Sunday Links
1. Bakken oil boom spreads to Montana as demand increases for commercial property in Billings.
3. Millions of patients are skipping their primary care doctors, and instead choosing faster, cheaper retail clinics.
4. Stuart Anderson: Analysis of new data obtained from U.S. Citizenship and Immigration Services reveals the agency has dramatically increased denials of L-1 and H-1B petitions over the past four years, harming the competitiveness of U.S. employers and encouraging companies to keep more jobs and resources outside the United States.
5. MIT offers free independent study course in Microeconomics, with video lectures, multiple-choice quizzes, problem sets and exams.
5. MIT offers free independent study course in Microeconomics, with video lectures, multiple-choice quizzes, problem sets and exams.
47 Comments:
4. Stuart Anderson: Analysis of new data obtained from U.S. Citizenship and Immigration Services reveals the agency has dramatically increased denials of L-1 and H-1B petitions over the past four years, harming the competitiveness of U.S. employers and encouraging companies to keep more jobs and resources outside the United States.
Keep the denials going, for every single guest worker program. Not everything can be kept offshore, and not everything can be moved offshore. In addition, there's always a political cost for offshoring as well.
Employers are not entitled to ideal conditions at the expense of those who can't just simply jump ship to another country.
seth-
your comment has little grounding in reality.
if you need a semiconductor engineer and none are available locally, you can't just grab some guy out of the mailroom and train him up.
if you cannot find or import such engineers, then you have to move the WHOLE CENTER to where you can.
thus, lots more jobs go overseas. the mailroom guy, the janitor, the finance guy, the office manager all lose their jobs because folks like you don't want to allow in a skilled professional.
i spent 15 years in silicon valley. there's a reason that there are so many indians and asians there: the US does not produce engineers in sufficient quantity.
if you will not let companies import engineers, then they have to export design centers or wind up uncompetitive and be driven out of business.
it's your own misguided immigration policy that drives offshoring of highly paid jobs.
Because of depletion, we need to find the equivalent of four Saudi Arabias by 2030 just to maintain current demand.
"Proven oil reserves in Saudi Arabia...estimated to be 267 billion barrels...produced 10.3 million barrels per day."
Repsol's YPF touts massive Argentine oil find, shares soar
Feb 8, 2012
"Vaca Muerta shale prospect holds 22.8 billion barrels of oil and gas resources.
If the exploration in the whole Vaca Muerta area is successful, and intense development work starts immediately, in 10 years Argentina's current oil and gas production capacity could be doubled," YPF said in a statement.
Argentina pumped around 760,000 barrels per day (bpd) of oil and 4 billion cubic feet of gas per day in 2010.
It cautioned that developing the entire shale play could cost $25 billion per year.
Peak Oil: The End of the Oil Age
Oil production in 33 out of 48 out countries has now peaked, including Kuwait, Russia and Mexico.
Global oil production is now also approaching an all time peak and can potentially end our Industrial Civilization.
The most distinguished and prominent geologists, oil industry experts, energy analysts and organizations all agree that big trouble is brewing.
The world is not running out of oil itself, but rather its ability to produce high-quality cheap and economically extractable oil on demand.
Oil is now being consumed four times faster than it is being discovered, and the situation is becoming critical.
"One of nature's biggest forces is exponential growth" - Albert Einstein
if you need a semiconductor engineer and none are available locally, you can't just grab some guy out of the mailroom and train him up.
...
I spent 15 years in silicon valley. there's a reason that there are so many indians and asians there: the US does not produce engineers in sufficient quantity.
While you ignore the tons of US citizens that are otherwise qualified for such work. Why would law firms have to create false job ads or otherwise find ways to avoid hiring US citizens?
thus, lots more jobs go overseas. the mailroom guy, the janitor, the finance guy, the office manager all lose their jobs because folks like you don't want to allow in a skilled professional.
The finance and office manager are not likely to go away, they're the ones that pushed for things to go overseas.
Worst case, they'll jump ship to somewhere else and repeat.
if you will not let companies import engineers, then they have to export design centers or wind up uncompetitive and be driven out of business.
I doubt that there would be a 100% departure, much less a 25% one. Political pressure would start to take over if businesses started heading for the exits.
The few that do leave would most certainly make room for businesses that don't consider US citizens as liabilities.
With your attitude, the US would never have been on the Moon. There would just have been a ton of talk of how our people are "faulty", instead of addressing such faults with employment.
it's your own misguided immigration policy that drives offshoring of highly paid jobs.
No, I'm just asking for removal of waste & fraud-generating regulation. Here's a question - is there a guest worker program that you like that would decimate the rampant fraud/waste/citizen contempt that I dont like?
"With your attitude, the US would never have been on the Moon. There would just have been a ton of talk of how our people are "faulty", instead of addressing such faults with employment."
And if the US had never gone to the moon, we would have spent tens of billions of dollars on something besides Tang.
