Brett Arends writes "In praise of Donald Trump." What I've quoted is #1 on a 5-point list. Point #2 is about immigration:
Illegal immigration has been cynically used by many wealthy Americans to bring in low-wage “scab” labor and drive down the wages of lower-skilled American workers... I am a huge supporter of immigration — my parents were immigrants — but our current policies are insane and upside down. We have allowed the unregulated and unsafe importation of low-wage labor — while blocking safe, regulated and skilled immigration. And anyone who’s said peep has been called a racist. Trump has put this issue on the map. Quite right too.Arends just has to preface his incisive list with assurance that he's not voting for Trump and he doesn't even know anyone who is, to which I say: Yeah, everybody's in the closet.
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Because of these same issues, watch as more and more African Americans warm to Trump, and then watch the progressives' collective head explode (ala that great scene in Scanners -- https://www.youtube.com/watch?v=YI3NoBeNwfk). Waiting for that magic moment is what makes many of us tolerate Trump's vulgarity.
What people don't understand is you can't stop the laws of economics; you can only delay them. You can erect barriers, but then you lose the benefits of possible lower costs and new products. Economic disruption is going to occur, the challenge is to try and slow the rate that allows people to adapt and change.
Trump's willingness to speak the truth seems destined to cause the rise and fall of many in the world. They had better triple his Secret Service Detail quick.
Not to disagree with the point about low paid labor but there is not and can be no trade deficit with a rational partner. Trade will always balance.
When we buy a widget from China, China winds up with dollars. We either pay the seller in dollars or we buy yen from a chinese bank for dollars. Somebody in China has the dollars.
Unless they value the dollars for the pretty engraving, they are completely worthless until spent. China can only spend those those dollars in the US. They can buy something and import it to China which works toward balancing the trade deficit or they can buy a Trump apartment in NY which doesn't. Go figure.
Evan as Trump is pointing out that the dollars spent on Chinese made I-Pads do not come back to the US, he always mentions how the Chinese buy his apartments. He never seems to make the connection.
There is no trade deficit.
Caveat: The Chinese can spend the dollars elsewhere, buying oil from Saudi Arabia or lending it to Washington. That does not change the above, merely shifts it. Now the Saudis or the Govt must spend the money buying US goods and services.
I am so sick and tired about hearing about the so-called trade deficit!
John Henry
"A man grasps a bag of tangerines" but he's not voting for it.
My thoughts:
(1) Back when I was a teenager (the 1950s and early 1960s) I developed an appreciation for hard work mowing lawns and shoveling driveways. Other teenagers got part time jobs at the McDonalds near the high school (no competitors back in those days!) or elsewhere. Today those jobs are filled by Hispanics, most speaking English very poorly and some clearly illiterate in any language. Where should young Americans get proper work experience before they graduate from high school or college?
(2) In earlier times, during downturns in the economy people on the low rungs of the economic ladder could maybe make ends meet by doing odd jobs or hiring out as day laborers. Today those jobs are filled by undocumented immigrants picked up at the local convenience store, and the past seven years have been a nightmare for them.
(3) And Arends is absolutely right companies using free trade agreements to get around child labor laws and environmental protections. Some of the firms, like Nike, have been caught and publicly shamed. That's pretty rare. And in the meantime Philip Knight achieved a net worth of $28 billion on the back of Asian children.
"Arends just has to preface his incisive list with assurance that he's not voting for Trump and he doesn't even know anyone who is"
One must signal one's virtue and show they are of the right sort.
I used to believe in free trade as a social good. No longer. It's just one more way for the elites to sell out the proles. So what if iPhones cost more and you have to wait three years to get a new version instead of six months if Americans have jobs and you don't have to know that your phone was built by what basically amounts to the labor of the enslaved?
PB,
The laws of supply and demand also apply to crime. Nothing to stop people from going after the rich and taking their stuff.
John Henry, you forgot that they could lend it to the American political parties through treasuries used to buy votes at interest paid by the voters.
Re "Slave labor"
Puerto Rico was a very poor, third world "nation" although part of the US and Puerto Ricans are natural born citizens. Still is very poor though not so third world any more.
My wife's parents grew up poor. Not US style poor, not even Appalachain style poor. Neither got past 4th grade before they had to start working. My father in law, when he died at about 85y/o could still barely read and write.
In about 1950 GE built a plant near the town where they lived and hired them both. My father in law was a porter. My Mother in law worked on the line placing a metal stamping in a plastic circuit breaker housing 30 times a minute.
Horrible, horrible jobs. Even though they were union they never made much more than the minimum wage, which until the 1970s was always less than the federal minimum.
Perhaps the govts should have prevented this.
OTOH, they were able to move from what was not much more than a grass hut to a concrete house (key in the tropics because of termites) and were able to provide a decent life for their 7 children. They were able to put the 5 youngest through university. They became teachers, an engineer, a CPA and a bureaucrat.
If it had not been for the so-called "slave labor" the cycle of poverty would have continued to this day.
So all you folks who complain about this low paid, low skilled labor can go fuck yourselves.
It is low paid, low skilled and crappy work at long hours. The parents may never do all that well. The children will do better and the grand children will do even better yet.
I'll fight tooth and nail to keep anyone from taking these opportunities away.
Also, see my previous note. The dollars we spend on the Chinese I-Pad or the cheap Kenyan T-shirt always comes back to us buying US goods and services.
Or, sadly, it comes back to finance US govt deficit spending.
John Henry
Free trade has net winners and losers. From an economic standpoint, you can say that it is a net benefit for the American economy as a whole because goods and services are cheaper and net income of the country as a whole is up.
But the net losers of free trade are frustrated and angry and there are a lot of them.
I have mixed feeling on the free trade. On the one hand, trading with a country that uses actual slave labor is bad. It undercuts our workers while enriching the slave owners. On the other hand, over the past few decades global inequality has been drastically reduced, and the lives of millions of people improved by the increase in free trade.
I'm not a fan of child labor, but I'm less a fan of child starvation. In too many places those are the only two realistic options.
I'm not a fan of dumping toxic waste into rivers, but it is a reasonable choice for a people to accept some level of pollution in exchange for jobs that allow them to provide food, clothing, medical care, education, etc. for their families.
