Trump has said that he will "make Mexico pay" for the wall. That isn't to mean that he expects Mexico's government to cut a big fat check. He will propose trade measures that will generate revenue from goods exported into the US from Mexico. This is to generate revenue and more importantly discourage firms from relocating outside the country and therefore eliminating jobs.
You can't blame the firms. They are acting in their own best self interest. When the labor and manufacturing conditions in this country are such that the costs are so high, the companies have to look to other ways. Regulations, Taxes, Labor Laws etc. It doesn't say, but I would not be surprised to find out that the 1400 employees in the article are all unionized with high wages, big juicy benefit packages, retirement, health insurance and all sorts of workplace demands on the company. I would bet a zillion dollars....if I had such a thing, that the new employees in Mexico will cost at least 2/3 less than the current employees.
Not only are employee costs less. Materials costs are less. Oppressive regulations...piffle. And the weather in Monterrey Mexico is pretty nice as well as the cost of living being lower :-)
So Trump proposes to tax and otherwise gain revenue from this. Another proposal that would be excellent is to tax or levy against the BILLIONS of dollars that are being sent to Mexico via money transfers between illegal aliens and their relatives at home. This and other transfers should be somehow taxed. BILLIONS of dollars removed from circulation in our economy and is often not taxed at all since it is money earned under the table.
If for no other reason, Trump has my vote. He understands business. He understands commerce and he is willing to use the tools of the trade to benefit the United States.
He explained it in one simple phrase: "extremely competitive marketplace". That's also known as customers, who when we like what they do, we call "us". We want lower prices at any cost. Every foreign made item says right on it that it's not made by us. It's right there next to the low price we love. The solution is simple, and entirely in our hands: don't buy it. Pay the much higher price for the American made product produced by artificially high wages, unions, and endless regulations. But, we don't want to do that - to be expected to support our own workers, to sacrifice some hard-earned cash, to put our money where our mouth is. We want big daddy government to force us to, because we are selfish,and cheap, and easy marks. Don't blame the company - they are run by people with the same principles and they need to survive. They have a choice to save some of the jobs or none. That's the only choice left when we abandon our own, and want free protection, security, benefits and good jobs without sacrificing anything. It's not foreigners who force our costs way above the market and add on stifling rules that our workers need to carry on to the playing field.
Regarding chick's comment: there is no explanation for off-shoring. What is the Dem and GOP Establishment going to say: "This is how we pay back the donor class and screw you, little guy?"
"He will propose trade measures that will generate revenue from goods exported into the US from Mexico." That would make us pay for the wall.
The only way to really make Mexico pay for the wall is to restrict - through fees - the transfer of money from here to Mexico, which has just this year grown to exceed oil exports - their second biggest source of cash. It's complicated and politically very difficult, but at least possible. I doubt Trump even knows about this mechanism or did when he made his famous claim, but that doesn't matter. He just says things people like the sound of, and if he doesn't deliver, I'm sure he'll blame it on some pussy somewhere.
The taxes on imports will drive up the cost of goods imported from Mexico. But that would make domestic products more competitive and hopefully increase domestic production and consumption. It wouldn't hurt to decrease the screws that are being applied to American businesses either in the form of regulations, taxes and especially one of highest corporate tax rates in the world.
The fees on money transfers is a no brainer and would be (should I ever be Queen of the world instead of just dust bunnies) on of the first things I would enact.
bagoh20 said...He explained it in one simple phrase: "extremely competitive marketplace".
The marketplace for votes is also extremely competitive and members of both parties are attempting to "offshore" votes, most conspicuously, Jeb! and Hillary! via cheaper imports.
I agree with much of what you say at your 10:37, bags. Your 10:45, not so much.
"They have a choice to save some of the jobs or none."
That might be true or it might not. It could be that they saw an opportunity to increase the profit margin of an already profitable business by moving the jobs to a low wage country. Carrier is a large part part of United Technologies' Climate, Controls & Security division which ran a 17.5% operating profit (EBIT) last year.
That's their job. Making a profit, but at some point if enough companies chase higher profits by outsourcing jobs you run out of people who can afford to buy your product. That seems to be the general direction of the country's industrial sector. Who needs America and American jobs if the executives can pump their bonus another million or three.