"While you ignore the tons of US citizens that are otherwise qualified for such work. Why would law firms have to create false job ads or otherwise find ways to avoid hiring US citizens?"
what us citizens qualified for such work? you are flat out making stuff up. there is a serious shortage of engineers, especially for QA and of nurses etc. meanwhile, there is a glut of these people in india.
the us thrived and prospered from immigrants. something like 40% of silicon valley companies are FOUNDED by immigrants.
it's been a massive benefit to us.
and what is your fetish about hiring US workers?
by your logic, california should demand that intel hire only californians and not hire immigrants from idaho.
hell, sunnvale should demand that they only hire sunnyvale residents and not anyone from san francisco or san jose.
i doubt you would champion such policies. so why at this one arbitrary border does it make sense?
something ruinous at the local level suddenly makes sense at the national level?
hiring people is just like trade in goods. creating artificial restrictions creates a deadweight loss and make the society as a whole worse off.
many companies don't offshore, they just delay or abandon projects for which they cannot find people, making them less competitive and eliminating potential growth and innovation.
the sad thing seth is you think you are trying to help, but in fact you are the problem.
"The finance and office manager are not likely to go away, they're the ones that pushed for things to go overseas.
Worst case, they'll jump ship to somewhere else and repeat."
that's just dead wrong. you need an office manager where the office is. finance guys dealing with expenses need to be where the expenses are incurred, and now they need to know a new set of laws, so you likely hire someone native.
your lack of basic business knowledge is astounding seth.
then, you contradict all your other notions about jobs and make it sound like jumping ship and getting a new one is so easy. i thought you said jobs were hard to get. now suddenly, they are easy?
"I doubt that there would be a 100% departure, much less a 25% one. Political pressure would start to take over if businesses started heading for the exits."
oh, i see, so the government should respond to people not liking it's foolish limits by ramming more draconian limits into place? nice fascist dogma seth.
force everyone to do what seth thinks is right.
"The few that do leave would most certainly make room for businesses that don't consider US citizens as liabilities."
and this is just drivel. they don't. not being able to fill a job is a liability. firms want to hire the best candidate they can (based on cost/benefit). who are you to tell them who that is?
sethollini?
"With your attitude, the US would never have been on the Moon. There would just have been a ton of talk of how our people are "faulty", instead of addressing such faults with employment."
and this is such a bizarre no sequitor i don't even know what to say. what on earth does that have to do with anything?
oh, BTW, most of the fathers of the US nuclear age and rocketry programs? jewish immigrants. if only we had kept them out and let the germans get the bomb first...
"No, I'm just asking for removal of waste & fraud-generating regulation. Here's a question - is there a guest worker program that you like that would decimate the rampant fraud/waste/citizen contempt that I dont like?"
easy. open the borders. anyone with a job offer is in. they can work, own property, start businesses, etc. they don't get entitlements and they pay taxes.
i hesitate to even ask what you mean by "citizen contempt". i'm going to guess it's more nonsense about being owed a job at high wages despite lacking skills. nothings going to fix that apart from you growing up seth.
regarding argentina, that's a nice find/expansion of reserves, but that whole field is what, 1% of proven reserves worldwide?
that seems a bit modest to claim "what peak oil"?
also: that press release says "potential resources". that's a LONG way from "proven reserves". that's like the difference between "market size" and "revenues".
So I clicked on that MIT OpenCourseWare link for the first time, as I always knew that any of these university attempts at online weren't going to be any good, since most university classes are a complete waste of time. I clicked around until I found this video and watched the first 7 minutes then skipped to the last 3 minutes to see his conclusion. Why this professor is clueless enough to think government redistribution is a topic for a micro-economics class, who knows, as that is a classic macro topic. As for the material itself, he does recount how redistribution will usually shrink the overall economic pie, but then leaves it open at the end as a question of values, whether redistribution and the resulting "deadweight loss" is a good idea or not, given that you maybe don't overdo it. I get the impression that he does a fair amount of math in between, even though any chalkboard math could only ever be an extremely simplistic model of what's going on. We don't need people getting more "educated" on tripe like this, which is precisely why all the universities are about to be demolished by online learning.
"Employers are not entitled to ideal conditions at the expense of those who can't just simply jump ship to another country"...
Geez! Who saw this kind of comment coming from sethstorm?!?!
