With a tax adavantage of having no corporate income tax, and the fact that the American worker will be much better educated than the $1 / hr (peasant) worker, the employer will be able to use much more advanced techiques and automation to make up the difference - probably more than make it up. And then wait until transportation costs catch up with importing things - the price of shipping stuff across the ocean is absolutely going to skyrocket if AlGore gets his carbon cap-and-trade nonsense instituted, and it looks like he will. There are no commerical nuclear cargo ships - they all run on fossil fuel.
Way back (so I have heard) Henry Ford realized that he had to (1) pay his employees well enough so that they could afford to buy his cars; and (2) give them enough time off that they had opportunity to drive a car and thus have the incentive to buy one.
Can a worker on today's minimum wage afford even the cheapest car? I mean: to buy a new one and run it?
Heh...given that minimum-wage workers still pay a huge chunk of the wages in taxes, they'd be lucky to buy Aunt Judy's beater.
Back in the 50s (according to a Readers Digest article a while back) the average worker in the 1950s could afford a new car and his house, without requiring the spouse to work. Even in the so-called "good" economy of the Clinton administration, a person would have had to be an executive to afford an average car and a house payment, especially once taxes are added to the mix.
In today's tax mix, a job for say $18 per hour (about 2.7x minimum wage) in an engineering field (most companies appear to value engineering about the same as Dilbert's boss does) ends up a net of around $13 per hour. That's just the taxation (including SS) on the income. Then you get taxed 6 to 10% to spend it, taxed on any interest if you save it, taxed on owning certain items, taxed if you sell them, and if you die with possessions the survivors get taxed. All that taxation and the Feds still run up the deficit (I don't blame Bush, didn't blame Clinton and will not blame Obama since the POTUS merely signs or vetoes what the Congress sends). We likely have the most expensive government in the world.
Minimum wage is like most regulation on companies, a mechanism that gives some companies an advantage over others. For instance, let's say you own a giant corporation and you pay people X/hr and there are new smaller companies trying to eat away at your market share and they pay X-3/hr. Simple solution, get a minimum wage law passed that sets the minimum at X-1/hr. Raise your competition's costs. This is why Walmart is in favor of the minimum wage, they already pay more than their competition for labor so they need to drive up their competitor's costs.
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The other angle is from the side of labor unions and established workers wishing to protect their market share of labor. The first law towards a minimum wage (which bush II was blasted for ignoring after katrina) was designed to keep low skilled workers from being competition to those already established. By establishing a minimum wage it cuts people off the first rung of the job ladder because they don't yet have the skills for their labor to be worth the minimum.
When Henry Ford started making model T's there was not yet a Federal Reserve system nor an income tax. It is these two pieces of the Wilson administration along with the inflation for WW1 that started the ball moving towards the point we are at today. Since then the federal reserve system continually devalues the dollar for the benefit of its owners and friends. War causes inflation as the government has the federal reserve create money to fund those wars and increases spending on welfare/entitlement programs in a 'guns and butter' type system. Today there are just massive bailouts in the trillions of dollars to the government's and federal reserve's friends. Meanwhile the public is distracted by the media to the mere 25 billion for the automakers. Citibank gets $45 billion plus $300+billion in backing instantly and it's just mentioned in the press. No lingering debate or even debate if Rockefellers should travel in coach.
When examining why people can't afford a house and car on one income anymore the blame lies in large part on the federal reserve system. It causes the bubbles. It drives inflation. It's reason to exist is to inflate. Finally we start to get a little deflation and it's all so horrible according to the pro-fed media. Why is it horrible? Deflation is a good thing for people who save, it's good for poor people who now can buy a little more with their money. It's only bad for those who benefit from the inflation system, those at the top of the banking and government systems.
Another factor in 'can't afford it' is that many people think they have to have so much crap and such a bigger house, etc that they don't realize that's the reason they need two incomes. That if they lived in a 1950s style house and set their sights of a car a little lower then they could. This of course isn't the case at all for anyone on the lower end of the wage scale.
