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How do we increase our exports?

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middleagedgamer

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First of all, this site needs an "economics" board.

Now, that being said, it is no secret that exports are good for the economy. In fact, the GDP - the overall gauge by which the strength of the economy is measured - factors in the trade surplus. Right now, we have a negative trade surplus, aka a trade deficit. Obama wants to increase our exports.

The question is, how do we do that? Our labor is so damned expensive that we can't produce anything as cheaply as, say, China or India.

If we can't compete with price, what can we compete with to increase our exports?
 

first of all this site does have an economics board Economics


just nuke china and india and fill the supply void, simple as that:mrgreen:
 

German labour is not cheap, nor is Japanese.

Yet both countries have strong export orientated economies, and companies that do very well exporting despite the high cost of labour

What they do have is highly skilled, well trained labour forces. The companies that employe them also invest in ensuring they have the skills to produce high quality goods that compete on quality rather then price.

The US focus on quarterly reports generaloly hurts the long term training and skill investment by both the company and the employee, that would allow more US manufacturers to compete on quality rather then price
 
middleagedgamer said:
I would appreciate it if you could be serious.
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theres no way you can compete with china or india in the export market, unless you increase the export of raw materials to china and india, but that is a finite solution, and will run out eventually.

and in all seriousness, there is an economics board
 
spud_meister said:
theres no way you can compete with china or india in the export market, unless you increase the export of raw materials to china and india, but that is a finite solution, and will run out eventually
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Then, what should we do?

Do you actually have a SOLUTION?
 
The only way you can do it is to compete with other nations. Make products other countries want at prices they want to pay. If we cannot or do not want to do this, then we're screwed.
 
middleagedgamer said:
The question is, how do we do that? Our labor is so damned expensive that we can't produce anything as cheaply as, say, China or India.

If we can't compete with price, what can we compete with to increase our exports?
Click to expand...

I suspect that one our problems is that we (Americans) want to buy cheap stuff, but we (generally) want to be paid high wages for producing cheap stuff. When I want to buy something that I highly value, I buy German, Spanish, or Japanese as a general rule. I do buy American-made goods for everyday use when I can find them, even if the price is higher. I avoid buying Chinese to the extent that I can.

To increase our exports, we will have to lower our expectations a little (on a mass scale) on what the value of our labor actually is in the world market, and the American worker will have to increase his attention to quality and detail somewhat. In China, it's pretty easy to produce massive amounts of products. They have a national mentality that works more like a colony of bees. In American, we value our individuality and tend to think that we are all worth more than we are in reality.
 
Make products other countries want at prices they want to pay.
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I was gonna say that.

geo.
 

First you can compete on price for product that is not labor intensive. For example our farmers are among the most productive in the world. As incomes rise in other nations they will want more choices and import foodstuffs from us.

Also as other nations become more middle class they will want our world class biotech products, technology etc.

If the Chinese currency gets revalued, then our clean energy companies will be able to compete.

We can also improve our balance of trade if we import less oil through a combination of conservation, clean energy and using our natural gas reserves.

If we could get our government ( both parties) to be disfunctional, we could put in place policies which would make us the marvel of the world again.
 

No way we could compete with them?

I say we just take BACK the jobs that we GAVE them - give those jobs back to Americans.
There - fixed.

Their 'exports' accredited to them *include* any and all items produced via American companies and then sent back to us for sale or further production.
 
the question's premise is false, as is GDP's. exports always = imports for the simple reason that cash is an export.
 
cpwill said:
the question's premise is false, as is GDP's. exports always = imports for the simple reason that cash is an export.
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That is the first time I have heard the balance of trade defined in such a manner. Not sure if this is a joke or some obtuse debating point.
 
cpwill said:
the question's premise is false, as is GDP's. exports always = imports for the simple reason that cash is an export.
Click to expand...

Pennies on the dollar in your way of thinking.

If I pay you $1.00 per item to make me 10 necklaces, and you keep 5 necklaces to sell at your leisure (and, for example, you sold them at $.75 @ - consider it a 'from the source discount'), and you give me the remaining 5 - then I sell those 5 at $2.00 @, who made more money?

You who did the labor and was able to sell a few items, or me - who had to pay you to do the labor and sell a few items?

$1.00 x 10 = $10.00 for the labor.
$.75 x 5 = $3.75 for the profit of the self-sold item

$10.00 + $3.75 = $13.75 total for the laborer

5 x $2.00 = $10.00 total for my profit

Obviously the one who did the labor and discount sales earned more in the end. . . thus - money didn't come back in a greater quantity than it went out.

It's a rough and out of whack example, but it's basicly how it works.
 
The United States is the second or third largest exporter in the world. Partially due to the cheap cost of production for many non durable consumer goods in China, India, Vietnam, Malaysia, etc..., the US consumer gains explicitly from their difference of standard of living. What is considered a months wages for a factory worker overseas could very well be only a day or weeks worth of wages for the average US consumer.

Another aspect is foreign exchange. With breaking news of a "gradual revaluation" for the Chinese Yuan, the cost of production will surely increase creating a balanced shift in the current account (either exports will rise, consumption will fall, most likely a combination of the two). As China continuously builds up its reserves of dollars, its currency will appreciate relative to the dollar due to natural forces of supply and demand. If they do not allow their Yuan to appreciate, they will suffocate other aspects of internal growth that accompany a rise in real income.

Last but not least.... The US consumer! So big that it needed its own paragraph. Even this great recession did not scare them into oblivion. With iWhatevers popping out in what seems every six months, and continuous quarter over quarter sales growth for consumer discretionary it is ever so apparent the US consumer will pull the rest of the worlds export machines back into moderate to high GDP growth rates. With US in mind, do not expect a trade surplus in our lifetimes.
 
The unfortunate thing is that outsourcing has become such an industry standard that the idea of ending the practice would cause businesses to crumble.

Too bad peole didn't give a **** when it started to happen countless years ago.
 
Aunt Spiker said:
The unfortunate thing is that outsourcing has become such an industry standard that the idea of ending the practice would cause businesses to crumble.
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Not only business... standard of living as well. Americans not only own businesses, but benefit from being able to purchase an endless list of goods at such a low price. So much in fact, the idea of a family not being able to either afford or locate a winter coat for a child is now a thing of the past. Not only are wholesalers, retailers, department stores, and discounters flush with cheaply made (some) inventory, places like Good Will are even more filled with used items.
 
It's quite simple really. We need to export higher end, more expensive products.
 
washunut said:
That is the first time I have heard the balance of trade defined in such a manner.
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then you haven't read your Adam Smith: "Nothing is more absurd than this doctrine of the balance of trade."
 
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