What strategy should America follow to create jobs?

These are good points. The same can be said for Giant or Acer or Asus, pretty much all started out as OEM. I go past Merida and Giant shops regularly in Taichung, now even their marketing is up there or surpassing all the foreign brands, amazing. BTW, don’t forget to listen to the audio excerpt above, the author worked for the Reagan administration negotiating trade deals!

The other advantage that being familiar with production gives you is the ability to link the markeplace > design > production and also from production > design > marketplace. They have a cross-over area that gives you insights and helps you move more quickly, if you have a good team in place with an open mind.

I’m surprised that Apple can maintain it’s brand and grow it’s market so well with so little production expertise but it has worked well for them so far. They must also have an incredible quality review team as they rarely make major errors (except for that antenna mess!). They show the power of innnovation and foward thinking. They didn’t take the quick and easy way of boosting market share like many other companies where CEOs just acquire and cut ‘waste’ to boost the bottom line. However I would never buy Apple shares because their market is for them to lose now. If other companies in Asia become willing to incorporate the ability to take risks and try out new ideas from the front watch out! We can see the ‘edge’ of difference between Asian companies and Western consumer companies is gone to almost nothing now (compare a HTC EVO with an iPhone 4, incredible speed of product evolution of HTC to reach this cutting edge level). Software and marketing expertise is the only thing holding them back along with lead from the front mentality that garners an extra respect in the marketplace such as Apple have done. We could call that the ‘Asian singularity’. One day I will see a product that blows my mind away that was designed and executed in Asia, I have yet to see that though…

Many Western electronics companies are moving to an assemble and service mode (HP/Dell/IBM) to make the bulk of their revenues…will that leave that at major risk if they get too far from the core hardware?

I see the free trade fundamentalists will be having a hard time digesting the above, give you a while to chew on the cud so to speak. It’s hard for Americans especially because it means re-evaluating things you were taught are orthodoxies since kindergarten and are rehashed through the media.

Hardly having a hard time digesting the above. The difficulty is a toss up between fathoming how someone could sleep through every history lesson they ever had about the trade and the causes of the Great Depression and your belief that all the other participants in global trade are static, i.e. they won’t react negatively with tariff increases in response to our tariff increases.

Your assumption of other participants being static is the fatal flaw in every argument you’ve made. Yes the US is a damn big market but we still have to sell our exports somewhere. If we start mucking around with rules and regulations to try and give ourselves an advantage then our trading partners will do the same thing and then some. When that happens the harm you’ve caused outweighs the minimal gain of sticking it to China for manipulating their currency. You’d have us lose billions of dollars in trade to possibly gain millions in domestic manufactoring. That’s until we develop new automated manufactoring processes and less labor is needed for production. Then the workers will be back out on their asses again, prices will be higher and it will all have been for nothing.

Those who cannot remember the past are condemned to repeat it.
-George Santayana

Hey, Honcho, you grew up in Ireland, so don’t tell me what I was taught as orthodoxy. I grew up being force fed socialist ideology from day one. You have no idea what it’s like to grow up in America so don’t begin to lecture me on what I grew up learning. You’re ignorance is pathetic. I’ve done nothing but provide you with legitimate policies to implement that would help MY country grow its economy. You’ve chosen to ignore them and instead paint all Americans as some kind of ignorant hillbillys. I would love to have a legitimate discussion with you, but you’ve shown that it’s impossible. I suggest you worry about your own country’s economic troubles, which are large, and stop lecturing us on what to do. All you have are tired soundbites to throw around. It’s really sad man.

What bugs me isn’t America’s lack of protectionism but India’s and China’s protectionism – and American acquiescence towards it. The lack of a level trade playing field should be the real focus and the U.S. should use its economic woes to add teeth to its currently largely toothless complaints about the currency, tariff and regulatory protectionism of China and India.

No more ‘developing countries get special treatment’ nonsense in the face of the systemic unwinding of the American economy.

It will be hard to make any case about the lack of a level playing field though as long as America’s fiscal house is in such a mess. That means tax, regulatory and other reform aimed at simplifying and reducing the cost of wealth creation on U.S. soil. Otherwise the whole protectionism argument isn’t much more than an argument over whether to close the barn door or not after the horses have gotten loose.

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There are currently 5 job seekers for every 1 job available. No matter how you slice and dice that, there are not enough jobs right now. There are 3.5 million unemployed. There is anecdotal evidence of people refusing low paying jobs - 6, 7, 8$ an hour - and keeping unemployment benefits, which averages $300/wk, which is $15k/yr, but there are no statistics on this, and people opposed to unemployment benefits can only point to the stories right now (which admittedly sound good, but are only anecdotal).

