'Trade is not a four-letter word'
September 29, 2011 By Jennifer Chu
Credit: UPS
While many Americans see today’s increasingly competitive global economy as contributing to the nation’s economic woes, UPS Chairman and CEO Scott Davis argued in a Tuesday talk at MIT that free trade ultimately benefits the U.S. economy and employment.
“One of the problems we have is not enough recognition in the population base and Congress that trade actually creates more jobs than we lose,” Davis said. “If we’re going to grow the economy and reduce unemployment, I think the biggest driver has got to be exports.”
Davis spoke to an audience of MIT students and faculty members, stressing the need for increased trade with international partners. He joined Yossi Sheffi, the Elissa Gray II Professor of Engineering Systems and director of the Center for Transportation and Logistics (CTL), in examining the role trade, infrastructure and logistics can play in boosting — or suppressing — the U.S. economy.
Davis is a member of President Barack Obama’s Export Council, an advisory panel that will examine ways to meet Obama’s goal of doubling the export of U.S. goods and services by 2015. In this capacity, Davis says part of his job is to educate the public that “trade is not a four-letter word.”
While U.S.-based multinational companies do a “fair” job of exporting products, Davis stressed the need to help small and medium-sized companies break into the export business. Davis pointed to recently signed free-trade agreements with South Korea, Colombia and Panama as opportunities for trade relationships and new jobs.
“[The agreement with] South Korea alone will create 70,000 new jobs,” Davis said.
Planes, trains and automobiles
Despite the promise trade may hold for new jobs, Davis says it will be impossible to meet the president’s export goals unless the government makes investments in improving the country’s infrastructure. Congested highways, crumbling bridges, outdated rail systems and inefficient air traffic control all have a direct effect on trade and U.S. competitiveness, according to Davis.
“If the average UPS truck in the United States gets delayed five minutes a day, it costs us $100 million a year,” Davis said. “And I guarantee you we get delayed every day due to congestion.”
He added that better infrastructure would lead not only to more efficient commerce, but also a smaller carbon footprint. For example, less congestion and more efficient air traffic controls would decrease the amount of idling for trucks and planes.
As a company, Davis said UPS has invested significantly in its own infrastructure, with fleets of new trucks and planes, as well as a “rolling laboratory” of alternative-fuel vehicles. The company is currently looking for ways to decrease its environmental footprint and increase fuel efficiency.
It’s a tricky problem for a company that essentially runs on fuel. However, Davis is optimistic, and plans to explore lower-impact options, such as rail and ship.
“We spent the last 20 years speeding the supply chain up for customers,” Davis said. “The next 20 years could very well be slowing the supply chain down, for the environment.”
More than a delivery truck
This may mean going back to the drawing board to come up with new shipping solutions — a very literal scenario for UPS. The company often generates new ideas via “whiteboarding,” a brainstorming process that UPS featured in a 2007 ad campaign. The commercials featured a lanky man, doodling on a whiteboard.
The doodles, drawn in brown marker, illustrated the company’s expanding shipping capabilities, from international delivery to package tracking and scheduled pickup.
“We seriously believe in the whiteboard ads,” Davis said. “We spend a lot of time with our customers at the whiteboards, doing the what-ifs, and sometimes you whiteboard all over the room, and that’s the way you think through these things.”
This kind of pie-in-the-sky thinking has driven the company in new, unexpected directions in the past few years, Davis said. In 2004, UPS announced an unusual partnership with Japanese electronics company Toshiba. In addition to shipping Toshiba laptops, UPS would also repair them. The unorthodox decision — what was a shipping company doing in the computer-repair business? — made a lot of business sense, according to Davis. Having repair facilities with parts and labor close to shipping centers sped up the repair process, delivering laptops back into customers’ hands faster.
In recent years, the company has become increasingly involved in the health care industry, shipping pharmaceuticals and medical supplies around the world. Davis said UPS is working with companies including Merck and Pfizer to set up shipping centers in places such as Africa, where there is a need for both therapies and a direct way to deliver them.
“We’re moving really sensitive stuff that needs to be temperature-controlled, and parts that are critical for surgeries, and people on the operating table need those at 8 a.m. the next day,” Davis said. “We’ve really broadened the business an awful lot.”
This story is republished courtesy of MIT News (http://web.mit.edu/newsoffice/), a popular site that covers news about MIT research, innovation and teaching.
Provided by
Massachusetts Institute of Technology
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Sep 29, 2011
Rank: 5 / 5 (3)
The real message of the article is "What's good for UPS is good for America."
Sep 29, 2011
Rank: 5 / 5 (2)
Sep 29, 2011
Rank: 5 / 5 (4)
Seriously though, UPS is showing typical new-age short-sightedness.
Once the U.S. consumer is completely tapped out and maxed-out in terms of debt, there will be a rapid drop in purchasing and shipments of all kinds -- a.k.a. "economic collapse". In the long term, "free trade" and the chronic trade deficits and loss of capital and industries that it promotes, will utterly bankrupt the U.S. This process of fiscal and economic evisceration, industrial and intellectual self-immolation, and general looting via "financial engineering" is already quite well along; the macroeconomic reality can no longer be masked by easy issuance of cheap debt. Consumption cannot grow faster than actual production on a sustainable basis; nor can debt sustainably grow faster than GDP.
The Ponzi economy is well past the cliff edge and in for a very "rough landing", UPS.
