Chinese imports: No one gets real like Dr Walter E Williams

[Bob Bigalard]

btw...

Any capitalized American entrepreneur who calculated the market as favorable could set up a domestic factory (likely with huge tax discounts and concessions from their state/county/local governments), build B-grade mock-ups of popular models of instruments, DIRECT RETAIL them from a website for LESS than the typical importers' marked-up prices, and put ALL of the importers out of business.

eh?

I might do just that...

[toakstertuba]

Thanks for posting. Very informative and sensible.

[bisontuba]

btw...

Any capitalized American entrepreneur who calculated the market as favorable could set up a domestic factory (likely with huge tax discounts and concessions from their state/county/local governments), build B-grade mock-ups of popular models of instruments, DIRECT RETAIL them from a website for LESS than the typical importers' marked-up prices, and put ALL of the importers out of business.

eh?

Sadly, that just would not work in today's economy. The employee cost ('living wage') in the U.S. can't compete with China. It is like saying we should go back to the gold standard.....not reality....

[cjk]

btw...

Any capitalized American entrepreneur who calculated the market as favorable could set up a domestic factory (likely with huge tax discounts and concessions from their state/county/local governments), build B-grade mock-ups of popular models of instruments, DIRECT RETAIL them from a website for LESS than the typical importers' marked-up prices, and put ALL of the importers out of business.

eh?

Sadly, that just would not work in today's economy. The employee cost ('living wage') in the U.S. can't compete with China. It is like saying we should go back to the gold standard.....not reality....

http://www.economist.com/news/special-r ... ack-united" target="_blank

[bort]

Why don't we just have them built in Cuba... Because apparently we're cool with them now...

[Heavy_Metal]

I suppose some of the main points are

- There really is no "American economy" anymore. "The economy" is global - whether anyone likes it or not.

- As I pointed out, an American manufacturer might be able to compete with a Chinese manufacturer - particularly with the advantages of DOMESTIC shipping, NO duty, local TAX concessions (with desperateness for real [private sector] jobs), and NO middle men who DOUBLE the cost of Chinese goods (ie. website DIRECT marketing).

- Musical-instrument-wise, no one should gripe that there is a huge market for B-grade mock-ups up popular models. There has ALWAYS been a market for B-grade musical instruments...ref: the old Kay factory in the Midwest, and the old Aeolean piano factory in Memphis (etc., etc...). The market is what it is. W-a-y back in the Stone Age (when every family in the United States had a two-inch-thick SEARS catalog in their home) most merchandise categories offered a "good", a "better", and a "best". The descriptions of each were so glowing that SEARS employees would joke about "best", "bester", and "bestest".

- Economics are numbers and behaviors. Those numbers are what they are and those behaviors are what they are. Some peoples' (well...) "religious" views are going to cause them to turn their backs (and, perhaps, their reasoning abilities) the numbers and to pretend the behaviors are not what they are.

below: American-made B-grade crap from "America's greatest days"...

The Gremlin might have been weird, but in an era when American cars were pretty much done by 80,000 miles or so, it and its AMC brethren were much better built and lasted a lot longer. They were the cars that would not die. I got my license on a '69 Rebel which we drove out to roughly 175,000 miles. Hardly B-grade crap from that perspective.

[Ken Crawford]

Kanstul direct markets. If there were potential for big money from a lesser line of instruments don't you think they'd jump on it?

[DaveWright]

As a B grade player, I welcome B grade instruments. I just wish they were still made locally.

[roweenie]

- Musical-instrument-wise, no one should gripe that there is a huge market for B-grade mock-ups up popular models. There has ALWAYS been a market for B-grade musical instruments...ref: the old Kay factory in the Midwest, and the old Aeolean piano factory in Memphis (etc., etc...). The market is what it is. W-a-y back in the Stone Age (when every family in the United States had a two-inch-thick SEARS catalog in their home) most merchandise categories offered a "good", a "better", and a "best". The descriptions of each were so glowing that SEARS employees would joke about "best", "bester", and "bestest".

There's really nothing new under the sun.

Even way back in 1908, the "least best" (arguably considered "C" grade?) offering by Sears, Roebuck & Co. was a foreign-made (French) product; this in a day where American makers (Conn, York, Holton, et. al.) were offering a superior product (at a higher price, of course).



BTW, I don't see many Marceau E flat basses being played nowadays, a true testament to their enduring quality.

The tuba I learned to play on back in the 70s (Couesnon E flat) was a more recent, but equal, example of a cheaply made foreign product, imported in for its low price point.

[hup_d_dup]

[quote="Dr. Walter E. Williams: There cannot be a trade deficit in a true economic sense.

Nevertheless, it does seem to matter what goods or capital are moving, and in which direction. For instance, a county that imports raw materials and exports finished goods is likely to have a higher standard of living than the country that exports raw materials and imports finished goods. Even exceptions to this general rule such as Saudi Arabia are likely (in my opinion) to experience a sharp drop in living standard at some point in the future — and there are clear signs that this process may have already begun.

Andy Grove, who built Intel into the most important semiconductor developer and manufacturer in the world, died last week. In today's NY Times there is a short article about an essay he wrote in 2010 for Bloomberg Businessweek. From the Times article:

• Mr. Grove acknowledged that it was cheaper and thus more profitable for companies to hire workers and build factories in Asia than in the United States. But in his view, those lower Asian costs masked the high price of offshoring as measured by lost jobs and lost expertise. Silicon Valley misjudged the severity of those losses, he wrote, because of a “misplaced faith in the power of start-ups to create U.S. jobs.”

http://www.nytimes.com/2016/03/26/opini ... inion&_r=0" target="_blank

Hup

[PMeuph]

Kanstul direct markets. If there were potential for big money from a lesser line of instruments don't you think they'd jump on it?

