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Tariffs to Help Domestic Manufacturers?

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Comments

  • brightness04brightness04 Member Posts: 3,148
    The country overall just happens to be a little bigger than your own family :-) Even in Michigan, having a UAW job is still the tiny minority. Wage for almost everyone else has gone up. Heck even UAW wage went up in te 1990's compared to the 1980's. Housing was relatively inexpensive in the early 80's, but became very expensive by the late 80's. Some of the late 1980's price levels around much of the country were not seen again in recent years.
  • rockyleerockylee Member Posts: 14,014
    Read these........

    http://www.forexblog.org/2006/08/us_automakers_a.html

    http://www.levelfieldinstitute.org/fact-sheet-yen.htm

    Rocky
  • rockyleerockylee Member Posts: 14,014
    The country overall just happens to be a little bigger than your own family Even in Michigan, having a UAW job is still the tiny minority. Wage for almost everyone else has gone up. Heck even UAW wage went up in te 1990's compared to the 1980's. Housing was relatively inexpensive in the early 80's, but became very expensive by the late 80's. Some of the late 1980's price levels around much of the country were not seen again in recent years.

    brightness, that wasn't just my family pal. It was everybody I knew in western michigan. In the mid 80's my mother was pulling down almost $14 buck an hour at GE. My father was making like $16 an hour. My other family members were making similar type of wages. The white collar family members and friends were making alot more than that obviously because college degrees weren't a dime a dozen like they are now. I doubt most Michiganders, will ever see as good of times as the 1980's....... ;)

    Rocky
  • brightness04brightness04 Member Posts: 3,148
    Rock, you have it exactly backwards. Repeated government intervention to "even the playing field" is what ails the socialist-leaning countries to the south. Mexico is not even the worst among them. Try Peru or Bolivia or Cuba.

    Here is the real scoop: government bureacrats do not know the real prices when they intervene. Everyday when we as consumers individually spend our money, we are in effect voting on what each of us need or want. That's how the consumers and the market place can find out the differences between what is a reliable car, what is not; whether OHV engines are better or OHC engines are better; whose door handle chips nails, whose doesn't; to things as minor as whose fake wood finish look real, whose doesn't; or for that matter whether wood finish should be replaced by metallic finish. That's how market rapidly fluctuates between big SUV's and econoboxes as gas prices fall and rise, and economy doing likewise. None of that would be reflected in bureacratic decision making. To a bureacrat, a car is a car, period. That's how the Soviet Russia, despite their highly intelligent and highly educated citizens on individual bases, ended up making Lada's of 1950's design all the way into the early 1990's! and would still keep piling up those cars that are worth less than component material that go into them if not for the collapse of the Soviet Union. That's what happens when government is in charge of what gets made what doesn't, and whose job gets preserved. The result is everybody suffer because the bureacrats inevitably decide to keep status quo for political reasons and stagnate the economy.
  • brightness04brightness04 Member Posts: 3,148
    The number of people you knew was tiny compared to 250 million! $14-16/hr is practically minimum wage nowadays even among temp agencies in NYC, Boston, DC, etc.. I routinely pay people $20-25/hr, and many of these are not white collar jobs.

    West Detroit was potato country before the carmakers set up shop there. Most people there are descendents of people who relocated there from places like Ohio and Midwest farm country in search of those high-paying auto jobs. They can move again as the driving engine of economic productivity change to something else.
  • kdhspyderkdhspyder Member Posts: 7,160
    Excerpt from the forexblog..
    If you remember, American automakers have been complaining for the better part of this year that the Japanese government is depressing the value of the Yen in order to make Japanese exports more competitive

    It talks about 'Japanese exports'. The Camry, Corolla, Solara, Matrix, Sienna, Tacoma, Tundra, Sequoia and some Lexus' are all made here in NA. There is no currency manipulation, nearly everything is in US and CA dollars.

    So again, why don't Ford/GM just sell their midsized and smaller vehicles for higher prices and make more money?

    Regarding the Level Playing Field 'Fact Sheet' just to be clear, the author is:

    "Source: Mustafa Mohatarem, Ph.D., Chief Economist, General Motors"

    Some of it may be accurate but some certainly is not.
    Quote:
    Cars produced here by Japanese companies also benefit heavily from this subsidy because of their high use of imported parts and components

    This is false. The Sienna for example has one of the highest NA Content percentages of all vehicles in the US at 90%. The GM/F entries in the minivan segment were just horrible 'after thoughts' and deserved to be shot dead. They were. The Tundra and Sequoia are sold nowhere else except in N America.

