Imports, Exports, and the Future

Discussion in 'Economy' started by Wiseacre, Jun 21, 2011.

  1. Wiseacre
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    Wiseacre Retired USAF Chief Supporting Member

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    In today's WSJ there is a story (sorry, no link, it's proprietary) that talks about recent changes in developing countries that are resulting in rising import prices here, with a focus on China. US import prices, excluding oil, have risen 8% over the past 2 years, and would be higher if you included oil. Which is a shift from the trend over the past 20-30 years. Essentially, workers in China and other emerging markets want higher wages, and that combined with other inflationary pressures means higher export costs to the US. Among other things, shipping costs have risen: 3 years ago it cost about $1000 to ship a 40 foot container from China to our west coast; now it costs $2100.

    So what does all that mean? For starters, you might see less offshoring where US companies move business elsewhere. US manufacturing has begun to rise a little bit lately, that trend should continue. But - as prices for a lot of stuff we used to buy from foreign companies goes up, our purchasing power drops. Our standard of living will decline, I think we're already seeing that now.

    And, if we can keep our own prices down and quality up, our exports could rise. Have to keep the dollar from getting too strong though, I suspect we're entering an age when exchange rates are going to take center stage as economc warfare becomes more prevalent. (That's my opinion, nobody else's.)

    But - we're going to have to be really smart about our fiscal and economic policies, we need to make America the place to invest and start a business. Right now, it just isn't. We've gotta fix our educational and training systems to be more effective at turning out young people that can innovate and produce stuff. We've gotta produce more of our own oil, and keep working on ways to be more energy efficient.

    Could all this happen? Sure, but the pols have got to get their stuff together first. I just don't see that happening until something big occurs to force a change.
     
  2. expat_panama
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    expat_panama Silver Member

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    No, American workers are already by far the worlds most productive. The reason you and I don't hire is not becuase Americans are ignorant. The reason you and I don't hire Americans is because we can't afford it which is why we're doing all we can to improve our incomes and reduce our 'outgo's' AKA costs, and the biggest business cost governments can cut the fastest are taxes.
     
  3. william the wie
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    william the wie Gold Member

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    Sounds right but you have to also figure in that the US as best of the worst is a safe haven to the rest of the world. The use of gunboat diplomacy and other pressures on the US are of limited effectiveness.
     
  4. iamwhatiseem
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    iamwhatiseem Gold Member

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    When everyone who buys products chooses the cheapest option 9 out of 10 times - this FORCES companies to seek cheaper labor costs.
    You go to WalMart, Cosco, Target etc. and choose cheap products - companies can't afford to have products built here.
     
  5. Wiseacre
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    Wiseacre Retired USAF Chief Supporting Member

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    I think we need more home grown innovators, scientists, inventors, creative people that can continue the pace of technological advancements right here. The way I hear it, we're falling behind in math and the sciences, that needs to be reversed. We need more skilled people trained in some discipline before they hit the job market. JMO.
     
  6. expat_panama
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    expat_panama Silver Member

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    Look if you don't believe me that we already do, just look at how the long standing trade deficit is proof that US innovators are coming up with new patents, new start-ups, new copyrights, to a scale that beats foreign tech all hollow. That so-called 'trade deficit' is just foreigners selling us goods for all the funnymoney they paid us when they bought up our patent licenses, our start-up stock, and our copyrights.
    That was Obama's story when he gave a speech to CREE a US tech company last week, that he thinks we can do better than the 15% we got graduating in STEM's programs (Science, Tech., Engineering, & Math.).

    He may be right considering the damage Obama's done since graduating with a law degree; CREE just moved their chip production to China.
     
  7. FiscalSanity
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    FiscalSanity Member

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    Interesting. i read an article in foreign policy magazine today that was talking about China's growing problems with labor unrest. As you said, it seems that the workers are starting to demand higher pay, and that's making their products less competitive in foreign markets. What I found interesting is that the Chinese government has been able to keep organized protests to a minimum through it's traditional methods of intimidation and arrest, but it hasn't been able to keep a growing number of unplanned protests from occuring.

    Several of the incidents that they talked about that created these type of protests were very similar to the one that kicked off the revolution in Tunisia. One protest began after a worker was knifed on the orders of his factory manager after asking for a raise. Another started after a couple of police officers tried to confiscate the goods a pregnant woman was selling on the street.
     

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