Cheap Products vs. High Wages... Americans Want BOTH!

[poyayan]

Quote from romanus:

What competitive advantages Korea or Japan could possibly have.

The cast based social system (if you ever been to Korea or Japan longer than a week and had a chance to familiarize yourself with how they think or work with them closely) prevents any possibility of entrepreneurship or innovation. They come to US to start businesses.

Both countries will continue to supply US with well educated technical workforce and relatively inexpensive technology products - but that's about it

Never.

This magnificent country of ours is perfect place for a capital to grow and multiply unhindered by political or cultural considerations and restraints, just like the yeast grows in the presence of warmth and sugar.

Take the same capital and place it anywhere in the world - it will say f*ck u
, I want go back where it's warm and cuddly - the US.

Hrm... frankly, I don't see any highly educated Korean or Japanese coming here lately. (That's 30 years ago) I wouldn't call those Samsung LCD TV or Lexus cheap neither. Even for Chinese, you see them flow both ways right now rather than one way to US.

You want to know what compeititve adv Korea or Japan has? Look at GM. They resurrect Daiwoo to make 5 times the number of cars when GM bought them. GM has one of the biggest share in the China market.

You are correct that in terms of free capital flow. US is still among the top. Also, although not Japanese nor Korean, US is still an attractive place for a lot of people.

Bottom line is : US model works. So, people copy it. Past edge not equals to future edge. We trader can only know this all too well...

 

[Gringinho]

Quote from scriabinop23:

The only way to win this game is to develop a comparative advantage (via educational system and culture) with technological and research skills versus everyone else in the world.
...

I totally agree.

The imbalances of old are getting eroded, and the advantage is waning. With better education, you can still hold a competitive advantage over others - but (information) technology is levelling the playing field for everyone.

In the end, there will be changes - no matter how much USA resists militarily and economically by trying to hold on to its position. That's just the dynamics of reality - and everyone are adapting, or perishing while resisting. No one are stronger than evolution and progress itself - you just can't stop time and sequential reactions.

The better you are at adapting - the better you will do in universe, and the smarter you probably are.

 

[indexer]

The problem is not education. The US system does a decent job for a large population and could be improved. Nor is it about the pre-medieval caste system in India that holds people down. I read somewhere that when people go duck hunting in parts of India they use people to retrieve the ducks because they are cheaper to use than dogs. Nor is it about a repressive communist government in China. These are side issues that people bring up to distract from the main issue.

As I stated earlier, the main problem is that the US has been pushing a free trade agenda while other countries are mouthing the words free trade but running a mercantilist trade policy. The problem is not NAFTA so much as it is China, India, South Korea, Japan and Tawian.
Fritz Hollings, former Senator from S. Carolina wrote a good article in the Huffington Post that nicely sums everything up.

http://www.huffingtonpost.com/sen-ernest-frederick-hollings/outsourcing-how-america-i_b_122170.html

Quote from makloda:

I have to ask though: How much money has the US as a society invested into basic research, universities, schools and other educational tools in order to further human capital over the last 25 years (in comparison to Europe and Asia)? You can't expect the middle class to double their median income every decade with many US highschool graduates having problems with the English language and basic math.

The more jobs on the lower end of the spectrum are being contested by emerging economies, the more competitive advantages in technology, education and research are necessary in order to make wage increases possible.

 

[Gringinho]

indexer,

what you are referring to are just the structural deficiencies of a system - and how it's being exploited. Just as anyone taking advantages of any system - be it cheap labour overseas or trade agreements - it's a dynamic balance that is driven forward by adaptation, markets, evolution, information, time...

To excel - you need to be better and faster at adapting - see what's coming around the corner and understand changes on many levels - large scale and specific incidents. So, one need to establish guidelines as well as be pragmatic in handling events - while constantly revising guidelines and not "set them in stone".



That is why education, and learning to improve, adapt - actually is key to success.
So why is this the case... well, you need to identify, understand and then react to change - and that is in most cases called education, because you are not alone in society - and need to bring more than yourself along.
http://en.wikipedia.org/wiki/Social_capital

 

[poyayan]

Quote from indexer:

The problem is not education. The US system does a decent job for a large population and could be improved. Nor is it about the pre-medieval caste system in India that holds people down. I read somewhere that when people go duck hunting in parts of India they use people to retrieve the ducks because they are cheaper to use than dogs. Nor is it about a repressive communist government in China. These are side issues that people bring up to distract from the main issue.

As I stated earlier, the main problem is that the US has been pushing a free trade agenda while other countries are mouthing the words free trade but running a mercantilist trade policy. The problem is not NAFTA so much as it is China, India, South Korea, Japan and Tawian.
Fritz Hollings, former Senator from S. Carolina wrote a good article in the Huffington Post that nicely sums everything up.

http://www.huffingtonpost.com/sen-ernest-frederick-hollings/outsourcing-how-america-i_b_122170.html

Think about it. If it is trade policy, then how come trade is booming between China, India, South Korea, Japan and Taiwan?

