China moving away from the dollar

[XLjedi]

Ya know, I don't really wish to get up on my capitalist soapbox but I'm a little tired of people characterizing US corporations with phrases like "greedy self-interests".

It's one thing to poke at the compensation packages of execs and mock the disparity between workforce and executive pay. It's another to just label US corps as greedy compared to foreign corporations.

Most corporations in the US see at least 40% of their earnings go directly to the US Gov't in the form of taxes. US corporations are among the highest taxed entities on the planet. If you want to entice US corporations to do more business inside the US then...

1) Stop making investment in every other country on the planet a tax haven to the US and...

2) Stop penalizing companies for repatriating foreign earned income. Right now if you only pay 25% income taxes in Canada the US would charge you the difference as you brought that money back into the US for reinvestment. The US tax code is keeping foreign earned income offshore.

[bookworm_020]

China can't afford to dump the U.S. Dollar and run, because if the U.S. economy takes a dive due to the Chinese ditching U.S. bonds, they will be cutting their own throats, as 50% of their trade surplus comes from the U.S. and no other market can absorb the goods and trade.

[Freiwillige]

That is another issue. The Federal tax sytem is set up to punish any manufacturer who makes things in America! Here is one fine example.

Maytag! For those of you who do not know Maytag as a company ceased to exsist around 2004. Maytag made everything in America and the government just taxed the hell out of them while other company's such as Whirlpool left and started making their products in Asia. The results? Whirlpool got tax breaks for shipping jobs over seas while Maytag got hammered. Maytag the name still exsists but they are owned by Whirlpool and as soon as they were bought they packed up the manufacturing plants and shipped them out!

We Americans are getting scammed. By our so called leaders, By foreighn interests, By corperations.

[Platapus]

Originally Posted by Freiwillige

Maytag! For those of you who do not know Maytag as a company ceased to exsist around 2004. Maytag made everything in America and the government just taxed the hell out of them while other company's such as Whirlpool left and started making their products in Asia. The results? Whirlpool got tax breaks for shipping jobs over seas while Maytag got hammered. Maytag the name still exsists but they are owned by Whirlpool and as soon as they were bought they packed up the manufacturing plants and shipped them out!

We Americans are getting scammed. By our so called leaders, By foreighn interests, By corperations.

No scamming, just Capitolism.

This was an excellent example of Capitalism at its best. And Capitalism is supposed to be what America is about, right?

Both companies (Whirlpool and Maytag) were in existence to make money. Corporations are not social programs, nor political entities. They are in business to make business pay off. They are motivated by profit, not social goodness.

Whirlpool, operating legally, changed their business model to maximize their profits by lowering their costs. Maytag chose not to.

Whirlpool chose to use the laws of business to their advantage. Maytag chose not to.

Whirlpool prospered and Maytag failed. This is exactly how it is supposed to work in a Capitalistic market.

What's to gripe about? It would be rather hypocritical to only like Capitalism when it works in your favour.

We may wring our hands about Corporations moving jobs overseas, but that is not a concern with Corporations (or their stockholders (us )). Profit is.

Clearly the market (us again) made their choices very clear. We preferred the cheaper Whirlpool over the Maytag stuff. Again, Capitalism working as intended.

Now, if we want corporations to be more concerned with what is good for the US and its citizens, we need to make the conscious decision to move away from Capitalism and adopt Nationalism. A step I don't think too many people really want to take.

Me? I like Capitalism. It works for me. I want to be able to buy the bestest for the leastest.

As a Capitalist, I would have a hard time paying more just because something is made in America (and probably lower quality to boot)

A Nationalist would have no problem with this.

This is what it comes down to -- Is the consumer willing to pay more for a domestic product when a cheaper product is available from overseas?

Factor in quality and the equation may get uglier for American Businesses. It took us about 50 years to kill the domestic product market. It will take many years to rebuild it....if we can. (Just wait until the African industrial revolution happens in about 20+ years)

It kinda sucks when Capitalism works against America, but that's Capitalism for you.

[baggygreen]

China in my opinion are becoming more and more of a creeping threat to the west.

Should they choose, at any point, to call in the US debt, what would happen? collapse. What if they choose to call in our debt? We couldn't pay it back.

What happens if they did that and then decided for example to make a move on Taiwan, or into Siberia, or even just to the Spratleys? We could do nothing about it, and suddenly the Chinese are self-sufficient.

I have no doubt that this day is coming. Before long, we can say goodbye to the era of English being the global language. How do we say hi in Mandarin, anyways?

[Freiwillige]

Originally Posted by Platapus

No scamming, just Capitolism.

This was an excellent example of Capitalism at its best. And Capitalism is supposed to be what America is about, right?

Both companies (Whirlpool and Maytag) were in existence to make money. Corporations are not social programs, nor political entities. They are in business to make business pay off. They are motivated by profit, not social goodness.

Whirlpool, operating legally, changed their business model to maximize their profits by lowering their costs. Maytag chose not to.

Whirlpool chose to use the laws of business to their advantage. Maytag chose not to.

Whirlpool prospered and Maytag failed. This is exactly how it is supposed to work in a Capitalistic market.

What's to gripe about? It would be rather hypocritical to only like Capitalism when it works in your favour.

We may wring our hands about Corporations moving jobs overseas, but that is not a concern with Corporations (or their stockholders (us )). Profit is.

