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Login to post Forums » Off-topic discussion » Made in America,Why NOT?

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Jan. 28, 2012 10:45 a.m. mguar Reader

Another thread was started about the lack of made in America stuff.I"m more interested in the why

Most assume the reason for that is people in China/Mexico/India/ Bangladesh etc.. will work for 9 cents a day. or a whole lot less than rich Americans..

Well that's not the case and even if people were willing to work for 9 cents a day that's not the prime reason things are made elsewhere..

It's called the law of unintended consequences..

Inheritance tax has been on the books for decades. The goal of the tax was to prevent a small handful of ubber wealthy to become the new "Royalty" So powerful that wealth could be handed down from generation to generation, gaining and consolidating wealth by marrying other wealthy families. Sort of like ruling authority was handed down and consolidated amongst the nobility..

Well with the aide of clever lawyers and special tax rules (why else do you think the IRS has 77,000 pages of tax rules and you only get 40?) That's exactly what has happened..
No longer does one family try to build better buggy whips, flap-doodles or thing-a-ma-jigs then the other family Now it's all about wealth..
Instead following the Harvard business training companies via for your business by shopping the world..
They get a tax benefit by closing the American plant with it's obsolete equipment and instead of spending money building a new plant they simply buy the products made overseas..

That way the ubber wealthy get to keep all the money and hide the income behind plant closings.. Rather being forced into reinvesting it and a whole bunch more building a world competitive plant.

For example airbags.. A new world standard Airbag manufacturing plant would cost say a Billion dollars.. Do you know where most airbags are made? In Finland!

Just in case you didn't know Finland has much higher taxes than America does.. Labor costs are much higher and regulations are tougher..

Most Seatbelts are made in Germany,, most electrical is made in Japan. Shall I go on?

The reason for that is costs are contained. A profit mark up is assured. However best of all is risk management. If they fail to sell a lot of cars they aren't stuck there paying for a airbag plant.
Jan. 28, 2012 1:02 p.m. pres589 Dork

Mods: Move this to Off Topic.
Jan. 28, 2012 2:32 p.m. DrBoost SuperDork

I can't follow the post. Sorry. But I just got one more post.
Jan. 28, 2012 2:57 p.m. madmallard HalfDork

broken formatting....
Jan. 28, 2012 3:09 p.m. Joshua HalfDork

"The goal of the tax was to prevent a small handful of ubber wealthy to become the new "Royalty" So powerful that wealth could be handed down from generation to generation, gaining and consolidating wealth by marrying other wealthy families. Sort of like ruling authority was handed down and consolidated amongst the nobility.."

"The reason for that is costs are contained. A profit mark up is assured. However best of all is risk management. If they fail to sell a lot of cars they aren't stuck there paying for a airbag plant."

Here is the missing text. I'm not sure whether he is trying to say the estate is positive or negative... Either way he has a funny way of doing it.
Jan. 28, 2012 3:15 p.m. JoeyM SuperDork

madmallard wrote:

broken formatting....

Yeah....he needs to stop putting spaces/tabs/other-indents at the start of paragraphs. That mucks everything up.
Jan. 28, 2012 3:39 p.m. rotard HalfDork

The formatting on this discussion board sucks.

That said, good points.
Jan. 28, 2012 4:52 p.m. mguar Reader

Joshua wrote:

"The goal of the tax was to prevent a small handful of ubber wealthy to become the new "Royalty" So powerful that wealth could be handed down from generation to generation, gaining and consolidating wealth by marrying other wealthy families. Sort of like ruling authority was handed down and consolidated amongst the nobility.."

"The reason for that is costs are contained. A profit mark up is assured. However best of all is risk management. If they fail to sell a lot of cars they aren't stuck there paying for a airbag plant."

Here is the missing text. I'm not sure whether he is trying to say the estate is positive or negative... Either way he has a funny way of doing it.

Estate tax was designed to prevent America from simply making the mistakes the Europe we originated from being repeated here. Power Should never be inherited. It needs to be earned..

America was designed by our founding fathers to be a meritocracy not handed down no matter what. Like many things it's become a dividing issue between political parties. The truth is there needs to be some moderation between extremes.

A parent has a responsibility to train and educate the children so that as they step into possible positions of power they have the skill and judgement to do well.

Inherited wealth does not prepare children to accept those responsibilities. In fact it causes great stress on those children.. First there is the fear. Fear of loss due to others taking that wealth from them. Fear of failing to do as well as the parent did. Fear of mistakes in judgement causing embarrassment etc.
The result is reliance on outside experts. The best "experts" come from Harvard. What is taught at Harvard tends to focus on quarterly reports. Not multi-generational obligations. (Noblise Oblige)

To put a valid counter argument forward.. Providing for your children's future is what parents sacrifice for.. That not only helps society by providing stability in the job market, in access to commodities, and opportunities for others.

The problem is that both goals are desirable. Government needs to regulate wealth inheritance. Provide enough transference of wealth to allow members of the lucky sperm club a reward for their parents sacrifice yet not so much that power can be consolidated into the hands of the few..