    Here is a huge problem for the UAW, but not for America. If you had your way and a tariff were imposed on all imports that would induce Toyota, Honda, et al to manufacture all their vehicles here in the US/CA/Mex. If that were the case employment here would soar but it would likely be at the expense of the UAW.
  • rockyleerockylee Member Posts: 14,014
    brightness, I don't disagree pal. I however think you take what I say sometimes to the far end of the spectrum. I of course don't want Soviet union type of government intervention but perhaps more along the lines of Germany or Norway. I'm not asking for our markets to be closed off totally but would like to see our government get involved enough to give american buisness a fighting chance without having to outsource everything. I guess I'm old school and want to save american ownership of at least some area's of our economy. The Iraq war is going to turn our currency into monopoly money if we keep the spending up.

    Rocky
  • brightness04brightness04 Member Posts: 3,148
    Come on, these accusations are so out of touch with reality. Look at the USD Index:

    http://www.chartsrus.com/chart.php?image=http://www.sharelynx.com/chartstemp/fre- e/chartindCRUvoi.php?ticker=FUTDX

    It shows the value of dollar compared to other currencies of the world. It's near record low! Kinda hard to accuse other countries of manipulating their currency lower when this is happening.
  • rockyleerockylee Member Posts: 14,014
    The number of people you knew was tiny compared to 250 million! $14-16/hr is practically minimum wage nowadays even among temp agencies in NYC, Boston, DC, etc.. I routinely pay people $20-25/hr, and many of these are not white collar jobs.

    Where do you live brightness ???? $20-25 an hour isn't bad if you live in Tx or Mi. ;) Does that include benefits ?

    West Detroit was potato country before the carmakers set up shop there. Most people there are descendents of people who relocated there from places like Ohio and Midwest farm country in search of those high-paying auto jobs. They can move again as the driving engine of economic productivity change to something else.

    The only sector that is hot right now brightness, is healthcare. Joe six-pack that graduates highschool can no longer go work in a factory and make a decent living learning with OJT anymore. :sick:

    Rocky
  • rockyleerockylee Member Posts: 14,014
    It talks about 'Japanese exports'. The Camry, Corolla, Solara, Matrix, Sienna, Tacoma, Tundra, Sequoia and some Lexus' are all made here in NA. There is no currency manipulation, nearly everything is in US and CA dollars.

    As more and more cars get made here the playing field becomes more level. However the domestics haven't recieved the same tax giveaways like the Japanese, have recieved. GM, has pumped millions into certain plants and got little from the government. read below.......

    Perhaps the biggest perception problem is that American automobile companies GM and Ford (Chrysler is now German-owned) squander all their money on plants overseas and foreign automakers build their factories in the U.S. Foreign car lovers will surely point to Kia’s plans to build its first-ever U.S. plant in Georgia, but they probably won’t mention that they received $400 million in tax giveaways to do it, which translates into $160,000 per job. Among the many benefits for the foreign-owned company, your tax dollars are going to be used for road improvements surrounding the complex, complete with flower beds and other beautification features. Hey, as long as we’re going to allow states to bid for private jobs with our public tax dollars, we might as well make it look good, right?

    And the foreign car lovers will probably also not tell you (or maybe they just don’t know or don’t want you to know) that GM and Ford pour more money into existing American facilities than foreign automakers spend on new plants, usually with little or no tax breaks. GM has already spent over $500 million upgrading two transmission plants this year, and has spent nearly a billion dollars over the last decade, for example, for facility upgrades in Texas. And what do GM and Ford get for making their existing plants more efficient? It isn’t tax breaks. Instead, they get accusations of not being "competitive" enough! Maybe here I should also mention that the average domestic parts content for Kia is 3%, while the average domestic parts content of Ford and GM is 78% and 74% respectively. This means that buying a U.S.-assembled (or even foreign-assembled, for that matter) GM or Ford supports more American jobs than a U.S.-assembled car or truck with a foreign nameplate.

