Walmart

[Dr. Shane]

I think you are a fine example of humility, Bravus. Although we disagree on many issues, I have nothing but respect for you and if I am wrong, I'll apologize to you when we get inside the pearly gates - unless I figure it out before then.

[there buster]

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which means that the US and many other economies in the world are basically going to converge to about the same standard of living

Yeah, that one gets dusted off every decade or so. Forty years ago, Krushchev said socialism would bury us economically. Thirty years ago, it was the Swedes, whose perfect solution would expose US weakness. Twenty years ago, it was the Japanese who were going to buy us out and take us over. Yawn.

But wait! Income disparity is growing ever greater and more pernicious, even as living standards converge!

Quite a trick.

[bevin]

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You are a cyber bully. You try to intimidate, insult and degrade those that disagree with you.

Shane, a simple reading through of the above thread will show that you started the personal attacks with the following remark.

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On a personal note, your inability to grasp simple economic principles baffles me. It makes me think you actually don't want to understand the information being presented and perhaps that is the same reason you don't grasp the perspective of many creation scientists.

You made this remark rather than supply a list of goods that the USA can make cheaper than another supplier.

I have given up hope that you will supply such a list - or that you will admit that you can't, although (at least for now) there are some items.

Those items the USA does not have a long term advantage in.

/Bevin

[bevin]

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But wait! Income disparity is growing ever greater and more pernicious, even as living standards converge!

There is a reason for this.

Basically we are seeing the shake-out of some of the manufacturers, in a series of bankruptcies and mergers. You can see this in the computer, car, airplane, sector - and also in the retail sector (Walmart!)

As the actual manufacturing costs are driven down and the volumes being manufactured go up, the owners of the manufacturing facilities actually make higher profits by selling much higher volumes at lower per-unit profits.

So they make lots of money.

Indeed modern CEO's, CFO's etc have perfected the art of extracting lots of money from companies that are going bankrupt!

The workers, on the other hand, have not.

/Bevin

[olger]

Play nice boys - you know I love you both.

Indeed,

olger

[Dr. Shane]

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Shane, a simple reading through of the above thread will show that you started the personal attacks with the following remark.

Hardly. It started with you asking a loaded question so that you could pounce on whoever dare answer with something other than what you had already decided they should.

Notice when I got personal I did not do it in sly, indirect way. I was quite open and direct. You are very much a bully or perhaps predator would be a better description. No one dare try to discuss creationism here without you pouncing on them and insulting them ever which way possible. We have had many highly educated scientists that have just got tired of being pounced on here. Yes, there is an elephant in the room or maybe a vulture is a better metaphor.

I, on the other hand, rarely address other members directly. I conscientiously try to stay focused on the topic and not on other members. I rarely even use the word "you". I often state my opinion by using words like "seems" "think" "believe" "feel" which does not convey my thoughts as absolutes. However if you ask me a loaded question and then jump on me when I don't answer the way you think I should, you can expect that I will call you on it.

[bevin]

What I asked was

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Right. Buy them.

Which is a fancy way of saying TRADE for the them.

Which is a fancy way of saying WE GIVE THEM SOMETHING.

What are we going to give them?

/Bevin

and it still hasn't been answered.

The USA is not an inherently lowest-cost producer of anything anymore.

It was the lowest-cost producer when other nations lacked the technology or the factories or the social infrastructure. This meant that we were (a) making our own wealth, and ( had goods to trade that other countries would exchange with us to get us raw materials or goods based on cheap labor that we wanted.

This gave us one of the best standards of living in the world.

However these benefits are no longer specific to the USA, and more and more countries capable of making their own wealth, and making the goods that get exchanged for raw materials.

Visibly:

Western Europe has now fully recovered from WW-II. They can make anything we can make. Economically, they don't need to interact with us at all.

China and India have made huge leaps forward in their ability to produce goods - and in their demands for raw materials. Economically their biggest effect on us might be their becoming major buyers of raw materials.

Invisibly:

Countries like NZ and Australia and Saudi Arabia and Iran don't need to interact economically with us at all. There is nothing that we supply them - not even tourists - that they can't get from elsewhere.

Did you see the report on the housing prices in Detroit?

/Bevin

[there buster]

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But wait! Income disparity is growing ever greater and more pernicious, even as living standards converge!

