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2011-10-11 Home Front: Culture Wars

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Posted by Scooter McGruder 2011-10-11 13:18|| || Front Page|| [11131 views ] Top

#1 Agreed.

Posted by Iblis 2011-10-11 14:26|| 2011-10-11 14:26|| Front Page Top

#2 But of course it will work this time.

Under socialism the goal is not to exceed and be sucessful(and thus taxed to death) but to merely meet the goal enough to avoid failure - or obvious failure. The old communist nations (USSR, China) eventually realized that and reformed (at least) their economic model to a more capitalistic one. North Korea and Cuba have not - and just look at their standard of living.

It wasn't "redistribution' which created the ipad, iphone, igirlfriend, and the rest of our truely amazingly high standard of living - it was good ole capitalism.

That your union bosses forced your company to move operations offshore with unrealistic and uncompetitive demands isn't my fault - *you* chose that path of your own free will. Now just about the only 'union jobs' are in the captive public sector (Teachers Union, Service Union, etc...) or the captive private sector (Boeing) - the rest are at risk of being shipped offshore - or at least to right-to-work states.

And I'm just waiting for the first city to hire a offshore company from China or India to provide services traditionally done by the city. (For example road maintenance)

BTW - how many of these protests are occuring in right to work states anyway? Just curious.

Posted by CrazyFool 2011-10-11 14:43|| 2011-10-11 14:43|| Front Page Top

#3 That your union bosses forced your company to move operations offshore with unrealistic and uncompetitive demands isn't my fault - *you* chose that path of your own free will.

We should all be satisfied with $250/month, dormitory bunk provided.

Posted by Eohippus Phater7165 2011-10-11 15:52|| 2011-10-11 15:52|| Front Page Top

#4 We should all be satisfied with $250/month, dormitory bunk provided.

But of course that is not what I meant. What I meant was unrealistic demands - demands like those given to the School Districts and other government entities (see California - but they have other contributing factors as well) which cannot go offshore. Do you think the unions would be realistic if their victims could not go anywhere else? They would suck them dry much like they are doing to cities and school districts now.

Posted by CrazyFool 2011-10-11 16:03|| 2011-10-11 16:03|| Front Page Top

#5 "We should all be satisfied with $250/month, dormitory bunk provided."

Labor market is a free market (as opposed to labor marked under communism where you do as you're told).

If you want to work for someone, you go out and contract. If you don't like your contract, you go out and contract with someone else.

If you don't like working for someone, you create your own job.

That simple.

Posted by twobyfour 2011-10-11 16:11|| 2011-10-11 16:11|| Front Page Top

#6 So what is a realistic salary for Americans? In the only economy wide open to the rest of the world, all a competitor has to do to out compete you is produce at lower cost + shipping than you can. In the information services, even the shipping cost is nil and labor cost is predominant.

In 2009, the average monthly wage of those employed in primary industries was only 1,196 yuan ($187.62), less than a quarter of the average wage of those working in financial services (5,033 yuan, $789.55), and the computer services industries (4,846 yuan, $760.22).

1 US dollar = 6.3745 Chinese yuan

Posted by Eohippus Phater7165 2011-10-11 16:16|| 2011-10-11 16:16|| Front Page Top

#7 If you want to work for someone, you go out and contract.

I do. That is why I am very attuned to long term falling wage rates and standard of living in the US.

Posted by Eohippus Phater7165 2011-10-11 16:18|| 2011-10-11 16:18|| Front Page Top

#8 Eohippus Phater7165 Unions won't help that. Just like tarrifs they can only transfer the cost from one party to another. i.e. unionised wages will be higher but so will inflation and thus the country will be slightly worse off.

Posted by Bright Pebbles 2011-10-11 16:45|| 2011-10-11 16:45|| Front Page Top

#9 So you would welcome living on £150/month. That should about cover filling your car once w/ petrol. Who needs food, housing, clothing, water, sewer, transportation, medicine, education. At least the BBC is free. Oops, no.

Posted by Eohippus Phater7165 2011-10-11 16:57|| 2011-10-11 16:57|| Front Page Top

#10 So what is a realistic salary for Americans?

What's the realistic salary based upon job definition? Do you believe low skill, low education level jobs should be artificially subsidized by tariffs and low quality standards? I'm not interested in having to pay for something that the UAW says I have to buy at a price and quality they say I have to accept.

