US manufacturing

Is it in the crapper, or is it doing fine as this article: http://www.azstarnet.com/sn/byauthor/280443 suggests?

The basic argument is that we make one jet plane/tractor or whatever and that affords us a crapton of chinese toys. If this is so, what is the reason for the trade balance? Is our manufacturing producing alot but we're just consuming even more?

Originally posted by voltaire
The basic argument is that we make one jet plane/tractor or whatever and that affords us a crapton of chinese toys. If this is so, what is the reason for the trade balance? Is our manufacturing producing alot but we're just consuming even more?

I got the impression that up until the recession, most Americans were consuming far more than their income and using easily available credit to do so. Many had no real hope of continuing such a practice indefinitely even without the recession.

Originally posted by voltaire
Is it in the crapper, or is it doing fine as this article: http://www.azstarnet.com/sn/byauthor/280443 suggests?

The basic argument is that we make one jet plane/tractor or whatever and that affords us a crapton of chinese toys. If this is so, what is the reason for the trade balance? Is our manufacturing producing alot but we're just consuming even more?

Also, goods are so cheap and credit is so easily available, that we've gotten into the habit of simply buying whatever we want. Even working class people can afford enormous LCD TVs, nice bicycles and other goodies for each child. My mother-in-law and her mother used to sew clothing for their children. But now, she says that clothing is so cheap that it just doesn't pay to do so. I went to Walmart yesterday. All this crap that we all have become accustomed to buying whenever we want is so cheap it's borderline ridiculous. New sweat pants, $7; wrist watches, $10, tee shirts, $5; DVDs, $5-10, balls for the kids to play with, $2; toaster ovens, George Foreman grills, those curly light bulbs, everything is so darn cheap. You just dump stuff in your cart because you figure "why not?" Then, after 20 minutes on line sighing at the incompetence of the underpaid check out clerks, you walk out of the store and you ask yourself "Did I really just spend $168 on all this crap?"

But fundamentally, people get themselves in credit trouble by buying cars and houses and vacations and stuff that costs serious money, not by buying too much crap at Walmart.

One of the reasons for the trade balance deficit is taxation. Because the upper middle class in the US pays so little taxes, they have large sums of money at their disposal; because they already have everything they need that money can buy they tend to buy imported luxury goods much more so than the lower middle class and the poor.

The rich people in the US pay crazy taxes. The top 1% pay 40% of income taxes. I don't think any country has problems because they have too many successful people.

Originally posted by KazetNagorra
One of the reasons for the trade balance deficit is taxation. Because the upper middle class in the US pays so little taxes, they have large sums of money at their disposal; because they already have everything they need that money can buy they tend to buy imported luxury goods much more so than the lower middle class and the poor.

what kind of imported luxury goods?

Originally posted by zeeblebot
what kind of imported luxury goods?

Any, including holidays.

Do you think the rest of the world could go without the goods we produce more easily than we could go without the goods they produce?

Originally posted by sh76
Also, goods are so cheap and credit is so easily available, that we've gotten into the habit of simply buying whatever we want. Even working class people can afford enormous LCD TVs, nice bicycles and other goodies for each child. My mother-in-law and her mother used to sew clothing for their children. But now, she says that clothing is so cheap that it just do ...[text shortened]... and vacations and stuff that costs serious money, not by buying too much crap at Walmart.

the problem comes when you leave the store and find out the place you work at has closed because the products you used to make are being made in china and sold in the US for cheaper causing people like yourself to buy the cheaper product.

It's self defeating to buy manufactured goods from china unless you replace the lost jobs in the US with new jobs from a new industry.

Originally posted by uzless
the problem comes when you leave the store and find out the place you work at has closed because the products you used to make are being made in china and sold in the US for cheaper causing people like yourself to buy the cheaper product.

It's self defeating to buy manufactured goods from china unless you replace the lost jobs in the US with new jobs from a new industry.

I guess at that point you decide whether you want to go to college or collect a welfare check.

Originally posted by uzless
the problem comes when you leave the store and find out the place you work at has closed because the products you used to make are being made in china and sold in the US for cheaper causing people like yourself to buy the cheaper product.

It's self defeating to buy manufactured goods from china unless you replace the lost jobs in the US with new jobs from a new industry.

Reminds me of one of the great Jib Jab vids of all time:

YouTube

I understand that a very limited amount of protectionism may be productive in certain cases. But I think that we can be prosperous in spite of buying cheap foreign products. As the OP pointed out, the US produces airplanes, farm equipment, food, computer technology, etc.

In any case, the individual does not have a strong enough interest in the macro perspective for individual choice to stop the importation of cheap foreign goods. I'd love to buy American, but I'm not going to sacrifice the best interests of my family by paying twice as much. Protectionism, to the extent it exists, has to happen on a society-wide level.

Originally posted by uzless
the problem comes when you leave the store and find out the place you work at has closed because the products you used to make are being made in china and sold in the US for cheaper causing people like yourself to buy the cheaper product.

It's self defeating to buy manufactured goods from china unless you replace the lost jobs in the US with new jobs from a new industry.

There are plenty of jobs to be made if you invest in the failing infrastructure and public schools, and investment in those areas creates new jobs as it boosts the economy. The tax required for this will immediately reduce imports from China.

Originally posted by uzless
the problem comes when you leave the store and find out the place you work at has closed because the products you used to make are being made in china and sold in the US for cheaper causing people like yourself to buy the cheaper product.

It's self defeating to buy manufactured goods from china unless you replace the lost jobs in the US with new jobs from a new industry.

What if the place you work at in Maine has closed because the products it used to make are being made in California and sold in Massachussetts for cheaper?

This job loss might have a severe effect on the local economy where you live in Maine. Does it really matter whether the product in now made by people in California or people in China? In both cases, it's far far away from where you live and the people making the product are total strangers to you.