LMAO!
so, an analogy you may understand occurred to me seth.
try this:
like most americans, i'll bet you have a home entertainment system. you have a TV, a dvd/blu ray player, maybe a surround receiver, probably a stereo, speakers, etc.
also, like most americans, i'll bet you do not have any american made components in that system.
why not? do you hate american workers and products?
they make all those things and what's more make the best ones in the world, hands down.
but you choose to pay less and buy foreign ones. why is that?
i didn't. literally every single component in my system is american made from the speakers to the cables, the blu ray to the projector and screen. every amp, the preamp, the video processor, every single thing, even the universal remote is made by control 4 right here in salt lake city.
it's astoundingly high quality. it's so much better than anything japanese of chinese you could buy as to be staggering.
it's also MUCH more expensive, and i mean much. think 10-20X the price.
but that's the price/performance point that makes me happy.
you could choose it, but you didn't. you chose NOT to buy american products and instead save money and get lesser quality.
then you have the gall to demand that american companies do with their hiring what you will not do with your own money?
that's rank hypocrisy.
you can spend your money on foreigners because you like the cost/benefit, but they cannot?
what makes you so special?
that's just entitled egotism.
until you are ready to put your money where your mouth is and pay up for american quality, you really ought to knock off demanding that others do so.
What "peak oil"?
You mean the 6 year rolling peak.
I don't know what your definition of peak oil is, but that chart shows peak net energy as light sweet barrels are replaced by heavy sour barrels.
Re: Jon Gruber
Ahhh yes, the sniveling little neo-commie that helped plan RomneyCare...
I notice that we are still hyping shale plays. Well, a friend of mine sent me the following forecast from the IEA. Take a look at the growth in US production. Even the usually optimistic IEA is suggesting that the US increase in production in 2013 will trail the increase 2012 and 2011. Given the fact that we are looking at a planned $100 billion plus investment in horizontal drilling the supply picture does not look very good, particularly if demand picks up.
Time to smell the roses boys and girls. Reality is what it is and the sooner you figure out what that is the sooner you can take advantage of the opportunities. Leave the fantasy to the naive optimists and those that don't have math skills above the grade five level.
morganovich, I think you're mostly right, but maybe you're taking it a bit too far. The reason Seth wouldn't care if he bought from Idaho instead of California is that there's no chance that Idaho will attack California, unlike some foreign countries he could buy from. I think such 19th-century mercantilist logic is woefully outdated, but it is what they hide behind. Also, while you were no doubt exaggerating to make your point, it's not really fair to say that you'd have to pay 10-20X the same price to buy American-made. The Chinese cut of an iPod is tiny, move that back here and it probably wouldn't push the total cost up by more than 10-20%. I don't see any reason to force consumers to pay that extra amount, but let's be fair in our numbers. I think you're dead on with most of what you wrote, but I just thought you overstepped a bit in these two situations.
Vangel, if you know when shale will come crashing down, please make a prediction. Simply saying that it will come down with no date is not much of a call. I realize that the market is complex and you may not be able to call the exact year, so then give the range you're betting on.
Seth, you keep railing against foreign workers in a way that seems personal. Why is this issue so important to you? Did you lose your tech job to an offshored worker and never get another similar job? I wonder why this issue is so personal to you.
"With your attitude, the US would never have been on the Moon. There would just have been a ton of talk of how our people are "faulty", instead of addressing such faults with employment."
[…]
oh, BTW, most of the fathers of the US nuclear age and rocketry programs? jewish immigrants. if only we had kept them out and let the germans get the bomb first…
A lot of the people in the NASA rocket programs were Germans who worked on the V weapons program in Pennemünde and brought to the US under Operation Paperclip.
But I understand half the main scientists on the Manhattan Project were Jewish.
re: foreign workers
of course, an obvious question is why this country that does produce enough engineers (STEM) even when we have high unemployment rates.
you'd think that some of the STEM education paths would lead directly to a guaranteed job and people would flock to their curricula.
why do we have a shortage when we have high unemployment?
The reason Seth wouldn't care if he bought from Idaho instead of California is that there's no chance that Idaho will attack California, unlike some foreign countries he could buy from.
Really? I would say that more American civilians have been harmed by a personal attack from someone from Idaho or California than from the PRC. And trade reduces the danger of attack, not enhances it.
The Chinese cut of an iPod is tiny, move that back here and it probably wouldn't push the total cost up by more than 10-20%.
It is not the cost that is the problem but the ability to change on the fly and produce under changing conditions. The US does not assemble iPods because its regulatory environment makes it impossible to change models as frequently and to make rapid improvements to the production process.
Vangel, if you know when shale will come crashing down, please make a prediction. Simply saying that it will come down with no date is not much of a call. I realize that the market is complex and you may not be able to call the exact year, so then give the range you're betting on.
I would say that as soon as we see a top in the bond market the financing for companies that are losing money on marginal shale production will end. While bubbles can last a lot longer than what we are likely to expect that could still be two years away. But if I were to guess it would be my bet that some time between May and the election could create a problem for the Fed's QE to infinity programs. Keep an eye on the price of gold and silver. As long as the CBs can put a lid on it by using the futures markets the party will go on. Once gold goes over $2,200 the end will be in sight and kicking the can down the road will be much harder to accomplish.
sprewell-
"it's not really fair to say that you'd have to pay 10-20X the same price to buy American-made"
you do not HAVE to pay that. my point was that i did and did so happily.
