Re: Forbes: "Budget To Nowhere"


"Rumpelstiltskin" <PleaseDoNotReplyByEmail@xxxxxxxxxxx> wrote in message
news:inpjq39hj3gqfob1gkjfsdoe8nmhrlu5nl@xxxxxxxxxx
On Wed, 6 Feb 2008 05:47:20 -0600, "John Galt"
<whoisjohngalt@xxxxxxxxxxxxxx> wrote:


"Rumpelstiltskin" <PleaseDoNotReplyByEmail@xxxxxxxxxxx> wrote in message


<snip>


Of course people are always going to try to get the best bang
for the buck. That's what people do, that's what I do, that's what
everybody does.

It's not what the Japanese do.



They don't?

They don't. They have a documented tendency to pay more for Japanese
goods.
Obviously, HUGE price disparities will alter that behavior, but they will
pay a bit more for domestic goods, as will most Asians, for that matter.


That's very socially conscious of the Japanese. They
don't need tariffs if they behave thus consistently. Other
nationalities don't behave that way though, and aren't
about to start. Any that did, wouldn't need tariffs to
protect their home industries, of course. The USA is not
in that situation, as evidenced by the fact that native
industry has largely disappeared. That wasn't much of
an argument you made for your case against tariffs, was it.

The point is that the entire discussion is based around self-inflicted
wounds. If Americans would check the label every now and again, we wouldn't
be having this discussion.

You seem to not mind the effect of tariffs, since you
don't object to the Japanese producing the same effect.
You just object to actual tariffs. That really doesn't make
sense.

First of all, tariffs restrict my freedom and yours. I value freedom of
choice.

Other than that, tariffs in a global society are just another bubble-causing
gimmick. They restrict competition and supply, which enables domestic
producers to raise their prices, who then have to hire more people at higher
and higher rates (especially since we're entering a period of labor shortage
as the boomers retire), which increases cost of goods sold, forcing product
prices up, and the entire cycle continues up and up.

However, think of the impact on the consumer. Since their cost of living
kicks up IN EXCESS of increased wages, they effectively have a loss of
disposable income. Since Americans simply refuse to do without, the net
effect of tariffs would be:

1) Higher product prices
2) Increased employment
3) Increased wages,

BUT

4) Increased use of credit
5) Decreased savings rates

AND THEN, EVENTUALLY, when they are *forced* to do without because of rising
prices......

6) Demand for goods decreases (but their cost of production remains high),
7) Businesses are forced to cease operations, as they are unable to make a
profit
8) Unemployment increases

Now, all that assumes that there are no retaliatory tariffs enacted on us.
Any sort of tariff will today provoke a response from the WTO, and
retaliatory tariffs would follow. This fact will quickly offset the
positives 1 through 3 above, and accelerate the negatives 6 through 8.


Is your non-objection to the Japanese way
based on the idea that some of them would cheat, and
therefore "free trade" would be implemented to that
extent, but only that extent? That's the only possibility
that even begins to work, but of course it doesn't stand
up to reason any better.

Retaliation is the issue. You might save a few jobs, but at great cost. This
study...

http://economics.about.com/gi/dynamic/offsite.htm?zi=1/XJ&sdn=economics&cdn=money&tm=4&f=00&su=p649.0.147.ip_&tt=2&bt=0&bts=0&zu=http%3A//www.mackinac.org/4107

....showed the net effect of the Bush steel tariffs, for example.




There are also many situations where the price difference between domestic
and imported simply doesn't matter. I picked up some very nice casual
stemware at Wal Mart a week ago, made in the USA, a buck a glass. And
there's always a domestic car that's as good of a "deal" as an imported
one,
if you look at price only.


American believe that American cars are pretty crappy
compared to Japanese cars, whether or not one feels that's
true, so those aren't equivalent goods.

Sure they are. There's no question that the Japanese are better at making
their cars more desireable, but if you take the emotions out of it, they're
machines with four wheels designed to get you from point A to point B. Same
purpose.

As to other things,
if native stuff costs no more than imported stuff, why are
imported things being offered for sale and bought in
preference to native stuff? If they aren't, then there's no
problem of course. If they are, then why?

This sort of thing raises issues with me as well. I SUSPECT that a modern,
high tech manufacturing facility can build stuff here at competitive rates
to anywhere in the world. What I THINK has happened in some cases is that
manufacturers came out of the 60's and 70's with manufacturing facilities
that were not modern, meaning that they had to make a choice between (1)
investing 10-50M to be competitive, or (2) just buy the stuff from overseas
and slap a label on it. Now, that's not good PR to say that you simply
didn't want to invest the money in a modern facility employing Americans, so
instead you deny that it's possible to be competitive here to avoid the bad
PR.

Now, by driving the dollar down, you weaken the advantage China has over us
and make our manufactured goods more appealing pricewise, both for export
and for Wal-Mart and the other major retailers, which is probably why I
found that stemware I mentioned. If the weak dollar holds for the
foreseeable future, it should encourage more and more domestically
manufactured goods and associated employment, thus getting us the BENEFITS
of the tariffs without the drawbacks.


Not very good arguments against tariffs here.

See above.

JG



.

Relevant Pages

  • Re: Forbes: "Budget To Nowhere"
    ... They have a documented tendency to pay more for Japanese ... pay a bit more for domestic goods, as will most Asians, for that matter. ... don't need tariffs if they behave thus consistently. ... If Americans would check the label every now and again, ...
    (soc.retirement)
  • Re: Forbes: "Budget To Nowhere"
    ... They have a documented tendency to pay more for Japanese ... pay a bit more for domestic goods, as will most Asians, for that matter. ... don't need tariffs if they behave thus consistently. ... If Americans would check the label every now and again, ...
    (soc.retirement)
  • Re: Joe the Plumber Throws McCain Under the Bus.
    ... work and produce goods in the USA, ... American workers get better wages and live better. ... you forget that the rest of the world can levy tariffs ...
    (soc.retirement)
  • Re: Joe the Plumber Throws McCain Under the Bus.
    ... work and produce goods in the USA, ... American workers get better wages and live better. ... you forget that the rest of the world can levy tariffs ...
    (soc.retirement)
  • Re: Commentary: Is it 1929 all over again?
    ... raise taxes and tariffs heading into an economic downturn. ... governments and firms alike encouraged ongoing production of goods even though mutual tariff walls prevented the sale of those goods abroad. ... Soon firms found that the prices they could reasonably charge for their goods had dropped below the costs of producing them. ... The goods part is pretty straightforward, but the labor issue is what really allowed the global economy to turn the corner. ...
    (soc.retirement)