Saturday, April 2, 2016

Policies That Encourage Not Offshoring Jobs

To preserve the hypocrisy discussion. I pulled this comment here.
"With respect to trade, I think our policy should be to encourage domestic production, and to take a hard look at policies and practices that become barriers to domestic production. But I would never tell a consumer what to buy on that basis. 
More specifically, I think our policy should be to encourage America to make better cars, but not to tell consumers they can't or shouldn't buy a car that's better. 
Our economy is far better served by encouraging manufacturers to build better cars, than it is by policies that delude consumers into thinking inferior cars are better than they are." Hiram 
"I think the real focus should be to address policies that make the off shoring of jobs attractive to business." Hiram
"I can't wait to see the "policy to encourage American Automakers to make better cars". While demanding they pay higher wages, higher taxes, higher regulatory oversight costs, that they keep jobs in America, etc, etc, etc. 
I think the car companies are highly motivated to improve their product quality and margins to pay for R&D, that is why they are manufacturing where their competitors do..." G2A
What policies do you all recommend? 

32 comments:

John said...

Now it sounds like everyone agrees that the US consumer should be free and encouraged to buy the "best" product or service. (ie best features, best looking, best quality, best performance, best price, etc) And that this should be based on their personal criteria and wants, not on what is "best" for our American workers.

This is a very capitalistic concept, so I just want to ensure you are all in agreement. Thoughts?

John said...

These pieces pretty well describe the policies that encourage companies to manufacture in a country. And it explains how good it is for us consumers, and how bad it is for US mfg personnel.

CNN US Mexico Jobs

Forbes Mexico the Car Capitol

The good news is I am helping to prepare a quote for another system to be installed in another of these new factories.

Anonymous said...

I have always why it's been American policy that business is responsible for the pension and medical costs of it's employees. Those are burdens our global competitors don't have.

--Hiram

John said...

Wiki Healthcare in MX

"Financing:

Out of pocket payments by patients represent over half of financing for the Mexican health care system, according to the WHO. Government expenditures accounts for 44 percent of health spending.

The public schemes, including the Mexican Institute for Social Security and the Institute of Social Security for Government Employees, are financed through general taxes, and payment from the employer and employee, determined by salary. The Seguro Popular also is funded by taxes, contributions from the state and federal government and payments by the families, as a percentage of income. Participants in Seguro Popular pay nothing at the time of delivery of the service.

How Mexico compares:

As with most other middle-income countries, Mexico does not have universal access to coverage for its population. About half of Mexico’s population does not have health insurance under the current silloed system, reports Francesca Colombo, a senior health policy analyst at OECD."

John said...

Hiram,
"Those are burdens our global competitors don't have"

In the countries with socialized medicine and pensions, who do you think is paying for that "burden" if not the businesses / employees?

Do you envision that in some way the government is growing money on trees? Or maybe all those public employees work for free?

From my link above. in the Netherlands...

"Financing: Government expenditure on health in the Nethlands made up 80 percent of health spending there in 2006, according to the World Health Organization. The required standard insurance is financed by a mixture of income-related contributions and flat premiums. The individual contribution is set at 6.5 percent of income, which is contributed by employers if the patient is enrolled through their job or by the patient if they are self-employed or unemployed.

The insured also pay a flat-rate premium to their insurer for a policy. Everyone with the same policy pays the same premium, and lower-income residents receive a healthcare allowance from the government to help make payments."

jerrye92002 said...

Still confusing having health insurance with getting health CARE, I see. Certainly a "premium support" system for purchasing health insurance chosen by people in the free market is a good solution and the opposite of Obamacare/Medicare/Medicaid. The secret to free markets is they must be free to operate. Every decision coerced by government, regardless of how well-intentioned, distorts that free market and, in the US, contributes mightily to the cost of doing business that disadvantages our businesses in a global marketplace.

"These costs are not insignificant. As the Competitive Enterprise Institute documents in the latest edition of its annual report "Ten Thousand Commandments," the so-called hidden tax imposed by the regulatory state has reached $1.88 trillion." --U.S. News & World Report

And then there are the taxes and labor costs.

Laurie said...

I don't know much about this topic, but Hillary has some ideas:

Hillary Clinton’s Strategy to “Make it in America”

John said...

Okay I read the whole thing. It looks like she wants to try to charge American companies more for making good business decisions. And then she wants to use that money for government managed business and citizen training. On top of this she wants to have tough trade deals and enforcement.

From the Forbes article:
"Today Mexico has free trade agreements with 44 countries, making it an ideal export base for automakers from Europe, China, Japan and, yes, America. The U.S.? We have agreements with only 20 countries, and Beltway protectionists have helped ensure we haven’t enacted a new one since 2012. Negotiations on the ambitious 12-nation Trans-Pacific Partnership remain pathetically slow."