you can get a sony blu ray player for $129. to buy US made oppo, you're going to pay more like $399-1200 depending on model. so maybe that's 3-10X. but her, an extra $250 is not much to uphold one's principles, right?
but the point is that seth could have bought american, but chose not to for his own selfish reasons, yet demands that others be forced not to do as he does.
perhaps a better example would be clothing.
one could, if they wished, buy all US clothes. companies like american apparel etc manufacture here.
it would likely cost a bit more and you'd have far less selection, but one could certainly do it.
i'll bet seth has not done that either.
to my mind, that makes him a hypocrite. i notice he lacks a response. he'll slink off, but pop up on another post spouting the same things despite being unable to respond to this simple criticism.
your 10-20% notions seem questionable to me. you'd need all manner of things besides labor. rent, insurance, more expensive power, osha, taxes, and on and on. i'm not sure it's quite that simple.
i was using real world examples because they were close at hand. i happen to know exactly what it costs to buy us AV equipment because i redid my theater recently.
10-20X is honestly an understatement. look up wolf projectors and krell preamps and you will start to see what i mean. but sure, it could have been done cheaper (and american).
that said, doing it at maybe 5 times the price of imported components is really about as low as you could possibly go. there are just no $99 US blu ray players or $200 US receivers. we do not make low end consumer stuff here, just the high margin high end.
but that makes it all the more hypocritical of seth not to do so.
if you can by US clothes for only 20% more, well, then that seems like far less excuse not to do so.
seth seems to have no issue forcing us employers to pay more for americans or to hire people that do not have the qualifications they desire, yet would not do so for his own pants.
that seems like a stunning double standard.
"Take a look at the growth in US production. Even the usually optimistic IEA..."...
The EIA (as the logo in the graphic shows) is usually optimistic?!?!
Funny but I always thought of them as being behind the curve by three or four years vangeIV, but optimistic?...
Just out of curiosity I'm wondering it you had seen the following over on the Oil Drum site?
The US Energy Information Administration's Faulty Peak Oil Analysis
Maybe there's something to your use of the word optimistic...
morganovich states:
"literally every single component in my system is american made from the speakers to the cables, the blu ray to the projector and screen. every amp, the preamp, the video processor, every single thing, even the universal remote is made by control 4 right here in salt lake city."
morgan, what is the name of the company(ies) that made the components in your system? I want to check them out.
morgan, nevermind, I see "control 4". Thanks.
buddy-
c4 is just the remote. sorry if that was unclear.
wolf projector, elite screen, bel canto amps, krell pre amp, wolf video scaler, oppo blu ray, cal audio cd transport, theta DAC, control 4 remote, transparent cables and interconnects, vanderstein speakers, JL subwoofers.
all are US companies and i think they all manufacture here as well.
i do have a roku as well. it's a US company, but i doubt they manufacture here.
i'm unbelievably happy with it.
The EIA (as the logo in the graphic shows) is usually optimistic?!?!
Yes it is. The EIA and CERA were pressuring the IEA to report depletion rates of 3.5% for years while everyone in the business understood that the rate was actually much larger. The real number turned out to be significantly higher.
Funny but I always thought of them as being behind the curve by three or four years vangeIV, but optimistic?...
They are behind the curve by three or four years. I suspect that by 2017 they will talk about how it makes no sense to spend more energy getting shale gas out of the ground than the energy that gas contains.
Just out of curiosity I'm wondering it you had seen the following over on the Oil Drum site?
The US Energy Information Administration's Faulty Peak Oil Analysis
No but if you read the comment, "The EIA's results are the most optimistic published, and appear to drive the unwillingness of the EIA and the US Department of Energy to take the issue of peak oil seriously," you will realise that the author prefers my interpretation of reality to that of the EIA.
People like Mark need to stop passing on hype and to start thinking on their own. The data is out there and not all that difficult to sift through for anyone who can think clearly and knows a little bit of math.
Vangel, being attacked by some random person from Idaho is completely different and has no bearing whatsoever on this discussion. The mercantilist fear is that Idaho or China grows so strong from their exports that their govts buy more arms and then attack California. While both are extremely unlikely, you have to admit that the Idaho govt doing so is far more unlikely. ;) As for trade reducing the danger, of course, but the mercantilists don't buy that. You say that regulatory requirements in the US are the real problem, but I doubt that's much of a factor if you situate in the right state, ie right-to-work states like TN or AL where cars are still being made. Alright, your prediction for the end of the shale boom is either this year or up to two years later if the bond market allows: let's see what happens.
morganovich, your claims of 3-10X for US-made tech still sound too high. That may be true for non-tech goods, but the cost of a gadget like the iPod is dominated by the cut for US software and European components, not the Chinese assembling that Seth and his ilk always complain about. My point is that even if that small cut, which covers rent and everything else you list in China, doubles or quintuples, you only raise the total cost by 10-30%. Perhaps AV equipment and other tech goods are just a bad example, because tech costs are dominated by US workers anyway. A better example might be non-tech manufactured goods that are sold at Wal-Mart or elsewhere, like your clothing example. And yes, I doubt Seth would be willing to pay more to employ US labor when it's coming out of his own pocket.
v-
oh, so now we should start subjecting the data from trusted government sources to this unproven idea called "math"?
that's crazy talk. who's gonna believe such outlandish and experimental notions?
trust math over government? wow, you "math" guys will believe anything.
why would government lie to us?
