I haven’t read the rest of your post, because I would desperately like to hear why you think that statement isn’t true.
Are you suggesting that if Apple moved production to the US the price of an Ipod would not go up?
Or are you suggesting that if the price of an Ipod went up to $600 demand would not fall?
Ah hah. Now you’re backtracking. You said previously that “consumption will stop” if tariffs are raised. Now you’re saying “demand will fall”.
Furthermore I never said or implied that the iPod prices would not go up with tariffs. Didn’t you read? I specifically SAID that in your scenario, if they went up to $1500 (assuming a FIVE fold increase in price) then by your same math, worker income would rise to $2980. Dude, you’re dodging now.
Yes yes, I know, you’ll have some excuse for two additional errors you’ve made here. The fact is American workers are missing out on a huge job boom that’s happening in other countries
how big? 1.4 MILLION JOBS produced during this down turn, that’s how big.
You have zero solutions for how we’re going to put the 6 million long term unemployed back to work. Much less how we’re going to put 16 million unemployed back to work. That is, except you’d rather have them sit idle earning $0 than earning $745 a week in manufacturing.
And that is why none of your arguments are rational. Or acceptable to most people.
Man, I would love to make 70% of my normal income when I’m laid off. My job shuts down a few weeks a year (now, for example) and at best I make 45% of what I usually do. And that’s when the state doesn’t randomly reduce benefits because they’ve decided that our layoffs are tied to the school calendar: in that case I make 25% of what I do when working.
I don’t know how people unemployed for real in this state avoid homelessness.
Okay, let’s try this again.
I said that if the price of an ipod goes up, consumption will stop. You said “Not true. Never has been true.”
How is that not true? Why the hell can’t you answer a fucking question in a straight forward way? I don’t give a fuck about booms and bubbles or what ever else is on your mind.
Just tell me, in your magical world, how does demand for a $300 ipod continue, when the price goes up above your tariff level (in your case a FIVE fold increase)?
Are you suggesting that with tariffs in place wages are going up 5 fold?
What, you want to try being wrong again?
Aw, emacknight is all flustered and has to start cussing.
Why can’t you stop backpedaling? You said demand would stop. Then you said it would slow down. You contradicted yourself. This is a fact. Own it.
I’m telling you that when consumer electronics prices were much higher than they are now, demand was still there. It did not stop. Computers were still selling - why? Because people were employed and had money to spend. Maybe in your magical world you don’t realize that - but that’s your problem, and you absolutely will not make it my problem.
You yourself said the average American wage for this is $745 a week. I went by that figure alone. $745 a week is $2980 a month.
Maybe in your magical world you don’t understand the difference between $2980 vs $1500 (your figure for the price of iPods as a result of tariffs) and $300 vs $0 (the current cost of an iPod vs what unemployed manufacturing workers earn now).
Now don’t throw a tantrum at me because I held you to your own math.
The irony…it burns, it burns… Seriously, look at your reply post to mine. 1 cite. From the great oracle of Yahoo news no less, a blurb about a snapshot of a small point in history. I give you multiple (note, more than one (1)) cites with historical data. The theory or logic (if you can call it that), is based on your belief alone. As if you’re somehow more right and everyone has been wrong all these years, your cherry-picking of data (what little you bring) and misunderstood analysis notwithstanding.
Yet you keep ignoring it. China is poor. They are poor from an average GDP/income per capita/median household/you-name-it perspective. Tariffs at this point in the game don’t really affect anyone because everyone is so poor. A country can protect nascent industries because those nascent industries don’t employ the entire population. Those people employed in those nascent industries will see benefits from working in a protected industry. The rest of the population gets screwed. Again, visual evidence makes the point clearer, but compare the coastal areas vs. the inland areas and you will see what I mean. The poor in the inland areas are already so poor that the economic damage from tariffs have no meaning to them. Contrast that to the US where even poor people have tvs, cable, cars, cell phones, tariffs will affect them even more as the high price of goods means that they cannot afford those items. Honestly, why do you avoid this analysis? Are the blinders on that tight?
Again, where is this money coming from? Look at the iPhone example, again, your mincing of words notwithstanding. Let’s leave out numbers so as not to confuse you any more than we need to:
Generally speaking, the price of an iPhone is X. If the price of the iPhone is increased, then less iPhones are purchased. True or False?
