Presidential Election: 2012

[Dotini]

Well, one route is to buy gold and other physical goods that the government can't inflate. Another route is to invest in companies that look solid enough to weather the storm. So stocks rise, real estate rises, commodities rise (especially gold), etc.

Is this good? No not at all. It's a symptom of weakness of the dollar.

Another problem is the Gold is really expensive right now (it just had a huge run up). Might want to wait a little bit for folks to start getting more comfortable with the new levels of debt and try to cash out of their gold positions. Gold will drop some and then you can get in. But then again, I've been waiting for a gold selloff for so long that I missed the most recent bottom. My problem is that I bought some a while back and I got used to those prices.

Also, there is talk of a Gold bubble, which is a real possibility despite real reasons for investors to flock to it and other commodities. So it's hard for me to buy more right now.

This morning, after the Fed yesterday declared QEIII, the price of oil, gold and silver are up. They will probably continue up if the Fed stays on this policy of risking inflation by printing money, in this case by buying up mortgages with it.

Respectfully submitted,
Steve

 

[Danoff]

This morning, after the Fed yesterday declared QEIII, the price of oil, gold and silver are up. They will probably continue up if the Fed stays on this policy of risking inflation by printing money, in this case by buying up mortgages with it.

There will be some profit taking at some point. When QE3 finishes, and people start thinking maybe we've seen the worst of it, they'll bail out of some of these commodities to buy more stock or even just to spend the money. I would expect GLD in particular to dip again in 6 months or so. But of course if I knew any of this for certain I could wager everything I own on it and make boatloads of cash... so take it with a grain of salt.

 

[BobK]

Because if you don't understand that chart, you don't understand the financial house of cards that our government is building. Bernake just announced that our government is going to take on $40 billion of debt PER MONTH indefinitely (I'm sure an end date will be supplied eventually). How are we going to pay for that? by destroying the wealth of everyone holding dollars.

Uhh, okay... I'll make it a point not to vote for Mr. Bernake then. oh wait...
[/sarcasm]

Seriously though, this is nothing new, they've been building this financial house of cards for decades now. I don't need a chart of current gold prices to know that.

If there's something you understand about politics right now, it should be that. Nothing else being discussed is as important. The game that is being played with our economy is extremely dangerous and has long term implications that will last decades. It's all about putting the pain off until the future when it's some other politician's turn to take the lumps, and it's us who will be paying for it down the line... and not necessarily just by working - there is a very real possibility that China could consider this an act of war.

This dates back to the Roosevelt (FDR) administration, really.

Not saying you're wrong, you're absolutely right. This has been going on for a long time, all that's happening now is it's getting worse. Yes a breaking point will be reached, sooner or later. But I don't see anything being done about it, too many people just don't care I'm afraid.

 

[Danoff]

Uhh, okay... I'll make it a point not to vote for Mr. Bernake then. oh wait...
[/sarcasm]

Seriously though, this is nothing new, they've been building this financial house of cards for decades now. I don't need a chart of current gold prices to know that.



This dates back to the Roosevelt (FDR) administration, really.

Not saying you're wrong, you're absolutely right. This has been going on for a long time, all that's happening now is it's getting worse. Yes a breaking point will be reached, sooner or later. But I don't see anything being done about it, too many people just don't care I'm afraid.

If you look at the debt, it wasn't nearly as much of a problem under Regan/Bush/Clinton/Bush Jr 1st term as it is now under Bush 2nd term/Obama. Partially because of the bubble during the Clinton/Bush years, but also because of the way that bubble is being handled.

Yea it's not particularly new, but that doesn't mean that we've been down this particular road before. This is uncharted territory for the US, and it's pushing the envelope of what nations can survive.

 

[Bye Ya]

http://www.upworthy.com/breaking-for-the-first-time-ever-video-of-what-mitt-romney-actually-thinks-about?c=la1



http://nymag.com/daily/intel/2012/09/real-romney-is-a-sneering-plutocrat.html

 

[Azuremen]

You could elaborate on how you feel about what Romney is saying there. Though I guess the highly liberal bias in what you've posted reflects your views?

