So, protectionism is a harmful economic policy?

[LJ_Reloaded]

Tell that to China's workers, who are now getting a 24% pay raise.

Wouldn't you like a 24% pay raise instead of 24% U6 unemployment?

http://www.businessweek.com/news/20...nals-honda-offer-tip-of-iceberg-update1-.html

China Jobs Gain Signals Honda Offer ‘Tip’ of Iceberg (Update1)
June 01, 2010, 9:05 PM EDT

(Updates with Foxconn, Honda statements in eighth and ninth paragraphs.)

June 2 (Bloomberg) -- China’s manufacturing job growth accelerated to the fastest pace in at least five years in the past three months, signaling more employers may be forced to follow Honda Motor Co. in offering higher wages.

The Federation of Logistics and Purchasing said yesterday in Beijing its average factory employment index for the past three months reached 52.7 even as its measure for manufacturing growth slid. The release came a day after Tokyo-based Honda offered a 24 percent pay increase to workers at a factory in the aftermath of a strike that shut down its Chinese production.

Faster job growth and higher wages will help Premier Wen Jiabao’s government rebalance the world’s third-largest economy away from export dependence. The shift may also stoke inflation, making it more important that officials contain prices in part by ending China’s currency peg to the dollar, said Peng Wensheng, head of China research at Barclays Capital.

 

[rgraham666]

Yes, and no.

Protectionism can make businesses lazy and less creative if they are protected from competition. This results in poorer products that cost more to manufacture as well as depressing wages and demand.

On the other hand product dumping is highly unethical and results in oligopolies and job loss.

Open markets can also result in making businesses lazy and less creative. It becomes more profitable to ship jobs to cheaper wage areas so they don't spend time worrying about making better products that cost less to make and provide more value.

Balance, as always, is best.

 

[JAMESBJOHNSON]

Unrestricted trade is always a race to the bottom of poverty. Free trade works best when one nation exchanges, say, its steel or lumber or oil for what it does not have, say, bananas or lobsters or tea.

But when a nation like, say, Vietnam makes our clothing what gets left out of the bargain is our costs for civilization. In Vietnam no one gets free schooling or pensions or Medicaid or potable water, etc., so Vietnamese pay miniscule taxes and work for Pennies. They work to eat, and sleep under bridges.

Thats not the case here. When a textile mill moves to Vietnam from North Carolina the shareholders immediately cease paying taxes and benefits but now sell $10 suits for $400 in North Carolina.

 

[PhaonsBrother]

Protectionism built America. 1817-1862 the country was built on obscene tariffs. In a global economy protectionism is harmful. China will learn quick when the factories move down to Southeast Asia.

 

[LJ_Reloaded]

Protectionism built America. 1817-1862 the country was built on obscene tariffs. In a global economy protectionism is harmful. China will learn quick when the factories move down to Southeast Asia.

And what good is that when the Southeast Asian factories face a monstrous import tariff in order to participate in the 1.x billion person Chinese market? They won't be able to compete with the prices of domestic-made products.

Endgame.

 

[TE999]

A cheap and plentiful supply of skilled or teachable labor coupled with no or low taxes will attract manufacturers to any country like an open can of Coke attracts Yellow Jackets.

Government Motors and Chrysler Corp. (now FIAT/Chrysler) were partially bankrupted by acquiescing to exorbitant demands for pay and benefits from the UAW. Ford barely ducked the bullet by selling more trucks than anyone else.

Foreign companies locate in the US because our labor is cheaper than that at home...they don't unionize either. Our taxes are also significantly lower.

US protectionism sowed the seeds of WWII by instigating a global recession.

If you want to buy a shirt in Wal-Mart that costs you $35.00 instead of $10.00...institute tariffs and protectionism. Works every time.

 

[LJ_Reloaded]

A cheap and plentiful supply of skilled or teachable labor coupled with no or low taxes will attract manufacturers to any country like an open can of Coke attracts Yellow Jackets.

Government Motors and Chrysler Corp. (now FIAT/Chrysler) were partially bankrupted by acquiescing to exorbitant demands for pay and benefits from the UAW. Ford barely ducked the bullet by selling more trucks than anyone else.

As usual you intentionally try to fool people by leaving out the exorbitant salaries of corporate upper management. The Big Three automakers went bankrupt for one major reason: no one wanted their cars. Why? Japan produced cars with higher gas mileage, and superior parts, while the Big Three imported inferior parts from cheap labor countries. Their cars fell apart not because of Unions, but because of sheer Corporate design. Their cars guzzled gasoline not because of Unions, but because of sheer Corporate design.