==> If you answered False, stop reading. An answer of False indicates you have no idea about the relationship between supply and demand. Seriously, if you cannot comprehend this logic, the rest of this post is meaningless to you, and for that I pity you.
But, I have faith that you are willing to learn, otherwise, why are you here? Let’s continue:
Tariffs are enacted to raise the price of iPhones. Yes, with me so far? Therefore, less iPhones are sold. If less iPhones are sold, then less employees, resources, and other materials for production are needed. True or False? [Hint: It’s False!]
Less workers, means less demand, which leads to a lessening of wages overall. Now, granted, this is the short analysis (because I want to go home early), but if you have read this far, I trust I have made my point. Now, I ask you, where are wages rising? Where does less demand mean that wages are rising?
In China’s case, aside from their questionable, non-standard, and opaque statistical measurement, their productivity and wages were so low, that foreign investment was willing to overcome any tariffs to take advantage of the one ready resource they did have: cheap labor. As is pointed out to you a regular basis here, US workers make way more than Chinese workers. The US does not have any cheap labor to offer. The decrease in demand from the tariffs will cause much more economic hardship than in China. Again, where are wages rising?
Oh, but wait, you say, historically, people always bought technology regardless of price throughout history! Yes, and…? This is where your logic becomes what is popularly known as: Epic Fail. Has it occurred to you that more people per capita now buy more cell phones, more cars, more technology than they ever had before? Yes, demand did not stop, overall, (but for certain products it has and will continue to do so) but it (demand) is no where hear as high when prices are lower.
But, the analysis doesn’t stop there. Less demand means less products needed/sold which means less workers and other resources needed to produce those products. Those lucky few who were able to keep their jobs will keep their salaries in the short term, but as more and more people are unemployed (because demand is dropping), then the increase in supply of workers means that wages will drop. If you argue against this, then it means you not only have no utter concept of supply or demand, but also no concept of price theory either. Answer emacknight’s question: How does demand continue when prices are higher? If demand continues at the higher price points, then why aren’t prices higher now? Why aren’t we all millionaires (nominally speaking, regardless of power purchasing parity)? Answer these questions, and hopefully you will see how ignorant your reasoning is.
I answered that already, and I just answered it again above. Here’s the short answer, hopefully, this will make more sense: America will not benefit because we are a wealthy nation. We have less people at subsistence farming levels (my guess is 0) than China. American labor is too high and will be greatly affected by price increases. China is poor with wages so low that the hundreds of millions won’t notice the economic damage, unless of course they have the magical ability to realize missed opportunity cost at the macro level. But, like I said, tariffs do not come without a price, regardless of the market shenanigans China practices: 25% of new graduates remain unemployed, the average Chinese worker cannot afford the goods he manufacturers (to name a few).
That’s nowhere near as hysterical as saying that raising prices will raise wages. That lack reason is a real knee slapper.
In other words, by paying off local governments (for “permits”), we can screw coastal China by moving production inward, taking further advantage of lower Chinese wages. Because of China’s work permit registration (one way they prevent migrant workers from entering the coastal provinces), we can ignore any worker gains made in the more productive areas. There is talk about building a company road in order to offset taxes. With labor at $3/hr, it’s much cheaper to just build the road. What a worker’s paradise tariffs bring to China. They keep foreign goods so high and their currency manipulation keeps labor so cheap that continue to lag behind the West (like I said, at best a 1985 standard of living). At least their reason is because the paranoid political party is scared of what actual freedom will bring to the people of China (my reasoned guess), whereas, your reasoning for tariffs is really not based on any actual reasoning at all (unless you count ignorant, mis-informed reasoning as actual reasoning).
And, you tell other people they are evading questions?
Even if that is applicable. $11k is a far cry from $30k and proving one has $11k is much different than having to actually part with it when one enters Canada. So, yes, bullshit, or rather, Epic Fail on your part.
