What really happened to manufacturing?

[skeptic]

The inflation-adjusted value of America's manufacturing output in 2009 was 120 percent higher than it was in 1970 according to Dr. Mark J. Perry who is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan.
CARPE DIEM: We Should Take More Pride in Our Manufacturing Dominance; We Still Make LOTS of Stuff Here

Brutus: yes we still make 45% more than China!! But, I'd still love to see tax credits and other incentives for American manufacturers to help even more.

We don't make 45% more stuff than China, China makes far more stuff than we do. But the price attached to Goods made in the USA totals 45% more than the price attached to the goods made in China, because China can make things for a small fraction of our costs.

 

[Dont Taz Me Bro]

Nonsense.

Automation happened.

America has never manufactured more with fewer people on the assembly line.

Automation and globalization

 

[Brutus]

Brutus: yes we still make 45% more than China!! But, I'd still love to see tax credits and other incentives for American manufacturers to help even more.

Skeptic: We don't make 45% more stuff than China, China makes far more stuff than we do. But the price attached to Goods made in the USA totals 45% more than the price attached to the goods made in China, because China can make things for a small fraction of our costs

Brutus: in fact, in 2005 real dollars the retail value of American made goods in 45% higher than Chinese made manufactured goods. They may make more inexpensive items than we do but the retail value of all those items is about half of the retail value of what we make.

 

[skeptic]

Brutus: in fact, in 2005 real dollars the retail value of American made goods in 45% higher than Chinese made manufactured goods. They may make more inexpensive items than we do but the retail value of all those items is about half of the retail value of what we make.

Correct, absolutely. But it doesn't matter. China can make the exact same stuff for 1/6th the cost as we can. So when they spend a mere $91 billion in annual defense spending the Pentagon gets the shakes because that $91 billion amounts to more stuff than what we get when we spend $500 billion on annual defense spending.

China manufactures stuff that is worth 3-4 times as much as what we manufacture. But they don't charge as much for it because they absolutely need US dollars to buy oil and food.

It is false and delusional to pretend that the US still manufactures 45% more than China does. We hardly make anything at all here anymore. And a good chunk of what we do make is made by illegal aliens who send their paychecks abroad.

Not to even get into the volume of stuff that we do make here that is made with Chinese parts.

 

[Brutus]

Brutus: in fact, in 2005 real dollars the retail value of American made goods in 45% higher than Chinese made manufactured goods. They may make more inexpensive items than we do but the retail value of all those items is about half of the retail value of what we make.

Correct, absolutely. But it doesn't matter. China can make the exact same stuff for 1/6th the cost as we can.

Brutus: 1/6th???? How so???? All they have is a labor advantage and labor is a tiny % of maufacturing cost. 4-8% in the case of autos, for example.

Skeptic: So when they spend a mere $91 billion in annual defense spending the Pentagon gets the shakes because that $91 billion amounts to more stuff than what we get when we spend $500 billion on annual defense spending.

Brutus: absurd. THe whole idea is to show comparability. THe can buy 1/5 the tanks that we can because they spend 1/5 the money on defense!!

Skeptics: China manufactures stuff that is worth 3-4 times as much as what we manufacture. But they don't charge as much for it because they absolutely need US dollars to buy oil and food.

Brutus: Too Stupid if it was worth 3 to 4 times they could charge 3-4 times more.

Skeptic: It is false and delusional to pretend that the US still manufactures 45% more than China does.

Brutus: it is the fact!! 20% of the entire worlds manufactured items which is 45% more than China.

Skeptics: We hardly make anything at all here anymore.

Brutus: does it occur to you to present some facts???

Skeptics: And a good chunk of what we do make is made by illegal aliens who send their paychecks abroad.


Brutus: BS!! our stuff is now very high tech and not made by Mexicans


skeptics: Not to even get into the volume of stuff that we do make here that is made with Chinese parts.

Brutus: again BS!!! THe Iphone is assembled in China with parts from all over the world yet they get credit for the entire value of the phones.

 

[Toronado3800]

Well I will go to Best Buy tomorrow and add up the value of all American made dvd players and pc's and compare them to the cost of the Chinese ones I find.

