America's state of manufacturers and my thoughts on them

[George_Washington]

For the past several decades, at least, America has had trade deficits. There are many economists who would say that this doesn't matter. However, I was pondering this issue today at work.

I remember that Adam Smith once said that the true measure of the worth of a product is how much labor went into it and that the true measure of a society's economy strength is based on how many goods and services a nation can produce. However, I argue that Smith wasn't entirely correct in his assessment of what a good economy consists of. I say that it was actually not how many goods and services a nation can produce but how high quality those goods are.

America's economy is very, very dependant on imports, probably more than any other country. I don't think our trade deficits are a problem per se. A lot of economists think that they are simply a sign of our increased spending on investments rather than saving our money and that could be true.

But I think that the real reason why we're so dependant on imports is simply because a lot of our products are low quality (American cars have been proven to not be as well made as Japanese and European ones, for example). The assembly line was a nice invention but contrary to Adam Smith and Henry Ford, I don't think that companies should focus on producing as many goods and services as they should on the quality of them.

So the question is, why don't our products match up? I think it's because companies know that the average American doesn't have a lot of discretionary income (meaning income that Americans have left over after neccessaery expenses are paid that they can spend on goods, services, investments, etc.) and so most companies are forced to cater to this average American type.

MY SOLUTION: We start by putting more discretionary income in the hands of American consumers. We do this by abolishing the current tax code, lowering the federal tax rate, abolishing the IRS, and putting federal restrictions on how many taxes local and state governments can charge. I think state governments, for the most part, charge people far too many taxes. If you're in the top income bracket in America, you pay roughly 30% of your income in federal taxes and another 20% with the state and local ones. So although, you pay something like half of your yearly income in taxes. In some cases, it can be even higher. That's ridiculous if you ask me. We cut stupid things like public day care centers, what a waste. Why should my tax dollars have to go to a family that was stupid and had too many kids than they could afford? Ridiculous. I think if we cut out a lot of stupid things that our tax dollars are going to, we'll still have plenty of money to fund welfare and neccessary programs. I realize that we need certain programs and I wouldn't want to cut those. I think the trick is not just to cut unneccessary federal spending but also state spending as well.

The states, I think, should be more restricted on how much taxes they can charge citizens. So should the local governments. We should have a federal law that a state can never charge more than a certain amount of taxes.

Anyway, moving on. The plan is that once consumers have more discretionary income in their hands, the natural demand for higher quality products will arise, and so corporations will naturally start to produce higher quality goods. This would probably not only reduce our trade deficits but might also raise wages for workers because companies would want to spend more making products and might pay more for labor to make them. Also, it might actually encourage companies manufacture domestically, rather than outsource, due to the possible lesser demand of cheap labor.

 

[nkgupta80]

For the past several decades, at least, America has had trade deficits. There are many economists who would say that this doesn't matter. However, I was pondering this issue today at work.

I remember that Adam Smith once said that the true measure of the worth of a product is how much labor went into it and that the true measure of a society's economy strength is based on how many goods and services a nation can produce. However, I argue that Smith wasn't entirely correct in his assessment of what a good economy consists of. I say that it was actually not how many goods and services a nation can produce but how high quality those goods are.

America's economy is very, very dependant on imports, probably more than any other country. I don't think our trade deficits are a problem per se. A lot of economists think that they are simply a sign of our increased spending on investments rather than saving our money and that could be true.

But I think that the real reason why we're so dependant on imports is simply because a lot of our products are low quality (American cars have been proven to not be as well made as Japanese and European ones, for example). The assembly line was a nice invention but contrary to Adam Smith and Henry Ford, I don't think that companies should focus on producing as many goods and services as they should on the quality of them.

So the question is, why don't our products match up? I think it's because companies know that the average American doesn't have a lot of discretionary income (meaning income that Americans have left over after neccessaery expenses are paid that they can spend on goods, services, investments, etc.) and so most companies are forced to cater to this average American type.

MY SOLUTION: We start by putting more discretionary income in the hands of American consumers. We do this by abolishing the current tax code, lowering the federal tax rate, abolishing the IRS, and putting federal restrictions on how many taxes local and state governments can charge. I think state governments, for the most part, charge people far too many taxes. If you're in the top income bracket in America, you pay roughly 30% of your income in federal taxes and another 20% with the state and local ones. So although, you pay something like half of your yearly income in taxes. In some cases, it can be even higher. That's ridiculous if you ask me. We cut stupid things like public day care centers, what a waste. Why should my tax dollars have to go to a family that was stupid and had too many kids than they could afford? Ridiculous. I think if we cut out a lot of stupid things that our tax dollars are going to, we'll still have plenty of money to fund welfare and neccessary programs. I realize that we need certain programs and I wouldn't want to cut those. I think the trick is not just to cut unneccessary federal spending but also state spending as well.

