Protectionism

[Whoha]

Originally posted by Az

The government also helps out quite a bit with land,fuel, and other items.

I don't see how this is possible -
a) China is an energy importer - if it was energy subsidies that made the industry profitable, it would mean that the industry is an actual burden on the country ( if it's energy is subsidized, it means that it's a burden anyhow, but imported energy also shows up in the trade balance)
b) I don't see land costs being a big problem for industry in the US, especially not around the coast.

Well I'm going by USBIC testimony to congress that they are facing imports which are cheaper then the cost of the raw materials required to produce the products.

[Geronimo]

Originally posted by Imran Siddiqui


I'm still left asking what's the point? Didn't foreign competitors offer cheaper prices? If US companies go under because they can't handle the fire, it doesn't bother me. In fact, I say it is a GOOD thing. Ted brought up the US automakers. Protectionism may have killed that industry because US car makers didn't have to worry about competition. That made them build ****tier and ****tier cars until it came to bite them on the ass. Yes, US auto makers lost a TON of jobs, but it was worth it.

I mean the US doesn't have to build up industry (the only way that protectionism can work). So it's best to allow competition to propel our industry to get more efficient.

The US industrial base is eroding across the board. Manufacturing makes up an ever decreasing fraction of the US economy. There is a problem Imran although its possible that is is not entirely or largely the result of free trade.

[Geronimo]

Originally posted by Imran Siddiqui
I understand the subsidies and I say, so what? We SHOULD get rid our business tariffs, but dealing with Europeans who may have higher tariffs on certain goods doesn't bother me.

If 3rd world countries want to do reciprocal tariffs, let them. Maybe that'll have us get rid of our barriers. However, I'd perfer that the US benefit from competition. Our industries are already established. They don't need protection.

'established' means very little anymore. Industrial bases that have been 'established' for as long as their particular industry has existed and even in some cases were companies that founded the industry and once enjoyed near monopolys easily become 'unestablished' and cease to exist these days.

[Maniac]

Originally posted by Imran Siddiqui
US auto makers lost a TON of jobs, but it was worth it.

Tell that to the people who lost their job.

[Ted Striker]

Who was responsible for making this image up????

http://money.cnn.com/2005/08/27/news/newsmakers/greenspan_housing.reut/index.htm?cnn=yes

[Ted Striker]

"The surprisingly high correlation between increases in home equity extraction and the current account deficit suggests that an end to the housing boom could induce a significant rise in the personal savings rate, a decline in imports and a corresponding improvement in the current account deficit," the Fed chief said.

Greenspan said the degree to which these changes are "wrenching" depends on whether the United States and its key trading partners maintain flexible economic policies that allow needed trade and other adjustments.

The large gap in the U.S. current account, the broadest measure of trade since it includes investment flows, has many in Congress worried.

The Fed chief has long warned that trade protectionism, including tariffs and other barriers to the global flow of goods, are a threat to world economic stability.

In what could be seen as a parting shot at those who maintain the U.S. central bank should adopt specific and openly stated targets for inflation -- similar to those at many of the world's major central banks -- Greenspan reiterated his steadfast opposition.

[Imran Siddiqui]

Originally posted by Geronimo
The US industrial base is eroding across the board. Manufacturing makes up an ever decreasing fraction of the US economy. There is a problem Imran although its possible that is is not entirely or largely the result of free trade.

Yet in real numbers manufacturing has been at its highest it has ever been. So what if it isn't as much of the economy as it once was. Why is it a problem at all? Our economy has decided to focus on different things.

'established' means very little anymore. Industrial bases that have been 'established' for as long as their particular industry has existed and even in some cases were companies that founded the industry and once enjoyed near monopolys easily become 'unestablished' and cease to exist these days.

Cause they couldn't compete. Tough luck. If these companies that were 'near monopolies' can't cut it anymore they deserve to be chased out of business.

[q=Maniac]Tell that to the people who lost their job.[/q]

Lemme guess, you've never ridden in a Ford Pinto .