"In about 1950 GE built a plant near the town where they lived and hired them both.
Well, GE won't make that mistake again: they sold their appliance business to Haier.
http://www.reuters.com/article/us-ge-divestiture-haier-elec-idUSKCN0UT0AG
Blogger tim in vermont said...
six months if Americans have jobs
Except, even if the I-phones are made in the US, it will not necessarily mean more US jobs.
As I and others have pointed out previously, US manufacturing output, adjusted for both inflation and population increase has been increasing pretty steadily for the past 50+ years and continues to do so.
But, because of automation and increased productivity, manufacturing employment has been steadily decreasing.
I have spent my working life since 1976 in factories in a wide variety of industries all over the US as well as some in Central and South America. The manufacturing jobs that most people think will save us are generally shitty jobs. Really shitty jobs. My mother in law put 100 million + little stampings into circuit breaker shells at GE. Would you like to do that? Would you like your kids to have to do that? If it paid $25/hr, would that change your opinion?
There are a lot of skilled jobs in manufacturing that do pay well. They all need education either vocational or academic. The jobs that everyone laments, that a HS graduate could do with little or no training, like stuffing I-Phones, or assembling circuit breakers are really shitty.
For the most part, they didn't even pay that well. When they did pay well by the hour, for example in oligopolies like steel, auto, rubber, they didn't pay all that well over the course of a couple years with retooling shutdowns, layoffs, reduced hours.
In other words, look at annual, or 5 year pay, and see how well they do.
Those manufacturing jobs are never coming back to the US, no matter what trade barriers are erected or laws passed. That is probably a good thing.
John Henry
John,
I'm usually aligned with alot of your posts but the idea there's no trade deficit is pure bunk. There is not some cosmic requirement that when we buy stuff from India they buy an equal amount back from us.
The trade imbalance is not about India having equally free trade or purchasing power back to the U.S. or some other country. The trade imbalance is that India or China invests in itself and results in their economy growing a result of a net outflow of funds from our economy. Which is fine, in the sense that as India grows it WILL buy more from us and others - but it will first require that growth, and that initial investment using funds from the U.S., that will not equally return.
Similarly, when we send $50 billion a year in consumption dollars to India we don't spend that here.
I'm not a protectionist/isolationist and there is significant value in free or lightly regulated trade. But there are downsides too.
I'm with many of the other commenters: if it's slave labor, it's evil. But if it's some people who were literally starving to death in subsistence farming, getting a better life by moving to the city and working crazy hours and getting paid next to nothing in a lousy factory - that's good. That's how poor people in this country improved their status, that's how poor people in every country improve their status. I am not interested in those who want those people to continue starving to death and dying in poverty. I do not think they have the moral high ground.
"Ever since the farcical Citizens United Supreme Court ruling turned the U.S.A. into the U.$.A." I am so tired of fools saying foolishness about Citizens United. At least Roe v Wade _really did_ make abortion legal.
Trump is the best man for bringing serious issues into the public debate. But that doesn't mean he's the best man for fixing them.
I've recommended this article before but if you have not read it, you should do so now. It is by Adam Davidson and it is probably the best non-technical article I have ever read on contemporary US manufacturing.
It looks, in depth, at a 100 year old company making auto parts, mainly fuel injectors. It looks at a skilled machinist and an unskilled assembler.
http://www.theatlantic.com/magazine/archive/2012/01/making-it-in-america/8844/
Russ Roberts at Econtalk did an excellent 1 hr long interview with Davidson at http://files.libertyfund.org/econtalk/y2012/Davidsonmanufacturing.mp3
I recommend both.
Davidson does NPR's Planet Money feature.
John Henry
Not in the closet here.
The question of whether immigration (in the aggregate, not just considering a "this is the face of" article showcasing a few model immigrants) benefits the host country (and not just a few in it, if that) surely needs to be raised. Yet the debate is almost always about benefits to would-be immigrants, and the cost-benefit balance to the host country is simply not raised. How unreasonable is it to simply declare that immigration exists to benefit the host country and, while it may also benefit the immigrant, that's not the primary reason why it's permitted.
For example, the Somali immigrant communities in Minnesota undoubtedly do contain some exceptional individuals, but, when viewed in the aggregate these communities have high welfare dependency and have produced more than a few jihadis. Is it even possible to question whether we're better or worse off because we admitted these immigrants, or must anyone who even raises the question be shouted down as "racist" because Somalia is in Africa?
The problem is, this idea that "we lose the shitty jobs, but gain better jobs" isn't working right now. This balance of fewer low-skilled jobs being evened out by fewer low-skilled workers -- well, it's *not* balanced at the moment. I'm not against free trade -- there are clear advantages, if for no other reason than that, in the long term, the U.S. is better off with the ROW being non-poor than poor. But we need to figure something out about the workers left behind -- and, to my mind, keeping a lid on immigration of low-skilled workers has to be one tool. Instead, we're still getting the same rhetoric, that we "need" these workers.
http://www.patheos.com/blogs/janetheactuary/2016/01/remember-the-blue-card-how-times-have-changed.html
Blogger TreeJoe said...
John,
I'm usually aligned with a lot of your posts but the idea there's no trade deficit is pure bunk. There is not some cosmic requirement that when we buy stuff from India they buy an equal amount back from us.
OK, I'll bite, what happens to the dollars that India winds up with?
When we buy $50bn worth of Indian widgets, what does India do with those dollars? Where does India spend them?
John Henry
The FANG’s (Facebook Amazon Netflix Google) supposedly represent the new American competitive prowess. They made a few people very wealthy, but do absolutely nothing for Main Street. They really don’t employ that many people in America. Not like General Electric, Boeing or US Steel did in their heyday. They really aren’t American companies, they’re global enterprises. The media gushs about Apple making 18 billion last quarter and becoming the most valuable company in the world. Who gives a shit? If Apple disappeared tomorrow, nobody on Main Street would miss them. I agree that the overseas manufacturing are shitty. But so is living on the dole, watching cable TV and substance abuse. People gotta do something.
The GE plant made residential circuit breakers, not appliances.
At one time GE had 30 plants here. The one my inlaws worked at probably had 750 employees or so at its peak. There were 3 other plants making similar breakers.