The states, I think, should be more restricted on how much taxes they can charge citizens. So should the local governments. We should have a federal law that a state can never charge more than a certain amount of taxes.

Anyway, moving on. The plan is that once consumers have more discretionary income in their hands, the natural demand for higher quality products will arise, and so corporations will naturally start to produce higher quality goods. This would probably not only reduce our trade deficits but might also raise wages for workers because companies would want to spend more making products and might pay more for labor to make them. Also, it might actually encourage companies manufacture domestically, rather than outsource, due to the possible lesser demand of cheap labor.

but the average american can buy a japanese car that is probably more reliable. so the problem may be different.

 

[PeaceBrother]

I dont like the whole tax idea you proposed because to me it sounds like it will turn into the entire middle/lower class working to try to appease the upper class. I think that higher taxes for the more wealthy is a good equalizer. No one needs that much money. Therefore the greater good would be done for the better majority of people. Also I liked your ideas of cutting out the child day care funded by the state. The world truely is overpopulated and your idea would encourage people to abstain from having kids. I also agree that this whole outsourcing thing has got to stop. It will cut down fuel costs, it will halt the support of communist totaltaranistic governments (china), and it will put more money in the average americans profit.
But I dont think there is definently a balance between quality and quantity of products. There is no reason there cant be both quality, and quantity for a reasonable price. The more we export the cheaper the product the lower our wages. We must break this cycle. The less we import, the more expensive the product (sometimes, not all the time), and the higher our wages. thats the way it should be. I think that we should just put huge taxes on imported products. That would encourage people to buy american products, and for companys to create american jobs. It will take a few years to break this cycle of trade deficit, but the sooner we start the better.

 

[Comrade Brian]

So the question is, why don't our products match up?

Some companies try sometimes to make products ineffecient or can be broken easily. E.g. power companies make profits off of your buying their power, so the more power you use, the more profits they have. Or e.g. your item breaks, need a new one, you buy a new one, more profits. And since Europe to a "typical US citizen" is all "socialist" so companies can't make profits blah blah blah.

We cut stupid things like public day care centers, what a waste.

Oh, yeah, sure, every mother/father/guardian can afford to take sooo much time off of work, or are you suggesting just leave whereever they live and fend for themselves, have them feed themselves, not get nabbed by kidnappers, learn basics yourself?

Why should my tax dollars have to go to a family that was stupid and had too many kids than they could afford?

So only wealthy people should have babies? Who will perform the labour in the future? Or are we just going to import everything or hire that illegal from Mexico?

might also raise wages for workers because companies would want to spend more making products and might pay more for labor to make them.

Oh yeah corps. are known for their ultra-benevolence. Companies are the ultimate penny-pinchers, you don't pay more because you have more profits, you still try to cut their wages every chance you get.

Also, it might actually encourage companies manufacture domestically, rather than outsource, due to the possible lesser demand of cheap labor.

After wages have inreased? That would signal an even greater race to see who can "outsource" more. Companies don't care who, where, when, what, they just want the cheapest labour they can purchase, much like any "consumer" or "bargain-hunter".

You'll never become any famous capitalist economist.

 

[George_Washington]

Oh, yeah, sure, every mother/father/guardian can afford to take sooo much time off of work, or are you suggesting just leave whereever they live and fend for themselves, have them feed themselves, not get nabbed by kidnappers, learn basics yourself?

What about private day care centers?

So only wealthy people should have babies? Who will perform the labour in the future? Or are we just going to import everything or hire that illegal from Mexico?

One of the chief reasons why there is so much poverty nowdays is because people have children before they are financially ready. All I am suggesting is that people take more responsiblity with their social lives. A wise person goes to college before having children.

You'll never become any famous capitalist economist.

My goal in life was and is never to become an economist. I believe I am at least wise enough to see through the inherent fallacies of communism, unlike you it would seem.

 

[PeteEU]

America's economy is very, very dependant on imports, probably more than any other country. I don't think our trade deficits are a problem per se. A lot of economists think that they are simply a sign of our increased spending on investments rather than saving our money and that could be true.

It is true.. no other nation spends so much more than it gets in as the US..

But I think that the real reason why we're so dependant on imports is simply because a lot of our products are low quality (American cars have been proven to not be as well made as Japanese and European ones, for example).

