my take: the demise of American Manufacturing (1 Viewer)

[msommer]

Probably.  Im not involved in shipping calculations - I have no idea what shipping a container costs.  I know a 40' container is pretty big and you can stuff a lot of things in there.

I can ask some of my old colleagues if you are intersted

That aside a few years ago I did a ocean freight calculation for one pair of Nike sneakers across the Pacific. If I remember correctly it came out at less than 10c a pair ....

Gotta love all those marketing dollars at work

 

[moleculo]

The longer term problem in what @moleculo brings up is the design. Because something like 3D printing could move "manufacturing" back locally all over the world. But if all the designs are Chinese, guess where the money is going.

It will be a few years before 3D printing can do electronics though

I don't think 3D printing solves anything.  I've ranted about it before.  But even if it wads viable, it would make what I'm describing worse - my complaint isn't so much about China as it is consolidation of manufacturing/design.  If 3d printing was viable, everyone would have their stuff locally printed at the same place (not efficient for companies to own printers that may or may not run at full capacity).  We would further lose differentiation.

 

[msommer]

I don't think so.  I don't think revolt is part of the Chinese DNA.  

Also, the workers aren't far removed from subsistence farming.  Factory work, while gruelling, is much easier than that.

Everyone in the area that I have spoken to keep saying that it is becoming harder and harder to attract migrant workers in the coastal cities, this is one of the principal wage drivers. Obviously it doesn't help that their conditions in the coastal cities and at work are atrocious (e.g. not being able to obtain residency or schooling for their children). It is not far from indentured servitude, in one year increments.

This is also one of the motivations for the Chinese to move factory jobs further inland, to quieten any potential unhappiness with the current regime. But the inland factories will serve mainly China and the Chinese because of logistics cost, but they keep the rural population where they are supposed to be.

 

[msommer]

I don't think 3D printing solves anything.  I've ranted about it before.  But even if it wads viable, it would make what I'm describing worse - my complaint isn't so much about China as it is consolidation of manufacturing/design.  If 3d printing was viable, everyone would have their stuff locally printed at the same place (not efficient for companies to own printers that may or may not run at full capacity).  We would further lose differentiation.

This is one point where we are in disagreement - we should hash it out while embibing some hoppy beverages one day. 

 

[Gawain]

We're paying 1800 for ningbo to La and 2700 for ningbo to my/nj. Not counting port fees. Generally Maersk. If the American consumer ever thought of the mark up we pay, the economy would shudder. I can get a zinc faucet in China for five bucks, sell it to a big box retailer for ten, who then retails it at 19.99. 

 

[Christo]

Airbus begs to differ

Fact of the matter though is that manufacturing jobs may be leaving China in the future but we are talking far future before they return to the US and Western Europe, if ever

A380 has put a big dent in Airbus.

 

[msommer]

We're paying 1800 for ningbo to La and 2700 for ningbo to my/nj. Not counting port fees. Generally Maersk. If the American consumer ever thought of the mark up we pay, the economy would shudder. I can get a zinc faucet in China for five bucks, sell it to a big box retailer for ten, who then retails it at 19.99. 

Saw at SCFI that the price went up almost $600 this week. Gotta hate the Koreans.

But I can't fault you for your choice of carrier

 

[msommer]

A380 has put a big dent in Airbus.

Fascinating plane. I happened to have the opportunity to visit their plant in Hamburg where they do the A380 fuselage (and the A320). Massive, absolutely enourmous.
I'd expect the A350 to make them a lot more money though

 

[Gawain]

Saw at SCFI that the price went up almost $600 this week. Gotta hate the Koreans.

But I can't fault you for your choice of carrier

I have two containers of bathroom vanities that are tied up in the Hanjin nonsense. Not all sunshine and lollipops when you're at the mercy of your forwarder.

 

[cstu]

A380 has put a big dent in Airbus.

The A380 is the best passenger plane in the world but no one besides Emirates wants to buy it.

 

[msommer]

I have two containers of bathroom vanities that are tied up in the Hanjin nonsense. Not all sunshine and lollipops when you're at the mercy of your forwarder.