By “studying” you mean…you know, just too many responses for this one…
Except for the current recession, Americans have been becoming steadily wealthier as time goes on. Is this a straight line increase? No, it never is. Cite. If you want to argue that the last 10 years have been flat or even decreasing, fine, but my short argument is that the wealthy have been increasing through automation (mostly) and off-shoring (like you said 2%) because they own the means of production. If you want to argue income inequality, for organization’s sake, please take it to another thread, or whatever… Besides, consumer debt is just that, on the part of the consumer. Are suppliers making people buy more? No, obviously.
Yes? You’re point being? None? (As evidenced by the lack of anything written). I thought so.
This simple-headed reasoning just does not cut here in GD, and I will continue to expose this ignorance the more that you type it. Look at your first sentence (emphasis mine). You do realize right there in your very sentence that demand is falling! Yes, you’re right! Earning $0 buys you 0 iProducts. Less money means less buying. What makes you think that employment will remain stable as prices rise? Where is this money coming from? Again, if this is true, why aren’t prices higher now? How can you possibly explain this in any way that makes any sense (other than to yourself, but that goes without saying…)? I haven’t even factored in inflation yet.
Again, the response is, find other work. We are/were in a recession, which you keep ignoring. Would you be making this arguments in the Summer of '07? All measurements were higher at that point than any time in history. ‘Oh, but there was a real estate bubble, everyone and their mom could see it?’ Really, did you know when it would end? Did you know the effects? Did you see the chain of events? Even those were guesstimations at that point in time. If you knew it, you could have invested the other way and made untold millions, and depending on your starting capital, possibly billions. So, please, save me from your 20/20 hindsight analysis.
What? Seriously…what? Who are my people? I quoted your own words. Assuming that it is true (which I can’t be bothered to look up right now), the cost of living is roughly the same, that does not mean that the standard of living has remained the same, in fact it’s gotten a lot better (especially if you are a skilled Asian worker emigrating to America). Look around you, if you don’t believe me. Look at the most likely black thing you are typing on [hint, Luddites refer to it as a “computer”).]
Unless subsistence farmers are competing with commercial farms, then yes, they earn $0 because they are not putting their goods to market. They consume it themselves. That is the very definition of subsistence farming. It doesn’t hurt to consult a dictionary. It’s in business 101 if you’re paying attention. As to your belabored unemployment statistics…the price of tea in China is what now?
And you know how I feel by how…? Are you reading my mind? C’mon now, there should be a law against that! Serious now: regardless of what upheaval free markets do to people in transition, there will always be business cycles, that cannot be regulated away. More importantly, free markets will always be better than controlled/managed markets, and history has already proven you wrong.
Which is what you want, right?
And, how will we do this? Seriously. Do you honestly thing the government has the ability to employ 16M people without doing damage to the economy, to otherwise stagnate growth and prosperity? Do the terms “opportunity cost” or “crowding out investment” mean nothing to you? If not, since you claim to be so knowledgeable of history, you may want to look up what happened to communism.
It’s a fact of human geography. Countries go through various stages of economic development. Moving from agrarian economies, to industrial, to tertiary. The USA is entering the third stage of development. Moving from a manufacturing Industrial economy, to a service and research oriented economy. Banking, Pharmaceuticals, Engineering, telecommunications. The fact that people want to move* backwards*** instead of forwards still astonishes me. MOVE ON, Industry in America is dead. Europe has been like this for almost 40 years now, and the USA refused to listen. The recent unemployment give people time to learn new skills for a new economy, but instead they chose to bitch about not having a job in a shit factory in Detroit or Tennessee, and not having enough free money.
I drove around all day waiting to get back and write that exact thing.
What’s so funny about Le Jacquelope “analysis” is that he/she/it actually believes that when Apple moves its factories to the US, it will be able to sell $300 ipods for $1500, and that means their factory workers will all get paid enough to buy at this inflated price. And why not? They are selling ipods for $1500, so they can keep their $200 revenue and pay $1300 to produce a $100 device. You see, once all those employees are being paid they can afford to buy ipods, which means employees will get paid even more. BRILLIANT!
It’s kind of like watching a child come up with a proposal for a perpetual motion machine, I hate to be the one to break his/her heart that putting a generator on a bike won’t be enough to power the bike up a hill.
I for one look forward to making $100/hour working at this spiffy new ipod factory. What I can’t figure out is why Apple hasn’t moved production here yet, it’s all so obvious. Maybe I should send a resume to get a head of the curve.