(note to those who do not know me, that was extreme sarcasm)
sprewell-
"morganovich, your claims of 3-10X for US-made tech still sound too high."
they aren't. price it yourself. i'm not talking hypotheticals, i'm talking about real product availability.
sure, you could make an ipad in the US for maybe 30 or 50% more or whatever the number is, but i'm not talking about what could happen, i'm talking about what HAS happened.
it's easy to buy a solid imported blu ray player for $99.
find a current model US made one for less than 4X that. i doubt you can. find me a US made surround sound setup with amps, speakers and a sub-woofer for $299. hell, find me one for $2000.
we will not make a system here for $360 that looks like the $299 one because who would buy it?
we don't make the low end stuff here because there is no margin in it and we cannot compete, so we go high end, where we can.
admittedly, this is a bit of an apples to oranges comparison, but is it really so different from say, QA engineering or load testing?
it gets outsourced to india because it's 1/10th the price and is relatively low skill, just like most people buy a sony tv for 1/30th the cost of a wolf projector and a screen because they are happy with that quality.
i think we're talking past each other a bit here.
you are looking at what it might cost to make a product in the US as opposed to china and i am looking at what it costs to buy the products that are actually made here now.
i also think you are really underestimating the cost difference.
a t shirt from american apparel is $18-20. old navy? $8-10. wal mart, god knows how low.
that's not 20%, it's 100-150%.
"You say that regulatory requirements in the US are the real problem, but I doubt that's much of a factor if you situate in the right state, ie right-to-work states like TN or AL where cars are still being made"
this is not true at all. permitting, environmental impact assessments, insurance, rent, build costs and time etc are all terrible in the US compared to overseas.
try getting permission to build a facility that uses hazardous chemicals (like mercury etc). you'll quickly find it's VERY expensive and time consuming.
it may be worth it for cars where the models are specific to the US and the cost to ship them is very high, but for somehting high value and low weight (like an ipad) it's much cheaper to locate somewhere easier/cheaper and ship.
Vangel, being attacked by some random person from Idaho is completely different and has no bearing whatsoever on this discussion. The mercantilist fear is that Idaho or China grows so strong from their exports that their govts buy more arms and then attack California. While both are extremely unlikely, you have to admit that the Idaho govt doing so is far more unlikely. ;)
I disagree. Yes, mercantilists are idiots who do not understand economics. But if you look at the situation I would say that the Idaho government is a greater danger to the average American than the Chinese government. After all, the Chinese government has no authority over Americans and does not like the idea of trying to harm customers for products made by Chinese companies. On the other hand, the Idaho government has more control over American citizens within its borders and has many means at its disposal to harm them. Your War on Drugs will kill many more Americans this year than the Chinese government.
As for trade reducing the danger, of course, but the mercantilists don't buy that.
Ir you are saying that mercantilists are economically illiterate I agree.
You say that regulatory requirements in the US are the real problem, but I doubt that's much of a factor if you situate in the right state, ie right-to-work states like TN or AL where cars are still being made.
That is not exactly true. There are many barriers to productivity that still get in the way. Not only do you not have the number of engineers that would be needed to get anyone competent enough to run an assembly line properly to stay is much harder in the US. In China the contracts are much more definitive and can restrict movements for a specified period unless the employee pays a fine that is a big chunk of his annual salary. (That is what one of my pals had to do to leave his job.) And when rapid changes are needed it is harder to get the people together even if all of the appropriate overtime payments are made.
Alright, your prediction for the end of the shale boom is either this year or up to two years later if the bond market allows: let's see what happens.
Keep an eye on what happens in Q2. By June the cracks should begin to show in several sectors. If you look at the revenues you will see that many of the tech companies came up short. If you look at gasoline demand you see that there was a decline. If you look at shipping rates you find them quite weak. Add the trouble in Greece, the muni problems in the US, the banking issue in China, the death of Japan, and trouble in Africa, Central Asia, and the Middle East and things are not looking very good for the optimists who need everything to work out just so that we can kick the can down the road for another year. While not impossible it is very unlikely that the CBs will be able to avoid another crisis for long.
that's crazy talk. who's gonna believe such outlandish and experimental notions?
trust math over government? wow, you "math" guys will believe anything.
The critics certainly attack such an approach by calling the people who like to think for themselves cynical.
morgan, thanks for the info on: "wolf projector, elite screen, bel canto amps, krell pre amp, wolf video scaler, oppo blu ray, cal audio cd transport, theta DAC, control 4 remote, transparent cables and interconnects, vanderstein speakers, JL subwoofers."
