# Ben Bernanke has a new tool at hand: open-ended bond buying



## BillS

When you read this story it should scare you:

http://www.washingtonpost.com/busin...829b2c-faff-11e1-a65a-d6e62f9f2a5a_story.html

This part in particular:

"Three Fed presidents have voiced support for an open-ended approach: San Francisco's John Williams, Boston's Eric Rosengren and Chicago's Charles Evans."

In other words, they want the Fed to print unlimited money until the economy improves or the dollar is totally destroyed. Here's the full text of the article:

Sept. 10 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke, who last month defended his unorthodox monetary policies, has a new tool at hand should he seek one to a revive a flagging economy and labor market: open-ended bond buying.

Barclays Plc forecasts the Federal Open Market Committee this week will announce monthly purchases of $50 billion to cut the jobless rate while holding inflation at 2 percent. *Economists at Goldman Sachs Group Inc. and BNP Paribas, responding to last week's report of slowing job growth, also say they expect an announcement of an open-ended plan on Sept. 13 after a two-day FOMC meeting*.

The Fed's practice of specifying an amount and an end-date for purchases has resulted in abrupt withdrawals of stimulus that later was renewed after the central bank failed to reach its goals. By contrast, an open-ended program would tie purchases to a sustained improvement in the economy, said Michael Gapen, senior U.S. economist at Barclays and a former member of the Fed Board's Division of Monetary Affairs.

"As a Fed chairman, 2 percent growth isn't doing it for you, 8 percent unemployment isn't doing it for you -- they need a faster acceleration," said Gapen, who is based in New York. "So, the decision is, 'OK, let's hit the pedal."'

Three Fed presidents have voiced support for an open-ended approach: San Francisco's John Williams, Boston's Eric Rosengren and Chicago's Charles Evans. James Bullard of St. Louis said that while he backs the strategy, he wants to see more economic data before taking action.

Treasuries, Gold

Treasuries, gold and stocks rose on Sept. 7 after a Labor Department report showing payrolls rose less than forecast as investors increased bets the Fed will expand record stimulus at its meeting this week.

Employers added 96,000 jobs in August, down from a 141,000 increase in July. Average hourly earnings were little changed, and the unemployment rate unexpectedly declined to 8.1 percent from 8.3 percent as 368,000 Americans left the labor force.

Bernanke, in an Aug. 31 speech in Jackson Hole, Wyoming, said additional bond purchases were an option to spur growth as he made the case for further stimulus. He didn't specify the duration or amount of any new program.

In the first round of so-called quantitative easing, the Fed in March 2009 began purchasing $1.25 trillion of mortgage- backed securities, $175 billion of agency debt and $300 billion of Treasuries to provide further stimulus after the benchmark rate was cut to zero in December 2008.

Operation Twist

In the second round, announced in November 2010 and lasting through the following June, the Fed bought $600 billion of Treasuries. Last September, the Fed announced its Operation Twist program to replace $400 billion of debt in its portfolio with longer-term securities through June 2012. That was later extended to the end of this year.

With open-ended buying, the central bank would "adjust this program as time goes on, either to increase it or decrease it, end it sooner or later, depending on how economic conditions develop," the San Francisco Fed's Williams said in an Aug. 31 interview at a Fed symposium at Jackson Hole.


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## UncleJoe

Just another way of pulling the wool over the eyes of the sheeple.


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## partdeux

I predicted it last winter, late september early october

One more after that and we'll be done... put a fork in it done.


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## invision

Open ended till the end... Devalue the dollar to the point of collapse... Wow! Our tax dollars hard at work.


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## db2469

invision said:


> Open ended till the end... Devalue the dollar to the point of collapse... Wow! Our tax dollars hard at work.


I still don't get it...what seems so obvious to John Williams, Peter Schiff, Rogers, and many others doesn't seem even worth considering to the Federal Reserve boys and others..what gives?


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## Bobbb

A lot of aspects of modern life are complex but that doesn't mean that everything in modernity is complex. The question of what ails the economy is not a complex issue. There are, essentially, two viewpoints.

1.) The problems that affect the US are an artifact of monetary policy, so if that can be fixed then all will return to normal, with normal being what was experienced during the 20 years.

2.) The problems that affect the US are an direct byproduct of economic fundamentals like productivity and supply and demand and until these issues are addressed the conditions that we are experiencing at present will constitute the new normal going forward.

One of the other position is correct with the other being incorrect.

The economy grows when wealth is generated, not when money is printed. So, how is wealth generated? Wealth is generated through specialization which yields improved productivity. If it will take me 4 hours of my unskilled labor to repair my car and it takes a skilled mechanic only 1 hour to repair my car, when we trade my money for his time, his skill at auto repairs generates wealth. Similarly, I may have a skill that I can trade wherein my skill allows me to generate wealth compared to someone lacking my skill. 

Now the problem for the US is that it takes a whole lot of specialization in order to produce the level of wealth that we're accustomed to. The mean level of income in the US is very high by world standards. This means that a lot of specialized labor and skill needs to be traded back and forth in order to create goods desired by consumers and from this we generate our wealth. The problem is that the labor pool in the US is not increasing its productivity in a uniform and progressive manner - some segments of the labor force can create a lot of wealth with their specialized skills and knowledge and other segments of the labor force cannot and some parts of the labor force can be entirely replaced by robots or by Chinese village workers. This unequal distribution of labor market skills results in a smaller segment of the workforce carrying an increasingly heavier load of being responsible for overall economic growth. This process cannot go on forever.

Our problem is that too many people in the labor force don't have skills that can be sold in the labor market for a price that these people believe that they are worth. Which employer is going to hire a worker who can produce $5 worth of value per hour of work and pay that worker $5, never mind $10 or more per hour? We've imported the tired and wretched, and poor, and ill-educated, masses from around the world and settled them into one of the highest cost of living societies on Earth. They can't pull their own weight.

To sustain a high-tech, high expense society there have to be enough people generating wealth to keep us all afloat. Right now we're being kept afloat by borrowing beyond our means to repay. The productive capacity to generate the wealth to repay the borrowing is simply not present in the US any longer.

The new normal, I believe, is a drastic reduction in the standard of living and the problem is caused by economic fundamentals and not by not enough money in circulation. We're never going back to the way that things used to be because the people of the US today are not the same people of the US of yesteryear.


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## Immolatus

Isnt this what Draghi is proposing also, QE to infinity?
What will actually cause a precipitous drop in the dollar, as in what will be the trigger? Will it be from on high, or does it bubble (Blobbing up! I assume you guys get it, right? AnAnonymous?) up from the bottom?
It cant be from the sheep, as they are blind to whats happening and will get slaughtered in the process. So by the time they see whats going on, it will be waaay too late. Prepare accordingly.
Something has to be keeping this all from exploding, no? What could that be? I guess if you are controlling both sides of the transaction (between the FED and the Treasury) its just a big circle jerk (can I say that?). At some (tipping) point, some bigwig decides its game over, all interest rates go through the roof and the system collapses under its own weight.
I hate to get into NWO stuff, but this has to be all very well planned and thought out, because they obviously know this cant continue forever (but look at Japan?), so at some point they push the button and its end game time? Someone has to be pulling the strings!

I'm rambling arent I? In a lot of ways, the more I study this crap, the more confused I become.


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## invision

Bobbb said:


> Our problem is that too many people in the labor force don't have skills that can be sold in the labor market for a price that these people believe that they are worth. Which employer is going to hire a worker who can produce $5 worth of value per hour of work and pay that worker $5, never mind $10 or more per hour? We've imported the tired and wretched, and poor, and ill-educated, masses from around the world and settled them into one of the highest cost of living societies on Earth. They can't pull their own weight.
> 
> To sustain a high-tech, high expense society there have to be enough people generating wealth to keep us all afloat. Right now we're being kept afloat by borrowing beyond our means to repay. The productive capacity to generate the wealth to repay the borrowing is simply not present in the US any longer.
> 
> The new normal, I believe, is a drastic reduction in the standard of living and the problem is caused by economic fundamentals and not by not enough money in circulation. We're never going back to the way that things used to be because the people of the US today are not the same people of the US of yesteryear.


You have hit the nail on the head. Why do you think KIA is one of the fastest growing car makers in US? Cheaper cars made by automation and lower paid workers, which beats the competition... Nicely stated.


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## partdeux

Immolatus said:


> I'm rambling arent I? In a lot of ways, the more I study this crap, the more confused I become.


The more I study, the less confused I become, but exponentially more worried.


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## BillS

db2469 said:


> I still don't get it...what seems so obvious to John Williams, Peter Schiff, Rogers, and many others doesn't seem even worth considering to the Federal Reserve boys and others..what gives?


They aren't stupid. It's deliberate. Destroying the dollar is what's necessary to force the US into a one-world government.


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## BillS

Bobbb said:


> The new normal, I believe, is a drastic reduction in the standard of living and the problem is caused by economic fundamentals and not by not enough money in circulation. We're never going back to the way that things used to be because the people of the US today are not the same people of the US of yesteryear.


We also don't live in the world of 1946 when the US was relatively free from foreign competition. When I came to the Fox Valley in 1978 Oshkosh B'Gosh was still making clothing in Oshkosh. Those days are gone forever. Those clothes are now made in China at 5% or 10% of the cost of making them in America. And it's not just the dollar cost. It's the fact that China has almost no regulations of any kind.


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## db2469

BillS said:


> They aren't stupid. It's deliberate. Destroying the dollar is what's necessary to force the US into a one-world government.


I, for one, have never bought into that one world scenario...I think because the debt is too high to raise interest rates without major repercussions, the only thing they can do is kick the can down the road and hope some solution appears down the road to get us out of this mess...


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## Bobbb

BillS said:


> We also don't live in the world of 1946 when the US was relatively free from foreign competition. When I came to the Fox Valley in 1978 Oshkosh B'Gosh was still making clothing in Oshkosh. Those days are gone forever. Those clothes are now made in China at 5% or 10% of the cost of making them in America. And it's not just the dollar cost. It's the fact that China has almost no regulations of any kind.


This has very little to do with whether or not our markets/industries have foreign competition, rather it has to do with how much wealth an American worker can produce compared to a foreign worker. As I noted, the people who make up America today have a different mix of peoples than those who made up America in the past. Bringing in people from nations which are Third World doesn't magically make them as productive as people who are multiple generation American and whose ancestors were instrumental in building up America to greatness. People are the reason that nations rise and fall and Third World nations aren't stuck in the Third World because they were unlucky when the First World slots were being handed out, they're their because they're filled with the people who live there. Moving those people here doesn't magically transform them, rather it slowly transforms us and moves us down the productivity ladder towards the Third World mean.


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## invision

WaIt a minute, why do you think we have seen the explosion of Mexican workers over the last 10 yrs? It isn't about productivity, it's about cost to manufacture. If an unskilled American worker would accept that they are an unskilled worker and accept that there is someone else that is willing to do the job at the same speed and quality for less money, then manufacturing would not have left the US like it has. Yes, this can create a greater separation in the "classes" but it's not anyone's job to make that unskilled laborer skilled, except himself and during his childhood his parents to give them the proper foundations: hard work ethics, education is a tool for success, drive and motivation. 

Further more, even if the migrant worker is slower, say a 1/4 slower, but costs 1/2 as much, cost of production just went down by 1/4 in regards to labor.


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## Bobbb

invision said:


> WaIt a minute, why do you think we have seen the explosion of Mexican workers over the last 10 yrs?


1.) Violation of the law by employers seeking to maximize their own profit at the expense of society.

