. Banks, in cooperation with ratings agencies like Moody, packaged loans containing a small percentage of AAA-worthy notes and a large percentage of junk. Ratings agencies then gave these junk packages their AAA blessing, based only on that small percentage of worthy loan(s).

Don't you remember the ratings-agency fluff to determine whether banks bought off the ratings agencies?

Banks were COMPLETELY absolved from anything to do with those mortgage securities.

You're poorly informed. Gov didn't guarantee squat. That's why Paulsen and Bush feverishly pleaded with Congress to bail out the players that lost. Do you remember Bush telling us we had to prevent financial abyss? Some members of Congress actually voted no to the 2008 Wall Street bailouts. Not all banks won. Lehman Brothers was shorted into bankruptcy to make bigger winners. But lots of losers permeated the deal, making it a win/lose situation.

Doesn't sound like SOME banks were absolved of anything until after-the-fact.

The Constitution REQUIRED a natural born citizen...is it so fucking hard than to put it on fucking TV so was can ALL see it? You distrust government...yet you believe them when they tell you they "saw it"?

Wrong and birther are no way to grow old, ibj. The Constitution doesn't require the State to make public what the State considers private information. The previous administration's State Department and the FBI vetted full security clearance, including citizenship.

The Constitution makes no distinction on how states choose to distribute what they consider private information on official, state documents.

You distrust government. You wouldn't cut the crap if you saw what you want to see with your own eyes. You'd simply move to the next "prove to me what I choose not to believe."

He came here to help already rich people grow richer...

Sounds like the last guy. Tax cuts for the rich, anyone?

Not to "dis" you...but you along with most people here are ignorant. A corporation IS A PERSON...the Supreme Court said so. They did that just so the rich and powerful WOULDN'T be held responsible for what they do!!!

Agreeing with you is like agreeing with Beck. It happens but not often.

You're a dreamer...good luck with that!

You're a pessimist.

 

[ODTreez]

Its all a product of corporations wanting to get higher profits.....prime example, WALMART.

 

[SpasticGramps]

It's an hour and a bit, but if you are interested in where the academic "pessimist" paradigm comes from it's respected historians such as Niall Ferguson (Cambridge and Oxford educated).

Probably one of the best academic explanations of what I believe is going on. He does discuss outsourcing the lecture as well as other pertinent subjects. He is the ying to Paul Krugman's yang. He does a great job outlining the Austrian vs Neo-Keyensian argument.

If you are versed in Nial Fergusons credentials you can skip the introduction. If not I would recommend smoking a bowl and listening the whole thing. I would recommend this as a must see.

Niall Ferguson: Empires on the Edge of Chaos FORATV

 

[DiscoBiscuit]

I'm not against educated pessimists...

Thanks for the link, Gramps. I'll give it a listen. I'm a social liberal but not necessarily in the Mario Cuomo economic sense. IMO, we can't give away the store to the poor any more than we can to the rich. There's a moral argument for society to assist the poor but I won't argue that here.

Whether they're liberal, conservative or politically middle-of-the-road, I tend to prefer economists that take history into account, not just economic philosophy alone.

 

[cashmunny]

Outsourcing is pure capitalism untempered my morality.

Also Niall Ferguson is a historian. Paul Krugman won the Nobel prize in economics. Two different animals. Do you go to a proctologist for a root canal? Both professions have their place but you don't want the former guy's hands in your mouth do you?

Providing jobs for people is not the goal of capitalism. The primary goal of capitalism is profit...and growing profits at that. Worker pay is an obstacle to profit. Why do you think slavery was so popular? The goal of the worker and the goal of the company are fundamentally at odds in this sense.

Gandhi's seven deadly social sins


Wealth Without Work

Pleasure Without Conscience

Knowledge Without Character

Commerce (Business) Without Morality (Ethics)

Science Without Humanity

Religion Without Sacrifice

Politics Without Principle

Frontline did an interesting special on Wal-Mart a while back. You can find it on youtube. Wal-Mart is the worlds largest company. If you are a business you cream your shorts at the thought of selling to Wal-Mart because your product can be seen and purchased by millions of people. But that exposure comes at a price. Wal-Mart is so large that they can dictate the prices they pay to their suppliers. And their dictated prices are so low that they are below the cost of suppliers who use American workers. So if you are a business, you can either lose out on the largest retail marketplace in the world and thus hand your competitor a gigantic gift with a bow on top. Or you can ship your manufacturing overseas to cut the cost to what Wal-Mart demands. And if you don't outsource to China you'll be out of business in short order because this is amoral capitalism and if you don't jump at the opportunity someone else will.

And why does Wal-Mart engage in such cut throat behavior? Because they are in competition with other businesses for customers and low prices attract customers and low prices are what has made them the largest company in the world. They aren't some Stalin-esque authoritarian regime telling people you must buy from us. Wal-Mart was voted into office, the people voted with their feet and their dollars. They are in the business of making profits for their shareholders not making jobs for Americans. And if they can sell a pair of jeans for $10 that cost $1 from China versus selling an American made pair that cost $9, which makes more profit? Which returns more stock price growth and more dividend growth?


And they basically drove Rubbermaid out of business. Even though the brand still exists, it's not the same company. They were dismantled and sold. The injection molding equipment for all those plastic tubs we all love to use for reservoirs...sold to a Chinese company for about $800K

It's easy to blame Wal-Mart. But really they are just responding to consumer pressure for low prices. We can all thank China for the fact that we enjoy sub $1000 gigantic flat screen TVs. Low prices are a good thing, but not the only thing.

