Offshoring - the snake that is eating itself.

[Trom]

@Le_Jacquelope

Since certain folks here are bent on citing the support of “90% of economists” in favor of offshoring, let’s show what the public thinks of it.

Poll shows support for offshoring tax - CNET

(Excerpt)

Yet the poll’s respondents show a clear split over the proper role of government in offshore outsourcing. More than 45 percent believe that Uncle Sam should not play any direct role, while nearly 47 percent believe that the government should protect U.S. jobs from moving outside the country.

Moreover, respondents do not necessarily believe that it is good for the United States: 63 percent indicate that the exportation of technology jobs threatens the long-term technology leadership of the United States. A little more than 22 percent disagree, while the remainder have no opinion.

“It’s more complex of an issue than the way it’s often portrayed. Most people would tell you that it really isn’t just a cost issue–it’s never just a cost issue,” said former Republican Congressman Rick White, now head of the bipartisan industry lobbying group TechNet. “You would never offshore unless you could get at least the same kind of quality, and even then, you wouldn’t do it unless you were sure you could protect your intellectual property, to make sure it wouldn’t be used against you in competition overseas.”

More than 45 percent do not believe that offshore outsourcing brings benefits to American consumers, compared to more than 33 percent who say it does. The rest are undecided.

Skepticism over offshoring is further reflected in responses on the presidential race. More than 62 percent indicate that they would not vote for a presidential candidate who supports foreign outsourcing, compared to almost 38 percent who indicate that they would. Even among executives, opposition to a pro-offshore outsourcing candidate remained relatively strong, with a margin of 58 percent to 42 percent.

So you guys who say my arguments are crap… take notice. 62% of Americans would not vote for a Presidential candidate that supports offshoring.

62% is a LOT of people to be calling idiots.

Only 40% of Americans believe in evolution.

I trust I don’t have to flesh this out further.

[treis]

@Le_Jacquelope

Your $2000 car? It’s about $17k in adjusted dollars.

But in actuality the average car was $3000 more than that by 1995. I cited that for you.

People are richer and now spend more on average for cars. I wonder if these two facts could possibly be related.

[Le_Jacquelope]

@RickJay

@Le_Jacquelope

I guess you haven’t heard of the term ‘Fordism’, have you?

Yes I have. The fact remains that Henry Ford raised wages to reduce turnover, and said so himself. That is established and well-cited fact. If you don’t want to accept it, I can’t force you to accept a fact.

There you go again, intentionally misinterpreting what I said.
More than once I have acknowledged that he said he raised wages to reduce turnover. I am not denying that. But that is not the only reason.

They can take pride in whatever they like, but the fact is they are famously inaccurate, dishonest, and their crap is full of religious nonsense.

They’re far from the only source citing that Henry Ford raised wages AND lowered the price of his car not only to stop worker turnover but also to enable his workers to buy his cars.

Are you now seriously arguing that cars in 1959 were better than cars today? Honestly, are you completely divorced from reality?

No, I’m not arguing that. You should have figured that much when I brought up my aging electric SUV. I was being facetious. You’re getting your panties in a bunch.

If they sold a car new today that was just like a car from 1959 I wouldn’t accept it as a gift, much less pay for it. They were hideously unsafe, had the fuel efficiency and engine response of a cargo ship, had few options or comforts, and the best of them would have been considered a colossal lemon by modern standards. They didn’t last as long, either.

Yes, we all know that.

I used 1995 prices for cars because that was the last year I could find them, and then speculated that 2005+ average prices were higher. You don’t even want to know what gasoline was in or after 2005.

Then you should have used consistent years for price comparisons.

If I had 2005 car price figures I’d have used them. I did search.

As to what gasoline prices have been recently, I provided a cite for you. **2005 gasoline prices were the same as 1959, about $2.50 in today’s dollars. ** As you can clearly see they spiked in mid 2008 but then plummeted to well under $2 a gallon and have settled back to levels essentially the same as the historical average, which is what they’ve always done. The overall trend for gasoline prices has been flat for eighty or ninety years; they vary up and down depending on the latest politics but overall have never gone up for an extended period of time.

Actually the spike started in 2006. Mid-2008 was the climax.

[Damuri_Ajashi]

@RickJay

@Le_Jacquelope

GDP? Is that all you’ve got? GDP is not the same was wages or standard of living. China is now the world’s SECOND largest economy. Or did you miss that fact, too?

Did you miss the fact that they have four times as many people?

The Chinese are, by American standards, amazingly poor.

We didn’t have much offshoring in the 1950s and only one worker was needed to finance a house and a car.

That’s because houses were much smaller and not as well appointed and, to be honest, many Americans still couldn’t afford them; “Leave it to Beaver” was not a representative example of American life at the time.

