When the Dollar Bill Comes Due

[Imran Siddiqui]

Are we not talking about inflation? Maybe we aren't. That's what happens when you have different threads going. I'm pretty sure you were saying that the US companies would be able to pick up all the slack though.

I was saying that US goods would be purchased in greater numbers as they would have relatively lower prices, thus helping US businesses.

They want higher prices for their goods. If they can get trade barriers the market price will go up.

They want to protect their jobs. They are constantly saying that more free trade will just destroy their domestic companies.

[Bosh]

Wow, Kid. Your heart is in the right place, but you really really to study some basic economics.

Its basic economics that unless there's a real boom period pretty much all factories operate quite a bit under full capacity. I don't have any statistics on hand, but I'd guess that US factories are running at 85% of capacity or less.

[Lawrence of Arabia]

i dont know what all the argument still going on here is about. its simple. people will switch from imports to US made goods, which in the last thread you said you thought was a good idea since thats the only way we keep US manufacturing jobs here. so the price goes up. i dont see what all this other stuff with factories are, etc. either its a good thing or its a bad thing, but you cant say that 'keeping US jobs is good so restrict trade' and then say 'oh no, import prices are going up.' dont you see the hypocracy?

[Imran Siddiqui]

Its basic economics that unless there's a real boom period pretty much all factories operate quite a bit under full capacity. I don't have any statistics on hand, but I'd guess that US factories are running at 85% of capacity or less.

Yeah, I didn't have the statistics, so I didn't want to make the claim. But I'm certain that factories in the US are not running at full capacity. I just don't know what % they are at right now.

[Bosh]

Yeah, I tried google and couldn't find exact statistics. But I did find this, its probably an extreme case but still instructive:

http://www.detnews.com/2005/specialreport/0502/13/A01-87977.htm

Financial analysts say the automaker has more cutting to do. Stephen Girsky at Morgan Stanley estimates 45 percent of GM's North American factory capacity -- the equivalent of 15 plants -- either is ununsed or making vehicles that generate little or no profit.

[Kidlicious]

Originally posted by Bosh
Wow, Kid. Your heart is in the right place, but you really really to study some basic economics.

Its basic economics that unless there's a real boom period pretty much all factories operate quite a bit under full capacity. I don't have any statistics on hand, but I'd guess that US factories are running at 85% of capacity or less.

Do you realize how much average costs per unit go up when capacity is fully utilized. There's a reason why they operate at less than 100% capacity.

Yeah, I tried google and couldn't find exact statistics. But I did find this, its probably an extreme case but still instructive:

http://www.detnews.com/2005/special...3/A01-87977.htm

quote:
Financial analysts say the automaker has more cutting to do. Stephen Girsky at Morgan Stanley estimates 45 percent of GM's North American factory capacity -- the equivalent of 15 plants -- either is ununsed or making vehicles that generate little or no profit.

You need to read a little more news. GM is a specific case. And we aren't talking about just automobiles. For one the GM plants buy parts from all over the world and put them together in the North American plants. And you are talking about something that is insignificant to the overall amount of imports to the US.

edit: Fixed mistake - changed increase capacity to full utilization of capacity.

[Kidlicious]

Originally posted by Lawrence of Arabia
i dont know what all the argument still going on here is about. its simple. people will switch from imports to US made goods, which in the last thread you said you thought was a good idea since thats the only way we keep US manufacturing jobs here. so the price goes up. i dont see what all this other stuff with factories are, etc. either its a good thing or its a bad thing, but you cant say that 'keeping US jobs is good so restrict trade' and then say 'oh no, import prices are going up.' dont you see the hypocracy?

I think nations should manage their trade. If you don't manage trade properly you are going to get problems. I agree that restricting trade creates higher prices and shortages, but you need to manage your trade so that you don't have a crisis.

[Kidlicious]

Originally posted by Imran Siddiqui

Are we not talking about inflation? Maybe we aren't. That's what happens when you have different threads going. I'm pretty sure you were saying that the US companies would be able to pick up all the slack though.

I was saying that US goods would be purchased in greater numbers as they would have relatively lower prices, thus helping US businesses.

Then you are arguing against a strawman. My point is that it would hurt consumers and then hurt the economy as a whole because of inflation.

They want higher prices for their goods. If they can get trade barriers the market price will go up.

They want to protect their jobs. They are constantly saying that more free trade will just destroy their domestic companies.

They are worried about losing their jobs, but it's more complex then that. They generally are against free trade because it limits their negotiating power though.

[Bosh]

Do you realize how much average costs per unit go up when capacity is increased.

I wasn't talking about increased capacity. I was talking about underutilized capacity.

[Kidlicious]

Originally posted by Bosh

I wasn't talking about increased capacity. I was talking about underutilized capacity.

Right. Sorry. I meant operating at higher capacity utilization, not increasing capacity.

[GePap]

The car market is a terrible market to use as an example, specially since so many car companies are multinational giants with manufacturing plants in amny places- few if any American factories use only American made plants, and many American car plants are for foreign brands.

I doubt even a slide in the dollar will cut into textile imports where American does NOt really compete. Ditto with many persojnal electronics. No one in the US makes TV's anymore.

The US's main trade products are services, not manufactured goods.

[Kidlicious]

Originally posted by GePap
I doubt even a slide in the dollar will cut into textile imports where American does NOt really compete.

Textiles mostly come from China, but there will be price pressure in other areas.

[Kidlicious]

One thing that I didn't consider is where else would say Germany export it's cars too. Looking at the ranks of importers of passenger cars there's no other place for these products to be dumped. The US imports $116,203,136 in passenger cars and the next closest importer is Germany with $32,808,032. You might think Japan would be a possibility, but they only import $6,985,896. China is only $4,444,491 but increasing the fastest. Other countries are increasing the importation of cars too, but the US is also increasing. So where would these products go is a question.

[Kidlicious]

Looking at the specifics of trade is pretty informative. One statistic that is suprising is that China exported $41,017,296 in computer equipment (mostly to the US) up from $20,132,256 the year before. No wonder computer prices have been so reasonable.

[Lawrence of Arabia]

Then you are arguing against a strawman. My point is that it would hurt consumers and then hurt the economy as a whole because of inflation.

why are you worried about the consumers now all of the sudden. arnt you FOR protectionist policies, which hurt the consumer. dont flip flop like john kerry.

They are worried about losing their jobs, but it's more complex then that. They generally are against free trade because it limits their negotiating power though.

again, you cant have it both ways. if it limits their negociation power, it means that real wages have gone up. Isnt that what you want? higher real wages to inefficient workers.