skywriter wrote:Perhaps you have forgotten than the only reasons we are dealing with China is because the cost of goods is much cheaper than we can produce them.
This is wrong in so many ways but living in the US, you'll never see them. Not until it's too late, anyhow. And the US has a serious hubris problem. I mean a serious problem.
Trying to keep this down under 100 pages but ...
There is no rational reason that products from China have to be cheaper - or in fact, proof that they are cheaper than American-made goods. This stuff about "American labor is too expensive" is total crap. I haven't looked in a couple years but as of, say, 2010 American and German labor were at the top of the scale in dollars of product produced per dollar spent on wages. China was down at 83rd. This means, in short, that American labor is cheaper than Chinese labor by an order of magnitude. Or several orders of magnitude, if you want to get technical.
As the owner of a small company in the US for twenty-eight years, I can tell you what killed me. First, rent. Rent quadrupled over a period of ten years. Housing ... over the same period of time, an okay (crummy cheapo, actually) house where I lived went from $65,000 to $450,000 to $500,000 to $650,000. Minimum. I could not believe that anyone would pay $695,000 for that interesting but crappy rundown shack that we bought in 1972 for $59,000 but it's a matter of record. Something is wrong here. A crummy condo for $250,000 ... and oh yes, insurance and medical and California sales taxes went from 4% to 9% and state income tax occurred and the people at the Board of Equalization (resale taxes) went out of their way to lie, cheat and steal. I had the local old lady bureaucrat so pissed she got in her car and came to my place to browbeat me. I won anyway
The essence of this part of the equation is that Kapitalism moved money from the hands of the many to the hands of the few; there was too much money in yuppy hands and the latte-sipping scum of the earth took a liking to where I lived. I got squished. My case was extreme but this same pattern has happened all over the US. Prices for real property in the US are ridiculous. They bear no connection to reality. They are like shares in Faceblob, a giant scam with the end goal of transferring all the wealth into a few hands. The successful end goal, I might say.
Another way in which you are out of date : once upon a time the US had manufacturing expertise. We had a lot of companies which were a hundred years old, which didn't make much money but paid their employees decent wages and provided a skilled workforce and decent lives. Pride in workmanship. Not skilled as in "I took three semesters of this in college", skilled as in they actually knew what they were doing. Same thing in computing - look at the companies in the sevenites and compare to google. Ha ha ha. Google, a fucking ad agency. These companies were the backbone of the middle class.
Unfortunately, starting in the late seventies, these companies became the target for what was then called corporate raiders. You take a hundred year old funky company that employs 2,500 people and runs by eighteenth-century methods - things like, they pay their bills on time instead of screwing their vendors out of every single god-damned motherfucking nickel they can (make that money work for us !), they treat their employees like human beings, they actually put money aside for retirement funds instead of "investing" in the stock market and hoping that shell game will come up 35 red, they had some sense of civic consciousness even when they aren't getting a tax break for their supposed philanthropy, you know, old-fashioned stuff. And oh yeah, they happen to own six blocks of downtown Cincinnati that they bought in 1880 for thirty-seven bucks.
So Kirk Kerkorian, Carl Icahn, Bill Agee, and several hundred others saw the backbone of the middle class as ripe fruit for their picking. Market cap low, assets high. And pick it they did. Over the next ten or fifteen years these raiders / venture capitalists dismantled the middle class. Gone. It ain't coming back. You guys can sell each other life insurance and upsize the fries now forever because the Banes and Kerkorians and Icahns and Romneys have dismantled your country. It's all in their bank accounts now. Unless you slit their throats, it's not coming back.
Now, a couple of things happened simultaneously and fed off each other : China realized a long time ago that they had to industrialize or forever be someone else's slaves. So they did what "economists" in the US sneered at : they built infrastructure. Large-scale infrastructure. Rail, ports, ships, steel, all that old-time rust-belt crap that the US sneers at. Ha ha ha, look at that dumb-fuck Commie government, pissing their money away on big state-owned projects ! Communism never works, they can never compete with us laissez-faire free market kapitalists ! Just look, we've got Alan Greenspan, the Wizard of Finance ! We've got CDO's with 800% roi, those dumbos are putting their money into steel mills and shipyards, ha ha ha ! They can be our houseboys while we roll in cash !