From CNN article:
"Cheaper labor, lower environmental standards and low export taxes -- or tariffs -- make Mexico an attractive place to move operations, not to mention that it's next door to America."

John said...

Laurie,
I am not saying that Mexico has it all figured out, but the reality is that American Consumers will "buy the "best" product or service. (ie best features, best looking, best quality, best performance, best price, etc)"

If Hillary ties an anchor around the necks of American companies that their foreign competition does not have... It is just a matter of time before our US manufacturing companies die out.

Anonymous said...

Still confusing having health insurance with getting health CARE,

Here is how I understand it. Health care is what doctors provide. Health insurance is how doctors get paid. Two entirely different things.

--Hiram

Anonymous said...

n the countries with socialized medicine and pensions, who do you think is paying for that "burden" if not the businesses / employees?

Not business. Not our competitors. Somebody has to pay for health care, and pensions, it's just a question of whom.

--Hiram

Anonymous said...

"Still confusing having health insurance with getting health CARE, I see. Certainly a "premium support" system for purchasing health insurance chosen by people in the free market is a good solution and the opposite of Obamacare/Medicare/Medicaid. The secret to free markets is they must be free to operate."

Obamacare is about 95% of what is being asked for here. It provides support for premiums in the form of subsidies, and consumers have a somewhat bewildering set of plans to choose from. The fact that Obamacare is so close to what Republicans want is the reason why, despite voting more than 50 times to repeal Obamacare, they have never once, approved an alternative. They are simply unable to provide an alternative that doesn't reenact Obamacare in all it's essentials.

I am a regular reader of the Wall Street Journal. Just about every week there is an op ed piece identifying some sort of problem with Obamacare. The interesting thing to me, the problems they identify are just about always problems associated with the market approach to health care, Republicans so fervently advocate. In a rational universe, those problems could very often be corrected by a two page bill passed by acclamation. After all, as Nancy Pelosi once said, you never really know what's in a bill until you pass it, so ways to improve just about every bill can be found through experience. But those changes never happen, because bill critics aren't interested in solving the problems they raise. As with the Supreme Court, Republicans aren't interested in the substance of problems, just the party affiliation of those seek to solve them. That's why they are so laser focused on issues like hypocrisy.

--Hiram

jerrye92002 said...

"Here is how I understand it. Health care is what doctors provide. Health insurance is how doctors get paid. Two entirely different things."

Exactly. When government steps in to give people health insurance, they do not offer any plans or even incentives to more health care providers to enter the business. And by disconnecting what consumers pay for health care from the care they receive, the result is that providers receive LESS for the service they provide. They either leave the profession, or the quality goes down to match the payments. In other words, the quality and availability of health care is decreased because of government interference in the marketplace, just like with any other good or service.

John said...

"Somebody has to pay for health care, and pensions, it's just a question of whom."

You are correct... However we know who is not paying for it... The government only has money to spend that they take from workers and/or companies. So ultimately all societal bills are paid for by companies or sole proprietorships.

Anonymous said...

So ultimately all societal bills are paid for by companies or sole proprietorships.

Does that mean I don't have to file my taxes this year?

It's great to talk about reducing government spending. But we still need the stuff government spends money on.

--Hiram

jerrye92002 said...

"It's great to talk about reducing government spending. But we still need the stuff government spends money on."

Maybe, maybe not. But one thing is certain. It is a whole lot better if you buy what you want and need and can afford, rather than some idiot in Washington buying it for you (or more likely, for somebody else). How often can you say "Oh, it's just what I wanted" to your government?

Sean said...

"So ultimately all societal bills are paid for by companies or sole proprietorships."

This is a chicken or the egg discussion. Do corporations exist without a government to authorize them? Do corporations exist without customers to sell to?

Sean said...

OK, John, for the moment let's say that I agree that American businesses in fact face "higher wages, higher taxes, higher regulatory oversight costs" (which I don't entirely agree with, but I'll set that aside), what would you do?

Do you favor cutting wages for Americans? Do you favor cutting taxes, and if so, how do you cut spending to prevent the deficit from increasing? What regulations can we do without?

Anonymous said...

It is a whole lot better if you buy what you want and need and can afford, rather than some idiot in Washington buying it for you (or more likely,

I want to buy an interstate highway. Are they on sale somewhere?

--Hiram

Anonymous said...

It is a whole lot better if you buy what you want and need and can afford, rather than some idiot in Washington buying it for you (or more likely,

We do know if Donald Trump has his way, nuclear weapons will be pretty much available on street corners subject to second amendment protections. After all, atomic bombs don't kill people, it's the people who drop them who do.

--Hiram

John said...

Sean,
Thankfully I stated it as "paid for by companies or sole proprietorships", not corporations. And yes business and trade existed long before governments, though some government can definitely help facilitate business, trade, transportation, law, order, etc. Just as too much government can definitely stifle business, trade, transportation, law, order, etc.