Honestly, I have to agree with him 100% and he is just being very realistic about why people will vote the way they do. Far too many people feel they just deserve things because they exist, regardless of what they actually have contributed.

 

[Bye Ya]

I'm not liberal, and I'm just putting a couple of links to a breaking political story out there.

You don't think Romney also has a sense of entitlement?

Shipping middle-class jobs overseas to save himself labor costs? Profiting from companies who were destined for bankruptcy? Is that really what you would call a 'contribution'?

 

[Azuremen]

Shipping middle-class jobs overseas to save himself labor costs? Profiting from companies who were destined for bankruptcy? Is that really what you would call a 'contribution'?

I'd say he is making smart business choices for the most part. His sense of entitlement probably comes from the fact he is worth $200 million from business, again the result of intelligent choices. The fact is his firm was hired to try to help businesses out, and sometimes those can't be saved. Are you expecting someone to not be compensated for their time and resources when a project doesn't pan out? Especially at this scale?

Now, I'm not saying I like Romney, because I don't care for a lot of what he wants to do. But I am tired of people thinking he is inherently "evil" because he is a businessman and has money.

 

[Bye Ya]

But I am tired of people thinking he is inherently "evil" because he is a businessman and has money.

How he does business and how he makes his money is the problem. You talk about 'smart' business as if it absolves the businessmen from any moral obligation. Constantly being at war is also smart business for those who are in the business of war profiteering.


Edit: The 47% Who They Are

 

[Danoff]

How he does business and how he makes his money is the problem. You talk about 'smart' business as if it absolves the businessmen from any moral obligation. Constantly being at war is also smart business for those who are in the business of war profiteering.

Totally agree, being a business person does not absolve them of any moral obligation. And I am no Romney supporter. But please do share with us where you feel he has acted immorally as a businessman. Tip - profiting from a company going bankrupt is not immoral. Otherwise we'd have to throw judges, juries, lawyers, CEOs, stockholders, accountants, secretaries, janitors, etc. in jail.

 

[Bye Ya]

I'll preface this with two things: 1. The website here just happens to have a lot of information. My opinions on the matter are my own, and I'm not a partisan. 2. "Within the laws and regulations" also does not exclude moral obligation.

You could argue that the shipping of jobs overseas is not immoral, however saying that you are concerned for the middle class and job creation when you literally do the opposite is hypocritically immoral, in my mind. We could argue what is immoral or not all day, I'm not interested in that. This is just my opinion of his business practices.

And my issue with profiting from bankrupt companies is not the business act itself, it's the words he uses afterward, such as, "these other people don't want to make a contribution" (talking about the "47%"). The practices that made him rich have not been a 'contribution' to this country in any way, only to himself and others as high up.


Romney Outsourcing


I know people who were affected by this firsthand, and this practice did not create jobs for them elsewhere. They did not, and have not, benefitted from it in any way.

 

[Danoff]

You're mistaken.

Shipping jobs overseas cannot be immoral unless you believe that US people are entitled to jobs whereas the rest of the world is not. Which would make you a nationalist of the worst kind.

Being concerned for the middle class while shipping jobs overseas is also not inconsistent. I would do the same were I in his position. A signal needs to be sent through the US economy that the burden that our government places on US workers is too high, and that businesses will take their jobs to governments that place less of a burden - to governments and employees who are more efficient. One could argue that it would be immoral to give a job to an overpaid overburdened American when someone else was willing to do it for less. That's just national favoritism. (though I would not make that argument - because I believe employers have a right to play favorites like that)

Hiring overseas employees and working within the government to reduce the burden it places on the middle class (and all other classes) is entirely CONSISTENT, and not hypocritical or immoral in any fashion. It sends the exact same signal.