"The taxes on imports will drive up the cost of goods imported from Mexico. But that would make domestic products more competitive and hopefully increase domestic production and consumption."
That would be nice and that's what you hope happens, but it usually doesn't because the American company just gets more complacent. Market still drives the price. They will still charge as much as possible. Prices will just rise for American consumers. The American product - now not forced to compete as hard - gets fatter and lazier. I know this stuff first hand. I've been competing head to head with the Chinese for decades in manufacturing. Our products generally cost less than half what they did before that competition threatened our survival. At first I tried to save us by having our products made in Taiwan, then China, then Vietnam, and Mexico. It was too hard, and unrewarding personally. These countries are very protectionist with their labor laws and corruption unless you are a huge fish. It was a mess.
So then we were forced to rethink everything we did, get smart, get lean, get serious, but it would have all been impossible if we were a union shop. We would just have gone under years ago, and imports would have taken our whole market and it's jobs. I'm thankful for the challenge of the imports, and so are our customers. They don't want buy imports, so if we can get close on the price, we get their business. It's now to the point where we compete on quality and service rather than price, and that puts us in the driver's seat.
Mexico is actually not competitive globally. They have some really obnoxious labor rules, and they are protectionist with them, which is why they do so badly for their people. Protectionism will kill our workers, and our economy as it has before and elsewhere. The reason why we are still doing better than most of the world after all this globalization is that we have more open trade than most nations. We should retaliate where we are treated unfairly, but we can't protect ourselves from our own stupidity with trade barriers.
Rabel, I agree with everything you say @ 11:44, but you can't expect people running companies where they get paid to improve profits to act against their own self-interest. That's why they were hired, and they better do it. The only solution I see is for Americans to get tougher on themselves, work harder and smarter like the competition, and pay more for American products if they want Americans to keep their jobs. We don't need the damned government or some tough-talking savior in DC making deals for his friends. That will fail as it always has. As you say: "Follow the money." We are the money, and business and jobs follow our spending. We need to lead them back home with carrots, not sticks. Money is always a free agent.
Why can't I expect American based businesses to act in a manner that both earns a profit and serves the interest of the country which provides the opportunity to make that profit? Isn't that what you did? Moves out of the country by large corporations are not about survival. They are about turning that 17.5% EBIT into a 19.5% EBIT and the benefits that improvement provides to the executive management.
We could make it more difficult and less profitable to move jobs out of the country. Too much protectionism is a bad thing. A little bit can be a very good thing. Eventually outsourcing and a mindless adoration of "free trade" that is only free on one side (reference your own example) will kill the golden goose. He's already looking quite ill.
Large corporations are owned by stockholders. The stockholders own the stock to get a return. If the return from company A is less, or growing less than company B, then the money goes to company B. For large corporations they not only complete for customer money, they compete just as fiercely with other large companies for general investment money from the stock market. You would have to expect all those people both big and small invested in retirement accounts and pensions funds to forgo the best return on their money for altruistic reasons that they would all have to agree on. The free market is not altruistic, but it's as fair as possible and generally rewards innovation, hard work, discipline and sacrifice. That's still pretty amazing.
Here's a great innovation: Stretch Jeans. I know, guys - it sounds faggy, but I have gone from a 36 waist in my Levis to a 32 without losing a pound, and they are really comfortable to work, play or lay around in, not to mention they grip your ass and junk so that Titus will follow you like a lost puppy. Try em through the Amazon portal at Lem's.
We could make it more difficult and less profitable to move jobs out of the country.
We could also make it LESS difficult to do business in the US and more profitable to keep doing business in the country. How about some carrots for American businesses instead of beating them over the head with sticks?
This is the easier solution. Stop with all the micro managing, over regulation, job killing rules, unions that price themselves out of jobs, taxes, fees, licensing.
I'm not saying we should have a regulation free or unlicensed business environment,.....just STOP with the ridiculous rules on the Federal and State levels. You know why produce from Mexico is imported at ridiculously low prices? Take a look at some of the completely retarded agricultural laws, restrictions on irrigation, and insane preventative measures that growers are subject to. There is one law that was supposed to fine the growers if animals, rodents or birds got into the crops. Really. You are gonna stop birds in the air from pooping??? Labor costs are through the roof.