You won't be seeing them any time soon, not unless you shell out a lot of money. Kind of an interesting conversation with your forwarder 

"What exactly made you book my containers on the carrier that EVERYONE knew was about to go bankrupt?"

Just read that there are still four Hanjin vessels at anchor in the PNW alone...

 

[Gawain]

To piggy back on Moleculo's take, I don't see ingenuity as well. I'm in operations, but I deal with the sales folks enough to know how it goes. They search all the big box retailers for new models. Then they examine the catalogs put out by the Chinese factories. Dump it all into an excel or a power point. There's your innovation. 

 

[msommer]

To piggy back on Moleculo's take, I don't see ingenuity as well. I'm in operations, but I deal with the sales folks enough to know how it goes. They search all the big box retailers for new models. Then they examine the catalogs put out by the Chinese factories. Dump it all into an excel or a power point. There's your innovation. 

Have you ever gone to the Canton (Guangzhou) fair? Hall af hall after hall of the same stuff under different factory names. So, yes, not a big believer in Chinese ingenuity, at least away from the top end guys (and they were likely educated at the top schools, if not abroad).

 

[PlasmaDogPlasma]

I don't think so.  I don't think revolt is part of the Chinese DNA.  

Isn't that literally how the became a communist nation?

 

[BassNBrew]

We used to compete with Foxconn and kick their ###.  Stupid executives and accountants did us in.  We had to eat all the executive salaries into our overhead while the Chinese arm didn't have to account for that.  Overtime we moved a product to China, the next year the remaining products that could be produced here cheaper would carry even more overhead.  It was a damn death spiral for domestic manufacturing.  You would think all the pretty boys with the fancy MBAs would have figured.  Eventually there was no manufacturing left so many of their jobs got eliminated too.

Beyond that, industry standardization was a killer.  Everyone like the fact that the USB port is the same on every device.  Problem was that the big boys like HP, Apple, Dell, etc would force us to design and test the damn new products but would only cut POs if we shared the design with the competition.  We would get a small premium for the first x number of units.

Maybe a politician will figure this out and make it attractive to manufacture in the US again.  Seems like incentivizing a company manufacture here with income taxable $15-$30 an hour jobs providing healthcare would be cheaper than food stamps, Obamacare, tax credits, etc.  

 

[BassNBrew]

As far as designs being copied, we'd put bogus numbers into the plastic molds and they'd copy those too.  We'd also get product returns that weren't even ours.

 

[Gawain]

Have you ever gone to the Canton (Guangzhou) fair? Hall af hall after hall of the same stuff under different factory names. So, yes, not a big believer in Chinese ingenuity, at least away from the top end guys (and they were likely educated at the top schools, if not abroad).

I have not, though I generally support the guys who go when they're too loopy to figure margins. I'm supply chain in a company that doesn't consider that a sourcing position. I also manage the production team (because I'm placing all domestic replenishment orders), but I haven't had the luxury to go to China. Seeing as how I could afford to drop 60 lbs and anyone less than vp flies economy plus at best...I'm not too upset. What part of the fair do you go to?

 

[msommer]

I have not, though I generally support the guys who go when they're too loopy to figure margins. I'm supply chain in a company that doesn't consider that a sourcing position. I also manage the production team (because I'm placing all domestic replenishment orders), but I haven't had the luxury to go to China. Seeing as how I could afford to drop 60 lbs and anyone less than vp flies economy plus at best...I'm not too upset. What part of the fair do you go to?

All the electronics, maybe six years ago. The "bladeless" fans were hitting the fair big time, must have seen fifty of those, identical but on different stands with different names.

Unbelievable. Would never go back unless my job was to actually buy those things. I was working for a container shipping line at the time, trying to be ahead of the curve.

 

[tdoss]

Living in CA I don't notice this much.  Out of curiosity what specific food items are being imported? 

I'm in Cali also.

I've noticed garlic and other small produce type items from time to time.

It's not abundant but caught my eye as odd.

Plywood though...from Home Depot...all from China that I've noticed, for years.

 

[tdoss]

I don't think so.  I don't think revolt is part of the Chinese DNA.  