It sounds so simple when laid out in this manner.. It is complicated by the process of paying for elections. As things stand today. the Ubber wealthy are able to make donations to elect politicians. (Often of both parties) They do so in donations large enough to ensure they get access to the politician..

With that access tax avoidance becomes the highest priority. (hence the 77,000 pages of the currant tax code while the average family is only provided with 40 or so pages). It's made worse by the tens of thousands of legal decisions that impact the tax return of the ubber wealthy.

Is it any wonder that ubber wealth has managed to eliminate the inheritance tax?
Jan. 28, 2012 5:05 p.m. Joshua HalfDork

In reply to mguar:

I wasn't arguing with you I was just saying that I wasn't sure which side of the issue you were on. Next time organize your thoughts a little bit more before going on a rant.

That being said I see what you're saying and have no problem with the estate tax. I do have a problem with the 5 million dollar exemption that has crept up in the last decade.
Jan. 28, 2012 5:48 p.m. gamby SuperDork

It's "uber". Uber.
Jan. 28, 2012 5:55 p.m. mguar Reader

In reply to Joshua: Thank you for taking the time to allow me to clarify my statements..

5 million exemption, after your attorney's minimize the tax obligation is very generous. When you add the allowable annual gifting (something like I believe $20,000 per each parent) so parents could put $40,000 per year into a living trust tax exempt per child.
That's an additional 3 million 400 thousand assuming the parents live to 85

with three children that means something like a 28 million estate can be passed down to the children without a cent of tax collected.. Those are simple things off the top of my head.. It would ignore depreciation and is likely calculated based on original purchase. Heck tens of thousands of legal decisions and 77,000+ plus pages of tax code must be considered before final valuation is determined.
Jan. 28, 2012 5:58 p.m. gamby SuperDork

mguar wrote:

something like a 28 million estate can be passed down to the children without a cent of tax collected..

...and the rich get richer.

Thus why "old money" is usually a stunning amount of old money.
Jan. 28, 2012 6:57 p.m. 914Driver SuperDork

Why not pontificate on the original thread?
Jan. 28, 2012 7:04 p.m. Timeormoney Reader

In the end, it's much cheaper to just make it overseas.
In a previous life I launched new electronics products. Even when we wanted to source US made subassemblies they were on average 10x the asian competition. Of course then they moved the final assembly plant, and I got a job outside US mfg. FYI non union plant, modern line design but you can't beat free labor
Jan. 28, 2012 7:10 p.m. JoeyM SuperDork

^^That is the point. Sure, you can make a product cheaper overseas, but if all the Americans are unemployed, they cannot afford to buy your product
Jan. 28, 2012 7:20 p.m. Curmudgeon SuperDork

Sure they can. They just need to sue the E36 M3 out of each other.
Jan. 29, 2012 9:42 a.m. mguar Reader

Timeormoney wrote:

In the end, it's much cheaper to just make it overseas.
In a previous life I launched new electronics products. Even when we wanted to source US made subassemblies they were on average 10x the asian competition. Of course then they moved the final assembly plant, and I got a job outside US mfg. FYI non union plant, modern line design but you can't beat free labor

False assumption. (that foreign labor is cheap enough to offset transportation costs)

It has been in the past especially with electronics that have low shipping costs per unit. However shipping costs have increased with the cost of oil.. and once the economy picks back up and demand puts pressure on shipping will go through the roof..

However much of the furniture sold in America has been foreign made lately. We've sold our hardwood to places like China and Europe and had it come back as finished furniture.. (Many times in the same container the wood was shipped over in).
What has happened is Foreign furniture plants have invested in automation and robotics while we're still using machinery from the 30-40's loading onto hand carts and pushing the pieces from machine to machine. It may be romantic but it's not efficient

With modern electronics the human element is almost no longer part of production.. Pieces and parts are loaded onto backing plates not by hand but by automation..
Jan. 29, 2012 9:54 a.m. mad_machine SuperDork

JoeyM wrote:

^^That is the point. Sure, you can make a product cheaper overseas, but if all the Americans are unemployed, they cannot afford to buy your product

exactly.. what is the point of cheaper if people don't have the money to buy it. The american people have been sold a bill of goods about cheaper cheaper cheaper...
Jan. 29, 2012 10:01 a.m. fast_eddie_72 SuperDork

mguar wrote:

Most assume the reason for that is people in China/Mexico/India/ Bangladesh etc.. will work for 9 cents a day. or a whole lot less than rich Americans..

Well that's not the case and even if people were willing to work for 9 cents a day that's not the prime reason things are made elsewhere..

Oh, well, if you say so. It's hard to argue with the compelling case you make. Especially since you don't make it.

China has a huge work force that will work for low wages. And, sorry, but that is a very enormous part of why they make so much stuff.