Sensible regulation instead of the boot on the neck types of regulation we have now. Centralized one size fits all rule making is what is killing agriculture and industry as well as the small business owner.
All these rules and regulations and high taxes may 'feel' good but they are mostly counter productive. Just look at what happens when the minimum wage is artificially raised to unsustainable levels. People lose jobs. Marginal business go under.
Rules made by morons who have no concept of what it takes to run a business.
A lot of my customers are boat building companies. It's a very labor intensive business, and thus a good job creator. When we started, there were many such companies in California, and most of our business was local to the state. Due entirely to regulations on labor and methods, nearly all of them have moved out of state to the midwest, and the ones who remain are small. Wages in the midwest are not cheaper, so it was not that. It was pure government assholitry, but the public voted for that, and the people who do it, and they keep electing them over and over.
I guess my main point in all of this is we are getting exactly what we deserve. We have choices and we can make it better all by ourselves, if we stop blaming some dark unseen rich guys with Snidely Whiplash mustaches - they only get one vote each. The enemy is us: the schizophrenics with delusions of good luck and good motives. We need to change minds with facts, arguments, and honesty. Success is hard, but it's not impossible and you don't have to cheat or bully.
"So you're good with slowly but eventually killing the goose if Joe's Hedge Fund can earn a better return this quarter?".
It doesn't matter what we want. It's Joe's money. You want to take it and use it how you please? Vote for Bernie. It won't make anybody any better off, but it will teach Joe a lesson: Don't invest here.
I hope nobody thinks Trump invests in altruism. The only reason Trump doesn't move his all his operations overseas is that shipping skyscrapers is very expensive, and they have all those damned foreigners there.
OT, but this has been a productive morning for me. I finally had some time to devote to a perplexing problem I've had with my plastic beverages. A couple of experiments in garage have led me to test a theory I had about the glass-plastic interface. If these experiments are reproducible, I may feel better about marketing these things.
"Vote for Bernie." Unfortunately that or something like it will be the long term outcome of our current trajectory. When enough voters become convinced that the people in positions of political and financial power are putting their own interests ahead of the interests of the country and the people, and more and more of those voters begin to feel the effects of that in their own lives, the people will eventually take the rich man's toys away at the voting booth to the detriment of us all. Why should they be patriots if the people in charge aren't. The Carrier move is just one more log on the fire.
However it's cheaper in Mexico because running a business in the US has very high regulatory costs -- the money you have to spend to spend money on employees -- that Mexico does not.
Make that cheaper and the change slows or reverses.
As for manufacturing, I think the US manufacturing output is in fact at an all-time high, anyway that was true recently. It takes lots fewer workers for that high output, though.
Part of my mission in life is to train and employ people, yet our company now has less than half the employees it had before the recession. More output, and even more profit, but less employees. That's the result of making employees artificially more expensive. Companies are forced to learn how to do more without hiring, and those jobs never come back. Maybe that's good since the jobs lost tend to be ones with little future anyway, but it can't be sustainable for a nation that refuses to educate its people while financially guaranteeing their needs.
There is no difference between a CEO moving Jobs to Mexico, and the average Joe buying an import product rather than the domestic one. Both do it to save money knowing it cost Americans' their jobs. At least the CEO is helping stockholders he works for rather than just himself. Therefore, please don't throw stones if your house is built from imported glass. Buy American or accept responsibility for the consequences. Make America Great Again!
An absolute lie. I've heard this shuck and jive many times with the typical 3 year phase transfer. It will be done in less than a year. I've been to Monterrey, Mexico many times to oversee such transfers and it's a train wreck every time. The whole thing is bullshit and I'm sorry to see that happen. So thanks Clinton, Obama, and the DEM/GOP for fucking people over more with your destruction of the American labor and capital markets to line your own pockets with. You should all burn for what you've done and are doing.
32 comments:
Another bump for Trump. And more Dem voters for Trump too, I suspect.
The Republican backers of open borders and untrammeled "free trade," along with the Rodham Dems will have to explain this one in the coming months.
I suspect that Sanders will make something of this as well.
A giant kick to the nuts.
Exactly Chick.
Trump has said that he will "make Mexico pay" for the wall. That isn't to mean that he expects Mexico's government to cut a big fat check. He will propose trade measures that will generate revenue from goods exported into the US from Mexico. This is to generate revenue and more importantly discourage firms from relocating outside the country and therefore eliminating jobs.