China is winning this trade war because of insanely lower wages. They're winning because they have no pollution or workplace safety laws. If you got rid of the union wages and benefits from Ford, Chrysler and GM, they would still lose to China as soon as China gets into the market.

Foreign companies locate in the US because our labor is cheaper than that at home...they don't unionize either. Our taxes are also significantly lower.

Uh, which foreign companies do that?
And how many jobs come here, versus jobs that leave?

US protectionism sowed the seeds of WWII by instigating a global recession.

And if we don't go back to protectionism, we will be owned by China.

I'd rather have a war than have China taking over.

If you want to buy a shirt in Wal-Mart that costs you $35.00 instead of $10.00...institute tariffs and protectionism. Works every time.

Here are questions that no one ever answers:
1) What good is a $10.00 shirt if you have no job?
2) Why can't you put it on layaway?

History has just shown you the folly of your reasoning.
People have been forced to put $10.00 shirts on credit because they have less income. Now they have nothing at all because they have no credit, and no job.

Look at China's protectionism. 24% wage increases for their workers. It speaks for itself.

If you want wage increases and not 10% unemployment, institute protectionism. Results over ideology.

 

[Epmd607]

And what good is that when the Southeast Asian factories face a monstrous import tariff in order to participate in the 1.x billion person Chinese market? They won't be able to compete with the prices of domestic-made products.

Endgame.

This isn't a 'what if'. Vietnam and Thailand are already getting international factories from China due to the rising cost of labour in China.

 

[JAMESBJOHNSON]

Not true.

Read THE RECKONING by David Halberstam.

Americans love land yachts. They want land yachts but they cant afford to drive them when gas prices rise. They want small cars just like they wanna drink water.

 

[LJ_Reloaded]

This isn't a 'what if'. Vietnam and Thailand are already getting international factories from China due to the rising cost of labour in China.

Fat lot of bad news that is when Chinese workers are getting 24% raises.

Betcha China will raise import tariffs when Vietnam and Thailand start becoming a problem. And what will they do to China? Invade? Attack their Pearl Harbor equivalent?

Read the article - China is trying to move away from dependence on exports. If their plan comes to fruition they can block trade with SE Asia and keep on trucking... I mean, really. A market with one and a half (officially speaking) BILLION people? Everyone is going to want to bend over to get access to that.

YES, there are factories opening up in Thailand and Vietnam. But no, they won't make much of an impact. Not as long as China keeps its tariffs up.

Not true.

Read THE RECKONING by David Halberstam.

Americans love land yachts. They want land yachts but they cant afford to drive them when gas prices rise. They want small cars just like they wanna drink water.

What I read is the auto sales. Sagging land yacht sales sank the Big Three. History trumps books.

If you disagree with me, feel free to discuss the fate of Hummer.

 

[stephen55]

Look at China's protectionism. 24% wage increases for their workers. It speaks for itself.

No, no, and no....

The (one) Honda plant in China (of several), which is a parts factory, agreed to a 24% wage increase to end a strike brought about by worker dissatisfaction over appallingly low wages. Because so many workers were putting in excessive overtime to make ends meet, many were getting burned out emotionally and there had been a series of suicides amongst the workers. Management saw the light and kept it's workforce by upping wages to a level where they would go back to work (as opposed to going back to work somewhere else).

One foreign owned car parts factory ups wages to keep workers alive. That's not Chinese government economic protectionism. Most factory workers in China are still working for low wages. What this says is that Honda, a Japanese company, would rather sell cars at a slightly lower profit than not sell cars.

 

[cowslinger64]

As usual you intentionally try to fool people by leaving out the exorbitant salaries of corporate upper management. The Big Three automakers went bankrupt for one major reason: no one wanted their cars. Why? Japan produced cars with higher gas mileage, and superior parts, while the Big Three imported inferior parts from cheap labor countries. Their cars fell apart not because of Unions, but because of sheer Corporate design. Their cars guzzled gasoline not because of Unions, but because of sheer Corporate design.





Your post was well said.

Something that rarely gets brought up is high upper management salaries. It's easy to blame the unions for creating this problem, but most of them were making 25 bucks an hour, plus benefits. Jack Smith alone a got 225 Million dollar golden parachute. Where's the outrage for that?

