It is virtually impossible for the biggest consumer nation in the world, and the richest, to sell more than it buys for any length of time. Our trade deficit is partly a price of our own success as a nation.
High wages, stricter environmental regulations, and other factors chasing off US based manufacturing, are also partly responsible, but we would still be running a deficit no matter what.
Quatitative easing may help, as will China basically being forced to allow their currency to rise may help as well, as a weaker dollar will help exports, but I doubt we will see a trade surplus until well after we are supplanted as the world number one economy. Unless you think we are going to quit consuming?
A good example is energy consumption. We are three percent of the world population, yet we consume 25% of the world's energy, how can we possibly sustain these level?
According to the Economic Policy Institute, had those jobs been created in the USA, unemployment would go down by a full percentage point.
Instead it seems that US companies prefer to create jobs in protectionist countries like China and in Europe, where there is still demand to buy goods and services.
I know how we can fix this! Give those companies sitting on a trillion dollars another tax cut!
rinse...wash...repeat.
What are some of the key points? If you said international sales and access to talent, then you are correct. What does that mean? Read the Dupont paragraphs.
40-50% of revenue from S&P 500 companies comes from overseas. Wouldn't you want your talent to be close to your customer? Don't just think of manufacturing, but think of sales, marketing, administration, operations, etc. Think about talent for a second. Most of these companies are referring to talent in the areas of Science, Technology, Engineering and Math. What's the U.S. unemployment rate for someone with at least an undergraduate degree? What's the unemployment rate for someone with an undergraduate rate in STEM? I work for a Silicon Valley based company. There is not enough qualified talent here in the U.S.
I can go on and on and on if you want.
Foreign car companies alone hire thousands of American workers to assemble their products right here in the good old USA.
Just another one of those times where the old saying "figures don't lie, but liars figure" come to mind. Statistics like this can be quite misleading.
...I know Toyota has created quite a few jobs in the US.
But if our trade policy was a good deal for America, then why do we have a a trade deficit?
It is virtually impossible for the biggest consumer nation in the world, and the richest, to sell more than it buys for any length of time. Our trade deficit is partly a price of our own success as a nation.
High wages, stricter environmental regulations, and other factors chasing off US based manufacturing, are also partly responsible, but we would still be running a deficit no matter what.
Quatitative easing may help, as will China basically being forced to allow their currency to rise may help as well, as a weaker dollar will help exports, but I doubt we will see a trade surplus until well after we are supplanted as the world number one economy. Unless you think we are going to quit consuming?
A good example is energy consumption. We are three percent of the world population, yet we consume 25% of the world's energy, how can we possibly sustain these level?
As I understand it, the EU has an economy about the size as ours. I know they're having trouble at the moment with their financial sector, but regardless, do they have a trade deficit as horrible as we do?
Notice from that graph, that during the 80's our trade deficit skyrocketed, and then returned to near historical levels. Then in the early 90's it tanked. What policy caused this? Surely we were just as successful a nation in 1990 as we were in 1998.
"A good example is energy consumption. We are three percent of the world population, yet we consume 25% of the world's energy, how can we possibly sustain these level?"
That's a damn good question, especially if that energy is coming from a finite source.
for why companies do not really want to hire here.
Im sorry, just because you have been doing the same thing on a line for 30 years, does not automatically make you work 70K/year.
If we are thinking about an opportunity in a European country, the 1st question out of the box is, "are any of the employees that could possibly transition to our company as a result of any agreement union members?" If yes, stop. It's usually at the top left of a process flow diagram.
...is that American workers need to outcompete Asian laborers by accepting a lower wage than them. But they can't because of big bad gummit getting in the way with those pesky minimum wage laws. If only Americans could get paid 50 cents an hour, then we could turn our economy around!
The need to do 2 thngs...
1) Take more pride in their work and less in their benefit packages. The reason they lost dominance in the auto industry was not labor cost, but piss poor products vs. high quality imports.