Sep 29, 2011
Rank: 1 / 5 (4)
Singapore, Hong Kong and Macau among hundreds of other cities around the world would not be the economic powers they are without free trade.
Sep 29, 2011
Rank: 1.7 / 5 (6)
http://www.thefre...pproach/
The creation of the USA was in part to facilitate free trade among the states. It has worked quite well to increase liberty and prosperity.
Sep 29, 2011
Rank: 4.3 / 5 (6)
Free trade implies fair trade. What you call "free trade" is in fact Free Rape.
Sep 29, 2011
Rank: 5 / 5 (4)
Sep 29, 2011
Rank: 1.6 / 5 (7)
Rubbish.
If you want to keep factory jobs in the USA, lower the cost of doing business in the USA.
The US govt is threatening to force Boeing to send factory jobs overseas because they are trying to stop Boeing from expanding to South Carolina.
China needs airliners and wants to buy Boeing airliners. If Boeing can't make them fast enough China will build their own or buy from someone else.
Sep 29, 2011
Rank: 4.3 / 5 (6)
What WILL happen, is China will steal Boeing's patents, industrial processes, and designs, and make its own planes anyway. That is and always was the plan. It's what happens with "outsourcing" and "free trading".
Sep 30, 2011
Rank: 5 / 5 (4)
Oct 01, 2011
Rank: 1 / 5 (4)
Smoot Hawley led to retaliation and world wars.
How do you expect this to change if no one trades with them so they can earn the wealth to improve?
And this has been demonstrated time and again, increasing wealth leads to better wages, pollution control and safety.
Oct 01, 2011
Rank: 1 / 5 (3)
If they are as good at making planes as they are at high speed rail, who will fly in their planes?
Oct 01, 2011
Rank: 4.5 / 5 (2)
It pains me to say this but they are better at high speed rails than we are, we don't even have any.
Oct 01, 2011
Rank: 1 / 5 (3)
Trader Joes, Whole Foods, etc. and their 'progressive' customers who support 'fair' trade will loose those products in trade wars. How will that make y'all feel?
Oct 01, 2011
Rank: 1 / 5 (3)
At what cost?
Their high speed rail is unaffordable for their people and their safety record is not so good. A lightning strike recently caused a collision.
Maybe this is why they want to buy more airliners: better, faster, cheaper.
Oct 01, 2011
Rank: 1 / 5 (3)
"Last week, the new leadership at the Railways Ministry announced that to enhance safety, the top speed of all trains was being decreased from about 218 mph to 186. "
"ministry also announced it would reduce ticket prices to boost lagging ridership "
http://www.washin...ory.html
Oct 01, 2011
Rank: 5 / 5 (1)
Oct 01, 2011
Rank: 1 / 5 (3)
For now, the high-speed trains appear to have few riders, mainly because ticket prices are considered exorbitantly high for most Chinese."
"During Februarys annual migration, officials noticed that the high-speed trains were largely empty. But the slow trains on those lines have been taken out of use, giving people few choices. As a result, the highways were clogged and more people rode long-distance buses."
http://www.washin...y_1.html
Oct 01, 2011
Rank: 1 / 5 (3)
http://www.fee.or...ression/
Oct 01, 2011
Rank: 5 / 5 (2)
The trade agreement would be between individual countries with both countries have exactly the same rights.
The tariffs could only be imposed when a trade deficit with the other country reached 10% over the preceding 6 month period.
Once the deficit dropped below 5% for the preceding 6 months the tariff would have to be eliminated.
The tariff would have to be applied to all products and services at the same rate. This would eliminate the politics.
It would be a Balanced Trade Policy. It would not start a trade war. It would be self defeating for the country running the trade surplus to retaliate because they have the most to lose right from the start and the most to gain by keeping their built-in 5% trade surplus protected by the agreement.
Continued
Oct 01, 2011
Rank: 5 / 5 (3)
A Balanced Trade Agreement could actually raise the standard of living around the world because if a country was running a trade surplus they could raise their prices to reduce their exports permitting the trade to grow in a balanced manner. This would have several advantages for them, they could reap more money for the same amount of work. Some of this money could be used to increase the wages of the people creating the goods and services. This would increase political stability in that country.
Rgyy2, here's the best part of all, The World Trade Organization could go into the scrape heap of history!
Oct 01, 2011
Rank: 1 / 5 (3)
http://www.econli...s13.html
"My problem is this: I have a trade deficit with J.C. Penney. Thats right. Month after month, I buy more from J.C. Penney than J.C. Penney buys from me.
In fact, J.C. Penney has never yet bought anything at all from me. Its been a one-way street right from the day I got my credit card in the mail. And I dont expect that this is going to change any time soon because J.C. Penney shows no interest in buying my chief export, which is columns like this one. It just doesnt seem fair."
"This trade deficit silliness is a throwback to the less enlightened times of 16th century mercantilists. "
http://www.mackinac.org/6419
Oct 01, 2011
Rank: 1 / 5 (3)
Swiss depend upon exports so their exports cost more in other currencies reducing their exports forcing employers to layoff people.
Tourism is down because the inflated currencies don't buy so much in Switzerland. For the Swiss who still have jobs, their franc buys much more in other countries, but there are not so many Swiss tourists.
So P thinks a balance of trade agreement would fix this?
Maybe govts should stop devaluing (inflating) their currencies?
Oct 01, 2011
Rank: 5 / 5 (3)
continued. . .
Oct 01, 2011
Rank: 5 / 5 (3)
These trade agreements would be trading rights both countries agree too, but they would be limited by the 3 basic rules in the agreement.
