Tax cuts- A simple lesson in economics

Fri Mar 26, 2004 6:28 pm

I don't have a problem with China's economy improving and wether we like it or not we are a global economy and becoming more so everyday.

My whole basic problem with this is it is always assumed (and desired among the more socialist elements) that we lower the American standard of living to make everyone in the world wealthier.

I say bunk to that. lets keep our standard of living high and raising and expect everyone to come up to our level. I don't want to sink down to theirs.

I meant to imply no additonal tax breaks. Companies get tax breaks everyday. I say we don't allow companies that are moving work out of the country to have any of the current tax breaks. This isn't really a tariff at all its more of an incentive saying you want some? give some.

I agree totally about Tariffs Thats about the worst thing you could possible do. Not only does it cause retalitory price wars but the worst effect is it allows the business' being protected to just coast along instead of improving and becoming more efficient. As an added bonus the foreign competitior becomes even more efficient to make up for the tariff. Then if you ever remove the tariff your protected business is really screwed.

Let me advance a little theorom of mine.

Capitalism in a moderated form is the most effective economic mode for one reason and one reason only. It is the most in tune with what we consider evolutionary theory. Survival of the fittest, competition, discovering your niche and exploiting it.

So thats one reason I fear tariffs. Stagnant life forms that quit evolving die off.

Fri Mar 26, 2004 6:32 pm

Originally posted by Colonel Ingus
I was waiting for this one. Fargin responded to it pretty well. The whole theory behind that is as lower skilled job move over seas hi tech and newer product production jobs replace them. We are getting rid of the hi tech and new jobs also now and THAT is whats hurting us. Kinda like that oh so wonderful NAFTA deal. "Lets move the low paying manual labor widget job out" What they don't say is "Oops! there goes the higher paying technical jobs also!" which should be followed by the addendum "Well at least Walmart is hiring"

Ok, but China et al are not part of NAFTA.

My biggest problem with China is it is not an open market, and is quite brutal by any standard; the persecution of Christians is horrendous. It's disgusting to think we restrict trade with Cuba (and should), however China being a much bigger threat is given MFN status. I know the theory is open up trade and the people will get a taste of Capitalism and only want more freedom. However, I don't see this ever happening in the near future. It seems to me China is using our wealth to use against us in the future.

A book called "Unrestricted Warfare" is a must read for anyone interested in China's stated goal of total destruction of the United States.

So I have to agree with you guys on China, but maybe for different reasons.

**And remember, we gave (not mentioning any names) China our nuclear secrets among other things a few years back. At least it generated some sizable election campaign contributions.

Fri Mar 26, 2004 6:46 pm

Question: If these are high skilled jobs going overseas, how is it that low skilled uneducated people can do them? Just an observation, not a comment.

This is an excellent excellent point!

The ones I am referring to such as IT jobs are done by trained individuals in schools in places like India. Lets not be arrogant and assume they have a poor education system.

An industry i am quite familiar, the circuit board industry has a lot of jobs that don't require hi tech skills. The hi tech skills part comes from the jobs such as engineering the circuit boards and maintaining and repairing the machines. They use prison labor in China to actual run the machines (one reason why quality is SO poor) and make agreements with the business' that produce the machinery to keep a local rep in the area for repairs. This is fact, I was working for a German multinational that does tons of business in China. They blew a ton of money buying the best machines that germany could make. Paid a ton of money to have it installed and run, and have technicians that have to live there (contractual agreement) to keep the machines running.

And the best part of the agrement to keep skilled labor nearby? Those technicians are spending their money in China and their economy reaps the benifits of it. The exact opposite of us moving work overseas.

just some examples anywho

Fri Mar 26, 2004 7:42 pm

I didn't mention we build and send high tech machines to China, so I know just how it's done. However, they are for GM cars built and sold in China.

Hungary, Mexico, Korea are just a few more. In fact, I'd have to say it's 50/50 now between domestic and foreign markets.

It's a stark reality, but we need to adjust and learn to cope.

Fri Mar 26, 2004 8:02 pm

Originally posted by Colonel Ingus

quote:
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Question: If these are high skilled jobs going overseas, how is it that low skilled uneducated people can do them? Just an observation, not a comment.
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This is an excellent excellent point!

The ones I am referring to such as IT jobs are done by trained individuals in schools in places like India. Lets not be arrogant and assume they have a poor education system.

Shoot, even jobs that might be viewed as "low-pay and low-skill" here in the states, which are being shipped overseas, are being manned by highly-skilled workers. Take telemarketing call centers for instance.

quote: "Call centres employ some 100,000 mostly young people in India. They are highly educated, usually holding degrees in engineering or computer science..."

http://www.ilo.org/public/english/bureau/inf/magazine/47/globit.htm