Now the failure of government has been to allow the manipulation of currency for two decades by those other nations. We didn't need a bunch of credentialed State Department types dealing negotiations as much as a damn good used car salesman to run hard deals and not worrying about feelings. The action now on going in the Senate to address that specific issue is the classical 'Barn Door-Horse' reaction. Further, the government's support for nearly two generations of waves of H1B visas has also destroyed incentive to grow and sustain the technical skills locally. Are the businessmen evil or the politicians they own and operate? Or is everyone, to include the workers, in the same category of greed and material envy?

Posted by Procopius2k 2011-10-11 17:02|| 2011-10-11 17:02|| Front Page Top

#11 Ok, let's take a few examples. Let's start out with the "low education level" job in industry. That could be a worker on an auto, appliance, or widget assembly line. The comparable worker in China makes $187/month (2009). Tell me, at what wage would our unskilled worker be competitive w/ the Chinese worker (let alone the Viet or Bangla worker) given the shipping and tariff (~2%) advantage the American worker enjoys. Given that wage, how much should be taken out of his paycheck to support the $3.8 trillion/year federal government?

Let's take the "highly skilled" worker, say a computer programmer or engineer. The comparable worker in China makes $760/month (2009). So should a highly skilled worker work for $9,000/year? What does that do to mortgage, car and tax payments? Anything left for food? I thought not. I guess the family could always move into a 1985 Chevy Suburban (0 down, low monthly payments). Or could quietly starve. So many choices.

Let's up the game. Pick a job. How about yours? What do you think the wage should be? At that wage, how is that job competitive with world wages?

Posted by Eohippus Phater7165 2011-10-11 17:30|| 2011-10-11 17:30|| Front Page Top

#12 Now the failure of government has been to allow the manipulation of currency for two decades by those other nations.

And what power goes a sovereign government have to stop this? Only one. Controlling the volume of trade, all the way to cutting it off outright.

Posted by Eohippus Phater7165 2011-10-11 17:34|| 2011-10-11 17:34|| Front Page Top

#13 Eohippus Phater7165

So You want American Juche as the Answer. North Korea tells you where that ends up.

Posted by Bright Pebbles 2011-10-11 17:58|| 2011-10-11 17:58|| Front Page Top

#14 In the only economy wide open to the rest of the world, all a competitor has to do to out compete you is produce at lower cost + shipping than you can. In the information services, even the shipping cost is nil and labor cost is predominant

The above leaves out an important factor: added value due to creativity, design factors etc.

The WSJ recently had an article on the industries which are trickling manufacturing as well as engineering back to the States. It is still only a trickle, but one that is increasing in volume as shipping costs go up, political risk in other countries adds uncertainty and some states in the US show that we can produce quality goods at competitive costs without unions, at least for sale within the US. (My Toyota was assembled and many of the parts built in the US, for instance).

However: if the US workforce is both highly paid AND inefficient (drug use rampant on Detroit auto assembly lines, for instance) OR poorly educated and trained (so that quality control systems fall apart, for instance) then yes - there is little value added by manufacturing here.

Posted by lotp 2011-10-11 18:00|| 2011-10-11 18:00|| Front Page Top

#15 FWIW, I grew up in a UAW family - two uncles served on national negotiating teams, etc.

My father was pressured to be a shop steward but refused because he saw the union demanding rigid work rules and high union officials' salaries and neglecting work safety, worker training and investment in upgraded processes.

Posted by lotp 2011-10-11 18:03|| 2011-10-11 18:03|| Front Page Top

#16 So You want American Juche as the Answer. North Korea tells you where that ends up.

I want Americans to make stuff and buy it. Capitalism is great at it. Where Capitalism (emphasis on capital) cannot compete are 5X the numbers or workers working at 1/15th the wage while having access to comparable production methods and low tariffs. With the current trading system, we will converge with China, falling closer to their level than they will rise to ours in a resource constrained world. All that does is create massive unemployment for decades in the US while the systems equalize.

The above leaves out an important factor: added value due to creativity, design factors etc.

What percent of the population (besides Lake Wobegon) do you believe are capable of high levels of creativity and intelligence. How are the non-gifted Americans going to work, make a family, and retire? Or do we just let industry die and the workers along with it?

The WSJ recently had an article on the industries which are trickling manufacturing as well as engineering back to the States.

Yes, only a trickle is returning after the US has exported 1/2 of it's entire manufacturing sector. In the meantime, the other half not exporting is still leaving. So is programming, engineering, medical, accounting, back office and just about every job that doesn't require immediate physical presence. And the trade flow will never be the other way, because other countries are not that stupid.

On a bright note, the imbalance will end one day. When the US dollar is worthless and people would not bother to even wipe their ass with it anymore. Of course we will have no industry or technology left by then. Unlike the ex-USSR, I don't think American women will be exportable.