Oct 01, 2011
Rank: 5 / 5 (4)
Oct 01, 2011
Rank: 5 / 5 (4)
His "trade deficit" with Penney's and other stores had to be offset by a "trade surplus" with his employer, or he would have been in trouble. He could have deficits with some entities and surpluses with others, but he had to have an overall "trade balance".
The international trade models of the 20th Century assumed that a successful country's overall balance of trade, in the long run would be zero. However, over the past 20 years the US has had huge and growing trade deficits, and is being stripped of its manufacturing base. The USA had an overall trade deficit of $635 billion in 2010, and the deficit will probably be even worse this year.
http://www.census...tml#2010
Prosperity won't return until we resolve this problem.
Oct 01, 2011
Rank: 1 / 5 (3)
"There's another account called the capital account. It consists of foreign direct investment in the U.S. such as the purchase or construction of machinery, buildings or even whole manufacturing plants plus foreign purchases of stocks, bonds and currencies. For example, Toyota might sell me a Lexus, manufactured in Tahara, Japan for $70,000 but not purchase any American goods such as wheat, cotton or steel. "http://townhall.com/columnists
Oct 01, 2011
Rank: 1 / 5 (3)
It doesn't work out that way. In our example, instead of purchasing American goods with the $70,000, Toyota might put the money toward building a Toyota plant, as it has already done, in Huntsville, Ala., that employs nearly 800 Americans. As a result of that current account deficit of $70,000, we have a capital account surplus (net inflow of capital into the U.S.) of $70,000."
http://townhall.c...s/page/2
Oct 01, 2011
Rank: 1 / 5 (4)
"They should show up in front of Walmart and other sellers of foreign products and denounce American consumers who buy foreign-made products. That would be honest. The "free trade but fair trade" lobby finds it more effective to pursue their agenda by stealth -- namely intimidate and bribe congressmen into enacting tariffs and quotas."
http://townhall.c...s/page/2
'P2' and others here seem to support national socialism.
Oct 01, 2011
Rank: 5 / 5 (2)
Stocks? The world doesn't need to buy OUR stocks. They can buy stocks in any country. They can buy stocks of companies that aren't being killed by unfair trade.
Bonds? How much more of our debt will the world buy before they realize we couldn't ever possibly pay it all back?
Currencies? They'll use the dollars they got from us, to buy dollars?
Oct 01, 2011
Rank: 5 / 5 (3)
This will continue until the average wage and standard of living in America drops down to somewhere between what it is now, and what it will become in the rest of the world when the global economy finally reaches equilibrium. Trouble is, there is 300 million of us and another 500 million in Europe. On the other side of the scales is the other 5200 million.
I'm afraid the eventual equilibrium point is much closer to where the developing world is today, than where the developed world used to be.
And until we reach that miserable equilibrium, let's prepare for 50% unemployment, riots in the streets, and complete disintegration of society and economy.
When shall we level about this with the American Consumer?
Oct 02, 2011
Rank: 5 / 5 (4)
Then comes the pressure to "become competitive" by cutting wages, health insurance, pensions, environmental standards, health and safety, etc. As PinkElephant notes, we might eventually become competitive through an equilibrium process that will leave us with Third World conditions.
Oct 02, 2011
Rank: 1 / 5 (3)
http://www.bea.go...nual.pdf
Appendix A: 2010, current account outflow $136B
net financial IN flow $250B
Looks like quite a few foreigners want US stocks, nearly $3,000 BILLION:
http://www.census...1205.pdf
Oct 02, 2011
Rank: 1.5 / 5 (4)
But if i were the US gov. i would do a lot of things different.
Oct 02, 2011
Rank: 5 / 5 (2)
Appendix A: 2010, ACTUAL current account outflow $470B, net financial inflow $254B.
You were saying?There are always a lot of suckers holding the bag right before a bubble detonates. And the U.S. debt/equity bubble is the largest one of them all. 30 years in the making. When this Ponzi blows up for good, there'll be a lot of hand-wringing about how nobody saw it coming; as a matter of fact they can all see it coming, but just like you too many are still in denial.
In the meantime, what's happened to wages, benefits, and employment numbers? It's only just beginning, too. The Fed's interest rates can't drop below 0: they're all out of gimmicks.
Should the Tea Party actually succeed, the final collapse will begin very soon. And about time too.
Oct 02, 2011
Rank: 1 / 5 (1)
HD lived up to their agreement and now their competitors are copying them.
Detroit was protected from competitors until the 70s and we found how inept US car companies are.
If P2s socialist tariffs were in place would Suburu be building cars in IN, or VW in Chattanooga or ...?
And don't forget about how tort law drove out small airplane manufacturers from the US.
Oct 02, 2011
Rank: 5 / 5 (1)
Fat Chance of consumer protests when most Americans dont have enough income to be consumers anymore.
We used to protest goods produced in nations that condoned child labor exploitation. I think the last one we tried to boycott was Kathy Lee Gifford who was stung by reports in the mid-1990s that her namesake clothing was made in Honduran factories that used child labor, and this helped to stunt sales of her merchandise, some industry experts believe.
But that protest hasnt been repeated for exploited labor in China because the poorest Americans can only afford the Asian imports offered at Wal-Mart, Target,or K-Mart. They dont have the option of refusing to buy because it is all they can afford. Its been about fifteen years since a successful protest was organized. Our economy is not the strong, moral purchaser it once was.