The guy that helped run Home Depot into the ground, got a 125 million dollar giveaway, and got to be in charge of Chrysler not long after.

The fact is, jobs like those lineman get in those factories, are what sustain this country. It's people like that, that are out buying things. Houses, cars, motorcycles, atvs, they eat out, go to see concerts, sporting events...they drive the economy. It sure isn't people making minimum wage, and sure isn't people like Jack Smith or the like.

We should have protected our borders years ago, instead it's been a race to the bottom for the American worker. Free trade is just another way of saying for the middle class to bend over. We'll never be able to compete with a guy making 5 bucks a day, nor should we have to.

The ignorance posted about unions, is quite appalling.

 

[Epmd607]

Yeah, it's genius, unions destroyed America...or built America and enabled the most expansive creation of wealth and prosperity in history. Also, Mexicans steal jobs, that's why factory work is now sent to China. Oh, those Evil Wet Backs!

 

[colddiesel]

A cheap and plentiful supply of skilled or teachable labor coupled with no or low taxes will attract manufacturers to any country like an open can of Coke attracts Yellow Jackets.

Foreign companies locate in the US because our labor is cheaper than that at home...they don't unionize either. Our taxes are also significantly lower.
)

BP employs 30,000 Americans. Maybe they could be asked to drill a few more holes.

 

[Katyusha]

Foreign companies locate in the US because our labor is cheaper than that at home...they don't unionize either. Our taxes are also significantly lower.

No they don't. They locate in the U.S. because it's cheaper than paying shipping costs and tariffs.

 

[TE999]

Cussing the corporation and lionizing the workers is an old and overworked sentiment. If it wasn't for people with the brains and initiative to start companies the workers wouldn't have a job. No one, not even CEO's, are infallible, but damn few workers could manage a multi-billion dollar corporation...if they could, they wouldn't be wage slaves.

Unions have long since served their initial purpose; improving working conditions and guaranteeing equitable pay for work performed...now they're into politics and attempting to get higher wages and benefits for less work performed, which is why jobs are continually going overseas.

The last thing this countries' economy needs is protectionist legislation and a trade war...we import more than we export...foreign governments hold title to the US through purchases of government bonds...we have an increasing debt spiraling upward...this is an excellent time to raise taxes, institute tariffs and adopt a VAT system.

 

[voluptuary_manque]

Loss of manufacturing jobs in the US is partly shipping the jobs overseas but also a lot of automation. The factories the move here (like Mercedes Benz) do so because the wage costs are indeed less here, especially down South where these plants are built. Non-union areas, those, but the workers are well paid enough that the UAW can't get any interest from them. Anti-union laws do help but they're not the whole answer. However, look at the factories. They're all robotic. The old view of an assembly line full of men turning wrenches is a daydream. They don't exist anymore. Heck, even the factories in China are being automated. Machines are cheaper than even the Chinese.

 

[Dragonlipz]

24% of very little is still 24% of very little......not that any republican cares about it....they enjoy a clear gap between rich and poor.....unless, of course, they are poor republicans who are also known as teabaggers......

 

[LJ_Reloaded]

Cussing the corporation and lionizing the workers is an old and overworked sentiment. If it wasn't for people with the brains and initiative to start companies the workers wouldn't have a job. No one, not even CEO's, are infallible, but damn few workers could manage a multi-billion dollar corporation...if they could, they wouldn't be wage slaves.

Wrong again. The "people with the brains and initiative to start companies" are utterly meaningless when the workers have no money to buy their products.

Haven't you been watching this whole recession thing? It started because people started not having money. That's what brought down Lehman Brothers: lack of money on the consumer side.

You have to realize that there is almost a perfect intersect between workers and consumers. You squeeze the workers, then the workers have less cash, and when that happens, the "people with the brains and initiative to start companies" won't have a job. Fact of history. That fact has played itself out exactly in that fashion over the last 2 years.

Unions have long since served their initial purpose; improving working conditions and guaranteeing equitable pay for work performed...now they're into politics and attempting to get higher wages and benefits for less work performed, which is why jobs are continually going overseas.

But what about the CEOs who are running their company into the ground and who demand multi million dollar salaries?

We keep pointing this out and you keep running away from it.

The last thing this countries' economy needs is protectionist legislation and a trade war...we import more than we export...foreign governments hold title to the US through purchases of government bonds...we have an increasing debt spiraling upward...this is an excellent time to raise taxes, institute tariffs and adopt a VAT system.