Do you know China is Japan's biggest trading partner now? Japan also is 3rd largest trading partner of China behind US & EU. China also is pretty close to over taking US as the biggest trading partner of ASEAN.

If they are all feeding off US, then they shouldn't work well with each other.

 

[poyayan]

Quote from Cesko:

It's not a secret that U.S. manufacturing sector "manufactures" more stuff with fewer people than 15-20 years ago.

Second, there is no difference between what's going on now with manufacturing what happened with agriculture in the past.

Yes, low precision manufacturing will go the way agricultural industry went. Instead of big combine for huge field, we will have a bunch of $2000 generic robot making shoes, clothes....etc. That will be the future of US manufacturing industry.

Of course, this does not exist yet..

 

[indexer]

It has got nothing to do with - dynamic balances, faster adapting or new paradigms. The US invented all that non-sense and it is just consultant B.S.

Read the article that I posted above from Fritz Hollings. It’s about not trying to be Mr. Nice Guy anymore and to start playing hardball. Tom Friedman (who is a billionaire by marriage), is a clown. We need more Hollings and less Friedman.

Quote from Gringinho:

indexer,

what you are referring to are just the structural deficiencies of a system - and how it's being exploited. Just as anyone taking advantages of any system - be it cheap labour overseas or trade agreements - it's a dynamic balance that is driven forward by adaptation, markets, evolution, information, time...

To excel - you need to be better and faster at adapting - see what's coming around the corner and understand changes on many levels - large scale and specific incidents. So, one need to establish guidelines as well as be pragmatic in handling events - while constantly revising guidelines and not "set them in stone".



That is why education, and learning to improve, adapt - actually is key to success.
So why is this the case... well, you need to identify, understand and then react to change - and that is in most cases called education, because you are not alone in society - and need to bring more than yourself along.
http://en.wikipedia.org/wiki/Social_capital

 

[indexer]

Without the big fat trade surplus that China has with the US, they would be shutting the rest of the ASEAN players out of their market with the exception of commodity imports. They are trying to win influence by allowing in some neighborhood trade. But, without the US surplus they would shut the door and ASEAN would be stabbing each other in the back as always.

Quote from poyayan:

Think about it. If it is trade policy, then how come trade is booming between China, India, South Korea, Japan and Taiwan?

Do you know China is Japan's biggest trading partner now? Japan also is 3rd largest trading partner of China behind US & EU. China also is pretty close to over taking US as the biggest trading partner of ASEAN.

If they are all feeding off US, then they shouldn't work well with each other.

 

[Gringinho]

indexer,

are you really saying that USA invented markets, adaptation, evolution, information, time? Are you by any chance a strongly religious person who adheres to blind faith?


You speak about resisting the changes by strong foreign policy - like objectivism, protectionism, interventionism and some libertarianism. Well, conflict can be very profitable sometimes - but let me know how it works out for you.
http://en.wikipedia.org/wiki/Interventionism_(politics)

Here in Brazil the rich are resisting higher wages and sharing the generated wealth, lacking a sorely needed land reform which frequently results in revolts - mostly by the MST who use terrorist tactics. Then they buy more guards, guns and level 5 bombproof cars. It's really nice and benefits the security and defence sector tremendously.


Now, think about how India and China churning out more than a million highly skilled engineers every year - and how incredibly difficult it is to be accepted to some of these studies. They're not the best in the world at much that they do, but they also lack the familiarity and social platform that we enjoy. However, they are catching up at frenetic pace.

Don't you think that trying to be a little smart, understand what the underlying dynamics are at such a level where we talk importance of education for a realistic future scenario where armed conflict is not the central issue?

No doubt others will have at least as formidable weapons and weapons technology as USA in the very near future with their expanding economies and technological catch-up. Russia, India and Brazil going for the Sukhoi PAK-FA fifth-generation fighter jet is just one example of this. Take a look at optronics, laser terrain mapping and new radar technology - as well as intelligent missiles and new emerging defence systems with countermeasures, like those from e.g Sweden.
http://en.wikipedia.org/wiki/Sukhoi_PAK_FA
http://en.wikipedia.org/wiki/Active_Electronically_Scanned_Array
http://en.wikipedia.org/wiki/LIDAR
http://en.wikipedia.org/wiki/LIDAR_Contour_Mapping


indexer,
essentially - what you are saying is that intervention of progress, evolution, markets, society should be made with strong foreign politics prone to conflict - so that you can maintain an advantage and those who oppose shall be crushed.
http://en.wikipedia.org/wiki/Neolibertarianism
http://en.wikipedia.org/wiki/Neoconservatism

You know, the rules of dictatorship, authoritarians and despots do not stand the test of time. You can't stop evolution.

 

[makloda]

Quote from Gringinho:essentially - what you are saying is that intervention of progress, evolution, markets, society should be made with strong foreign politics prone to conflict - so that you can maintain an advantage and those who oppose shall be crushed.

Exactly! That's how the Soviet Union worked and boy was their 'middle class' rich and wealthy!!! I think their blowup in the 1989/1990 was just a historical fluke and not an economic implosion!