The US automakers aren't paying income tax. The reason is they're not making any money.
Furthermore, if they were to make a profit, they still wouldn't owe any income tax because they can carry prior losses foward against future net income.
The US automakers can make money for several years before they'll owe any tax. Your theory that income tax is what is raising the prices of their cars is without basis based on the above.
Furthermore, its without basis on general economics because the buyer determines the price of the product. The seller's costs only determine whether he will make a profit at that price. The buyer doesn't evaluate what it costs to make something and what a fair markup on that would be. He evaluates what the item is worth to him.
Part of that evaluation is what he can get for the same money from someone else. Even if a chevy is worth $20,000 to someone but he sees a toyota for $18,000 that has all the chevy has plus a little more, it's unlikely he's going to buy the chevy. He'll see the toyota as being worth $21,000 to him and costing only $18,000. A bargin.
Don't suppose it occurs to anyone that had there been no corporate income tax when they _were_ making money, they would have had more to invest, do more research and development, make better cars, accumulate some operating capital, etc., rather than shipping about 40% to the gov't.
Largely irrelavant. Except possibly if you're an oil company.
Partly true.
You're only taxed on your NET PROFIT.
R&D, aquiring other companies, buying new equipment, etc, are all pre-tax costs.
If you have any money left after all that, and if you don't have any past losses to carry forward, then you pay corporate taxes. And if you have any money left after you pay taxes, then you pay dividends out of what's left. Or you keep it in the bank.
But since many companies are operating on credit, and since they have past losses, I doubt they've posted any profits recently that were taxible anyways.
What's going to hurt the federal and state gov'ts in the next few years are the income taxes of the thousands of white collar and blue collar people in the auto and financial services sectors that are unemployed or becoming unemployed.
I think the best idea would be to not tax corporations _at all_ and be D*** glad that they are here and not in India or Mexico or Canada or Russia. Corporations don't pay taxes anyway, their customers do.
Oh, yeah, and if we get the depression-era 25% unemployment or worse, its going to hurt a lot. If the US loses its AAA credit rating, and China won't lend us money, there's going to be a lot of death and... recovery at all would be in doubt.
Canada is not India or Mexico or China when it comes to economic trade. Canada is pretty much the only country in the world that the US can count on to be affluent enough to buy a lot of US-made stuff and NOT have huge import duties or taxes applied to that stuff, and be close enough so it doesn't cost a fortune to ship that stuff there.
The problems for US trade are Mexico and China. There was no practical value for the US to sign a free trade agreement with Mexico. Unlike China, I've never heard that Mexico buys a lot of US-gov't T-bills to support it's trade surplus with the US. All I hear is a lot of grief that the US has over illegal immigration (supported by the Mexican gov't) and the drug problem caused by Mexico. Why the US congress and senate allows Mexico to get away with all that shit, and still allow it to be part of NAFTA, I'll never understand. They weren't even part of the "coalition of the co-opted" - they sent no troops to Iraq or Afghanistan.
India and Russia are no threat to US jobs because they are too backwards and corrupt to be alternative locations for moderately skilled blue-collar jobs.
The heavy trade reliance that the US has with China is designed to convert them from communism to capitalism. I have no idea if it's going to work in the long run, but in the short term it has contributed to the erosion of US blue-collar jobs like nothing else in history.
Maybe not, but it has the one thing in common with them in that it is _not here_!
We need stuff here so that American workers can have good manufacturing jobs and we can produce stuff so that we halt our slide toward having our only national endeavors being burger flipping, stock trading, and suing each other.
Still, our manufacturing sector needs a huge boost. It'll take a combination of squelching envirowackos, BANANAs, and NIMBYs that oppose everything that has to do with manufacturing or construction, and making it profitable to be in the USA again.
Congress is corrupted with lobbyists. That's probably the main thing that makes Congress act strangely. We probably need to eliminate lobbyists altogether, or at least restrict them to those that represent blocks of voters.
They seem to do OK at siphoning off the software jobs. Working in a factory is easier than building software.