2.) The changing nature of the economy - as it becomes more complex, industries which can't generate enough surplus wealth to keep up with the rising tide of productivity seek short-cuts in order to stay in operation and the principal short-cut is to reduce the cost of labor in their good.

Frankly, a business which relies on the presence of a peon class does more harm than good to the US. The employer and the employee benefit but the employee can't earn enough to contribute their fair share to the maintenance of society so invariably they end up being subsidized by others.



> It isn't about productivity, it's about cost to manufacture.


Sure, but we're talking about a subset of the workforce here - unskilled Americans versus unskilled Mexicans working in America. If the unskilled American is not more productive than the unskilled Mexican, then they can't justify a higher wage.

Let's leave aside for the moment the violation of good order engaged in by American employers who are favoring illegal Mexican labor over American labor, reaping private gains for themselves and socializing losses into the system.

The root of the problem is the proportion of unskilled Americans in relation to the rest of the labor force and their growth rate, both internally and through immigration. We don't need to be adding to the pool of unskilled labor by importing millions of immigrants who then enter the labor market and compete against the unskilled Americans already there, thereby driving down wages and increasing the social subsidy that flows to the unskilled American worker.



> If an unskilled American worker would accept that they are an unskilled worker and accept that there is someone else that is willing to do the job at the same speed and quality for less money, then manufacturing would not have left the US like it has.


Do the job where? In the US or off-shore? If in the US, nope, we shouldn't be permitting the importation of replacement workers which shunt our native-grown unskilled labor out of the workforce and onto social welfare programs.

That dynamic though is only part of the reason. The cost of government is a very big part of the manufacturing exodus. Regulations, fees, paperwork, etc add to the costs even if the business is suffering a loss in any given year.



> Yes, this can create a greater separation in the "classes" but it's not anyone's job to make that unskilled laborer skilled, except himself and during his childhood his parents to give them the proper foundations: hard work ethics, education is a tool for success, drive and motivation.


People are not interchangeable cogs and neither are PEOPLES. If some god came down to Earth and "magically" moved the population of South Africa or Zimbabwe into the territory of the US and moved the population of the US into the territory of South Africa and Zimbabwe the Zimbabweans wouldn't simply slide into high levels of wealth and the Americans wouldn't slide into Zimbabwean levels of wealth.

Also, if we all lived on our own little island and there was no interdependency and we never crossed paths with each other, then your notion of how things should be might work out well, but that's not how we live. We live in cities, in suburbs, in small and large communities of different sorts which overlap with each other and this interdependency creates benefits and problems. When your system produces vast wealth and life outcome disparities and you benefit you're also going to be at great risk from those who are disadvantaged by their station in life. Your life quality would be vastly improved if the wealth disparity shrunk into a tighter band of variance. A middle class society is generally a better society in which to live than a society where the privileged have to live in gated communities, have to have armed escorts accompany them when they wish to go shopping in the broader community, where they must fear kidnapping, etc.

So your every man is an island ideal doesn't really work that well as a system of organizing a society. The problem here is that the importation of replacement workers is leading to that very outcome. The wrinkle in this great scheme is that politics will intervene to stop the class divide from growing to disastrous proportion because the voting mass of the unprivileged will outweigh that of the privileged and the majority will vote themselves benefits that the privileged will have to pay for. The problem here is that wealth redistribution doesn't make a society better off, only wealth generation does, and wealth generation finds its roots in the human capital level of the people who inhabit a society and our policies are working towards eroding the human capital level in our society.

We need to be climbing the value production ladder and pulling all citizens up the ladder, so that they can generate more wealth per hour of work than their counterparts in other countries. What we're doing is importing other countries' low human capital levels in order to keep operational businesses which can't pull their own weight any longer.


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## BillS

Bobbb said:


> This has very little to do with whether or not our markets/industries have foreign competition, rather it has to do with how much wealth an American worker can produce compared to a foreign worker.


No, it has to do with the cost of manufacturing. America has brought in a lot of unskilled immigrants but those people do very well in factory settings. When I worked in a foundry 30 years ago they had all the Mexicans in one department doing the hardest and dirtiest work.

America can't compete with countries that pay 25 cents an hour for their labor costs. It doesn't matter how good our workers are.


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## Bobbb

BillS said:


> America can't compete with countries that pay 25 cents an hour for their labor costs. It doesn't matter how good our workers are.


There's more to this that your simple examples.

The wage differential doesn't determine, or even principally determine, the pricing on a product.

Let's walk through an example - 25 cents per hour versus $8.50 per hour in America - a 34x difference. Now, let's assume that American workers are not malnourished, which means that they can concentrate for longer periods of time without having to contend with hunger pains. Let's assume that this improves their productivity by a factor of 2x compared to the foreign worker. Now the differential is 17x. Let's say that their higher level of education (still High School or High School drop-out but still better than being illiterate with only 4 years of schooling) lowers their error rate in manufacture by 3x, a 4% error rate instead of a 12% error rate. This reduces the differential to 15.58x. Now factor in the material and overhead cost of the junked product as a factor of the labor cost - let's say that the non-labor cost component of a product is 10x greater than the cost of the labor, so the error rate results in the waste of material, rental of space in the factory for a period of time when no production took place, the cost of electricity, etc but material and other costs remain the same between the America factory and the foreign factory, so the wastage from error is 10x the 25 cents per hour times 12% error rate, or 30 cents per hour. The cost of error in the foreign factory ends up costing more than the labor used in the foreign factory, 30 cents per hour versus 25 cents per hour, but only costs the American factory 30 cents per hour compared to the $8.50 per hour for wages, thereby dropping the ratio from 15.58x to 10.41x.

Now factor in the cost of capital of paying for inventory at various stages of manufacture, packing, and transit which involve long lead times compared to local manufacture in the US which can result in a more efficient Just In Time supply chain, meaning that the owner's capital is used more efficiently and less profit is being spent on interest paid on borrowed capital. Pick your own number here.

Now take into account the differential cost of shipping for the products. Obviously the more massive the product the more it's going to cost to ship. Then there are the port charges. Then there are the custom's broker's fees, and so on, all chipping away at the wage price differential.

The point is how much of the cost of manufacture is allocated to labor versus all the other costs associated with manufacture. If labor costs are a small part of the total cost structure, then the wage differential between foreign and domestic labor becomes less significant.


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## BillS

db2469 said:


> I, for one, have never bought into that one world scenario...I think because the debt is too high to raise interest rates without major repercussions, the only thing they can do is kick the can down the road and hope some solution appears down the road to get us out of this mess...


So why is all this happening then if it isn't deliberate? I can understand it a little if the Fed is funding deficits but what they're doing now is creating money to buy mortgages. Nobody with any knowledge of economics would support inflating the currency. It's too ridiculous to believe the people involved are just idiots who don't know any better.


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## Bobbb

BillS said:


> So why is all this happening then if it isn't deliberate? I can understand it a little if the Fed is funding deficits but what they're doing now is creating money to buy mortgages. Nobody with any knowledge of economics would support inflating the currency. It's too ridiculous to believe the people involved are just idiots who don't know any better.


Because, to them, the alternative is worse. Imagine that you're a liberal and your whole view of the world revolves around government taking on more and more of the functions that comprise society and now you see that your vision has led to disaster. The repudiation of all that you believe becomes too much to bear, so you look around for another course of action which allows you to cling to your philosophy.

That's all you need for an explanation and it is the simplest explanation which fits the facts. Look at how ObamaCare passed. At a time of mounting deficits what did the Democrats do? They passed the mother of entitlement programs - they're trying to take over 1/6th of the national economy and provide subsidy to those in need and to those who can pay for their own medical care but believe that they are paying too much.


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## pandamonium

BillS said:


> They aren't stupid. It's deliberate. Destroying the dollar is what's necessary to force the US into a one-world government.


I said it before and I'll say it again...George Soros


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## Marcus

Bobbb said:


> There's more to this that your simple examples.
> 
> ....The point is how much of the cost of manufacture is allocated to labor versus all the other costs associated with manufacture. If labor costs are a small part of the total cost structure, then the wage differential between foreign and domestic labor becomes less significant.


You neglected to mention transportation costs which are actually more of a cost driver than labor costs.

I recall reading somewhere (it may have been something by Paul Zane Pilzer) that manufacturing costs contribute 20% to the final sales price of a given product. The other 80% (besides profit) is transportation/distribution costs.

If you look at Wal Mart, they make their money by controlling their distribution/transportation costs and JIT delivery.


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## invision

Marcus said:


> You neglected to mention transportation costs which are actually more of a cost driver than labor costs.
> 
> I recall reading somewhere (it may have been something by Paul Zane Pilzer) that manufacturing costs contribute 20% to the final sales price of a given product. The other 80% (besides profit) is transportation/distribution costs.
> 
> If you look at Wal Mart, they make their money by controlling their distribution/transportation costs and JIT delivery.


Yes that is true in manufacturing, but also look at house painting, construction, yard care, etc... Manual labor jobs.


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## Bobbb

invision said:


> Yes that is true in manufacturing, but also look at house painting, construction, yard care, etc... Manual labor jobs.


Those jobs can't be off-shored though. These jobs are the primary battle ground where America's unskilled are competing with imported unskilled. I can't develop a moral argument which supports the importation of unskilled labor when there are millions of unemployed unskilled in America and to make matters worse the supply surge of the imported unskilled depresses wages in those sectors.


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## invision

I think you are missing my point, the reason why we are seeing large numbers of immigration legal as well as illegal, is because we have a workforce that thinks it is above themselves to get a job at whatever wage, instead they bitch moan and groan and use government assistance as a crutch... When they see someone else in there former job earning what could be half as much, they blame corporate america for being money hungry greedy *******s. Man, business is business, that is capitalism, and that is a part of the American dream. 

I quit college 1 yr from finishing a degree in Mech Eng, AND a degree in Comp Sci. After 10 yrs in the workforce AND climbing from phone based tech support to being a six figure paid IT Director AND sitting on two industry related non-profits board of directors and having built two side companies and sold for $100,00+ in profit each, I went back for a Business Management degree, which I also quit cause I couldn't stand that I was teaching half the classes... I had everything handed to me and when I quit college originally, I turned down instantly co-owning a chain of franchise to operate... Instead I worked my way up the ladder... Step by step, hung by hung. What I do isn't physics, it's more simple common sense than anything. But I read every book, article, and webinar to educate, self-train, become an expert in a wide field of network engineering - from routers and switches to servers to DRP/BCP and BPI. So what is this leading to?

If something happened and I lost it all. I would start from scratch. If I couldn't find a job in something I have 20 yrs experience, a name and reputation in the SE as someone "industry known as an expert" in two or three areas. I wouldn't get on the bandwagon that I deserve $135 an hour or $200+ after hrs, which is slightly below what I personally charge for my expertise, it would be, damn I need a job, ANY job at ANY wage... If it takes two to support me, then it takes two. But you know what? I would be 1) looking at every opportunity to find a way to climb that ladder or 2) look for options back in my industry using my skills.

I agree we have a ton of unskilled individuals that are only breeding more unskilled workforce... The problem is, I don't want to support them. I am tired of doing that, it's not my job too. If I did what I have done then so can anyone else.


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## Bobbb

invision said:


> I think you are missing my point, the reason why we are seeing large numbers of immigration legal as well as illegal, is because we have a workforce that thinks it is above themselves to get a job at whatever wage, instead they bitch moan and groan and use government assistance as a crutch...


I think that you're misdiagnosing cause and effect. The reason that we have high levels of immigration, legal and illegal, is because of laws passed by Congress and ineffective enforcement of the laws and certainly not because many people have developed a dependency on the government. It is well within the power of Congress to completely stop ALL immigration and it is well within the power of the Executive to deport every illegal immigrant.

