Posted on 02/11/2016 10:13:47 PM PST by tcrlaf
This is a major economic blow to Indianapolis' struggling manufacturing sector. One of the City's largest employers, Carrier, announced it's closing its manufacturing facility on Indianapolis' west side, eliminating 1,400 jobs. The layoffs will begin in 2017 and be spread over three years according to the Indianapolis Star. Carrier's president of HVAC systems, Chris Nelson, says the move is part of the "continued migration of the HVAC industry to Mexico, including our suppliers and competitors, and ongoing cost and pricing pressures driven, in part, by new regulatory requirements." Let me guess that more than a few of these workers at this Carrier plant who are about to lose their jobs will be casting ballots for Donald Trump this year.
Carrier is also closing its facility in Huntington and moving it to Mexico, putting another 700 Hoosiers out of work.
(Excerpt) Read more at wthr.com ...
That's some real heady stuff, right there.
I don’t know why the Mexicans are coming here, all the jobs are going there.
There are many here who will only see cheaper air conditioners and wonder why no one stops in their cafe/store any more.
That ripple effect is sometimes fairly local, sometimes profound and widespread.
much of this has to do with the EPA and regulations involving refrigerants.
carrier has to do what they can to stay viable, I don’t blame carrier, I blame the EPA.
Those are the sort of regulations killing the coal industry as I type. They have shut down electrical generation plants wholesale, and their coal mining suppliers. They increase the cost of refined petroleum products and anything made from refinery feedstocks.
At some level, there should be a "clean enough" level, and that should be THE target, period. Hit and maintain that, one time cost, and you are good to go. Instead, the regulations which can be changed virtually overnight, get ramped up another notch after billions are spent meeting the last set of criteria.
It is like telling you to paint your house blue, then after you are done, telling you it isn't blue enough and to do it over, repeatedly.
Now, for the kicker: industrial machinery does not sit idle well. It degrades, corrodes, and generally goes to pot.
It isn't as if someone can just run in the door and restart any of these facilities after they have been closed down a few months. It costs major money to get them going again, if they haven't been dismantled for scrap, or sold off to the third world for pennies on the dollar.
A small oil refinery near here went to Africa in the 80s, lock, stock, and barrel. Nothing left but some concrete pads before the site was reclaimed.
On the other hand, the higher prices that everyone pays via tariffs is universal. Unless you are off the grid, and ride a horse.
I have yet to meet a sane person that does not guard their own bank account with some measure of an economic authoritarian streak. I have no clue why that would be considered a negative. I am one of these that believe firmly in the idea of NO taxation/mandate without representation... That to me could be construed as having an economic authoritarian streak. This nation has drifted so far to the left that ‘free enterprise’ is now promoted in requiring open borders.
And yet I cannot tell you whom I will vote for or against... My primary ballot is yet to be filled.
Whether or not you can handle it you are NOT an able teacher... You have, I am the smartest guy on the board attitude.
Of course we have authoritarian streaks with regard to our own wallets, as we should. And it should extend to politicians. And others who propose tariffs thinking that there is a "free lunch."
While a Tariff is a Constitutionally authorized way for the government to raise revenue, the problem isn't one of the government having or not having money. They create another pile when they run out, on our dime.
The problem is that the Government is now in the business of shutting down business.
Regulatory agencies have long passed the point where they can generally make substantial impact on pollution (except when they are the polluter), and the moving target standards are small fractions, but significant ones when it comes to eliminating that extra .0000005%.
So it is with getting all the dust out of stack emissions, all of the mercury or sulfur or what have you, and at some point that fraction MORE to be removed than the last time regulations came out won't make diddley squat of difference to the people down wind who would have to live to be a thousand to gain any benefit.
The ones who do benefit are the ones in competing industries, their investors and others who benefit from that coerced prosperity, and the people who auction off the facilities for scrap.
Everyone else pays more for a less cost-effective option by Government decree.
We have regulated our industry out of prosperity and our economy has followed, as industry has done what those who seek to make things do. It has gone where it can make things without being constantly jacked up by some minion with a freshly printed rule.
It is the Government that needs to be downsized, so the rest can prosper.
“Sounds like the sucking sound described by HRoss...”
He’s still around. I wonder what he thinks of all this.
The government. Obviously.
I guess paying bribes & protection money is cheaper than doing business in the USA.
I can’t decide which is worse: Moving your business to an extremely violent, crime-ridden country, or the business conditions in the USA that led to such a decision.
Then again, Indianapolis is one of the top 10 murder capitols in the USA. So, maybe Carrier management is moving to Mexico to escape the violence.
“Tariffs do more harm than good in many ways.”
From 1865 to 1900 the United States experienced the fastest economic growth in its history. It became the greatest industrial economy on the planet and developed a thriving middle class. Millions of people from around the world immigrated to the US to participate in the economic boom. During this era the United States had the highest tariffs in its history.
Those tariffs were specifically designed to promote the development of US manufacturing and fully fund the federal government. The standard of living for the average household grew rapidly during this time as the technological marvels of the period became accessible to middle class homes.