[Bosh]

Originally posted by Ramo
The big problem with "free trade agreements" is that rather unjustifiable IP protections are included, which really amount to protectionism on behalf of the rich countries. The other big problem is that such agreements fail to address our agrisubsidies, again amounting to protectionism on behalf of the rich since poor countries can't afford those sorts of trade barriers. There was a fascinating Times article recently pointing out that CAFTA has been so one-sided in these respects that US negotiators had to threaten withdrawing the decades old bilateral trade agreements that we had with Central American states, in order to get them to sign on (and there is still virulent opposition in these states' legislatures).

Yeah this is one of the examples of what I was talking about, another is farm subsidies etc. etc. What is called free trade isn't really all that free...

[DanS]

Originally posted by shawnmmcc
And DanS - every example that has been given by a fellow poster, you spout vague economic principles.

In no way are these economic principles vague, even though they are somewhat counterintuitive. That's why they are mostly followed by our country.

[mrmitchell]

Also, Canadian workers are much better educated that US workers in the Southern anti-union states. The Koreans are complaining they have to use pictorials to train Bubba for the assembly line.

Wrong. Some Canadian racist in a high position in Ontario started this hearsay. Toyota and Honda have entirely denied that their Southern workers are any more illiterate than Canadians.

[mrmitchell]

PROOF

http://www.al.com/printer/printer.ssf?/base/business/1120814483136400.xml&coll=2&thispage=1

Canada auto industry rep takes dig at ability of Alabama workers
Friday, July 08, 2005
MICHAEL TOMBERLIN
News staff writer
A Canadian auto industry official said Alabama workers, unable to read, had to be shown "pictorials" to learn how to use high-tech equipment in auto plants. His remark drew rebukes from Honda and Toyota.

Gerry Fedchun, president of the Automotive Parts Manufacturers' Association, told the Canadian Press on Thursday that workers in Alabama and Mississippi don't measure up. His comments followed a decision by Toyota to build a plant in Ontario rather than in the Southern states.

The news service quoted Fedchun as saying the Honda plant in Lincoln and the Nissan plant near Jackson have struggled to reach full production because its workers are untrained and often illiterate.


Toyota rebuttal:


The story quoted Fedchun saying Alabama job-trainers had to use "pictorials" to teach workers how to use sophisticated equipment. "The educational level and the skill level of the people down there is so much lower than it is in Ontario," Fedchun said.

Efforts to reach Fedchun were unsuccessful Thursday.

Dennis Cuneo, senior vice president of Toyota's North American operations, took exception to Fedchun's comments in a letter Thursday.

"We operate an engine plant in Huntsville, Ala., and I was in charge of the site selection for that plant," Cuneo wrote to Fedchun. "We spent a considerable amount of time and effort in the site selection process, and carefully studied the skill levels of the potential workforce before we selected our Alabama site."

Cuneo noted that nearly one-third of the workers at the Huntsville plant are college graduates and 97 percent have at least a high school education.

"Huntsville ... is the city that put the first man on the moon," Cuneo wrote. "Huntsville ranks second among the top metropolitan areas in the U.S. for scientists and engineers per capita, and has the second largest research and technology park in the U.S."


Honda puzzled:


Cuneo said Toyota has already announced two expansions in Huntsville and will have $490 million invested and employ about 800 when the projects are completed.

"As you might imagine, that kind of investment is confirmation of the confidence that we have in our Alabama workforce," he wrote.

Mark Morrison, spokesman for Honda in Lincoln, said he was puzzled by Fedchun's comments. Honda has invested $1.1 billion in Alabama since 1996 and set company records in establishing operations. The automaker now has 4,500 employees in the state.

"Obviously, Honda electing to expand its operation before we even got Line 1 at full capacity speaks volumes of the quality of the workforce that we have in Alabama," Morrison said.

The Lincoln plant handles all North American production of the Odyssey minivan, which was once made at Honda's plant in Ontario.

"The goals that we have met and exceeded have been a tribute to the capability and trainability of our workforce," he said.


`Out of left field':


As for Fedchun's claims that Honda has had to use pictures to train its workers, Morrison said other than engineering diagrams that all manufacturers use, that is not true.

"No, we have not had to do that," he said.