Partly true. Many "american products" have been outsourced or sold to foriegn companies. Another reason is low quality but that is rather rare. The biggest reason is taste. Most people like burgers and cola, but dont like things like american cars that drive 1 mile on the gallon.

The assembly line was a nice invention but contrary to Adam Smith and Henry Ford, I don't think that companies should focus on producing as many goods and services as they should on the quality of them.

While quality is a noble thing, I doubt its the way forward. Reliability is key and price. The only reason chinese goods sell is because of price, a price that is so low that if the product only holds a week or a year, the buying a new one would not be that big a cost. Japenese items are expensive yet they hold for years and require little maintance.. and thats not because its great quality, but because they are reliable and easy to maintain. While many US cars require special parts imported from the US (we talking about US brand cars, not US cars made abroad by US companies), Japenese cars can use legacy replacements and in many cases spare parts from other manufactures.

So the question is, why don't our products match up?

Image is one reason. Quality compared to price is another and taste is a third. Many people dont want to buy american products out of political grounds. Others dont want to pay the same or a bit more/less for crappy quality when they can buy japense or extremly cheap chinese goods.

I think it's because companies know that the average American doesn't have a lot of discretionary income (meaning income that Americans have left over after neccessaery expenses are paid that they can spend on goods, services, investments, etc.) and so most companies are forced to cater to this average American type.

I see where this is heading.. tax cuts.

MY SOLUTION: We start by putting more discretionary income in the hands of American consumers.

How much more do you need? Americans are already the biggest spenders and most debt ridden people on the planet.

We do this by abolishing the current tax code, lowering the federal tax rate, abolishing the IRS, and putting federal restrictions on how many taxes local and state governments can charge.

Sounds like a Forbes..

I think state governments, for the most part, charge people far too many taxes. If you're in the top income bracket in America, you pay roughly 30% of your income in federal taxes and another 20% with the state and local ones. So although, you pay something like half of your yearly income in taxes. In some cases, it can be even higher. That's ridiculous if you ask me.

How is it ridiculous? Dont you want a working and functional society? Just cutting taxes because its ridiculous is not the answer. Who should pay for the things we all cant live without?

We cut stupid things like public day care centers, what a waste. Why should my tax dollars have to go to a family that was stupid and had too many kids than they could afford? Ridiculous.

Like it or not, one thing you cant beat is mother nature. Are you implying that the state or some group make the call if someone can have kids? Whats next, only married people can have kids, and only whites can mate with whites and all children are to be screened for genitic faults? Public day care centers are needed in a society that demands that 2 people in the familly work full time for the family to survive.

I think if we cut out a lot of stupid things that our tax dollars are going to, we'll still have plenty of money to fund welfare and neccessary programs. I realize that we need certain programs and I wouldn't want to cut those. I think the trick is not just to cut unneccessary federal spending but also state spending as well.

I agree fully on this.. there is lots of unneccessary stuff in goverment that can be cut and especially in the US. Military and intelligence spending in the US has gone nuts.. who the hell needs over 11 different intelligence agencies that cant even talk to each other. And dont forget about the billions wasted on pork each year. But you know as well as I do, that if there are cuts, it will hurt the poor, women and children or the elderly.

The states, I think, should be more restricted on how much taxes they can charge citizens. So should the local governments. We should have a federal law that a state can never charge more than a certain amount of taxes.

Good luck getting that through.

Anyway, moving on. The plan is that once consumers have more discretionary income in their hands, the natural demand for higher quality products will arise, and so corporations will naturally start to produce higher quality goods. This would probably not only reduce our trade deficits but might also raise wages for workers because companies would want to spend more making products and might pay more for labor to make them. Also, it might actually encourage companies manufacture domestically, rather than outsource, due to the possible lesser demand of cheap labor.

A pipe dream. Companies are motivated by greed, the more profit and higher stock price the better, and screw the worker. Sounds like a commie but its true. A company will always goto the area where wages are lowest and hence costs.. thats why we have outsourcing of things like telephone support. As long as companies are allowed to outsource and move jobs overseas then wages will be forced down and hopefully the overseas wages will be forced up (although one has yet to see this trend in certain countries).

Its an evil spiral one gets in. High paying jobs are moved overseas and replaced by lower paid jobs and hence the buying power is lower and hence the number of products or quality of products sold suffer. And so on.

 

[Australianlibertarian]

The Japanese produce quality products because of many things.

