3 ms·

Many of these cities that have declined and lost tax revenue have done so because the industry they surrounded upped and left to China/Central America. The ind

Many of these cities that have declined and lost tax revenue have done so because the industry they surrounded upped and left to China/Central America. The industry left for China because, again, the government is placing the interests of financiers over the interests of average Americans. They do this by following a strong dollar policy (the polar opposite of China's weak yuan policy).

jacquesm 11y ago
>The industry left for China because, again, the government is placing the interests of financiers over the interests of average Americans. That's not so much the government as it is the companies doing the moving, it's all about the cost of labor and in developing countries that cost is a small fraction of a developed one, no matter what their currency policy. The 'strong dollar' is only strong relative to other currencies, and is mostly strong because it is the reserve currency for many and the currency in which oil is being traded.
- crdoconnor 11y ago
  >That's not so much the government as it is the companies doing the moving, The companies are doing the moving because the Chinese government pegs its currency very low and the US allows its currency to float very high. There's nothing at all inevitable about all that ridiculously cheap stuff coming from China or those abandoned factories in Detroit. It's all the result of a set of very deliberate policy choices. >it's all about the cost of labor and in developing countries that cost is a small fraction of a developed one, no matter what their currency policy. If labor were all that mattered all of the new factories would be built in the middle of Bangladesh rather than in the Pearl River Delta. Their labor is far cheaper. Most of the world has lower cost labor. The work goes to China specifically because it has infrastructure of a rich nation but the currency of a poor nation. Even with that there is no requirement for us to trade with them. US elites also made a deliberate choice to drop trade barriers with China despite the repressive nature of the country. Again, because it serves the interests of US oligarchs. >The 'strong dollar' is only strong relative to other currencies What exactly did you think I meant by strong?
  - jacquesm 11y ago
    Bangladesh is definitely the site of a fairly impressive number of new factories. They don't have the tech expertise yet (that the Chinese do have now) so it will be a while but you can expect that they'll be moving up on the ladder soon enough. Lots of textile, shoes and other lower tech stuff already coming out of Bangladesh (and other countries besides). Governments can influence their currencies only so much before they too become overstretched and their limits are tripped well below the level at which the developed/not yet developed part would no longer make sense. We're not talking about 10 or 20% here. The work goes to China because right now for some goods that makes the most sense to companies that have the option to choose. But this does not hold true for all goods and it will not hold true forever. There is absolutely no requirement for you to trade with them, simply stop buying anything made in China. As far as the lack of trade barriers goes, wasn't the US the biggest proponent of a free market worldwide?
    - crdoconnor 11y ago
      >Bangladesh is definitely the site of a fairly impressive number of new factories. I couldn't see jack shit going on when I visited. Just clothing factories. Clothing always migrates to where the labor is cheapest because it is one of the least capital intensive industries and most labor intensive. Even then it was only in the area around Dhaka (and close to the container port). North of Dhaka there was basically nothing except poverty (which is pretty much what it's like in most of Central China, too). No infrastructure = no industry. >Governments can influence their currencies only so much before they too become overstretched What you meant to say was "governments can push the value of their currencies up only so much before being overstretched". Pushing them down isn't all that hard. Right? >As far as the lack of trade barriers goes, wasn't the US the biggest proponent of a free market worldwide? A) There's no such thing as a free market. It's an economic fairy tale. B) US oligarchs are big proponents for tearing down trade barriers. Union leaders not so much. C) Just how much do you think they cared about destroying US industry in the process?