Contrary to popular opinion, there are NOT 99 weeks of unemployment, this is propaganda perpetrated by mainstream media and those opposed to using tax dollars for this - sounds really good doesn’t it? 99 weeks, what the hell are people complaining about? In fact, it depends on your state and the unemployment there, and more importantly, it depends on when you started on it. You could very well get the state 6 months and now, since there is no extension of federal benefits, you’re done. Here’s the real way it works:

So let’s dispense with the “99 weeks” number, it is not the case for much of the unemployed, and definitely not the newly unemployed (within the past 6 months). The federal extension MUST be extended, or a lot of people are in deep doo-doo. More later, been a busy week.

BTW, thanks for the good articles (and audio clips) everyone, most of us don’t have the time to go out and hunt for news every day, I only hunker down on the weekends when there’s free time to do my internet and book reading. To me, this thread is starting to look like the Why American Capitalism is Bad thread, in the sense that people on it are not gonna get swayed to the other side, but at least the details of what each side is proposing and the various statistics are getting put out there.

I don’t see many people arguing just for protectionism. As I said a country should use every means at it’s disposal to ‘tip the balance in it’s favour’. Getting focused on the ‘danger of tariff increases’ is kind of silly when the Chinese and other countries use alternative methods to achieve tariff type effects, they have used this for the last 20 years and there is still no change in the situation, they merrily wish for it to continue. Your ‘danger’ has already happened, almost total loss of manufacturing base. So what if they react negatively, do you know nothing about negotiation? Everytime you want something the other guy has to give away something, he’s not happy about that! But if you don’t want to fight you get rode roughshod over. If you are afraid and show you are afraid then you can’t win from the start. There’s a very interesting statistic I would like to know, what % of exports from China to the US are from US based companies and what % are from Chinese indigineous companies.

That’s the weakness of ideology and looking too much at the past to compare to the present! The world has changed a huge amount since the 1930s, capital is mobile, jobs are mobile, markets are everywhere, production is everywhere. Multinationals truly are multinational.

Me, I’m just wondering why most Americans happily acquiesce to a system that doesn’t benefit America in it’s present form. Even Andy Grove, president of Intel, admits as much. I’ve no doubt America will still have the best science and technology for decades to come, it’s not putting down America, just strange that if that doesn’t translate into a better American for a large part of it’s citizens. Probably the majority can continue to do well but with a growing underclass. There will be some successful innovative manufacturing stories but few and far between. It also depends on what level of debt the US can sustain before defaulting. Answers are complex but there are commonsense places to start, and when 1 service job only creates average 1.5 spin-off jobs and when 1 manufacturing jobs creates average of 5 spin-off jobs, well that is an important thing to look at. Plus no amount of innovation will help to create many jobs if you don’t have a manufacturing base to scale up i.e. lithium batteries/solar cells/IC design etc. Sometimes you have to spend money to make money, sometimes you have to protect and nurture industries in their growth phase or during development of new technology. Just like a farmer would nurture a tree until it produces some fruit. A farmer wouldn’t do very well if he decided to measure how profitable he was from the amount of fruit he got from the tree every quarter for the first two or three years only.
That’s similar to how a lot of public companies operate in the West now.

Yes, Ireland does have problems as I know I grew up in a high unemployment state and it is now, once again, a high unemployment state, that’s why I know how important jobs are to an economy. Ireland lost it’s way over the last 10 years with an even worse property boom than the US, terrible mismanagement from government also. But I have lived in Taiwan a long-time and have learnt a lot from here too.

The economic fundamentals only appear to have changed: This Time Is Different. Eight Centuries of Financial Folly.

Protectionism, trade wars, excessive government debt will have the same results they’ve had over the last eight centuries of capitalism.

Well I know there is a risk but there is a risk in doing nothing. In fact there is more than a risk there is already significant job loss and income tax loss. So we can always point to instances that were similar in the past but of course there are probably just as many instances that were different. And yes, 2010 really is different from the 1930s. In the 1930s Western companies still concentrated their production in their homeland. Now many Western companies, while nominally located in the West, relocated their production base to Asian countries. Even if some levels of tariffs were to come in, some of these companies may not be badly affected and may even prosper, they already locate their major production sites in China for China, in India for India etc. The obvious anomaly to this situation is the US where they don’t have large production bases. So the key is to get them to move at least some production into the US. In this situation a ‘rebalancing’ of the system is more likely to favour the US than cause it issues. It’s not 100% but there’s a good chance simply because the current situation is so weighted towards production overseas. Don’t forget, the US is still the NO.1 market for most goods and services.

