Where is the US economy headed?

@cicerone imposter,

It is self evident in the auto industry, ci. Look at how the companies caved to unions, promising wages, retirement, and health plan packages that are not sustainable in a competitive auto manufacturing market. You can argue that quality is the primary factor, but quality also is influenced by a workforce that is coddled to the point that if it isn't in their job description, an employee cannot be told to do it.

I am not blaming unions for the entire problem, only for part of it. Auto company executives that became complacent, with big pay packages not commensurate with performance are also to blame. If you believe that ridiculous pay packages for executives are a drag on companies, then you also must admit that higher than otherwise normal payscales and fringe benefits for union members are also a drag on the competitive ability of businesses. Econ. 101. Look, competition is competition, and if a union demands wages above a level that the free market cannot sustain, then the jobs go away, thats just common sense. This is a world market, end of story. If you have one set of rules here, vs another set of rules somewhere else that makes it cheaper to produce products, then what happens?

The auto industry is just one example of many industries. Hey, all you have to do is go into Walmart and look at the labels on the products. This is not rocket science. You have a brain. Use it.

I will try another example. If I am in business, and I want something done, something manufactured, I have a choice. I can look at all the companies that can produce that product according to my specifications. I can choose between a company here with high costs, including a unionized labor force with high wages and benefits, or I can contract with a company that uses a lower paid workforce. Now, I might be idealistic and even be willing to pay more for the American contractor, however, if it causes my product to become uncompetitive to the point that I might go out of business, I would swallow hard and opt for the less expensive contractor simply to stay in business. This is common sense, ci, and it happens all the time, every day in this country.

3 Replies

@okie,

Quote:

It is self evident in the auto industry, ci. Look at how the companies caved to unions, promising wages, retirement, and health plan packages that are not sustainable in a competitive auto manufacturing market. You can argue that quality is the primary factor, but quality also is influenced by a workforce that is coddled to the point that if it isn't in their job description, an employee cannot be told to do it.

Do you know why the Japanese imported cars do so much better than the local ones, Okie? Because the companies don't have to pay for health care packages: the government provides for it. The very policy that you and others fight against is what has led them to be far more competitive in the same market as our automakers.

Maybe we ought to try it, what do you say?

Cycloptichorn

1 Reply

@okie,

Harrumpf! I blame the problems in the American auto industry on John Kenneth Galbreth. I forget the title of the book, circa 1968, but his thesis was that some industries, automobile in particular, had become so controlling that they could not only decide what we would pay, the could also decide what we would buy. The big three seemed to have swallowed it, hook, line, and sinker. The Japanese did not.

But yeah, wages are a large component of prices, and the Japanese plants working with non-union labor in the US seem to be doing quite well, at least on a comparative basis.

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@okie,

okie, Look at what Cyclo and roger said, below your post. Most of the problems stems from several things. The first is called "quality of product." The second is called "product mix where gas guzzlers have not been competitive." The US auto makers have been quite stubborn in this regard. The third is "managements failure." In this third category are such things as universal health care that in countries like Japan and Germany do not have to price their cars to include those very expensive costs - not only for the workers past and present, but also for their dependents.

Go back to square one, and try again.

1 Reply

@cicerone imposter,

No need to try again. Unions are in the mix of the problem. I would add that benefits, including insurance, as mandated by unions, are also a huge problem. Employers should not be paying for employees insurances. This makes no sense. After all, do they pay for auto insurance or homeowners insurance? No. And they shouldn't pay for medical either. Cyclops has a point, but I don't think the best solution is government paid health care. We've discussed this before.

Another huge problem is our taxing system. I favor the retail sales tax, and eliminating all income tax, including on businesses, which would provide a perfectly level playing field between all products sold in this country, regardless of origin, in regard to tax burden on those products.

We need to actually address core problems with the economy, and tackle them, instead of dancing around the symptoms, tweaking symptoms, as the candidates do, especially Obama.

1 Reply

@okie,

okie wrote:

Quote:

Employers should not be paying for employees insurances.

You still haven't explained why? You're now saying that the 47 million Americans covered under their employment is not good? Please explain.