Now there is one plant making pretty much the same number of breakers as all 4. Dunno how many people but at a guess 500 or so on 3 shifts.
They announced last year that they are building a brand new plant. It will be highly automated with much more capacity and even fewer people.
John Henry
Comparative (not competitive) advantage is what rules, provided that the markets aren't fixed by government or private force.
It assumes though that currencies trade freely.
Slave labor, provided it's not by force but by best option, is okay.
However, that's all steady-state. Transitions are a problem, when the job you trained for disappears.
I agree that the overseas manufacturing are shitty.
JSD, I was speaking of most unskilled US manufacturing jobs being pretty shitty.
John Henry
In the 50s, making my private pilot cross-country requirements, I noticed that above Albany NY the river was bright green, some plant or other dumping waste into it.
The benefits of pollution flow to the consumer, not the manufacturer, unless you're the only one polluting. Competition drives the prices down low enough to make the field unattractive to enter.
In the 50s society decided it was rich enough to prefer clean rivers to low prices, and all those rules came in.
When China is rich it will do the same thing. Until then, they choose differently.
Question -- Doesn't China buy our debt, then we pay them interest on what they bought?
It assumes though that currencies trade freely.
RHHardin
Doesn't matter what currencies. We, and the Chinese et al, trade goods and services for goods and services. 10,000 Chinese I-Pads for 1 Trump apartment. 50 chinese microwaves for 100 head of American cattle or whatever.
Dollars and yen and what govts do with them doesn't matter. It is only accounting.
John Henry
Should have been doesn't matter what currencies do. They may or may not be manipulated by govts.
Doesn't matter.
John Henry
Part of the problem is the accounting of who gets what. Apple designs it's Iphones in the US. It contract manufactures it's phones in China. The Chinese assemblers use components designed in the US and other countries as well as made in other countries. Apple sells the phones worldwide and takes in far more revenue from foreign sales than what it spends in China. Of course if we had an intelligent tax scheme Apple wouldn't be parking it's foreign earnings overseas and instead it would be repatriating the cash.
The problem isn't free trade, the problem is one sided free trade.
This is where Trump does have a point.
Thanks for the link. I have been amazed at how apoplectic the National Review/Weekly Standard and the rest of the "pure conservatives" are if anyone even mentions, no matter how obliquely, that maybe a trade deal is not the greatest thing since sliced bread.
It is as disingenuous as the racism charge, usually used by the left but if that is what it takes to stop trump the "pure conservatives" are more than willing, when talking about immigration
AllenS,
That's exactly what we've done. We used to do it with the Japanese in the 1980s.
They agree to buy our debt while we agree to build their economy by buying their stuff. We have a large trade imbalance with China but when you figure in the amount of our debt they buy it evens out. China is the largest holder of US debt, followed by Japan.
They will be the first ones we stiff when we can't pay our debt anymore.
My wife's parents grew up poor. Not US style poor, not even Appalachain style poor. Neither got past 4th grade before they had to start working. My father in law, when he died at about 85y/o could still barely read and write.
My dad and mom both grew up in Appalachia, my Mom did make it to 7th grade, my dad had to drop out at 10 years old and couldn't read or write. Nonetheless, he was able to move to the north, learn a trade, and make a good living, that is until the 70s when all the manufacturing jobs started moving overseas. After that, it was back to struggling to survive. Me, I ended up joining the Army, learning computer skills, getting an advanced degree and making a good living (and managed to hang on, some how, to jobs despite outsourcing and H1-B visas.) But my brother and sisters, not so lucky. They neglected to be born with the cognitive skill set required for advanced schooling and "knowledge work." So they are all struggling. Have all their lives and always will. And the funny thing is, you can go to any college in the U.S. and they would be presumed to have "white privilege."
The argument is always that if we didn't give them crappy low paying jobs them foreigners would be even worse off, hell were being benevolent outsourcing our pollution and making it worth their while to enslave their children. Well, we might be improving their lives, but we are also making someone else's life worse.
I understand trade enhances all boats but there is no doubt that some boats rise very,very high and some boats do not rise much at all. In the last couple of decades the folks with the smaller boats have NOT risen that much.
Not only that but an active movement to replace those workers HERE, not overseas but HERE is on-going. Disney is getting sued for hiring guest workers that must be trained by the people being let go. It certainly isn't because they cannot find Americans to do those jobs, it is because it is cheaper. And our government promotes this, it needs to stop.
I understand Disney wanting to make more money, we all do. But the biggest reason that Disney wants to cut those Americans out for cheaper labor HERE is because of:
"While CEO of Walt Disney in 2009, Iger earned a total compensation of $29 million, which included a base salary of $2,038,462, a cash bonus of $9,260,000, stock awards of $6,336,509 and option awards of $8,308,647. Iger earned a $13.5 million bonus in 2010, which was a 45.4% increase from 2009."
Free trade and immigration policy in this case is taking from the smaller boats and giving to the higher boats. It just is. And worse yet, many are just saying to heck with it, there isn't a job to be gotten unless I am a college graduate with 100+K of debt so forget it.
Now I know I am going to have someone say, well don't you like that cheap iPhone. Not that much, tbh. Guess what I could probably easily have gotten a used one or a cheaper one. I would like more jobs in this country much,much more.
I am unabashedly, college educated, very upper middle class, Texan voting for Trump. He has the big things right and he isn't such a p**** that he will not say it.
Dude,
It doesn't lift all boats. Some boats sink, some slowly, some right away. There are net losers of free trade. How will they react is the question
AllenS said...
Question -- Doesn't China buy our debt, then we pay them interest on what they bought?
1/29/16, 9:00 AM"
Yes they do and be thankful they do. First by buying our debt that means the Congress can spend more money than the IRS can collect. The alternative is paying a lot more in taxes today. Just consider that most of Western Europe has higher personal income tax rates that kick in at lower income levels plus a VAT tax and they also have governments deficits. So unless social spending is slashed considerably and the defense department essentially abolished the alternative is grim tax wise but for the purchase of our bonds.
Second its a backhanded complement to our economy that the Chinese government buying our debt instead of investing the money in other areas.
But the net losers of free trade are frustrated and angry and there are a lot of them.
Exactly, and the response of our so called "elites" who benefit from free trade and cheap labor from low-skilled immigrants is to tell them to go out in a field and die (metaphorically.)