Oct 02, 2011
Rank: 5 / 5 (1)
"Maquiladoras are owned by U.S., Japanese, and European countries and some could be considered 'sweatshops' composed of young women working for as little as 50 cents an hour, for up to ten hours a day, ...the cost of living in border towns is often 30% higher...and many of the maquiladora women...are forced to live in shantytowns that lack electricity and water surrounding the factory cities... 90% of the goods produced at maquiladoras are shipped north to the United States."
http://geography....oras.htm
Oct 02, 2011
Rank: not rated yet
Sure Subaru would have built a plant in Indiana, probably several years earlier to avoid the socialist tariffs!
Oct 02, 2011
Rank: not rated yet
Oct 02, 2011
Rank: 1 / 5 (1)
If we are such suckers why has that money been reinvested in the USA?
"Appendix A: 2010, current account outflow $136B
net financial IN flow $250B
Looks like quite a few foreigners want US stocks, nearly $3,000 BILLION:"
Sources above.
"In our view, the
most striking features of the world at present are the low rates of investment and growth in
some of the richest countries, whose surpluses account for about half of the US de¯cit. The
result is that ¯nancial capital is °owing out of countries with low investment and growth
and into the US and other fast-growing countries."
http://pages.ster...test.pdf
Oct 02, 2011
Rank: 5 / 5 (2)
Oct 02, 2011
Rank: 5 / 5 (2)
Oct 02, 2011
Rank: 1 / 5 (1)
What are 'they' going to do with it?
Recall the outcry when some Japanese bought Pebble Beach golf club? The owners made a good profit and the Japanese later sold at a loss. Where the Japanese planning to move the golf course to Japan?
I know socialists refuse to understand the importance of capital so I am not surprised.
The current depression and the depression from the 30s are the result of socialist policies, not capitalism. The same socialist policies P2 advocates.
'our'? Your national socialism is showing.
Oct 02, 2011
Rank: 5 / 5 (1)
It is a real debt year after year after year accumulating to nearly 8 trillion over the last 3 decades of so. We ought to be ashame of ourselves for doing this to our children.
Oct 02, 2011
Rank: 5 / 5 (1)
Isn't it strange how both started under Republican administration???
Oct 02, 2011
Rank: 1 / 5 (1)
The real issue with our trade problems are the massive increase in money that we continue to create (inflation) and export in exchange for goods and services.
The source of our demand to continue to create new money (inflation) is our ever expanding government.
If we stopped creating inflation, China wouldnt be able to continue vendor financing our consumers to buy their products and we wouldnt be in this situation to begin with.
Tariffs don't protect jobs or wages. The only real solution to our trade problems is to stop printing money and reduce the size of our government so that the dollar strengthens in value rather then continues to weaken."
http://www.pennyj...?aid=520
Oct 02, 2011
Rank: 1 / 5 (2)
Socialism is practiced by both parties.
Why do you think the media supports anti-conservative Republican candidates like Romney or Christy? They will continue to support statist policies as P2 supports.
Wilson's 'progressive' polices led to a significant depression in the 20s, but Coolidge didn't make it worse. He cut govt spending and you don't here much about that do you?
Hoover supported govt intervention and FDR made it worse. Govt was the cause, not capitalism.
Oct 02, 2011
Rank: 5 / 5 (1)
I doubt you know so I will tell you, to replace some of the money lost by our trade deficits. Otherwise we would be in The Great Depression 2 now instead of a Great Recession.
Oct 02, 2011
Rank: 5 / 5 (2)
The also sell so cheaply because their government owns the entire labor market through the a state-run, communist party stangle-hold on all resources owned worldwide.
The labor market in China depends completely on state hiring, even where tiny capitalist style markets are a front for the Politburo.
And trade deals with China for multinationals looking to set up factories in China, to take advantage of cheap labor, have found that once China has the factories up and running glitch free, the government comes in and takes over all the technology and equipment the multinational provided for startup. They are locked out of their factories, all assets stolen. They lose everything they put into it. But new takers still delude themselves that their turn will be different. Not Likely!
Oct 02, 2011
Rank: 5 / 5 (1)
Oct 02, 2011
Rank: 5 / 5 (2)
Oct 02, 2011
Rank: 5 / 5 (2)
That's the same policy that Republicans have been advocating and legislating since Reagan. It doesn't work. It was proven under Coolidge, Hoover, Reagan and both Bush administrations. Trickledown economics is a tragic joke.
"Hoover. . . deeply believed in the Efficiency Movement, which held that the government and the economy were riddled with inefficiency and waste, and could be improved by experts who could identify the problems and solve them."
"Hoover entered office with a plan to reform the nation's regulatory system, believing that a federal bureaucracy should have limited regulation over a country's economic system."
He shut down regulatory agencies in the belief that less government is better. He was wrong. Stock speculation went wild, creating the depression.
Oct 02, 2011
Rank: 1 / 5 (2)
Why don't you move there if China is the socialist miracle?