I think my current entertainment system has only one U.S. made subset; the speakers that I made myself of U.S. components.
"The critics certainly attack such an approach by calling the people who like to think for themselves cynical."
or they appeal to authority and claim the the BLS or the IEA are made up of blah-da-ditty-blah credentialed professionals and who are you to think you know more than they do?
i find that response particularly hilarious.
well, i'm the guy beating the market dodging the blow ups while these "professionals" keep driving off cliffs like tunsis the driving cat.
well intentioned scientists and particularly economists are wrong all the time, but the ones at government sponsored agencies are anything but well intentioned. subject to all manner of political pressure, they play the tune the piper who appointed them calls.
what us citizens qualified for such work? you are flat out making stuff up. there is a serious shortage of engineers, especially for QA and of nurses etc. meanwhile, there is a glut of these people in india.
Then this video does not exist, and the issue does not exist. These are not immigrants in any sense of the word - for they do not assimilate with the US nor become US citizens.
The only glut that exists is one of foreign governments that are willing to bend over backwards for businesses, but break the backs of those that are only workers.
I don't need a passport to cross states. Or go through a constituentship exam if I wish to participate in the destination state's government. This is to be taken only as a justification of not going below the national level, nothing more or less.
As for your speech about US-built audio systems(and their components especially), I'd wager that the margins for such things are quite high.
Seth, you keep railing against foreign workers in a way that seems personal. Why is this issue so important to you? Did you lose your tech job to an offshored worker and never get another similar job? I wonder why this issue is so personal to you.
It is more than just personal if you see an assault on regular US citizens by business to enact offshoring - whether it is to hide it or link its non-disclosure to severance agreements. Such contempt expressed against US citizens is something I've never been in favor of seeing implemented.
If it was so good, it would be something people would practice openly and without fear of disclosure to the affected parties.
And yes, I doubt Seth would be willing to pay more to employ US labor when it's coming out of his own pocket.
Did so for some Altama boots a while back. They lasted longer than expected, and were cheaper than the imported equivalent.
morganovich,
"they aren't. price it yourself. i'm not talking hypotheticals, i'm talking about real product availability.
sure, you could make an ipad in the US for maybe 30 or 50% more or whatever the number is, but i'm not talking about what could happen, i'm talking about what HAS happened."
That's precisely the problem with your previous argument. As you say, "we will not make a system here for $360 that looks like the $299 one because who would buy it?" As you yourself admit, the reason the prices for the US-made tech are so high is because they're not going to bother getting killed in the mass-market segment, so the few US firms all aim for the luxury end of the market. But that's not empirical evidence that one can't make the mass-market system for $360 in the US. My only point is the minor one that that's the number that you should be using for comparison, to be fair to Seth, not the luxury prices you were using. That's why I said non-tech manufactured goods might be a better comparison, which I suppose your T-shirt prices would qualify as. As for the regulatory requirements to put an iPad-assembling factory in the US, I'm skeptical of your claim that it would be that much more difficult in the US, but I don't know enough about that sector to gainsay your claim.
Vangel, you're just trying to change the subject to the Idaho war on drugs, because Idaho drug law doesn't differ much from other US states. I think the way to counter the mercantilist claims is by pointing out that the chance of China attacking is incredibly tiny, but one has to admit that the chance of Idaho attacking is even tinier. ;) I like how you say that my claim about regulatory requirements isn't true, then change the subject to other barriers like contracts and the difficulty of finding engineers. :) I suspect that even with all those problems, you could probably assemble here at 3-5X the cost, which would only add 20-30% to the cost of an average iPad. Of course, you'd have to change the entire assembly process to use much less labor and much more automation in the US, so it wouldn't be the same amount of jobs as in China anyway. And as we all know, it just won't happen, because most consumers just don't care enough about having something US-assembled to pay that extra 20-30%. As for your shale call, I'll probably forget about it, but I just wanted to try and make you make a call, instead of just making vague predictions of impending demise.
Seth, that video is some funny shit, but what did you expect? Do you really think simply putting in visa restrictions would mean employers would abide by them? That hasn't worked at all for the southern border, it's not going to work at all for smarter tech people. :) You didn't answer my question of your personal connection to this issue, as I suspect that is what is really driving you. Did you lose your job to a foreign worker or do you just blame them for not finding another job with the same pay? Never heard of Altama boots before but googling around, I see that they also make boots in China, though I don't know if all of them are.
spre-
"But that's not empirical evidence that one can't make the mass-market system for $360 in the US"
it's evidence of something more important: that no one would want to. that's the same, in the end, as can't. you can make them, but you can;t sell them, so you go out of business. thus, you are not able to make them. being able to make them for any period of time means being able to sell them, at a profit, and sustain yourself.
we cannot do that, thus, we cannot make them.
