The Republican Primary Race Is Filling Up

[Alpo]

This is an old chart, but it is relevant to the "China" cheap labor discussion. The chart is the bill of materials cost for an iPhone 3G 6 or so years ago. Some of the "other" content includes France and Scandinavia. It is interesting that China represents less than 5% of the total product cost and the largest share comes from countries with high cost social programs and standards of living.

The last chart I saw for an iPhone 5S showed most of the non China offshore cost in Japan and Korea.

 

[BugI02]

Just returned from a quick goto to the pipes of the interwebs. Survey says no. Plenty of anecdotal, some scholarly treatises but more concerned with theory. Within the time I was willing to spend no information I would hold reliable on rate of convergence or equilibrium point. A lot of fuzziness about 'buying power' rather than actual currency equivalents

I would think it might be granted by inspection that a company moving a type of production to say China or Viet Nam where pay rates were on the order of 1/10 US$ or less would be unlikely to be doing so because they wished the pay of their foreign contactor labor to converge on levels they left the US to avoid. Do you think Carrier is moving their production facility to mexico because they hope their labor costs will rise to the point that they are again paying US level wages?

 

[BugI02]

Perhaps the beginning of what we're looking for

Globalization?s critical imbalances | McKinsey & Company

As the GDP growth of emerging-market nations continues to outstrip that of the developed world, the pressure on currency values will continue to build. Eventually, the tension must be released, and currency values will readjust. For all of us, the speed of that adjustment makes a big difference. The dollar and euro would need to be devalued by between 30 and 50 percent for financial foreign-exchange rates to reflect the purchasing-power-parity (PPP) exchange rates of emerging-market currencies more closely (and, therefore, for labor of equal quality and productivity to be priced relatively equally across geographies). An adjustment of this magnitude that took just a few weeks, rather than a few years, would obviously jolt the global economy.


That would seem to indicate the equilibrium point would be around 1/2 to 2/3 your current earning power. Not exactly a decline to third world but certainly second world levels

 

[IndyDave1776]

That would seem to indicate the equilibrium point would be around 1/2 to 2/3 your current earning power. Not exactly a decline to third world but certainly second world levels

Those who are barely managing to maintain their habits of living indoors and eating regularly as it is would probably take a far more harsh view of the implications here than, say, someone who may have to give up the annual vacation or not own a boat.

 

[T.Lex]

Those who are barely managing to maintain their habits of living indoors and eating regularly as it is would probably take a far more harsh view of the implications here than, say, someone who may have to give up the annual vacation or not own a boat.

That comes near to wealth redistribution. What role does the government have in deciding who gets to own a boat and who struggles to make ends meet?

Serious question.

 

[IndyDave1776]

That comes near to wealth redistribution. What role does the government have in deciding who gets to own a boat and who struggles to make ends meet?

Serious question.

The proper role would be to refrain from trade and tariff agreements tantamount to dropping our pants and grabbing our ankles, precipitating the obvious consequences.

In a free market, you will always have those who are more prosperous than others. At the same time, you undercut the national free market when you allow outsiders to invade that market under entire different sets of rules than the rules governing those in the domestic market, yielding exactly what we have now with most suffering to some extent, and the most vulnerable (who are willing to work) suffering the most having the double-competition of foreign manufacturing labor and illegal aliens at home.

 

[T.Lex]

The proper role would be to refrain from trade and tariff agreements tantamount to dropping our pants and grabbing our ankles, precipitating the obvious consequences.

In a free market, you will always have those who are more prosperous than others. At the same time, you undercut the national free market when you allow outsiders to invade that market under entire different sets of rules than the rules governing those in the domestic market, yielding exactly what we have now with most suffering to some extent, and the most vulnerable (who are willing to work) suffering the most having the double-competition of foreign manufacturing labor and illegal aliens at home.

Well, a US without tariffs would be dropping our pants to the rest of the world, since they would keep them.

 

[IndyDave1776]

Well, a US without tariffs would be dropping our pants to the rest of the world, since they would keep them.

Seriously, particularly this side of World War II when we absorbed that stupid notion that we needed to carry everyone else's economies on our back to keep them away from the communists, we have had a steady diet of unsustainable and self-destructive economic policies centered on grossly imbalanced trade agreements, and did so for a long enough time that the rest of the world has come to consider it an entitlement. This needs to stop, and stop now. Trump has that much absolutely right.

 

[BugI02]

Those who are barely managing to maintain their habits of living indoors and eating regularly as it is would probably take a far more harsh view of the implications here than, say, someone who may have to give up the annual vacation or not own a boat.

Yep. Those posts are a follow on to #5199 and #5200 largely directed to JettaKnight. The sentiments of which you speak have given us Trump and could easily give us the Hitler people think Trump is at the extremes

View attachment 47376

 

[JettaKnight]

Do you think Carrier is moving their production facility to Mexico because they hope their labor costs will rise to the point that they are again paying US level wages?

Heck no. But I do think a wage hike in Mexico would make moving to Mexico less attractive.

That would seem to indicate the equilibrium point would be around 1/2 to 2/3 your current earning power. Not exactly a decline to third world but certainly second world levels

Interesting.


As a point of information, the "second world" was countries behind the Iron Curtain. For all intents and purposes, it is basically just DPRK now; I don't think China still qualifies.


Trying to comprehend global trade and the global economy is giving me a headache. I'm going back to simpler things like computer engineering and brewing beer.

 

[Twangbanger]

...(China to clean it up). If there's no trade between us, what do we have for leverage?

...Sending millions of laborers in America back to Mexico will only lower Mexican wages and make it more attractive for companies to go to Mexico. If Mexican crime and corruption goes down and wages go up then America benefits - less companies moving, less illegal aliens.

