Skip to comments.The problem with the economy
Posted on 01/11/2014 5:46:53 AM PST by killermosquito
The problem with the economy is that it used to take 100 people 8 hours to create a widget. Now a 100 widgets can be created by 5 people in 1 hour. We have too many people to create the number of widgets that are needed so widget manufacturers don't need to hire more people.
Unfortunately, widget manufacturers have discovered that people in other countries can make widgets too. And they can ship those widgets here at less cost than the cost of paying 5 people to create a 100 widgets in an hour. The widgets aren't made as well as they used to be but no one seems to mind since the widgets cost less to buy.
Sadly, the widget retailers are beginning to learn that they can no longer hire people to sell widgets because people can buy widgets while surfing the web from the comfort of their Lazyboys.
Our only hope is that our children can learn to repair widgets or Lazyboys and that the cost of each doesn't become so low that people decide to discard their widgets and Lazyboys rather than buy new ones in which case all of our children will work in the waste removal industry.
Import tariffs. Make the process less efficient.
“in which case all of our children will work in the waste removal industry.”
Oops. My rural waste collection site is now automated with just one attendant. He thinks he’s going to be replaced by a camera system that will be used to monitor all sites from a central location. (No telling what will happen if somebody tries to leave a spiral light bulb in the wrong can. Presumably they’ll have an automated fire control system to kill remotely them.)
...If it moves, tax it.
If it keeps moving, regulate it.
And if it stops moving, subsidize it.
Get these politicians and thier gov out of our way!
Your explanation is overly simplistic and juvenile.
It is no less idiotic than when President Obama blamed ATMs for killing jobs in banking.
one only has to look at China to see what happens to every upstart nation....the wages do not remain low enough to justify manufacturing there....so it moves on to the next undeveloped nation. This will continue until there is greater parity across the world.
No problema-—our ‘Rat n Rino’ leaders will mandate $15/hr burger flippin jobs for all as their benevolent gift to the grateful masses.
Robots are the solution, you buy robots to create 10 times the wigets here in the same amount of time or less for a fraction of what it would cost to pay a child in China to make it and ship it back here.
Then just make sure we are the ones building the robots of tomorrow :)
Americans do not get hired in factories in Communist China or Third World Craphole India
Even an automated American factory will have to hire Americans to service and repair equipment. Also, an automated US factory will use American power and utilities to run plants. Wealth does not get redistributed out of America thru automation and streamlined production
The two dumbest groups of people are Global Warmists and Free Traders. Both use disproven theories that ignore incontrovertible facts. And Al Gore was instrumental in pushing both
I don’t have the complete solution, but I suspect the first step would be teaching the younger generation(s) how to fix things. We have two generations of Americans now that cannot repair a damn thing. In the desert, the most valuable man is not the one that sells ice, he is the one that repairs the ice maker.
Out of 100 people in your sphere;
How many can change a tire on a rim? 5?
How many can weld a broken piece of metal? 1?
How many can repair a broken water line? 2-3?
We no longer make stuff and no longer teach people how to repair the stuff we have. Our education industry teaches our kids that if they do not go to college and major in minority studies of some kind or the almighty COMPUTER SCIENCES they are doomed.
To me, this would be a good place to start.
The problem is that we are in a self-inflicted economic deep freeze caused by a Liberal Vortex of destructive policies.
And the labor and tax cost is still the same as when it took 100 people to build the widget which people cannot afford because they no longer have a job.
Buy the widgets made in the US. Even if you only employ five people, that's five people paying into our military and space program instead of China's, and it's five less people collecting unemployment that our children will have to pay for.
If government gets off of people’s backs and allows them to be free to innovate and incentivizes productive behavior there will be jobs aplenty.
The widget that took 100 people to build had a price of $100. The widgets made by 5 people cost $5. Every house in America has a widget. It’s not all bad.