Clearly the market (us again) made their choices very clear. We preferred the cheaper Whirlpool over the Maytag stuff. Again, Capitalism working as intended.

Now, if we want corporations to be more concerned with what is good for the US and its citizens, we need to make the conscious decision to move away from Capitalism and adopt Nationalism. A step I don't think too many people really want to take.

Me? I like Capitalism. It works for me. I want to be able to buy the bestest for the leastest.

As a Capitalist, I would have a hard time paying more just because something is made in America (and probably lower quality to boot)

A Nationalist would have no problem with this.

This is what it comes down to -- Is the consumer willing to pay more for a domestic product when a cheaper product is available from overseas?

Factor in quality and the equation may get uglier for American Businesses. It took us about 50 years to kill the domestic product market. It will take many years to rebuild it....if we can. (Just wait until the African industrial revolution happens in about 20+ years)

It kinda sucks when Capitalism works against America, but that's Capitalism for you.

You are entirely correct in all of your points above. Whirpool chose the better long term market strategy. But the question poses itself as to why it is cheaper to move overseas in the first place? Answer, Government laws and regulations. Why would our government tax heavily any US based manufacturing but give tax breaks to those who shift opperations overseas? Foreighn interests and lobby in washington! Should not our own Government protect the interests of the American worker?

Now im not talking about protectionism, just eqauling the playing field.
Tax breaks should be given to to companys who make products here. Not the other way around.

[Schroeder]

Still wouldn't change much since the worker in China get 0,50$ an hour (I don't know how much they get, but I think it is nothing you could make a living off in any western country). So tax alone can't compensate for the higher income in the western world. You would have to accept an income below the one of a Chinese to make the companies stay here. Good luck in trying.

The attitude to want everything as cheap as possible is one that will screw the western world big time soon because we all are just buying products that aren't made here anymore and therefore we will destroy our jobs and our nations....(says the guy with the Japanese car....).

[Tchocky]

Originally Posted by Freiwillige

But the question poses itself as to why it is cheaper to move overseas in the first place? Answer, Government laws and regulations. Why would our government tax heavily any US based manufacturing but give tax breaks to those who shift opperations overseas? Foreighn interests and lobby in washington!

Not really.

It's a lot cheaper to live in China than it is the US. Standards and costs of living are higher in the US. Therefore workers in the US will demand higher wages for the same work than a worker in China. It's a no-brainer for a corporation to lower it's cost base. It's the reason my job is being outsourced in the next few months.
Tax breaks to businesses play a role, but it's rather small when compared with the vast gap in wage rates.

I mean, you don't see many US manfacturing jobs being outsourced to France or Sweden, do you?

[August]

Environmental regulations (or lack thereof) have a lot to do with it too. It's a lot cheaper to produce things when you don't have to pay to safely dispose of the resulting toxic waste.

I think we should apply tariffs to goods that come from countries that have less restrictive green laws than ours.

[Tchocky]

Quite a lot of money made in shipping waste to less-developed countries.

Helps Western governments achieve their environmental targets, I guess.

Sigh

[Schroeder]

Originally Posted by August

I think we should apply tariffs to goods that come from countries that have less restrictive green laws than ours.

I think that would be a good idea.

But again, that is against the laws of capitalism.

[Platapus]

Originally Posted by Freiwillige

But the question poses itself as to why it is cheaper to move overseas in the first place? Answer, Government laws and regulations.

Cheap labour that will work long hours, assemble things according to the plan, with no unions that simply jack up the costs and add little to production?

[Christopher Snow]

Skybird: The new powers that be in Washington D.C. have simply renamed those toxic assets "Legacy assets" instead, so there's really nothing to worry about any more.

All your EU countries...and the Chinese too...should be lining up any minute now to start buying them in droves.


CS

[Skybird]

Originally Posted by Christopher Snow

Skybird: The new powers that be in Washington D.C. have simply renamed those toxic assets "Legacy assets" instead, so there's really nothing to worry about any more.

All your EU countries...and the Chinese too...should be lining up any minute now to start buying them in droves.


CS

Will not happen. It just was in the news yesterday that British and German state bonds lay like lead in the shelves. People do not buy them, ruining the governments' calculations to raise financial funding that way. Now, US bonds are even more toxic and worthless than British and German ones, which are diamonds in comparison. International markets since years are overflooded with Us bonds. Some said that US bonds already are the new currency that has taken over the role of the dollar. And the Chinese - are over and over saturated with American bonds. the Iraq war was indirectly financed by the Chinese that way, as was the trade deficit of the past and the budget deficit.

Maybe there should be a new unified two-national medal for both countries, kind of a congress medal with Mao's portrait in the heart of it.

[Christopher Snow]

No of course it won't happen. Not in the real-world.

But in the new administration, things are different: Renaming them is SUPPOSED to work! See? So we renamed them! It'll work!

No, sadly our fearless leader and his followers/underlings still don't see the problem--but it's ok, because we all know they are still the only hope for the entire world.*

Or....

...as any "rocker" knows...

......................................The "gain" knob on this amp goes to ELEVEN!!!!

----------------
[* No. Obama hasn't noticed yet that he wasn't elected President of the Globe...but eventually his teleprompter will let him in on the terrible secret].

Last: When WW3 happens, it might well be fought over who's portrait finally goes into the middle of that medal.


CS