this is why we need to separate real, empirical fact from hypotheticals. you can always say "well we COULD do X", but if doing so results in repeated predictable bankruptcy, well, then no, we can't really do that on any kind of durable basis and the equilibrium is the US not doing it.
hey, we could make them here and give them away too, but not for long.
i think you are missing the real picture here.
but again, my point is more than fair to seth.
a 10X price difference is LOW compared to labor cost differences.
and in a place where costs are closer, it just makes him look worse.
and hey, he's the one demanding that US companies overpay for workers and buy american. an american who assembles ipads would get paid easily 10X what a guy at foxconn makes.
thus, i think the comparison is very apt.
you home entertainment system is not your whole life, it's a small part, less that the 20-30% labor cost of assembly. so paying 10X more should be even less of a big deal, or, if as seth claims should occur, maybe he should go without.
you seem to have your referents all crossed here.
the analogy is this:
labor price = product price
labor share of cost = entertainment system share of person expenditure.
in both cases the ratios are less egregious for seth, not more.
you really have this backwards as i think you are thinking of the theater cost as "the whole economy".
Vangel, you're just trying to change the subject to the Idaho war on drugs, because Idaho drug law doesn't differ much from other US states. I think the way to counter the mercantilist claims is by pointing out that the chance of China attacking is incredibly tiny, but one has to admit that the chance of Idaho attacking is even tinier. ;)
Idaho is closer and better armed. I find it strange that people are so reluctant to look at the data. The odds of us harmed by our own countries is much greater than that of being harmed by some foreign government. And the 'US' does not trade with 'China'. Wall-Mart, Sears, Best Buy, etc., buy from hundreds of companies that have Chinese operations. Those companies purchase components, raw materials, machinery, tools, etc., from other companies that have operations all over the world. The Chinese government does not get the revenues or the profits. Most go to the vendors, workers, and investors. And it is not in the interest of the individuals who profit to have their government start a war with anyone, particularly a good customer.
Sorry but I don't really see a threat from an unprovoked Chinese attack. And I don't see how any mercantilist or nocon can spin a convincing narrative that would indicate otherwise. How does buying cheaper goods from China make a Chinese attack more likely again?
I like how you say that my claim about regulatory requirements isn't true, then change the subject to other barriers like contracts and the difficulty of finding engineers. :)
Your claim is not true. Every aspect of American economic life is highly regulated, not just the labour market. And unionization is not the problem because many of the companies that I saw in China had unions. The company that I worked in had a two day works stoppage because the workers were pissed off that they could not get a bigger chunk of the IPO when the company went public.
The issues run deeper. In the US you can't call workers on Saturday afternoon and ask them to come in at midnight to change over a line so that you can substitute one component for another even if you offered to compensate them properly. In the US you could not build an extension to the factory without going through a very lengthy review and get all kinds of approvals from government bureaucrats at all levels. In China I can build a mill or a mine in a sixth of the time that I could in the US even though the mine or mill would have the same environmental impact in both cases. In the US there are too many items on the critical path that can cause a project to stall. Investors minimize the risk by going elsewhere.
I suspect that even with all those problems, you could probably assemble here at 3-5X the cost, which would only add 20-30% to the cost of an average iPad. Of course, you'd have to change the entire assembly process to use much less labor and much more automation in the US, so it wouldn't be the same amount of jobs as in China anyway.
Ever been to an assembly plant in China? It is highly automated. Go and take a look at the stretch from machines used by Boeing and compare them to the ones used by Chinese. The Chinese equipment is newer and better.
I remember some fool from the US government investigating the sale of a mill by a McDonnell Douglas manager to the Chinese plant that I used to work in. When he asked where the machine was I told him that it was moved to a town about a day's ride over mountains. He could take a plane out for a short trip and could be back in a few hours. When I inquired why he was so interested in that piece of crap he said that it was high tech equipment that could help the Chinese Navy make propellers that would be more silent. When everyone started to laugh the investigator got pissed off. That was until I took him to the actual mills that the company was using. They were the newest thing out of Japan and several generations better. Needless to say the investigation was dropped. The fact was that the Chinese used less labour for some operations because they had better machinery and more automation.
Chinese companies use automation because Chinese labour is expensive. Many people point to how little people are paid but they somehow forget that the figures are after tax, do not include cash bonuses, and the cost of free food, accommodations, entertainment, health care, etc. My company had a free daycare center for employees. Married employees got a two bedroom condo that was around 1,100 square feet. Utilities were heavily subsidized. The education curriculum was enhanced to include marketable skills. The higher grades in high school taught specialty courses. Whenever the factory began a new project all of the engineering specifications were broken down and taught. The best students who would not make it to university because they did not score high enough in the exams would write exams and do practical work to win a place on the new manufacturing teams. Kids would go over the engineering and try to find any ambiguity or errors. (They found thousands of problems with the FAA approved Boeing and Douglas engineering and a similar amount on the Airbus engineering.)