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@cicerone imposter,

Thats an easy question to address, ci. Several reasons, ci.

Philosophically, the function of employers paying wages for employees and also paying for personal expenses are just not connected, they are separate responsibilities. The responsibility of employers is to pay the employee for his work, and the responsibility of people, citizens, is to manage their own expenses and mode of living.

I think one reason among many that medical expenses have gone out of control is because the people paying for them are often not the people receiving the services. The best way to control costs is to bring to bear on it the choices and oversight directly by the people and their own pocketbooks, the people that receive the services. Imagine for a moment what would happen to the type and cost of automobiles if employers were required to provide personal automobiles for employees. Or groceries. Imagine caviar every night, or steak and lobster.

Anytime you skew the market by mandating something that employers should not lawfully be required to do, you end up with unintended consequences, whether it be health insurance, groceries, buying all the employees a free trip to Las Vegas, buying them lottery tickets, providing automobiles, whatever.

Anytime you take the responsibility away from the rightful owner, you end up with consequences. In this case, you create an uneven playing field with businesses, placing businesses at a disadvantage in the market, thus one reason they are going overseas, and on the other side of the ledger you are skewing the costs of medical insurance and care, probably alot more than most of us think.

This is so basic to Econ 101, freedom, free market theories, etc., ci, I am surprised it has to be explained. Now I realize an employer can pay an employee however he wishes, and if it happens to be medical insurance, fine, but then it should be taxable as income, as John McCain points out, and it should not be mandatory. After all, if an employer pays with an automobile, it should be taxable, or if it is in anything other than cash, it should be taxable. Pretty basic, ci. But then again, I favor eliminating income tax, which would eliminate the problem altogether, but whatever the employer pays with, it is a direct cost in his budget.

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@Cycloptichorn,

Quote:

Do you know why the Japanese imported cars do so much better than the local ones, Okie? Because the companies don't have to pay for health care packages: the government provides for it. The very policy that you and others fight against is what has led them to be far more competitive in the same market as our automakers.

Maybe we ought to try it, what do you say?

But that is a subsidy Cyclo. Anybody can be more competitive if they get a subsidy. And it doesn't grow on trees. It comes from other sectors. And those other sectors are inhibited in their potential as a result. It's a bet.

We demand human rights for Chinese and other workers for the same reason the North demanded the abolition of slavery. That's because we know that if economics alone determines the issue we will become slaves ourselves otherwise. The irony is that it is our ineradicable propensity to bargain hunt which causes it.

We buy foreign imports because they are produced by people with fewer rights than you have. No other reason.

Quote:

Maybe we ought to try it, what do you say?

That is so naive that it makes me wonder whether you can dip your soldiers in your boiled egg without splattering yolk all down your bib.

1 Reply

@spendius,

spendius wrote:

Quote:
Do you know why the Japanese imported cars do so much better than the local ones, Okie? Because the companies don't have to pay for health care packages: the government provides for it. The very policy that you and others fight against is what has led them to be far more competitive in the same market as our automakers.

Maybe we ought to try it, what do you say?

But that is a subsidy Cyclo. Anybody can be more competitive if they get a subsidy. And it doesn't grow on trees. It comes from other sectors. And those other sectors are inhibited in their potential as a result. It's a bet.

We demand human rights for Chinese and other workers for the same reason the North demanded the abolition of slavery. That's because we know that if economics alone determines the issue we will become slaves ourselves otherwise. The irony is that it is our ineradicable propensity to bargain hunt which causes it.

We buy foreign imports because they are produced by people with fewer rights than you have. No other reason.

Quote:
Maybe we ought to try it, what do you say?

It is so naive that it makes me wonder whether you can dip your soldiers in your boiled egg without splattering yolk all down your bib.

I certainly don't need economic advice from a British drunk, thanks very much.

I don't think there's much evidence that the Japanese, who we buy a lot of our imports from, have a lower level of rights than we do....

Cycloptichorn

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@Cycloptichorn,

And you can't read either Cyclo. I never said anything about human rights in Japan.

And you really ought to have used "any" instead of "much" if you wish any intelligent person to think you have said anything.

