An NDD Spin-off Thread

[Sacamuelas]

"One question- do you think seatbelts, airbags, ABS etc primarily protect people from themselves, or from other people?

Solid-
Don't sharpshoot GH just to attempt to defend your statement about the safety laws. It just clouds a very good point made by Greenhat. He seems to have been focused on the legitimacy of the actual creation of the laws. It is the "legislators making laws to tell us how to live our lives because they think they are infallible know-it-alls” type argument. I have a problem with these laws as well.

Your prior points are expressed quite well. Don't undermine the legitimacy of them. You are a smart young man. You are just wrong this time.

Lawsuits and consumer demand for safety have driven all automakers to start including side air bags, etc. The government does not need to legislate their use. On that same note, I think an insurance agency can have a right to place into its written policies that non-belted drivers get no pain/suffering, etc if involved in an accident.

[Solid]

Sir,
With all due respect, while I tried to find a hole in GH's argument, and tried very hard, I couldn't and conceded the point. It was not my intention to undermine his clarity of thought by obfuscating the issue with another argument- I meant it as a genuine question, because his view interested me. However, I do agree that my question could be interepreted as a dig, and I wish I had worded it better.

Your prior points are expressed quite well

Thank you!

Lawsuits and consumer demand for safety have driven all automakers to start including side air bags, etc. The government does not need to legislate their use.

I agree that this is certainly the case currently, but I think that originally consumers were comparatively unaware of the risks involved in driving. As such, it was the government's saftey laws that created a concern, and therefore demand, for saftey features in cars.

Thank you, and if I sound sarcastic anywhere in this post, it's not intentional,

Solid

[Surgicalcric]

Originally posted by Solid
...but I think that originally consumers were comparatively unaware of the risks involved in driving. As such, it was the government's saftey laws that created a concern, and therefore demand, for saftey features in cars.

Solid

That and Ralph Nader. Can I just say I hate a Nader Nail.

[Surgicalcric]

On subject:

Its not the governments place to write laws forcing a person to protect himself.

Personally I hate airbags. Do they save lives? Yes they do. Would I like to see them removed from cars? Depends on whether I have had one deploy while I was treating a patient the given day you ask me.

[Ockham's Razor]

To touch back on the economy...

We can all agree that our economy is based on consumer spending, correct? In fact, our economy is 2/3rd's consumer spending. So, therefore, if we continue on this pace of outsourcing and replacing tech and manufacturing jobs with "service industry" jobs, we are going to have a much weaker consumer class. That would, by deduction, lead to a weaker overall economy.

When they factor in the level of increase in productivity they are actually including jobs in countries where we have outsourced jobs. Indian and Pakistan, for example. It's an untenable situation if we are going to leave a great void for all the jobs we are losing. Unless we innovate and find a replacement for those jobs in some "New" sector. As we did when we lost computer manufacturing jobs and replaced them with software jobs. Now we are even losing those to outsourcing.

These are scary times for the middle-class. I would advocate NDD's solution to ensure that jobs stay in America by tying those large tax incentives given to corporations are tied to keeping jobs in America for Americans. How much in taxes do many of these corporations that are outsourcing actually pay? And the argument that "they employ lots of people who DO pay taxes" is dwindling, because those jobs are being off-shore. Instead of providing a benefit, many corporations simply have a corporate office with a skeleton crew and do all of their work off-shore and the prices they charged for the same products made by Americans remain the same as when they employ foreign labor. The only difference? The profit margin of the corporatation.

Pure capitalism is a terrifying thing to many people. Pure capitalism is basically survival of the fittest. That is why we instituted so many social programmes to help those who could not survive in a capitalistic society. Public Works programs, Social Medicine for those who really need it, Food programs, education and job training... We have struck a very fair balance between capitalism and socialism for many decades. We try to only reign in corporations for very egregious violations, and yet provide some protection for the average citizen. To scrap that system, which has made us the most prosperous nation on Earth would be, in my opinion, a great mistake.

