Monday, August 15, 2011

I [heart] outsourcing!

I consider myself somewhere between the WSJ editorial page and Pat Buchanan when it comes to free trade but listening to the "no China" crowd on Lars today was just too much.

The reality is that all those callers are fans of outsourcing and unless they are farmers they outsource their most basic need: food production.

The average Joe has realized that it makes more sense for them to work 40 hours a week for a salary that allows them to buy inexpensive food from the grocery store rather than work 80 hours a week to grow their own food.

They trade their particular labor skills for money to exchange for goods/services from other people's particular labor skills. This only makes sense.

Rather than spend your time farming you can be a lawyer/mechanic/doctor/etc and buy food with money left over for housing, clothing and internet!

But I see these same people who are happy to "outsource" their internet connectivity to Comcast crying just because I don't mind buying an inexpensive toaster made in China.

I must be a fool for thinking that my time is better spent earning a wage that allows me to buy the toaster rather than spend my time building a fire and toasting the bread myself.


Anonymous said...

Freedom is what allows an individual or a company to outsourse. Would we limit freedom? How would you stop Nike from having those shoes made in China? But at the same time it is possible to protect both our economy and our jobs.

1)A simple change in our trade agreements that required trading partners to buy as much from us as they sell to us. This could be phased in over a few years starting at buying at least 50% of what they sell with the next year 75% and then 100%.
2)identify critical products, manufacturing capability and skills and require that a minimum of these things are done inside the U.S. and by U.S. workers. Things like aircraft, forging, machining, etc. A reasonable goal might be 25% or it could be as high as 50%.
3) eliminate taxes on businesses and replace it with a VAT on goods and services. This would put U.S. companies at an advantage because their products would be cheaper.

Anonymous said...

I disagree with #1. Comparative advantage is what makes globalized economies work for the US, and a quota would be an incentive for them to produce less and sell it to us at an increased price.

Average Joe said...

I must be a fool...

No argument there. For our family, it takes about 3-4 hours a week to grow a lot of our own food, in a pretty big garden, after the initial planting is done, which basically burns up one or two weekends in the spring. But I can see how you might not have those three or four hours a week if you spend the time in target practice with a semi-automatic rifle, watching TV with your fellow sheeple and writing idiotic blog posts. To each his own.

Anonymous said...

#1 is not a quota. What could be more fair then your trading partners actually trading. But more importantly you need to know that most other countries have these restrictions and far worse. This at least is a simple and fair regulation that would not encourage companies to produce less.

MAX Redline said...

@Anon 753: Have you ever experienced the effect of VAT? I have, and it ain't pretty. It's a tax added to a tax added to a tax; every time value is deemed to be added, another tax is laid on. It actually makes goods and services needlessly expensive.

@AJ: How nice that you have property with sufficient space to grow 100% of your family's food. Selfish, of course, but nice for you. Metro planners would prefer that the space you're devoting to food production be taken up instead with additional housing. Actually, they'd prefer that you move into a lab-rat cage, use light rail, and not worry about trying to produce your own food.

You're just greedy.

MAX Redline said...

@AJ: By the way, how are your tomatoes coming? Got any ripe yet?

Since you grow a lot of your family's food, I assume you're really into canning and preserving, baking your own bread, slaughtering your own animals.

Did you cut trees and mill lumber for your home construction?

I actually know people who do all of the above. One has spent this week baling hay and stacking a thousand bales into one of the barns that he built with lumber he milled.


Anonymous said...

This idea of freedom in the global market is great in theory. It assumes that people can easily move to find jobs and says nothing about peoples standard of living, the unemployed's drain on society, the population explosion, etc...The reality of it is ugly. As long as my job is not outsourced then I don't care. When it is, and it will be eventually, I will have to re-train and do something else to support my family. Not a great prospect, the older I get.

Average Joe said...

I said I have a garden, not a farm. And the tomatoes are just starting to come in, actually. Thanks for asking.

Anonymous said...

”It assumes that people can easily move to find jobs and says nothing about peoples standard of living, the unemployed's drain on society, the population explosion, etc...The reality of it is ugly."

You bring up some interesting points, and I don't know anyone who would argue that global trade is perfect. However, I'd point out that free trade in a global sense is almost always good for both country's economies, and strong economies tend to generate more jobs in the countries that engage in it. There's no argument that the transition can be difficult for individuals, but those individuals who remain versatile and strive to keep their skills marketable will thrive.

Anonymous said...

I can't speak to how every country with a VAT manages their tax or how politicians change it. But in theory a VAT only taxes the increased value of a product and as such does NOT tax a tax. On the contrary it is a regular sales tax that taxes a previous tax.

Anonymous said...

And to add on to what Anon 9:48 said, VAT's are not inherently bad. Look at Canada. Their economy is much more sound than our own (even with all of their "socialism"), and their VAT doesn't seem to be standing in he way of their vibrant economy. In fact, the VAT is gaining favor internationally because it has several advantages over a sales tax. When properly implemented (so that certain other taxes are offset), it can be a useful tax structure.

In fact, I can't understand why a true conservative would have any problem with a VAT, since it would broadly tax consumption instead of production.

Of course, in today's political climate, we can't even have a honest national discussion about a VAT's disadvantages and merits because "VAT" has the word "tax" in it. Conservatives tend to be philosphically opposed to any and all taxation, which they often regard as "theft". Interestingly enough, these same people who bitch and moan about taxation are often some of the same people who loudly bitch and moan when the government considers reducing some entitlement that they personally benefit from. The old, "I want my cake AND I want to eat it too" argument.

Speaking of such hypocrisy, I was listening to Lars the other day (I can take about 30 minutes of his constant spinning and distortions before wanting to throw-up), and some nurse called to blame Obama for the fact that she was just laid-off. She had worked at a nursing facility that catered to elderly Medicaid recipients. Because Medicaid was recently cut, she lost her job. So on the one hand, she's a conservative who wants government to spend less. On the other hand, when that decrease in government spending affected her personally and caused her to lose her job, she cried "Foul!" (And do you think Lars pointed out this blatantly obvious hypocrisy? Of course not. Any chance to engage in Obama Derangement Syndrome and blame Obama for something, negates any need to point out obvious hypocrisy.)

I see this type of hypocrisy often amongst conservatives. Wanna see it yourself? Just go up to ANY conservatiove who collects a Social Security check. Ask if they'd be willing to have their check reduced 20% if overall spending on SS was reduced 20%. Don't be surprised when they vehemently oppose your suggestion based on the silly notion that they "earned" that money, despite the fact that they will likely collect far more than they ever put into the system.

Yup, conservatives really dislike OTHER people being on the government dole. But when it comes to them, well..."that's different". It always is, isn't it? :)

Anonymous said...

Canada is in a totally different situation then the U.S. is. They are a resource rich country with a small population and the worlds biggest market right next door. Their succes is in spite of their socialism and high taxes.

Don't forget the VAT would/should replace other taxes not in addition to other taxes.

Anonymous said...

"Their succes is in spite of their socialism and high taxes."

Lol, you crack me up. Leave it to a conservative to spin success as failure.

'Course, I might take you more serious if you had anything to back up what you said...

Anonymous said...

The statements are backed up by facts. We are Canada's largest market. Canada is sitting on huge resources most of which we buy. Canada has 1/10th of our population. Because of their vast resources and willing buyer they have more jobs then people. They should be doing even better then they are but their high taxes are holding them back.

Anonymous said...

"The statements are backed up by facts."

Lol. What facts? Can you source them? Or are you just spewing your interpretation of Canada's economic history?