Recession coming?

[RatLabGuy]

I hear ya, and I agree with a lot of the principles of what you're saying, but it's definitely not being communicated well in my opinion.

Politics and policies are a big part of it, but the American addiction to buying the cheapest shit is the driving force behind it. Harbor Freight used to make the cheapest crap tools at the cheapest prices, and Craftsman used to make good quality tools at a fair price with a lifetime warranty. Craftsman died while Harbor Freight flourished. Honestly, I place a big part of the blame on the boomers because they grew up with good stuff, took it for granted, cheaped out on everything for their own benefit, and didn't give a crap what was left in the wake.

The biggest problem with outsourcing that is impossible to accurately quantify is the long term value of the knowledge, equipment, and skills that are retained by keeping production stateside. Understanding how things are made and why they are made a certain way and how they are designed and what it takes to source and supply the raw material and go from nothing all the way to a finished product is often as much an art as it is a science. 99 times out of 100, a well sorted process will produce better results than a "better" process that is not yet optimized. Just look at what GM has done with the pushrod V8. Science can prove that dual overhead cams and desmodronic valves and pneumatic-this-and-thats are better, but a stock 400hp LS will still deliver a beatdown, run reliably for a quarter million miles, and is simple to work on and manufacture and assemble. And a little forced induction easily puts them in the nearly 700hp range, with a warranty, from the factory. Because it is well understood and well sorted out. The reason it works for the LS is because they have been developing that platform since the mid 90's.

I don't think anybody disagrees with the principles laid out here.

Point being that when you separate engineering/production/assembly, there is a knowledge gap, and when you move these things to different countries in different time zones, there is a communication and understanding gap, and "progress" stalls and sometimes even regresses. Add in the drive of companies to make things cheaper (primary driver of outsourcing), and focus on investor returns (short term profits, often at the cost of long term value), and you end up in the situation we are in, where US companies post record profits for overpriced, low quality products, made in 3rd world countries (or 3rd world conditions), and often with little regard to true long term environmental impact of such disposable products and a non-level playing field when it comes to regulations and working conditions.

The question remains, how do we address this problem? Some ideal has to give.
Either it is a willingness to deal with things just being produced elsewhere, OR a willingness to have a substantial change in how our free market operates, OR a willingness to have a lot more government involvement in the business cycle in order to steer the correction. There is no alternative to one of those. Tell me which ideal you're willing to violate and we can work out a solution.

 

[83oldyoda4x4]

Shouldn't the government at least negotiate some good trades deals and tariffs.
I mean these other countries tax the piss out of american goods and what do we do on imported goods?

 

[DSM Turbos]

I don't think anybody disagrees with the principles laid out here.

The question remains, how do we address this problem? Some ideal has to give.
Either it is a willingness to deal with things just being produced elsewhere, OR a willingness to have a substantial change in how our free market operates, OR a willingness to have a lot more government involvement in the business cycle in order to steer the correction. There is no alternative to one of those. Tell me which ideal you're willing to violate and we can work out a solution.

Considering americans keep buying the overseas produced stuff, and complain about the prices of finding the same thing that is made in the USA, I think people have mostly spoken. Supply and Demand.

 

[RatLabGuy]

Shouldn't the government at least negotiate some good trades deals and tariffs.
I mean these other countries tax the piss out of american goods and what do we do on imported goods?

How much do you want to pay for your goods? Do you enjoy inflation?
In the end, its the consumer that pays those tariffs.

Also - again - is it the governments job to intervene in the free market?

 

[DSM Turbos]

China is becoming less relevant in many manufacturing areas these days. A ton of it is moving to Vietnam.

You see it in IT a lot also, always looking for cheaper labor. Every 10 years its moving somewhere to find the next cheapest place to do whatever your business is doing.

 

[RatLabGuy]

Considering americans keep buying the overseas produced stuff, and complain about the prices of finding the same thing that is made in the USA, I think people have mostly spoken. Supply and Demand.

So then which f the other two ideals do we give up?

 

[drkelly]

You see it in IT a lot also, always looking for cheaper labor. Every 10 years its moving somewhere to find the next cheapest place to do whatever your business is doing.