Posted by Eohippus Phater7165 2011-10-11 18:28|| 2011-10-11 18:28|| Front Page Top

#17 If all you have to sell is your labor do not be surprised if someone else is selling the same service for less. 5% of the people are Americans and 95% aren't.

Americans are very good at offering more than just labor. For example, they are more reliable. They work harder when they are working. They work smarter and keep the business going even when the equipment is not working well, and they take fewer vacations. Also Americans generally follow the rules and the rules are made is a mostly fair way. Think more broadly about what an employer needs when they consider who to purchase labor from.

BMW and Honda did not put plants into the USofA because US workers were cheaper, they did so because US workers were offering a better value.

While education can really help someone provide higher value labor (and thus demand a higher wage), just having your suit tailoring show up on time is a real value in the savings to the customer who can plan for it as one stop not many. And that value is worth a higher wage for the punctual American tailor across town rather than the low wage tailor across the sea.

Posted by rammer 2011-10-11 19:00|| 2011-10-11 19:00|| Front Page Top

#18 What percent of the population (besides Lake Wobegon) do you believe are capable of high levels of creativity and intelligence. How are the non-gifted Americans going to work, make a family, and retire? Or do we just let industry die and the workers along with it?

The Japanese did quite nicely with ordinary people in manufacturing cells organized around productivity/quality principles developed by a US consultant - but REJECTED by US industry at the demand of the unions.

My point is that intellectual capital drives the ability to manufacture in a higher wage setting at a profit. We have had several decades of exporting that capital. The loss of actual manufacturing is a consequence, not the driver.

Examples of intellectual capital exported, often at government connivance:
- advanced aircraft technologies, including control systems, key materials for aircraft bodies and production techniques- exported to China under the Clinton Administration (which just happened to receive large campaign donations from Chinese monassteries around the same time)

- computer science and robotics expertise, exported by state universities who deliberately enroll large numbers of Chiness and other foreign grad students over US students because a) the foreign governments pay high tuition and b) US students have in many cases grown lazy and lack both the discipline and the foundational skills to excel in these areas (which are my expertise, so I know whereof I speak).

We CANNOT fix our economy through tariffs nor through a primary focus on manufacturing jobs -- we MUST regain leadership in developing and commercializing new technologies. Then the manufacturing jobs will follow.

If we do try the tariiff/trade war route, we will end up a nation of buggy whip makers in a world of UAVs. I follow the progress of robotics, coomputational and military technologies in China fairly closely. Unless they implode for social or economic reasons (which is possible but not something to rely on), they will overtake us in ways that we will never recover from. And the timeframe is sooner rather than later.

Posted by lotp 2011-10-11 19:06|| 2011-10-11 19:06|| Front Page Top

#19 Americans are very good at offering more than just labor. For example, they are more reliable. They work harder when they are working. They work smarter and keep the business going even when the equipment is not working well,

Not according to lotp. How much smarter do you have to work to compete with someone making 1/10 of your wage plus have trade barriers on their side? Are you that smart or hard working? Is any human?

BMW and Honda did not put plants into the USofA because US workers were cheaper, they did so because US workers were offering a better value.

They are cheaper. Hourly compensation costs in manufacturing, U.S. dollars, 2009
Germany $46.52
USA - $33.58
Japan - $30.36

The locations where the foreign companies put the plants are even lower wage than nationally. The wages are comparable to Japan's and much cheaper than Germany's. US wages are cheaper than both shipping and tariffs are included. On the minus side - corporate income tax, but multinationals can get around that easily. Now rerun the same calculation when the foreign labor rate is $3/hour.

As an addition exercise, try to export an American car to either Germany or Japan.

Posted by Eohippus Phater7165 2011-10-11 19:26|| 2011-10-11 19:26|| Front Page Top

#20 When the US dollar is worthless and people would not bother to even wipe their ass with it anymore. Of course we will have no industry or technology left by then.

Get a grip with the hysterics. As the dollar drops the cost of labor in that same world market drops. That makes work in the US worth more to those same operations that pull up stakes and move production. For example.

Strange how industry and technology that didn't exist in China thirty years ago now exists. I suspect as the currency adjustments come, that same technology and industry will have an opportunity to return to places they have left.

Posted by Procopius2k 2011-10-11 19:28|| 2011-10-11 19:28|| Front Page Top

#21 Everything you say is true, lotp, but it does not answer the political question ep7165 raises of what to do with those who cannot be productively employed by the high tech manufacturing renaissance you describe. And we are producing a lot of those people. They are going to be a problem either way.