It ain't worth it, then. We need our middle class to prosper. Wages have been stagnant since the 70's. A lot of it has to do with the huge amounts of money being shunted into "environmental concers" that will, if this global warming nonsense really gets going, probably make a depression-era existence a permanent thing. And the rest of it is mostly shipping our jobs overseas by making a hostile manufacturing environment here with things like taxes and wildly excessive pollution regulations.
Why do we need "good jobs" with the qualifier "manufacturing"?
Why not let other countries pollute themselves with heavy industry. Why don't we find some nice clean highpaying stuff to do? Oh, because our workers are dumb... because people complain about taxes (that on a world wide basis are very reasonable) and elect people who cut them, and then with the lower taxes we find out the schools suck.
Why would voters need lobbyists? If you outlaw them, then you just write your Congressperson/Senator.
See education comments above.
Hostile manufacturing environment? So hostile that Subaru is losing money running a no land fill plant in Lafayette IN? GM, Ford, and Chrysler doing anything like that while they're making tons of money?
Actually, if you want to know what happened to GM, Ford, and Chrysler, its this:
1) They have an old model for handling retirees that assumes their workforce will grow over time, but instead in got smaller (the same problem social security has), and so now they're buried in the cost of supporting that.
2) They haven't needed new factories, because their volume has dropped, so all their factories are old an not up to current efficiency standards.
3) In addition having volume drop, they've knowingly given up volume by giving up markets. Look at GM and its small cars. Outside of the Saturn SL, GM hasn't built a small car on its own since the Chevy Vega, which came out almost 40 years ago. The Chevette was a reskinned Opel and the entire Geo line consisted of bought cars for which GM was merely a distributor. Ford's second generation Escort was a Mazda 323. Its Festiva was built in Korea.
4) What were the best engineers in America doing in the 70s and 80s? Working on the space shuttle and on weapons. People sit back and say the USSR couldn't compete with Reagan's military build up. True enough. But the US couldn't compete with the Asians in consumer goods while that was going on. People can see that spending a bunch of money on military goods broke the USSR, but don't bother to look and see what it did to the US.
I'm sure waving the flag makes some people feel good, but what good are feelings if you're waving the flag over a broken economy? Oh, yea, and George's spending on the current wars pretty much finished things off... over $700 billion in borrowed money... so far.
Because - there are a lot of people that are not comfortable programming computers, and so forth. They are, however, quite comfortable doing plumbing and electrician work and working assembly lines, and so forth. A manufacturing job working for a factory that employs 300 generally pays far more than a comparable job working for a private business that has 5 plumbers, or 7 electricians, etc. And of course the factory employing 300 is 300 more jobs in a city of 15,000 people than would otherwise be in that city by simply servicing people's residential plumbing and electrical and other needs. IOW, with or without a union, these jobs are "better" in both wages and working conditions than comparable jobs.
Because, America needs manufacturing in the country. These are basic parts of the economy that produce something of value where it didn't exist before. Produce a car, and there is value in that for a very long time. Produce a hamburger, perform some service, that work is often undetectable the next day.
Because America needs manufacturing in the country as both a National security issue and an economic issue. If we need to go to war, we shouldn't have to check to see if we're getting something necessary to conduct that war from the country we're going to war with. IOW, if we're attacked by Japan (again!), how great an idea is it if we're getting most of our cars from them? How about if we're attacked by someone that is friendly with Japan or (some other of our sources of manufactured goods) and decides to withhold their products from us to help their "friends." Plus, there's a balance of trade issue if we're not doing something in any major sector such as manufaturing. We bleed money to the rest of the world in the textile industry and the auto industry and the electronics industry, etc. I read somewhere that we _can't_ reproduce the battleships we once built because we don't have the steelmaking industry we once did. Not sure if its true, but its plausible. We shouldn't be in such a position.