All of these things cost money but do not show up as part of the compensation. What would it be worth to you if your first 10 years after university a company paid all your living costs, provided entertainment, health care, paid for your food, etc? Well, the company does not want to pay for all those things so it tries to replace as many people as it can by machinery. That means that if you replace 100,000 jobs in China you will need about as many qualified workers in the US.
And as we all know, it just won't happen, because most consumers just don't care enough about having something US-assembled to pay that extra 20-30%. As for your shale call, I'll probably forget about it, but I just wanted to try and make you make a call, instead of just making vague predictions of impending demise.
Consumers show that they would rather pay less every day. That is what drives markets, not speculation by guys like me and you.
The issues run deeper. In the US you can't call workers on Saturday afternoon and ask them to come in at midnight to change over a line so that you can substitute one component for another even if you offered to compensate them properly.
I'm not sure that's the case. Businesses just are just unwilling to compensate these people properly.
In the US you could not build an extension to the factory without going through a very lengthy review and get all kinds of approvals from government bureaucrats at all levels. In China I can build a mill or a mine in a sixth of the time that I could in the US even though the mine or mill would have the same environmental impact in both cases. In the US there are too many items on the critical path that can cause a project to stall.
But at the same time, that mill or mine will be built and operated that much worse in the Third World. It's easy to say yes to building factories when they're shoddy and you are willing to kill the people that won't be good little yes-men.
Your claim is not true. Every aspect of American economic life is highly regulated, not just the labour market. And unionization is not the problem because many of the companies that I saw in China had unions.
Company approved ones.
"I'm not sure that's the case. Businesses just are just unwilling to compensate these people properly."
you mean like you are not willing to compensate US audio/video companies "properly" and instead choose to oppress them by buying lower quality foreign versions?
vangel-
i've been to foxconn. they use an awful lot of labor.
even after raises, it's 2000 yuan a month. that's $317 or $1.98/hr for a 40 hour week. likely it's less as they probably work more. in practice, it's probably more like $1.20.hr.
sure, they get rudimentary housing and food in many cases, but calling them "expensive" in comparison to a US worker is pretty outlandish.
note that the wage was not even half that until just recently. (it was 900 yuan/mo)
no question, they are hitting their lewis point and wages are going to move up sharply, but as of now, they are still a tiny fraction of US wages.
flipping a big mac here pays far more than building an ipad at foxconn.
i just do not see how you get to "chinese labor is expensive".
All of these things cost money but do not show up as part of the compensation. What would it be worth to you if your first 10 years after university a company paid all your living costs, provided entertainment, health care, paid for your food, etc? Well, the company does not want to pay for all those things so it tries to replace as many people as it can by machinery. That means that if you replace 100,000 jobs in China you will need about as many qualified workers in the US.
At one time, they did for purposes of morale. Unlike China, they had some basic respect for the people that were employed by them.
To a more limited extent, larger companies (as opposed to the high-churn, stable-as-a-nuclear reactor startups) still do that. It's offered as a paid option.
You act as if workers are a burden that should receive the utmost disrespect for not becoming businesspeople.
Consumers show that they would rather pay less every day. That is what drives markets, not speculation by guys like me and you.
Sure about that? That's hard to say if you add the assurance that people wouldn't mind the minor bump from it being made in approved nations with approved practices.
i just do not see how you get to "chinese labor is expensive".
They're more expensive slave labor than other Third World countries.
I'm not sure that's the case. Businesses just are just unwilling to compensate these people properly.
It certainly is the case. And the fact that you and others are 'not sure' is meaningful. Companies need certainty to be effective. Without such certainty they can't make plans or count on the expected to actually happen.
But at the same time, that mill or mine will be built and operated that much worse in the Third World. It's easy to say yes to building factories when they're shoddy and you are willing to kill the people that won't be good little yes-men.
Actually, it is not going to be worse. It is the same company using its own internal processes. The people that run the mine live there in both countries. They have no desire to expose themselves and their families to hazardous conditions. The last time I was in Shaanxi one of the companies told me that they would build a larger mill to handle increased output from a planned expansion. It took around six months to get the job done. In the US just the permit approval would take longer.
flipping a big mac here pays far more than building an ipad at foxconn.
i just do not see how you get to "chinese labor is expensive".
The companies that I worked with paid bonuses for overtime. (I expect Foxconn pays overtime as well.) The engineers got well paid because they were being poached away from competitors. Workers got much more than basic accommodations, particularly skilled ones with experience.
Now this may not be true of Foxconn because it is in a much more competitive business than the companies that I worked with but you have to admit that people want to work there and will fight to get jobs that will give them the opportunity to earn a few bucks and to save money.
They certainly can't be worse off than the workers for Nike and Columbia. And look at some of them have managed to do.
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...some of them have managed to do
That familiar story that reads like approved script from the PRC? Why am I not surprised?
They are the good little slaves that only aspire to become slavemasters to their fellow countryfolk. They know nothing of questioning a business, for they will die or disappear if they do.
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