If you base your economy on imports

Charles E Hill

Fri Nov 07 12:24:03 -0800 2008

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I don't agree that employment should come with a lifetime guarantee.  If you want a lifetime guarantee, work for yourself.

Some other choice quotes from that article:

Some outsourcing companies see a bright lining to the cloud--lower attrition rates. In the last few years, Bangalore firms have averaged attrition rates between 20 to 40 per cent, the highest in any Indian city. The head of the business process outsourcing unit of Wipro once told me the unit churned its entire workforce every four years or so. If attrition rates were in the low two-digits, that used to be a talking and selling point for the company.

and

And then the Bangalore workforce will go back to feeling like average tech workers instead of modern-day Maharajas.

one of the bullets

zogger

Fri Nov 07 12:35:37 -0800 2008

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One of the bullet points on Obama's new website is this:

End Tax Breaks for Companies that Send Jobs Overseas: Barack Obama and Joe Biden believe that companies should not get billions of dollars in tax deductions for moving their operations overseas. Obama and Biden will also fight to ensure that public contracts are awarded to companies that are committed to American workers.

And that's been going on a long time now and has been quite annoying to some of us.

one of the bullets

Charles E Hill

Fri Nov 07 12:41:13 -0800 2008

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Well, you're not going to get an argument out of me on that point.  I fully agree.  Heck, I can even put a Republican spin on it for you.  They're going to cut domestic corporate taxes.  :-)

If you base your economy on imports

President4242

Fri Nov 07 12:49:08 -0800 2008

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I don't agree that employment should come with a lifetime guarantee.  If you want a lifetime guarantee, work for yourself.

And yet, in the past, many industries came with basically a lifetime guarantee of employment (lifetime being in excess of three decades, with your oldest employees being the most valuable due to their experience).  It is only in the past 20 years or so that the two-year employment cycle has become common.

If you base your economy on imports

asdfg

Fri Nov 07 13:11:36 -0800 2008

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but prior to the organization of labor, there was no guarantee then either. I think in a longer view of history, the 2 or 3 generations working lifetime 9 to 5 factory jobs will be more of an anomaly. Around here if you want lifetime job security, you get a gov't job. Of course, there are definite trade-offs.

If you base your economy on imports

President4242

Fri Nov 07 13:30:36 -0800 2008

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Well, before that you had 5-10 generations of serfs working for a hereditary Lord whose family had also been on the land for 5-10 generations....

If you base your economy on imports

phred14

Fri Nov 07 13:42:32 -0800 2008

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Heck, around that time you also had the Guilds, and 5-10 generations of craftsmen following in their father's footsteps.

If you base your economy on imports

President4242

Mon Nov 10 11:46:58 -0800 2008

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Thank you for mentioning my absolute favorite economic system of all time.

If you base your economy on imports

phred14

Mon Nov 10 12:31:06 -0800 2008

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I wasn't commenting on relative merit, or anything like that.  It's just that some like to cite "historical precedence" and say that long term employment has no historical precedent, and is a mid-20th century phenomenon.

Then again, would you rather work in a guild, or in a sweatshop?  Probably neither with any significant worker's rights or safety regulation, but at least the lack of mechanization the former means that your safety is largely in your own hands, whereas in the latter there were free-running machines, and the only safety anyone was concerned about was that of the machine.

If you base your economy on imports

phred14

Fri Nov 07 16:28:27 -0800 2008

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In the long view of history, you're being revisionist.  This was said several stages down, but I'll stick it here.

First off, there is no long view of history for factory jobs - they're a relatively recent invention.  There is a long history of farming and craft jobs, and in those jobs it wasn't just 2 or 3 generations - it was more.  The son farmed on his father's land, and farmed it as his own when his father was too old to work.  The son apprenticed in his father's guild.  Etc.

If you base your economy on imports

asdfg

Fri Nov 07 18:23:48 -0800 2008

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Describing farming in a hand to mouth society as a lifetime guaranteed job is a stretch in the sense of the original post to which I was responding.

If you base your economy on imports

phred14

Fri Nov 07 18:58:14 -0800 2008

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It wasn't just farming hand to mouth, I was trying to say that there were the guilds too, and those are probably a better example.  The factory just isn't that old to have a real history.

Some of the early factories were run basically by robber barons who abused their workers horribly.  Then we came into the Union era, and some of that has gone too far the other direction.  Now we're into the Union-busting days, and some people are telling us that the no-job-security is "normal" and "historical".

