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Note that you're basically saying that we should all pay more for cars just so that those workers can keep their jobs. Fair enough, but why stop there? What ab

Note that you're basically saying that we should all pay more for cars just so that those workers can keep their jobs. Fair enough, but why stop there? What about all the other productive jobs lost due to cheaper foreign labor? It would be unfair to give special treatment just to auto workers. Either everyone should have a right to forever keep the profession of their choice, or no one should. Soon enough you find yourself in the situation where everything is more expensive and everyone's standard of living is lower, because all comparative advantage has been lost. This has been known for well over a hundred years, but people still have trouble accepting it.

vkou 7y ago
No, we should pay more for cars so that executives can keep their multi-million dollar pay, and so that the average surgeon can afford three summer homes, and so that my 401k can keep growing at an average of 7%/year, from now till the day I die, without me having to lift a finger. Duh. Why is optimizing labour costs the only option that such false dichotomies put on the table? Why are all other expenses sacred, but wages the first on the cutting block? It's not a 'if we don't cut pay, we will live in a dysopia where nothing is affordable' situation. It's a 'if we don't reign in the capital owners, the healthcare cartel, and management compensation, we are going to continue to live in a dystopia, where the vast majority of normal people continue to get squeezed to enrich those three groups.' (I'd also throw in loan servicing in there, but sadly, the existence of the bloated retail banking sector is a consequence of those three problems, not the cause.) Most of a typical family's expenses are housing and healthcare. No amount of blue collar wage cutting is going to make either of those two line items affordable. But it sure as shit will make said blue collar family not be able to afford them. Wringing your hands over the cost of consumer goods, while ignoring those two elephants is bad policy. We'd all be better off if we lived in a world where cars and widgets and clothes cost twice as much, but healthcare half as much. Well, most of us would, at least. You can find such a model on the other side of the pond.
- pdonis 7y ago
  > We'd all be better off if we lived in a world where cars and widgets and clothes cost twice as much, but healthcare half as much. No, we wouldn't, because people buy cars and clothes more often than they buy health care. What costs a lot in the US is health insurance, not health care. And that's because the thing called health "insurance" isn't actually insurance; it's not just covering you against unforeseen large expenses. It's more like an expensive maintenance plan that you're forced to buy whether it's cost effective to you or not--like the full service maintenance plans that car dealers try to sell you, except that you can refuse to buy them from car dealers. What really needs to happen is to separate out three very different things that are lumped together today into what is misleadingly called "health insurance": (1) Routine, predictable maintenance expenses, like regular physical exams and vaccinations, and routine care for common illnesses like the flu. These should be provided by a competitive free market, like they were in the US before WW II when employers started offering health benefits to attract workers since wartime regulations prohibited them from offering higher wages. Competition would drive these costs down since the expenses are routine and it's reasonably easy for people to tell good providers from bad ones. (2) Unforeseen, large, temporary expenses, like accidents. These are what would normally be covered by something properly called "insurance". For auto accidents, people's auto insurance is already required to cover them in most states; but for other kinds of accidents--slips and falls, broken bones while playing sports, etc.--an ordinary insurance model would be suitable, provided by health insurance companies. (3) Expensive chronic conditions that require ongoing treatment (usually drugs, but not always). These are the hard ones to cover, but a system that was dedicated to covering them and nothing else would be much better than the bastardized system we have now that lumps everything together. These are the kinds of things where it makes sense to pool national resources and provide some kind of universal coverage, since it's usually not feasible to assign specific causes so an ordinary insurance model can't work. But if national resources were pooled to provide universal coverage for just these things, we could see how much they actually cost and we would be more focused on finding ways to reduce the frequency of such conditions. > You can find such a model on the other side of the pond. Really? Cars and clothes are twice as expensive as in the US?
- gridlockd 7y ago
