China's Boom About To Go Bust

[Oracle of Delphi]

Get ready for those Walmart prices to rise!

Video: http://www.msnbc.msn.com/id/21134540/vp/26296147#26296147

[Intrepidation]

Time to bring jobs back to America instead of relying on cheap labor and products from China.

Of course, that won't happen, the guy in the Article stated he was looking to India and Vietnam for cheap labor. It never ends.

Edited August 20, 2008 by Dodgefan

[thegriffon]

Even if he wanted to manufacture in the US he probably couldn't get finance to do so. Vietnam, India, yes, the US or Europe, no.

[daves87rs]

Should be interesting, that is for sure.....

[vonVeezelsnider]

Driving around in a U-Body van too I see based on the video... Jeez with that kind of info my dad may stop hating commies.

[trinacriabob]

I can't exactly remember all the interactions from my principles and intermediate macroeconomics classes when it comes to balance of trade and balance of payments.

This should prop us up a little bit or throw us a "left hook." I forgot. I know that last week, with every uptick of the Dow and drop in oil, the dollar strengthened against the Euro, the CDN and the British pound.

Sometimes, it gets pretty complex and can make one's head spin.

[Drew Dowdell]

Globalization is reversible.

[A Horse With No Name]

Globalization is reversible.

We need to reverse it and get a real creative class in this country to start making things we actually want to buy and own.

Chris

[Drew Dowdell]

Economics should be mandatory starting in 6th grade.

[Newbiewar]

Globalization is reversible.

its called elminating free trade... or limiting to countries that play be the same rules...

it appears china has screwed themselves with a labor law, manditory wages... seems still a bit low, but a lower bidder will always do nicely

[CSpec]

Oh dear--hopefully prices here won't increase.

[capriceman]

Time to bring jobs back to America instead of relying on cheap labor and products from China.

Problem!

We are to lazy to take those jobs. The AVERAGE American doesn't want to work in a factory. They rather sit in a comfortable office.

GM can NOT fill jobs on the Lines in Detroit right now. No one wants to work on the line. you could walk up and get hired like in the 1920's at GM right now. but your pay is $14.50 your Cap is $24 and NO health care just 401k. Its a decent job but you cant support a family on that or live happily so no one wants them.

[daves87rs]

Problem!

We are to lazy to take those jobs. The AVERAGE American doesn't want to work in a factory. They rather sit in a comfortable office.

GM can NOT fill jobs on the Lines in Detroit right now. No one wants to work on the line. you could walk up and get hired like in the 1920's at GM right now. but your pay is $14.50 your Cap is $24 and NO health care just 401k. Its a decent job but you cant support a family on that or live happily so no one wants them.

I'm not so sure about that Cap ( thought I could agree with the lazy part)

D-Ham will be cutting even more people back, and even if there are a few openings, they will end up coming from the truck plants. Ditto for Livonia Trans.

Right now both plants do have some extra Temps...but I don't expect them to stick around. It looks like most of the workers from these plants will stick around for a while.....

I sometimes find it interesting that people don't realize just how few employees GM will have....

[daves87rs]

Economics should be mandatory starting in 6th grade.

[PurdueGuy]

Problem!

We are to lazy to take those jobs. The AVERAGE American doesn't want to work in a factory. They rather sit in a comfortable office.

Many of those Chinese jobs wouldn't look the same in the US. A room like the video showed with a dozen basic machine tools and some boxes on the floor, with 3 dozen people running around, would be replaced by 3 high-tech machines and 2 people checking a computer screen occasionally to make sure it was working right.

Ah yes, I remember now what my lean manufacturing prof said. He was asked what the factory of the future would look like. He replied "it would be staffed by a man and a dog." He was then asked, "well, what does the man do?" "He feeds the dog." "What does the dog do?" "The dog keeps the man from touching anything."

[Oracle of Delphi]

Many of those Chinese jobs wouldn't look the same in the US. A room like the video showed with a dozen basic machine tools and some boxes on the floor, with 3 dozen people running around, would be replaced by 3 high-tech machines and 2 people checking a computer screen occasionally to make sure it was working right.

Ah yes, I remember now what my lean manufacturing prof said. He was asked what the factory of the future would look like. He replied "it would be staffed by a man and a dog." He was then asked, "well, what does the man do?" "He feeds the dog." "What does the dog do?" "The dog keeps the man from touching anything."

Or himself!

[Drew Dowdell]

Or himself!

only if he's a Republican within view of a young congressional page.

[Oracle of Delphi]

only if he's a Republican within view of a young congressional page.

Ha, well I am not Republican! Since I vote in two countries (I have dual citizenship), in Germany I am a member of the European People's Party or in German it's called Europäische Volkspartei. In the US I am more left leaning.

Edited August 21, 2008 by Pontiac Custom-S

[thegriffon]

We need to reverse it and get a real creative class in this country to start making things we actually want to buy and own.

Chris

You need to reverse the trend to market specialization in the minds of investors and retailers. Re-establishing the US as a diversified export hub would contribute to globalization, not reverse it.

The major problem cause by globalization itself is a breakdown in the ability of central banks to control inflation by damping local demand. Inflation is now caused by rises in global commodity prices, driven by global demand, which can't be controlled by raising interest rates in a local economy. Australia is a good example. an unrelenting series of interest rate increases over many years has had zero, zip, nada effect on inflation, but has succeeded in crushing the local economy. Yet every time, they tried it again, and again, and again. Even now that they are risking recession, they aren't prepared to lower rates because of inflation. Hello, if you do something and it doesn't work—stop doing it!!!! Goddam, they even made the situation worse by driving up the cost of housing in higher rents and mortgage payments (oh, yeah, house prices are collapsing, finally, because no-one can borrow the ridiculous sums they used to, and inf act can't afford to borrow anything). Governments instead should be focusing on diversifying supply, expanding the local production base, expanding competition importing from a wider range of sources (not just two or three retailers and wholesalers all importing from China).

Effective globalization should allow traders to source goods from the lowest cost market, keeping inflation under control. Instead they have locked themselves into a mindset that "China is cheapest", when in fact it may not be. A wise trader ensures he has a diversified supplier base—maintaining local production centers so he can react to changes in exchange rates, new labor agreements, environmental concerns, market changes etc. (automakers are one of the few groups to understand this). Instead they have burned their bridges and thrown out their safety net. Now they're screwed. They should be rebuilding local capacity, but they have by and large eliminated their local suppliers. I can buy simple, low-cost manufactured goods—kitchen utensils, clothing etc., manufactured in the USA, ship it across the Pacific in inefficient small, single quantities for a lower cost than comparable (well actually inferior) Chinese-made goods imported in bulk into the Australian market. Theoretically we should be flooded with cheap, high-quality US-made goods. There are practically none, except for a core of consumer expendables manufactured by so-called "evil" global multinationals—toothpaste, shampoo, pasta sauce, rice (rice, for goodness sakes!), coffee, chocolate, razors, canned fruit (say thankyou to Coca-Cola, Sara-Lee, P&G, Mars etc.); even disposable packaging for consumer goods is imported from the US, filled with local produce and sold at a lower cost than empty containers made in China or India etc.. It should not be economical to ship low-cost consumer goods all they way across the Pacific if there is a market large enough to support local production. I remember 20 years ago that it was cheaper to manufacturer shoes in the US rather than ship them from sweatshops in SE Asia all the way across the Pacific only to arrive after they have gone out of style. If anything that has only been magnified by higher fuel costs.