Furthermore,

Outsourcing jobs makes the US economy more efficient, which makes us competitive globally. To save the jobs of the people who man the phones at the help center, you risk the jobs of the engineers, accountants, business managers, and marketing experts who actually run the company and make it work. Overpaying the folks at the help center results in less company productivity and can cause the US economy to falter. We directly benefit from having those jobs shipped overseas. It pushes our workforce into more intelligent, more efficient, more educated positions where they can leverage the instruction from our great universities into jobs that ultimately generate more revenue for their own families and strengthen the US economy.

But when we ship unskilled jobs overseas, it makes no sense to open up another unskilled job. Those who lose their unskilled job should take that as a signal that they need to gain new skills to continue being competitive.

 

[Bye Ya]

Please explain your interpretation of this burden on the middle class.

You say that shipping jobs overseas relieves some of this 'burden' on the middle class, yet what are you replacing it with? You aren't replacing the jobs... and the money you just took out of the American economy either doesn't get replaced, or it has to return from somewhere else. All you did was shift income to be spent within our economy from the middle class to the upper class who owned that country, and you gave it to someone across the globe. It's not about nationalism, its about the people who live in a country, under its economic system, not being able to participate any longer within their own country's economy.

I have a friend who's family lost two sources of income at Fruit of the Loom factories because their jobs were shipped overseas. They took over $25k annually in losses from that business decision, once they did find new work elsewhere. Their jobs were not replaced as a result of those business practices, and they still make less money today because their qualifications previously were based on seniority within that factory. The bottom line is that they still make less now because their jobs were shipped overseas years ago, yet their costs have also risen.

Now explain to me how their burden is less.


Your talk of more efficient, more intelligent job creation is simply not a reflection of reality. It's a nice theory.

However

Those who lose their unskilled job should take that as a signal that they need to gain new skills to continue being competitive.

They don't ship the jobs overseas because the people there are more qualified, more intelligent, have more skills, etc. They do it to save on labor costs, period. The family I mentioned had their jobs shipped to a south American country that is further behind the US in terms of education, specifically higher education. I'm not buying it, and statistical evidence shows that it is not working.

And while we're on higher education. These jobs are being taken away from the middle class, so you say the middle class needs to step up their education and become more valuable to companies, etc. Yet there are many actions in place currently that are working to price the middle class out of higher education.

Not to mention... what if you ship a 55-year old's job overseas? You going to tell them that since they've lost their income they need to now, at 55, take out a massive loan and go to college?

 

[Danoff]

Please explain your interpretation of this burden on the middle class.

It's a government burden (on all classes, I'm not particularly interested in the middle class over say, the poor or rich). To have a job, your government requires medicare, social security, and income tax to be collected. That means that for you to work for the same standard of living as someone in another country, you may require your employer to pay MUCH more. Add to that the cost of compliance with regulation such as OSHA or ADA, and concern about lawsuits from employees over wrongful termination, discrimination, or sexual harassment, and you begin to understand the financial picture that companies face when they hire someone. Your salary may be the least of their concerns!

This is the burden that our government and legal system place on hiring someone in the US... and it's not a burden shouldered by our businesses, it's a burden shouldered by employees. Your salary is lower, or you are less competitive with people overseas, as a result of these regulations.

Now some of that burden may be a good thing, and we may want to keep it, but we need to understand that certain jobs will go to workers overseas as a result - and that to shoulder that burden we need to make ourselves more valuable.

You say that shipping jobs overseas relieves some of this 'burden' on the middle class

Nothing relieves this burden on any class except reductions in taxes and regulations.

You aren't replacing the jobs... and the money you just took out of the American economy either doesn't get replaced, or it has to return from somewhere else.

By definition, the money saved on unskilled jobs makes the product cheaper and more competitive, enabling greater revenues from US customers as well as abroad - which will result in more money spent innovating. It's the innovation that you want to be a part of.

I have a friend who's family lost two sources of income at Fruit of the Loom factories because their jobs were shipped overseas. They took over $25k annually in losses from that business decision. Their jobs were not replaced as a result of those business practices, and they still make less money today because their qualifications previously were based on seniority within that factory. The bottom line is that they still make less now because their jobs were shipped overseas years ago, yet their costs have also risen.