And its not just low skilled labor that is being replaced. Brick laying is considered a skilled trade. Where I live you only see Mexicans doing that labor now. And its pretty common to see Mexicans displacing carpenters and even electricians. Yeah, I know, they have to work too. So do the people they are displacing.
Ever wonder why its so hard for high skilled workers to immigrate to and work in the U.S.? Because the "elites" don't want their children to have to compete with them.
I understand Disney wanting to make more money, we all do. But the biggest reason that Disney wants to cut those Americans out for cheaper labor HERE is because of:
"While CEO of Walt Disney in 2009, Iger earned a total compensation of $29 million, which included a base salary of $2,038,462, a cash bonus of $9,260,000, stock awards of $6,336,509 and option awards of $8,308,647. Iger earned a $13.5 million bonus in 2010, which was a 45.4% increase from 2009."
In 2009 the Disney Company had revenues of $36bn. How large and deep is the talent pool of people capable of running a $36bn enterprise profitably? As for making money, that is what the shareholders expect. Shareholders in companies like Disney want their dividends.
As soon as illegals from Mexico start taking the jobs of lobbyists and consultants (i.e. The children and other family members of politicians) the wall will be built and the border will be enforced.
You have to have excellent political connections to run a company like Disney. You need to buy off lawmakers to extend copyrights for ever, to make sure cable companies can't sell channels a la carte so ESPN makes more money, etc.
Disney is crony capitalism at its finest/
There is not some cosmic requirement that when we buy stuff from India they buy an equal amount back from us.
I don't know if a free-floating exchange rate is "cosmic," but there actually is a kind of "requirement" that they buy an equal amount back from us.
https://www.youtube.com/watch?v=c9STBcacDIM
I recommend listening to the whole 14 minutes, but you can get the gist of Milton Friedman's explanation from 4:30 to 9:30.
That is not to say there not an issue with a mismatch between current US labor skills and the available work. However, Trump's protectionist policies, if enacted, will worsen matters.
That is not to say there not an issue with a mismatch between current US labor skills and the available work.
I love this. So bloodless. So bureaucratic. Also, its not quite true. A lot of jobs that US citizens could be filling are being taken by people in the country illegally.
It's an abstract issue to people who are economically secure and a concrete issue to people who are not. This is part of the reason Mitt Romney lost and a bigger reason why Trump is resonating.
More and more people chasing fewer and fewer jobs causing population disruptions all over the world. I'm for Trump, but his solutions only slow things down for a relatively short period of time.
How do people get money when automation takes over most jobs?
The only thing I can think of is all must be owners and all must share in profits. Either that or become wards of the state. What other solution is there when the average person with a college degree can't make a living because automation/artificial intelligence is faster and cheaper than humans?
I don't think ending free trade is a good idea. More trade is better than less trade.
However, I do think a lot of our employment problems could be solved by less immigration. No immigration would be bad, but too much immigration is also bad.
Let's start removing illegals and controlling our borders before we do anything about free trade. I'll bet that'll change things enough that people will be surprised.
overseas slave labor
Evidence not provided.
How can civilized employers compete against that?
Technology. Maybe.
The real problem is that people don't want to spend more money in order to avoid products made in sweatshops; "elites" forcibly removing choices from people who have different concerns than the "elites" is generally a bad idea.
Two comments:
If you haven't already, everyone here should read Thomas Sowell's book "Basic Economics". It will give you a much better understanding of the impacts of offshoring, etc. Very straight forward and easy to understand it is well worth the effort.
Our corporate tax structure mitigates against manufacturing expansion in the US. We have the highest corporate rate in the world and we double tax foreign earnings so they are never repatriated. A reform of the the corporate tax will not stop all foreign outsourcing, but it will put American workers on a more level playing field and, perhaps, able to compete with foreign workers for jobs. US manufacturers given a rational choice would prefer to do business here - it is a lot easier to manage.
Khesanh0802....I have read that book but cannot recall the gist of his thoughts. Enlighten me if you would.
@Dude1394 It is a basic economic text with out all the formulae and rigamarole. The gist is what many have said above: one can not avoid the laws of economics no matter how much one deceives oneself that is possible. He gives many good, current examples.
My copy is on the bookshelf I suggest you get your own. You can use Ann's Amazon portal.
Blogger Ignorance is Bliss said...
" I'm not a fan of child labor, but I'm less a fan of child starvation. In too many places those are the only two realistic options."
I understand this sentiment and share it. However nowhere in the life rulebook is it stated that you can have all of the children you want and they will all live. I understand the desire to have a lot of children in poverty, but it is not necessarily the poorest of our country who should sacrifice so that the third world can have unlimited population growth either.
Harsh...but overpopulation is something that typically causes lot's of kiddos to die.
" More than half of the gains by 2050 will come from Africa, according to the report. The continent will add 1.3 billion people over the next few decades—roughly equivalent to the current population of China.
By 2050, 1 in 4 people on Earth will be African, and the report expects Africa to be the only region that will continue to grow after 2050. "
I know that Africa is a poor example because they are not the ones being asked to manufacture things. But it was an example of just blindly saying, okay we will take care of all of the children. There are some pretty harsh unintended consequences there as well.
@Khesanh0802 I will have to look and see if I actually bought a copy. I may have read it from the library.
Yes...Dr. Sowell is one of my favs.
cubanbob: In 2009 the Disney Company had revenues of $36bn. How large and deep is the talent pool of people capable of running a $36bn enterprise profitably? As for making money, that is what the shareholders expect. Shareholders in companies like Disney want their dividends.
1) I like nice fat dividends on my investments.
2) In a properly functioning economy people with rare skills will (and should) make a lot of money.
3) Companies operating in the United States should be able to import foreign workers to replace American workers in order to increase 1) and 2) above. (And btw this has been going on for decades, sometimes as a preliminary step in offshoring but also for on site employment; nothing new here.)
It is possible to assent to 1 and 2 as relative, not absolute, values, and conclude that the people practicing 3, and the pols who enable them, should be tarred and feathered (or some satisfying modern equivalent thereof.)
I'd be willing to take a hit in the value of my portfolio to see that.