As we saw in the labor markets of the late 90s, the best way to increase wages and insure full employment is to have labor scarcity. Employers chasing after employees does wonders for the labor force participation rate, it drops the unemployment rate drastically and it insures healthy wage growth. You know who doesn't like this state of affairs? Employers and those with capital.



> When they see someone else in there former job earning what could be half as much, they blame corporate america for being money hungry greedy *******s. Man, business is business, that is capitalism, and that is a part of the American dream.


People would be hard pressed to find someone more anti-liberal than me so I hope you don't confuse the following as being rooted in mushy liberal ideology. The blame that you highlight is actually quite accurately drawn. A business which benefits from being domiciled in America has a first duty to hiring Americans at a labor rate which meets the clearing rate in the labor market. When American business instead uses its resources to lobby Congress to expand immigration in order to flood the labor market with new bodies and thereby depress wages, to import guest workers in order to avoid hiring American workers for a market-fair wage, then American business is indeed being money-hungry, greedy son's of bitches because they enjoy all the benefits that arise from being American domiciled corporations and shunt off to the side their responsibility to hire American workers.

One part of Capitalism is the joining together of capital and labor in order to produce wealth. In a closed system both work in opposition to each other to capture as much of the wealth that is produced by the joint effort. When the interests which represent Capital bribe lawmakers to flood the labor market with new workers imported from abroad, they're dealing from the bottom of the deck because this gaming of the system unsettles the balance of interests between Capital and Labor by increasing the supply of labor and decreasing the cost paid to labor.

Now, from a societal POV Capital already has the option to chase cheap labor all over the globe as there are no capital controls in the US. If a corporation wants to hire cheap workers then it can relocate to another country and many corporations do this. What really screws the pooch for society is when cheap workers are imported into the nation for cheap workers are rarely celibate, they tend to have children, they tend to use roads, water systems and other civilizational infrastructure, they tend to use health care, and due to their low income in the US they are not paying their fair share of the burden imposed on all of us to pay for the civilization that we live within.



> Instead I worked my way up the ladder... Step by step, hung by hung. What I do isn't physics, it's more simple common sense than anything. But I read every book, article, and webinar to educate, self-train, become an expert in a wide field of network engineering - from routers and switches to servers to DRP/BCP and BPI. So what is this leading to?


A lot of people do what you're doing, which is they imagine policy should be set by their own personal example. The problem is that not everyone is like you. I could share my own personal successes here and then declare that national policy should be set on how I progressed through life and the result of doing this would be sheer inefficiency. You sound like a smart and driven man but not everyone is like you and it does no good to pretend that they are. Most parents get a clue about this dynamic as they watch their children not living up to the dreams that the parents have for them. Some parents get lucky and their kids surpass the highest hopes that their parents had for them. The reality is that policy should be set on realistic terms based on observable reality, not on some imagined standard.



> But you know what? I would be 1) looking at every opportunity to find a way to climb that ladder or 2) look for options back in my industry using my skills.


Meanwhile, Capital is doing it's darnedest to flood the market with imported workers who have your exact skill set, thus driving down wages faster than you can climb the ladder and to sweeten the experience for you, Capital is working to insure that preference is handed to the imported labor because this will aid it in its future rentseeking bribery to expand its labor importation because the world is filled with 6 billion people who want to live in America.

Obviously this isn't happening at your tier in the labor market because you're not unskilled and there isn't a flood of people who can enter your profession and drive down your wage to subsistence level in addition to driving down wages in all the other positions that you'd be qualified to enter based on your intellect and education.



> I agree we have a ton of unskilled individuals that are only breeding more unskilled workforce... The problem is, I don't want to support them. I am tired of doing that, it's not my job too. If I did what I have done then so can anyone else.


Good, I can put on my anti-liberal hat again. I don't want to support them either. I want them to be working. The best way to get them working is to have jobs for them. The best way to develop jobs is to stop importing replacement labor. The best way to stop importing replacement labor is to deport every damn illegal alien and to stop all immigration until such time as labor shortages develop. The fact that a tight labor market is going to increase the cost of labor for business is fine with me for this dynamic will rationalize the economy and get rid of businesses which can't produce enough value by using labor at a market clearing rate, that is, a business that can only be successful by hiring workers at such a low wage that society has to subsidize the worker's use of societal resources. Better for that company to shut down and not import a net-cost immigrant into the nation. Secondly, the fact that a tighter labor market is going to increase wages is going to result in labor gaining a tad larger share of the value produced from the combination of labor and capital and that's fine too. Even though this will mean that having dinner at a restaurant is going to be more expensive for most people because the restaurant now has to pay higher wages, I don't really care much to subsidize people's cheaper restaurant meals made possible by cheap labor which can't meet the costs of using society's resources and therefore comes out of pocket via increased taxes. If people want to eat at restaurants they should pay all the costs associated with doing so rather than expecting the workers to be subsidized by society at large.


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## machinist

*Benny and the Printing Press*

From Jesse's Crossroads Cafe:
http://jessescrossroadscafe.blogspot.com/

Quote:
"The Fed clearly signalled their intent to spend, and gave some indications of their willingness to 'do whatever it takes' in their own Draghi moment. What will restrain them? The difference is that the US has no Merkel, just Urkel(D). Or Herman Munster(R).

Remember that in this sort of reserve fiat currency the only limiting factor to their printing is the value of the bonds and the dollar, which is after all a bond of zero coupon and unrestricted duration. Well, unrestricted until there is a default, but that is another matter. And they all do it, sooner or later."

Looks to me like we are right on track to destroy the dollar. Seems to me like the choice has ben made to do so, because it is the only politically palatable way to get out of the debt-hole we are in. Fasten seat belts. It is going to be quite a ride.


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## BillS

Bobbb said:


> There's more to this that your simple examples.
> 
> The wage differential doesn't determine, or even principally determine, the pricing on a product.
> 
> Let's walk through an example - 25 cents per hour versus $8.50 per hour in America - a 34x difference. Now, let's assume that American workers are not malnourished, which means that they can concentrate for longer periods of time without having to contend with hunger pains. Let's assume that this improves their productivity by a factor of 2x compared to the foreign worker. Now the differential is 17x. Let's say that their higher level of education (still High School or High School drop-out but still better than being illiterate with only 4 years of schooling) lowers their error rate in manufacture by 3x, a 4% error rate instead of a 12% error rate. This reduces the differential to 15.58x. Now factor in the material and overhead cost of the junked product as a factor of the labor cost - let's say that the non-labor cost component of a product is 10x greater than the cost of the labor, so the error rate results in the waste of material, rental of space in the factory for a period of time when no production took place, the cost of electricity, etc but material and other costs remain the same between the America factory and the foreign factory, so the wastage from error is 10x the 25 cents per hour times 12% error rate, or 30 cents per hour. The cost of error in the foreign factory ends up costing more than the labor used in the foreign factory, 30 cents per hour versus 25 cents per hour, but only costs the American factory 30 cents per hour compared to the $8.50 per hour for wages, thereby dropping the ratio from 15.58x to 10.41x.
> 
> Now factor in the cost of capital of paying for inventory at various stages of manufacture, packing, and transit which involve long lead times compared to local manufacture in the US which can result in a more efficient Just In Time supply chain, meaning that the owner's capital is used more efficiently and less profit is being spent on interest paid on borrowed capital. Pick your own number here.
> 
> Now take into account the differential cost of shipping for the products. Obviously the more massive the product the more it's going to cost to ship. Then there are the port charges. Then there are the custom's broker's fees, and so on, all chipping away at the wage price differential.
> 
> The point is how much of the cost of manufacture is allocated to labor versus all the other costs associated with manufacture. If labor costs are a small part of the total cost structure, then the wage differential between foreign and domestic labor becomes less significant.


Your reasoning is all bogus because Mexicans aren't less productive than American citizens. Factories run at a standard production speed. Those who can't handle it are replaced by those who can. The problem is that our factories can't compete with the starvation wages paid by Chinese factories. Try to find any magazine article that agrees with you.


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## invision

machinist said:


> Looks to me like we are right on track to destroy the dollar. Seems to me like the choice has ben made to do so, because it is the only politically palatable way to get out of the debt-hole we are in. Fasten seat belts. It is going to be quite a ride.


yep, your right... My dad pointed out that Johnson tried a lot of socialist ideas that were total BS today on the phone...he is extremely ticked off, because he as a 73 yr old businessman that is wanting the profits that the Dow is giving him, but also doesn't want to go past 30% investment of wealth in PM's, because as he stated "if we keep printing funny money, that funny money is going to be worth less than a #^~'ing peso"... I told him to keep his PC on in the office and his laptop running from where ever he is in the house, start the stock feeder app, and when he saw a 100 pt drop on Dow and a 50 drop on NASDAQ, put in a sell order at 75% diffenece between his purchase price and current price and get out completely - could be a week, could be six months, could be 2 yrs but do it M-F, while also taking this month's 5-8 CDs that have matured and cash them in for gold and silver using a 60-40 ratio, and get the PMs in hand - not electronic purchase. After this month, take 50% of CDs and invest in stock if still climbing, 25% PMs and 25% back into CD...

I can hear him writing and then he goes, how do you know all this, it sounds good. I will be buying on the up, earn more short term, selling for profit as it turns down, and PMs investment over last 10 years is a better ROI than CDs... Then he goes why reinvest in CD's? I am like how do you buy your houses? He is like oh yeah I borrow on the CD for less than a % interest and let the CD mature to cover the loan... I am like, see you still have your short term buy power with the new CDs


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## Marcus

Bobbb said:


> Those jobs can't be off-shored though. These jobs are the primary battle ground where America's unskilled are competing with imported unskilled. I can't develop a moral argument which supports the importation of unskilled labor when there are millions of unemployed unskilled in America and to make matters worse the supply surge of the imported unskilled depresses wages in those sectors.


It's true those jobs can't be off-shored, but there are also a number of dirty, smelly, hot jobs that most Americans won't do for $12-15/hr.
Why? Because they can sit on their rears and collect unemployment or disability (the new long term unemployment.) Or they'll work on a job and get 'hurt' when it's time to do something they don't want to do. I've seen it many times.

It seems like too many Americans (mostly the younger ones under 40 without a strong work ethic) think that they know a shortcut to easy money so they're not willing to put forth the effort or bide their time until they get promoted. They want it now. Hence the popularity of folks like Kim Kardashian and Paris Hilton who are only known for their infamy.

Most of the immigrants I've known are very willing to work and work hard.

I've surpervised many a contractor crew doing very hot and dirty work waterblasting in the hot Texas sun. Without fail, most of these folks are originally from down south of the Rio Grande. All they ever asked for was some of our water to cool off.

Why did we end up going with contractors? Because too many of the employees were unwilling to do the work and do it right even though they making in excess of $25/hr. They all wanted the easy jobs where they wouldn't get wet, hot, and dirty. Without fail, they'd stand around until the one or two guys I could rely upon did the really nasty stuff. The layabouts spent more time gaming the system than they did actually working.


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## Bobbb

Marcus said:


> It's true those jobs can't be off-shored, but there are also a number of dirty, smelly, hot jobs that most Americans won't do for $12-15/hr.
> Why? Because they can sit on their rears and collect unemployment or disability (the new long term unemployment.) Or they'll work on a job and get 'hurt' when it's time to do something they don't want to do. I've seen it many times.