It's time to make corporations more accountible. If they want tax incentives, then they need to agree to maintain some percentage of their jobs on these shores. Without that guarantee, what incentive is there for the American taxpayer to subsidize their business in the form of tax incentives?

NBG

I have to say I always enjoy reading your threads.
You always seem to hit the nail on the head.

When people in my group ask difficult questions, I wish
I could articulate thoughts as eloquently as you.

Regards

[Sacamuelas]

Originally posted by Ockham's Razor
To touch back on the economy...
So, therefore, if we continue on this pace of outsourcing and replacing tech and manufacturing jobs with "service industry" jobs, we are going to have a much weaker consumer class. That would, by deduction, lead to a weaker overall economy.

Like the new name BTW.
I don't agree with your prediction. The economy is growing. We are on an economic upswing IMO. Please list some historical facts that support your statement. I can think of quite a bit of manufacturing/tech jobs lost in factories due to technology in the last few decades.. I think our overall economic status within the world community is actually due to this. We evolved, innovated, and pursued new technology and new ideas. That is what has made us "the most prosperous nation on Earth".

Unless we innovate and find a replacement for those jobs in some "New" sector. As we did when we lost computer manufacturing jobs and replaced them with software jobs. Now we are even losing those to outsourcing.

I agree, but that responsibility falls on the individuals shoulders. It should not be forced through legislation. Do you really think a mediated half-measure that would make it through the congressional BS factory would be best suited for US businesses? Or do you think that US businesses themselves know what is best for themselves in each of their unique business environments? I chose the latter. If they fail to make a proper decision, the company will pay for it through its consumers.

I would advocate NDD's solution to ensure that jobs stay in America by tying those large tax incentives given to corporations are tied to keeping jobs in America for Americans.

We have already noted NDD is a socialist on this issue. TO much time studying peasant worker revolutions I think. LOL


It's time to make corporations more accountible. If they want tax incentives, then they need to agree to maintain some percentage of their jobs on these shores. Without that guarantee, what incentive is there for the American taxpayer to subsidize their business in the form of tax incentives?

Hmm.... that sure does sound like you should have used the buzzword "quota" in that sentence. What is this, a new form of affirmative action for middle class economic special interest groups too. Okay, that pretty much covers everybody in the country except the extremely wealthy. It is us verses them. We get to make decisions about where we work or when we quit, but they will be deemed illegal or penalized if they decide to change our status.
Sounds great comrade…

[NousDefionsDoc]

WTH? I thought this was over for some reason.

Couple of questions - what's the first duty of government?

If they fail to make a proper decision, the company will pay for it through its consumers.

Not necessarily. And even if they do, it will be after the fact and the jobs are gone. Easier to stop them leaving than get them back.

Greenhat, I disagree with you that the market forced environmental and safety consciousness. Maybe it is industry specific, but that hasn't been my experience.

The problem I see is with regard to overseas labor, the market isn't level and I don't see how it can level itself. At least not in this century. Your never going to convince a majority of US consumers to buy US so the companies will stay US. The consumer will buy what he feels is the best value, regardless of where it comes from. The US consumer doesn't want to hear about those Chinese workers building those Walmart stereos, he wants his blue light special and coupons.

[Sacamuelas]

I thought it was too. However, it popped up on the radar screen due to Guinness's post. Oh well, I am bored, the twin warriors are still asleep-and the wife is gone to a baby shower. What else is there to debate? LOL

First duty?
In reality, I would say- to preserve itself. Or were you going for Law and Order or freedom and democracy?

I know it seems easier to try and play prevention politics on these issues. I just think that there is no way to predict when the next "tech boom" type industry will be innovated and flourish in our country. If we start stifling businesses by actually providing incentive to keep the status quo, we will prevent them from having access to the free capital needed to invest in the new technology.

We can not stop our progress towards a consumer driven- service economy. If we do, we will become stagnant while the rest of the world catches us in technology and innovation. So for a few years/maybe a decade all things will look acceptable. However, as we flounder under a government enforced status quo, we will have lost the very thing that made America the economic leader in the world-flexibility, innovation, potential, desire for the new, and imagination.