  > No, we should pay more for cars so that executives can keep their multi-million dollar pay, and so that the average surgeon can afford three summer homes, and so that my 401k can keep growing at an average of 7%/year, from now till the day I die, without me having to lift a finger. Duh. Don't worry, your 401K has a decent chance of losing half its value before you retire. As for multi-million dollar compensation, why don't you run the numbers and see how much the executive salary adds up to and then tell me how much money could be saved there. Maybe you'll have an argument then. > Why is optimizing labour costs the only option that such false dichotomies put on the table? Why are all other expenses sacred, but wages the first on the cutting block? If you run a multi-national company, in order to stay competitive, you need to look for the cheapest prices everywhere, including labor. Labor just happens to be the major cost factor, so naturally it's the first thing to optimize on. Your own wages are, naturally, the last thing you want to optimize on. You can argue that these companies should be bribed into taking more expensive local labor, just keep in mind that this bears a cost that all of us pay. > Most of a typical family's expenses are housing and healthcare. No amount of blue collar wage cutting is going to make either of those two line items affordable. But it sure as shit will make said blue collar family not be able to afford them. Wringing your hands over the cost of consumer goods, while ignoring those two elephants is bad policy. Of course, housing and healthcare can't be outsourced in the same way that car manufacturing can be. If I follow your line of reasoning, manufacturing should get the same privilege, so that housing, healthcare and consumer goods will be less affordable. Like I said, this is possible, but you lose the comparative advantage, which is just leaving wealth on the table. Perhaps those auto workers should get a job in those more privileged industries instead? > We'd all be better off if we lived in a world where cars and widgets and clothes cost twice as much, but healthcare half as much. Fair enough, let's artificially suppress healthcare compensation in favor of manufacturing compensation. I'm sure it'll do "wonders" for the quality of either. > You can find such a model on the other side of the pond. On the other side of the pond, everyone earns less, especially healthcare workers.
  - vkou 7y ago
    How exactly will my 401k lose half it's value before I retire? Are capital owners going to stop making money or something? Is there an anarchist-communist revolution scheduled next Tuesday? Your mathematics don't make any sense. If 60% of my household budget goes towards housing and healthcare, and 40% of it goes towards consumer goods, made by people like me. If I lose 20% of my wages, for a 10% reduction in the cost of consumer goods, this will put me into a net -16% deficit. Stop optimizing for the cost of consumer goods. They aren't the problem for a typical household. They haven't been a problem for a typical household since we've figured out mass production in the 70s. They never will be a problem for a typical household, unless we have a complete collapse of civilization. > Fair enough, let's artificially suppress healthcare compensation in favor of manufacturing compensation. I'm sure it'll do "wonders" for the quality of either. Every other country on Earth manages to provide equivalent or better healthcare, for much lower prices (Even adjusted for PPP). They don't have parasitic insurance and billing industries, they don't waste healthcare money on marketing spend, and they have reigned in physician salaries. None of those things have any impact on the quality of healthcare (Actually, the first two have a pretty major negative impact on the quality of care), but they do have plenty of impact on the cost of care. > On the other side of the pond, everyone earns less, especially healthcare workers. It's not what you earn, it's how much you have left over after you pay the bills.
pytester 7y ago
>Note that you're basically saying that we should all pay more for cars just so that those workers can keep their jobs. You're assuming that the higher costs will necessarily all be passed along to the consumer rather than come from profit margins. I think it's a valid assumption if the market were comprised of a lot of highly competitive firms rather than 3 not-very-competitive-at-all firms. There's definitely a link, I think, between record high and increasing corporate profit / GDP ratios over the last 15 years and outsourcing.
- gridlockd 7y ago
  Why don't you look at the profit margins? But please, don't just look at the good years. For GM, it's probably about 4-5% average in the last years: https://www.macrotrends.net/stocks/charts/GM/general-motors/profit-margins https://www.macrotrends.net/stocks/charts/GM/general-motors/... > I think it's a valid assumption if the market were comprised of a lot of highly competitive firms rather than 3 not-very-competitive-at-all firms. Consumer goods are generally highly competitive. There are no monopolies or exorbitant profit margins. The number of companies is irrelevant. Even if it was just a single company, as long as the profit margins are low, consumers are not at risk of being overcharged. Outliers are companies like Apple, which have a monopoly on their IP, but that's a different story.