There just isn't enough history to call that history.  The pendulum has been to both ends and is swinging back to the first - not even one complete cycle.  We don't know what the stable state might be, just that it's likely in between the extremes we've seen.

It sounds more to me like it just happens to align with the wishes of employers, and gives them the benefits without the drawbacks, so their calling it "historical" to try to legitimize it.

If you base your economy on imports

Charles E Hill

Fri Nov 07 13:13:44 -0800 2008

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And it was unsustainable, which is why you don't see it now.  Lots of things will work for short periods that can't be extended indefinitely.

Okay, I guess this will be the long form of the argument.

Assume you have Company A that has 10,000 employees and makes widgets.  What happens when Company B can make widgets for half the cost due to automation or other operational efficiencies?  Company B can then sell their widgets at a price below Company A can make them for and will drive Company A out of business.

How are you going to prevent competition from lowing costs.  And when personnel costs are one of the largest factors, how are you planning on dealing with companies improving efficiencies and reducing the number of people they have to hire to do the same amount of work?

Protectionism is one of the things you have proposed.  Tax imports of competitive goods to keep the cost of domestially produced goods cheaper and more desirable.

Well, what happens when a company decides to circumvent your tariffs by opening a new, highly-automated factory INSIDE the U.S.  It doesn't create a lot of jobs, because it is mostly automated?  It allows the new company to put the hurt on the one doing it with people-power because of cost benefits.

Case in point, which I got from one of Zogger's posts with a Google link to NAFTA and Mexican immigrants, U.S. manufacturing numbers.  The total manufacturing output of the U.S., measured in both goods quantity (more stuff) and dollar amount has risen since the implementation of NAFTA.  What has gone down is the number of actual U.S. manufacturing jobs.  Increases in efficiency, not cheap Mexican labor, has taken a number of U.S. manufacturing jobs.

Protectionism doesn't work.  It means you're an isolationist, because everyone else in the world will retaliate with tariffs of their own on your goods, totally crippling your export markets and KILLING jobs.  See the Smoot-Hawley Tarrif Act, among others, as a primary factor in creating the Great Depression.

For another issue that lifetime employment creates, see this excellent article on the Dependency Ratio.

we allow protectionism now..

zogger

Fri Nov 07 15:49:44 -0800 2008

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..just for *some* people and with *some* overseas places, take china. They charge higher rates, much higher, for our imports to them. Why is this allowed, no quid pro quo even?? Japan used to basically make US cars be almost stripped to the frame for "inspection"-that the importers had to pay-before allowing them in to be sold, so guess what the prices turned out to be. And so on. The US has been running import/export trade with a hugely imbalanced notion of tariffs, lock step with giving the tax breaks for offshoring, which is completely reverse protectionism, it is on purpose destructionism, destruction of the economic and political power of the US middle class, whioch was the biggest threat to the new feudalism model "they" want to institute. How about a little more balanced fair play for a change? The US is quite large enough that if we had stuck to a more diversified economy we wouldn't NEED to either export nor import so much, there wouldn't be much of a need to really even bother. That's not isolationism, it's just being more independent, which is a clear distinction. Keep your own bucks recirculating around your neighbors, or ship them off to way the heck over yonder someplace....I remember when we recirculated internally more, and my purchasing power was much greater than now. And here's the real proof, we haven't been protecting or engaging in more balanced fair trade, and our balance of trade is...you know exactly what it is, it falls between "wow!" and "might as well call it national economic suicide".

If their non protectionist theories worked..where is the proof? I am looking around, all I see is pretty dismal economic reports. The only way they kept it going this long is crank up the overlapping credit bubbles. You can't do that forever, eventually them folks over there are going to want real, actual goods for what they got to offer, the days of them accepting poker chips and IOUs are fading fast now, and we have NO backup economy to replace that with, because the [bad name and choice descriptive phrases linked to the bad names] tied their casino economy to our real economy so much now the poofing of one will collapse the remnants of the other. We *have* a protectionist economy, it exists, we are in it, it just is protecting the top 1% and faking everyone else out with their worthless electronic promises of future money, ie, "magic beans for the cow" con games.

If their ideas worked, those labor stats would be really different. If their ideas worked, we wouldn't have prez elect hit on that as the number one topic of his first news conference. If their ideas worked, there wouldn't be any bailouts needed. If their ideas worked, you could open up the smallest town news paper and see columns of real "help wanted" ads, not "sell avon" and "join the marines".