Oct 02, 2011
Rank: 1 / 5 (1)
"The Coolidge-Mellon team took dead aim at a steeply graduated federal income tax. The tax had been implemented in 1913 by the Woodrow Wilson reformers, imposed only on the rich and intended solely to redistribute income. But with U.S. entrance into World War I and its unprecedented demand for revenue, the income tax became a revenue-producer with a steeply graduated tax structure rising to a near-confiscatory top marginal rate of 77%. In the first two Harding budgets shaped by Mellon, that top rate went down to 56% and then 46%."
http://www.calvin...acy.html
Oct 02, 2011
Rank: 1 / 5 (1)
"In his inaugural address the next March, he said "I want the people of America to be able to work less for the government and more for themselves." "
"The Coolidge boom was built, not on stock speculation, but on his tax cuts. "
"After Hoover's election, lame-duck President Coolidge tipped what he thought about Smoot-Hawley. He said that he didn't think that the farmers would be helped. " {He was correct.}
http://www.calvin...acy.html
Like Reagan, Coolidge was opposed by the socialist Republicans.
Oct 02, 2011
Rank: 1 / 5 (1)
"Herbert Clark Hoover was very much the "forward-looking" politician. We have seen that Hoover pioneered in attempts to intimidate investment bankers in placing foreign loans. Characteristic of all Hoover's interventions was the velvet glove on the mailed fist: i.e., the businessmen would be exhorted to adopt "voluntary" measures that the government desired, but implicit was the threat that if business did not "volunteer" properly, compulsory controls would soon follow."
"Featured in Hoover's plan were increased inheritance taxes, public dams, and, significantly, government regulation of the stock market to eliminate "vicious speculation." "
http://mises.org/daily/2902
Oct 02, 2011
Rank: not rated yet
Probably for the same reason you don't move to the New Capitalist Russia with their flat tax and wild west capitalism.
Oct 02, 2011
Rank: 5 / 5 (1)
Why are you surprised? Don't you learn anything from history?
Oct 02, 2011
Rank: 1 / 5 (2)
"But before you worry about Chinas becoming No. 1 any time soon, consider the remaining gap between its economy and the U.S. economy. In 2009, Chinas GDP was $4.9 trillion, only 34 percent of the U.S.s $14.3 trillion. Because China has 1.32 billion people, or 4.3 times as many as the U.S. has, the gap in per-capita GDP was even bigger: Chinas $3,709 was only 8 percent of the U.S.s $46,405.
Just to maintain this gap at current levels, Chinese GDP will need to grow at double-digit rates for four years before tapering off, or rise sixfold in three decades (assuming that U.S. real GDP increases 2 percent per year on average for the next 30 years, and using government population projections). To close the per-capita GDP gap in 30 years, Chinese GDP would need to grow about 10 percent per year for three decades, or expand to 17.8 times its current size in that period. "
http://www.bloomb...rd-landi
Oct 02, 2011
Rank: 1 / 5 (2)
"The advocates for Christie are selling him in exactly the same way Obama's did, and for exactly the same reason -- Obama did not, and Christie does not, threaten their respective party orthodoxies, and both promise a comfortable working relationship with party elites."
"Christie's perfectly timed speech provided the opening for a last-ditch attempt by a Republican establishment, worried about a faltering Romney, to head off trends they do not like represented by the Tea Party, Jim DeMint, strong alternative conservative and libertarian voices in the New Media, and other unsettling influences on the right."
http://www.americ..._the_ski
Oct 02, 2011
Rank: 5 / 5 (1)
YOU are the one claiming we cannot compete with them on the world markets or even inside this country. That is YOUR explanation as to why we continually run a trade deficit with them.
Oct 02, 2011
Rank: 1 / 5 (2)
Prohibition is a virtual checklist of everything people dislike about DC today:
Read more: http://www.nypost...Zf8WuNaD
"
Not I. You are the advocate for tariffs, not I.
Oct 02, 2011
Rank: 1 / 5 (2)
Really? Which ones?
Oct 02, 2011
Rank: 5 / 5 (1)
My explanation is simple there is no such thing as a fair or free trade agreement.
Oct 02, 2011
Rank: 3 / 5 (2)
Oct 02, 2011
Rank: 5 / 5 (2)
1) Currency devaluation driven by govt. deficit spending
2) Massive public and private debt expansion
3) Massive increases in financial leverage due to deregulation
Real wages haven't risen since the 1970's. Unemployment has only just started rising; it has a lot farther to go. If we withdrew govt. deficit spending right now and stopped new debt creation, our economy would instantly contract by 30-40%. That includes this useless and meaningless "GDP" figure.
Our REAL economy (as opposed to financial pyramid schemes and service-industry Ponzi) has been contracting for the last 30 years, and that contraction can no longer be masked by throwing more debt into the system or continuing balance sheet fraud amongst the megabanks.
Oct 02, 2011
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The purpose of the tariff was to try to save the domestic manufacturer from bankruptcy. In what way does the tariff make a protected company more likely to fail?
Oct 02, 2011
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http://market-tic...ynr=2248
Here, in data from the Fed and the BEA, it is clearly seen that every year from 1980 until briefly interrupted by the rebound of 2008-2009, debt in the U.S. has grown faster than GDP.
Since debt issuance is actually included in the GDP number as the dollars "gained" by selling of debt notes are immediately put into circulation, then it clearly follows that had we not grown our debt at all, the GDP growth numbers would have been consistently negative every year from 1980 until 2008.
THAT is a long-term economic contraction, if ever there was one.
Also, debt growing faster than GDP = eventual macroeconomic detonation, ala Greece.
Oct 02, 2011
Rank: 5 / 5 (1)
The reason for the boom in the 1920s was mechanization during and after WWI, and production of cheap autos, home appliances, and the product catalogues that gave anyone the chance to buy goods from the big cities. And the soldiers post-WWI brought home their accumulated war wages and became the ultimate factory workers and consumers. The boom came from the bottom up, from consumers.