Uh oh, it seems you missed the key point of that article. They are hiring overseas because there are sales overseas. Those are jobs servicing local demand. It wouldn’t be right for Americans to have those jobs because they don’t pertain to the production of goods and services for sale in the American market. Oddly enough, no mention of tariffs, not sure I can trust that article, since tariffs are the key to employment success.
You know what would get sales to go up in the US? If we increased all the prices. It’s brilliant! Sales were way higher back in [some historical time] and prices were higher back then too. I call it demand side stimulus: all the government has to do is increase prices, and then demand is sure to go up. After all, if increased demand can cause prices to go up, why can’t the reverse be true?
You know, I get tired of doing the game of 1000 cites with you guys and then you claiming it doesn’t say what it really says.
First of all, who’s “everyone”? Opposition to offshoring is not exactly unpopular - in fact it is growing. Because that tortured mess you call your logic is getting exposed for what it is - a tortured mess.
Ah, make that 102 times.
And I will point out to you yet again that their protectionism has helped them grow.
As for your brutally tortured logic about how this won’t work for America, I’ll leave you to the previous discussions here about Germany and how they protect a number of their industries… to good effect, no less.
Your blanket argument that protectionism is bad for a developed nation is little more than reciting platitudes. Repeatedly. Turning it into a broken record. (Cue: “I know you are but what am I?”)
None of what you said shows in any way that China isn’t at least whittling down on the number of poor in their country. The growth of their middle class, in fact, says they are whittling it down.
Meanwhile our middle class is disappearing. Another fact you keep trying to ignore.
Oh and we have PLENTY of homeless poor in America with no TVs, cable, cars or anything. So can you also ditch that broken record logic, too?
Not necessarily always false or true. History shows that much. Obviously either history has no idea about the relationship between supply and demand… or you know nothing about history, and I pity you.
Case in point: cars have gone up in price over time and they keep on selling like hotcakes. Why? Because wages also went up. Woah, imagine that. We’ll come back to this basic lesson which you have so far failed to comprehend, but for now…
Since history does not always agree with you on this premise, and since you fail history, it’s safe at this point to skip your laughable stunt of economics epic fail.
I’ll leave you with a question of how much cars cost in 1950 versus now and how many sold back then versus now and let you get back to the next round of insults and cussing because, really, that’s all you have left at this point.
Your argument is like a bad cartoon that always ends with your own case crashing upon launch. Like Wile E. Coyote but not as funny because at least Wile E. was original.
Your argument’s self-immolation ends on a particularly sad note, that being that consumer electronics (if not iPods in particular), this year, did not grow in sales like other things did. http://www.eetimes.com/electronics-news/4211770/Santa-brought-fewer-gadgets-in-2010
That you call what you wrote “analysis” is about the only originally funny part of this.
Answer: His premise that higher prices will always kill demand is wrong. History shows this.
On the other hand, history does back up my retort: right this minute, demand is down on exactly the kinds of products you’re talking about (consumer electronics) because of all the high unemployment. It’s happening right now. You. Failed. History.
And again, I will remind you:
An American who earns $0 can’t afford anything, either.
And Germany benefits from protectionism, too.
Yes, we already know your arguments belie a militant ignorance of history.
Wages and prices have risen in tandem since the 1950s… or even further back than that. Although, despite all the price benefits of offshoring, wages have fallen BEHIND inflation for the last 10 years.
You have failed to show, then how hiring unemployed Americans to build iPods at prevailing wages ($745 a week) will destroy demand for iPods, much less lower our nation’s standard of living.
But the biggest point of failure for your logic comes below…
Wait, I thought you said China favored the coastal regions. So by your … ahem cough logic cough wheeze all you’re doing is giving the inward regions “equal time”.
Oh wait, I don’t think you meant to contradict yourself like that… moar cussing! moar deflecting your logic errors at me!
Once again history hates your line of “reasoning”.
Please explain here which direction China’s middle class is going. Is it increasing or decreasing? Go ahead… you can cuss at me some more now.
I love how you use that word ‘reasoned’. Your arguments demonstrate an ignorance of history and even current events that is so great it has its own gravitational field.