I agree with you about this phenomenon but I believe you're looking at a two-part problem and only identifying one part. The question is whether Americans will work for $12 per hour, or a similar, more detailed question. Many won't because, as you note, the social welfare benefits are more attractive in that they give $x amount of money for NO labor. Now, let's try an experiment, keeping everything else equal, including the social welfare benefits, and let's start raising the wage that employers offer. What will happen to some of those people who decided that they would be better off taking welfare rather than working at a hot and sweaty and tiring job?

I would never take a job that paid me $4 per hour to shovel out an out-house pit. I would take that job though if I was paid $500 per hour. The point here is that every job will be filled if there is a meeting of the minds between employer and employee. Employers crying about not being able to fill jobs at the wages that THEY WANT TO OFFER is not a position that should engender much sympathy.



> It seems like too many Americans (mostly the younger ones under 40 without a strong work ethic) think that they know a shortcut to easy money so they're not willing to put forth the effort or bide their time until they get promoted. They want it now. Hence the popularity of folks like Kim Kardashian and Paris Hilton who are only known for their infamy.


Yeah, that's a problem but the fault lies not with the ignorant youth but with their parents who failed to teach them good values. It's sad that these youth are going to have to learn hard lessons but they will . . eventually.



> Most of the immigrants I've known are very willing to work and work hard.


So what? I mean, that's good and I applaud this, but this doesn't solve any problem. Here's a key point - you favoring these immigrants presumes that there is a process which brings in a REPLACEMENT POPULATION for our American freeloaders. There is no one-to-one exchange going on. These immigrants are additional population and their presence 1.) adds to the population, 2.) depresses labor demand, 3.) keeps wages lower than they should be, 4.) moves some Americans out of the labor force and onto the welfare rolls, and 5.) increases all of our taxes by adding an ADDITIONAL person into the net-taker category, even if they are working and paying taxes they're not really paying their share of government expenses.

Unions used to, and some still do, understand this point. Bringing in "scabs" to replace union workers weakens the union's role with respect to management. Bringing in immigrants weakens the worker's power in the labor market and grants more power to management to lower wages because now there are more workers in the national workforce competing for the same number of jobs. This is classic labor economics, in fact, it's a classic supply and demand problem - increase supply of a good and the price of the good drops.

So, right back to the top. The solution here is for employers to share with workers more of the value that workers produce and this will come about naturally if labor supply starts to tighten and immigrants aren't brought in as "scabs."



> I've surpervised many a contractor crew doing very hot and dirty work waterblasting in the hot Texas sun. Without fail, most of these folks are originally from down south of the Rio Grande. All they ever asked for was some of our water to cool off.


That's usually the case with first generation immigrants but the children of these immigrants acculturate to American standards. Now don't get me wrong, if you're the supervisor or the owner I can well understand that it is in your interest to hire hard workers for lower pay thus making your supervisory job easier and putting more money in your pocket. However, from a public policy POV what's good for the owner of a business is not the same as what is good for society where all sorts of competing interests have to be be balanced.

Those hard working immigrants from south of the border have filled niches in the unskilled labor market and, as I noted above, they are not replacing our own low skilled population, they're displacing them.

This report is from the era when employment ratios were quite healthy and wage growth was doing pretty well, so you can extrapolate from the "good times" to the present miserable conditions:

The share of young black men without jobs has climbed relentlessly, with only a slight pause during the economic peak of the late 1990's. In 2000*, 65 percent *of black male high school dropouts in their 20's were jobless - that is, unable to find work, not seeking it or incarcerated. By 2004, the share had grown to *72 percent, compared with 34 percent of white and 19 percent of Hispanic dropouts.* Even when high school graduates were included, *half of black men in their 20's were jobless in 2004*, up from 46 percent in 2000.​
Now I understand that employers have far better work relationships with young Mexican illegals than they generally do with young black men. Attitude, reliability, work ethic, you name it. But we as a nation are not exchanging a black man, or a white man, for every illegal Mexican that works here. These low level jobs used to be filled by our own poor people and once people are in the workforce a lot of social malady in their lives disappears, so these jobs work to keep people on the straight on narrow and get them on a ladder where they can progress upwards in life. When an employer favors an illegal or even an immigrant because it's in his best interests, he shifts massive costs onto all other Americans who now have to deal with the consequences which arise from jobless Americans and in particular cases, like black men, there is the community devastation which results - men going to prison, men unable to start families or care for the families that they father.


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## Marcus

Bobbb said:


> Now, let's try an experiment, keeping everything else equal, including the social welfare benefits, and let's start raising the wage that employers offer. What will happen to some of those people who decided that they would be better off taking welfare rather than working at a hot and sweaty and tiring job?


If you also mean to keep the price of our goods equal, then all you're doing is raising the cost of doing business. This is why minimum wage standards actually create more unemployment for marginal workers. There is a very elastic demand for most products (barring consumer goods like TP and food) that is price sensitive. Raising costs to a business when the business can't raise prices and still compete in the marketplace only drives the business to automate and innovate so they can lower their headcount which leads to more unemployment.

In case you don't know, Automation is dominated by the Japanese and I believe the Swedes even though the first industrial robot was built by a US company for GM.

If you don't mean to keep the prices equal, then all you're doing is creating more inflation since businesses will pass along their costs. If you're not old enough to remember, the 1970s was a good example of what happens when government mandates labor rate increases. The cost of living pretty much doubled in 10 years and folks were much better off in 1970 than they were in 1979 since tax rates weren't indexed for inflation. So Uncle Sam took a bigger bite out of most folks paychecks which left folks with a lower standard of living.



Bobbb said:


> Employers crying about not being able to fill jobs at the wages that THEY WANT TO OFFER is not a position that should engender much sympathy.


Understand that the company I work for pays the highest wages in the area since one of the wage comparisons used in determining the wage structure is a GM plant in Arlington. Starting pay, after probation, is over $17/hr for non-skilled workers plus benefits like a pension, 401K, and insurance. Back in 2007 before the recession, we had over 5000 applications for ~25 positions so it's not like we can't pick and choose who we want.



Bobbb said:


> Yeah, that's a problem but the fault lies not with the ignorant youth but with their parents who failed to teach them good values. It's sad that these youth are going to have to learn hard lessons but they will . . eventually.


I agree, but in a number of cases, there's only one parent.



Bobbb said:


> Unions used to, and some still do, understand this point. Bringing in "scabs" to replace union workers weakens the union's role with respect to management. Bringing in immigrants weakens the worker's power in the labor market and grants more power to management to lower wages because now there are more workers in the national workforce competing for the same number of jobs. This is classic labor economics, in fact, it's a classic supply and demand problem - increase supply of a good and the price of the good drops.
> 
> So, right back to the top. The solution here is for employers to share with workers more of the value that workers produce and this will come about naturally if labor supply starts to tighten and immigrants aren't brought in as "scabs."


Again, please understand that enough of the company employees choose not to work these 'bad' jobs that have to be done. There were several employees who made over $100K and in one case, $150K last year.



Bobbb said:


> That's usually the case with first generation immigrants but the children of these immigrants acculturate to American standards.


I don't disagree with you there though it usually takes more than a single generation since some of the old school Mexicans will kick their offsprings rear if the offspring are layabouts. It's called pride and honor which the old school folks have in abundance.



Bobbb said:


> Now don't get me wrong, if you're the supervisor or the owner I can well understand that it is in your interest to hire hard workers for lower pay thus making your supervisory job easier and putting more money in your pocket.


It's not my money since it's not my company, but my only concern is to have enough warm bodies to get the job done and done on time since a $120K downtime is scheduled. I can remember several times when we doubled or tripled the downtimes due to a lack of labor. We don't hire workers for lower pay, but we do contract out when we need the bodies. If most of those bodies are from down south, so be it.


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## mojo4

Well its all quite simple...... 1- a massive decline in manufacturing. 2 - A workforce with much less willingness for hard work. 3 - Massive gov regulations. Add all 3 together and its lights out for the US. When I was a kid everyone in Denver worked for Gates rubber or Samsonite. They closed both plants and moved em overseas. The prices never dropped, the companies just made more money. I'm not sure about Samsonite but Gates closed when ma Gates, the daughter of the founder, died in the early 1980's. She owned the company and demanded things be made here. They still made plenty of money because go around Denver now and there are still plenty of museum wings and such with the name of Gates on them. So they made lots of money. But when they traded Denver workers (my dad was one) for workers from wherever the heck they never dropped their prices, they just made more. When ma gates died her sh!thead kids sold out right away to some foriegn company who kept the name of gates (betcha lots of you here have their belts and hoses in your cars today) but traded American workers for much cheaper foreign labor. Nope, as long as its cheaper to ship halfway around the damn globe they won't manufacture here. And as long as people like ma gates aren't running the businesses our manufacturing here is dead. This is my firsthand view of American manufacturing death. Anyone else have a similar story?


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## Bobbb

Marcus said:


> If you also mean to keep the price of our goods equal, then all you're doing is raising the cost of doing business.


I agree, however costs to business are not the only consideration, they are just one of many considerations. While this increases the costs to business it simultaneously reduces the costs to taxpayers and when we're dealing with government operations versus private enterprise, the deadweight loss of government operations far surpasses the additional costs imposed on business. The system, or the checks and balances, will balance out and, in fact, the system will see an overall boost of efficiency because we've off-loaded an inefficient government taxation and social welfare scheme onto the more efficient private sector.



> This is why minimum wage standards actually create more unemployment for marginal workers. There is a very elastic demand for most products (barring consumer goods like TP and food) that is price sensitive.


I agree. The problem with minimum wage laws is that they compel employers to pay an employee more than market price. The upper bound on market price is the value that the employee creates. Now minimum wage, by it's very definition only applies to fairly small segment of the labor force, those at the very bottom and with the least ability to produce value via work, so how exactly does it benefit society to keep these people chronically unemployed while we import replacement workers for these jobs?

Now, not every low skilled worker is stuck at the very bottom of the wage ladder, so a restriction on labor force growth will increase the demand for their labor, raise their wages and create greater incentives for them to climb the wage ladder in search of even larger rewards in comparison to those they can find on welfare. When this process plays out all up and down the wage ladder, not just at the bottom with minimum wage laws, then the increased cost of labor will apply to all products and services and a rebalancing between returns to labor and capital will take place. What we've seen during this time of out of control immigration is a growing annual return to capital and a declining annual return to labor and this is pissing off the leftists to no end leading them to implement ever more expansive government and social welfare redistribution schemes rather than tackling the unpleasant task of tightening up the labor market by restricting supply of immigrants.



> Raising costs to a business when the business can't raise prices and still compete in the marketplace only drives the business to automate and innovate so they can lower their headcount which leads to more unemployment.


You make this sound like a negative. It's not. A robot doesn't need health care subsidy, it doesn't have children who need schooling, the robot doesn't drive to work and require a highway and all sorts of other streets designed to accommodate high levels of vehicle traffic. A robot doesn't eat food, so society doesn't need to waste fertilizer in growing crops, depleting soil and it doesn't need to pass civic bond measures to finance the expansion of sewer systems and waste treatment facilities. Robots don't drive drunk, they don't commit crimes, they don't go to prison. You get the idea.

Any job that can be done by a robot should be and when this process plays out alongside a policy of restricting the importation of replacement labor, then all workers, skilled and unskilled can be redeployed to tasks for which robots cannot provide a replacement service. We have a workforce that already exists and many in the workforce cannot pay enough in taxes to pay their own way, so we shouldn't be adding to this segment of the workforce and we should be finding ways to move them up the income ladder.