In a global economy, parity is the best counter to labor migration.

The problem with your China comment is, we do not have "no" trade with them. We have a _ton_ of trade with them. And more to the point, with current policy, there's no threat of that changing in any significant way. What incentive do they have to change anything? The leverage comes from the prospect of reducing it, and doing so at a time while they are still an export-based economy and need trade with us in order to continue to develop. If we wait to play our cards until after they've developed a significant internal consumer economy, are more self-sufficient, and no longer need us, then our leverage will really plummet.

Moving on to the Mexico paragraph, I'm not sure how old you are, but I was in my 20s around 1992 when Clinton was entering office, the Assault Weapon Ban was on its way, and every g*ddamn issue of the Wall Street Journal seemingly contained an editorial explaining how NAFTA was the Right Policy for America. I vividly remember the things that were being said in support of passing NAFTA. Hell, in my post-college Ayn Rand state of mind, they even had _me_ convinced. I read every page of Atlas Shrugged for the first time while the whole debate was playing out. "The rising tide lifts all boats." Or, "The winners will Far outnumber the losers." And "A Healthy Mexico is the best, surest, most stable friend America can have."

Well - we're 20 years out from there, now. I've got a few more gray hairs on my head, and can think more for myself. And we can make some empirical conclusions about what has happened. The export of US jobs has not transformed Mexico in anything close to the way NAFTA proponents said it would. A generation of lower-educated Americans (who want to work) has been put on disability, pushed out onto an ice floe, and basically told to hurry up and die. And what do we have to show for this? Mexico is still a ****hole. How long do we have to wait for "parity" to kick in?

More importantly, what if this whole "strategy" turns out to be wrong? What if this is all just Think-Tank theory, in part financed by foreign trade interests, and we've tragically miscalculated the real-world disadvantages of what we're doing? What if we've helped set loose destructive forces in our society nobody could have imagined, in the form of a middle-American Heroin epidemic, divorce, incarceration, and destruction of the middle and lower-middle class work ethic, which took this nation over a Century of misery to build up? Those jobs that moved to Mexico didn't make a drop in the bucket of the cesspool of their society. However - they sure ripped the heart out of a lot of American dreams and communities.

And don't look now, but those people are tearing up the Republican Party. Much to the dismay of some (ahem):

How Did Trump Happen? | The American Spectator

A week before the Indiana Primary, Charles Koch fired a shot across Ted Cruz' bow, saying to a reporter: "I'm not sure there's anyone in this race I can support." (I can only imagine what a surprise this must have been to Cruz, who was willing to shut down the government to make government smaller).

Four days later, Cruz was in Indiana, stating: "Carrier didn't move to Mexico because of Trade...they moved because of the Obama Administration's regulatory policies." Basically, parroting the US Chamber of Commerce-approved viewpoint on the Carrier closing. ("Yes, boss...I heard you, Mr. Koch"). I wonder if he shouldn't have spent some time handing out free needles to Heroin addicts in southern Indiana, just for some perspective.

Four days after that - Cruz lost Indiana by 16 points.

Voters are tired of GOP compliance in turning the US economy into even more of a rigged Casino.

 

[Tombs]

Trump released a list of 11 people who are under consideration for his supreme court picks

News from The Associated Press

Trump unveils list of 11 potential Supreme Court nominees | TheHill

Donald Trump releases list of 11 possible Supreme Court nominees - CBS News

 

[pudly]

The first two reviews I've seen of this list are very hopeful from a Constitutional view:

Trump's Supreme Court list | Power Line
Donald Trump's Terrific List of Fabulous Judges | Cato @ Liberty

 

[IndyDave1776]

It’ll be a great day when our military has everything it needs to fight effectively, and Obama has to have a bake-sale to pay for his luxury travel.

It will be a better day when Obama needs to have a bake sale to pay for his trip in a cargo crate to pay for his return to Kenya.

 

[Twangbanger]

It will be a better day when Obama needs to have a bake sale to pay for his trip in a cargo crate to pay for his return to Kenya.

What I seeing happening is that we will spend more on College than the next 162 nations combined, because the Democrats will attach the Education / Industrial Complex to the only funding source that can print its own money...but you'll still need a Bake Sale to pay the "student fees."

 

[jamil]

What I seeing happening is that we will spend more on College than the next 62 nations combined, because the Democrats will attach the Education / Industrial Complex to the only funding source that can print its own money...but you'll still need a Bake Sale to pay the "student fees."

Education is the new Healthcare.

 

[chipbennett]

The first two reviews I've seen of this list are very hopeful from a Constitutional view:

Trump's Supreme Court list | Power Line
Donald Trump's Terrific List of Fabulous Judges | Cato @ Liberty

That's unpossible. I keep hearing that there is zero difference between Trump and Clinton.

 

[MisterChester]

What I seeing happening is that we will spend more on College textbooks than the next 162 nations combined, because the Democrats will attach the Education / Industrial Complex to the only funding source that can print its own money...but you'll still need a Bake Sale to pay the "student fees."

FTFY

 

[MisterChester]

Education is the new Healthcare.

Education costs have exploded since the 90's. My folks (born in the late baby boom stage) were able to afford college by working a minimum wage job. That is completely impossible today unless you plan to save for a few years without paying for anything else including food, clothes, or rent.

 

[JettaKnight]

That's unpossible. I keep hearing that there is zero difference between Trump and Clinton.

Speaking of unpossible, I heard that a great reason to support Trump was that he doesn't need "big money" donors.



Donald Trump Embraces Big Donors And The RNC With New Fundraising Agreements : NPR