Hardly. If you don’t have $11k on hand you’re screwed. Or did you not get that part? Oh I’m sure the unemployed have $11k lying around. Suuure they do. The only epic fail here is whoever sent you out with a diploma.
But not the working class. And I care about the working class. The wealthy will always be able to get a heart transplant or cancer treatments if they need it. The working class is the ones who go homeless when there’s a downturn.
I’m arguing about jobs. Jobs that 16 million people don’t have, jobs that haven’t even kept up with new entrants to the workforce for the last 10 years, jobs that people need to keep a roof over their heads.
Stop.
Right.
There.
What you think (if you can call that “thinking”) doesn’t cut it on the GD doesn’t mean a hill of beans. If, somehow, the Great Debates can prove some kind of collective intellectual prowess, your arguments are detracting from any appearance of GD prowess. Greatly.
You have not produced so much as one single challenging or well-made argument. Not even one.
Ooooh, intimidating! Well, intimidating in the sense of the way your arguments resemble a cartoon villain putting on his cape only to get it caught in an airplane turbine. Repeatedly. Call it Groundhog Day. Or something.
So now we get to the part where your argument self-detonates in the worst possible way.
Someone has to hire a substantial portion of those 16 million jobless Americans at some point. Which means employers must pay out more money than they are now. You following me so far? Good. Employers right now are making do with fewer workers. ANY TIME they hire workers now, they’re adding labor costs. So by your theory prices of everything should go up as soon as we put any substantial number of those 16 million people back to work, even at minimum wage.
Going by your logic we should keep them jobless to keep prices down. Or hell, why not fire more people and have even fewer workers doing more work?
Yes, I know, you’ll want to blame the legendary failures in your reasoning on me shining the light of day on it.
What other work? You guys can never seem to answer that. Can you answer that?
Oh wait, I know, join the knowledge industry! Which, as I pointed out to you already, is moving overseas. Oh and they don’t have enough jobs for all the folks who are ENTERING the workforce per month… much less all the people who are out of work right now.
Wrong again. I’ve been pointing out that the recession was caused by stagnant wage growth and anemic job growth being covered up by rampant growth of debt which created the illusion of wealth and which fueled spending. When the debt bubble collapsed the real nature of our economy was laid bare.
I also pointed out that according to the US Chamber of Commerce we lost a minimum of 2 million jobs to offshoring. The US Chamber of Commerce - and I cited that, too. Bringing back 2 million jobs back in 2007 would have slowed the recession at the outset - probably preventing a bigger chunk of the layoffs/job massacres that broke out in 2008.
Actually, I was. Because in the Summer of '07 consumer spending was fueled by rising consumer debt. It was a nonsense economy and lo and behold it collapsed in on itself.
Yes, yes, and yes. I, and a number of other Doctor Doom’s (look up Henry Kaufman and Nouriel Roubini) and Chicken Little’s, who all got laughed at by society at the time. I bailed out of the stock market in July of 2007 and even advised my clients to do so, at the risk of my JOB (which I later demanded to retire early from because I got tired of the bull-crap).
The market rose a little higher and peaked in September-early October; I got a zillion phone calls from people I told to divest, saying I made them jump the train early. RIGHT after that? The market dipped, and then it never recovered; in fact, it tanked. In April of 2009 I told people to jump back in. (The nadir was actually March, pretty far below what it was in April.)
I saw the outrageous prices of homes. I saw all the 125% home equity loans. I posted about it on forums. In real life I argued against them at the community bank where I worked as head of IT. I talked out of turn at meetings and put my job on the line to argue against jumping into the subprime craze. I’d have been fired with cause if it weren’t for the (future) banking services manager sounding the alarm about the statistical facts of the subprime and home equity loan bubble. He was older so I guess they listened closely when he started speaking. But when the carp hit the fan we weren’t like those credit unions out east that collectively needed 30 BILLION in NCUA bailouts.
Goodness gracious, boy you make me laugh. I have recorded posts on other forums that clearly show I predicted several parts of this mess before it happened. It ain’t prophecy, son. It’s the ability to read the writing on the wall. The math simply did not work out that the bubble was going to last much longer. The math does not support your assertions, either: neither does history or current events.