It makes no sense for America to be importing tomato pickers who use all of the services above and then have children who also use more services. It costs $10,514 to educate one child per year in the Los Angeles Unified School District. How does a roofer or berry picker with 4 children find the means to pay his own way when just the schooling for his kids costs $42,000 per year?



> If you don't mean to keep the prices equal, then all you're doing is creating more inflation since businesses will pass along their costs.


Whenever there is a rationalization process there is usually a change in behavior. This inflation ultimately resolves itself by a reallocation of gains between labor and capital and those business which try to pass on their costs, which will be most of them, will face consumers who may not accept business as usual. For instance, if a restaurant can offer cheap meals by paying low wages to immigrant workers and the supply of low skill labor starts to shrink, then the cost of their product is going to increase. The consumer market may respond by choosing to forgo the newly more expensive restaurant meals and instead spend their money on remodeling their kitchen in order to make food preparation in the home more efficient. Bad news for restaurants and good news for different sectors of the economy. The point here is that the restaurant sector in this example is only viable when society subsidizes the low cost labor that it relies on and this situation ultimately boils down to the taxpayer helping pay for the restaurant meals that people currently enjoy. This implicit subsidization is a hugely inefficient process and it actually sucks wealth out of a nation by protecting inefficient operations from carrying their own weight.



> If you're not old enough to remember, the 1970s was a good example of what happens when government mandates labor rate increases.


You're misunderstanding my point. There is no government mandated wage increase. Any wages increases which arise will arise from market forces which are reacting to labor market scarcity. Think back to the late 90s. The job market was hopping and unemployment was low. What would have happened to that job market if you had the god-like power to dump an additional, say, 50 million new workers into the American labor market? That would have ended the good times and you'd have done a massive favor for employers and capital while giving the royal shaft to workers and to taxpayers.



> Understand that the company I work for pays the highest wages in the area since one of the wage comparisons used in determining the wage structure is a GM plant in Arlington. Starting pay, after probation, is over $17/hr for non-skilled workers plus benefits like a pension, 401K, and insurance. Back in 2007 before the recession, we had over 5000 applications for ~25 positions so it's not like we can't pick and choose who we want.


Clearly you're not affected by minimum wage laws and the work that you guys do produces more than $17 per hour in value if you're paying your employees $17 per hour wages (ignoring the benefits you mention.)



> Again, please understand that enough of the company employees choose not to work these 'bad' jobs that have to be done. There were several employees who made over $100K and in one case, $150K last year.


And lots of kids these days don't mow the lawn nor do they work at McDonalds. When there is an easy out then people take the easy out. Right now these highly paid guys in your company don't do these jobs because you can hire someone else to do them. What happens when the labor supply gets restricted and the job still needs to get done? Will these guys throw away their livelihood and go on welfare?

I get it. Rationalizing towards new norms is never pretty nor is it trouble-free and simple.



> If most of those bodies are from down south, so be it.


And my aim is to prevent you from doing so because while this makes your life easier and brings more profit to your company, you're giving me and other taxpayers a royal screwing by shifting the costs of people who end up on welfare, but who should be in the labor force, onto us.

If you can find a way for ship out of the country a welfare dependent, or incarcerated inmate, for every worker you import to take a job, then it's a wash, but that's not happening, when you import a worker, or enable an imported worker to stay here, then you're displacing an American worker and this ultimately ripples downwards to the lowest rungs of the labor force and pushes those people into positions where they impose huge costs on the rest of society. So, what's good for you is not necessarily good for all of us.


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## invision

Bobbb said:


> If you can find a way for ship out of the country a welfare dependent, or incarcerated inmate, for every worker you import to take a job, then it's a wash, but that's not happening, when you import a worker, or enable an imported worker to stay here, then you're displacing an American worker and this ultimately ripples downwards to the lowest rungs of the labor force and pushes those people into positions where they impose huge costs on the rest of society. So, what's good for you is not necessarily good for all of us.


Bobbb - I see your point and everyone else's.. And my own...

I do have an idea for the commented I quoted above from you.

- by taking away the crutch of welfare, unemployment benefits, and 99 weeks entitlement, by mandating drug testing for these benefits, and by increasing detailed inspections in regards to workman's comp, disability claims, and such... Things could change for the better or worse. A person would either be poor and live on the streets or they would put forth the effort. They want to be homeless by choice let them, because at this point they aren't on the system.

- how many on this board are self-sufficient? Why can't a prison be more self-sufficient? Why can't we have the inmates that complete these grunt jobs, force them to get their GEDs, give them a bootcamp training program? At the point they hit jail, a group of their peers have determined them guilty, instead of having another mouth to feed, cable tv to provide, LexisNexis legal research libraries available for them... Make prisons work camps.

- correct me if I am wrong, but are you Native American? I am only 3rd born generation American. My ancestors came to America to better themselves. My point of view is I do not except the use of illegals, but I do support those who come to America to better themselves, that has alway been the American dream


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## Bobbb

invision said:


> I do have an idea for the commented I quoted above from you.
> 
> - by taking away the crutch of welfare, unemployment benefits, and 99 weeks entitlement, by mandating drug testing for these benefits, and by increasing detailed inspections in regards to workman's comp, disability claims, and such... Things could change for the better or worse. A person would either be poor and live on the streets or they would put forth the effort. They want to be homeless by choice let them, because at this point they aren't on the system.


I'm fine with decreasing the incentives for not working. As I pointed out above people do make decisions which voluntarily keep them out of the labor force and on some type of assistance because when all factors are considered, it's a better deal for THEM to refuse a job.

That said, it's simplistic to assume that this is the only problem because right now if you did a simple tally on the number of jobs that are available and compared that to the number of people who are simply seeking work, you'd find that there are not enough jobs available. Therefore, not everyone on welfare is there because they want to be. Now your proposal for reform is actually affecting the people who are not your target demographic.



> - how many on this board are self-sufficient? Why can't a prison be more self-sufficient? Why can't we have the inmates that complete these grunt jobs, force them to get their GEDs, give them a bootcamp training program? At the point they hit jail, a group of their peers have determined them guilty, instead of having another mouth to feed, cable tv to provide, LexisNexis legal research libraries available for them... Make prisons work camps.


This is a tricky business here. We don't want to verge into the territory of slave labor camps and we don't want, or at least I don't want, the state to profit from prisoners. Paying for the cost of incarceration is one thing but how do you determine the cost? If prison guard unions sees that they have a "captive labor market" (pun intended) to exploit, then they have a lot of bargaining power to keep jacking up their wages and using prisoners to pay for them and so long as the prison's aren't making a profit, the exploitation aspect is minimized but that's only face appearance.

Also keep in mind that many in prison are the dregs of society, so what are you going to do with a lifer who has nothing to gain by playing along?



> - correct me if I am wrong, but are you Native American? I am only 3rd born generation American. My ancestors came to America to better themselves. My point of view is I do not except the use of illegals, but I do support those who come to America to better themselves, that has alway been the American dream


You know what? If I go back far enough in my family tree I'm sure that I can dig up a Roman ancestor who owned slaves or an ancestor who was a slave, so by your logic, what was good enough in the past must be good enough today. Similarly, if I keep going back in my family tree I'm sure that I can find a cultural practice where UG, my great-great-many times great grandfather used his club and konked a woman on her head and thus made her his wife, so seeing how that worked so well for him and his father before him, hey, I should do that too.

You asked me a question, so now let me ask you a question. Back in 1970 the US population was 203 million and today our population is 311 million, a 53% increase in population in 42 years, so is there ever a point at which you think that the US population should stabilize and cease growing. Would a US with 2 billion people be a pleasant place for your children to live? How about an America with 5 billion people?

Would you like your taxes to keep increasing? Most immigrants that arrive here are poor. This means that they're not paying their fair share of costs. Those costs have to be paid and that means that the burden for providing increased roads, more schools, more highways, more sewer systems, more electrical grid, more water reservoirs, and so on gets passed onto the rest of us who make more in income that the immigrant makes.

Shouldn't immigrants that arrive here benefit the People of the US instead of the People of the US sacrificing so that immigrants can enjoy a better life?

Now to dredge up an earlier point - how the National Income is allocated between labor and capital over the last few decades:

In the United States, where labor's share began its decline in the 1980s, it fell a further 2.5 percentage points over the past 20 years. Excluding top earners' income, the decline in the adjusted labor share was 4.5 percentage points.

The decline in labor's share of national income did not result from a shift away from labor intensive industries to industries that employ a low share of labor. The OECD's analysis found overwhelmingly that it is within-industry declines in labor's share of industry value added that explains the fall in labor's share. On average, the OECD found, *real wage growth within industries did not keep pace with productivity growth.*​
Think about the bolded comment. Let's reduce that to a very simple relationship, one employee and his employer. Every year the employee gets better at his job and can produce more of a good or service than in the previous year. This gain in productivity arises from experience, intelligence and better equipment. This added value that arises from his work has to go to either the employee or his boss or they have to share the increase in value. They decide to share. Now the question of how to allocate this new wealth is key and what strongly determines this issue is negotiation strength. Both realize that they are mutually dependent on each other in order to produce this wealth but they don't have equal power because both can avail themselves of replacements - the employee can go to work for another employer and the employer can hire another employee, but the demand and supply curves are not identical. When there is a shortage of workers this improves the worker's negotiating strength and when there is a surplus of workers this weakens the employee's negotiating position.

For decades now the share of new wealth that employees create has been declining. This isn't a natural occurrence. Back in the early-middle part of the 20th Century when America had immigration moratorium- restriction, the middle class came into its own, labor was scarce and a low skilled, low income worker could support a household on one income. One income families were far more common then than they are now. Blacks' share of the national income rose, millions of blacks were integrated into the labor force, far before Civil Rights legislation came into being, etc.

Immigration restriction = no new sources of labor = rising share of national income going to workers = lower levels of people on welfare and in prison = lower taxes

Generous immigration = continual flood of new labor to eradicate labor market scarcity = declining share of national wealth going to worker = more people on welfare and in prison = higher taxes


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## BillS

Marcus said:


> You neglected to mention transportation costs which are actually more of a cost driver than labor costs.


Totally untrue. If you were right then nobody would have factories in China because the costs of transportation would outweigh the benefits of lower wages.


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## BillS

mojo4 said:


> Well its all quite simple...... 1- a massive decline in manufacturing. 2 - A workforce with much less willingness for hard work. 3 - Massive gov regulations. Add all 3 together and its lights out for the US. When I was a kid everyone in Denver worked for Gates rubber or Samsonite. They closed both plants and moved em overseas. The prices never dropped, the companies just made more money. I'm not sure about Samsonite but Gates closed when ma Gates, the daughter of the founder, died in the early 1980's. She owned the company and demanded things be made here. They still made plenty of money because go around Denver now and there are still plenty of museum wings and such with the name of Gates on them. So they made lots of money. But when they traded Denver workers (my dad was one) for workers from wherever the heck they never dropped their prices, they just made more. When ma gates died her sh!thead kids sold out right away to some foriegn company who kept the name of gates (betcha lots of you here have their belts and hoses in your cars today) but traded American workers for much cheaper foreign labor. Nope, as long as its cheaper to ship halfway around the damn globe they won't manufacture here. And as long as people like ma gates aren't running the businesses our manufacturing here is dead. This is my firsthand view of American manufacturing death. Anyone else have a similar story?


The people who owned the business moved the manufacturing to China so they could make more money. To expect the businesses to stay makes as much sense as expecting water to flow uphill. Businesses exist to make money. They don't exist to employ people. If a factory moves to China they can have a state of the art facility with all the newest equipment. Something they can't afford in America. American factories are typically aging facilities with aging equipment. Besides, you have much higher taxes in America. Especially in a liberal state like Colorado. It's no wonder businesses move to China if it makes sense for them.