It’s a very different situation than the 1930s with Germany, UK , Japan and Britain vying for dominance but with their respective companies and production firmly ensconced and supported in their home bases.

The methods to actively encourage production (instead of the current ‘laissez-faire’ approach) in the US could be varied. They could be tax incentives such as altering a company’s tax rate according to how much of the good or service was produced in the US, they could be grants, they could be tariffs on imports. This is not forgetting important points put forward by Politbureau about ease and cost of setup and running a business.

To get back to the original topic of strategies for job creation, does anybody see any other way to get more jobs going in the US outside of a manufacturing push?

Roadmap for America’s future

Congressional Budget Office evaluation of effects of “Roadmap” on U.S. economy, fiscal health, entitlements

While I didn’t read much of that article yet, it’s ironic that republicans are so alarmed about the fiscal deficit now after being involved in approving two major wars and military spending increases which have seen the biggest increase to the deficit budget. Pot calling kettle black perhaps?

Presumably you’ve read the CBPP and Krugman’s responses to this, and dismissed them without discussion here, before posting that:

Here’s the original CBPP review: http://www.cbpp.org/cms/index.cfm?fa=view&id=3114

So the CBO only analyzed part of the plan, didn’t include the revenue loss, and it’s the biggest transfer of wealth from the middle class to the wealthy in the past 30 years. Kudos!

‘The Roadmap would give the most affluent households a new round of very large, costly tax cuts by reducing income tax rates on high-income households; eliminating income taxes on capital gains, dividends, and interest; and abolishing the corporate income tax, the estate tax, and the alternative minimum tax’

This is similar to how Taiwan’s tax system operates, which is extremely unfair to regular workers here who prop up the ‘missing’ budget with their income taxes. The almost total abolishment of estate tax in Taiwan (without incentives to invest in productive businesses on the island) has also led to a property bubble here…no use to anybody.

…unless you either got in early and cheap(er), or you’ve got a ton of savings/disposable income to invest in the already high prices. In other words, either your investment gamble paid off, or you’re rich getting richer - either way, that’s no way to run an economy.

And will someone please explain to me how elimination or minimization of estate taxes - which generally only affect the very richest estates - goes hand in hand with a meritocracy? Let’s be honest here - The American Dream is based on the theory of a meritocracy.

Why does a kid lucky enough to be born into a very wealthy family, get to slack off (ahem, W) or fail (ahem, W) their whole life and still be secure for themselves and generations to come, while a kid unlucky enough to be born to poor parents with a shitty school with high unemployment and crime rates gets to have a shit life 99% of the time no matter how hard they work? That’s America eh?

Fact is America ain’t a meritocracy, the American Dream is bullshit, and the rich keep getting richer at the expense of the poor and middle classes.

And yet the market based system for the distribution of wealth has worked better than that of any socialist system to date. The reason for this is simple, human nature.

Edit: added missed coma for McCoy. Dammit Jim I’m an Engineer not an English Teacher.

A politician is a politician regardless of stripe. A political system is based on the short term while the economic system is a long term system. Having the political system drive the economic system for short term benefits in a bid for re-election leads to problems. The national dept and the expanding decifit is a huge problem regarless of which party is responsible. The US is technically bankrupt. Run the numbers, there is no way the US government can fund it’s obligations. They will either have to default or inflate. Defaulting is politically impossible so inflation by devauling the currency (printing money) is the more likely outcome. Inflation is most destructive to the middle class.

And there’s lots of simple humans.

The “Roadmap” may be nothing more than a cynical ploy by the rich to keep poor and middle class people from getting their hands on their fair share of rich people’s money.

Maybe not though. Maybe it’s just a recognition of the unpleasant fact that it takes capital to create jobs and enterprises and so you’ll unavoidably need to leave capital in the hands of capitalists so they can conduct business rather than have their wealth redistributed like seed corn to the poor and hungry.

That’s certainly what the Soviet Union discovered when it tried to create a workers’ paradise sans capitalists. Capitalists and vigorous capitalism are just necessary evils if the shelves are going to be full.

The “Roadmap” isn’t really being offered as a serious option at this point though as we’re well on our way down the road of discouraging capitalism, increasing taxes, piling on long-term debt, expanding government, mulling over protectionism and trade wars and proliferating government red tape as the magic bullets to solve our economic woes.

When they fail miserably to accomplish that goal though and average Americans are desperate for any alternative to Obama’s cultural revolution the Roadmap will be there and waiting as one of the alternatives.

Revelution?

Human nature is not that simple. Especially when multiplied by billions of us all over the world.