They lost their jobs because of the burden our government places on hiring them. The people who lose their jobs will not benefit directly. But that doesn't mean it's bad for the country. Those people need to educate themselves and get jobs that can't so easily be outsourced.

Outsourcing the factory worker's job saves the company enough money to hire an engineer. That's how we become a more efficient economy. More demand for engineers means higher salaries and eventually more supply of engineers.

Your talk of more efficient, more intelligent job creation is simply not a reflection of reality. It's a nice theory.

It's economics. It's law. Your example is not unsurprising or in any way contrary to what I'm saying.

They don't ship the jobs overseas because the people there are more qualified, more intelligent, have more skills, etc. They do it to save on labor costs, period.

Correct. I never indicated otherwise.

And while we're on higher education. These jobs are being taken away from the middle class, so you say the middle class needs to step up their education and become more valuable to companies, etc. Yet there are many actions in place currently that are working to price the middle class out of higher education.

I don't care specifically about the middle class (or any class). I wish that you would widen your focus from a specific set of people that you'd like to benefit and look at the nation as a whole.

There are many things contributing to the rising cost of higher education, but it is still attainable to those who want it.

 

[Bye Ya]

There are many things contributing to the rising cost of higher education, but it is still attainable to those who want it.

What chance does a 50-year old, or even someone in their 40's, with only a high school diploma, have of suddenly reinventing their life as a higher-educated person when their job gets shipped overseas?

Let's not forget that they likely already had financial obligations that they were maintaining through their previous income. Now you put them in a bind, and ask them to also go to college, where they will be hard pressed to not only find a new job, but to find one that covers their previous expenses while they also struggle to make time to study, if they are even capable.


1. This American's income is taken away. Their contribution to the American economy is now less, or even non-existent. Their burden (if indeed you speak of paying taxes), just went up. And how do you relieve the middle class tax burden by increasing it and simultaneously cut taxes for the upper class? Someone has to pay taxes. The middle class can't because you took their jobs, and the upper class aren't doing it either.

2. You just improved someone else's economy. You gave this person's income to someone in another country, where it will be spent. The other country's economy benefits, and the only benefit here at home is for the upper class who saved money in the process.

3. The middle class make up the vast majority of the population. That's why my focus is there.


4. More money for things like engineers... what makes you think they will hire the engineers from within our own economy? This is about profit, not education. Whoever can get the job done, and who costs the least, gets the job, end of story.


5. Why the middle class? Where else?

The lowest can't take on the tax obligations of the rest of the country. The upper class aren't willing to contribute equally, so where else? You are talking about a society where only the wealthiest and most educated benefit, but economies falter without a strong middle class. Just divide the country into class and look at the population numbers. The country is, by and large, the middle class. If you are not benefitting the middle class, you are not benefitting the largest portion of our population.

 

[Danoff]

What chance does a 50-year old, or even someone in their 40's, with only a high school diploma, have of suddenly reinventing their life as a higher-educated person when their job gets shipped overseas?

We've shifted topics at this point haven't we? I mean, you started off calling Romney immoral and now we're talking about the availability of education to 50-year olds.

Let's not forget that they likely already had financial obligations that they were maintaining through their previous income. Now you put them in a bind, and ask them to also go to college, where they will be hard pressed to not only find a new job, but to find one that covers their previous expenses while they also struggle to make time to study, if they are even capable.

If they're 50, they have no business having zero savings, and I don't like that we apologize for middle-aged people not saving any money after working for 30 years. But we're way off topic now.

1. This American's income is taken away. Their contribution to the American economy is now less, or even non-existent. Their burden (if indeed you speak of paying taxes), just went up.

I'm not talking about whatever financial obligations they have, I'm talking about their employability as a result of government overhead.

2. You just improved someone else's economy. You gave this person's income to someone in another country, where it will be spent. The other country's economy benefits, and the only benefit here at home is for the upper class who saved money in the process.