vkou 7y ago

No, we should pay more for cars so that executives can keep their multi-million dollar pay, and so that the average surgeon can afford three summer homes, and so that my 401k can keep growing at an average of 7%/year, from now till the day I die, without me having to lift a finger. Duh. Why is optimizing labour costs the only option that such false dichotomies put on the table? Why are all other expenses sacred, but wages the first on the cutting block? It's not a 'if we don't cut pay, we will live in a dysopia where nothing is affordable' situation. It's a 'if we don't reign in the capital owners, the healthcare cartel, and management compensation, we are going to continue to live in a dystopia, where the vast majority of normal people continue to get squeezed to enrich those three groups.' (I'd also throw in loan servicing in there, but sadly, the existence of the bloated retail banking sector is a consequence of those three problems, not the cause.) Most of a typical family's expenses are housing and healthcare. No amount of blue collar wage cutting is going to make either of those two line items affordable. But it sure as shit will make said blue collar family not be able to afford them. Wringing your hands over the cost of consumer goods, while ignoring those two elephants is bad policy. We'd all be better off if we lived in a world where cars and widgets and clothes cost twice as much, but healthcare half as much. Well, most of us would, at least. You can find such a model on the other side of the pond.

pdonis 7y ago
> We'd all be better off if we lived in a world where cars and widgets and clothes cost twice as much, but healthcare half as much. No, we wouldn't, because people buy cars and clothes more often than they buy health care. What costs a lot in the US is health insurance, not health care. And that's because the thing called health "insurance" isn't actually insurance; it's not just covering you against unforeseen large expenses. It's more like an expensive maintenance plan that you're forced to buy whether it's cost effective to you or not--like the full service maintenance plans that car dealers try to sell you, except that you can refuse to buy them from car dealers. What really needs to happen is to separate out three very different things that are lumped together today into what is misleadingly called "health insurance": (1) Routine, predictable maintenance expenses, like regular physical exams and vaccinations, and routine care for common illnesses like the flu. These should be provided by a competitive free market, like they were in the US before WW II when employers started offering health benefits to attract workers since wartime regulations prohibited them from offering higher wages. Competition would drive these costs down since the expenses are routine and it's reasonably easy for people to tell good providers from bad ones. (2) Unforeseen, large, temporary expenses, like accidents. These are what would normally be covered by something properly called "insurance". For auto accidents, people's auto insurance is already required to cover them in most states; but for other kinds of accidents--slips and falls, broken bones while playing sports, etc.--an ordinary insurance model would be suitable, provided by health insurance companies. (3) Expensive chronic conditions that require ongoing treatment (usually drugs, but not always). These are the hard ones to cover, but a system that was dedicated to covering them and nothing else would be much better than the bastardized system we have now that lumps everything together. These are the kinds of things where it makes sense to pool national resources and provide some kind of universal coverage, since it's usually not feasible to assign specific causes so an ordinary insurance model can't work. But if national resources were pooled to provide universal coverage for just these things, we could see how much they actually cost and we would be more focused on finding ways to reduce the frequency of such conditions. > You can find such a model on the other side of the pond. Really? Cars and clothes are twice as expensive as in the US?
gridlockd 7y ago