Long, long, LONG story short: I am the very last person on EARTH that you want to accuse of not seeing this mess coming.
Oh, and side note: I hate the stock market because of its obsession with quarterly statements. I prefer to invest in main street, my community, and all of that. BY CHOICE. I don’t want my finger in the socket when the entire fracked reserve banking system goes boom. And it will do so.
Unless you’re one of the homeless. You know, those entire FAMILIES that got made homeless during this mess. The ones down the road from me in Sacramento who got pushed out of their tent cities because they made Sacramento look bad?
Ah yes, I know, their standard of living is increasing, too. Dumpster diving in America being better than dumpster diving in China and all that. :rolleyes:
sigh :smack:
Your argument never seems to learn the lesson about putting on capes, does it? You say they earn $0 but that is so woefully wrong. Their wages is the cost of the food they eat, at least. Plus where they live. Unless you’re willing to say that food is free in China.
To put this in practical terms for you, if America’s jobless were actually able to produce their own food (which, collectively they can’t, because no matter how much skill they have, there aren’t enough farming jobs for them) and build their own homes (also impossible; because they’d have to own land, which they don’t!), they would be eating grapes and living under a roof. Grapes are what, $2 a pound here at the local stores, and a roof over your head is $1000 a month just renting it? Now convert that to whatever it’s worth in China and you have how much those subsistence farmers make.
Not always. The USSR laughed off the Great Depression, remember?
And the American market has plenty of Government controls and management. Free as in uncontrolled and unmanaged markets have never existed - except in the drug trade.
Once again you fail history.
Like your arguments, ‘want’ has zero relevance here. The word you’re looking for is inevitability, if we continue to stay the course.
Employing 16 million unemployed people does more damage to the economy than setting them adrift in your universe? Really?
Your argument borders on sheer lunacy. I would buy you a plane ticket to go out and preach THAT to their faces. That line of insanity you just posted deserves to be heard, far and wide, just so people can see just how whacked out crazy your line of thinking is. Most pro-offshoring people think the same way; the entire pro-offshoring argument is founded on this absolute pile of nonsense.
You, sir, would be a hero. Few things on God’s green earth would galvanize the working class better than what you just said.
I only wish you understood people well enough to appreciate just how bad you sounded writing that.
Do the terms “lost tax revenue due to 16 million people being unemployed” or “lost tax revenue due to a permanent state of 8% unemployment (see: Europe)” mean anything to you?
Does the word “unrest” mean anything to you? You’d better get familiar with that word.
How about “economic collapse”? How many countries are going to invest in a nation where budget crises are spreading like wildfire, unrest is erupting, and the currency is tanking?
Tell ya what - the math all says we’re headed in those directions. What I want is irrelevant - what is at hand is collapse if we stay the course.
The fact that you liken tariffs to communism shows your arguments are moving past the point of comical idiocy to frothing desperation.
(That’s your arguments, not you. Wouldn’t want to be accused of calling you names. You’re doing that part all on your own.)
We are already losing ALL of these sectors to offshoring.
Biotech research offshoring (pharmaceuticals). Engineering has been going overseas for decades. Telecommunications? Seriously? That ship sailed to India a LONG time ago.
These are facts that all of you are ignoring. One has to wonder why? Perhaps it represents a giant hole in your argument that you can’t address?
MOVE ON to what?
And how will they learn these new skills?
Perhaps they will pay for this using Monopoly money?
More questions you guys refuse to answer.
^^^This argument is like watching a chimp confronting an algebra equation. sigh
Germany is laughing out loud at emack’s argument. They don’t even bother to say “nein”. They just chug along with their domestic factory labor while American politicians buy into emack’s “analysis”.
Going by that mangled bloody mess you call your “reasoning”, if any of those 16 million Americans get even a minimum wage job the cost of goods in this country should increase by leaps and bounds.
If Apple doesn’t hire them but someone else does hire them, something ELSE out there will go up by 2, 3 or 5-fold because of the extra cost in labor. That is, if we go by your cough logic wheeze.
If you cannot grasp the magnitude of the error you made here then to quote True Grit, “I can do nothin’ for you, son.”
Are you saying that higher prices will not kill demand? You said demand is down right now, why is that?