In 1955 the average American made, in inflation-adjusted dollars, about $26,000. Today the average American makes about $42,000. People were not better off in the 50s.

Yeah, there are entire neighborhoods of post war 3 bedroom 900 square foot homes around here. They had bigger plots of land tho.

[Damuri_Ajashi]

@Le_Jacquelope

@penultima_thule

Peg the USD against what? Gold?

“What gives China the right to do things we can’t?”
Well you can, but self interest and the example of Smoot Hawley would suggest you’re a whole lot better off not doing that.

Obviously China is proving that Smoot Hawley does not apply in this situation. I mean, really, it’s right there in our faces: China’s economy is growing by leaps and bounds because of or in spite of their Government subsidies and import tariffs.

I’m sure you understand the difference between China’s trade barriers and what happened with Smoot-Hawley, right?

Self interest says we should raise tariffs against China to bring those manufacturing jobs back. The current solution is not working. Free trade is not working. Why must we continue on with what does not work?

Smoot Hawley effects only come into play if there is in fact retailation. if I erect trade barriers and the suckers decide that free trade is too important to reciprocate then i get all my goodies and everyone else can suck my eggs. Only the credible threat of reciprocation can make China change its mind.

[Damuri_Ajashi]

@even_sven

Americans- even poor Americans- are lightyears better off than your average Chinese person.

For example, let’s look at Chinese college students. I taught what would be the equivalent of a low-ranked state school. Most of my students were the children of farmers or factory workers. I think it is pretty representative of your average Chinese college experience outside of the elites.

Students in my college slept 6 people per a dormitory. They did not have hot water or showers in their dorm buildings- once a week they would go to the public shower to wash their hair. They washed their clothes by hand, hanging them to dry. It wasn’t too big of a burden because most students only had a few changes of clothes. No students had a car. Indeed, few professors did. Only one or two of my students had ever been on an airplane, and the vast majority had never been outside of their home city. The few students with computers became very popular, but most students relied on public internet cafes. Students did not generally go to restaurants or bars, although for a treat they might grab some street food once in a while. Many of my students would save money by eating vegetarian food, although all expressed a desire to eat meat every day. On breaks, most students helped their parents farm.

China is growing so fast because they have a long ways to go, and a lot of people are suddenly able to afford basic consumer goods. China’s large working population and a huge injection of cash coming from privatizing formally public lands is fueling a lot of their growth.

I have no problem with China growing, its inevitable. I have a problem with China accelerating its growth at our expense using unfair trade practices.

[Damuri_Ajashi]

@Le_Jacquelope

@even_sven

Americans- even poor Americans- are lightyears better off than your average Chinese person.

Not the unemployed, who are earning $0. At least Chinese farmers have their food covered.

For example, let’s look at Chinese college students. I taught what would be the equivalent of a low-ranked state school. Most of my students were the children of farmers or factory workers. I think it is pretty representative of your average Chinese college experience outside of the elites.

Students in my college slept 6 people per a dormitory. They did not have hot water or showers in their dorm buildings- once a week they would go to the public shower to wash their hair.

Great deal… they can at least afford college. This is falling out of the reach of more and more Americans at a time when a college education is starting to make the difference between a job as a receptionist and unemployment.

I don’t think you understand the sort of sacrifices these folks are making to send their kids to college. In China, a college education can mean the difference between being able to aprticipate in the new economy and being stuck on the farm pulling rice.

[Damuri_Ajashi]

@John_Mace

@BrightNShiny

I definitely feel for the Chinese, but their own currency peg artificially lowers their living standards. It’s in your students’ interests to get rid of the currency peg.

So, what would happen to our standard of living if we negated that artificially low pegging of their currency by imposing tariffs?

We would export more, import less and pay slightly more for stuff made in China while corporations tightened their profit margins.

[Damuri_Ajashi]

@even_sven

The truth is, we all benefit from trade with China.

Tell that to the unemployed folks who had their jobs shipped to China.

[Damuri_Ajashi]

@xtisme

No…they aren’t. You are wrong. China isn’t competing for US manufacturing jobs, since the only way we could compete with China on a price basis for those manufacturing sectors would be through heavy (and capital intensive) automation. We COULD make most of the stuff currently being made in China and imported to the US, but if we did they would cost more, and all those jobs wouldn’t be coming back to the US…instead, we’d be using robots to make them (which would be a boom for the robotics and maintenance guys, but wouldn’t be bringing home to blue collar bacon you seem to be wishing for).