Funny. Between the phony dotcom shit and then the phony housing boom and the phony Wall Street boom, over the next twenty years the US pissed away all its savings and knowledge and skills. Unless you think that losing hundreds of billions of dollars on fraudulent derivatives is a valuable skill, anyhow. Pretty incredible to me, pissed away everything meaningful that the US had in a mere thirty years for what ? Horseshit. Pure stupid fantasy-driven horseshit. "We're going to get rich on financial services !" yeah right. Finance (as played by the kapitalists) is the most worthless function in any economy ever. All it does, every single time, is destroy the society. Every single god-damned time. Every single g-d mofo time. Will you morons ever get that through your brainless Down's Syndrome neanderthal skulls ?
Back to the concurrent historical waves ... by this time China had developed a pretty good (useless rust-belt) infrastructure. Also by this time the majority of old-time laidback marginally profitable companies that made up the heart of the American economy had either been destroyed or were in the hands of kapitalists who knew nothing about the businesses (an MBA can operate any business ! Yeah, just like I can drive an ocean liner because I once took a class in it, with a real simulator !) but they sure as hell knew how to operate a spreadsheet. Do a joint venture, China gives a five year no-tax deal, Foxconn operates the factories, Apple suddenly has no responsibilities except to collect the profits. Yay ! Aren't we smart !
Uh, no. Apple now has nothing. No plants, no people, no manufacturing expertise, no nothing. The day Foxconn decides to retail those products ion the US for twenty percent under Apple prices is two days before all those loyal Appple fans skedaddle. Hey, it's a free market !
This happened everywhere. Most American "manufacturers" are not manufacturers anymore. They are suits who don't know shit except how to collect the big money for themselves. I could list the proofs but promised to get this in under a hundred pages.
The fact that the middle class economic system was being dismantled was covered up by the concurrent fraudulent housing boom. But now that the housing fraud has collapsed and there are no more real jobs for middle america, youse guys got some deep shit to wade through. Worse still, you all seem to be living in that fantasyland. "More stimulus !" Stimulate what ? Put up 100,000 McDonald's ? You already tore down everything of value in the country. Hey ho, way to go Ohio. "More tax breaks for the rich !" Yeah, that'll work. Just like it did before.
Specifically the general unregulated environment causes enormous environmental impact,
That's basically horse crap and has been for over a decade. Ja, there's lots of places where people cheat but I lived in the US, too. Love Canal ? Thalidomide ? China should have done better but it's not what you read in the Times, either. I could show you photos of all the pollution control stuff a friend had to put in a new factory down south - a sweater factory. Soap and water they had to deal with but still, they had to put it in, a lot of it. This was ten years ago. And the wingers in the US are hell-bent for leather on dismantling any environmental safeguards you have anyhow. Fracking, anyone ? Dismantle CARB ? List the real ingredients on food ? hahahahaha.
As for the imagined behavior of your canonical American businessman in China, what do you expect from a purchasing agent anyway? They're not the brightest bulbs in the bunch wherever they come from.