    So again, why don't Ford/GM just sell their midsized and smaller vehicles for higher prices and make more money?

    Well it's going to take time to turn-around GM/Ford. We are just seeing the beginning phases..... ;)

    Rocky
  • rockyleerockylee Member Posts: 14,014
    Here is a huge problem for the UAW, but not for America. If you had your way and a tariff were imposed on all imports that would induce Toyota, Honda, et al to manufacture all their vehicles here in the US/CA/Mex. If that were the case employment here would soar but it would likely be at the expense of the UAW.

    One of these days the japanese transplants will be unionized and toyta will do a better job handling it than the big 3. ;)

    Rocky
  • rockyleerockylee Member Posts: 14,014
    I see no comparison with other currency's brightness. Did you give me the wrong link ?

    Rocky
  • rockyleerockylee Member Posts: 14,014
    This is false. The Sienna for example has one of the highest NA Content percentages of all vehicles in the US at 90%. The GM/F entries in the minivan segment were just horrible 'after thoughts' and deserved to be shot dead. They were. The Tundra and Sequoia are sold nowhere else except in N America.

    kd, the Sienna and the Camry are the most american made out of the transplants. Yes the Sienna is 90% and some Camry's are as high as 87%. That is a good thing. ;)

    Rocky
  • brightness04brightness04 Member Posts: 3,148
    Rocky, the American, and worldwide, experience in the last 70 years or so has pretty much shown that government intervention is not a manageable spectrum. Once government gets into one sector, messes it up, the supplier and customer of that sector can't help but agitate for intervention in favor of incumbents too, which the government would be all too happy to comply because that would mean more money to play with. The result is progressive take over of the economy by the government. It's a quagmire very much like Iraq; governments only knows one answer to obvious failures: commit even more resources! :-)

    The West German Wirtschaftswunder ("Economic Miracle") in the 1950's was very much the result of Ludwig Erhard's pro-market reforms. Instead of currency manipulations like the Weimar Republic did in the 1920's, Erhard chose a path of sound money, low taxes and freer market. That's how West German economy took off. Germans, west and reunified, have been living off that ever since. In any case, both Ford and GM have significant operations and sales in Germany, so Germany is not exactly protectionist. The relative lower number of Japanese cars may have to do with the fact that so far Japanese carmakers have been focusing on the US market in the past few decades. The German carmaker with the most government participation is VW, which is partly owned by the State of Lower Saxony. We know what a basket case VW is.

    Norway is very big on free trade. It has no domestic carmaker, so every car is imported. Its low tax policies make the country quite a popular destination for foreign direct investment.
  • brightness04brightness04 Member Posts: 3,148
    The link is correct. You just have to wait for a few seconds for it to load. It's the USD Index, charting from 1972, when Nixon closed the gold window, and USD became a floating currency.
  • brightness04brightness04 Member Posts: 3,148
    What's "benefits"? Isn't pay a benefit? I don't make empty promises to people working for me. They do honest work for me, and I pay them honest money (well, for the sake of this argument, let's assume Federal Reserve Notes are, for the time being; that's what my clients pay me in).

    No, I'm not in healthcare. The high cost of healthcare pretty much shows the problem with government intervention.
  • lemkolemko Member Posts: 15,261
    Joe Sixpack can't do much without a college education which itself is getting further and further out of reach. I'm glad I went to school back in the 1980s. I was able to pay off my student loans ten years ago with little difficulty.

    Today's kids are hamstrung by massive debt before they even get out of the gate. Today, it's more like paying a 30-year mortgage. It's pretty difficult to pay off $100K+ from school plus your rent/mortgage. Forget about marriage and kids, especially when wifey also has a $100K+ student loan debt.
  • rockyleerockylee Member Posts: 14,014
    So they make $20-$25 an hour with no health or retirment benefits. I understand....that might be all you can afford to pay and stay in buisnesss....regardless depending on the work they do its still sounds okay.

    Rocky
  • brightness04brightness04 Member Posts: 3,148
    That's a classic example of what happens when you let government officials to run "industrial policies" or "creat jobes." You can count on them squandering public money for fanfares where they can show individually countable "jobs created" instead of simply lowering overall tax level for everyone and stimulate economy that way.