Posted by Nimble Spemble 2011-10-11 19:28|| 2011-10-11 19:28|| Front Page Top

#22 My point is that intellectual capital drives the ability to manufacture in a higher wage setting at a profit. We have had several decades of exporting that capital. The loss of actual manufacturing is a consequence, not the driver.

That is exactly the point. A lot (but rapidly declining) of the world's intellectual capital is developed within the US, often with taxpayer dollars. The US could be maximizing the value of innovations but the products, therefore the value added, are invariably made overseas. The driver of this loss of industry, jobs, wealth and future is having a wide open market for imports and little control of the export of critical technology. In this process, we hand the keys for the next generation of innovation to our competitors. And Republican voters are the worst in this respect.

We CANNOT fix our economy through tariffs nor through a primary focus on manufacturing jobs -- we MUST regain leadership in developing and commercializing new technologies. Then the manufacturing jobs will follow.

I disagree somewhat. The US is still the leader in most areas of technology. By capturing the value chain that innovation (which we already lead) provides, you provide the wealth to feed back into more innovation and create a wealthier overall society. Even worse, American universities and corporations are not only educating future competitors, but exporting the design centers wholesale (e.g. GE Medical X-rays HQ is moving to China instead of exporting the machines). Innovation (a few percent to a few tens of percent in the pharma industry) is not enough to carry an economy. Just as loaning each other money at credit card rates does not an economy make.

Posted by Eohippus Phater7165 2011-10-11 19:50|| 2011-10-11 19:50|| Front Page Top

#23 EP you are a tiresome troll. I will take one more run at this.

US wage $33, Japan wage $30. Therefore, US wages are less? NO, they are actually higher. 33>30. By this simple math US workers are worth at least $3 an hour more to Honda. Now why is that? Think of a reason and then go on your rant.

Besides if $3 wages were a good thing than Honda could have bought 11 workers for that one American. But they didn't. And the reason is simple. The management costs associated with keeping $3 workers on task is too large to be worthwhile in a complex business like building cars. Sewing t-shirts, probably ok. Writing computer code, no way. There is no one working for $3 an hour writing code.

So, your assertion that employers run to the lowest cost labor is false according to your own data and the straw man of the existential yellow peril that you keep repeating is completely bogus.

So, get out from under your troll bridge and see the world as it is, rather than as you imagine it might be.

Posted by rammer 2011-10-11 20:39|| 2011-10-11 20:39|| Front Page Top

#24 The US is still the leader in most areas of technology

This statement shows significant ignorance of the hollow state of our base science and technology. In many areas we are eating the last of our seed corn, i.e. living off products from rapidly aging research outcomes, with nothing in the queue for the next wave.

I lead R&D in one area of advanced science/tech for a well known organization. I *know* where we lead, and where the competition is and is going. I taught at the university level for the better part of a decade. I have some direct familiarity with our student population.

what to do with those who cannot be productively employed by the high tech manufacturing renaissance you describe. And we are producing a lot of those people. They are going to be a problem either way.

Yes, but not in insoluable one. A crumbling infrastructure does need revitalization - but not through corrupt government direction of funds. An aging population will need nurses, aides and other service providers for which training can be accomplished through community colleges in many cases. There is an oil boom in North Dakota, and we could have a lot more mining and extraction jobs if this administration's policies were reversed.

There are a lot of jobs that could be created for the people you cite, NS, with a small amount of retraining as needed. The problem is political policy and will.

Posted by lotp 2011-10-11 21:39|| 2011-10-11 21:39|| Front Page Top

#25 Rammer,
EP you are a tiresome troll. I will take one more run at this.

Take your troll accusations and ram it up your ...

US wage $33, Japan wage $30. Therefore, US wages are less? NO, they are actually higher. 33>30. By this simple math US workers are worth at least $3 an hour more to Honda. Now why is that? Think of a reason and then go on your rant.

Transportation and a 2.5% tariff.

"Estimates by Martin Baily of the McKinsey Institute and the Institute for International Economics report that labor hours to produce an auto in North America, including parts, are decreasing at an annual average of 1.7 percent annually since 1987, and are now approaching 100 hours total."

Wage differential on 100 hours @ $3/hour = $300. Tariff on a $30K car, the tariff is $750 or a factor of 2.5X the salary differential. Then there is cost of shipping across the Pacific. See how "simple math" works?

In addition, the Japanese transplants are competing with Detroit where total wage and benefit rates are 40% higher ($69 vs $48/hour). That's $2k per car. But, no, wages have no effect on price advantage.