There is a reason for this.

!

[Dr. Shane]

This is the loaded question you asked.

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And why should China or some other cheap source of labor send goods here?

When I gave the correct answer you started twisting and spinning things trying to make an anti-American point that doesn't even make economic sense. I pointed out that US dollars are a commodity in and of themselves and you still hold to the indefensible position that all currencies in the world are the same because they can be exchanged one for another and that the cost to exchange them is so small that it should actually be considered free.

You can state your economic opinions all day long. That isn't a problem. The problem is when you ask loaded questions and than attack and try to demean those that disagree with the answer you want them to give. That is being a cyber bully and does not help Club Adventist in our efforts to attract new members and maintain those we have. Don't ask a question when your motive is only to attack those that don't answer it the way you want them to. Just state what your opinion is. You don't have to set other members up to be attacked by you. Learn to disagree without being disagreeable.

[bevin]

The question is not loaded. It is critical to understanding why the USA has had a standard of living higher than much of the rest of the world, and why it is not going to continue to have such an advantage.

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I pointed out that US dollars are a commodity in and of themselves and you still hold to the indefensible position that all currencies in the world are the same because they can be exchanged one for another and that the cost to exchange them is so small that it should actually be considered free.

If the position is "indefensible" then you should be able to simply refute it, rather than using some "I teach this stuff and you are an ignorant and wilful student" non-argument.

You actually supported this position by pointing out that exchanging pesos for dollars is, indeed, practically free.

I refuted your point about oil transactions requiring the use of $US - regardless of what the price-per-barrel is quoted in. Most transactions between two non-USA parties do not require $US - or any other currency. Pure barter is always an option - although governments may like to get a currency value and collect taxes.

The only reasons for actually getting $US are (a) because like several other currencies, you don't loose a lot by holding onto them to defer a transaction, and ( you are doing business with someone who demands them.

So, while it is true that $US are a commodity (ie: they are traded) the trading, in fact, is just deferred bartering.

So $US being a commodity does not answer the question "And why should China or some other cheap source of labor send goods here?".

/Bevin

[lazarus]

This is interesting!

Having lived most of my life in the UK and the last 5 years in the US there some interesing differences this layman (non-economist) would like to point out.

Things are definately cheaper in the US. That cheapness comes a a price!

In general, I have found the quality of goods i've purchased in the US to be poorer, from clothing to furniture, to housing. I often have had friends ask to buy shoes, and other itms from Europe because they believe the quality to be better.

I do a bit of DIY and I find the materials available in hardware stores to be of an inferior quality.

Walmart is a good example of the trade off. Walmart clothes, to my mind, are probably of the poorest quality that can be found.

In Europe a decision has been made to have higher taxes to provide certian services to the people. Health care, free at the point of access is not a bad thing. I was willing to pay higher taxes so that a poor family coulds take their sick child immediately to hospital and not have the added stress of worrying about how much this will cost.

Affluent countries around the world have made the decision to care for their citizens in this way. Thats a commendable thing.

Bigger yet cheap houses and bigger yet cheap cars come at the price of longer hours, a longer communte etc.

There's always a price to be paid.

[bevin]

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Things are definately cheaper in the US. That cheapness comes a a price!

Some things are cheaper. Some are much more expensive. Some are much the same. For instance: New Zealand has cheaper (for the same item/procedure) dental work, car repairs, car insurance, medical costs, some foods, electricity (although that is very regional in the USA).

Often I find an item is cheaper in the short term, but requires earlier replacement, increasing its cost of ownership.

So you have to watch the brand you buy, at Walmart or anywhere else.

/Bevin

[Dr. Shane]

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The question is not loaded.

Denial is not an admirable quality. Until you can admit you have this character defect there is little, if any, hope of you being about to conquer it.

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You actually supported this position by pointing out that exchanging pesos for dollars is, indeed, practically free.

I did not and the fact that you read it that way shows your inability to grasp international economics. That is OK. You don't have to know everything about everything. You know something about computers and health care. You are making your mark in the world.

[Dr. Shane]

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Walmart is a good example of the trade off. Walmart clothes, to my mind, are probably of the poorest quality that can be found.