    That being said, be careful about some of these numbers. The tax incentives often quoted are not necessarily give-aways per se, but tax concessions; i.e. the money would not be there to begin with if the plant is not built.
  • rockyleerockylee Member Posts: 14,014
    Joe Sixpack can't do much without a college education which itself is getting further and further out of reach. I'm glad I went to school back in the 1980s. I was able to pay off my student loans ten years ago with little difficulty.

    Today's kids are hamstrung by massive debt before they even get out of the gate. Today, it's more like paying a 30-year mortgage. It's pretty difficult to pay off $100K+ from school plus your rent/mortgage. Forget about marriage and kids, especially when wifey also has a $100K+ student loan debt.

    My wifes and I's friends whom are a married couple both are working on doctorates in communication studies and I believe both will rack up over a 100K each in student loans by the time they graduate. So over $200K in college loans @ 9% interest ......OUCH !!!!!

    Lemko, you said it best college is getting out of reach for the middle class and poor. You got to have a rich dad like brightness to afford to go. ;)

    Rocky
  • rockyleerockylee Member Posts: 14,014
    Regardless they are getting a Multi-Million dollar break. ;)

    Rocky
  • brightness04brightness04 Member Posts: 3,148
    $20-25/hr is $50k in a 2000+hr year, especially after bonuses and over-time. Healthcare for a single person in her 20's only costs $2-3k, and chances are that she can get better deal if her family or husband works for a bigger firm. Retirement is however much she would like to put into her own 401k. The amount I pay in wages completely dwarfs the cost of healthcare and typical retirement contribution from other employers. I simply find it a waste of time to play nanny to my workers; they can take care of themselves. I do match education expense dollar-for-dollar if the program is related to my line of business.
  • brightness04brightness04 Member Posts: 3,148
    GM and F get similar benefits when they invest overseas, making the politicians of some other lala land look good. That's unfortunately what happens so long as people believe their government has a place in "industrial policy" or targetted "job creation."
  • rockyleerockylee Member Posts: 14,014
    What state do you live in ????

    I agree with your mentality of pay a larger lump sum upfront and let the employees take care of the
    rest-->retirment/benefits. I proposed this idea to the union and we've taken it to the company and they refuse to do buisness this way. :confuse: I'd like to bring it up again this contract. :)

    Rocky
  • lemkolemko Member Posts: 15,261
    My sister is a veterinarian. Her student loan payments exceed the mortgage payments on her rather nice Maryland home. Fortunately, my brother-in-law is very well-to-do financially. Her specialty is large animals like horses and cows.

    At least sis has good taste in vehicles. She drives a really nice Ford F-250 for her job. Bro-in-law is a snob with a Mercedes S-Class who always busts on me for my GM cars. However, it's pretty funny when my 19 year-old Buick is more reliable than his yuppie ride.
  • brightness04brightness04 Member Posts: 3,148
    MA. The reason why most employers prefer to pay "benefits" is because that's tax-deductible and there is economy of scale for larger firms. It's just another trick to shut out new competition, curtesy of the union movement of the mid 20th century. Also the reason why healthcare is so expensive: those who benefit from healthcare are not paying. It's like an all-you-can-eat buffet, except doctors are a lot more expensive than food, and there is AMA with a government license to restrict supply.
  • dhamiltondhamilton Member Posts: 878
    You need to get out more. My wife has 110k in student loans but she's an MD. Her loans are 2.9 percent. We could pay them of in her first year of private practice [Anesthesiologist]
    Lemko, How does someone rack up 100k in student loans and get out with a bachelors, is that what your telling me? That makes no sense. I am far from a right leaning Republican guy. However, I'm not a Government should do everything for us guy either. I'm with Brightness on this, the more the Government get's involved, the worse it gets. The big 3 need to figure out how to change their own diapers.
    I do believe that people should have moral convictions about buying things from third world countries where people aren't paid a living wage and such. Just be a smart consumer which is what I believe most Americans are. That's why the big 3 are in the dumper and others are excelling. When the big 3 make a better product, people will buy it. That's the American way.
  • rockyleerockylee Member Posts: 14,014
    LOL, yeah you do have that to at least boast about.

    Rocky
  • rockyleerockylee Member Posts: 14,014
    Go to the university of michigan for 4 years and you will easily have $100+K bill waiting for you at granduation. ;)

    Rocky
  • rockyleerockylee Member Posts: 14,014
    I see........