The first thing we as a country need to do is recognize that we live in a competitive world. There are widget makers in Germany and China and Russia. They all want to corner the market on widgets. We have to be competitive with them. Our business environment needs to focus on being competitive. Our government and our businesses cannot be at odds with each other. We need to do a top-to-bottom review of every rule, regulation, law and government agency to ensure they are necessary and not needlessly detrimental to business. Every dollar spent by a business to meet a government rule, regulation or law is a dollar that could be spent making that company more competitive with foreign companies. Private sector jobs PRODUCE tax money. Government jobs CONSUME tax money.
Quite similar argument, yes.
Productivity gains cannot be impoverishing.
Ignored here is the fact that the machines that now assist in the making of the widgets have to be manufactured with labor content, and the cost of the goods produced goes down, freeing more capital for consumption and investment.
Technological advances are good, not bad. Period.
Get on the Internet and look up “Dark factories”. In Japan, there are factories which make items that no person enters except to fix the machines. There are many things that still require manpower, e.g., designing the machines, etc.
With respect to people in other countries making the widgets. We need to be more productive. The cost/item is what is important. Import duties could also be used. And a responsible citizentry could not buy some products made in other countries. Think shirts, pants, underwear, socks,.......
We also need cure for diseses, better energy sources, etc all of which require smart, skilled personnel.
EPA proposes restrictions for new wood stoves [Free Republic]
You’ve nailed it completely, assuming you’re Amish.
For the rest of us, there is a non-vertical demand curve.
The answer is to think up new widgets to be made so that the excess production capacity can stay busy.
The potential economic boost from widgets is that we could build and sell widget shelves, widget display cases, and specialized widget cleaning cloths (that give older widgets that Like New Glow). The down side is that no one really needs those any more than they need a Chia or a pet rock. We’ve met all our real economic needs for a trivial capital and labor cost, and the rest is wants - optional.
I would enjoy a pretty brass and glass widget display case, but many of the unemployed are already meeting their economic desires without working at all. Why should they get a job making those cases, selling those cases, and delivering those cases, when they can have everything they personally want without working at all? Government already gives many people plenty of loot, and they can fill in gaps such as Airhead Obama Shoes under the table. Why should they work for the pushy manager at WidgCases unlimited, the guy who gets irritable if they are late when they don’t feel like showing up? Why should they take a manufacturing job at Glass&BrassOutYourA when that work will just make their arms and back sore for no more money than the right combination of SNAP, EBT, and other subsidies?
It’s hard to fill those extra jobs for nonessential goods and services, when many of the unemployed don’t actually want to work, and the ones who do are hard to identify among those pretending to look for work while praying they won’t get stuck with a job. Employers know there are decent, qualified people out there, but it’s exhausting trying to figure out who they are.
I agree but I think they know exactly what they are doing in a massive power grab.
Well, we can say woe are us, go live under a bridge, be thankful someone is making widgets and hope there is someone not living under a bridge who will give us a widget for free.
Or, we can go where they make widgets and ask if we can work with them to make them.
And, we can push government into the ocean so it stops being an obstacle to us coming out from under the bridge to invent the most efficient way to get those widgets to others or working for one of those inventors. Maybe we can also think up more uses for widgets.
There are lots of issues in a complex economy. Right now our biggest goes beyond issue and straight to problem. It is a gaggle of clowns that are supposed to be leaders. They have spent many years providing incentives to live under that bridge and preventing the most efficient manufacture, distribution and use of widgets. Then when someone actually gets around them to make a living here with widgets, they ban them.
It's impossible to plow those clowns out of town fast enough.
You can't make people dispose of their wheels or their domestic animals or their trucks just so that more manpower is needed
What humans have always had to do is adapt to the movement of progress and new inventions.
If a robot replaces you at your factory job, you had better learn how to build robots (i.e. learn how to write code).
Washington, DC and incompetent political leadership.
Repubs and Demos did away with tarriffs long ago because of their lobbying for overseas companies.
The problem with your solution is that making widgets takes energy. And there’s few ways of producing energy that don’t produce CO2. Starting a widget factory with the new CO2 regulations that are in the regulatory pipeline would likely be unprofitable.
I have news for you.
You do not have a clue.
For a quick example, take the invention of the auto or the airplane.