In my mind, when one steps back and looks at the big picture, what is happening is this: High paying manufacturing jobs in America are gone for good and with that comes lower living standards. One car rather than two. A used car rather than a new car. Tofu instead of beef. Renting rather than owning. Working in old age versus retiring. And people will rightly bitch and complain. But it's not all bad, there is a hidden unquantifiable upside. While American and Western living standards are falling, third world living standards are improving. Improving the economies and the standards of living of the third world benefits us all. Those countries become more stable. There is less war, less poverty, less famine. You want to see a revolution in the making, look around the world for a lot of unemployed men. And I'm not talking about US unemployment rates of 10-20%, I'm talking about families starving to DEATH because the crops failed and there are no jobs. If you were in the situtation wouldn't you take a pitchfork and head to the nations capitol ? China is in that situation. Their agricultural sector is modernizing, it is becoming less labor intensive. There are millions of men being displaced from farming and heading to the cities for work. They need jobs. China HAS to grow their economy or the government will fall. I mean they aren't going to win a popularity contest based on their human rights record. But if people can feed their families they will put up with a lot.

Fortunately or unfortunately, in capitalism a company is responsible to it's shareholders first and foremost. Therefore you do what it takes to grow sales, earnings, and profits because that is what pays and grows your shareholder's dividends. Workers are a means to that end. The jobs and benefits you provide for them are incidental and are actually COSTS which drive down your profits and subtract from your primary goal of providing shareholder value.

I don't like it, but what's the answer? I don't know. You can't regulate morality. People will always act in their economic short term interest, meaning they will choose the store, the product with the lowest price.

In my mind the problem is not Wal-Mart or outsourcing or China. The problems are:

1)A short term focus on quarterly earnings growth on Wall Street.
2)A short term focus on low price among American consumers.
3)The lack of morality of the unrestricted free market.

lastly, and in mind the thing that makes me despair the most

4)A capitalistic model based on growing consumption is eventually doomed to fail on a planet with finite resources.

We human beings arrived at this point, the most successful sentient beings the world has ever seen, through evolution. And capitalism reminds me of evolution; completely amoral and survival of the fittest. There are however plenty of examples from biology of populations which have become so successful they exceeded the capacity of the environment to sustain them and thereby all perished.

Human beings are pretty smart though, we can solve almost any problem if we have the will and consensus to do it. As a species I'd give us a good 50-50 shot at long term survival. But then again I'm an optimist.

 

[SpasticGramps]

Outsourcing is pure capitalism untempered my morality.

Also Niall Ferguson is a historian. Paul Krugman won the Nobel prize in economics.

Yes, Neill is a historian. He is able to look outside of the philosophical cage that some economic models lock us into and see the bigger picture. I think that is important when looking at the world as a whole and realist determinations. Economic cycles happen in the larger historical framework. Not the other way around. BTW, Keynes would not support our current fiscal policy. This can only be labeled Neo-Keynesian.

He also isn't part of the establishment complex that has fucked us for so long like Krugman is. Writing a column in the New York Times implies an agenda to me. He makes a lot of money peddling his Neo-Keyensian beliefs.

 

[cashmunny]

I read a transcript of a lecture given by Niall Fergusson in Washington DC. He made an interesting point that historically speaking there is no correlation between sovereign default and debt/GDP or deficit/GDP ratios. None. What does appear to be a significant risk factor for default is when the proportion of government revenue that goes towards servicing the interest on existing debt exceeds a certain fraction. He suggested 20% as the tipping point. If that's the case we as a country have a ways to go before we are at risk because US treasuries are still regarded as "safe haven" investments and rewarded accordingly with low interest rates.

Interestingly enough at that same lecture was present a member of the Rothschild family, as in the Rothschild banking empire. I think that when you have a Rothschild in the audience, you've become a member of the establishment.

 

[SpasticGramps]

He suggested 20% as the tipping point. If that's the case we as a country have a ways to go before we are at risk because US treasuries are still regarded as "safe haven" investments and rewarded accordingly with low interest rates.

Interestingly enough at that same lecture was present a member of the Rothschild family, as in the Rothschild banking empire. I think that when you have a Rothschild in the audience, you've become a member of the establishment.

I'd recommend you watch his whole lecture. I forgot what year he said that we will reach above 20%, but I bet it's a lot closer than you are thinking. The dynamics have changed significantly in the last couple of years.

Interesting and valid point about the Rothschilds.

 

[DiscoBiscuit]

... Niall Ferguson is a historian. Paul Krugman won the Nobel prize in economics. Two different animals. Do you go to a proctologist for a root canal? Both professions have their place but you don't want the former guy's hands in your mouth do you?

No and no. History is a dynamic aspect of economics because the pros and cons of respective economic policy reflect the present. If only after the fact, Ferguson understands and explains historic, economic indicators and their consequences.

Those who fail to learn from history are doomed to repeat it. This happens with economic policy quite regularly.

As Ferguson stated, Krugman won his Nobel in economics for trade negotiations, not economic policy. One can argue that an expert trade negotiator can influence sound economic policy. Volker is arguably the sound fiscal guru with economic policy. But he's a cock block with the younger crowd that thinks we can spend ourselves to oblivion, then grow our way out.

 

[SpasticGramps]

Also, bond vigilantes would disagree with your sentiment about Treasuries being a safe haven.

Bill Gross the CEO of PIMCO. The largest bond fund in the world was on Bloomberg the other day saying it would be wise to get out of dollar denominated assets. Bonds and currency. That's not good news.

For your viewing pleasure.

Bill Gross Telling Bloomberg To "Avoid Dollar Denominated Government Debt"


Sorry off topic.

Outsourcing blows.

 

[smokefrogg]

it means microsoft paid tech support deletes exchange email inboxes FOR us, they then delete user profiles FOR us, we then hang up on their dumb asses and kick them out of the remote session and begin restoring everything from backups thus keeping me there till fricking midnight when the job should've been done 5 hours ago!