Eventually, we will be forced to compete as an equal with all the other countries to market and produce the same items. We will not be able to do that with our standard of living and legal requirements for safety/environment/benefits.

IMO, that is not what America was founded on or successful doing for that last two hundred years.

[Solid]

Although the theory of Comparative Advantage has several flaws in application, I believe that it can function and that despite certain incongruences, the US economy is evolving a Comparative Advantage (CA) in the services sector.
This means that jobs that are not part of that sector must be shed so that employment can be re-allocated to service industries. Out-sourcing is a very good way of doing this, because it means that despite the initial loss of the original investment in a foreign country (foreign direct investment), the US-based company will be able to make profit in the long-run, thereby not only freeing labour for reallocation to economically efficient sectors, but also doing so in a way that preserves profits.

It seems to me that by preventing out-sourcing, we are simply preventing our economy from evolving to the next stage of Comparative Advantage, thereby incurring losses by remaining in industries where we can no longer effectively compete, missing out on the potential benefits of a CA in services, and decreasing the time and economic gap between the US and, for example, China, Japan, and to a lesser extent the EU.

That said, an unregulated CA motion would involve a sudden unemployment 'shock' to the US economy. It would therefore drop wage rates significantly, and decrease consumer power and living standards. To avoid this, it is prudent for the US government to create incentives to slow the rate at which companies out-source and shed labour. These incentives should be short term, because any long term incentives will 'snag' the evolution and thereby prevent the US from reaping the full benefits of a Comparative Advantage in services.

Just my .02.

Solid

Originally posted by NousDefionsDoc


The problem I see is with regard to overseas labor, the market isn't level and I don't see how it can level itself. At least not in this century. Your never going to convince a majority of US consumers to buy US so the companies will stay US. The consumer will buy what he feels is the best value, regardless of where it comes from. The US consumer doesn't want to hear about those Chinese workers building those Walmart stereos, he wants his blue light special and coupons.

You are assuming that it should be level. I disagree. Similar to NBG's (your logic patterns don't match your new user name, Ian) assumption that "service industry" somehow will make for a weaker consumer class than manufacturing. Nothing to support that assumption, as a matter of fact, it would be rather easy to demonstrate that the opposite is more likely true.

The US consumer (and any other consumer) should make decisions based on their best interests... and so should corporations. And they will, REGARDLESS OF LEGISLATION. You can't make companies stay here, and you can't pull stunts that penalize them with consumers because those things will penalize American consumers far more than they penalize any corporation.

When I refer to market forces, I am referring to those that businesses traditionally consider:
Price
Value
Relationships
Image
Supply
Demand

The US wants to maintain its standard of living? It has to keep moving ahead, has to keep innovating, inventing, recreating what America has done best. The fact that the United States did that for the entire 20th century is what drove the US economy. Not manufacturing...but being the leader in manufacturing technology. That is what Henry Ford brought to the table 100 years ago. That kind of innovation must continue... and that is what will differentiate the US from other nations, or the US will become a third-world nation. It's sink or swim... and it should be. Not a level market, but a differentiated market. Too much commodities focused thinking instead of creative thinking in business will kill business.

Capitilism scares people? Tough. So do lots of things. Doesn't change the fact that global markets and more efficient transporation leading to lower costs mean that competition is getting tougher. And that means that whoever (nation, company, etc.) that adapts better to capitilism (Adam Smith style) will survive and thrive. And those that don't? They will fold, sooner or later... just like the Soviet Union.

[Sacamuelas]

Solid-
I agree with everything in your first two paragraphs. Excellent post. I admit, you express my thoughts better than I do.

The idea of anything being "short term" legislation only is a difficult one to enact once the law is made. There are numerous examples of this in our country today. Affirmative action is a good one to stir up a little discussion. It was meant to be a temporary short term measure to help alleviate a problem. How hard is it going to be to repeal it now? We are better off not falling into the trap, IMO.