Right now an ipod costs $300 and Apple is able to sell a million units in the US (feel free to look up the actual number). If they decided on Monday to raise the price to $600, do you think they would sell the same number of units? Would they sell more? Would they sell less?
What if they raised the price to $1500, would they continue to sell the same number of units as they did when the price was $300?
Is there ever a price where people would decide not to buy it?
If the answer is no, then why is the price of an ipod $300 and not $1500 or $15,000 or $15million?
Um, exactly how old are you? I was there when memory prices went up and down. $400 for a 16 meg simm. People were still snapping them up like crazy. Along with $2500 486-DX33’s. Were you there? I was.
Were you there when cars cost a FRACTION of what they cost now?
I’m just pointing out historical points where higher prices have not killed demand. Higher prices will lower demand in the short run; but when these prices are caused by higher wages, the demand will snap right back.
Because wages are down. Don’t get huffy at me - I cited it for you. Sales of consumer electronics in general, if not iPods in particular, are down. This, in spite of sales of other things being up. Again, don’t get on me about it - call the statistics illogical.
In the short run, perhaps. If this price increase is backed by a jump in the number of Americans going from earning $0 to $745 a week the medium run is that sales will go back up.
We have 16 million jobless Americans out there. If Apple doesn’t hire them to make iPods, someone else at some point must hire them. Whether the additional cost of their wages drives iPods up in price or drives something else up in price, something is going up in price, if your point is to be considered valid.
Your “logic” dictates that if millions of Americans are hired back into work the prices of everything will skyrocket. Ergo we should set the jobless adrift.
You cannot escape this conclusion. Well, actually you can, if you handwave like crazy.
The answer to that is more complex than you realize.
If an iPod costs $300 and I earn $0 an hour because I’m unemployed, will I buy it? Or more importantly, CAN I buy it on $0 an hour?
If Apple hires me at $745 a month and this forces iPods to go up to $1500, will I buy it? More importantly, CAN I buy it at all now?
I can just as logically ask you why isn’t an iPod $10?
What exactly can you afford if you earn $0 a month?
What exactly can you afford if you get hired at $745 a month?
Any chance you have an answer for these two questions?
I would also like to know what you think Apple doesn’t sell its $300 ipods for $10.
And for what it’s worth, this isn’t Jeopardy. You don’t get points for answering a question in the form of a question.
And this sort of response is inappropriate, boorish behavior.
We have a policy of attacking the argument, not the poster, but you are not attacking the actual argument, simply making snide remarks.
Stop it.
[ /Moderating ]
This is irrelevant. The market of 20 years ago is different than the market today. But even given your invalid assumption, the fact that memory was more expensive in the past proves emacknight’s point. Memory was too expensive for us to be able to build the kind of applications we use today, and as a result the market for that memory was much smaller. At $400 for 16 megs of RAM, MP3 players are wholly unaffordable. So that market did not exist.
You seem to be unaware of basic economic theory. The supply-demand curve states pretty categorically that if you drive up prices of a good or a service, you will lose customers on the margin. How many customers you lose depends on the elasticity of demand and how big the price increase is. I guarantee you that if iPods were $1500, no one but the rich and a few early adopters would have them.
Cars have never, ever been cheaper than they are now. This is true on an absolute cost basis in constant dollars (i.e. just comparing car categories and not considering the quality of the cars), but it’s overwhelmingly true when you add in the value of the quality and features modern cars have.
In 1962, A Ford Galaxie 500 was the typical middle-class family sedan. It cost $3350.00. Converted to 2010 dollars, that’s 24,601.56. The equivalent Ford product today would be the Fusion, at $19720. And at that price, you get airbags, CD stereo, more power, much more safety, etc.
No, it won’t. Because you’ve lost wealth. You just don’t understand what economics is all about. It’s about efficient production and the proper allocation of resources. If another country can build the things we need for less money than we can, it’s to our benefit to take the offer, and use the freed resources for higher-valued activities. Then everyone wins.