      - jacquesm 11y ago
        Clothing is how it starts. Not all that long ago Thailand was 'just clothing factories' and now they make a substantial chunk of the tech goodies shipped worldwide. Not all that long ago, China could make clothing, basic machinery and some consumer goods that were not too capital intensive. It's an incremental process. > Just how much do you think they cared about destroying US industry in the process? Not a whole lot. But then again, that's their prerogative under the system you have in place. If someone wanted to keep the jobs local and to exclusively source their half-fabricates from local producers under exclusive contract stating that they were required to maintain this all the way up their supply chain then such a person might have cornered the market against those willing to sell out your countries manufacturing backbone. The most likely outcome of such a plan would have been bankruptcy. It's an arms race and everybody that buys 'made in China' stuff because it is slightly cheaper is complicit.
RockyMcNuts 11y ago
maybe. of course, China is currently pursuing a strong yuan policy. propping up the yuan amid massive capital flight. on current capital flows the yuan is overvalued. if you go to Shanghai you're not going to feel like you're in a super weak currency 3rd world country. you're going to feel like you're in boomtown Chicago of the late 19th century. you don't want to have free trade and get cheap stuff from China, slap a massive tariff on them, you pay $2,000 for your iPhone, you deal with massive smokestack industries here, and of course become a manufacturing ghetto since you can't export anything if you refuse to import anything. the flip side of strong dollar is a free lunch and influence since everyone around the world wants dollars. run a closed economy and forget about that. in fact all of Silicon Valley is a product of globalization. Design in California, manufacture in Pearl River delta, sell globally, create a dominant tech culture and ecosystem, most of profits come back to California. yeah, Wall Street is a problem, they're doing a few things like Dodd Frank, CFPB etc. to reduce the free lunch Wall Street gets, could do more. honestly poor muni governance, idiots who refuse to pay taxes for services is a bigger reason pensions are broke.
- crdoconnor 11y ago
  >you don't want to have free trade and get cheap stuff from China, slap a massive tariff on them, you pay $2,000 for your iPhone, you deal with massive smokestack industries here, and of course become a manufacturing ghetto since you can't export anything if you refuse to import anything. If my rent dropped by 5% and my smartphone price spiked to $2,000 I'd still come out ahead. If this policy continues indefinitely eventually the US industrial ecosystem will be destroyed completely. When that happens China will abandon its "keep the yuan low" policy and your smartphone will suddenly cost $2,000 but the US won't have the expertise or the infrastructure to suddenly rebuild all its factories. That will take decades. Then the US will end up like Argentina - a pale shadow of its former wealth.
  - RockyMcNuts 11y ago
    If we turned into Argentina, it would be because of financial mismanagement and poisonous politics, not trade. Like rich people who don't want pay for a civilized society, impoverished masses, populism, breakdown of the social contract, violence and political thievery between the groups. I don't know how much you know about Argentina, but it takes generations of economic mismanagement, predatory politics, and violence to transition from a developed country to a developing country. If a mercantilist trade policy was the only thing keeping the USA wealthy we're not going to stay on top anyway. You don't stay rich by trying to keep the rest of the world poor. That is the attitude that gets you to Argentina politics though. It would be a shame if the richest country in the world were to say economic and civil liberties are great at home, but we're not going to lead by example and deal that way with the rest of the world. Cheap yuan policy is history and has been for a few years, people don't seem to have caught up to that yet.