Besides if $3 wages were a good thing than Honda could have bought 11 workers for that one American. But they didn't. And the reason is simple. The management costs associated with keeping $3 workers on task is too large to be worthwhile in a complex business like building cars. Sewing t-shirts, probably ok. Writing computer code, no way. There is no one working for $3 an hour writing code.

Pay attention. M-A-N-U-F-A-C-T-U-R-I-N-G wages. Again:

In 2009, the average monthly wage of those employed in primary industries was only 1,196 yuan ($187.62)

That's a dollar an hour.

So, your assertion that employers run to the lowest cost labor is false according to your own data and the straw man of the existential yellow peril that you keep repeating is completely bogus.

One word: China. Two words: $270,000,000,000 deficit. Remind me again what wonderful products and services China has developed that we cannot do without to the tune of $270 billion year?

So, get out from under your troll bridge and see the world as it is, rather than as you imagine it might be.

Open your eyes. Smell the coffee. The largest, most productive sector, employing the most workers is already half gone. Now that bones are being picked clean, technical, medical, clerical and financial sectors are being systematically raided. Where are your children and grandchildren going to be employed, if at all?

Posted by Eohippus Phater7165 2011-10-11 21:48|| 2011-10-11 21:48|| Front Page Top

#26 This statement shows significant ignorance of the hollow state of our base science and technology. In many areas we are eating the last of our seed corn, i.e. living off products from rapidly aging research outcomes, with nothing in the queue for the next wave.

America is still the #1 or #2 leader is most technical areas, but as acknowledged, our lead is eroding rapidly. A lot of it is both people and government shifting resources to the financial area for quick gains. The future be damned.

There are an unlimited supply of foreign eggheads and H1B, F, J and alphabet visas. I have worked or consulted w/ companies where I was the only US citizen engineer at the site. Depressing in the extreme.

My first job out of uni was designing mainframe computers. Back then we made most the components, electronic and mechanical were made in US factories and we were intimately familiar with the workings. Nowadays, a set of masks is shipped off to Asia and the final product is never seen.

I lead R&D in one area of advanced science/tech for a well known organization. I *know* where we lead, and where the competition is and is going.

As I know mine. I can see the product trends but more importantly, I can trends of where the design tools are being created. There is a wholesale sifting of EDA tools development overseas by the major EDA companies.

Yes, but not in insoluable one. A crumbling infrastructure does need revitalization - but not through corrupt government direction of funds. An aging population will need nurses, aides and other service providers for which training can be accomplished through community colleges in many cases. There is an oil boom in North Dakota, and we could have a lot more mining and extraction jobs if this administration's policies were reversed.

Oil and mining - yes. It brings new wealth into the economy. But the demand for elder care does not increase national wealth. It it going to bankrupt the nation as the dollars are extracted from working people and given, for lack of better word, unlimited care. It just slices a diminishing pie into smaller portions. That's why I emphasize creating new wealth and with enough scale to employ those who are not in the top 5%.

Posted by Eohippus Phater7165 2011-10-11 22:14|| 2011-10-11 22:14|| Front Page Top

#27 A lot of it is both people and government shifting resources to the financial area for quick gains. The future be damned.

For some time I lived and was professionally active in the areas of NY that were the center of IBM mainframe development. Interacting with a lot of the older IBM engineers and developers in professional societies was depressing. They were out of date technically, highly paid (or laid off), but for the most part seemed to have little or no initiative to upgrade skills, get a new degree or otherwise improve their value-add. They seemed universally to be bewildered that having made it into a 'tenured' job at IBM, things didn't just go swimmingly for decades thereafter.

There are exceptions - the supercomputing group being one of them. But by and large, I came away with the strong impression that IBM corporate leadership really had no choice but to move that R&D far away if they were to retain any competitiveness at all. Not due to manufacturing wages nearly so much as a passive, entitled and entrenched white collar workforce.

But then perhaps I'm biased by many years in Silicon Valley, Research Triangle Park and some pockets of innovation in southern California a few decades ago. I've seen both blue and white collar workers who busted butt to improve their skills, make the company work, produce outstanding product, win in the marketplace. And some of those workers were H1 visa holders who became valuable contributors as naturalized citizens.

Posted by lotp 2011-10-11 22:31|| 2011-10-11 22:31|| Front Page Top

#28 I worked for that "other" mainframe maker in Sunnyvale. I saw the industry shift to CMOS tech while we were working ECL and BiCMOS and exploring GaAs. For me it was a tossup of going to a new venture or grad school.

Posted by Eohippus Phater7165 2011-10-11 22:39|| 2011-10-11 22:39|| Front Page Top

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