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## machinist

Delco Electronics, Division of General Motors had a management meeting once a year when I worked there in the 1970's. At that time, Delco was the world's leading producer of moncrystalline silicon for semiconductors, and they were THE state-of-the-art manufacturer. During one meeting in the early 70's, the CEO made the statement that Delco would NEVER go offshore for manufacturing. But while he was talking about it, they were building a semiconductor factory in Shanghai. They lied a lot.

I do not mean to say that cheap labor was the only reason for offshoring manufacturing. At the time GM top management was mainly concerned with union labor being the main impediment to higher profits, but they also had an intolerable corporate culture. That culture in top management included the idea that they were the biggest, and thus they were the best, so it followed that the decision makers could do no wrong. The worst decision they made was continuing to embrace big cars as their major profit center, even after 1973-74's gas shortages proved them wrong. That let in Asian competition in car sales, and the rest is history. To compete with more fuel effiecient Japanese cars required a massive investment in retooling the entire corporation in a very short time (they waited too long to start it) that was the beginning of GM's financial woes. 

Later, I worked at Central Foundry Division in Bedford, IN, now called GM Powertrain Div.. They lost business to US competitors then (early 80's) when their product quality was very poor. The poor quality was a direct result of bad management decisions, many of which were based on management turf wars. See John Delorean's book, "On a Clear Day You Can See General Motors". He describes how the board of directors was taken over by people with accounting and money manager backgrounds, which led to short-term decisions on capital investment. That was the beginning of the end. 

I blame GM's eventual bankruptcy on poor management, having seen it from the inside as it happened. But cheap offshore labor was a BIG factor that influenced the new money-men leading the corporation. Favorable tax policy for offshore profits was the final nail in the coffin of US manufacturing.


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## Marcus

BillS said:


> If you were right then nobody would have factories in China because the costs of transportation would outweigh the benefits of lower wages.


Actually, it is true.

There are certain types of transportation that are more efficient in cost in tons/mile like railroads and shipping in enclosed containers. Tractor trailer transportation costs are among the highest with courier delivery being the highest.

I do know that it costs roughly $2000 to ship 20,000 pounds roughly 1000 miles using a tractor trailer. That's about twice as expensive as using railroads.

So why aren't companies using the railroads more? With the advent of JIT inventory systems, delivery dates for inputs have to be met or a factory is idled. Thus JIT tends to favor OTR (tractor trailer) deliveries rather than RRs since OTR are more flexible when the unforeseen happens (delivery times given a truck wreck vs train wreck.)

Even given the transportation disadvantages, some companies are bringing a few jobs back to the US since they've discovered that political, labor, and social instabilities in foreign countries can put them out of business very quickly. The high tech (and high value) electronic gadgets will probably continue to be made off shore, but the bulkier items will eventually be made here as transportaion costs offset the higher labor costs in the US. Even then, companies will build in more business friendly states with lower labor costs.

As someone mentioned earlier in this thread, companies are in business to make money, not provide jobs.


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## db2469

Great posts all, very informative to those of us who haven't thought of those things to that degree!


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## invision

machinist said:


> I do not mean to say that cheap labor was the only reason for offshoring manufacturing. At the time GM top management was mainly concerned with union labor being the main impediment to higher profits, but they also had an intolerable corporate culture. That culture in top management included the idea that they were the biggest, and thus they were the best, so it followed that the decision makers could do no wrong. The worst decision they made was continuing to embrace big cars as their major profit center, even after 1973-74's gas shortages proved them wrong. That let in Asian competition in car sales, and the rest is history. To compete with more fuel effiecient Japanese cars required a massive investment in retooling the entire corporation in a very short time (they waited too long to start it) that was the beginning of GM's financial woes.
> 
> .


 I agree, growing up around the Dayton, Ohio area. I am familiar with Delco, also had an uncle and cousin that worked in Muncie, IN at Borg Warner plant their entire lives, my uncle retired, my cousin was laid off when the closed the plant in 2009.

I personally think a lot of the offshoring has to do with the Unions, being from a heavy union city growing up, i understand the initial need for them, but like anything they ballooned to big to powerful and to demanding for corporations to deal with.

I also agree with the comment GM, and for that matter Chrysler and Ford waited to long in the 70s to make the switch to better fuel efficient automobiles... God loves muscle cars...

I will give some other examples where companies fell behind because of failure to adapt to new technologies.

LexisNexis - when I was there from 1996-2000 the CEO stated around 1996 that the Internet was a fad and that we would continue to build client server based software instead of moving to web base software. At the time, West Law jumped the gun and beat us to the web and blew away our pricing because it lowered their support costs (phone support and onsite support)... Today, LexisNexis has caught up in technologies, but are still playing catch up on market share,

Microsoft - two areas here - although they tried to adapt into the cell phone space, they were a year behind, and instead of moving forward kept the same technology in place. With Win8 release later this year, they will re-enter the market...a little to late. They are now going to jump on the tablet platform with win8, uh... I already had a great tablet, iPad... It is going to have to really beat my tablet to get me to spend $800 on a new one.

Apple - they were one of the first to release a home computer, they were the first to market with a clean User Interface that was mouse driven. However, their failure to adapt to move away from proprietary hardware, allowed MSFT to jump ahead and dominate, because they allowed their OS to go on any hardware that supported a certain chipset. Apple 20 yrs later has never caught up. I can buy a killer laptop for $899 running Win7 OS, but I spend 3-4 times as much for a PowerBook with less power?

IBM - lead the race for business computing providing massive mainframes that cost a large dime. When the move started to servers, IBM failed to compete with the likes of HP and Dell. Today they are in the market space, but the leaders are still HP and Dell, in fact Dell has it down to a science compared to HP for high quality great service, low cost and that is why HP is now having issues too in a market they once dominated.

Why falling behind matters, for LexisNexis their product is better and has more data mined that Thompson in regards to the law docs area. However, during that short window, how many thousands of law students where adapting to the web products of West while in college? It's the same as the browser wars of years gone by... First to use and learn becomes the defacto. Unless you can really have a product that outshines the competition.


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## invision

Bobbb said:


> This is a tricky business here. We don't want to verge into the territory of slave labor camps and we don't want, or at least I don't want, the state to profit from prisoners. Paying for the cost of incarceration is one thing but how do you determine the cost? If prison guard unions sees that they have a "captive labor market" (pun intended) to exploit, then they have a lot of bargaining power to keep jacking up their wages and using prisoners to pay for them and so long as the prison's aren't making a profit, the exploitation aspect is minimized but that's only face appearance.


There is a way, get rid of the unions?!? Sorry, I am not a supporter of the unions... Most if not all are supporting Obama, they definitely helped in 2008. I think there was a time and place for unions, but because of union demands, such as paying someone $25 an HR to dig a hole, etc they have outlived their usefulness. Like most things when they grow powerful, they corrupt. Last week I saw a road crew, 6 guys digging one hole...5 where standing around holding shovels. While I waited in line at the flag guy, I rolled down my window and asked if he was union, guess what yes. Ever talk to construction people who have worked jobs in NYC?



bobbb said:


> Also keep in mind that many in prison are the dregs of society, so what are you going to do with a lifer who has nothing to gain by playing along?


Well, gee, no work no eat.. Simple. Why would you NOT want the state to profit instead of have this financial drain? So as for having the prisons contribute to city and state revenues, sure do it, the money could be used to strengthen education, public transit, public healthcare facilities, provide small business grants. it ALSO might lower the crime rate some too, you never know until you try? As time goes by and IF crime rates go down, then we are better off as a society.



bobbb said:


> You asked me a question, so now let me ask you a question. Back in 1970 the US population was 203 million and today our population is 311 million, a 53% increase in population in 42 years, so is there ever a point at which you think that the US population should stabilize and cease growing. Would a US with 2 billion people be a pleasant place for your children to live? How about an America with 5 billion people?


Ok, let's just be like china... Gee I haven't even had a child and I am 41... What we have is a system that promotes having a child because it means more welfare assistance and more tax deductions... That needs to change... We have lost family values, I see it every where, I posted about my step-daughter and a male friend (both 13) texting about "toys" he found of his mother. His mother took away his iPhone for a week. When she gave it back it was a NEW one...with a promise of the iPhone 5... Huh? really? How many parents give a shit about their kids grades? How many communicate with their teachers and have a hammer fall on their kids head if they bring home a C or worse grade?



bobbb said:


> Would you like your taxes to keep increasing? Most immigrants that arrive here are poor. This means that they're not paying their fair share of costs. Those costs have to be paid and that means that the burden for providing increased roads, more schools, more highways, more sewer systems, more electrical grid, more water reservoirs, and so on gets passed onto the rest of us who make more in income that the immigrant makes.


So for those of us who's ancestors arrived here earlier under similar conditions, hey we are just lucky? Wow, I am glad my great grandfather move from England when he did...


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## machinist

invision said:
"I personally think a lot of the offshoring has to do with the Unions, being from a heavy union city growing up, i understand the initial need for them, but like anything they ballooned to big to powerful and to demanding for corporations to deal with."

So true. At Delco, in order to move a 1/2 pound item (miniature air cylinder with limit switches built in) across a 10 acre field to get a production line going (downtime cost many kilobucks/hour), we had to have a forklift driver haul the thing from the tool crib to the dock where the shipping/receiving clerk logged it out, he gave it to a truck driver who drove a 5 ton van box 6 blocks around the complex to get to the dock at the other plant, a forklift driver picked it up and logged it in with the receiving guy, he gave it to a forklift driver (who was on break and had to wait till he got there), and the forklift guy brought it to the the department in need. 

This all took half a day.

At that point, only an electrician could handle the part and take it to the machine that wanted repair. The electrician opened the box and saw that it had air hose fittings on it. He called a pipefitter to install it. Pipefitter said it was a machine part (an air cylinder) so it had to be a machine repairman who put it on. Machine repairman said, "I ain't touchin' it, 'cuz it's got WIRES and SWITCHES on it. It wants an electrician." 


It took 2 days before they all agreed to have every Union tradesman stand around while each one did a small part of the install. Cost about 1/4 Mil for the down time. Yeah. Unions cost the the auto companies a fortune.


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## partdeux

BillS said:


> Businesses exist to make money. They don't exist to employ people. If a factory moves to China they can have a state of the art facility with all the newest equipment. Something they can't afford in America. American factories are typically aging facilities with aging equipment. Besides, you have much higher taxes in America. Especially in a liberal state like Colorado. It's no wonder businesses move to China if it makes sense for them.


Slight correction, CEO's primary responsibility is to increase shareholder value. Slight but distinctive difference.

Transportation costs are going to become increasingly (exponentially) expensive.

China has been buying US equipment at bankruptcy auction for $0.10 on the dollar. Of course they are going to be able to product cheaper, paying 1/10 the wages of a US company, buying equipment for 1/10 the cost, much easier to make a profit.

I've had too many business dealings with China. Chinese govt and management impresses the hell out of me. They typically sell to US companies at 75-90% the cost of buying local. What CEO (remember shareholder value) isn't going to suddenly increase his profits by 25%? It would be a violation of his fiduciary responsibility to the shareholders. What is even more amazing to me, a US company will accept trash product from a Chinese company, that they would never accept from a US company.

For a US mfg to put up a large mfg plant, it can take 2-3 years. China can have it operational in six months.


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## Bobbb

invision said:


> There is a way, get rid of the unions?!? Sorry, I am not a supporter of the unions... Most if not all are supporting Obama, they definitely helped in 2008. I think there was a time and place for unions, but because of union demands, such as paying someone $25 an HR to dig a hole, etc they have outlived their usefulness.