This is a fundamental lack of understanding of macro economics. The cost of American goods went down, which makes American companies more competitive, which allows them to hire innovators instead of factory workers. What part of that is confusing?

3. The middle class make up the vast majority of the population. That's why my focus is there.

It's narrow. If you look myopically at benefiting the middle class, you'll make decisions that ultimately hurt the middle class.

4. More money for things like engineers... what makes you think they will hire the engineers from within our own economy? This is about profit, not education. Whoever can get the job done, and who costs the least, gets the job, end of story.

...because engineering salaries are able to more easily shoulder the burden that government places on American workers (ironically in the name of helping the poor), and because our university system is still extremely competitive worldwide.

 

[Bye Ya]

We've shifted topics at this point haven't we? I mean, you started off calling Romney immoral and now we're talking about the availability of education to 50-year olds.

I am addressing very specifically the issue I originally brought up. It's completely on topic.

If they're 50, they have no business having zero savings, and I don't like that we apologize for middle-aged people not saving any money after working for 30 years. But we're way off topic now.

"No business having zero savings." This is an arrogant and short-sighted statement. Life happens, and things don't always work out so that you end up with savings, but according to you there's no excuse. Ok.

Let's say their job was outsourced, and they got by until the next job came along, but used up their savings in the process. Now their next job is lost, then what? It's their fault, right?

I'm not talking about whatever financial obligations they have, I'm talking about their employability as a result of government overhead.

And their employability just went down. So how does that help anyone? Remember, we're not taking away teenagers' jobs here and saying, "It'll be fine, just go get a higher education." These are people who are past that point, and they are the majority of whom these decisions affect.

This is a fundamental lack of understanding of macro economics. The cost of American goods went down, which makes American companies more competitive, which allows them to hire innovators instead of factory workers. What part of that is confusing?

"Cost of American goods went down"... the only thing that for sure went down was the company's labor costs. There's nothing to suggest they are for sure going to lower the cost of their products and become more competitive in the market. In many cases they were doing just fine and the labor cost cutting was just a perk.

...because engineering salaries are able to more easily shoulder the burden that government places on American workers (ironically in the name of helping the poor), and because our university system is still extremely competitive worldwide.

Not if the engineering jobs are also outsourced. I don't know why you think there is a distinction between factory line workers and engineers. Labor costs are labor costs, and they will ship those jobs overseas just the same if it saves money.

 

[Joel]

Owing people dollars (student loans?) is the best possible position to be in when massive inflation occurs, because you can pay back the dollars you borrowed with dollars that are worth less.

I would be in that position, but I didn't get a dime from Ontario (or federal) student loans. Silly me for assuming that my father moving us all across the country to make a better life for his family, putting in 50+ hours a week and tons of travel for the last 15 years to become a partner in his firm, paying off his loans early so that he and his partner could both own 50% of the company earlier, and then finally reaping the rewards of his hard work (and paying obscenely high taxes for it), would mean that I would get at least some of the money he's put into the system. But what do I know? My dad does business and has money, which means he's an immoral, selfish, and evil man who needs to "pay his fair share" already.

My parents "make too much money" for me to get anything from student loans. Next year I'm going to be taking a loan out from the bank, so I don't get the super easy government loans where half of it goes away for free after you graduate just because.

 

[Danoff]

And their employability just went down. So how does that help anyone? Remember, we're not taking away teenagers' jobs here and saying, "It'll be fine, just go get a higher education." These are people who are past that point, and they are the majority of who these decisions affect.

Their employ-ability went up. They went from working in a job that had no place in the US economy (given the parameters of the US economy) and are now available to be deployed on a job that does have a place in the US economy. You're entirely focused on the micro economics of one particular party in an overall transformation of an economy. Not that it's an unusual position, yours is by far the most common view taken on this, but it's wrong.

"Cost of American goods went down"... the only thing that for sure went down was the company's labor costs. There's nothing to suggest they are for sure going to lower the cost of their products and become more competitive in the market. In many cases they were doing just fine and the labor cost cutting was just a perk.