    Rocky
  • kdhspyderkdhspyder Member Posts: 7,160
    Here's the whole picture on the US$/Y movement over the last 35 years.

    US$ vs JY

    In 1971 the US$ was super strong due to the fact that interest rates here were as high as 20% or more. There were 4 recessions in 10 years; housing was in the pits because mortgage rates were as much as double what they are now and no one could afford anything. It was cash or nothing in most cases.

    The US$ 'bought' 350 Yen at that time, ( Now it 'buys' 118 Yen ). Why? The Federal Reserve made a concerted effort from about 1982 onward to bring down interest rates to stimulate business here inside the US. The lower the interest rates the better it is for all of us, right? Credit debt is less, the value of housing goes out of sight, auto loans can be as low as 2-3% stimulating auto production and the stock market goes out of sight making tens of thousands of 'paper' millionaires. This in turn hyper-stimulates consumer buying here in the US and local companies made fantastic profits during all of the 80's and 90's.

    That sounds pretty good to me. The Federal Reserve did a great job of stimulating the market by driving interest rates to all time lows.

    What else did this stimulation do? It drove down the value of the dollar to all time lows also. If interest rates go down the dollar is less valuable as an investment. Also every asset in the US is less valuable also; land, buildings, companies now are all 1/3 the price they were back in the 70's. This encourages investment here ( Toyota, Honda, Hyundai, BMW, etc ). A company in 1970 with 350Y Million to invest here could buy $1 Million in US assets. That 350Y Million today buys $3.1 Million in assets.

    So here are your options:
    .. let the Fed continue to manipulate the currency by dropping interest rates so that your credit card debt stays low, HELOC rate stays low, auto loans stay low, business and the stock market boom,etc.
    .. let the Fed raise interest rates which will increase the value of the dollar vs the Yen for example but we pay for it at home with higher debt costs and a lower level of business here inside the US.

    BTW, the Fed has manipulated the US$ vs the Euro in the opposite direction. Since the introduction of the Euro in the late 90's the US$ is about 15-20% weaker making imports from Europe more expensive and our exports to Europe less expensive. This stimulates business here.

    Did you notice that the biggest manipulator of the currency is the US Federal Reserve.
  • dhamiltondhamilton Member Posts: 878
    for a bachelors?

    Find some place else to go for cheaper.
    Rice for instance, here in Houston. I doubt it's 100k for a 4 year bachelors, and it's got more job power/panache than U of Michigan. Plus, the economy is very stable in Texas.

    I lived in Michigan for 4 years, I hated every minute of it. One of the most backward places I've ever been, and I travel a lot for my job.
  • rockyleerockylee Member Posts: 14,014
    BTW, the Fed has manipulated the US$ vs the Euro in the opposite direction. Since the introduction of the Euro in the late 90's the US$ is about 15-20% weaker making imports from Europe more expensive and our exports to Europe less expensive. This stimulates business here.

    We need to do that to asia, so they will buy our goods. Maybe in my grand kids lifetime we will see that ?

    Rocky
  • rockyleerockylee Member Posts: 14,014
    I am from michigan, and hate Texas. This state lacks buisness and morale ethics and caters to the wealthy.

    As far as Rice, being a better school than the U of M ????Your kidding me right ? Rice, is nothing more than another West Texas A&M. If I went in for an interview at a big company and I had Rice on my resume. The hirring manager would go where's that in Japan ? :D

    Rocky
  • british_roverbritish_rover Member Posts: 8,502
    My wife went to a very small all womens private college in VA for four years. She lived on campus all four years and even if she had borrowed every penny to go to school there, she had scholarships to cover about a third of her room/board and tuition, she couldn't have cracked 100,000 dollars.

    100k for a bachelors is just silly for the most part. There are a few schools that you could spend that much money on if you didn't have any scholarships.

    Yale is one that comes to mind.

    MIT is another.

    U of M is not in that same league.
  • kdhspyderkdhspyder Member Posts: 7,160
    You know all of this is discussed and agreed upon by the major trading partners at least once a year. None of this is a surprise, it's intentional. It's planned.
  • british_roverbritish_rover Member Posts: 8,502
    I went in for an interview at a big company and I had Rice on my resume. The hirring manager would go where's that in Japan ?