I've put up a few stories about malawi here. They used to be starving, impoverished, etc, because they stopped being protectionist of their own people and internal economy and went to a few cash exports model for their main economic focus, all based on credit and following the advice of folks who decry "protectionism". It was a disaster. Since they went to "protecting" their basic necessities and their people, not just the top 1%, they are doing much, much better. Coincidence? To me, protectionism isn't a bad word, it is exactly what I want a government to do for me and my neighbors. If there is any left over, then go trade it off and speculate, but don't make that outside trade and wild speculation be the top priority, else you get the *mess* you see right now.

There's degrees and nuances to that word, it isn't all completely percentages of tariffs. The basic root word is protect, and there's nothing wrong with that. "Sorry kids, from now on you are on your own,I have to drop protectionism in favor of 'free security", hope you can provide for yourselves, because I won't protect this family anymore, I don't make enough profit". That's reality at that scale and you can move on up with it, a nation is supposed to be a big family, we either have a national government of all the people and not just a select few elite or just trash it, get rid of governments all together and every human for himself.

If we choose government, and a national government, heck ya they should protect the diversity of the economy and basic things like food and energy production. Once you become dependent on outside sources, they gotcha by the short and curlys, look at europe now with not being energy independent, having to be tied to russia and the mid east. They aren't really digging on that scene, and it is because they failed to adequately protect the REALLY important stuff. Over there, France actually "gets it" the most, they protect energy supply, food supply, their military/national security and at least adequate level of diverse manufacturing. You start not protecting and just go for the cheapest deal, that's what you get and can look forward to and also look forward to someone else one day offering them guys a better amount than you do, then what? En-screwed, that's what. Up a creek, SOL.

Basically, we need a little more balanced and reasonable idea someplace between "anything goes" and the 20 foot high wall around the border extremes, right now it is the "anything goes" model and it is teh epic fail and looking to get worse now before it gets better. Here I go with my typical old saying "We ate the seed corn". We failed to protect it. We've pawned our tools to party down and binge consume e-waste gadgets. We failed to protect those tools. We cooked our books and just entered any random huge number we wanted to to our balance sheet -insane on a personal level, illegal if you try to do that on a small sscale "uttering", passing a bad check, but for some reason this is considered a good idea at huge scales...nope, we failed to protect honest bookeeping and honest reality backed money and living within our means and insuring we had a well diversified economy..trading it off for a gambling first economy. And now they are going whole hog to "protect" the gambling first economy.

It ain't gonna work. Unless we abandon that notion and protect the real economy, whatever is left..well..make up your own doomer scenario, I already did and am acting against that potential, instituting my own emergency mitigation efforts, because I can clearly see we sure weren't adequately protected, and good enough proof for me is in the headlines.

The new administration and prez might be able to semi fix things, but only if they stop listening to the [bad name and descriptive phrases] gents that got us into this mess in the first place. Those [bad name] people should be barred from any job that doesn't have a mop or shovel connected to it for life, as a condition to stay out of jail, IMO. Fraud and buncoism are against the law, those folks who engage in that at levels with a ton of digits to the left of the decimal point shouldn't be in charge of the treasury and largest central bank!

I'll wait and see who gets picked, see where they come from, if it is the same pack of [bad names] from the same [big casinos masquerading as banks], forget it, toast, it will be the same fatcat protectionism as always, just called something different. I'll wait, I think it is beyond fair to see what the new guys in office actually do, as opposed to say or not say. I am not impressed with blinkenlights on the dash and turbo paint jobs, I want to feel that baby move to make a judgment call. They call it the honeymoon period, I call it a trial beta test. And for the record, I am not flaming or ranking anyone here, I just have a very hard time countenancing any defense whatsoever for the failed economic policies of the dudes who have been in charge the past 30 years or so, even their dismissal of protectionism. Just because an example of one way to look at it didn't work, doesn't mean all examples won't work. It is quite possible to actually learn from history after all.

we allow protectionism now..

Charles E Hill

Fri Nov 07 16:15:04 -0800 2008

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There is a certain amount of quid pro quo with foreign countries and tariffs.  They just aren't on the same goods.  You'd have a better argument with Japan and rice imports than with the autos.  "Not one imported grain!" and all that.  These things are frequently offset in other ways and other tariffs.

You keep saying "protectionism", but you are making up your own definition of the word.  This is a good overview of the concept I'm referring to.

I believe you are using a more general "America first" sentiment, which is different and, of course, more desirable from an American perspective.

we allow protectionism now..

President4242

Tue Nov 11 16:13:17 -0800 2008

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And yet, America First, whenever it comes up in a discussion on economics, WILL garner shouts of "Protectionism" from anybody who supports NAFTA and the WTO.