Think about your argument, but substitute ‘automation’ for ‘foreigners’. A worker doesn’t care if his job was lost because a robot is doing it or because a Japanese or Chinese company is doing it. The only reason we make the choice to obsolete that job is because we’ve found that it’s no longer worth doing. So do you think we’d be better off if we destroyed our automation and put humans back in those jobs? Would this be a positive move for society as a whole? It might put a few unemployed people back to work, but only by essentially putting them on permanent charity.
In the end, the country has more wealth than it would have had without the trade, and that increase in wealth improves the lives of the citizenry. Cut off trade, and you’ll destroy a lot of the efficiency in the economy and impoverish everyone. But look on the bright side - maybe the Gini index will come down, and everyone can be miserable together.
I think a key flaw in Le Jacquelope’s analysis is that he’s describing it as though an iPod goes up to $1500 and everyone’s salary goes up from $0 to, say, $745 a week.
In reality, even in this recession, 9/10 people have jobs, and the jobs he’s trying to seize for the other 1/10 are pretty much the lowest paid.
The price of an iPod going up to $1500 will kill demand among the 90%, which can’t possibly be outweighed by the occasional guy in the lowest 10% buying an iPod.
Actually automation is Le Jacquelope’s other bugbear…
I don’t think he’s ever gone as far as saying we’d be better off with switchboard operators or lamplighters, automation is just something that’s bad now :rolleyes:
It’s not irrelevant. Perhaps what you meant is it damages your argument. But it’s not irrelevant.
The market didn’t exist because the technology didn’t exist and the idea wasn’t put forth. RAM prices got cheaper because of efficient production, not because of offshoring.
You seem to be unaware of the effect that rising wages has on rising prices. Another facet of basic economics.
And if you keep putting people on unemployment to send their jobs overseas you won’t sell many, either.
Sales of consumer electronics in general are down. I’ll leave it to you to wonder why.
Ok now that’s just laughably wrong. No, that’s Twilight Zone level wrong.
Everyone wins? Uhm, Rod Serling called, he wants his reality bender machine back. I’ve got 16 million reasons why your argument is tragically wrong.
Offshoring has rarely freed anyone for higher-valued activities. You have no examples of when it has. People who lose their jobs to offshoring rarely ever get a job that pays as well. The ones who win from offshoring are the corporate execs.
You know, at some point you gotta leave the boards and tell these knee-slappers you call arguments to the FACES of those unemployed people. Tell them to their faces how they win. Maybe even tell them what they won. Really, try not coming back here until you’ve told this to a few unemployed people. I know you never will, though. People who make the arguments you do, never tend to confront the jobless face to face with their “reasoning”.
As I’ve said before, automation isn’t all that. If it was we wouldn’t have Toyota plants popping up in the U.S. and hiring workers.
Actually as I’ve also said before, I’m all for free trade with Japan, Europe and Canada. They don’t undercut with third world wages. I’m just all for blocking out China and their ilk until they can clean up their own shops.
You know, you pooched the screw a lot here but you really pulled a humdinger with that “Then everyone wins” schtick.
Everyone doesn’t win. We all lose. This offshoring thing has created a permanent employer’s market. You can take this to the bank - we will never see the end of this employer’s market if we stay the course. At least, not until the currency collapses due to these enormous trade deficits and mounting debt we’re racking up to support the swollen ranks of the jobless.
Tehroot says we need to move on. I ask, “move on to WHAT?!” And no on ever has a response to that.
I explain to you guys that we’re ALREADY moving knowledge-based jobs overseas. Research, engineering, all that. No one here has been able to explain how this benefits us, much less what displaced knowledge-industry workers are going to do when their knowledge jobs leave the country.
All you can say is “sacrifice the 16 million unemployed, if they get jobs we’ll ALL be impoverished”.
You’ve been on this forum for so long, insulated by smugness and unjustified self-confidence that you have no idea how much damage you do to your own argument when you say these things.
What makes me sad is that when I engage pro-offshoring people in real life, that they never say these things in public. You would make it so much EASIER to convince people to vote against pro-offshoring candidates.
You’re missing the best part: demand can’t be killed. That 10% is going to be super rich because the other 90% will continue to pay $1500. Now that 10% will be able to afford the inflated prices for everything else, driving up the wages of the other 90%.
It all works beautifully if we ignore the law of supply and demand. Might as well ignore the second law of thermodynamicswhile we’re at it.