Coolidge consistently blocked any attempts at government intrusion into private business. However, the overconfidence of these years contributed to the speculative bubble that sparked the stock market crash and the Great Depression. The government's role as an arbiter rather than an active entity continued under President Herbert Hoover. Hoover worked to get businessmen to respond to the crisis by calling them into conferences and urging them to cooperate. Hoover's vigorous attempts to get business to end the depression failed.
Oct 02, 2011
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The wealthy, like the Rockefellers and Stanton began to amass great stores of valuable goods that could be vaulted away or ostentatiously displayed in mansions. They bought private railway cars. Who benefited from sales of that type? The wealthy invested in gold, art, and high value luxury goods which could be put on ice. They did not contribute to consumerism in any way, because they only bought very expensive products specially designed to entice rich customers.
There were so few tangibly wealthy families that only a few dozen of the best products were sold, which did not contribute to the overall economy in any way. The rich bought from the rich and kept their wealth among their class. No such thing as trickle-down economics.
Oct 02, 2011
Rank: 1 / 5 (2)
And I notice no one can back up their assertions.
They are shielded from competition. Ever wonder why US car companies didn't have cars people wanted to buy in '79?
Again, no one can back up their assertions.
Oct 02, 2011
Rank: 1 / 5 (2)
Then why even have any trade agreement?
As for China being a communist country, look under the hood and don't be surprised at what you find, corruption, inefficiency and no rule of law.
Oct 02, 2011
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That is opposed to the many millions of middle and lower class consumers who worked hard to improve their homes and lives.
Oct 02, 2011
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Lowering the taxes on businesses was done specifically to give them more operating capital so they would build more factories, hire more workers, assist in repairing the economy they had a large part in destroying.
That implies an obligation to use their wealth for the common good. They would still profit from those new factories and workers wages, because their goods would continue to be sold, their buisiness would not go bankrupt (while their personal pocketbook remained fat from profits rather than from refunded tax breaks.
I do believe one should be able to keep one's wealth. But from my point of view, there is no wealth at this level to save. Back then, it was all in the pockets of the Rockefellers and men like Stanton.
I believe in enlightened self-interest where the greatest good benefits the greatest number of people. Greed on the other hand benefits nobody.
Oct 02, 2011
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Oct 02, 2011
Rank: 5 / 5 (1)
China is a Command Economy ruled by an Oligarchy. Same thing as Russia. This is much closer to Fascism than it is to Communism.
Remember, a central feature of Communism is that there is no private property, and there is no private wealth. That's not the case with China, nor with any other nation on Earth.
Oct 02, 2011
Rank: 1 / 5 (3)
http://www.thefre...riedman/
Then you must support capitalism.
"The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries." Churchill.
Oct 02, 2011
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Oct 02, 2011
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Oct 02, 2011
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R2: First it wasn't government's fault and now it is government's fault. Make up your mind. Presidents don't govern in a vacuum. A government agency was at fault? Why weren't the presidents aware of it, since they apparently took the stance of hands off the economy? I will catch up on the reading later. The blog is too long. I have work to do. Besides, I don't trust blogs all that much. They are blogging because they have a spin to present. This one obviously is super-capitalistic (-expealidocious.)
I keep going back to the fact that businesses outright refused to assist in correcting the problem. Typical capitalistic profit-protectionism. And that after two presidents had lowered taxes to their wealth benefit.
It sounds awfully like today.
Oct 03, 2011
Rank: 5 / 5 (1)
What China (or the Soviet Union) _calls_ itself does not necessarily describe what it really _is_. The Soviet Union was permanently stuck in a state resembling what Lenin called "Dictatorship of the Proletariat" -- which in Lenin's theory was a necessary intermediate stage during which Capitalist influences are eradicated from society. The next stage afterwards was supposed to be an evolution toward actual Communism. Except it was obviously unachievable, because it assumed that human beings were infinitely malleable blank slates at birth, who could be molded into whatever behavioral pattern the stewards of society decided upon. That theory (Behaviorism) turned out to be false.
In reality, humans are lazy and selfish, and are best motivated by personal gain and competition rather than egalitarian cooperation. Capitalism works with human nature, Communism goes entirely against it. Which is why Communism is impossible in practice, and does not in fact exist in the real world.
Oct 03, 2011
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The "People's Republic of China" is actually the "Fascist Dictatorship of China".
Oct 03, 2011
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Oct 04, 2011
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"Getting people to spend requires the Chinese government to eliminate many of the subsidies -- including cheap labor, low interest rates and an undervalued currency -- that have fueled growth so far. Consumers need more income, so companies will have to pay their workers more. Consumers also need a stronger currency to boost their buying power, so exporters will lose some of their competitive edge. Savers need to earn a high enough return to guarantee their retirements, so banks and companies borrowing costs will rise. "
"As a result, vast swaths of Chinese industry could be rendered unprofitable. Bad loans could force the government to step in and recapitalize banks. Fixed investment, which makes up 46 percent of the Chinese economy compared with only 12 percent in the U.S., could fall sharply, undermining the employment growth needed to boost spending."
http://www.bloomb...to-the-g
Oct 04, 2011
Rank: 1 / 5 (1)
They all are opposed to individual liberty, free markets and limited govt.
Those who want to quibble whether China is fascist or communist, why do you really care unless you are a fascist, socialist, statist, communist....?