Just one example - I have dozens. Head of Abbot Laboratories - not a p/a, the head guy. Wife is fucking everything that slithers. She posts on all the foreigner bulletin boards using an assumed name but ... Anyway, she's snotty and stuck up and too ugly even for me to give it a shot. Everything goes along fine (more or less, depending on whether you are her husband or not I guess) until the American "engineer" at Caterpillar she is screwing gets caught by his wife. Wife is Japanese, not stupid so instead of making a family fuss she gets revenge. She takes the phone photos and starts sending them unsolicited to people she knows will react badly. Mayhem. Sweaty dishevelled unflattering sex photos (why do people do that, by the way ? It doesn't seem smart to me) all over the internet - wife of the head of Abbot. China is the very home of gossip and the human flesh search. Do you think every single company Abbot was dealing with wasn't aware of this ? He was the talk of the town for six months and probably didn't even know it. Probably had a green place mat, green chopsticks, green napkins at every dinner he went to, ha ha This is the Head Guy for Abbot Laboratories in all of China. Pharmaceuticals, one of the areas where the US claims to have some expertise, some technology, something we can actually sell. Ha. Chinese people are more than a little bit concerned with appearances. All the Chinese players will see the name Abbot and think "Green Hat Pharmaceuticals" for a long long time.
From top to bottom, Sky. Top to bottom.
If you need more stories I got 'em. Plenty
About p/a's not being so bright, you're absolutely correct. So why do the brilliant American companies refuse to hire any people who actually have a clue ? Maybe because they don't want to hear the truth ? Plausible deniability ?
Here's another little clue for y'all : the "they need our technology" schtick ? No, they don't . China currently prefers to buy from Germany. In 9 cases out of 10 they realize that Germany actually has technoloogy. In general, German companies aren't run by a bunch of finance-type scumbags. They have a clue.
In the few cases that the US still does have something to offer (GE aircraft engines, for example) they simply hold out the carrot and the greed-ridden American executives come running in their private jets. "You want our technology ? Sure ! Sure ! Give us three good-looking quarters and you can have anything you want !" German companies are not that stupid.
Besides, why isnt the supplier speaking English anyway, they're the supplier! Oh, yes I forgot, that would cost money to train these Chinese people.
Why the fuck should they ? This is their country. You came here for the cheap prices. The language is your problem, not theirs.
Can't have that, a peasant saved is a peasant earned!
AMERICAN companies are the useless pieces of shit that absolutely refuse to pay even a nickel for quality control. I've been there. I've told people "52% of these parts are out of tolerance" and the answer ? Every single time ? "Well, we need them now to fill this order so ..."
Sky, sorry, but this is a truth ; American companies are shit. S-H-I-T Every single piece of the poor-quality Chinese goods problem can be traced directly back to the American company that refused to do incoming inspection, refused to do quality control, refused to listen to anything except "Wow, we're going to get these parts for twenty cents each !" I have sat there and listened to these stupid sons of bitches rationalize away the wrong materials in a product because they wanted the "low cost" and weren't going to listen to anything that countered their moronic fucking fantasy. People have been killed that I know of because of this (if the victims hired a translator they could have got ten times as much in the law suit) but did they care ? Hell no. Ten bucks. Kapitalism.
Dickwads. Worthless total fucking loser dickwads - and they are running your country.
I'm just waiting for Brazil to finally to come to the table and undercut China. Dont forget there's always Africa someday. By that time we'll be drowning in pollution from low cost manufacturing anyway, so who cares.
Here's the funniest part : y'all keep telling yourselves this. But first, no other "low cost" countries have the infrastructure. All those wasted big projects by the stupid commie state-owned sector actually have a purpose.
Second, all the equipment is here now. Small secret - it can't be moved. Cannot. C-A-N N-O-T Once it comes in, it never goes out. It's part of the registered capital. Can't be moved. Period.
So if y'all want to walk away and leave all these factories to the joint venture partners and middle management that you trained (gotta localize the management ! gotta localize the management !) then be China's guest. I doubt that they'll even thank you, though. And with the cost of all these factories being free, thank you so much Seagate Mattell GM Dell HP Younameit, youse gonna have a hard time competing on price.
btw, where will you be getting hard drives for the next three years while Seagate tries to open factories in the jungle ? or maybe Mexico would be better. Lots of people would love to be beheaded with their corpse left on the highway. I'd be rushing right down there.
Oh yeah. If you think that retailing is harder than making, you've got a big surprise coming. A great big fat one.
the US has fucked itself. Hubris, greed, and stupidity. Will be interesting to watch ......