You would with your logic conclude that those technologies have ruined the transportation industry. Fewer inns for weary travelers, fewer farmers making hay and grain, fewer people required to move goods from source to destination....
Yet look at all of the industries both have created.
And the hundreds of thousands of jobs.
Now the real reason for our sick economy:
Our employment situation and in fact our entire economy has been ruined by our progressive government.
One of the latest examples is the forced closing of the huge lead smelter in Herculaneum.
Lead is not used only in bullets. One of the largest users of lead is the battery industry.
So either lead will be imported from overseas or battery manufacturers will be forced to move overseas.
I know, the tree huggers think all of those items will be made from recycled lead. How stupid. Where do they think recycled lead originates? And to use only recycled lead assumes that we are stuck where we are in capacity, that is that we will not have expansion.
Another example is the government policy toward coal.
Go down the list:
On and on and on.
Some industry has been strong armed out of the country, but most have been eased out with over regulation, so gradual and insidious that they don’t even realize how it happened.
Sure, we have some industry left...but obumbler is not through.
The cure is for the government to reduce the EPA to its original intent, trash the IRS and replace it with a sales tax, close the NLRB, go back to the tariff system, repeal Dodd-Frank, obumbler care....
You get the picture.
While I approve of import tariffs, as a replacement for the income tax, the problem is not cheap labor. The problem of cheap labor is it creates an imbalance in the ‘nessesity is the mother of invention’ factor. If you can get 5 Mexican’s to do 1 american’s job he wont do, there is no market for the next ‘cotton gin’ that’s an american job that he want’s to do, built it in a factory by John Deer.
The problem is not efficiency, the problem is taxes & regulation.
Our insane tax laws, especially income tax, force a businessman to spend ever more time dealing with taxes & not widgets. Over regulation eats up more of his time & money satisfying overzealous bureaucrats. The fear of crossing regulatory thresholds such as 50 employees in Obamacare limits an employer's efforts to grow the business. Ridiculous discrimination laws force employers to hire & retain bad employees.
The attraction of offshore manufacturing is not limited to cheap labor. Foreign workers usually have a far better work ethic - they come to work to work & not socialize. They don't skip work for the beach. Those that can't do the job are easily replaced.
When you make widgets cheaper with fewer people more people can afford to buy them and you sell more widgets raising the employ level from the low.
Now add someone has to make the custom built widget making machine and more people are employed. Building custom widget makers pays good too.
Now bring 100 new kinds of widgets to market and employment sky rockets.
But, let the government, at all levels, take over half the money out of the economy and people no longer can buy new widgets and widget makers do not have the money to bring new widgets to market.
This is the part you missed...
1. Force inefficiencies into the system (this is the very essence of many union work rules).
2. Reduce wages so that it's cheaper to hire someone than to automate a process.
There are two reasons why people don't know how to fix things these days: (1) the world is too complex to know how to fix everything you use in your daily life, and (2) the work you do requires you to know how to work with some things, but not others.
Let's look at your example. In a desert, the guy who knows how to repair the ice maker may be more valuable than the one who sells the ice, but if the ice maker gets bitten by a rattlesnake then the medical doctor who doesn't have a clue about ice or ice makers is the most valuable man of all.
Import duties don’t do anything to make America more competitive.
“I think I have figured out the problem.”
I don’t think so.
Bring back American jobs from China.
Go in any store. Pick up any item. Look at where it was made.
That is your problem, right there.
House is burning, and you tell us that the problem is fire. Thanks.
Except before there was an income tax there were import duties. The Progressives of 100 years ago instituted an income tax to replace tariffs. You should know the truth. When you defend Free Trade (which really means no tariffs) you are defending a progressive idea, I prefer to call it a nightmare....
When both parties are in favor of no (or historically low) tariffs, income taxes, and open borders you know something is wrong.
The problem with the economy is that...
...there’s a destructive asshole in the White House.
Well it’s pretty obvious, when we are buying everything from a massive communist country which has now overtaken us on the global exporting stage, that we should...
BRING JOBS BACK TO AMERICA.
