Republican aggresors grow skeptical of free trade

[Kuciwalker]

Well, what is the advantage then? It certainly isn't more efficient to make goods in China and ship them 8000 miles rather than making them here and shipping them 500 miles.

Yes it is. Proof: it's cheaper.

[Imran Siddiqui]

Originally posted by Kuciwalker

Well, what is the advantage then? It certainly isn't more efficient to make goods in China and ship them 8000 miles rather than making them here and shipping them 500 miles.

Yes it is. Proof: it's cheaper.

[DinoDoc]

Originally posted by Kuciwalker

Well, what is the advantage then? It certainly isn't more efficient to make goods in China and ship them 8000 miles rather than making them here and shipping them 500 miles.

Yes it is. Proof: it's cheaper.

It is?

[Arrian]

Cheaper doesn't necessarily mean more efficient.

For instance, if you're a hippie tree hugger, making a toy in China and shipping it across the world to sell in the US is doubleplusungood.

-Arrian

[Victor Galis]

Originally posted by Kidicious

I think you mean that the dollar will stop getting weaker and the deficit will close. I know of that theory. How much evidence is there for it. It seems to me that the cheaper our exports get the larger the deficit gets. We would have to radically alter our economy to export enough to close the deficit with such weak currency. The dollar has been falling quite a bit and the deficit keeps getting larger.

It gets cheaper in their currency terms. In dollar terms US exports don't get any cheaper. Heck... you can jack up the price in dollar terms and have them pay the same price.

Yes, I know we get good prices, but it's still jobs for debt. I think people over value cheap stuff.

Seeing as most people are employed, I can see how this might happen.

I don't think we would push out any production of high-tech goods at all if we imported less low-tech goods. It would take some time to adjust, but we could easily produce both and our productivity would get a boost.

Care to explain this one?

Unemployment rates are decieving and never tell the story of how a labor force is being used. People have a lot of very low productivity jobs (like low skill service), jobs that can be replaced by higher paying manufacturing jobs.

Do you really want those kinds of jobs?

Selling more stuff overseas isn't going to happen. You can blame corporations for that, and there's nothing much we can do. We aren't Japan, we can't organize our society to do that. Plus our economy is just to big for that kind of strategy.

You can blame corporations for trying to make money?

Well, what is the advantage then? It certainly isn't more efficient to make goods in China and ship them 8000 miles rather than making them here and shipping them 500 miles.

Nor do Chinese factories make good more efficiently than we do. On the contrary, they require far more man-hours to make each unit of production than we do. Their productivity is vastly lower than ours.

The reason production has moved to China is that labor is twenty times cheaper there than here. But this just means that workers are earning less, which means that they can't afford to buy as much stuff. There is no net economic gain to switching to cheaper labor with the same or lower productivity.

On the contrary, the gains from trade occur even if we make both products better. We can produce more high-tech stuff where the US-China advantage is even more pronounced and trade those goods for cheap Chinese imports. (Or we can have the current system where the US prints money and people send it goods.)

[Zkribbler]

Well, what is the advantage then? It certainly isn't more efficient to make goods in China and ship them 8000 miles rather than making them here and shipping them 500 miles.

Doesn't coating all our toys with lead paint make them heavier and more costly to ship?

...and adding anti-freeze to our toothpaste surely must make it more expensive.

[Whoha]

the anti-freeze is cheaper then the quality non-death causing ingredient.

[Victor Galis]

Seems the solution here would be for federal regulatory agencies to check the quality of imports rather than limiting the trade wholesale. I'm sure there's plenty of non-lethal Chinese products out there. Imposing blanket import restrictions doesn't ensure that the smaller number of products that do get in are any better than they are.

[Kuciwalker]

Originally posted by Arrian
Cheaper doesn't necessarily mean more efficient.

For instance, if you're a hippie tree hugger, making a toy in China and shipping it across the world to sell in the US is doubleplusungood.

But, to a rational person, not less efficient

[Vanguard]

On the contrary, the gains from trade occur even if we make both products better. We can produce more high-tech stuff where the US-China advantage is even more pronounced and trade those goods for cheap Chinese imports. (Or we can have the current system where the US prints money and people send it goods.)

If we were making products that China was buying (or anyone for that matter), then there would probably be an advantage to trade.

But we aren't. We are stopping making products with our highly efficient industries to buy inefficiently made goods from China for dollars. We do this because labor costs are very low in China and buying their goods and selling them here is slightly more profitable for US businesses than making goods here.

But eventually US consumers run out of borrowing capacity. And then the economy stops working.

If the Invisible Hand of the economy were forcing the world to buy US goods or services to balance the money we are sending to China, then the US would not be running a persistent trade imbalance. Nor would our manufacturing base have shrunk as much as it has. Nor would the dollar be this weak. Since these things are true, the only alternative is that we are trading debt for goods, a type of trade that has no overall economic benefit.