We are losing these jobs right now, you agree. Yet, our economy is on a upswing and the unemployment figures are actually better for the last three months than they have been in 2.5 years. Oh and the wage issue, well, the average Americans wage was higher than inflation in each of the last three years. Thoughts?

[Solid]

Affirmative Action certainly is "a big stirring stick".
That said, is is possible for the government to create time-limited subsidies which incentivise against out-sourcing? I must admit that I am used to dealing with the English economy, so I'm not sure if mechanisms are the same in both countries.

I'm out in a remote village in Switzerland right now, so I don't have very many available news sources (internet link is slow and treacherous). This severely impairs any ability I have (if it ever existed) to analyse the economy. A friend told me that unemployment was slowly falling, but that the economy MAY not be on the mend (unemployment may not be falling fast enough to suggest true economic recovery). Is this true?

Thanks, sorry to be a burden.

Solid

[Ockham's Razor]

GH and Sacamuelas,

Everything you presented is solid economic fact. I can't dispute that. Even the report on the economy as presented by Mankiw is proven economic fact, Solid pointed that out very clearly.

The economy, according to LEI's, IS improving. We are growing. This is all great news. Yes, I am aware of the difference between micro- and macro-economics. The jobs problem is a Macro issue.

My concern lies in that economists are having a hard time explaining why, after we have been in recovery status for several months, is there no increase in hiring. Many point to productivity, uncertainty, etc... All relevant. I for one am optimistic that the projected job growth of 3% for this year will be realised. It is a big number, but if we rely on past history an economic theory, our current economic growth should help us realise that 3% number.

I'm just a protectionist when it comes to jobs. I do realise the bigger picture in a macro frame of thought. Basically what Solid laid-out with regards to out-sourcing.

There is NO stopping our conversion to a service economy, absolutely none. I don't think legislation will be able to cushion the blow as we make that conversion either. Unfortunately, this is an issue that only time will resolve.

I just have a mistrust towards big business. Look at the Yankees, trying to get A-Rod... They need to be in the 100% tax-bracket.

I can only hope that businesses will worry about one of the points you mentioned GH, Image. Business should be free to make their widgets without governmental intervention or unfair taxation when they provide a service to the economy and create jobs. However, a balance between rights of the business and rights of the worker needs to be in place. Before the government stepped in with the creation of OSHA and passed legislation, worker's had no rights. Sure, they could quit and go elsewhere, but when unsafe working conditions and low-pay was the norm everywhere is that really an option?

We've struck a good balance between socialism and capitalism in this country. Businesses in this country are very prosperous and profitable, and we have safe workplaces and good wages. I'm only hoping, thinking with a Macro view, that wages and employment rolls increase as much as our overall economy has been. Then, as we transition to a service economy, I think we all benefit.

All I ask is that someone go to these countries that now handle customer phone calls and teach them how to speak English. It should not take me 45 minutes to order an Elvis plate from the Franklin Mint.

Originally posted by Ockham's Razor
I can only hope that businesses will worry about one of the points you mentioned GH, Image.

Image is what allows businesses to charge more than the bare bottom line for their products. Look at BMW, Mercedes. How can they charge what they do? Image. Most corporations understand that. The Yankees sure do.

Before the government stepped in with the creation of OSHA and passed legislation, worker's had no rights. Sure, they could quit and go elsewhere, but when unsafe working conditions and low-pay was the norm everywhere is that really an option?

Ever read David Copperfield? That book and many like it are what made changes... image again. Not OSHA, not legislation. Those were just regulations, the cost of which drove up the cost of products.

We've struck a good balance between socialism and capitalism in this country. Businesses in this country are very prosperous and profitable, and we have safe workplaces and good wages.

Good balance? I don't think so. Businesses are very prosperous and profitible? Find out how many companies go under every year. Find out how many file some sort of bankruptcy.

All I ask is that someone go to these countries that now handle customer phone calls and teach them how to speak English. It should not take me 45 minutes to order an Elvis plate from the Franklin Mint.

Sounds like a market. Form a business.