jacquesm 11y ago

>The industry left for China because, again, the government is placing the interests of financiers over the interests of average Americans. That's not so much the government as it is the companies doing the moving, it's all about the cost of labor and in developing countries that cost is a small fraction of a developed one, no matter what their currency policy. The 'strong dollar' is only strong relative to other currencies, and is mostly strong because it is the reserve currency for many and the currency in which oil is being traded.

crdoconnor 11y ago
>That's not so much the government as it is the companies doing the moving, The companies are doing the moving because the Chinese government pegs its currency very low and the US allows its currency to float very high. There's nothing at all inevitable about all that ridiculously cheap stuff coming from China or those abandoned factories in Detroit. It's all the result of a set of very deliberate policy choices. >it's all about the cost of labor and in developing countries that cost is a small fraction of a developed one, no matter what their currency policy. If labor were all that mattered all of the new factories would be built in the middle of Bangladesh rather than in the Pearl River Delta. Their labor is far cheaper. Most of the world has lower cost labor. The work goes to China specifically because it has infrastructure of a rich nation but the currency of a poor nation. Even with that there is no requirement for us to trade with them. US elites also made a deliberate choice to drop trade barriers with China despite the repressive nature of the country. Again, because it serves the interests of US oligarchs. >The 'strong dollar' is only strong relative to other currencies What exactly did you think I meant by strong?
- jacquesm 11y ago
  Bangladesh is definitely the site of a fairly impressive number of new factories. They don't have the tech expertise yet (that the Chinese do have now) so it will be a while but you can expect that they'll be moving up on the ladder soon enough. Lots of textile, shoes and other lower tech stuff already coming out of Bangladesh (and other countries besides). Governments can influence their currencies only so much before they too become overstretched and their limits are tripped well below the level at which the developed/not yet developed part would no longer make sense. We're not talking about 10 or 20% here. The work goes to China because right now for some goods that makes the most sense to companies that have the option to choose. But this does not hold true for all goods and it will not hold true forever. There is absolutely no requirement for you to trade with them, simply stop buying anything made in China. As far as the lack of trade barriers goes, wasn't the US the biggest proponent of a free market worldwide?
  - crdoconnor 11y ago
    >Bangladesh is definitely the site of a fairly impressive number of new factories. I couldn't see jack shit going on when I visited. Just clothing factories. Clothing always migrates to where the labor is cheapest because it is one of the least capital intensive industries and most labor intensive. Even then it was only in the area around Dhaka (and close to the container port). North of Dhaka there was basically nothing except poverty (which is pretty much what it's like in most of Central China, too). No infrastructure = no industry. >Governments can influence their currencies only so much before they too become overstretched What you meant to say was "governments can push the value of their currencies up only so much before being overstretched". Pushing them down isn't all that hard. Right? >As far as the lack of trade barriers goes, wasn't the US the biggest proponent of a free market worldwide? A) There's no such thing as a free market. It's an economic fairy tale. B) US oligarchs are big proponents for tearing down trade barriers. Union leaders not so much. C) Just how much do you think they cared about destroying US industry in the process?
    - jacquesm 11y ago
      Clothing is how it starts. Not all that long ago Thailand was 'just clothing factories' and now they make a substantial chunk of the tech goodies shipped worldwide. Not all that long ago, China could make clothing, basic machinery and some consumer goods that were not too capital intensive. It's an incremental process. > Just how much do you think they cared about destroying US industry in the process? Not a whole lot. But then again, that's their prerogative under the system you have in place. If someone wanted to keep the jobs local and to exclusively source their half-fabricates from local producers under exclusive contract stating that they were required to maintain this all the way up their supply chain then such a person might have cornered the market against those willing to sell out your countries manufacturing backbone. The most likely outcome of such a plan would have been bankruptcy. It's an arms race and everybody that buys 'made in China' stuff because it is slightly cheaper is complicit.

RockyMcNuts 11y ago

maybe. of course, China is currently pursuing a strong yuan policy. propping up the yuan amid massive capital flight. on current capital flows the yuan is overvalued. if you go to Shanghai you're not going to feel like you're in a super weak currency 3rd world country. you're going to feel like you're in boomtown Chicago of the late 19th century. you don't want to have free trade and get cheap stuff from China, slap a massive tariff on them, you pay $2,000 for your iPhone, you deal with massive smokestack industries here, and of course become a manufacturing ghetto since you can't export anything if you refuse to import anything. the flip side of strong dollar is a free lunch and influence since everyone around the world wants dollars. run a closed economy and forget about that. in fact all of Silicon Valley is a product of globalization. Design in California, manufacture in Pearl River delta, sell globally, create a dominant tech culture and ecosystem, most of profits come back to California. yeah, Wall Street is a problem, they're doing a few things like Dodd Frank, CFPB etc. to reduce the free lunch Wall Street gets, could do more. honestly poor muni governance, idiots who refuse to pay taxes for services is a bigger reason pensions are broke.

crdoconnor 11y ago
>you don't want to have free trade and get cheap stuff from China, slap a massive tariff on them, you pay $2,000 for your iPhone, you deal with massive smokestack industries here, and of course become a manufacturing ghetto since you can't export anything if you refuse to import anything. If my rent dropped by 5% and my smartphone price spiked to $2,000 I'd still come out ahead. If this policy continues indefinitely eventually the US industrial ecosystem will be destroyed completely. When that happens China will abandon its "keep the yuan low" policy and your smartphone will suddenly cost $2,000 but the US won't have the expertise or the infrastructure to suddenly rebuild all its factories. That will take decades. Then the US will end up like Argentina - a pale shadow of its former wealth.
- RockyMcNuts 11y ago
  If we turned into Argentina, it would be because of financial mismanagement and poisonous politics, not trade. Like rich people who don't want pay for a civilized society, impoverished masses, populism, breakdown of the social contract, violence and political thievery between the groups. I don't know how much you know about Argentina, but it takes generations of economic mismanagement, predatory politics, and violence to transition from a developed country to a developing country. If a mercantilist trade policy was the only thing keeping the USA wealthy we're not going to stay on top anyway. You don't stay rich by trying to keep the rest of the world poor. That is the attitude that gets you to Argentina politics though. It would be a shame if the richest country in the world were to say economic and civil liberties are great at home, but we're not going to lead by example and deal that way with the rest of the world. Cheap yuan policy is history and has been for a few years, people don't seem to have caught up to that yet.