Firstly Japanese culture puts a high emphasis on saving face, and keeping repsect amoungst peers. This trickles down to production, wherebye producing a poor quality car, would be deeply embarrassing to the designers and builders of the automobile.

Secondly Japanses businesses were some of the first companies to implement Total Quality Management. In this process inefficiencies are attempted to be minimised at every level of production. So if you can get rid of quality problems and inefficiencies you can make a quality product at a reasonable price.

Also Japanese manufacturers do not have the same wag constraints as U.S companies. I.e Japanese workers are paid good salaries, but the do not recieve pension, or medical benefits.

Lastly American cars are crap. (As are Australian made cars! LOL!) Sorry to say it, but the fact that Americans still think of push-rod V8's when they think performance just shows how antiquated the industry is. Detroit had it good for so long, because gas was cheap and the American consumer could afford to buy and run big gas guzzlers.

But then things went sour....

The Japs started producing better quality cars that were cheaper, more reliable, and more economical to run. During the late 70's and 80's Detroit was on the ropes. The 90's heralded SUVs but these hunk of chunk ego inflators, were only band aids on gapping wounds. In all other classes of automobiles, the U.S car manufacturers were being beaten by cheaper, more efficient, or more reliable Japanese, Korean, and European rivals.

Then gas prices went up, U.S buyers didn't buy SUV's as they once did, then things in Detroit really hit the fan........


Point of the story is; if your rest on your reputation, other competitors will eventually beat you with better quality products. That is the story of capitalism.:twocents:

 

[Comrade Brian]

What about private day care centers?

You can't control the amount of how many private day cares, nor can you keep control of the amount of fee.

One of the chief reasons why there is so much poverty nowdays is because people have children before they are financially ready.

Few people are "financially ready".

All I am suggesting is that people take more responsiblity with their social lives.

Doubt it will happen anytime soon.

A wise person goes to college before having children.

If they go to college.

My goal in life was and is never to become an economist.

I believe that.

I believe I am at least wise enough to see through the inherent fallacies of communism, unlike you it would seem.

Well why don't you explain them? Apparently I am too stupid to do it myself.

 

[George_Washington]

You can't control the amount of how many private day cares, nor can you keep control of the amount of fee.

Yeah just like you can't control how many Mcdonald's Franchises pop up but see, that's where the free market comes in. Where there is demand, there will be supply. Considering private insitutions tend to function more efficiently than public ones, I think it would work out. The price would naturally come down as there are more day care centers competing for business.

Few people are "financially ready".

There are, in fact, people who wait to have children until they are into their careers and are making decent money. It's just the smart thing to do.

Doubt it will happen anytime soon.

So even though I choose to live my life responsibly and intelligently, I have to pay for people who want to pump out children every 7 seconds because...?

If they go to college.

Even if they don't go to college, they can still wait until they are more settled into their careers, whatever that may be.

Well why don't you explain them? Apparently I am too stupid to do it myself.

I don't know what else to say except just open your eyes and look at how inefficient every communist country in the past one hundred years has been. Evidence has clearly shown that communism doesn't work. The whole idea of Marxism is based on ignorance and irrationality. The state is not a means to an end and never will be. Face it, America and the west defeated the stupidity of Marxism and all for what is logical and rational.

 

[Comrade Brian]

Considering private insitutions tend to function more efficiently than public ones

Says who? It depends how the state is organised more or less.

The price would naturally come down as there are more day care centers competing for business.

Perhaps, also such things lead to collapse.

So even though I choose to live my life responsibly and intelligently, I have to pay for people who want to pump out children every 7 seconds because...?

It is impossible for one to have a child every 7 seconds.

Even if they don't go to college, they can still wait until they are more settled into their careers, whatever that may be.

And they also must avoid dangers in any job/career, such as not lose it or get your wages cut, both are very real and happen every day.

look at how inefficient every communist country in the past one hundred years has been.

Tell me where has communism existed then, also no "communist 'state'" was in existence in 1906.

Evidence has clearly shown that communism doesn't work.

Such as? Anyways "communism" has worked before in the earliest human societies, though largely pirimative and later developed into slave and fudal societies because of the pirimative industry.

The whole idea of Marxism is based on ignorance and irrationality.

Such as what? Dialectics? Materialism? etc?

The state is not a means to an end and never will be

Yes it can be part.

Face it, America and the west defeated the stupidity of Marxism and all for what is logical and rational.

So are you saying you give credit to every square kilometer from Canada to Argentina, for "defeating" several countries that collapsed pretty much on their own weight of buraucracy, and then calling you have defeated Marxist theory? Bit of an exaggeration.