Lots of 'work' and 'work packages' at my work is sent to India because the engineers rate over their is much cheaper. I'm actually reviewing some work right now that a couple of guys did for me over the past few months.

 

[DSM Turbos]

Lots of 'work' and 'work packages' at my work is sent to India because the engineers rate over their is much cheaper. I'm actually reviewing some work right now that a couple of guys did for me over the past few months.

My last company was moving a lot of "work" from India to the Philippines

 

[DSM Turbos]

So then which f the other two ideals do we give up?

I'm not personally complaining about how it is now. I buy US made when it makes sense, and I buy imported shit when it makes sense.

 

[jeepinmatt]

I don't think anybody disagrees with the principles laid out here.

The question remains, how do we address this problem? Some ideal has to give.
Either it is a willingness to deal with things just being produced elsewhere, OR a willingness to have a substantial change in how our free market operates, OR a willingness to have a lot more government involvement in the business cycle in order to steer the correction. There is no alternative to one of those. Tell me which ideal you're willing to violate and we can work out a solution.

Stop being cheap bastards and only buy good stuff. If the market demands quality over price, things will eventually shift. Unfortunately it took 50+ years to get here, so it won't happen overnight. I'm guilty of it too, but I try to prioritize quality over cost, even if its sometimes just for the principle.

 

[RatLabGuy]

Stop being cheap bastards and only buy good stuff. If the market demands quality over price, things will eventually shift. Unfortunately it took 50+ years to get here, so it won't happen overnight. I'm guilty of it too, but I try to prioritize quality over cost, even if its sometimes just for the principle.

So how do you make that happen? How are you going to get a culture change?
Especially for poorer folks that have limited options.

 

[RatLabGuy]

It's like the old adage, "Good, fast, cheap - pick any two."

Just switch to "Good, Domestic, Affordable - pick any two."

 

[83oldyoda4x4]

So how do you make that happen? How are you going to get a culture change?
Especially for poorer folks that have limited options.

Import tax.

So question, how did all these american companies afford to pay their employees well and give them a pension when they retired? Is it now corporate greed taking all the profits or are they no longer as profitable?

 

[RatLabGuy]

Import tax.

So just make everything really expensive? You enjoy inflation? How do you deal with the shit economy while the transition happens?

Also - you're cool with the govco pushing the private market around?

 

[Bebop]

Import tax.

So question, how did all these american companies afford to pay their employees well and give them a pension when they retired? Is it now corporate greed taking all the profits or are they no longer as profitable?

Does not work.

I already posted this, but:

When the previous gov implemented tariffs on chinese steel (in order to make US steel more competitive), the first thing the US vendors did was raise the US-made product by the same margin and people kept buying chinese because the US shit is still much higher.

 

[DSM Turbos]

Import tax.

So question, how did all these american companies afford to pay their employees well and give them a pension when they retired? Is it now corporate greed taking all the profits or are they no longer as profitable?

What are those other countries going to do then on the export tax of their raw materials that we need?

 

[83oldyoda4x4]

So just make everything really expensive? You enjoy inflation? How do you deal with the shit economy while the transition happens?

Also - you're cool with the govco pushing the private market around?

I guess we should just only sell services to other american and drop manufacturing all together.

Since when hasn't Govco been involved in the private market lol

 

[83oldyoda4x4]

So just make everything really expensive? You enjoy inflation? How do you deal with the shit economy while the transition happens?

Also - you're cool with the govco pushing the private market around?

What are those other countries going to do then on the export tax of their raw materials that we need?

So lets take automotive industry, We tax cars from EU what 2.5%. Yet they tax ours at 10%.

So your telling me we couldn't get that negotiated a little more evenly to help US cars be more competitive not just in US but world wide?

 

[RatLabGuy]

So lets take automotive industry, We tax cars from EU what 2.5%. Yet they tax ours at 10%.

So your telling me we couldn't get that negotiated a little more evenly to help US cars be more competitive not just in US but world wide?

