tag:blogger.com,1999:blog-3240565408401956331.post1892380490518359886..comments2023-07-08T05:49:38.333-04:00Comments on Larry Davidson's Thoughts on Macro and Other Stuff: Misunderstanding Changes in US Competitiveness -- Miss Piggy and US ImportsUnknownnoreply@blogger.comBlogger4125tag:blogger.com,1999:blog-3240565408401956331.post-87836258965417082742010-11-09T09:25:45.613-05:002010-11-09T09:25:45.613-05:00Hey Crash -- the only thing I would add is that Pr...Hey Crash -- the only thing I would add is that Prof Adler, our Prof at Georgia Tech in the 1960s, drove into our heads that firms that provided the best products and services were the ones that made the best profits. He had a benign view of profits -- as the reward for meeting society's needs. I think he would agree that any company that makes short-term profits through short-cuts or sleight of hand would find those profits to be transitory. I think most firms who have shipped their production overseas did it so they would serve their customers better and therefore survive in very competitive times. So I am agreeing with you but I am trying to put a slightly more positive spin on the process.Larry Davidsonhttps://www.blogger.com/profile/10028971586654033347noreply@blogger.comtag:blogger.com,1999:blog-3240565408401956331.post-87216997873011634372010-11-09T09:12:23.152-05:002010-11-09T09:12:23.152-05:00Death spiral! Gordian knots! I'm already shaki...Death spiral! Gordian knots! I'm already shaking in my alligator-skin, Justin Ropers, made in Sri Lanka BTW. I recall that the last US-made TVs, Zenith, came out in the late 70s. After that, the manufacturing division of the company moved to Mexico. Lower labor costs, ya know. Since then, our economy had continued to slide into a service-based one. Not that it's bad...gives us something to complain about. But if I'm the HMFWIC at Zenith and looking at my bottom line and trying to make money for my stock holders, I'm going to attack my largest cost center, people, first. Why should I pay a circuit board tester $50/hour plus all of the health/retirement bennies when I can pay a "peon" 60 peso/day and get the same quality? I'm not in business to provide jobs. I'm not in business to provide, despite Prof. Adler's assertion, a service. I'm here to make money for me and my stock holders! Until we can get our labor costs under control, we'll continue to ship our manufacturing base, and, frighteningly, more of our service base (Tried talking to Dell tech suppport lately?), offshore and watch our imports exceed our imports. What? Me worry? I'm just trying to untie this Gordian knot while I watch my Hitachi flat screen TV.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3240565408401956331.post-54182133425487402082010-11-07T11:37:11.390-05:002010-11-07T11:37:11.390-05:00Dear Tuna,
At least you are consistent! You and I...Dear Tuna,<br /><br />At least you are consistent! You and I have discussed this issue many times and I have nothing additional to add. While there is a role for manufacturing in the USA -- it won't help the many displaced workers who cannot meet the needs of very high tech very high value-added opportunities of the future. A return to the old days of US manufacturing dominance just isn't going to happen. LarryLarry Davidsonhttps://www.blogger.com/profile/10028971586654033347noreply@blogger.comtag:blogger.com,1999:blog-3240565408401956331.post-56984859987314502892010-11-05T18:05:15.060-04:002010-11-05T18:05:15.060-04:00Dear LSD. Nice overview . . . . Yes, we’ve had qui...Dear LSD. Nice overview . . . . Yes, we’ve had quite an appetite for cheaper ferin goods so that we could maintain our standard of living by not paying domestic labor the wages they wanted, particularly union labor. The downside, however, has been a reduction in U.S. goods production as jobs were (inadvertently or purposefully?) exported (I noted you did not mention jobs in the context of export calcs). Shall this mentality continue – e.g. buying ferin cheaper goods to maintain our standard of living – then we be in a death spiral. At the bottom of the vortex we’ll find ourselves in a Gordian-like knot – so poor and in debt that we won’t even be able to pay for the cheap ferin goods we consume yet unable to export to rebuild wealth because other countries are exporting too to pay down their debt. Demand for U.S. goods will be mitigated by other country’s exports despite a weak dollar (in its own death spiral due to recent Fed purchase of bonds via printing $600 B dollars – hey a really neat trick to borrow from ourselves, eh?).<br /><br />Contrary to “conventional wisdom,” the U.S. needs to rebuild manufacturing to produce goods for domestic consumption. That will reduce demand for ferin goods and eventually move the trade balance in our favor.Anonymousnoreply@blogger.com