Its not jobs, its economic growth. At the margins a floating RMB will close teh current account deficit and result in more exports from us as our goods become cheaper and fewer imports from China as their goods ebcome more expensive. We won’t suddenly be manufacturing cheap plastic toys in Indiana but we will be importing fewer of them and selling more American goods to China. that means we will need mroe people to make whatever it is that China wants to buy with their more valuable currency.

[Damuri_Ajashi]

@Baboonanza

But this is not inevitable. America can still retain properity for itself, though it’s almost certain that it’s previous dominance is at an end. But protectionist policies won’t save you, at best they will provide a temporary illusion of strength before an inevitable and greater collapse.

I don’t think its at an end. I think that we are in a transition period but that transition is more painful than it ought to be because of the unfair practices of China.

[Damuri_Ajashi]

@Le_Jacquelope

@xtisme

The economy that’s in a recession? That one? The one we aren’t out of yet?

Exactly. THAT ONE. The one we wouldn’t be in if it weren’t for offshoring.

Whoa wait a minute. You’ve said a few things that I didn’t agree with but your point about China’s unfair trade pracitces were close enough that I didn’t really bother disagreeing with you but this recession was not caused by China (the piss poor recovery mgiht be their fault but not the recession). The recession should be blamed on the Republicans.

I’d like to see a comet hit China. I hate that country. I despise it. I despise them as much as I would have despised Nazi Germany.

WTF!!!

I’d be happy with them dropping the currency peg.

[Le_Jacquelope]

@Damuri_Ajashi

@Le_Jacquelope

Exactly. THAT ONE. The one we wouldn’t be in if it weren’t for offshoring.

Whoa wait a minute. You’ve said a few things that I didn’t agree with but your point about China’s unfair trade pracitces were close enough that I didn’t really bother disagreeing with you but this recession was not caused by China (the piss poor recovery mgiht be their fault but not the recession). The recession should be blamed on the Republicans.

I blame it on both.

I’d like to see a comet hit China. I hate that country. I despise it. I despise them as much as I would have despised Nazi Germany.

WTF!!!

Ah, don’t get so wound up. It won’t even happen. Besides if it did we’d get the fallout. I was just riling these guys up. (Although it would cancel out a lot of global warming*)

I’d be happy with them dropping the currency peg.

I’m not happy with that. I want them to drop the currency peg, stop their One Child policy, I want their people to stop murdering their baby girls, I want China to become democratic, I want them to stop undercutting us with their nonexistent pollution laws, I want their pollution to stop crossing the ocean to poison us, I want them to stop producing toys that poison kids, I want their Chinese Drywall out of our houses, I want their cyber spies to stop messing with our military network, I want them to enact OSHA workplace safety laws,

I want them to come into the 21st century before I will accept trade with them.
Until then I will go absolutely out of my way in every way possible to avoid buying anything made in China. It may not be much, and I don’t have much of a choice when it comes to computer equipment, but I am well off enough that I can and will vote with my dollars. By God.

• Just kidding. I need to insert this now to prevent any more “WTF!!!”

[Marley23]

@Le_Jacquelope

I was just riling these guys up.

Le Jacquelope, your stay here is going to be a short one if you keep this up. Don’t say things “just to rile people up;” that’s trolling. Insulting other people and acting like a jerk does not make your arguments more effective or memorable. It makes it less likely anybody will take you seriously … except maybe the staff, who will see you as someone who needs to be pointed toward the exit. This is a formal warning not to do this again.

[RickJay]

Well, there we go.

[Le_Jacquelope]

@Marley23

@Le_Jacquelope

I was just riling these guys up.

Le Jacquelope, your stay here is going to be a short one if you keep this up. Don’t say things “just to rile people up;” that’s trolling. Insulting other people and acting like a jerk does not make your arguments more effective or memorable. It makes it less likely anybody will take you seriously … except maybe the staff, who will see you as someone who needs to be pointed toward the exit. This is a formal warning not to do this again.

I’ve had to put up with their insults and jerk behavior for far too long. At what point do you tell them to stop?

[John_Mace]

@Damuri_Ajashi

@John_Mace

So, what would happen to our standard of living if we negated that artificially low pegging of their currency by imposing tariffs?

We would export more, import less and pay slightly more for stuff made in China while corporations tightened their profit margins.

Why would we export more? We wouldn’t export more to China, would we? And our tariffs on Chinese goods isn’t going to make other countries buy more from us. would they? What am I missing?

And I’m not sure that corporations would tighten profit margins. That certainly is an option, but one that they will only employ as a last resort.

At any rate, I’m still not sure what your answer to my question is. Do the things that will happen result in a net increase or net decrease in our standard of living.? Because unless you can convince me that it will improve our standard of living, I don’t see the logic in punishing China on principal.