Right now OPEC is out to kill our shale oil industry. Doing a good job with three BKs and 300k laid off in Texas.
OPEC can do this because the Sauds are the low cost provider and the oil industry is owned by the government. No profit motive. Same deal with the Chinese steel industry. This is how we get screwed.
If our government was looking out for all citizens then it would slap a tariff on OPEC oil and Chinese steel. Screw'em.
A crappy repetitive job that produces value is still a job that produces the kind of pride that a welfare check cannot. If somebody couldn't pay enough attention in school to get into junior college, I am not sure that they would suffer as much in a job that an engineering student would find impossibly boring. The only people who get pride out of a welfare check are people who get them by fraud.
Angelyne wrote:
1) I like nice fat dividends on my investments.
2) In a properly functioning economy people with rare skills will (and should) make a lot of money.
3) Companies operating in the United States should be able to import foreign workers to replace American workers in order to increase 1) and 2) above. (And btw this has been going on for decades, sometimes as a preliminary step in offshoring but also for on site employment; nothing new here.)
I counter your 3) by saying that foreign workers are no more skilled than American workers; in many cases, they will just work for less. I got this opinion by working and observing the chemical industry and the academy for decades and also, by volunteer teaching chemistry at the high school level. American kids are just as smart, but why should they train for careers which will only be flooded by H-1B workers?
Burglary and robbery are more honorable than permanent welfare. If you don't have enough and can't find work, then take it from he assholes.
American kids are just as smart, but why should they train for careers which will only be flooded by H-1B workers?
I think Trump has hinted at or will soon enough say that American workers are going to have to get used to the idea of working for less "if we are going to compete." What he hasn't dared yet say nor even hint at is that the American upper middle and even the wealthy will have to take a hit "if we are going to compete."
The great global economic equilibration so prized by libertarians (and until quite recently by Republicans in general) is fraught with unintended societal problems which were were not thought through.
If we are going to compete, then let's not use our military to benefit other countries. The Syrian civil war is wreaking havoc on Europe but the US doesn't need to get involved. Let Europe deal with the refugees since they are at their doorstep. China, Japan, and South Korea don't get involved with this shit and neither should we.
We can allow the European Union's economy to further deteriorate so they won't be able to compete with the US.
chickelit: I counter your 3) by saying that foreign workers are no more skilled than American workers; in many cases, they will just work for less. I got this opinion by working and observing the chemical industry and the academy for decades and also, by volunteer teaching chemistry at the high school level. American kids are just as smart, but why should they train for careers which will only be flooded by H-1B workers?
Wut?
I think you misread my comment. Or didn't read the whole thing.
I doubt we have a single point of disagreement on this topic.
A crappy repetitive job that produces value is still a job that produces the kind of pride that a welfare check cannot. If somebody couldn't pay enough attention in school to get into junior college, I am not sure that they would suffer as much in a job that an engineering student would find impossibly boring.
I remember watching a documentary on the Manhattan project, there was a step in the process of making the bombs where large numbers of machines were being used to separate uranium or something, not quite sure, but it required someone to watch a gauge and if the needle fell out of a certain range then a control had to be adjusted. They tried using PhD candidates for this and it was a disaster. It was so boring that they couldn't pay close enough attention. So they put out help wanted ads for some innocuous sounding factory jobs, hired a bunch of non college educated women, and they did the job just fine.
If Trump and his ilk [read; billionaire businessmen] are willing to pay high wages that American workers require then by all means let's bring a bunch of jobs back to America. But something tells me they are not ready to do that. Talk is cheap.
mccullough: If we are going to compete, then let's not use our military to benefit other countries. The Syrian civil war is wreaking havoc on Europe but the US doesn't need to get involved.
The U.S. is largely responsible for the region-wide destabilization that has resulted in the metastasizing disaster that is the "refugee" crisis. Pity "we" didn't recognize the wisdom of minding our own business before "we" helped to, um, unleash hell.
I see precious little "we" here, anyway. Our military has been used more and more to benefit interests that have precious little to do with "we".
Let Europe deal with the refugees since they are at their doorstep. China, Japan, and South Korea don't get involved with this shit and neither should we.
Lots of shit I wish our fatuous elites didn't get us involved with - including teaming up with Europe's fatuous elites to shovel PC multiculturalist bullshit all over Europe, for lo these many decades. (Not that this lets the peoples of Europe off the hook for putting up with this nonsense; they seem to be even more cravenly submissive to it than Americans have been.)
You're right, we shouldn't be garrisoning Europe and footing its defense bills. But it's not as if we do this out of the kindness of our hearts.
We can allow the European Union's economy to further deteriorate so they won't be able to compete with the US.
Yeah, wouldn't it be awesome if Europe were over-run and burnt to the ground by the barbarian hordes so we could be more competitive?
The last time Europe was burned to the ground, the US had its 25 greatest years with a thriving middle class. It's not like we're dropping bombs on them. Their declining fertility rates and social welfare states led to their stupidity in importing enough Muslims to accelerate their ruin.
Their fault, not ours. But no reason we shouldn't use it to our advantage. And every reason we shouldn't follow their stupidity but should follow the approach of South Korea, China, and Japan.
Re John Henry @ 8:00 a.m. -- Your point reminds me that in the late '80s I attended an on campus lecture given by Walter Williams. At the time the boogey men were the Japanese. Their pockets were full of dollars earned from selling us high quality cars and electronics, which dollars they brought back to the USA and were buying up high quality real estate. I think they may have bought Rockefeller Plaza or other New York landmarks. The "fair trade" types were distressed.
Dr. Williams explained away their concern. First the Japanese bring us high quality goods and in exchange we give them paper dollars. The paper dollars have no intrinsic worth, the goods have true value in that we can actually use them to enhance our lives. Because the US was not producing anything the Japanese want to exchange for the paper dollars, the Japanese bring the paper dollars back to the US and buy real estate. They can't take the real estate home with them - it has to stay here. We do give them another piece of paper called a Deed for the real estate, they get to take that piece of paper home. In the end, we have the high quality and useful Japanese goods, our paper money, and the actual real estate. The Japanese have a paper deed. He concludes by asking - How is that bad?