If you had a lyin', cheatin', trampin', whorin' wife and you proclaimed that you no longer supported marriage, what should we think? Does your reality of marriage transfer to everyone?

There was a time and a place for unions, so you say, and I agree. I'm no supporter of the current practice of unions, but I'm a firm supporter of the idea that unions SHOULD BE WHAT I THINK THEY SHOULD BE. Pretty funny, huh? In this regard I'm like a liberal waxing poetic about patriotism for a US that he hates but imagines how great it could be if he could change the entire nature of American society.

Workers should have the right to come together and bargain as a unit in that this collective action equalizes the power imbalance between labor and capital. This coming together is the only way to capture more of the wealth created by labor's input in the face of a lot of power that Capital wields.



> Like most things when they grow powerful, they corrupt. Last week I saw a road crew, 6 guys digging one hole...5 where standing around holding shovels. While I waited in line at the flag guy, I rolled down my window and asked if he was union, guess what yes. Ever talk to construction people who have worked jobs in NYC?


I'm standing alongside of you on this aspect - this is a huge problem. Unions as currently constituted lead to inefficiency, which is exactly the wrong thing to be valuing.



> Well, gee, no work no eat.. Simple. Why would you NOT want the state to profit instead of have this financial drain?


Profit is a powerful motivator and the last thing I want to do is to give the All-Powerful State a motivation to incarcerate more people. I'd rather pay more in taxes than to have a State having an incentive to find new ways to put people in prison and keep them there longer. Go look at what's happening in North Korea and their prison camp system. There the state profits from the work created by their slave labor camps.



> Ok, let's just be like china... Gee I haven't even had a child and I am 41... What we have is a system that promotes having a child because it means more welfare assistance and more tax deductions...


Well, living as we do is a welfare state, whether we like it or not, you're now part of the problem (unless you are wealthy or your income tops you out on FICA contributions, and if so, then never mind the following.)

SS & Medicare are set up as an aggregated way for society's children to care for society's parents instead of individual children providing care for their own elderly parents. SS is mostly self-funding but the typical Medicare recipient prepays about 20% of his expected post-retirement medical expenses. Now, if these programs were no longer aggregated but the funds were separated per individual, then SS would be a wash but when the Medicare "savings" were depleted then the senior's own children would have to bear the cost of providing the medical care he needed. At the aggregated level, when a lifetime's worth of FICA contributions + income growth on that pool have been depleted then it is society's children who pay for the medical care of society's parents. You not being a parent means that you're free-riding the system. And no, the taxes you pay to educate society's children in public schools doesn't come anywhere near what you're expected to impose on society to care for your medical needs when you get older.

The system as its currently configured shows the signs of being designed by delusional leftists, in that child incentives treat all people equally and all people are not equal. The system should be incentivizing high income people to have more children and low income people to have fewer children, in that the high income people will require less subsidy for their children, will produce children who have a higher likelihood of paying more in taxes over their lifetimes than they consume in services and will be diluting the intergenerational transfer of their family wealth, thus slowing the wealth gap between rich and poor. Meanwhile the poor can concentrate their scarce resources on only one or two children, use the resources that would have been spent on additional children to help give their children a better leg up in the world, and when they die their estate doesn't get diluted across many children but gets divided to two children or gets concentrated (two parents to one child) to their only child.



> So for those of us who's ancestors arrived here earlier under similar conditions, hey we are just lucky?


Wow, I guess we should do away with Drunk Driving laws because I recall stories of my grandparents having the freedom to get shit face drunk and then getting behind the wheel. If my grandparent's generation had the freedom to drive while drunk, then so too should this generation. Right?



> Wow, I am glad my great grandfather move from England when he did...


Your romanticism, devoid of reason, is a huge problem for society. Population in the US is doubling every 40 years and ALL of that population growth is due to immigration.

2012 = 310 million.
2052 = 465 million
2092 = 698 million
2132 = 1,050 million.

You seem like a guy who doesn't like socialism and yet you support immigration which, due to the particulars of immigration patterns, leads the US towards a more socialistic future, riven by increased levels of race, ethnic and class hostility and ever more intrusive government in order to "keep the peace."

You want lower taxes and less government and the period of reduced immigration into the US saw the greatest gains for middle class income and the least amount of social turmoil in the sphere of culture.

What is to be said about desiring certain outcomes and then purposely choosing a path which leads you away from those outcomes? You know, going back full circle to the top of this comment, there are guys who are married to lyin', cheatin', trampin', and whorin' wives and these guys manage to be willfully blind to all of their wives' flaws and still think of her as the virginal princess from their youth despite all of the grief these wives rain down on their husband's lives. These men are romantic fools who deeply love their wives and they ignore the reality of their married life because of their attachment to a romantic vision which is completely divorced from reality.


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## invision

Bobbb said:


> .
> 
> Profit is a powerful motivator and the last thing I want to do is to give the All-Powerful State a motivation to incarcerate more people. I'd rather pay more in taxes than to have a State having an incentive to find new ways to put people in prison and keep them there longer. Go look at what's happening in North Korea and their prison camp system. There the state profits from the work created by their slave labor camps.


Oh come on, get out of your BOL... If you force inmates to be self-sufficient, aka work hard and learn a trade or skill, then they most likely won't be a repeat offender. 1) you have given them skills to get a job, and 2) you have given them the impression that prison is work. You anti-government thinking in regards to US being like Korea is totally basely. Their would be extreme civil unrest if our government started to create new ways to imprison people... Really?



Bobbb said:


> Well, living as we do is a welfare state, whether we like it or not, you're now part of the problem (unless you are wealthy or your income tops you out on FICA contributions, and if so, then never mind the following.)


not to sound egotistical but I topped out my SS contributions in my early 30's, I pay around $65,000 a year in federal income tax... Don't give a crap or will ever depend on SS. Since I can't control it or give input to the money I contribute, I have NEVER seen it as a viable input to my financial well being for retirement means. I also believe that because of mismanagement of the funds that it WILL NOT be there for me when I hit 65, so while add it to my net worth?

Each person should depend upon themselves for their own retirement, I have an untouchable trust which is MULTI-millions, if my parents blow through it before they die, so be it because it is theirs in the first place.



Bobbb said:


> Wow, I guess we should do away with Drunk Driving laws because I recall stories of my grandparents having the freedom to get shit face drunk and then getting behind the wheel. If my grandparent's generation had the freedom to drive while drunk, then so too should this generation. Right?
> 
> [\quote]
> 
> Been drinking?wtf?
> 
> 
> 
> Bobbb said:
> 
> 
> 
> Your romanticism, devoid of reason, is a huge problem for society. Population in the US is doubling every 40 years and ALL of that population growth is due to immigration.
> 
> 2012 = 310 million.
> 2052 = 465 million
> 2092 = 698 million
> 2132 = 1,050 million.
> 
> You seem like a guy who doesn't like socialism and yet you support immigration which, due to the particulars of immigration patterns, leads the US towards a more socialistic future, riven by increased levels of race, ethnic and class hostility and ever more intrusive government in order to "keep the peace."
> 
> You want lower taxes and less government and the period of reduced immigration into the US saw the greatest gains for middle class income and the least amount of social turmoil in the sphere of culture.
> 
> 
> 
> My political beliefs are mine, I vote for who I think is best, never a straight party ticket. I hate socialism and supporting others, and if anything I am a true capitalist at heart. Not a republican or a democrat, a capitalist.
Click to expand...


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## Bobbb

invision said:


> If you force inmates to be self-sufficient, aka work hard and learn a trade or skill, then they most likely won't be a repeat offender. 1) you have given them skills to get a job, and 2) you have given them the impression that prison is work.


Please refrain from shifting the terms of the debate.

Invision: _Why would you NOT want the state to profit instead of have this financial drain? _

Bobbb: _Profit is a powerful motivator and the last thing I want to do is to give the All-Powerful State a motivation to incarcerate more people._

Invision: _If you force inmates to be self-sufficient . . ._

Look back on my earlier comment and you see the following:

Bobbb: _This is a tricky business here. We don't want to verge into the territory of slave labor camps and we don't want, or at least I don't want, the state to profit from prisoners. Paying for the cost of incarceration is one thing but how do you determine the cost?_

If prison officials keep jacking up the "cost" of operating the prison, then more and more labor can be extracted out of the prison population while the prison is operating at a loss.

Look, keeping prisoners in prison is one of the CLASSIC rationales for government and for the use of tax money. This is not welfare redistribution, it's classic government as understood through the entire history of civilization.

Now back to your point, there is a pretty substantive difference between educating a prisoner in a trade and working that prisoner so that he supports the costs of his incarceration. Education costs money, so here your education rationale is at cross purposes to your self-sufficiency argument and your profit argument.

What is it that you're actually arguing because it seems like you have a fuzzy vision of something and you only clarify it in reaction to comments and what you clarify seems ad hoc and not coherent. Do you want prisons to profit from the labor of inmates, do you want prisons to be financially self-sufficient or do you want prisons to provide education training with respect to marketable job skills?



> You anti-government thinking in regards to US being like Korea is totally basely. Their would be extreme civil unrest if our government started to create new ways to imprison people... Really?


Massive civil unrest, huh? Let me introduce you to Civil Asset Forfeiture laws.

Police stopped 49-year-old Ethel Hylton at Houston's Hobby Airport and told her she was under arrest because a drug dog had scratched at her luggage. Agents searched her bags and strip-searched her, but they found no drugs. They did find $39,110 in cash, money she had received from an insurance settlement and her life savings; accumulated through over 20 years of work as a hotel housekeeper and hospital janitor. Ethel Hylton completely documented where she got the money and was never charged with a crime. But the police kept her money anyway. Nearly four years later, she is still trying to get her money back.

Ethel Hylton is just one of a large and growing list of Americans - now numbering in the hundreds of thousands - who have been victimized by civil asset forfeiture. Under civil asset forfeiture, everything you own can be legally taken away even if you are never convicted of a crime.

Suspicion of offenses which, if proven in court, might result in a $200 fine or probation, are being used to justify seizure of tens or even hundreds of thousands of dollars worth of property. Totally innocent Americans are losing their cars, homes and businesses, based on the claims of anonymous informants that illegal transactions took place on their property. Once property is seized, it is virtually impossible to get it back.​
When police have a profit incentive for seizing assets under these laws, and they do in that most of the proceeds get added to police budgets, then, wouldn't you know it, police tend to use these laws quite a bit.

If you want prisons to generate profits for the state, then you are giving government a powerful incentive to incarcerate more people so that they can use this captive labor in order to generate more profit for government, be it bureau, agency or department.



> Been drinking?wtf?


Was my analogy badly constructed? I don't think so. Let me break down the point. You are relying on arguments based on "what was good in the past, MUST also be good today." I replied in kind - drunk driving was good in the past and today it is punished, therefore, if ALL that was good in the past remains good today, then drunk driving laws should be abolished so that we can all, once again, enjoy the same freedom that our ancestors enjoyed.



> My political beliefs are mine, I vote for who I think is best, never a straight party ticket. *I hate socialism and supporting others,* and if anything I am a true capitalist at heart. Not a republican or a democrat, a capitalist.


And yet you are enthusiastic about importing millions and hundreds of millions of new people into America, most of them poor and lacking much education, who are "net tax takers" rather than "net tax givers" and whose votes, each as equal as the one you cast, will support increased socialism. Look at the voting patterns of immigrants right now - they are heavily Democratic because they love how Democrats are for Big Government and how Democrats spend money on them. As I noted, what you reveal of your positions, and I concede that you're only revealing a small part of your total philosophy, shows a remarkable duality between a romantic vision that flies in the face of reality. You hate certain things like "socialism and supporting others" and you strongly support programs which bring about that which you hate.