> No, we should pay more for cars so that executives can keep their multi-million dollar pay, and so that the average surgeon can afford three summer homes, and so that my 401k can keep growing at an average of 7%/year, from now till the day I die, without me having to lift a finger. Duh. Don't worry, your 401K has a decent chance of losing half its value before you retire. As for multi-million dollar compensation, why don't you run the numbers and see how much the executive salary adds up to and then tell me how much money could be saved there. Maybe you'll have an argument then. > Why is optimizing labour costs the only option that such false dichotomies put on the table? Why are all other expenses sacred, but wages the first on the cutting block? If you run a multi-national company, in order to stay competitive, you need to look for the cheapest prices everywhere, including labor. Labor just happens to be the major cost factor, so naturally it's the first thing to optimize on. Your own wages are, naturally, the last thing you want to optimize on. You can argue that these companies should be bribed into taking more expensive local labor, just keep in mind that this bears a cost that all of us pay. > Most of a typical family's expenses are housing and healthcare. No amount of blue collar wage cutting is going to make either of those two line items affordable. But it sure as shit will make said blue collar family not be able to afford them. Wringing your hands over the cost of consumer goods, while ignoring those two elephants is bad policy. Of course, housing and healthcare can't be outsourced in the same way that car manufacturing can be. If I follow your line of reasoning, manufacturing should get the same privilege, so that housing, healthcare and consumer goods will be less affordable. Like I said, this is possible, but you lose the comparative advantage, which is just leaving wealth on the table. Perhaps those auto workers should get a job in those more privileged industries instead? > We'd all be better off if we lived in a world where cars and widgets and clothes cost twice as much, but healthcare half as much. Fair enough, let's artificially suppress healthcare compensation in favor of manufacturing compensation. I'm sure it'll do "wonders" for the quality of either. > You can find such a model on the other side of the pond. On the other side of the pond, everyone earns less, especially healthcare workers.
- vkou 7y ago
  How exactly will my 401k lose half it's value before I retire? Are capital owners going to stop making money or something? Is there an anarchist-communist revolution scheduled next Tuesday? Your mathematics don't make any sense. If 60% of my household budget goes towards housing and healthcare, and 40% of it goes towards consumer goods, made by people like me. If I lose 20% of my wages, for a 10% reduction in the cost of consumer goods, this will put me into a net -16% deficit. Stop optimizing for the cost of consumer goods. They aren't the problem for a typical household. They haven't been a problem for a typical household since we've figured out mass production in the 70s. They never will be a problem for a typical household, unless we have a complete collapse of civilization. > Fair enough, let's artificially suppress healthcare compensation in favor of manufacturing compensation. I'm sure it'll do "wonders" for the quality of either. Every other country on Earth manages to provide equivalent or better healthcare, for much lower prices (Even adjusted for PPP). They don't have parasitic insurance and billing industries, they don't waste healthcare money on marketing spend, and they have reigned in physician salaries. None of those things have any impact on the quality of healthcare (Actually, the first two have a pretty major negative impact on the quality of care), but they do have plenty of impact on the cost of care. > On the other side of the pond, everyone earns less, especially healthcare workers. It's not what you earn, it's how much you have left over after you pay the bills.

pytester 7y ago

>Note that you're basically saying that we should all pay more for cars just so that those workers can keep their jobs. You're assuming that the higher costs will necessarily all be passed along to the consumer rather than come from profit margins. I think it's a valid assumption if the market were comprised of a lot of highly competitive firms rather than 3 not-very-competitive-at-all firms. There's definitely a link, I think, between record high and increasing corporate profit / GDP ratios over the last 15 years and outsourcing.

gridlockd 7y ago
Why don't you look at the profit margins? But please, don't just look at the good years. For GM, it's probably about 4-5% average in the last years: https://www.macrotrends.net/stocks/charts/GM/general-motors/profit-margins https://www.macrotrends.net/stocks/charts/GM/general-motors/... > I think it's a valid assumption if the market were comprised of a lot of highly competitive firms rather than 3 not-very-competitive-at-all firms. Consumer goods are generally highly competitive. There are no monopolies or exorbitant profit margins. The number of companies is irrelevant. Even if it was just a single company, as long as the profit margins are low, consumers are not at risk of being overcharged. Outliers are companies like Apple, which have a monopoly on their IP, but that's a different story.