Because if we don't hang onto our manufacturing sector, we're going to forget how to do it. No, really. The vast majority of human knowledge is not written down, it exists in the memories of individuals. Let the rest of the world do the manufacturing, we will, as a nation, forget how - or at least how to do it efficiently. Nobody can make a Stradavarius violin now because that manufacturing process was not written down or handed down in an apprenticeship through the decades. That's lost knowledge. It could happen here.
Because heavy industry is lucrative like few other endeavors and allows greater prosperity for people that have IQ's under 130 than any other thing one can do. You can be a lawyer or doctor and live better, on average, than factory workers. You used to be able to do it as a programmer, but outsourcing and H1B visas allowing virtually the entire world to come here and take jobs from Americans has pretty much gutted that profession. "Smart" college students don't study computer science any more unless they absolutely love it and don't care how long it takes to pay off their student loans, because they aren't going to be making all that much $$$ any more.
Because there is no such animal that can be performed by those that can, or feel comfortable, doing factory kind of work. We need _good_, high-paying jobs for people who enjoy and have aptitude for working primarily with their hands as well as their brains.
Look, fully half the population has IQ's less than 100. Those people are not going to make good doctors, lawyers, or computer programmers, but they can make good factory workers. Factory work is one of the few avenues to higher prosperity for those people. Plus, not _all_ of the factory workers have IQ's under 100, either, but the person with, say, an 85 IQ can still do a crackerjack job on an assembly line or running some stamping machine or etc.
Voters sometimes need a collective voice concerning certain issues. Abortion, unionization, gun control - these things are best approached by groups with spokespeople.
And if any kind of group has a representative for their interests to people in Washington, it should be voters. "The people" are what this country is all about. If industry wants such a voice, maybe they'll need to form the "guild of manufacturing executives" or "The American Bar Association" or "The Screen Actors Guild" and so forth. Having people that represent entities that are not people, but corporations, is, I believe, proving to be a bad thing.
Education is fine, but my Mom was a teacher - with respect to education, she said, "You can't pour 5 gallons of water into a 4 gallon pail," meaning you can't teach a guy with a 90 IQ to be a doctor, or a software engineer. It just ain't happenin'.
Yep, that too.
Seems reasonable.
GM's, and other American manufacturer's bread and butter were in large cars and trucks. They do/did them very well. Why waste your engineering and research talent making cars that Americans don't want to buy (from you?) The rest of the world had a huge headstart in small cars, and attempting to get as good as or better than them was basically paddling upstream, esp. when it was necessary to expend every available ounce of engineering talent attempting to satisfy the (unreasonable, in my opinion) demands of the greens concerning tailpipe emissions as well as factory emissions and the safety radicals in terms of auto safety which are both harder for larger cars and trucks.
If we hadn't taxed the snot out of manfacturing, and let the greens go hog-wild in f'ing the manufacturing sector with wildly excessive regulations, we could have had a growing consumer manufacturing industry, too. But the greens were (and still are) allowed to approach the issue of "the environment" as if there was a bottomless pit of money to pay for it. Also worth mentioning is the safety issue - that is far overdone, too. Why should I be _forced_ to buy safety features that I don't want on the car I buy? I don't want air bags. I don't want antilock brakes. I don't want stability control. I don't want traction control. I want the $$$ that my car would be cheaper by due to not paying for these features. Everything like this makes individual prosperity to be less. Not being forced to pay for things we don't want or need probably should be an amendment to the Constitution. But all the money spent on that both in the excessive price of goods with unwanted features and billions spent in taking the last few grams per mile of some pollutant out of a manufacting plant's smokestack or a vehicle's tailpipe (which is much harder to do for a big car or truck than it is for some imported rollerskate of a car) is lost to people that might otherwise have spent it on a better standard of living for themselves.
Well, we could have simply stayed home and done nothing, and let the terrorists keep hitting us, year after year after year... how many buildings would we be missing now? How many more people would be dead when the terrorists do finally get their hands on weaponized anthrax? I think without going to Afghanistan and Iraq, we would know the answers to those questions, and we wouldn't like it
- assuming we were among those that could still care about it.
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