The imbalance of import tax isn't really the problem. Its that if you made it even, then American consumers are now just paying 7.5% more on the price of an already overpriced car they can't afford, because the car CAN'T be made domestically right now, or that the domestic mfr will raise the price by the same amount, and even if it could it would still cost 20% more to buy because American labor is expensive and we'd still have to import other materials to build it.
The real "negotiation" isn't between governments, its between the government and the consumers.

I guess we should just only sell services to other american and drop manufacturing all together.

That's literally the situation we are in right now. And yet here people are bitching about what a precarious position it is (rightly so).

Since when hasn't Govco been involved in the private market lol

Sure, and I bet you love it right? So you're advocating they get even more involved.

 

[CasterTroy]

How are you going to get a culture change?
Especially for poorer folks that have limited options.

Oh wait... we're not talking about elected officials

 

[jeepinmatt]

So how do you make that happen? How are you going to get a culture change?
Especially for poorer folks that have limited options.

Are they poor because they keep buying cheap things that don't last and they have to buy another?

So just make everything really expensive? You enjoy inflation? How do you deal with the shit economy while the transition happens?

Also - you're cool with the govco pushing the private market around?

Keeping the money and production in country actually reduces inflation, so long as the rest of the world percieves your products and dollars as valuable.

And no, government is the problem, not the solution. Abolish the Fed.

 

[jeepinmatt]

So question, how did all these american companies afford to pay their employees well and give them a pension when they retired? Is it now corporate greed taking all the profits or are they no longer as profitable?

Does not work.

I already posted this, but:

When the previous gov implemented tariffs on chinese steel (in order to make US steel more competitive), the first thing the US vendors did was raise the US-made product by the same margin and people kept buying chinese because the US shit is still much higher.

This is true in a short term view, and a great example of why people in this country don't have the fortitude to "get back to where we were" so to speak. We are in a global economy, so all actions have global reactions. Tariffs on Chinese steel are only sensible if Chinese steel is outselling US steel in the US because of cheaper prices for similar quality, and the US steel companies have sufficient or excess product available. Shifting demand for US steel via tariffs on Chinese steel doesn't work if it is only a politically patronizing nod to a dying industry, that suddenly creates a short term demand spike at understaffed and underequipped companies, which have to scramble to meet short term artificial demand. It has to be a sensible, gradual approach that takes into account many things which I don't know and I don't have an answer for.

 

[83oldyoda4x4]

Because you don't want to pay the prices it would cost to do all of that in the US.
Its simple economics, it's cheaper to get things from other places.
That's how capitalism works.

The imbalance of import tax isn't really the problem. Its that if you made it even, then American consumers are now just paying 7.5% more on the price of an already overpriced car they can't afford, because the car CAN'T be made domestically right now, or that the domestic mfr will raise the price by the same amount, and even if it could it would still cost 20% more to buy because American labor is expensive and we'd still have to import other materials to build it.
The real "negotiation" isn't between governments, its between the government and the consumers.


That's literally the situation we are in right now. And yet here people are bitching about what a precarious position it is (rightly so).

Sure, and I bet you love it right? So you're advocating they get even more involved.

So what is your opinion on a solution to this problem .gov has created.

 

[shawn]

corporate greed

That's not a thing.

 

[Bebop]

This is true in a short term view, and a great example of why people in this country don't have the fortitude to "get back to where we were" so to speak. We are in a global economy, so all actions have global reactions. Tariffs on Chinese steel are only sensible if Chinese steel is outselling US steel in the US because of cheaper prices for similar quality, and the US steel companies have sufficient or excess product available. Shifting demand for US steel via tariffs on Chinese steel doesn't work if it is only a politically patronizing nod to a dying industry, that suddenly creates a short term demand spike at understaffed and underequipped companies, which have to scramble to meet short term artificial demand. It has to be a sensible, gradual approach that takes into account many things which I don't know and I don't have an answer for.

I agree.

We need instagram / tiktok influencers / movie stars to shift people's mind towards buying american again.

This is how you change peoples point of view.






Tell me I'm wrong !

PS: I'm aware how sad this may sound but I actually think it would work.