Nope. They have made there market in top-shelf instruments, there's no incentive for them to expand and make B market stuff.

Also, there would be no tax incentives to bring jobs to Anaheim and land out there is so cost prohibitive that the cost to set up a factory and the cost that employees would want would deter from working for low wages.

For this factory to work as Joe hinted at. I think it would need somewhere rural (say at least 100 mile outside a major city) to factor in for cheap land for the factory and for the employees to build housing (To allow them to work for less). Next, it would need to be located somewhere close to a large portion of the population. (to produce the lowest overall shipping costs) Somewhere where the climate is moderate would be great has to minimize the heating/ac bills. A state with the least tax possible would be ideal and a place with fairly high unemployment as to get the most tax incentives possible.

[Ken Crawford]

I just don't believe that it is possible to manufacture nicely playable sub-5k instruments in the US as they do in China.

[Ken Crawford]

I assumed you were classifying all Chinese tubas as B-grade mockups. But many of these Chinese tuba are nicely playable. I don't think Chinese quality tubas could be manufactured in the US and be sold at Chinese tuba prices. Factory workers here are going to have to be paid at least $15 dollars an hour with benefits. Maybe one of the sponsors here that travels frequently to the jinbao factory has some idea what those workers are paid. A US factory is also going to have greater workplace safety and environmental standards to adhere to that can cost money and also insurance costs.

[Dan Schultz]

..... Factory workers here are going to have to be paid at least $15 dollars an hour with benefits. Maybe one of the sponsors here that travels frequently to the jinbao factory has some idea what those workers are paid. A US factory is also going to have greater workplace safety and environmental standards to adhere to that can cost money and also insurance costs.

Wage doesn't matter much if it's done once and done right. I'd venture a guess that the Chinese throw out A LOT of stuff.

Oh wait!.... maybe it's the 'rejects' that are being sold here in the US.

[Three Valves]

That Sears Screamer One was my bike!!

Now that we determined that trade deficits aren't that bad, let's talk budget deficits.

[Donn]

Monthly Budget Review: Summary for Fiscal Year 2015

In fiscal year 2015, which ended on September 30, the federal budget deficit totaled $439 billion—$44 billion less than the shortfall in 2014. Fiscal year 2015 was the sixth consecutive year in which the deficit declined as a share of the nation's gross domestic product (GDP). The deficit peaked at 9.8 percent of GDP in 2009; it fell to 2.8 percent in 2014 and to 2.5 percent in 2015.

Not that this necessarily means anything, but note interesting coincidence, that a gentleman with the unlikely name of "Barack Obama" was placed in nominal control of the federal bureaucracy in 2009.

As for trade deficits ... economists have a lot of ideas about how things work. For an example throwing around some of those ideas, including foreign reinvestment in US dollars, read Dean Baker Neil Irwin on Donald Trump’s Trade Scorecard. Personally, it seems to me that a country that makes nothing and buys everything has a problem, and suggest suspicion of any analysis to the contrary.

[Three Valves]

Monthly Budget Review: Summary for Fiscal Year 2015

In fiscal year 2015, which ended on September 30, the federal budget deficit totaled $439 billion—$44 billion less than the shortfall in 2014. Fiscal year 2015 was the sixth consecutive year in which the deficit declined as a share of the nation's gross domestic product (GDP). The deficit peaked at 9.8 percent of GDP in 2009; it fell to 2.8 percent in 2014 and to 2.5 percent in 2015.

You realize that a decrease of the increase is not an reduction overall, don't you??

I suppose if I was bouncing $500 checks all over town eight years ago but now I'm only bouncing $150 checks is an improvement...

Kinda.

[Donn]

Monthly Budget Review: Summary for Fiscal Year 2015

In fiscal year 2015, which ended on September 30, the federal budget deficit totaled $439 billion—$44 billion less than the shortfall in 2014. Fiscal year 2015 was the sixth consecutive year in which the deficit declined as a share of the nation's gross domestic product (GDP). The deficit peaked at 9.8 percent of GDP in 2009; it fell to 2.8 percent in 2014 and to 2.5 percent in 2015.

You realize that a decrease of the increase is not an reduction overall, don't you?

If you mean "decrease of the [rate of] increase", yes - but that isn't what they're reporting.

I suppose if I was bouncing $500 checks all over town eight years ago but now I'm only bouncing $150 checks is an improvement...

Are you aware of any bounced checks from the federal government?

One of the weaknesses of democracy is that, just as we may tend to elect the officials who we'd feel comfortable hanging out with at a backyard BBQ, likewise we tend to see government fiscal policy based on experience with household bank accounts. Economics at that level is hard stuff, I doubt that even 1% of the US population can sort these issues out and be reasonably confident someone isn't pulling the wool over our eyes, and even at that less-than-1% level you can't expect people to really agree.

My impression is that the main problem with budget deficits in recent history is our response to them (and by "we" I mean neoliberal national governments, driven by/appealing to popular sentiment.) "Austerity" measures in Europe recently showed what a bad idea that was during a recession.

[Three Valves]

Are you aware of any bounced checks from the federal government?

My impression is that the main problem with budget deficits in recent history is our response to them (and by "we" I mean neoliberal national governments, driven by/appealing to popular sentiment.) "Austerity" measures in Europe recently showed what a bad idea that was during a recession.

1. Not yet

2. Just out of curiosity, when is a good time for "austerity" or when was the last time Greece implemented such a scheme??

[alfredr]

Hail to Dorothy! The wicked witch is dead!