    Thats just ignorant everyone in the south knows what kind of school Rice is. They even have a little bit of a reputation out of the south.
  • kdhspyderkdhspyder Member Posts: 7,160
    From upstate NY, RPI and Union will fall into the $100K+ range for four years. But that's the whole bill including R&B, F, T & B. $30K per year is not unusual today for private schools.

    OTOH prime state schools like NC State, UVA, UCLA, etc can be huge bargains.
  • dhamiltondhamilton Member Posts: 878
    That's the problem with Michigan, most people that lived their didn't realize there was more places on the planet. It's like the 1950's is still in place. Very insulated and small minded.

    If people are paying 100k for a U of M bachelors, then I rest my case.
  • rockyleerockylee Member Posts: 14,014
    Last time I checked it was $27K a year to go to the University of michigan
  • brightness04brightness04 Member Posts: 3,148
    We need to do that to asia, so they will buy our goods. Maybe in my grand kids lifetime we will see that ?

    I'd be very careful about "we need to do that" to anyone, but especially Asia. That's exactly what the FDR administration did in 1934, debasing the US Dollar and drive up the currency of China (siver money back then). The result was catastrophic. Instead of opening up Chinese market for American exports, the policy destroyed Chinese currency and its economy within the next dozen years, and enabled communist take-over there, with myriads of headache for the US for the following decades.

    Currency manipulation is really quite an exercise in futility. What we need is sound money, and ratonal government. The rest of the world, especially Asia, will simply trust their savings to us. Much of the rest of the world is inherently insecure about their own future; that's why they save so much. So long as they save so much more than we do, our manufacturing can only compete at the cutting edge of technology, not the commodidized manufacturing like generic carmaking.
  • rockyleerockylee Member Posts: 14,014
    That's the problem with Michigan, most people that lived their didn't realize there was more places on the planet. It's like the 1950's is still in place. Very insulated and small minded.

    What ????? Texas, is still like living in the 1980's. My god people still get there kicks watching Hee Haw and the Andy Griffith show.....get real dude. :confuse:

    Rocky
  • british_roverbritish_rover Member Posts: 8,502
    Yeah just pure tuition is hard to break the 100k mark for most schools even high end private places. You have to include R&B plus everything else.

    My five years at a public university in VA with me picking up the bill for the last year and my parents picking up the half the bill for the first year then financing the balance was around 20,000 but that only included one year of R&B.

    I lived in apartments the rest of the years I was at school. So that is about 5,700 dollars a year give or take a few hundred dollars.
  • rockyleerockylee Member Posts: 14,014
    http://www.post-gazette.com/pg/06353/747147-28.stm

    Rocky
  • british_roverbritish_rover Member Posts: 8,502
    Yeah that does not sound right and it is not.

    I just looked it up.

    http://www.finaid.umich.edu/financial_aid_basics/cost.asp

    In state tuition plus R&B and books is less then that.

    Out of state is of course higher but that is how it should be.


    Total estimated cost for a freshman or sophmore including tuition, R&B and books is less then 21,000 dollars a year.
  • brightness04brightness04 Member Posts: 3,148
    http://www.umich.edu/news/index.html?Releases/2005/Feb05/r022805

    Tuition cost for UMich is . . . . . . . $8,200
    Room & Board, etc. . . . . . . . . . $10,000
    (much of R&B is living expense, one incurrs without going to college)

    Grants . . . . . up to $12,200
    Work study . . . . $2500
    Loans . . . $3500

    So, basicly the loan amount is $3500 a year, or about $15k after four years.
  • dhamiltondhamilton Member Posts: 878
    Harvard, the Rice of the northeast. :blush:
  • rockyleerockylee Member Posts: 14,014
    Well I was going by out of state tution which I was off $13K because its $40K.

    Rocky
  • british_roverbritish_rover Member Posts: 8,502
    If you are on a budget don't go out of state for your education that is just stupid.

    If none of the schools in your state have the program you want then you can go to an out of state school for the in state rate.

    I know several people who have done this.
  • rockyleerockylee Member Posts: 14,014
    Whats this obsession with Rice ? Did you go there or something ? Harvard, the Rice of the northeast.....aren't we getting just a bit carried away ???? :confuse:

    Rocky
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