Just a note- electronics? Made in Japan? Maybe in the 1980s. I recently bought a TV and looked for one made in Japan. Couldn't find one. Electronics made in Japan were typically of very high quality. Audio collectors look for the stuff that was made in Japan.
Jan. 29, 2012 10:09 a.m. ThePhranc HalfDork

So things are made in other countries not because of market mechanics but because of some Illuminati type conspiracy to keep the rich rich and the poor poor?
Jan. 29, 2012 10:13 a.m. ThePhranc HalfDork

fast_eddie_72 wrote:

mguar wrote:

Most assume the reason for that is people in China/Mexico/India/ Bangladesh etc.. will work for 9 cents a day. or a whole lot less than rich Americans..

Well that's not the case and even if people were willing to work for 9 cents a day that's not the prime reason things are made elsewhere..

Oh, well, if you say so. It's hard to argue with the compelling case you make. Especially since you don't make it.

China has a huge work force that will work for low wages. And, sorry, but that is a very enormous part of why they make so much stuff.

China also has a revolving work force. Every year they lose about 1/2 of their factory workers. Turn over is very high but always fresh faces to fill spots. Wages are kept low because so few stick around to advance. Right now factories in China are seeing that once a year culling. Supply dips slightly as new workers are being brought in and trained.

This can only last so long. At some point you will see a union pop up demanding the fair wage and safety. Like the American unions were once needed for.
Jan. 29, 2012 10:14 a.m. fast_eddie_72 SuperDork

mguar wrote:

Timeormoney wrote:

In the end, it's much cheaper to just make it overseas.
In a previous life I launched new electronics products. Even when we wanted to source US made subassemblies they were on average 10x the asian competition. Of course then they moved the final assembly plant, and I got a job outside US mfg. FYI non union plant, modern line design but you can't beat free labor

False assumption. (that foreign labor is cheap enough to offset transportation costs)

It has been in the past especially with electronics that have low shipping costs per unit. However shipping costs have increased with the cost of oil.. and once the economy picks back up and demand puts pressure on shipping will go through the roof..

I'm out of this thread after this - the guy just told you he did it. If you have some actual experience with the matter I'm sure everyone would like to hear about it. Otherwise, you kind of sound like your posting opinion as fact. Dude, I'm tellin' you. If it was cheaper to build iPads in the US than to build them in China and import them back, Apple would do it. They aren't going out of their way to get work in the hands of the Chinese. They're looking at the bottom line. You'll need to back your ideas up with something - anything - if you expect anyone to take your word over every major manufacturer in the world.
Jan. 29, 2012 10:23 a.m. mad_machine SuperDork

Eddie is right.. partially. Labor is a big reason.. wages is cheap and turnover is fast in the employment field. The other part is the lack of safety and emissions laws... they can build stuff there cheap because they do not have to give a rats ass what it does to the people and the environment.

People talk about bringing jobs back to the US.. but until they start talking with their wallets.. it is all hot air
Jan. 29, 2012 10:25 a.m. mguar Reader

fast_eddie_72 wrote:

mguar wrote:

Most assume the reason for that is people in China/Mexico/India/ Bangladesh etc.. will work for 9 cents a day. or a whole lot less than rich Americans..

Well that's not the case and even if people were willing to work for 9 cents a day that's not the prime reason things are made elsewhere..

Oh, well, if you say so. It's hard to argue with the compelling case you make. Especially since you don't make it.

China has a huge work force that will work for low wages. And, sorry, but that is a very enormous part of why they make so much stuff.

Just a note- electronics? Made in Japan? Maybe in the 1980s. I recently bought a TV and looked for one made in Japan. Couldn't find one. Electronics made in Japan were typically of very high quality. Audio collectors look for the stuff that was made in Japan.

I actually study China.. less than 2 decades ago the average Chinese person aspired to someplace to live, a bicycle, and a radio. Then they aspired to own a TV next a home and finally a car.. (see the trend yet) Incidently China is now #2 behind USA in the number of new cars purchased

Wages in China have risen dramatically. How much? Well every 3-5 years wages have doubled. Ever since the ping-pong diplomacy of the Richard Nixon era.. So much so that China is now exporting jobs to North Korea, Philippines, Vietnam and other low wage countries.

If America had the same rate of increase the average American would now be making 1.3 million dollars a year..
Jan. 29, 2012 10:37 a.m. mguar Reader

In reply to mad_machine:

You have bought the story sold to you. The reason jobs go offshore is because someone has figured out how to do things cheaper.. In the case of many things it's because of state of the art investment in the manufacturing plant..

Look at Airbags or seatbelts.. look at furniture.. That big plant in China that builds so much furniture has less that 13 people working there.. Everything and I do mean everything is automated..

There is a local furniture plant that is a major producer nearby and it has 300+ cars parked in the lot 24/7/360 Yet they don't ship out 1/10th the amount of furniture the Chinese do..
The remarkable thing? Chinese are buying much of their wood locally as well.

As far as safety and pollution laws? Making airbags is a dirty dangerous process. So why in Finland? Their labor costs are higher than ours rules are tougher.. Most seatbelt assembly's are made in Germany.. Think their rules are easier Labor cheaper? Taxes lower?

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