2) Wages do not have to be EXACTLY the same. The last time I checked, goods made overseas still have to be shipped over here. Pretty damn expensive!! And don't forget tariffs. But the days of making 70K for turning a screw are gone. If you want to make more in the market, make yourself more valuable!!
1) Last I checked, it wasn't those workers making 70k (which isn't actually true) who were designing those piss poor products. Every time someone said, "maybe we should increase fuel economy standards", corporate auto companies pissed and moaned until the cows came home. Now we can't sell US made cars to China because they don't meet China's fuel economy standards.
2) No, wages do not have to be the same. Neither do tax rates on businesses. What we do need are tariffs. If it costs 10 cents of labor in China to make a pair of shoes, and it costs a dollar to make that same pair of shoes in the United States, then you charge a 90 cent tariff on shoes. Do that, and Detriot will no longer look like someone dropped a fucking bomb on it.
...of course that's not going to happen, will it? The love for a buck thumps love for country each and every time.
willy, trying to start a trade war, are you? Bump up the tariffs too much, and the Chinese will start charging the U.S. company $2.00 for the leather to make the $1.00 pair of shoes.
Talking about tariffs, want to know why American made autos don't sell well in the EU? Take a look at the tariffs, import duties, and VAT on U.S. made autos. Got a couple of friends in England that would dearly love to buy a new Corvette, but they don't want to pay $200,000+ for it to be delivered there.
What's wrong with a trade war? There already is a trade war going on right now, we've just decided to let everyone else (and the wealthy) win.
The EU is smart on this front. Keep the competition out, and their workers keep their jobs, and unemployment stays low. How else do you think a puny little island with no resources became The British Empire?
the party that starts one will watch consumer prices shoot through the roof!!!
They will be out of power so fast you would be stunned. They both know this, so it isn;t going to happen.
Time to start living on the "NOW" Willy. Fat Cat Labor jobs are going the way of the DoDo.
The real problem is wage gap and as long as it persists, management will move jobs out of the country to keep profits high and show stock gains. Bonuses on profit and market gains are the motivators. If they fail, they get the golden parachute.
Can't loose so who cares?
Cut taxes, don't regulate, and let businesses run over people at will.
UPS hires more (additional) people overseas? They are a service company. That’s where the additional packages exist that need to be delivered. I do not know the mix but more and more of these packages are not being delivered to the U.S.
Caterpillar builds 3 new factories in China. The article didn’t mention John Deere but they have built 5 factories in China. Most of the finished output of these factories is for delivery to Asian markets. Some components are made for import into the U.S to be used in final assembly here.
There are 2 main reasons why the factories are being built in China. It makes economic sense and China requires it. It is virtually impossible to import into China. You must produce there. Once you produce there you can also import. Dealing with government corruption is also high. Cheaper than paying the mostly above board lobbyists here?
When a U.S. company does better overseas especially during a recession in the U.S. it allows them a little extra edge back home to better weather the storm. Additional things need to be done here both in and out of government to increase incentives to keep employment here (lower corporate taxes and repairing our broken primary and secondary education system are 2 prime examples). Trade tariffs might seem tempting but we consume too much to win that battle.
One factor that always gets left out of these stories is that the global manufacturing population is shrinking. It has been for a long time. Eventually in the not to distant future it will be far lower than it is today. Broadly it’s due to increased productivity. More specifically it is increased automation. Increasingly machines make things not people. Even in Asia it makes far more sense to have a robots assemble goods than people, even if it costs more. The reason is quality. Manufacturing jobs today are in three main areas, functions where no robot yet exists, maintenance of the automation equipment and operations small enough that they cannot afford to automate.
For the record I have a huge trade deficit with my grocery store. Of course I am on better terms with the grocer than the U.S. is with China.
Also, about the U.S. being 3% of the population and consuming 25% of the energy. The U.S. share of the global GDP is also about 25%