As noted earlier, since China and the US are both members of the WTO, the best way to deal with this issue is through the WTO. Acting unilaterally defeats the whole purpose of having an organization like the WTO in the first place. And if we can’t make our case to that governing body, then maybe we should consider that we don’t have a good enough case to make.

The countries that should be pissed at China are other low wage countries that actually compete for the same jobs that China has. We’re long past the point of competing for the low wage jobs China covets.

[Marley23]

@Le_Jacquelope

@Marley23

Le Jacquelope, your stay here is going to be a short one if you keep this up. Don’t say things “just to rile people up;” that’s trolling. Insulting other people and acting like a jerk does not make your arguments more effective or memorable. It makes it less likely anybody will take you seriously … except maybe the staff, who will see you as someone who needs to be pointed toward the exit. This is a formal warning not to do this again.

I’ve had to put up with their insults and jerk behavior for far too long. At what point do you tell them to stop?

Here’s what you do: read the rules, learn the way people post here, and let the moderators handle the other stuff. If you think someone else is breaking the rules, report it and let the moderators handle it.

[Damuri_Ajashi]

@John_Mace

@Damuri_Ajashi

We would export more, import less and pay slightly more for stuff made in China while corporations tightened their profit margins.

Why would we export more? We wouldn’t export more to China, would we? And our tariffs on Chinese goods isn’t going to make other countries buy more from us. would they? What am I missing?

I think all the changes would happen at the margins. Chinese goods would become relatibvely more expensive and ours would become relatively more affordable. We already export stuff to China, if their currency was more valuable, we would export even more as our stuff becme even more affordable and peplel would stop buying as much Chinese made stuff because it would be marginally more expensive. Am I missing something?

And I’m not sure that corporations would tighten profit margins. That certainly is an option, but one that they will only employ as a last resort.

When prices go up because of an increase in costs of production, profit margins generally go down (oil seems ot be the exception to this rule where cost of inputs go up and profit margins go up even more).

At any rate, I’m still not sure what your answer to my question is. Do the things that will happen result in a net increase or net decrease in our standard of living.? Because unless you can convince me that it will improve our standard of living, I don’t see the logic in punishing China on principal.

It is almost impossible to prove one way or the other but I do think it would increase our aggregate utility. A bunch of people would get jobs here and they would spend money here they didn’t have before and that would boost our economy and help everyone. Sure the prices on Chinese products would rise a little bit but the increased economic activity would improve our ability to earn the moeny to afford the price increase.

As noted earlier, since China and the US are both members of the WTO, the best way to deal with this issue is through the WTO. Acting unilaterally defeats the whole purpose of having an organization like the WTO in the first place. And if we can’t make our case to that governing body, then maybe we should consider that we don’t have a good enough case to make.

Yeah I agree that teh WTO should be the first step but is there ANY DOUBT that China is manipulating its currency? Part of me is just pisssed that our government is too chickenshit to call the Chinese on it.

The countries that should be pissed at China are other low wage countries that actually compete for the same jobs that China has. We’re long past the point of competing for the low wage jobs China covets.

They’re not just taking Sri l;ankan jobs, theya re taking US jobs as well, or have you been entirely ignoring the French guy.

[aruvqan]

@RickJay

We’ll have to do other things, as has always been the case. We found new jobs for switchboard operators. We found new jobs for chimney sweeps, whaling vessel operators, and typing pool workers. Economies change.

If you really think that what’s going to happen is that eventually 300,000,000 Americans are just going to sit around on their asses saying “Gosh, I can’t find any work,” you’re so far behind on the required reading here that I’m not sure where to start. We can only spend so much time knocking down absurdities, like your apparent belief that Chinese people are as rich as Americans, or that there is mass starvation in the United States.

Call center jobs are being sent to India, so where are all the now unemployed call center workers going to work?

Manufacturing is being sent offshore, so where are all the unemployed factory employees going to work?

Service sector, you say? When people don’t work, they don’t have the money to go out to eat, or get haircuts, or see movies, or go on vacation … they stay home and conserve their dwindling supply of money. They stop buying new clothes, books, appliances … they reduce what they buy as groceries, no more luxury items.

mrAru and I have a few acres, so at least we could grow enough food to keep costs down [not enough space to grow grains, or any animals except chickens who can actually live semiferal] but not everybody lives on acreage.

New job for buggy whip and carriage spring makers? Of course, they went into different manufacturing jobs, making autos and bicycles and appliances … but now all those jobs are in factories in India and Malaysia … so where are they to work? Unemployment is funded by taxes, no jobs, nobody is paying those taxes. Food banks and shelters are fed by donations and grants - nobody has money, nobody makes the donations that they are needing to serve the people without jobs.

Where is all your money for funding this, and all the new jobs coming from?