That being said. I am not protectionist, but I do think there should be a place for trade regulation that accounts for the wage disparity caused by governments that enslave their people. How do we determine that and how much? ... I don't know. Plus it is common for unions and other crony capitalist to use such "fair trade" concepts as a camel's nose under the tent to seek all sorts of rents. This problem together with the globalization of trade fostered by the revolution in containerized shipping and computerized inventory control, and I do not think we should try to protect the shitty jobs you described.
mccullough: The last time Europe was burned to the ground, the US had its 25 greatest years with a thriving middle class.
Like I said, awesome reason for anybody to be happy to see Europe burned to the ground. So it follows that if we burned everybody else in the world to the ground, we'd have an even more thriving middle-class? What are we waiting for?
It's not like we're dropping bombs on them.
No, just on the Middle East, which has some slight relation to today's unpleasantness.
But it's clear that you are going to be adamant that the U.S. is entirely blameless for that mess.
Their declining fertility rates and social welfare states led to their stupidity in importing enough Muslims to accelerate their ruin.
Unlike us, with our burgeoning native birthrate, a completely contained and well-managed welfare system which in no way contributes to dysfunction and decline, and - thank God - an immigration system that only admits digestible numbers of the most productive and culturally compatible people.
Look, every Western country, including the U.S., is beset with the same self-destructive social and political pathologies, differing only in degree. Do you think, for example, that our government plans to prudently stop "importing Muslims" (or other problematic population) at some point before there's enough of 'em "to accelerate our ruin"? Ha ha ha. Stupid Euros. We'd never be stupid enough to let people who'd screw us like that rule us, no sirree!
Their declining fertility rates and social welfare states led to their stupidity in importing enough Muslims to accelerate their ruin.
Unlike Europe, we actually import children w/o their parents.
@Angelyne: My apologies. My irony meter was broken earlier.
The author started out well enough, observing what a boor is Donald Trump and declaring that he won't vote for Trump.
The problem was when he tried to put any sort of serious spin on anything Trump stands for. If, that is, we can even be certain that we know what Trump stands for.
POINT 1: The author should have quite while he was ahead, observing that free trade agreements do not lend themselves to simple arguments and bland pabulums. That much is true. So tell it to Trump. So far, Trump's grandiose proposal about a massive import tax on some manufactured goods is one of those simple pabulums that ought to be embarrassing in a serious discussion.
POINT 2: "Scab labor." The author conflates "scab" (non-union) labor with immigrant labor. If you mix those things up, his point doesn't even make sense, because what he seems to want is more jobs for Americans. High levels of unionization might be good for a dwindling number of those union workers, but it isn't much good for non-union workers looking for employment, nor for employers trying to expand American businesses.
POINT 3: I have to say this is easily and clearly the dumbest thing written in the entire column. He calls the defense of Frist Amendment rights in Citizens United "farcical." I dare say, this business writer doesn't understand the first thing about what was at stake in the case or what the decision stands for. In any event, his view has no place in the Republican Party. Join the Democrats, if you want to play those kinds of campaign finance reform games. And note well; I think Trump is as stupid as this writer. Yet Trump hasn't even made clear his precise views on Citizens United and how the decision (a constituitional decision) would be "reversed."
POINT 4: Well, uh, I too believe in capitalism. I don't understand where this is such a compliment to Trump. Among American billionaires (if you believe Trump is a billionaire as he claims), Trump is a uniquely cheap, miserly, charity-resistant guy. There are wealthy capitalists -- like the Koch Brothers -- whose giving to charity makes Trump's appear almost nonexistent. Trump presents the most mean-spirited face you could imangine in capitalism. "Capitalism" as a theory and/or a credo is not being done any favors by Donald Trump.
POINT 5: Something the author calls "spin." Or "no spin." That's a good thing? Please do not ever let me hear this author claiming that campaigns should be about "issues." Trump's campaign is about insults. I like great political speech writing. Great political speech writing elevates ideas, challenges writing and words to be clear, and calls everyone together to a higher ideal. Trump is standup comic. The urges us to give Trump for breaking down barriers of traditional standards, whether we "love him or hate him." Well I hate Trump, to be sure, and I see no reason to give Trump any credit. Making it passable to insult the war record of someone like John McCain is not a step forward in any conceivable way.
Beach Brutus,
You reference Walter Williams. He is a good source on this and you are absolutely correct.
What I have been trying to emphasize is that when the Japanese bought Rockefeller Center with the money from selling us Toyotas, it did not count toward the "trade deficit". Because of the way the trade deficit is defined, the toyotas we imported did, though. This is how we seem to have a deficit. In reality, the Toyota imports and the RC sale balance out.
The Japanese also bought Pebble Beach Golf course around the same time. Great outcry against both sales: "They are taking over the US!!!!!"
There is a followup, though. Not long after they bought both, maybe 5-10 years, they sold them at a big loss.
There was also an outcry about companies like Toyota, Nissan, Honda, Kawasaki and others taking the money they made exporting cars to the US and spending it QUELLE HORROR!!! building manufacturing plants in the US. Many times in places where people did not want to belong to unions. Somehow it was bad to have modern factories, good places to work, compared to the dinosour US auto companies and paying well for their areas.
I never understood why it made any difference whether they plant was owned by a Japanese company or a US company. Both pay US wages to US workers. Taxes to govts, buy local supplies and parts and so on.
Seems like a good thing to me unless you are GM, Ford, Studebaker or Chrysler.
John Henry
The US didn't invent Islam so I don't se how we are to blame for the Middle East being so fucked up. Our stupidity has been intervening there and letting middle easterners, immigrate to the US. We used to bar immigration of Arabs until 1965.
As far as Mexicans, a good chunk of the US used to be Mexico. Europe would love to have Mexicans instead of the crowd from MENA. Some of them are a problem, but most of them aren't.
The people who struggle the most in the US are blacks, most of them the descendants of former slaves. Again, better than the crowd from MENA. If we can just get more miscegenation between blacks and whites (or Asians) we can alleviate the problem a bit. Chinese and Korean immigrants are the best educated and we should take as many of them as we can absorb. Also, the Nigerian immigrants are highly educated, as a group, but we don't need the Muslim one's because of the danger.
Let the Brits keep taking the Pakistanis and the rest of Europe take the crowd from MENA. We can then start taking the productive Europeans who will start to flee their declining continent.