Also, the workers aren't far removed from subsistence farming.  Factory work, while gruelling, is much easier than that.

I don't know...after seeing that dude stand down a tank.

I wouldn't put it past them to eventually rise up.

 

[Ministry of Pain]

I got a hard on just from the thread title. The more of you that learn about the decay and slow rot and can speak out about #### the better. This country could be in such better shape.   

FC was talking about little rate hikes we can't seem to endure which also says strong economy...instead we pay people to take loans out now. 

 

[Doctor Detroit]

Eventuay their workers will revolt for better wages and working conditions

No, no they won't (guessing you just can't spell and that is eventually).  Shows your complete lack of Asian culture and history.  Economies of scale will change the playing field like it has everywhere else, but otherwise industry revolves around means of production and processes.  China controls the means of production, it's not a free market by any means.  They will remain an industrial power for a long time, but since they can't really produce premium products, they'll never reach their ceiling like the U.S. or Germany did.  Keep an eye on India, if you know where that is. 

 

[moleculo]

No, no they won't (guessing you just can't spell and that is eventually).  Shows your complete lack of Asian culture and history.  Economies of scale will change the playing field like it has everywhere else, but otherwise industry revolves around means of production and processes.  China controls the means of production, it's not a free market by any means.  They will remain an industrial power for a long time, but since they can't really produce premium products, they'll never reach their ceiling like the U.S. or Germany did.  Keep an eye on India, if you know where that is. 

I wouldn't say they can't produce anything.  They absolutely can and will produce premium products - iPhone is the easy example.

 

[Grace Under Pressure]

Great thread. It highlights why we (the U.S.) are not going to go back to a manufacturing based economy anytime ever. That doesn't mean we won't have any manufacturing in the U.S., but the sheer scale and the state-supported advantages China holds are obvious, and it would be pointless to try to "win back" those jobs. The U.S. should be rightfully focused on areas of opportunity where either locally manufactured or artisan level craftsmanship are at a premium, and also promoting a diverse base of industry employment in services, professional, healthcare, construction, education and other sectors.

 

[moleculo]

Thinking this through and reflecting on the comments in this thread, my epiphany is more about the consolidation trend than China.  I think China helped bring consolidation to the forefront, but this is a trend that goes beyond international trade issues.

Swiss watches: moderate level brands like Tag Heuer, Omega, Tissot, Oris, etc all buy their movements from the same place: Swatch.  

Appliances: i've been led to understand that all of the domestic brands (Maytag. Frigidaire, whirlpool, etc) all manufacture at the same places, if they aren't all the same damn company.

The modern consumer product landscapes a tangled web of frienemies.

In hindsight, I think I was pretty naive to not understand how it all works.  I still don't get it, really.  

Here's the part i don't like: it commodities people like me.  Companies don't win by having better engineered products.  They win by having products that hits a sweet spot with the consumer.  Consumers don't choose product A over B because someone like me did a great job, they choose because A looks cooler or suits their needs better.  That's a pretty disheartening notion - everything I have worked my whole professional career for is ultimately unimportant.

As for other industries: the same #### will happen to them eventually too.  One day, both Boeing and Airbus will buy jet engines from the same Chinese manufacturer.  Consumer products are the first to see this because they face the most pricing pressure, but it's gonna happen everywhere else, it's just a matter of time.

 

[Grace Under Pressure]

Consumers don't choose product A over B because someone like me did a great job, they choose because A looks cooler or suits their needs better.  That's a pretty disheartening notion - everything I have worked my whole professional career for is ultimately unimportant.

Engineering is still an integral part of product development, but the idea the engineers make products that consumers will buy is not consistent with current models. Our product development plan has around 12 stages, most of the stages include consumer focused feedback in both the front and back end stages. Actual Prod D, as an engineer would think of it, begin at Phase 7. Granted, this is mostly coming from a Marketing perspective.

 

[msommer]

As for other industries: the same #### will happen to them eventually too.  One day, both Boeing and Airbus will buy jet engines from the same Chinese manufacturer.  Consumer products are the first to see this because they face the most pricing pressure, but it's gonna happen everywhere else, it's just a matter of time.