We need a trade war. Countries depend on us for their export dollars. We can leverage this to hold them by the balls.

If you think that free trade is going to save us from the coming selloff of Government bonds, you're crazy. China is going to sell them off regardless. It's coming. Our debt will be called in.

The question is, do you want to face that day on your feet, standing up for America's working class, or do you want to face it on your knees, with Government service cuts and starving masses engaging in bloody riots?

You have 6 million LONG TERM unemployed Americans out there, man. People who will soon lose their unemployment benefits in a time where 6 workers are competing for every 1 existing job. That's a lot of people who will die or become homeless. A lot of riots. A whole lot of unrest. Such as the likes of which you have not ever seen before.

Why the fuck do I care about avoiding a trade war when a lack of tariffs is going to cause a war at home?

 

[JAMESBJOHNSON]

There wont be any trade war because America's manufacturing sector shrinks every day, and American consumers have less money to spend every day. You cant fight a trade war without money and stuff to sell.

And when a nation has no cash and no manufacturing its people must improvise and innovate or do without. That is, when your economic system fails one of two things happens: Free enterprise germinates in the debris or you starve.

The conflict I foresee is a struggle between free enterprise and American government sponsored industries (cartels and monopolies).

 

[LJ_Reloaded]

There wont be any trade war because America's manufacturing sector shrinks every day, and American consumers have less money to spend every day. You cant fight a trade war without money and stuff to sell.

Sure you can. You can move manufacturing back home and put a bunch of $30/hour workers back on the assembly line. They'll certainly buy stuff.

And when a nation has no cash and no manufacturing its people must improvise and innovate or do without. That is, when your economic system fails one of two things happens: Free enterprise germinates in the debris or you starve.

Or riots and a civil war happens.

 

[Loring2]

Yes

Look at China's protectionism. 24% wage increases for their workers. It speaks for itself.

No, no, and no....

The (one) Honda plant in China (of several), which is a parts factory, agreed to a 24% wage increase to end a strike brought about by worker dissatisfaction over appallingly low wages. Because so many workers were putting in excessive overtime to make ends meet, many were getting burned out emotionally and there had been a series of suicides amongst the workers. Management saw the light and kept it's workforce by upping wages to a level where they would go back to work (as opposed to going back to work somewhere else).

One foreign owned car parts factory ups wages to keep workers alive. That's not Chinese government economic protectionism. Most factory workers in China are still working for low wages. What this says is that Honda, a Japanese company, would rather sell cars at a slightly lower profit than not sell cars.

You are precisely correct and your last sentence;"What this says is that Honda, a Japanese company, would rather sell cars at a slightly lower profit than not sell cars." tells the story of the Chinese Government's concession to good economic sense as well.

This is Capitalism, Beijing style because they did approve.

 

[Loring2]

Yes JBJ

There wont be any trade war because America's manufacturing sector shrinks every day, and American consumers have less money to spend every day. You cant fight a trade war without money and stuff to sell.

And when a nation has no cash and no manufacturing its people must improvise and innovate or do without. That is, when your economic system fails one of two things happens: Free enterprise germinates in the debris or you starve.

The conflict I foresee is a struggle between free enterprise and American government sponsored industries (cartels and monopolies).

I think your conlusion is inevitably correct JB; It's to bad that the crises(sic) are being put off. Political band aids on economies are simply not viable any more than real band aids can successfully stanch the flow of blood from a throat which was cut from ear to ear.

 

[JAMESBJOHNSON]

Sure you can. You can move manufacturing back home and put a bunch of $30/hour workers back on the assembly line. They'll certainly buy stuff.


Or riots and a civil war happens.

The only universal human traits are navels and cowardice. Riots and civil war never improve the prospects of communities cuz nearly everyone is a coward; civil wars trade one yoke for another. The Amish come about as close to real freedom as anyone gets, and the Feds cant stand it.

 

[JAMESBJOHNSON]

I think your conlusion is inevitably correct JB; It's to bad that the crises(sic) are being put off. Political band aids on economies are simply not viable any more than real band aids can successfully stanch the flow of blood from a throat which was cut from ear to ear.

I read today how the government harasses the Amish over a way of life free of government handouts and commercial beads & blankets. Theyre virtuallly self sufficient and take care of each other. Not good!