We need to start thinking more strategically like the Chinese and give up the stale idealism and silly multicultural globalism that has infected our leadership.
I do believe that we should have tarriffs on any oil imported by ship. I would be fine with $10-20 per barrel.
My goal would not be to move the price of oil, we don't import all that much. Most of our imports come from Canada and Mexico.
My goal would be to bankrupt all these corrupt kleptocracies.
Sure, Saudi Arabia can produce oil for $5-10bbl. But they need $75-100/bbl oil to support their economy. Other countries have higher costs. Venezuela spends $20-40/bbl for crappy crude that requires extra processing. None of these OPEC countries can survive long with even $50 oil. Nor can Russia.
It is looking like new technologies coming on line will allow our shale oil to be profitable as low as $15-20.
Sarah Palin was right, "Drill baby, drill!" Flood the market with cheap oil and natural gas. Let OPEC drink its delicious, nutritious, oil.
John Henry
I used to pass this article out to my students. It is from Inc Magazine from 1993:
How to Save for Seed Capital
Excerpt on saving seed capital from Gwen Kinkead's book, 'From Chinatown: A Portrait of a Closed Society.'
By George Gendron
"Many immigrants start out as street peddlers. In three or four years, they have saved enough -- between $50,000 and $100,000 -- to start small businesses. I didn't see how that was possible until I met Mr. Lin. . . .
"Lin forgoes any privacy or comfort not because he is poor but to save money. He earns $360 a week peddling vegetables and fruit. Selling umbrellas is more lucrative, bringing in from $80 to $100 a day. His monthly income, Lin says with utter frankness, and with a relish common to most Chinese when they discuss money, averages $1,800. He has saved some $18,000 of his annual $22,000 income in each of the last four years. . . . All told, Lin has $70,000 tucked away for a small business.
"I asked Lin how it was possible for him to save eighty percent of his income.
"He explained that he spends only $250 a month -- the money for his rent, a few dollars on the telephone, and about $100 on food. 'Rice very cheap,' he said, smiling. 'And boss gives me lunch.' "
-- From Chinatown: A Portrait of a Closed Society by Gwen Kinkead (HarperCollins, 1992)
http://www.inc.com/magazine/19930201/3353.html
I don't see any reason why this would not be as true today.
One caveat: He does not seem to pay taxes. OTOH, on an income of $22m he would not owe much either. It would slow his savings a bit but probably not that much.
John Henry
Anglelyne said...
Look, every Western country, including the U.S., is beset with the same self-destructive social and political pathologies, differing only in degree.
Japan is more extreme in terms of population growth/child bearing. This suggests that the changes are related to real limits to growth rather than the particularities of different social systems. It is also arguable whether all of Europe can be lumped together culturally. The Germans and the Italians have large cultural differences, yet they have ended up with similar birth rates. If we want culturally homogeneous countries then we have to accept significantly lower rates of economic growth. The Japanese have made a clear decision on this. The US is in conflict, with the elites favoring GDP growth, but the rest of the country somewhat delusional about what this trade-off would mean to them economically.
Just now on Drudge, a headline from ABC News; "Donald Trump Calls Ted Cruz an 'Anchor Baby.'"
http://abcnews.go.com/Politics/donald-trump-theory-wouldve-republican-debate/story?id=36595589
With Trump, you never know if he's just stupid (not understanding what an "anchor baby" is) or if he's just being insulting without regard to the sensibility of the insult. The exact quote from Trump included the line that Cruz "was an anchor baby in Canada." The logical (I know; we're talking Trump here) extension of that notion is that Cruz was born to an American woman who should have remained in the U.S. where her own citizenship lay. And that "anchor baby" Ted would qualify his parents for Canadian citizenship. The marvel with Trump is how these idiocies keep pouring out, without any of his supporters batting an eye.
Aren't there a large number of Cruz supporters who find this offensive? I consider myself more "tolerant" of Ted Cruz than "supportive." (I am in no way a Cruz-hater.) And I find this offensive. Embarrassing to the Republican Party; at least to whatever Trump is identifiable as a Republican, which may not be much.
The US is in conflict, with the elites favoring GDP growth, but the rest of the country somewhat delusional about what this trade-off would mean to them economically.
GDP is a necessary mesurement.
Chuck,
Trump is seriously joking about Cruz Canadian citizenship. He's going to continue to jab Cruz about this because it is a weakness for Cruz. You pound away at your opponent's weaknesses. Nice guys finish last. Ask Romney.
Trade deficit was the reason for the "Opium Wars" that Britain used to beat China into submission in the 1850s.
The British people became addicted, in a sense, to tea which was a substitute for the polluted water of London that contained Cholera organisms. The Empress of China would only sell tea for silver ingots. They also refused to allow tea plants to be exported. Soon there was a real risk that China would take all the silver in Britain. The British, being experienced in free trade, grew opium in India and exported it to China, which they sold in "opium dens" for silver ingots. The trade cycle was complete.
Then the British in Hong Kong stole tea plants which they shipped to India where they grew well. Then they didn't need China anymore. Most commercial tea products in Britain come from India.
Sarah Palin was right, "Drill baby, drill!" Flood the market with cheap oil and natural gas. Let OPEC drink its delicious, nutritious, oil.
Sarah Palin has been ridiculed by people who think Bernie Sanders is an economic genius.
Sarah Palin has been ridiculed by people who think Bernie Sanders is an economic genius.
Even more ironic is that just last week, Sarah Palin was ridiculed here in these comments by people now insisting that Trump is a big meany.
A lot of interesting discussion here about trade and immigration, some of it quite well informed, some of it just passionate. But the inspiration for the discussion, Arends' comments about Tromp, was imbecilic. Arends shouldn't be ashamed to say he's a Tromp supporter; they're a perfect match.
mccullough said...
Chuck,
Trump is seriously joking about Cruz Canadian citizenship. He's going to continue to jab Cruz about this because it is a weakness for Cruz. You pound away at your opponent's weaknesses. Nice guys finish last. Ask Romney.
Well, okay then. Trump is going to do a-n-y-t-h-i-n-g to win.
Got it. The part I don't get is that Trump originally said that he liked Cruz and wouldn't do anything to exploit the issue; he only thought that others might raise it against Cruz at a later time. Since then, the closer Cruz's Iowa numbers get, the more Trump exploits it.