I absolutely agree with you in this respect. In fact, Wal-Mart negotiates with many manufactures to make products just to sell in Wal-Mart. There are GoodYear tire models that are made just for Wal-Mart and are not available from GoodYear tire dealers. Levi jeans makes jeans that are sold just at Wal-Mart. How this works is that Wal-Mart tells the manufacturer how much they (Wal-Mart) will pay them for their product. The manufacturer then develops a new product (of cheaper quality) that they can sell for that price. Not all products in Wal-Mart fall into that category but many do - including electronics. Basically, you get what you pay for.

However that said, let's go back to my childhood example of always getting used clothing. Wal-Mart makes it possible for poor children to get new shoes - even though they are of lesser quality. I am not so sure that is a bad thing.

Higher quality goods are available in the US but they are also more expensive. Most shopping malls have high-end stores in them. One need not go to Europe to find quality goods but they ought to avoid Wal-Mart, Target and the like.

On another note, I will share that this past Summer when my family was vacationing in Costa Rica, a massive protest closed down the capital city of San Jose. They were protesting CAFTA. I personally heard a protester with a bull horn say that if CAFTA passed they would lose jobs to the United States because of the US wholesale and distribution system allowed the US to market goods cheaper than those in Costa Rica. I had to chuckle as labor leaders here opposed CAFTA because they were afraid that it would cost the US jobs.

I see such trade agreements as a win-win for all involved and it seems to me to be a method of wealth distribution. I don't think that is a bad thing. American companies build factories in other countries which provide good-paying jobs for them and inexpensive products for us. Eventually, if Christ delays His return, the standard of living in these nations should become equal to that in developed nations (if they can clean up the governmental corruption) in a large part due to foreign investment in them.

[Bravus]

So, through all the bickering, the two of you actually come to exactly the same conclusion: living standards will converge.

(I'd add the caveat, to spare Ed's guffaws, 'in some places, for some')

[Bravus]

To be fair, Shane's assumption is that America keeps its current standard of living and lifts other countries up to it, bevin's that America's drops to meet others as they rise.

[bevin]

I agree that is where we have ended up.

There are certainly some American's who will drop - Robert's observation about the IT workers is very real, and they are not the only group - automobile factory workers come to mind, as do aircraft mechanics, and others.

There are others who may actually rise - Ed's observation about the income disparity increasing, mine about CEO's and others learning how to pillage a company, and maybe even all the minimum-wage earners.

In the long run, the USA needs to decide how it is going to transfer profits from manufacturers to everyone else.

Walmart, going back to the topic, is forcing manufacturers to be more efficient by forcing them to compete with each other. This actually transfers wealth from the manufacturers to the purchasers - which is (as a purchaser) a good thing.

But what happens if robots completely take over the human jobs in the factories and at Walmart?

/Bevin

[there buster]

Those countries that embrace free markets, property rights, entrepreneurship, and the rule of law will continue to grow and rise. This may or may not include the U.S.

Ireland is a good recent example of this process.

The Democrats are determined to "reform" us into European stagnation.

Those countries that embrace central planning and socialist "guarantees" will be hampered.

Many of the world's poorest countries will stay that way, due to corruption and lack of freedom.

And while the left continues to bewail the inequality of income in the U.S., where poor people often own two cars and have cable TV, these "progressive" Third World kleptocracies will feature dictators who own private jets while the bulk of their people lack permanent shelter and clean drinking water. Far from being criticized, the kleptocrats like Hugo Chavez will be praised for offering "universal healthcare" even as large groups live in tarpaper slums in big cities.

[there buster]

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the USA needs to decide how it is going to transfer profits from manufacturers to everyone else.

Exactly the sort of central planning nonsense that will indeed pull the U.S. down to everyone else's level.

[there buster]

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But what happens if robots completely take over the human jobs in the factories and at Walmart?

Neo-Luddite silliness.

Once it was the whaling industry. Then it was oil. Next it was steel, and then the auto industry. When those jobs disappeared, what would happen to the U.S. economy?!!

With entrepreneurship and continual adaptation, we've grown continually more affluent. Our unemployment rate is historically low, much lower than Europe, and that despite millions of illegal immigrants.