Nowadays, especially with electronic gadgets, it’s cheaper to just buy a new one than to repair it.
Gen.Blather, I think you have hit upon something. Security jobs will be plentif.
ronnie raygun, mulligan & 1rudeboy, we agree government is a huge part of the problem not the solution.
Yardstick, I agree we need better widgets. To get them we need more mathemeticians, scientists and engineers and fewer degrees in the humanities. And less lawyers.
Cringing Negativism Network, we should never have opened up our economy to a communist country.
Alberta's Child, Erik Latranyi & old curmudgeon, of course my explanation is simplistic. I'm not sure you detected my sarcasm and humor.
tflabo, soon robots will do to McDonalds what Red Box did to Blockbuster. Though I think McDonalds is smart enough to lead fast food into the robotic age.
TexasFreeper2009, Tupelo, El Laton Caliente, Mister Da, RoosterRedux, stevem, wayoverontheright, Pollster1, blueunicorn6 & SeminoleCounty, I think we are on the same page.
blueunicorn6, you said, "Our government and our businesses cannot be at odds with each other." They can't be in bed with each other either.
Ted Grant, you're missing my point. The problem isn't really the problem. I want more product with less labor. I want more competition and not less. I want innovation. And I want people who can adapt. ---------
Things need to become more organic. We individually need to grow more of our own food. Make and fix more of our own stuff.
I don't think we will become an agricultural based society again but decreasing our dependence on others with big gardens and chickens can help.
We need to decentralize. Wealth and power are concentrated into the hands of fewer and fewer people. I don't have a problem if that is happening on a level playing field but the game is fixed.
States have to take back our country from the federal government.
End the minimum wage.
End the 17th amendment.
I am almost persuaded that only property owners should be allowed to vote but that might be too drastic. Certainly increase the voting age to at least 21 and maybe 25.
Incentivize government in ways that politicians are rewarded for spending cuts, reduced regulations, and lower taxes.
Competition always works: it increases choice, quality, and lowers cost. How can we increase competition? How can we increase innovation so that new products are entering the market place faster?
Government must stop rewarding bad behavior and stop penalizing successful people.
End the IRS, EPA, NEA, NEA, FEMA, HUD, NLRB, FED, DHHS (Dept Health & Human Services), and DHS (Dept of Homeland Security). End welfare. End extended unemployment benefits.
The time has come for term limits.
No lawyers in elected office for the next 10 years.
The education system from top to bottom is a complete joke. Schools are children warehouses. Colleges are diploma mills.
I don't like the idea of dismantling large businesses but the large businesses have become influential to the point that I don't know if they own the government or if the government owns them.
How can we penalize the media for choosing sides?
How can we penalize the abuses in the lobbying industry?
People were scared to death of NAFTA but most of the jobs went to China not Mexico.
THANKS TO ALL FOR PARTICIPATING.
Well to tell the truth, I never said we should never have opened America to a communist country.
What I am saying is, we are not demanding anything in return.
China is walking away with everything of value in America.
What is our plan???
Are we simply going to outsource everything and eventually collapse?
That appears to me, to be what is happening.
Bring back American industry. Protect American jobs.
Big business has decided that profit is more important than country.
Until Wall Street places value on Main Street things are not likely to improve.
The guy I work for sells Product Manufactured in China.
It used to be Manufactured in Taiwan, and before that Japan.
Now, Vietnam and Indonesia are undercutting China.
If he bought from US Manufacturers, if there are any left that make what he sells, he wouldn’t be able to sell a thing because his Customers couldn’t afford the Cost He would be out of Business in a matter of weeks.
That is how it is, especially when you sell Products bought with discretionary Income. Heck, Obamacare might just finish him off anyway.
Vietnam and China have fought in recent history, perhaps China is looking for a pretext to go to war with them again.
>”Big business has decided that profit is more important than country”<
BS, if you don’t keep costs down while your Competitors do, you are out of Business, period. Your Employees lose their Jobs and your Investors lose their Money.
Profits spur Investment and Expansion. Losing Money has the opposite effect.