You can't blame the firms. They are acting in their own best self interest. When the labor and manufacturing conditions in this country are such that the costs are so high, the companies have to look to other ways. Regulations, Taxes, Labor Laws etc. It doesn't say, but I would not be surprised to find out that the 1400 employees in the article are all unionized with high wages, big juicy benefit packages, retirement, health insurance and all sorts of workplace demands on the company. I would bet a zillion dollars....if I had such a thing, that the new employees in Mexico will cost at least 2/3 less than the current employees.
Not only are employee costs less. Materials costs are less. Oppressive regulations...piffle. And the weather in Monterrey Mexico is pretty nice as well as the cost of living being lower :-)
So Trump proposes to tax and otherwise gain revenue from this. Another proposal that would be excellent is to tax or levy against the BILLIONS of dollars that are being sent to Mexico via money transfers between illegal aliens and their relatives at home. This and other transfers should be somehow taxed. BILLIONS of dollars removed from circulation in our economy and is often not taxed at all since it is money earned under the table.
If for no other reason, Trump has my vote. He understands business. He understands commerce and he is willing to use the tools of the trade to benefit the United States.
He explained it in one simple phrase: "extremely competitive marketplace". That's also known as customers, who when we like what they do, we call "us". We want lower prices at any cost. Every foreign made item says right on it that it's not made by us. It's right there next to the low price we love. The solution is simple, and entirely in our hands: don't buy it. Pay the much higher price for the American made product produced by artificially high wages, unions, and endless regulations. But, we don't want to do that - to be expected to support our own workers, to sacrifice some hard-earned cash, to put our money where our mouth is. We want big daddy government to force us to, because we are selfish,and cheap, and easy marks. Don't blame the company - they are run by people with the same principles and they need to survive. They have a choice to save some of the jobs or none. That's the only choice left when we abandon our own, and want free protection, security, benefits and good jobs without sacrificing anything. It's not foreigners who force our costs way above the market and add on stifling rules that our workers need to carry on to the playing field.
Regarding chick's comment: there is no explanation for off-shoring. What is the Dem and GOP Establishment going to say: "This is how we pay back the donor class and screw you, little guy?"
"He will propose trade measures that will generate revenue from goods exported into the US from Mexico." That would make us pay for the wall.
The only way to really make Mexico pay for the wall is to restrict - through fees - the transfer of money from here to Mexico, which has just this year grown to exceed oil exports - their second biggest source of cash. It's complicated and politically very difficult, but at least possible. I doubt Trump even knows about this mechanism or did when he made his famous claim, but that doesn't matter. He just says things people like the sound of, and if he doesn't deliver, I'm sure he'll blame it on some pussy somewhere.
True Bago
The taxes on imports will drive up the cost of goods imported from Mexico. But that would make domestic products more competitive and hopefully increase domestic production and consumption. It wouldn't hurt to decrease the screws that are being applied to American businesses either in the form of regulations, taxes and especially one of highest corporate tax rates in the world.
The fees on money transfers is a no brainer and would be (should I ever be Queen of the world instead of just dust bunnies) on of the first things I would enact.
bagoh20 said...He explained it in one simple phrase: "extremely competitive marketplace".
The marketplace for votes is also extremely competitive and members of both parties are attempting to "offshore" votes, most conspicuously, Jeb! and Hillary! via cheaper imports.
I agree with much of what you say at your 10:37, bags. Your 10:45, not so much.
"They have a choice to save some of the jobs or none."
That might be true or it might not. It could be that they saw an opportunity to increase the profit margin of an already profitable business by moving the jobs to a low wage country. Carrier is a large part part of United Technologies' Climate, Controls & Security division which ran a 17.5% operating profit (EBIT) last year.
That's their job. Making a profit, but at some point if enough companies chase higher profits by outsourcing jobs you run out of people who can afford to buy your product. That seems to be the general direction of the country's industrial sector. Who needs America and American jobs if the executives can pump their bonus another million or three.
Show me the money, as somebody said.
"The taxes on imports will drive up the cost of goods imported from Mexico. But that would make domestic products more competitive and hopefully increase domestic production and consumption."