BTW, the USA implements its fascist control via its regulatory agencies, the IRS, GSEs and its central bank (Federal Reserve).
Oct 04, 2011
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This has been abundantly demonstrated by the radical social experiments in various South American and African countries, and more recently in Iraq. Mexico too, is in such a terrible shape today precisely because its government is too weak to stop the crime lords, not because it's too strong.
Oct 04, 2011
Rank: 1 / 5 (1)
This is inept govt, not limited govt.
How does organized crime flourish if the govt is limited to protecting the property rights of every individual?
Organized crime flourishes under over-reaching regulatory state that fails to enforce the bad laws and regulations it tries to impose.
That's why corruption is so rampant in China. China IS an organized crime state.
Mexico is weak because it is corrupt. It is corrupt because it is socialist. Corruption is the only way anyone can make money.
Oct 04, 2011
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Also, once you're left bereft of property by not being a local crime lord, "property rights" don't amount to a whole lot for you. That's the overwhelming majority of the population, in the end.
Oct 04, 2011
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Oct 04, 2011
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Why? If those oriental 'virtues' were so great, why didn't China rule the world centuries ago?
Recognition of inherent, unalienable, individual human rights is what has led the world to liberty and prosperity.
The socialist, collective 'values' you think are so great has lead to millions murdered by those very 'great' Chinese over hundreds of years.
For centuries, the Chinese enterprise was lower than low. The best and brightest aspired to be a member of bureaucracy.
When the Chinese people were liberated from coerced collectivism, they have prospered as we see in Hong Kong, Macau, Taiwan and in China towns around the world. Like Jewish culture, the Chinese culture has been shaped by oppressive govts stealing their property. Education and family is what enabled them to prosper.
Oct 04, 2011
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Oct 04, 2011
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Oct 04, 2011
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High cigarette taxes motivates black markets. We all know how organized crime developed because of Prohibition and the 'war on drugs'.
Inconsistent and bad immigration laws and all sorts of mandated labor costs motivate slave labor in the US.
Muggings flourished in NYC when the cops didn't enforce the law and when it was illegal or difficult for people to defend themselves making popular vigilante movies like Death Wish and Dirty Harry.
The govt claims to be protecting people with FDA rules but it kept a heart valve out of the USA for over 4 years while people died and those same misplaced laws are driving medical device manufacturers out of the country.
"This is an all too familiar story, the FDA impeding useful innovations in the U.S."
http://www.aei.or...e/104216
Oct 05, 2011
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Oct 05, 2011
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They are banned by the govt, but people still want them.
I don't want to 'legalize' any drug. I want to decriminalize all drugs. Legalization puts the govt in the position of being responsible leading to a tax on products it knows are harmful. Decriminalization puts the responsibility upon the individual, AND would enable an independent means for certification of quality and purity.
Of course I have read Grapes of Wrath. Of course employers seek the lowest cost labor (not the same as cheapest). But when govt mandates minimum wages, farmers switch from hand picked crops to machine harvested crops. That is what happened in NW Washington.
Why do think keeping slaves is cheaper than paying independent people a wage and letting them take care of themselves? Strawberry growers in NW WA used to pay by the flat, not the hour.
First rule of medicine, do no harm. Does the FDA 'do no harm'? They screw up individuals die. But why do collectivists car
Oct 05, 2011
Rank: 1 / 5 (1)
They want these slaves (aka illegal immigrants) to vote for democrats who will toss them a few scraps while those in power, the politicians and the pinky ring union bosses live high.
Now I support allowing anyone into the USA who wants to work or start a business. This would open the door to Indians, Filipinos, Europeans, Chinese, Koreans, etc who want the opportunities.
Of course under BHO, most are now leaving because the USA is killing opportunity.
There was funny editorial a while back about Mexico reclaiming Los Angeles and all the Mexicans in LA were running north to escape.
Oct 05, 2011
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Oct 05, 2011
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And any call for lifting visa restrictions, increasing immigration quotas, or boosting funding to the INS and US consulates abroad to let them catch up with backlogs, immediately runs into "conservative" opposition.
Oct 05, 2011
Rank: 1 / 5 (1)
http://www.migrat...isas.pdf
Oct 05, 2011
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"Labor market immigration policy must balance two main goals: supporting economic growth and competitiveness (including finding ways to recruit and attract global talent) WHILE PROTECTING THE WAGES AND INTERESTS OF US WORKERS."
- emphasis mine
Oct 05, 2011
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Why? If those oriental 'virtues' were so great, why didn't China rule the world centuries ago?"
@ryggesoqn -- I was commenting that the Chinese economic system doesn't fit well into our scheme for classifying economic systems, partly because the Chinese often have a different world-view than Americans. I was not necessarily saying that their system was great, and I definitely wouldn't want to trade places.
Oct 05, 2011
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Why? If those oriental 'virtues' were so great, why didn't China rule the world centuries ago?"
@ryggesoqn -- I was commenting that the Chinese economic system doesn't fit well into our scheme for classifying economic systems, partly because the Chinese often have a different world-view than Americans. I was not necessarily saying that their system was great, and I definitely wouldn't want to trade places.
Oct 05, 2011
Rank: 1 / 5 (1)
Socialism describes the Chinese economic system quite well.
But Pinky, you asserted it was conservatives who were opposed to increasing legal immigration. Since when are labor unions conservative?
Oct 05, 2011
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They are opposed to the type of immigration that fires a qualified and capable American worker, only to fill his position with a severely underpaid immigrant worker, who is "owned" by the company until he/she finally gets the green card.