Most innerspring mattresses and Ashley sofas we sell are at least manufactured in the USA......dressers and other 'case goods' are imported.

I think automobiles are the most complicated mass produced item. Talk about reliable computers that must work when left outside. Where are most of those made? (I honestly havent checked in a few years)

 

[Brutus]

Well I will go to Best Buy tomorrow and add up the value of all American made dvd players and pc's and compare them to the cost of the Chinese ones I find.

Most innerspring mattresses and Ashley sofas we sell are at least manufactured in the USA......dressers and other 'case goods' are imported.

I think automobiles are the most complicated mass produced item. Talk about reliable computers that must work when left outside. Where are most of those made? (I honestly havent checked in a few years)

Brutus: if you're concerned about the loss of manufacturing then you must support the Republican Balanced Budget Amendment. If we have no debt to sell the Chinese what are they going to do with their Walmart dollars? Answer: buy American made goods.

 

[skeptic]

Brutus: 1/6th???? How so???? All they have is a labor advantage and labor is a tiny % of maufacturing cost. 4-8% in the case of autos, for example.

It isn't that simple. Their labor advantage is spread across the entirety of their nation and it effects every single cost of doing business except the cost of raw materials. If raw materials account for 12% of a units wholesale cost you are right they can't make it for 1/6th the price. But if raw materials account for only 5% of the units wholesale cost they can make it for 1/8th what we can.

And they do, and I have seen it. They make finished machine lathes and ship them to the USA for less money than I can buy the raw steel. There are thousands of parts in just one of these lathes.

BTW, I went to my Chrysler dealer to get a bulb receptacle for my truck. It cost me $38. That part cost a dime to make in China. And for the same money I could buy two cordless drills with cheap batteries at my local Harbor Freight.

 

[skeptic]

Brutus: absurd. THe whole idea is to show comparability. THe can buy 1/5 the tanks that we can because they spend 1/5 the money on defense!!

You are an idiot. $91 billion in China has far more purchasing power than $500 billion is in the USA. You can hire a PHD in China to work for a full day and it will cost you less than a union carpenter will in CA for 40 minutes of his labor.

 

[skeptic]

Brutus: it is the fact!! 20% of the entire worlds manufactured items which is 45% more than China.

You are an idiot. We make 20% of the world's good because those goods are measured in US dollars.

It costs $2 to make a screw driver in the US, the exact same screw driver is produced in China for 28 cents. Identical in every way. But the American made tool counts as if it is worth 7 times as much. So if we make 3 screw drivers($6) to their 14 ($4.13) your doctored stats proclaim that me make 45% more manufactured goods (screw drivers). It's a lie.

 

[skeptic]

Brutus: BS!! our stuff is now very high tech and not made by Mexicans

yeah, well maybe. I feel pretty confident that at least 30% of our productivity is accomplished by illegals within our borders. After all they work and they typically still make things. Most Americans can't change a tire or their oil.

The service sector employs more than 70% of our legally employed. I bet construction and manufacturing and food processing provide at least 65% of the employment for illegals.

 

[8537]

Making a more efficient hot dog machine doesn't decrease the demand for people to make hot dogs - it increased the demand for hot dogs...and buns...and everything else.

 

[Toronado3800]

Well I will go to Best Buy tomorrow and add up the value of all American made dvd players and pc's and compare them to the cost of the Chinese ones I find.

Most innerspring mattresses and Ashley sofas we sell are at least manufactured in the USA......dressers and other 'case goods' are imported.

I think automobiles are the most complicated mass produced item. Talk about reliable computers that must work when left outside. Where are most of those made? (I honestly havent checked in a few years)

Brutus: if you're concerned about the loss of manufacturing then you must support the Republican Balanced Budget Amendment. If we have no debt to sell the Chinese what are they going to do with their Walmart dollars? Answer: buy American made goods.

I am mildly in favor of a balanced Federal budget....but really do not associate it with our trade deficit. Two different things.

If I buy a DVD player I redistribute $5 American dollars (or some percentage) to China's GDP.