Heh... yea that's just a silly view of business.

So the cost of producing the goods went down. They can either reflect that in a reduction of price or by investing in the company in some other fashion (like hiring innovators). If the company chooses to reduce its prices, it's because the company feels that it will create greater profit by reducing those prices. Overall profit generated to the company is good for the company - which helps keep everyone ELSE at the company employed and is the ONLY POSSIBLE WAY TO SPUR GROWTH IN THE COMPANY.

And overall, American companies becoming more efficient (producing goods for less money, being able to grow, being able to innovate) is good for the US economy as a whole.

Not if the engineering jobs are also outsourced. I don't know why you think there is a distinction between factory line workers and engineers. Labor costs are labor costs, and they will ship those jobs overseas just the same if it saves money.

Yea, it's true that it's possible that government burden on American employees could result in the entire American workforce being outsourced and eventually kill the economy. There's no denying that. All the government has to do is raise taxes across the board to about 90% or so and suddenly we will have no economy. Your point is valid.

So that proves what exactly? That government burden is bad for the economy? This is practically economic law.

But outsourcing is not necessarily bad for the US economy - it could certainly be bad for a specific individual though.

 

[Bye Ya]

Their employ-ability went up. They went from working in a job that had no place in the US economy (given the parameters of the US economy) and are now available to be deployed on a job that does have a place in the US economy. You're entirely focused on the micro economics of one particular party in an overall transformation of an economy. Not that it's an unusual position, yours is by far the most common view taken on this, but it's wrong.

Yours is a common short-sighted one. Yeah, their employability went... up. They went from $35K a year at a factory to $17K a year at the Starbucks where their employability now fit in. You think they're going to get another job just like the one they had when the trend is to ship that job overseas?

The macro level is what the economy boils down to - people HERE with money in their pockets who are spending it and helping business across the board.

But outsourcing is not necessarily bad for the US economy - it could certainly be bad for a specific individual though.

The problem is that you're not actually talking about the US economy any longer. You are talking about participants in a global market, who simply happened to be located here. If I run a business where all of my employees live in another country, then the economy that benefits most is that other country's, because their citizens are spending money there. Sure, we might make a little on taxes from our American-based products, but the real group who benefits most in America is the business owner(s). These really aren't 'American' products any longer.

 

[Danoff]

Yours is a common short-sighted one.

Yes, definitely. Looking at the efficiency of the economy as a whole instead of looking at specific individual cases is common and short sighted .

Yeah, their employability went... up. They went from $35K a year at a factory to $17K a year at the Starbucks where their employability now fit in.

Well it depends on your point of view. From the point of view of economic efficiency, that's an improvement.

I know you hate to hear that, but it's the way things ought to be. There is nothing immoral about it (remember that? we were talking about morality earlier).

You think they're going to get another job just like the one they had when the trend is to ship that job overseas?

Of course not. What have I said that led you to that conclusion?

The macro level is what the economy boils down to - people HERE with money in their pockets who are spending it and helping business across the board.

That would not be the macro level.

The problem is that you're not actually talking about the US economy any longer. You are talking about participants in a global market, who simply happened to be located here.

💡 We're getting somewhere!

If I run a business where all of my employees live in another country, then the economy that benefits most is that other country's, because their citizens are spending money there.

Not necessarily. Jobs are not the goal of economies, products are. This is a fundamental disconnect between most people (and politicians) and reality. They think that economies exist to provide jobs, totally backward. Jobs exist to provide products - if it weren't for products and services, why would we work? and if that country can provide those products for less money than we can, we can benefit as a whole from that.

Look we could have people making $1 an hour putting beads on bracelets in a factory somewhere in order to provide ourselves with the bracelets that we want - but we don't want those jobs, we want better jobs. And what we end up with is being able to benefit from China producing cheap goods for us, while we produce greater value and never have to sit in a factory putting beads on a bracelet.