IF robots replace the workers in Wal-Mart, we will be designing and building the robots. And when robots do that, we will be designing them. And with the added liesure, we will be making movies and music--

A materialistic worldview lacks imagination. And as Einstein said, imagination is more important than just about anything else.

[Robert]

American companies build factories in other countries which provide good-paying jobs for them and inexpensive products for us.

Your 100% delusional Shane, concerning trade issues!

American companies are elsewhere because of cheap labor and other perks, period! Let me give you a simple example of why these unfair trade polices are unfair:

Let's say you have a hamburger joint. I have one too down the road a bit. Thing is I get all sorts of perks because I know some people in high places. While you are required to pay a minimum wage, I pay about 2 bucks an hour. The taxes on my building are substantially less than yours, even though they are valued the same. In nutshell, because of unfair practices, more customers are showing up at my joint because of cheaper prices. Now you're almost out of business. So sorry!

Robert

[Dr. Shane]

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Shane's assumption is that America keeps its current standard of living and lifts other countries up to it

I would not go that far. There are too many variables for anyone to pretend to know what is going to happen. The US dollar, for example, seems to be artificially high because so many countries invest in the US to keep the dollar high because they have a vested interest in doing so. If the euro takes over as the most popular international currency, less countries may invest in US industries and the dollars' heyday will be on hold if not over.

I would raise my eyebrows if anyone starts making predictions of what will happen. The best we have is educated guesses. Most economists that I have read do not predict the euro taking the dollar's place although it is a real possibility. If the value of the dollar drops dramatically it will make goods from other countries more expensive which means more goods will start being manufactured in the US again. Currently many countries, like China, have their currencies pegged to the US dollar so when the US dollar falls, so does their currency. As a result, the falling US dollar does not cause an increase in cost for the goods from that country. That is what many call unfair.

[Dr. Shane]

The American companies I am familiar with (and some may have different deals) must pay their workers the wages set by the foreign government. In Mexico, many of the American firms have company stores where employees can purchase goods with vouchers. These are not the bad kind of company stores like coal-mining companies would use to keep their employees in debt. These are company stores that allow the company to skirt the maximum wage laws of Mexico. Mexican law states that an American company can only pay a factory worker X amount of pesos per day. So the company gives the workers vouchers, in addition to their pesos, that they can use at the company store. They do this so they can attract and retain good workers and they still save lots of money over what they would pay American workers.

This is the point. American factories can pay Mexican workers more than other factories in Mexico and thus provide the best factory jobs in Mexico and still save money over what they would pay American workers.

[bevin]

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the USA needs to decide how it is going to transfer profits from manufacturers to everyone else.

Exactly the sort of central planning nonsense that will indeed pull the U.S. down to everyone else's level.

Whoa - back up the bus. I never said the USA government needs to tax the manufacturers. I never said anything about central planning.

All I said was that, as a country, we need to decide how this is going to work.

You are making a proposal - you think that pure enterprenurial spirit will make it happen. Turns out I think you are largely right - I have seen it happen in New Zealand when they went to a more free market, user-pays system; and I see it happening in New Hampshire today.

But there are some issues that need to be thought through in the USA. For instance...

Should we DECREASE taxing manufacturers and/or INCREASE taxing imports to level the playing field so that the incentive to import to avoid paying taxes is avoided?

Should we continue to fund health care the way we do - all health care professionals agree the current system is absurd.

We have assets that are not privately owned. Oil, coal, radio spectrum, fish, land - what is the appropriate way to exploit these. Should they get given to friends of the current government, should they be leased, should they be preserved, ...

Should we continue to honor foolish property grants from the past? If George Washington had given his son all land west of the Mississippi, would we honor that grant today? Was it really his to give?

As we go into a world with different constraints and with different costs of manufacturing and transportation, these are reasonable questions.

Right now the USA does have central planning through the legal system - the liability laws, for instance, where you and I can enter into a contract and then have some random jury overturn it and award you millions of dollars in compensation because I did exactly what the contract said I would do...

/Bevin

[bevin]

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Once it was the whaling industry. Then it was oil. Next it was steel, and then the auto industry. When those jobs disappeared, what would happen to the U.S. economy?!!

It is a mistake to assume that, just because you have successfully fallen the first 99ft of a 100ft fall, the next 2 ft will be just the same...

/Bevin