If they buy American bonds we get to buy whatever with the money. Trick is we need a better return on our investment in pig research, roads, aircraft carriers, or solar energy than China gets on their investment to outpace them in the economic cold war.

What will they do with their Walmart dollars? I dunno, buy DVD players made in China? McDonalds burgers made in China, owned by a U.S. company.

 

[Brutus]

They make finished machine lathes and ship them to the USA for less money than I can buy the raw steel.

Brutus: you've cut yourself all confused! Most commodities are priced in US Dollars. They pay the same price as we do for most raw materials. If they want to buy oil and coal they pay the world price just as we do!!

 

[Brutus]

Toronado: What will they do with their Walmart dollars? I dunno, buy DVD players made in China? McDonalds burgers made in China, owned by a U.S. company.

Brutus: here's the simple rule of econ 101. No one in China will take a single dollar if they can't buy american goods and services of value with it, except now because they can buy bonds with it because we have a huge deficit that we finance with bonds or Treasury Bills.

If they bought our goods and services our economy would boom!!

 

[skeptic]

They make finished machine lathes and ship them to the USA for less money than I can buy the raw steel.

Brutus: you've cut yourself all confused! Most commodities are priced in US Dollars. They pay the same price as we do for most raw materials. If they want to buy oil and coal they pay the world price just as we do!!

Yes, they pay the same commodities price. But they don't pay the same markup thru the distribution chain because the folks in shipping and distribution only mark up according to Chinese labor costs and costs of doing business in a Chinese labor market.

Raw potatoes cost $.74 /KG in the US and in China. But at the grocery store in the US they cost more like 1$/lb. In China they may only cost $1/kilo. As potato chips in the US they may cost more than $20/lb whereas in China those value added chips might cost $3/kilo, or .50 cents for a 15 oz bag.

Since the markup from factory cost to wholesale is typically 200% and the markup from factory cost to retail is typically 600% the initial costs make a mighty difference in the retail price.

Since you obviously have absolutely no experience that would prepare you for this discussion I can only explain it and hope that you manage to get it. But I have serious doubts that you are capable of the perceptive leaps required to appreciate how labor costs have profound multiplier effects on the costs of retail goods.

But the fact is that because of our labor costs the 200% mark up of our wholesale distribution scheme adds as much to the cost of raw steel as the 600% retail and wholesale markup costs of Chinese made goods adds to their price for precision machine tools made from that same steel.

 

[Brutus]

Skeptic: Since the markup from factory cost to wholesale is typically 200% and the markup from factory cost to retail is typically 600% the initial costs make a mighty difference in the retail price.

Brutus: no idea what you are talking about, 600%? Chinese goods usually show up here about 25% less than American goods, they are often of lower quality, and that is after huge currency manipulation. So, 600% is in the absurd range.

 

[MaggieMae]

This is precisely why I'm in the pet industry. Can't be outsourced, can't be automated.

Unfortunately, it's an industry I fear mankind will soon lose interest in. <shrug>

During the Depression, my grandfather, an educated but out of work man, learned how to be a barber. He figured with everybody competing for the few jobs available, they'd all be wanting haircuts. And they did.

 

[MaggieMae]

They make finished machine lathes and ship them to the USA for less money than I can buy the raw steel.

Brutus: you've cut yourself all confused! Most commodities are priced in US Dollars. They pay the same price as we do for most raw materials. If they want to buy oil and coal they pay the world price just as we do!!

Could you please just hit the QUOTE button at the bottom of the little screen you type on?

 

[skeptic]

Skeptic: Since the markup from factory cost to wholesale is typically 200% and the markup from factory cost to retail is typically 600% the initial costs make a mighty difference in the retail price.

Brutus: no idea what you are talking about, 600%? Chinese goods usually show up here about 25% less than American goods, they are often of lower quality, and that is after huge currency manipulation. So, 600% is in the absurd range.

But then again you have shit for brains and no clue what you are talking about.

Most Chinese goods show up here at 1/4th or 1/5th the costs of US goods. But the markup evens the playing field.

It costs 1/4th as much just to ship a Chinese machine tool from Bellingham to Fresno as it did to make it and ship it overseas to CA.

Did you graduate from high school? Just asking.