They pretty much already do -  at Rolls Royce. Except they don't buy them, they sort of lease them.

The program is called "Power by the Hour". Essentially you pay Rolls Royce for every hour their engine is on. You supply the airframe, the crew, the fuel, they supply the power for lift and flight, ensure maintenance is up to snuff, problems are fixed etc.

 

[moleculo]

They pretty much already do -  at Rolls Royce. Except they don't buy them, they sort of lease them.

The program is called "Power by the Hour". Essentially you pay Rolls Royce for every hour their engine is on. You supply the airframe, the crew, the fuel, they supply the power for lift and flight, ensure maintenance is up to snuff, problems are fixed etc.

Interesting.  Do they have any competition in this space?

 

[Thorpe]

Maybe a politician will figure this out and make it attractive to manufacture in the US again.  Seems like incentivizing a company manufacture here with income taxable $15-$30 an hour jobs providing healthcare would be cheaper than food stamps, Obamacare, tax credits, etc.  

NY just spent millions of dollars to create 75 jobs (Start Up New York).  Another program is giving something like 2.5 billion dollars to companies to create jobs (a huge chunk of that went to Solar City).

 

[msommer]

Interesting.  Do they have any competition in this space?

Honestly not sure. But the programme is at least very popular among MBA professors. At least three of mine brought it up

It's pretty smart if you want to smoothen your cashflow and have a very good handle on your product, what goes wrong and how to fix it (as well as a global organization to handle maintenance - at least it has to span the area of operations of your customers). The fancy name is servitization

IIRC there is one other manufacturer of commercial jet engines for big planes, but the name escapes me, and I read about a Japanese cmpany (Kawasaki?) making a new engine for smaller planes but the details are very fuzzy. Not my hometurf

 

[cstu]

As for other industries: the same #### will happen to them eventually too.  One day, both Boeing and Airbus will buy jet engines from the same Chinese manufacturer.  Consumer products are the first to see this because they face the most pricing pressure, but it's gonna happen everywhere else, it's just a matter of time.

Funny you should say this - Mercedes and BMW engines are made in India by Force Motors.

 

[RedmondLonghorn]

NY just spent millions of dollars to create 75 jobs (Start Up New York).  Another program is giving something like 2.5 billion dollars to companies to create jobs (a huge chunk of that went to Solar City).

And this is why incentive programs are usually a pretty bad use of taxpayer dollars. Instead of having a Byzantine and onerous regulatory and taxation scheme and then trying to pay companies to ignore those issues, why not have a sensible and streamlined system that companies actually want to do business in? Please note, that isn't the same thing as saying "throw out all regulation and taxes". I am talking about making them sensible.

Tax incentives also involve the government "picking winners" which invites excessive lobbying and creates a clear incentive for corruption.  

 

[msommer]

And this is why incentive programs are usually a pretty bad use of taxpayer dollars. Instead of having a Byzantine and onerous regulatory and taxation scheme and then trying to pay companies to ignore those issues, why not have a sensible and streamlined system that companies actually want to do business in? Please note, that isn't the same thing as saying "throw out all regulation and taxes". I am talking about making them sensible.

Tax incentives also involve the government "picking winners" which invites excessive lobbying and creates a clear incentive for corruption.  

You could make tax breaks for new SMEs I suppose, but mot likely that could be exploited by existing corporations, unless you had some ownership regulation for the SME (which then becomes byzantine, filled with loopholes).

 

[Doctor Detroit]

I wouldn't say they can't produce anything.  They absolutely can and will produce premium products - iPhone is the easy example.

Sure, but iphone is an American product with American production standards, inspections, and quality control.  Just because it's made in China makes little difference IMO, it could be made anywhere. 

 

[moleculo]

And this is why incentive programs are usually a pretty bad use of taxpayer dollars. Instead of having a Byzantine and onerous regulatory and taxation scheme and then trying to pay companies to ignore those issues, why not have a sensible and streamlined system that companies actually want to do business in? Please note, that isn't the same thing as saying "throw out all regulation and taxes". I am talking about making them sensible.

Tax incentives also involve the government "picking winners" which invites excessive lobbying and creates a clear incentive for corruption.  