From 1988 to the present the federal government has pursued a low tariff policy. During this period the much of US manufacturing base moved offshore and with the migration millions of middle class jobs. The standard of living for the average household declined during this period for the first time in US history. The middle class is shrinking, most new jobs are not full time and the labor force participation is at historical lows. Income inequality is at historical highs.
Free traders love to talk about the evils of tariffs. However, the economic boom promised by academics, big business, and politicians when we embarked on the great tariff reductions of the 1990’s and 2000’s has not occurred in the United States.
As to the Great Depression of the 1930’s the facts are:
1). The Depression began before the Smoot Hawley tariffs were passed in 1930. The agricultural economy had been in deep recession with falling prices and farm bankruptcies since 1926. The financial collapse on Wall Street occurred in 1929. Consumer and industrial demand for manufactured goods began dropping precipitously in 1929, before tariffs were raised.
2). In 1929 foreign trade (imports and exports) comprised less than 5% of US GDP. About half of US exports were agricultural goods with the remaining half manufacturing goods and services.
3). From 1929 to the depth of the depression in 1932, US GDP declined by 50%. Even if the 1930 tariff resulted in the loss of all manufacturing exports (which it did not), it explains only 2.5% of the 50% drop in GDP.
4). At the bottom of the depression, foreign trade still represented 5% of GDP.
5). Today most economists understand the collapse of the stock market followed by a credit crunch resulting from the Federal Reserve tight money policies exacerbated the decline in domestic demand for goods and services. From 1929 to 1932 manufacturing production dropped by 55% in the US. Less than 2% of that drop was attributable to declining exports of manufactured goods.
The great free trade experiment of the past 25 years has been a disaster for average family, the middle class, and the US economy. What are the specific benefits to our country?
If low tariffs and “free trade” are so good for our country and its citizens answer these questions:
1). Why do the agreements require thousands of pages of exceptions, rules, and special provisions? If zero tariffs are so good, why aren’t they one page agreements?
2). Why are the agreements negotiated in secret?
3). Why does the passage of these agreements invariably require Congess to cede its powers to the executive branch to secure passage? Congress gives up its power to amend the agreements and in recent years the Senate has agreed to pass with a simple majority. Good agreements should easily secure a 2/3 majority vote.
4). Why do these agreements result in the US ceding sovereignty to international organizations?
5). Why do these agreements permit other countries to subsidize their exporters with export tax credits, investment capital, and non tariff barriers while US companies do not receive the same benefits?
The zero tariff policy of the past 25 years is a failure on every measure that counts for the citizens of this country. It has been wonderful for the citizens of China, Mexico, Vietnam, Korea, and other nations whose factories now produce goods once made in America. Return to the high tariffs of the 19th century and we will see a manufacturing boom.
More government regulation and higher corporate taxes would have prevented this.
The idea that this growth was due to the tariffs is an interesting one.
From 1988 to the present the federal government has pursued a low tariff policy. During this period the much of US manufacturing base moved offshore
Are you sure? We manufacture more than we did in 1988.
Free traders love to talk about the evils of tariffs.
I love to talk about the evil of all taxes.
Return to the high tariffs of the 19th century and we will see a manufacturing boom.
If we return the size of government to that of the 19th century, I think we'd boom, regardless of the way we finance that much smaller government burden.
Exactly what were the benefits to the US economy and the average American citizen from the tariff policies of the last 25 years?
Lower prices on imports. Larger markets for exports.
“Lower prices on imports. Larger markets for exports.”
Decline in inflation adjusted average family income.
Shrinking middle class.
Rise of China as a military and industrial power.
As to lower prices on imports, I worked for a country that outsourced its manufacturing in the 1990’s and early 2000’s. Not one cent of the higher margins was passed to customers in price reductions. Instead the cash flow from the higher margins was used to buy back the company’s stock. Financial engineering to benefit the upper 1%.
Here are some hard numbers with respect to trade. Looks like the trade advantage since the pro free trade George H.W. Bush administration took office in 1989 has been shifting to foreign countries.
US trade deficit (goods) 1988: $118 Billion
US trade deficit 2015 (goods): $736 Billion
What is the average family income?
Shrinking middle class.
Can you define middle class?
Rise of China as a military and industrial power.
Giving China MFN status was a bad idea.
As to lower prices on imports, I worked for a country that outsourced its manufacturing in the 1990's and early 2000's.
I've heard that before. But we manufacture more than ever.
Not one cent of the higher margins was passed to customers in price reductions.
Prove it.
Instead the cash flow from the higher margins was used to buy back the company's stock. Financial engineering to benefit the upper 1%.
Only the 1% owns stock? Do you own any stock? How much?
US trade deficit (goods) 1988: $118 Billion
US trade deficit 2015 (goods): $736 Billion
1988 Exports (goods) $322.4 billion.
2015 Exports (goods) $1504.9 billion.
How many of Carrier’s employees voted for Obama? How many of those angry employees didn’t care about Obamacare and its impact on jobs when they voted for him a second time?
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