Such trade arises from competitive mechanisms instead of from economic efficiency. It results in a simple transfer of wealth from US manufacturers and workers to importers.

What's in it for the Chinese? Basically, for them, any trade is upside. Increasing the marginal efficiency of industry by trading doesn't matter to them. They don't care if their industry is inefficient. What is important is that they have a positive balance of trade so they can bid more than us for oil.

[Kataphraktoi]

(like... a massive war in the Middle East)

Hardly affecting the economy.

It results in a simple transfer of wealth from US manufacturers and workers to importers.

No,wealth is the ability to generate goods and services. As cheap industrial goods shift to china, more of the population can go into other, possibly higher paying occupations. Maybe not the same people that lost jobs, but still.

[Zkribbler]

Originally posted by Zkribbler


Doesn't coating all our toys with lead paint make them heavier and more costly to ship?

...and adding anti-freeze to our toothpaste surely must make it more expensive.

And now the Chinese agressors are targetting our beloved Cub Scouts!

The Chinese-made items contain lead paint, organization says.


Cub Scouts across the country are being asked to hand in some of their badges after the Boy Scouts of America announced today that more than a million of the Chinese-made items contain potentially hazardous levels of lead paint.

"No illness related to the product has been reported to us," said Gregg Shields, the national spokesman for the Boy Scouts of America. "We're just trying to be prepared and keep everyone safe."

The square "totem" badges, distributed by Georgia company Kahoot Products Inc., are painted blue and yellow and picture a wolf below the slogan "Progress Toward Ranks." Cub Scouts -- 7- and 8-year-old boys -- earn them by completing a number of tasks, including memorizing the Cub Scouts' motto, sign, handshake, and salute, and mastering an elective such as caring for a pet, growing a plant indoors, or making a stencil pattern, Shields said.

There are about 1.5 million of these badges in circulation.

The badges are the latest in a long list of China-made products including bibs, lunch boxes and toys that have been recalled in recent months for lead-paint problems and other safety hazards.

Shields said the Boy Scouts "recently" began testing products made in China and distributed by American suppliers. Out of 94 items, the totem badges were the only products found to have lead in excess of the U.S. Consumer Product Safety Commission standards. Lead paint has been banned in the United States since 1978 because of lead's link to brain and neurological problems, particularly in children's still-developing systems.

Details of the recall are still being worked out, but Shields said the Boy Scouts of America has alerted local councils of the problem. A letter from Kahoot Products forwarded to local councils advisers consumers to "remove the Cub Scout Recognition totem badge from the children's possession and [keep it] in a safe place where only adults will have access to them."

A representative from Kahoot could not be reached, but on a recorded message for people calling its headquarters, the company said it learned of the problem Sept. 27, and notified the Boy Scouts on Tuesday. On the recording, the company also assures parents that it is unlikely that their child ingested any lead, saying, "The paint on the badge is very robust in its ability to adhere to the badge and does not flake off."

[DinoDoc]

Originally posted by Victor Galis
I'm sure there's plenty of non-lethal Chinese products out there.

Given the increasing speed at which recalls of good from China are occuring that doesn't seem to be a large number.

[Berzerker]

Imran, every country in the world manages world trade, and always has. We just do a crappy job at it. It's better than it would be if we didn't manage it at all though.

Really now? In addition to the inherent corruption of politicians deciding who to "manage", haven't we managed ourselves into our need for oil? We've been subsidizing the hell out of oil for decades at the expense of alternative fuel sources, now we've got a huge deficit in part because of oil imports.

[DAVOUT]

Originally posted by Vanguard


If we were making products that China was buying (or anyone for that matter), then there would probably be an advantage to trade.

But we aren't. We are stopping making products with our highly efficient industries to buy inefficiently made goods from China for dollars. We do this because labor costs are very low in China and buying their goods and selling them here is slightly more profitable for US businesses than making goods here.

But eventually US consumers run out of borrowing capacity. And then the economy stops working.

If the Invisible Hand of the economy were forcing the world to buy US goods or services to balance the money we are sending to China, then the US would not be running a persistent trade imbalance. Nor would our manufacturing base have shrunk as much as it has. Nor would the dollar be this weak. Since these things are true, the only alternative is that we are trading debt for goods, a type of trade that has no overall economic benefit.

Such trade arises from competitive mechanisms instead of from economic efficiency. It results in a simple transfer of wealth from US manufacturers and workers to importers.

What's in it for the Chinese? Basically, for them, any trade is upside. Increasing the marginal efficiency of industry by trading doesn't matter to them. They don't care if their industry is inefficient. What is important is that they have a positive balance of trade so they can bid more than us for oil.

QFT