That would be nice and that's what you hope happens, but it usually doesn't because the American company just gets more complacent. Market still drives the price. They will still charge as much as possible. Prices will just rise for American consumers. The American product - now not forced to compete as hard - gets fatter and lazier. I know this stuff first hand. I've been competing head to head with the Chinese for decades in manufacturing. Our products generally cost less than half what they did before that competition threatened our survival. At first I tried to save us by having our products made in Taiwan, then China, then Vietnam, and Mexico. It was too hard, and unrewarding personally. These countries are very protectionist with their labor laws and corruption unless you are a huge fish. It was a mess.
So then we were forced to rethink everything we did, get smart, get lean, get serious, but it would have all been impossible if we were a union shop. We would just have gone under years ago, and imports would have taken our whole market and it's jobs. I'm thankful for the challenge of the imports, and so are our customers. They don't want buy imports, so if we can get close on the price, we get their business. It's now to the point where we compete on quality and service rather than price, and that puts us in the driver's seat.
Mexico is actually not competitive globally. They have some really obnoxious labor rules, and they are protectionist with them, which is why they do so badly for their people. Protectionism will kill our workers, and our economy as it has before and elsewhere. The reason why we are still doing better than most of the world after all this globalization is that we have more open trade than most nations. We should retaliate where we are treated unfairly, but we can't protect ourselves from our own stupidity with trade barriers.
I think that was Hillary that said that.
Rabel, I agree with everything you say @ 11:44, but you can't expect people running companies where they get paid to improve profits to act against their own self-interest. That's why they were hired, and they better do it. The only solution I see is for Americans to get tougher on themselves, work harder and smarter like the competition, and pay more for American products if they want Americans to keep their jobs. We don't need the damned government or some tough-talking savior in DC making deals for his friends. That will fail as it always has. As you say: "Follow the money." We are the money, and business and jobs follow our spending. We need to lead them back home with carrots, not sticks. Money is always a free agent.
Why can't I expect American based businesses to act in a manner that both earns a profit and serves the interest of the country which provides the opportunity to make that profit? Isn't that what you did? Moves out of the country by large corporations are not about survival. They are about turning that 17.5% EBIT into a 19.5% EBIT and the benefits that improvement provides to the executive management.
We could make it more difficult and less profitable to move jobs out of the country. Too much protectionism is a bad thing. A little bit can be a very good thing. Eventually outsourcing and a mindless adoration of "free trade" that is only free on one side (reference your own example) will kill the golden goose. He's already looking quite ill.
Large corporations are owned by stockholders. The stockholders own the stock to get a return. If the return from company A is less, or growing less than company B, then the money goes to company B. For large corporations they not only complete for customer money, they compete just as fiercely with other large companies for general investment money from the stock market. You would have to expect all those people both big and small invested in retirement accounts and pensions funds to forgo the best return on their money for altruistic reasons that they would all have to agree on. The free market is not altruistic, but it's as fair as possible and generally rewards innovation, hard work, discipline and sacrifice. That's still pretty amazing.
Here's a great innovation: Stretch Jeans. I know, guys - it sounds faggy, but I have gone from a 36 waist in my Levis to a 32 without losing a pound, and they are really comfortable to work, play or lay around in, not to mention they grip your ass and junk so that Titus will follow you like a lost puppy. Try em through the Amazon portal at Lem's.
We could make it more difficult and less profitable to move jobs out of the country.
We could also make it LESS difficult to do business in the US and more profitable to keep doing business in the country. How about some carrots for American businesses instead of beating them over the head with sticks?
This is the easier solution. Stop with all the micro managing, over regulation, job killing rules, unions that price themselves out of jobs, taxes, fees, licensing.
I'm not saying we should have a regulation free or unlicensed business environment,.....just STOP with the ridiculous rules on the Federal and State levels. You know why produce from Mexico is imported at ridiculously low prices? Take a look at some of the completely retarded agricultural laws, restrictions on irrigation, and insane preventative measures that growers are subject to. There is one law that was supposed to fine the growers if animals, rodents or birds got into the crops. Really. You are gonna stop birds in the air from pooping??? Labor costs are through the roof.
Sensible regulation instead of the boot on the neck types of regulation we have now. Centralized one size fits all rule making is what is killing agriculture and industry as well as the small business owner.