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## JayJay

The people who owned the business moved the manufacturing to China so they could make more money. To expect the businesses to stay makes as much sense as expecting water to flow uphill. Businesses exist to make money. They don't exist to employ people. If a factory moves to China they can have a state of the art facility with all the newest equipment. Something they can't afford in America. American factories are typically aging facilities with aging equipment. Besides, you have much higher taxes in America. Especially in a liberal state like Colorado. It's no wonder businesses move to China if it makes sense for them. 


One more thought..and it AIN"T mine..I read it.
Most businesses really don't move because of money factors, profit/loss, and cheap labor.
The regulations and red tape here have sent them overseas.
Yeah, The PITA factor won and sent them there.
IF I was a manufacturer, I probably would be in China or India now.
This coming from a wife of a semi operator who hauls logs in Ky.
PITA, time consuming, and repetitive is not even the beginning of the complaints.
And this is just ONE little truck and trailer.

And before you nail me to a cross, I do buy American made as often as I can.
I do have cheap, China, and foreign made crap, but bought before I realized the importance and health factors of buying American.
I spent $25 more for my weather radio at Lowe's and a few days searching for American made.


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## invision

Bobbb - every comment I make on a subject let's call it an apple, you reply with an orange.

A lady carrying $35,000 or what ever while flying is an extreme case, and I highly doubt all the facts are straight and clear in your source of information regarding the case. If you cross any state line with more than $9,999 you MUST report it to the IRS. I know, I travel to MS, FL, and Vegas to play in WSOP and WPT events... It's a pain but fact of life, I can't wire the money to the casino either since potential money laundering could be involved. So, perhaps this lady with her life savings didn't report it? I read somewhere that 99% of all $100 bills will test positive for cocaine. Thus the dog scratching the bag. I go to the bank, sign the forms, have a certified check made out to me and I go, carrying that large amount of cash on hand is not only dangerous but extremely stupid.

I also replied to you about union based workers demanding more money if prisons were self sufficient - i said get rid of the Unions, my next comment about no work no food, and access money going to the state for increased education, supporting public hospitals, urban redevelopment, etc was in relation to getting the unions out. He'll,take the acces and give a percentage to the guards, god knows they have a thankless job.

As for DUI abolishment, that is an useless comparison, allowing immigration to still occur can be a good thing too. The concept that every immigrant is uneducated and unskilled is a biased and stereotyping statement, it almost sounds like you have lost a job to foreign workers because you wanted more than it was worth to pay you. I know several doctors, lawyers, investment financial analyst who are all immigrants and all have entered with all intentions of becoming US citizens. The only place I agree on would be if they have ANY type of criminal background.

We can't just slam the door shut, just like we can't just limit 1 child to a family. 

Companies like Microsoft, Cisco, Apple, not to mention others like GM, GE, etc look for the best talent, sometimes that talent comes from other countries.

US based companies that are not classified as an 501C1 are there for one thing... To make money, no matter the size, from mine to Microsoft. Hell dude I export server support overseas... My call centers are US based, but server support is overseas. I can get 300 MSCE certified engineers covering 24/7 for a forth of 1 MCSE working 20 hrs a week. My cost is actually based on my server count, my cost is $60/server per month, I charge $200/month... If an onsite engineer is needed i charge $135/hr and pay $50/hr, if it is so bad that it requires me onsite, then double that price cause i make more than that and it would end up being after hours for long hours 24 - 72 straight. My friend, that is free enterprise, that is corporate America, and that is the heart of capitalism. If I could find as high as quality as I have now for even less, I would switch in a heartbeat. 1 year ago I was spending .79 cents per GB at the data center provider for my backup solution, I changed hosting providers, today I pay .23 cents per GB... I have 8,000 GBs of customers data online, That is a $4,480 savings PER MONTH... And did I offer any savings to ANY of my clients? No... Because I am already lower than the competition... So I added $48,000+ per year to my net profit. Welcome to US business 101.


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## Bobbb

invision said:


> *If you cross any state line with more than $9,999 you MUST report it to the IRS.* I know, I travel to MS, FL, and Vegas to play in WSOP and WPT events...


Sorry, I'm calling ******** on this. Cash transactions over $10,000 have to be reported and declarations have to be made when entering the US, but someone driving across a state line carrying $10,000 doesn't have to notify the IRS that he is going to take that trip.

If you'd like to put me in my place, please provide an IRS technical bulletin which specifies this reporting requirement for citizens and residents of the US. When you do that, then I'll concede that you were correct.



> carrying that large amount of cash on hand is not only dangerous but extremely stupid.


Why are you veering off topic? I rebut your points and then you sink your teeth into distractions instead of acknowledging that you were incorrect. Whether this lady is stupid for carrying cash is beside the point, the point is that asset forfeiture laws a.) give police an incentive to seize assets even without an underlying criminal act on behalf of the asset's owner and b.) this law is being grossly abused because police profit from it. These two points *directly address* your notion of prisons being set up do earn profits for the government.



> The concept that every immigrant is uneducated and unskilled is a biased and stereotyping statement


Oh brother. What you will do to remain true to you illogical romantic belief is a sight to behold. Look, some guys who engage in brutal gang rape are also nice guys in other situations, so what exactly is the point of picking out exceptions to the rule? I could load you down with countless statistical reports which show the heavy preponderance of immigrants in poverty but would evidence actually change your mind?



> it almost sounds like you have lost a job to foreign workers because you wanted more than it was worth to pay you.


Are you a leftist or something? You're arguing like one. What exactly did I write which gave you this impression? The motives of someone you debate have no bearing on the strength of the argument that that person is advancing. Do you hate socialism because some bully took away your lunch money when you were a kid and then treated all of his friends to ice cream? If this were true, what bearing does it have in your arguments against socialism? Would that invalidate your arguments against socialism?



> We can't just slam the door shut, just like we can't just limit 1 child to a family.


Why can't we? You make it sound like restricting immigration is the equivalent of breathing water. Why exactly can't a nation decide who to invite to join the nation and whether to invite anyone at all? Why is it impossible for a nation to do that? Why is it impossible when we have a history of doing just that?



> Companies like Microsoft, Cisco, Apple, not to mention others like GM, GE, etc look for the best talent, sometimes that talent comes from other countries.


Give me a break. This feature of immigration is so rare in terms of the flood of immigrants that it's not even worth mentioning. Secondly, there have always been exceptions for people of extraordinary talent to bypass quotas and restrictions. Thirdly, how these companies define "best" is left to them instead of by some verifiable metric, and companies are well known for bringing in talent in order to take advantage of wage differentials and depress wage levels in the domestic market. You should be well aware of this considering your own industry background.



> My friend, that is free enterprise, that is corporate America, and that is the heart of capitalism.


You do realize, I hope, that the rules of trade are the creation of politics, so you blowharding about what constitutes capitalism is missing the mark by miles for your current practices are constrained by the limits of laws and treaties. What happens to your business strategy freedom if the US passes a law restricting international currency transfers like other countries have done during currency crises. How about introducing a tariff on the importation of goods and services?



> Welcome to US business 101.


It takes a lot of chutzpah to be lecturing strangers on how business is conducted when you know jack about the other person's background.


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## Bobbb

Asset forfeiture horror stories are all over the place. Here's one from Texas:



> You can drive into this dusty fleck of a town near the Texas-Louisiana border if you're African-American, but you might not be able to drive out of it-at least not with your car, your cash, your jewelry or other valuables.
> 
> That's because the *police here allegedly have found a way to strip motorists, many of them black, of their property without ever charging them with a crime. Instead they offer out-of-towners a grim choice: voluntarily sign over your belongings to the town, or face felony charges of money laundering or other serious crimes.*
> 
> More than 140 people reluctantly accepted that deal from June 2006 to June 2008, according to court records. Among them were a black grandmother from Akron, who surrendered *$4,000 in cash* after Tenaha police pulled her over, and an interracial couple from Houston, who gave up more than *$6,000 *after police threatened to seize their children and put them into foster care, the court documents show. *Neither the grandmother nor the couple were charged with any crime.*


There goes your convenient fiction about cash being seized because it amounts to more than $10,000 being transported across a state line.



> That law permits local police agencies to keep drug money and other property used in the commission of a crime and add the proceeds to their budgets.


There's your perverse incentive. The cops pad their budgets with money seized even when there is no crime that has taken place.


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## Marcus

Bobbb said:


> Sorry, I'm calling ******** on this. Cash transactions over $10,000 have to be reported and declarations have to be made when entering the US, but someone driving across a state line carrying $10,000 doesn't have to notify the IRS that he is going to take that trip.
> 
> If you'd like to put me in my place, please provide an IRS technical bulletin which specifies this reporting requirement for citizens and residents of the US. When you do that, then I'll concede that you were correct.


It's my understanding that you can't take over $10K in to or out of the country without reporting it to customs or it will be subject to confiscation and you'll be liable for fines.

https://help.cbp.gov/app/answers/detail/a_id/195/kw/CURRENCY RESTRICTIONS

http://forums.journeyetc.com/north-...while-traveling-between-states-usa-plane.html

There are some practical limits due to the danger of theft. Cash transactions above $10K also require a CTR to be filed, but it has nothing to due with traveling between states. If you deposit or withdraw $10K in cash into your bank in your home town, the same form (CTR) will be filled out and transmitted to the government.

Casinos also report transactions over $10K and sports wagering wins over 300:1 odds (if I remember correctly.)


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## invision

Just looked it up, and I am mistaken in regards to the 10,000 across state lines, but every time i do pull 10,000 out for personal use, I do have paper work from the bank and it is IRS related. I assumed it was also needed for travel across country since it is need for entering US from abroad. BTW - I do get a copy of the paperwork and keep it with me when traveling. Part of the statement is that they can seize it, is because they do have a right to know where it came from when it does trip the alert as drug money. So i guess my stupidity for not truly checking the laws, may have saved me when I can simply whip out the paperwork and state where it came from.

I see your points on everything, although I am far from a socialist as you now have claimed, I just don't agree with you on some of them, just like you won't agree that unions should be abolished, or prisoners should be made to work long hard hours and not get tv, smokes, etc as others in other posts have stated as well as mine.

In regards to immigration, I really could care less. 

My original point is there are too many Americans who think they are worth more than they really are, unions helped with that too. I think I am worth what I am paid, because I am paid that, also I am paid that because it is within the "price range" of the skill set. A little higher than average for my location, but not to much to not draw clients. I let my reputation and referral list speak to why I am $20-30 higher per HR consulting. That is the thought process of every working person in the US, as long as their inline with the average, problem is that people always want more raises they demand them, I am not against giving raises based on performance, but with every business decision that effects the bottom line, there comes a time to review the best process that a company takes. If the Atlanta market were suddenly flooded with IT consultants at the same level I am, and were working for far less, say $80/HR, I would cut my rates to compete, but I would also adjust my hiring patterns, where what was $50/HR is now going to be around $35/HR or so,,, and I would find people too.

So we agree to disagree. But, we also have a lot of items that we both agree on too... 

Now, here is (meant to be humorous), we have had a great debate, neither one of us giving up much, however there have been a few statements that we both can and do agree on.... And we are both watching things very closely and we both believe what the Gov is doing with printing more money is wrong and economic failure is on the horizon... 

Now, why can't the idiots in congress do what we just did?
I


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