Neal Wade, executive director of the Alabama Development Office, said he and Gov. Bob Riley were made aware of the comments Thursday.

"These comments came out of left field and obviously do not reflect Toyota's feelings or the feelings of any of the other manufacturers," he said.

Fedchun's organization, the Toronto-based Automotive Parts Manufacturers' Association, has more than 400 members accounting for 90 per cent of independent parts production in Canada.

[Ted Striker]

Yeah, that's just silly.

I don't have the numbers, but states like Kentucky and Tennessee have invested alot into their educational systems in the past years.

North Carolina is also known for an exceedingly good educational system.

[Mr. Harley]

MrMitchell - thanks for the post there. I should know better than refer tof a single source that I didn't research.

Imran, you've got a huge logic hole in your argument.

However, I'd perfer that the US benefit from competition. Our industries are already established. They don't need protection.

Hold it. If the other country's industry makes it impossible for our industry to compete, and drives them to bankruptcy - then they don't need protection?


Examples in aerospace.

McDonnel-Douglas vs Airbus - out of airline business, forced merger

Boeing vs Airbus - reduction in world-wide operation, price cutting forced to marginal profitability levels due to supports for Airbus and subsidzied loans from governments to foreign airlines that purchase Airbus products.

GE turbine vs Rolls Royce - EU hush kit standards that favor Rolls Royce, freezing out US turbine manufacterers. Both equally quiet, standards de facto require use of Rolls Royce. Possible due to different solution to the same problem and how gas turbines are made. This also hurts US airlines and cargo carriers, two shots of protectionism for one regulation!

Bell and Sikorsky vs Eurocopter. Subsides, including research, development, government buy-out of debts and forced consolidation by governments to form Eurocopter.


Imran - prior to EU - really Germany and France with some Spanish and Italian participation, if memory serves me correctly - participation, all of these US companies were showing a profit, and competing though I will admit McDonnel-Douglas had some problems with an aging product line. Of course Airbus gets to redesign ITS product line with taxpayer money, McDonnel-Douglas had to do it out of pocket.

Once the EU subsidies, including for research and design, got going, every one of these companies, representing I would suspect over 50% of the US Aerospace market, started having substantial economic problems. Would you want to compete in fees with a legal firm that got all it's pretrial research at half off, and then didn't have to pay income taxes on their receipts. What would that do to your practice, and your income level? THAT is why you should be concerned.

I'm not even going into other industries, I can do these off the top of my head.

[Imran Siddiqui]

Hold it. If the other country's industry makes it impossible for our industry to compete, and drives them to bankruptcy - then they don't need protection?

Nope. Work harder at it. You think European companies are getting unfair benefits, try to cut them off at the pass. I mean if you don't think Boeing doesn't get some preferential treatment and corporate welfare you are deluding yourself. They need to work their lobbyists harder or innovate. Or else they get sunk. Sorry, them's the breaks.

You act like this is all horrible for the US in its entirty. I'm sure the airlines that buy these planes are getting them for far cheaper, which most definetly will help them out.

And individual countries didn't have subsidies before? Suddenly, it's the evil EU which is destroying our industies? If it is such a problem, there are international trade treaties or the creation of the same. Once again, they have lobbyists, which are very well paid and connected.

They aren't emerging industries in poor countries, which are probably the only ones that I may agree with you should have the benefit of protection.

If you still think trade wars are the answer, I suggest you check out the Great Depression.

[Mr. Harley]

I noted that Trade Wars are a lose-lose propostion earlier. The solution is carefully targeted tariffs and fees that not only equalize but penalize countries that do this.

Imran, what about the Rolls-Royce engines (didn't even save money, just froze US companies out of the market via after-the-fact regulations? And Eurocopter? Would you mind competing with the hypothetical law firm I describe? It would certainly be good for me, but I try to look a little bit beyond my own pocket book.

I can also vouch that I look beyond that, because due to my job being eliminated, and my retirement system with a 60% reduction in any SSI I earn Bush's proposals to change Social Security from Insurance to Accounts is almost certain to favor me personally, by a hefty margin actually. I still oppose them.