I have been thinking for awhile that some citizens want government to keep everyone safe and secure no matter what the cost to our society.

Therefore if someone loses their house that they built in a flood plain or next to the ocean, these people will demand society help pay...

Therefore if one company like Enron misbehaves, these people will demand that we ensure it never happens again and society will pay. (ie Sarbanes Oxley)

Therefore if someone chooses to not study or work, or becomes addicted to something, or has more children than they can afford to care for, society must pay.

Interesting CFR Link I especially like Figure 3 on pg 9.

Now I am not sure what exactly can be removed, but I am pretty sure a lot could. Things seem to have been okay in the 50's and since then the US laws have at least quadrupled...

Sean said...

"I especially like Figure 3 on pg 9."

Why? Who cares about the number of pages? That tells you literally nothing about the nature of the regulations.

What about this, from page 6:

"Although there is no data directly comparing regulatory and paperwork burdens across countries, available evidence suggests U.S. companies are not more burdened than their competitors abroad. The U.S. economy has long been among the least regulated in the world. The United States is currently the top-ranked large, rich country in the World Bank’s Ease of Doing Business Index, and has been for every year but one since the index was first compiled in 2001. The index is a composite of
a host of objective variables, including how long it takes to start a business, availability of credit, procedures for registering property, and the enforcement of contracts—which, taken together, are a reasonable starting point for comparing regulatory burden. Organization for Economic Cooperation and Development (OECD) indicators broadly corroborate the index; the United States scores better than any other G7 country by having less complex regulatory procedures, fewer administrative burdens,and lower entrepreneurship barriers"

Sean said...

"Things seem to have been okay in the 50's"

Really? Jim Crow OK with you? Rampant discrimination against women in the workplace? No Medicare?

"Leave It To Beaver" was not a documentary, you know.

Sean said...

"I especially like Figure 3 on pg 9."

I like the upper-middle of page 6. Injects a little rationality into some of the claims that get made here frequently.

John said...

Sean,
I forgot to answer your other question. I don't prefer cutting wages in America, however I certainly don't want government to arbitrarily set a much higher minimum wage. This will just increase the cost of doing business in America and pressure more jobs to move elsewhere.

What I really would prefer is that if everyone who believes US wages should be higher and Unions should be stronger would limit their purchases to high domestic content product and services when available. And preferably they would support deporting all illegal immigrants who are taking the jobs from people who are here legally.

John said...

Details regarding Pg 6

Apparently we only score really high "on getting credit", "resolving bankruptcies" and "enforcing contracts". Not sure if that is good or bad...

John said...

Okay how about 1972, after the civil rights act, etc, etc, etc... The page 9 graph shows we have tripled the number of pages of regulation since then...

Sean said...

"Apparently we only score really high "on getting credit", "resolving bankruptcies" and "enforcing contracts". Not sure if that is good or bad..."

Those scores are based on NYC and LA only, yet we still rank very strongly compared to the rest of the world. And most of the U.S. has a less stringent regulatory environment than those two places.

Sean said...

"The page 9 graph shows we have tripled the number of pages of regulation since then..."

Pages of regulation is a useless metric. Tells you nothing about the content of such regulations.

John said...

Here is some more info:

US News Regs Need to be Reined In
Maine Wire: To Help Businesses
AAF Regulatory Costs

John said...

The good news is that my oldest Daughter is getting her education in Accounting / Finance... It may not add much value for the customer, but Lord knows the government is going to keep demanding more of them.

I work for an Engineering / Manufacturing / Consulting firm and you would not believe the number of Human Resources, Finance, Accounting, Lawyers, Import-Export Compliance and Safety personnel we need to have to keep up with the regulations and reporting. On top of that these folks need someone to report the information to them, so Project Mgrs like me spend a significant amount of time dotting i's and crossing t's.

Remember my words... "Value for the Customer" This is what your customer is willing to pay for. All other costs are simply burden and hopefully are adding value in some other way. (ie to society, to employees, to management, to investors, etc)

If another country / company can reduce the burden, that allows companies to lower their prices and increase sales. Or they can hold the market price and increase their margins... Either way the extra cash can be used for more Research and Development, or Production Improvements... Both of which can add "Value for the Customers". It is like the virtuous cycle...

jerrye92002 said...

"I want to buy an interstate highway. Are they on sale somewhere?"

No, but I've got a drug-addled welfare mom here you can have. Sorry, but I think we're both being a bit facetious. Interstate commerce is specifically the purview of the federal government, and state and county highways, and city streets, all get done by those "proper" jurisdictions, presumably with coordination across them where needed. But I also observe that government doesn't actually DO the work, but puts out for competitive bid to private business. Yes, there's a bit of bureaucracy and red tape and over-regulation involved that could be cut, but that is peanuts compared to the VAST expenditures on things the government should NOT be doing at all, or do not do well.