Part of outsourcing stems from the American standard of living that has risen dramatically, causing Americans to refuse to take certain jobs for certain pay. You have to either dramatically overpay an American to do the job, or you can pay less elsewhere and let the American get a job that is worth what they want to earn.

This is progress. Trust me, we don't want to be China.

 

[Bye Ya]

Yes, definitely. Looking at the efficiency of the economy as a whole instead of looking at specific individual cases is common and short sighted .

Ignoring the current state of the American economy which resulted from the practices you are suggesting...

That would not be the macro level.

Individuals are what I'm talking about.




You are talking about creating products, great. I don't disagree. The problem is that in your model the ones who have the money to spend on those products are not Americans, they're cheap labor in other countries.

If your company is made up of 80% non-American workers... can you really call your product "American-made?" Americans aren't the majority of your employees who are earning an income through working for you, so they're not spending money in our economy as the result of your business's existence. The costs you save by outsourcing the jobs go toward your competitiveness in the global market, but there again you're really just generating products that are in reality, by and large non-American. Of the 20% involved in your company that are American, the ones at the top reap the most benefits.

So how does that translate into a better 'American' economy, and not simply a more profitable global company whose owners happen to be located in America? The economy is self-contained within that company, and not tied to a particular country, except through taxes. In the end it's a situation where non-US citizens benefit, with the exception of the business owners themselves. It renders the term "American" rather arbitrary.

 

[Danoff]

Ignoring the current state of the American economy which resulted from the practices you are suggesting...

Huh? You're gonna have to explain that one. Here are possible ways that I interpret that:

- You think that the current state of the American economy is due to outsourcing: Wrong.
- You think that I'm suggesting that the burden placed on American workers by the government is appropriate: Wrong.
- You think that the American quality of life has not improved during our transformation into higher efficiency, higher value, higher education jobs? Wrong.

So, how am I to interpret that?

Individuals are what I'm talking about.

I'm well aware.

You are talking about creating products, great. I don't disagree. The problem is that in your model the ones who have the money to spend on those products are not Americans, they're cheap labor in other countries.

If your company is made up of 80% non-American workers... can you really call your product "American-made?" Americans aren't the majority of your employees who are earning an income through working for you, so they're not spending money in our economy as the result of your business's existence. The costs you save by outsourcing the jobs go toward your competitiveness in the global market, but there again you're really just generating products that are in reality, by and large non-American. Of the 20% involved in your company that are American, the ones at the top reap the most benefits.

So how does that translate into a better 'American' economy, and not simply a more profitable global company whose owners happen to be located in America? The economy is self-contained within that company, and not tied to a particular country, except through taxes. In the end it's a situation where non-US citizens benefit, with the exception of the business owners themselves. It renders the term "American" rather arbitrary.

So much confusion.

Ok, let's say I have an opportunity to create a company that will sell electricity to anyone in the world for 1/100th of the current price. This company will create massive profits for the Chilean economy, most specifically Easter Island. The people of easter island (are there people of easter island?) will become billionaires overnight, but due to their odd cultural disposition, they will only ever spend those billions within easter island (which is a bad choice for them, because they'll not see much quality of life improvement).

So I have a valuable product, and all of my employees are outside the US, and all of the revenue that my company generates will be spent outside of the US, but my products are available in the US.

Are you telling me that the existence of this company would be bad for the US economy? It would put people out of work (esp. power plant workers) put power companies out of business, and destroy existing jobs.

Are you telling me right now that you think the US economy would NOT benefit from the existence of a company that would reduce costs just because it would cause us to restructure our economy and because the profits of that company don't circulate in the US economy?

For God's sake, do not answer yes.

 

[Bye Ya]

If your company has 100% non-US employees, and 100% of its revenue is spent in economies outside of the US, why even call it an American company? What about your products is American at all?

 

[Danoff]

If your company has 100% non-US employees, and 100% of its revenue is spent in economies outside of the US, why even call it an American company? What about your products is American at all?

It's not an American company, it's a Chilean company with Chilean workers and profits flowing into the Chilean economy. The only thing about the products that are American are that they can be purchased by Americans.