And the crazy thing with Trump (well, it's all crazy all the time with Trump) is that Trump himself has flipped and flopped and flipped again on the Cruz/birther issue:
http://www.mediaite.com/tv/donald-trump-has-now-flip-flopped-twice-on-ted-cruzs-eligibility/
I actually think the question has some academic legal interest. Still, I don't think any American federal court would rule against Cruz. And the one person in the whole country, alongside the "Queen of the Birthers" Orly Taitz, who really ought not to be weighing in with a legal opinion on any birther issue given past idiocies with Obama/birtherism, is Donald Trump.
What does China spend the "trade inbalance" on? Our debt. Without them financing our deficits, interest costs would be significantly higher.
Also, the manufacture of goods simply flow to the lowest cost producer. If we quit buying stuff made by slave labor in China, it will not come back to the US, it will simply move to next lowest cost producer. You have to tariff every country until the cost exceeds the cost of producing it in the US. This would cause a drop in the standard of living. It's not just an iPhone that will cost more. It includes the $15 flip phone that poorer Americans buy.
Japan was the low cost producer after WWII. This boosted their economy and wages, which meant they were no longer the low cost producer. Then came Mexico and the other SE Asian countries. Once their economy and wages are lifted, production shifts somewhere else. If government doesn't screw it up, their economy shifts to other higher value goods and services.
There needs to be a whole new discussion on immigration and its relationship to supply and demand in the workforce. Arends is wrong about skilled/educated workers. There are plenty coming in, supported by big business, which suppresses middle income wages. We actually need greater LEGAL immigration of lower skilled workers if there were no illegal immigration.
The problem with the massive flow of open borders is that the people aren't coming here because of demand for workers. They are fleeing something worse. This means supply will exceed demand (including new demand created by the immigrants) and current residents will lose jobs.
JSD said:
"But so is living on the dole, watching cable TV and substance abuse. People gotta do something. "
IMO hat is what unlimited immigration of unskilled people has done to American's unskilled citizens.
Think about that when you wring your hands over the high numbers of heroin overdoses. America needs to start considering its own citizens first.
"you can't stop the laws of economics; you can only delay them"
Interesting thought. Assuming this is true, which is better? Delaying the results or hastening them?
John Henry, there is dignity in any honest work, and if you don't believe that, you can go fuck yourself. The United States government, through the vehicle of endless regulation of manufacturing, has driven manufacturing offshore, and if you don't believe that, you can go fuck yourself. My grandfather was from Tennessee and worked his way up from yard-boy to manager of a fire brick mill in Illinois. I have been working since I was 12, humped it through the chemical engineering program at the University of Texas at Austin on my own dime, wore my carpenter clothes to my finals, because I was going to work as soon as they were done, and have worked in an industry that is a model of increased productivity despite all the jackasses in Washington. As far as I am concerned all government-titty-sucking-tax-advantaged Puerto Ricans can go fuck themselves.
Oso negro,
Of course I believe there is dignity in honest work. Any kind of work, however shitty, is better than being on the dole. There are a whole lot of reasons why that is so but I suspect that we would agree on most of them.
Go back and read what I wrote about the shitty job my mother in law had at the GE for 35 years. That job, shitty as it was, was in large part responsible for the ultimate success of her family. I was praising, not condemning those unskilled jobs.
That doesn't make many of the unskilled manufacturing jobs any less shitty.
You are right that govt policies have driven lots of manufacturing jobs overseas. I've been pretty vocal here over the past 8 years or so about the need for smaller govt and govt that is more business friendly. Also for lots of reasons that we might agree on.
As for US manufacturing, has it gone down or up? Not that there has not been the occasional year where it dipped but I do not think there have been 2 consecutive years, You seem to be confusing US manufacturing employment with US manufacturing output.
One has been on an upward trend for 50-60 years or more. The other has been on a downward trends for even longer.
Sort of like what happened in farming, another shitty job that didn't pay all that well. In 1900 some large percentage of the populace was engaged in farming. Now we have far fewer people engaged in it and far more output.
We do need to think about what these people with little or no skill will do without the shitty manufacturing jobs. It is a huge problem. It is exacerbated by the US govt using the Chinese funds to keep them out of the work force.
Suppose we did not run a deficit, suppose the Chinese could not spend their dollars lending to govt? What would they do with them? Probably something like the Japanese did. They would be building plants like mad in the US, employing US workers.
They could not afford, any more than Apple can afford, to have unskilled labor stuffing boards like they do in China. The plants would be highly automated. But there would be more jobs in the US and those jobs would support other, unskilled, jobs.
You are wrong about me, Oso and I am surprised. I've been pretty explicit here about what I think. I've never supported govt support of able bodied people. They need to work, for a lot of reasons.
Trying to close the door to China and other countries will make it worse, not better.
John Henry
For an idea of the economics of unskilled labor vs automation, let me give you an example:
In the GE plant where my mother in law worked, her job was placing a small metal stamping in a plastic circuit breaker housing.
I sold automated and automation machinery for 22 years and continue to work with it as a consultant. To insert that part automatically, you would need 1 vibratory feeder, an escapement, some controls and a mounting stand. (see https://www.serviceengineering.com/our-products/vibratory-feeder/ for some examples. I used to work for them) Total price would have been around $40-50,000. Perhaps a bit less today.
Figure around 10% per year for maintenance.
The cost of labor, at GE plants, used to be $25,000. That was the number they used in capital justification.
They ran 3 shifts so $75,000/yr.
So net savings of $70,000 per year for a 1 time expense of $50,000? Seems like a no brainer to me. Except that federal and local tax policies made it more profitable to employ labor than machines.
Anyone want to explain how we are going to get those jobs back from China? Even if we get the manufacturing back?
Oso Negro said:
As far as I am concerned all government-titty-sucking-tax-advantaged Puerto Ricans can go fuck themselves.
Another thing you and I agree on. For far too long the federal and state (including PR) govts have handed out money for nothing like a cheap addictive drug. We can see the results in out cities and in Puerto Rico.
Lots of great, hard working people in PR with great work ethic. Govts make it too hard to work and too easy not to.
That needs to change.
John Henry
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