You need lessons from somebody mate. I was sober as a judge when I wrote that and I'm barely tipsy now but most of the best things I've learned were from drunks and there's no need to be drunk to remember them.

Try not to label somebody a drunk as a clinching argument. It is an insult to your readers and makes you look foolish. Try to engage with with has been said.

1 Reply

@Cycloptichorn,

Cycloptichorn wrote:

I don't think there's much evidence that the Japanese, who we buy a lot of our imports from, have a lower level of rights than we do....

Cycloptichorn

How come you used Japan as an example instead of China, cyclops? Very Happy

And wait until China starts importing cars into the U.S., see what happens then.

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@okie,

How many cars can you get on a ship okie? What's the delivery charge compared with shipping them from Detroit in terms of a dealer's percentage?

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@spendius,

Furthermore Cyclo, what does " a lot of our imports" mean?

Free trade is a figment of an undereducated imagination running wild at the prospect of it's own astounding brilliance. It's such a simple idea you see and requires very little effort.

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@okie,

okie wrote:

Cycloptichorn wrote:

I don't think there's much evidence that the Japanese, who we buy a lot of our imports from, have a lower level of rights than we do....

Cycloptichorn

How come you used Japan as an example instead of China, cyclops?

And wait until China starts importing cars into the U.S., see what happens then.

Uh, we were talking about automobiles and Health care, so I used the country we get most of our imported cars from. Silly me to think that you would catch on to that right away Rolling Eyes

I agre with the Chinese import question; that's one reason that I try not to buy products which are made in China.

Cycloptichorn

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@spendius,

spendius wrote:

And you can't read either Cyclo. I never said anything about human rights in Japan.

And you really ought to have used "any" instead of "much" if you wish any intelligent person to think you have said anything.

You need lessons from somebody mate. I was sober as a judge when I wrote that and I'm barely tipsy now but most of the best things I've learned were from drunks and there's no need to be drunk to remember them.

Try not to label somebody a drunk as a clinching argument. It is an insult to your readers and makes you look foolish. Try to engage with with has been said.

I called you a drunk, b/c you post drunk all the time, and it's obvious when you are in your cups. You make even less sense then usual Laughing

I was talking about Japanese autos with Okie when you butted in; the fact that you wanted to change the subject is immaterial to me.

Cycloptichorn

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@okie,

okie wrote:

Quote:

This is so basic to Econ 101, freedom, free market theories, etc., ci, I am surprised it has to be explained.

"Where in econ 101 does it say anything about "freedom, free market theories, etc.?" I studied from a textbook written by Samuelson. What was your's?

Please identify your statement by identifying which textbook, and page number(s).

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@okie,

okie wrote: Philosophically, the function of employers paying wages for employees and also paying for personal expenses are just not connected, they are separate responsibilities. The responsibility of employers is to pay the employee for his work, and the responsibility of people, citizens, is to manage their own expenses and mode of living.

Your "philosophy" stinks. Also please show the relevance of your "philosophy" to any econ 101 textbook.

1 Reply

@cicerone imposter,

cicerone imposter wrote:

okie wrote: Philosophically, the function of employers paying wages for employees and also paying for personal expenses are just not connected, they are separate responsibilities. The responsibility of employers is to pay the employee for his work, and the responsibility of people, citizens, is to manage their own expenses and mode of living.

Your "philosophy" stinks. Also please show the relevance of your "philosophy" to any econ 101 textbook.

Well, if I could get my employer to pay for not only my health care insurance, but my other insurances, my house, my car, my groceries, and everything else, hey, now that sounds awfully good. Sounds like living in a company town. Or maybe more like some kind of communist system where my employer is the government?

Now whose philosophy stinks, ci?
By the way, my favorite economics book is Basic Economics by Thomas Sowell.

You are too funny, ci!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

1 Reply

@okie,

Please show us the Sowell textbook name and page number.

1 Reply

@cicerone imposter,

You said "your favorite" is Sowell, but you didn't say whether you used his textbook or not. You must identify the textbook and page number, or you can cut and paste it here on this thread.

1 Reply

Where is the US economy headed?

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