Now tell me you understand how America can benefit from this scenario - the scenario where Americans send their hard earned dollars to Chile (never to be seen again) in exchange for cheaper products.

(In technical mumbo jumbo, this is known as a trade deficit)

 

[Bye Ya]

It's not an American company, it's a Chilean company with Chilean workers and profits flowing into the Chilean economy. The only thing about the products that are American are that they can be purchased by Americans.

Now tell me you understand how America can benefit from this scenario - the scenario where Americans send their hard earned dollars to Chile (never to be seen again) in exchange for cheaper products.

(In technical mumbo jumbo, this is known as a trade deficit)

Right, America is the 'other' country in this case. Maybe we have access to the products for cheaper, maybe not. And the key difference is a Chilean company with Chilean workers vs. an American company with non-American workers.

Now say that you are an American company, like Fruit of the Loom, and you do the same thing. All of your employees are from other countries, they spend all of their money outside of the US, and you also happened to get rid of say 500,000 US jobs in the process of cutting labor costs. How does America benefit, specifically when of those 500,000 jobless people only a small percentage end up with a job that earned as much as before?

 

[Danoff]

Right, America is the 'other' country in this case. Maybe we have access to the products for cheaper, maybe not.

We do... I just said that.

can be purchased by Americans

And the key difference is a Chilean company with Chilean workers vs. an American company with non-American workers.

Huh?

Now say that you are an American company, like Fruit of the Loom, and you do the same thing. All of your employees are from other countries, they spend all of their money outside of the US, and you also happened to get rid of say 500,000 US jobs in the process of cutting labor costs. How does America benefit, specifically when of those 500,000 jobless people only a small percentage end up with a job that earned as much as before?

Exactly the same as my example.... it's the reason I made the example I made.

 

[Bye Ya]

It's not an American company, it's a Chilean company with Chilean workers

Fruit of the Loom - American company, non-American workers

Key difference.



The Chileans didn't outsource their workers. The workers then had money to spend inside their Chilean economy. I don't see how you cannot make this distinction.

 

[Azuremen]

Key difference.

Fruit of the Loom has US workers though, so your hypothetical is still just that.

The Chileans didn't outsource their workers. The workers then had money to spend inside their Chilean economy. I don't see how you cannot make this distinction.

You failed to understand the example he made it would seem. It actually was identical to your suggested Fruit of the Loom situation.

 

[Danoff]

Key difference.



The Chileans didn't outsource their workers. The workers then had money to spend inside their Chilean economy. I don't see how you cannot make this distinction.

You've lost lock on what I'm trying to say.

I'm trying to say that in my example America benefits from a Chilean product even though Chile retains all of the profits and jobs.

See? This is the ultimate in terms of outsourcing. Chile has all of the jobs, all of the profits, all of everything. The only thing America has in this example is the ability to purchase the products. And America still benefits dramatically in my example.

To dig into the theory a little bit, a trade deficit (like we have with China these days - and goes along with outsourcing) involves us sending worthless pieces of paper to other countries in exchange for them sending us valuable products or services. This benefits the US as a whole, because if those dollars are ever exchanged for US goods and services in the future, they'll be worth less than they were when we shipped them over (the goods don't suffer the same inflation). On the otherhand, if they're NEVER exchanged for US goods and services in the future, we experience deflation - in which case our dollars increase in value.

We'd be extremely lucky if there were no jobs anywhere in the US, and China manufactured everything we needed, and all we had to do was print worthless pieces of paper to hand them in exchange for all of the goods and services we used.

Fundamentally, you don't know it, but you're complaining about trade deficits - but trade deficits benefit the economy. The downside (which we have not gotten anywhere close to talking about) is whether the trade deficit is sustainable.

So back to my example, my Chilean company is the extreme of your fruit of the loom company. It hires nobody in the US, takes all of the profits and never gives them back, and only sells extremely cheap electricity to the US. Do you see how we benefit from what amounts to 100% outsourcing of electricity generation?