All these rules and regulations and high taxes may 'feel' good but they are mostly counter productive. Just look at what happens when the minimum wage is artificially raised to unsustainable levels. People lose jobs. Marginal business go under.
Rules made by morons who have no concept of what it takes to run a business.
So you're good with slowly but eventually killing the goose if Joe's Hedge Fund can earn a better return this quarter?
A lot of my customers are boat building companies. It's a very labor intensive business, and thus a good job creator. When we started, there were many such companies in California, and most of our business was local to the state. Due entirely to regulations on labor and methods, nearly all of them have moved out of state to the midwest, and the ones who remain are small. Wages in the midwest are not cheaper, so it was not that. It was pure government assholitry, but the public voted for that, and the people who do it, and they keep electing them over and over.
I guess my main point in all of this is we are getting exactly what we deserve. We have choices and we can make it better all by ourselves, if we stop blaming some dark unseen rich guys with Snidely Whiplash mustaches - they only get one vote each. The enemy is us: the schizophrenics with delusions of good luck and good motives. We need to change minds with facts, arguments, and honesty. Success is hard, but it's not impossible and you don't have to cheat or bully.
"So you're good with slowly but eventually killing the goose if Joe's Hedge Fund can earn a better return this quarter?".
It doesn't matter what we want. It's Joe's money. You want to take it and use it how you please? Vote for Bernie. It won't make anybody any better off, but it will teach Joe a lesson: Don't invest here.
I hope nobody thinks Trump invests in altruism. The only reason Trump doesn't move his all his operations overseas is that shipping skyscrapers is very expensive, and they have all those damned foreigners there.
C'mon, I'm kidding!
OT, but this has been a productive morning for me. I finally had some time to devote to a perplexing problem I've had with my plastic beverages. A couple of experiments in garage have led me to test a theory I had about the glass-plastic interface. If these experiments are reproducible, I may feel better about marketing these things.
"Vote for Bernie." Unfortunately that or something like it will be the long term outcome of our current trajectory. When enough voters become convinced that the people in positions of political and financial power are putting their own interests ahead of the interests of the country and the people, and more and more of those voters begin to feel the effects of that in their own lives, the people will eventually take the rich man's toys away at the voting booth to the detriment of us all. Why should they be patriots if the people in charge aren't. The Carrier move is just one more log on the fire.
Thus Bernie. Thus Trump.
Jeb has an explanation for this.
It is an act of love.
And rather than just bitch let me offer a solution:
1. Destroy the Republican Party as it exists today.
2. ???
3. Profit.
The problem is the change, not the fact.
However it's cheaper in Mexico because running a business in the US has very high regulatory costs -- the money you have to spend to spend money on employees -- that Mexico does not.
Make that cheaper and the change slows or reverses.
As for manufacturing, I think the US manufacturing output is in fact at an all-time high, anyway that was true recently. It takes lots fewer workers for that high output, though.
I think the strategy is to move all the jobs to Mexico so the Mexicans will stay there. Or something.
Part of my mission in life is to train and employ people, yet our company now has less than half the employees it had before the recession. More output, and even more profit, but less employees. That's the result of making employees artificially more expensive. Companies are forced to learn how to do more without hiring, and those jobs never come back. Maybe that's good since the jobs lost tend to be ones with little future anyway, but it can't be sustainable for a nation that refuses to educate its people while financially guaranteeing their needs.
http://www.decktech.net/glasses/mfg4.jpg
There is no difference between a CEO moving Jobs to Mexico, and the average Joe buying an import product rather than the domestic one. Both do it to save money knowing it cost Americans' their jobs. At least the CEO is helping stockholders he works for rather than just himself. Therefore, please don't throw stones if your house is built from imported glass. Buy American or accept responsibility for the consequences. Make America Great Again!
very sad
Why not hire a Mexican CEO. You can probably snag one for less than 50 grand, including bonuses. Isn't that covered in Economics 101?
An absolute lie. I've heard this shuck and jive many times with the typical 3 year phase transfer. It will be done in less than a year. I've been to Monterrey, Mexico many times to oversee such transfers and it's a train wreck every time. The whole thing is bullshit and I'm sorry to see that happen. So thanks Clinton, Obama, and the DEM/GOP for fucking people over more with your destruction of the American labor and capital markets to line your own pockets with. You should all burn for what you've done and are doing.
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