Oct 06, 2011
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http://thecnnfree...ss-asia/
Isn't that just endearing and oh so inspiring? Brings a tear to my eye, it does.
Oct 06, 2011
Rank: 1 / 5 (1)
In this way, our civilization could die of energy starvation, albeit we are sitting on the pile of energy, because we have no economical mechanisms, how to motivate people in its utilization.
Oct 06, 2011
Rank: 1 / 5 (1)
Fascism is socialism.
Huge visa backlogs are due to quotas, and due to the State Dept making excuses for NOT wanting to be in the business of processing visas.
Ever been to a US consulate to process a visa?
Oct 06, 2011
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http://en.wikiped.../Fascism
and then by reading the definition of Socialism:
http://en.wikiped...ocialism
As always, it would help immensely if you did not remain so utterly ignorant regarding the very issues you seek to discuss.
Oct 06, 2011
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Those who quibble about the flavor of socialism must be an advocate for one of those flavors.
Is that why you call yourself 'Pink' Pinky?
Oct 06, 2011
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Oct 06, 2011
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Free?
Fair?
Longer words...
Balanced. Trade.
Let me read the article first...got caught in the undertow of commentary.
Stick to quotes soggy. Otherwise people get the impression you are free to express yourself.
Oct 06, 2011
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Soggy. Brain teaser before I go:
The difference between socialism and sociology.
Remember we spend a entire 200 plus post thread on this.
Oct 06, 2011
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Fascism was readily adopted by Germans in the 20s as they were already socialists.
Oct 06, 2011
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Oct 06, 2011
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Unless, maybe, Pinky likes some form of socialism but doesn't like being put in the same category with fascists.
Democrats and unions are supporting the communists protesting Wall Street while those same democrats are soliciting and accepting donations from Wall Street.
Oct 06, 2011
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Oct 07, 2011
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Most of stable causal space of stable society is represented with gradient of less and dense phases, which correspond the democratic and conservative parties in 1:1 ratio. IMO communists and fascists correspond the particles of matter and antimatter with opposite curvatures and they annihilate mutually in direct contact, despite their behaviour is similar with respect to the rest of society, like at the case of electron - positron pairs.
Oct 07, 2011
Rank: 1 / 5 (1)
"Fascism advocates a state-directed, regulated economy "
Socialism: "...centrally planned economies directed by a single-party state that owns the means of production. "
All are OPPOSED to free markets and private property.
Oct 07, 2011
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Even Sweden has had to end their tax on wealth, among other anti-socialist concepts, to keep from collapsing.
Oct 07, 2011
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"Sweden has the most even distribution of income distribution of any nation"
Oct 07, 2011
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Mises.org
You have found the world center of the Austrian School of economics and libertarian political and social theory.
For god sake, Adolf, wipe that fascist smirk off your postmortem Austrian face.
Soggy's Sprachrohr
Oct 07, 2011
Rank: 1 / 5 (1)
"Sweden has the most even distribution of income distribution of any nation"
Sweden must not believe this to be too important as they abolished their tax on wealth to attract wealthy Swedes to return to Sweden.
Oct 07, 2011
Rank: 5 / 5 (1)
lol
"and the winners are......?!? Woohoooo. Go team go!
(Historians are the name of my team, great team, great bunch, never once losing or failing to validate a history for anyone's agenda. God hands alone wrote the Bible, not a chance in hell to tweak that one. Best you let that dog sleep. Of course you will reflect on Churchill's quote over history written by winners.)
lol
The last time I ,as a German, told Swedes what to believe was during the war. Did you replace us? We Germans tax the hell out of ourselves - to no avail. The Swedes make us look like we are the No. 1 tax haven in world. Yes, wealthy Swedes. (Returning from Germany.)
Oct 09, 2011
Rank: 1 / 5 (1)
A common 'progressive' bumper sticker is 'Free Tibet' and many 'progressives' seemed to be impressed by Chinese communism.
"China is built on lies and its officials are hypocrites, the Dalai Lama said on Saturday, speaking via videophone after visa problems prevented him from joining Archbishop Desmond Tutu's birthday celebrations in South Africa."
"In reality, for the communist totalitarian system ... hypocrisy (and) telling lies has unfortunately become part of their lives."
http://www.reuter...20111008
Oct 20, 2011
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Despite a high national unemployment rate and the availability of a wide range of training and certification programs, United States manufacturers are struggling to find skilled workers to fill key positions. This widening skills gap is approaching critical levels, threatening manufacturers' competitiveness and hurting their chances at success in the market.
U.S. manufacturing companies are facing a workforce shortage for as many as 600,000 positions, according to a new survey from Deloitte and the Manufacturing Institute. Based on a national poll of 1,123 manufacturing executives, the survey found that 5 percent of current manufacturing jobs are unfilled due to a lack of qualified candidates."
http://news.thoma...T.mc_t=b
Oct 20, 2011
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""These unfilled jobs are mainly in the skilled production category positions such as machinists, operators, craft workers, distributors and technicians," Emily DeRocco, president of the Manufacturing Institute, said in an announcement of the results. "Unfortunately, these jobs require the most training and are traditionally among the hardest manufacturing jobs to find existing talent to fill.""
"The low regard that younger workers have for manufacturing jobs may be exacerbating the skills gap, as manufacturing ranked last among industries in which 18 to 24 year-olds would choose to start a career. "