I'm generally against the typical Republican mantra of deregulation.  All regulations are there for a reason and the reason isn't to screw business, it's because someone was cheating the system and regulations were put in place to contain the cheating.

That being said, I do think we have a bad regulatory environment that emphasizes the wrong values.  Somehow, we have become a society that values short-term goals over long-term sustainability.  Its in how corporations are structured, how they report earnings (quarterly) and how executives are compensated.  The Chinese don't have the same views.  

Case in point- the supplier I visited this week sacrifices short-term margin on product they make for us in exchange for real-estate bargains from the gov't.  They aren't in it to make 50 points of margin, they are in it for max employment because max employment leads to them convincing the government to sell them more land at a discount... Land in an area that is seeing explosive growth.

We have our priorities in the wrong place.  Neither party is willing to address this because they are both caught up in the short-term gravy train.

 

[moleculo]

Sure, but iphone is an American product with American production standards, inspections, and quality control.  Just because it's made in China makes little difference IMO, it could be made anywhere. 

Right -thats part of my point though.  The Chinese are more than capable of QC.  We taught them.  We are teaching them today.  I have a QA engineer colleague here today to help a different supplier with this.  I promise you, they will take what he teaches them and apply it to other companies.

 

[cstu]

Right -thats part of my point though.  The Chinese are more than capable of QC.  We taught them.  We are teaching them today.  I have a QA engineer colleague here today to help a different supplier with this.  I promise you, they will take what he teaches them and apply it to other companies.

Lenovo's quality is nearly on par with Dell and Asus

.  Could see them even surpass them in a couple of years. 

 

[Doctor Detroit]

Sure, but iphone is an American product with American production standards, inspections, and quality control.  Just because it's made in China makes little difference IMO, it could be made anywhere. 

Right -thats part of my point though.  The Chinese are more than capable of QC.  We taught them.  We are teaching them today.  I have a QA engineer colleague here today to help a different supplier with this.  I promise you, they will take what he teaches them and apply it to other companies.

They have tried copying our model from the beginning though haven't they?  I think generally their issue is innovation but they also want to flood markets with products to gain market advantages through volume.  I don't think that lends itself to making premium products that grab market share and once they lose the ability to out-produce cheaper than anyone else, they will regress to the mean.  That is already happening now and has been for awhile, so if China doesn't start producing their own high end products I think the world passes them by. 

 

[moleculo]

They have tried copying our model from the beginning though haven't they?  I think generally their issue is innovation but they also want to flood markets with products to gain market advantages through volume.  I don't think that lends itself to making premium products that grab market share and once they lose the ability to out-produce cheaper than anyone else, they will regress to the mean.  That is already happening now and has been for awhile, so if China doesn't start producing their own high end products I think the world passes them by. 

I agree that they lack innovation.  I think what has happened is they outsourced innovation to us - let is come up with the great innovations, but they will be the ones to capitalize on it.

 

[Murph]

Someone earlier in the thread mentioned Hanjin's bankruptcy in the context of shipping. That was the first I had heard of it until I saw this article today. Looks like a good explainer for dummies like me who don't know about this stuff. Any of the more knowledgeable folks have comments?

http://www.slate.com/articles/business/moneybox/2016/09/hanjin_s_bankruptcy_has_its_cargo_ships_unable_to_dock_is_global_shipping.html

 

[RedmondLonghorn]

I'm generally against the typical Republican mantra of deregulation.  All regulations are there for a reason and the reason isn't to screw business, it's because someone was cheating the system and regulations were put in place to contain the cheating.

That being said, I do think we have a bad regulatory environment that emphasizes the wrong values.  Somehow, we have become a society that values short-term goals over long-term sustainability.  Its in how corporations are structured, how they report earnings (quarterly) and how executives are compensated.  The Chinese don't have the same views.  

Case in point- the supplier I visited this week sacrifices short-term margin on product they make for us in exchange for real-estate bargains from the gov't.  They aren't in it to make 50 points of margin, they are in it for max employment because max employment leads to them convincing the government to sell them more land at a discount... Land in an area that is seeing explosive growth.

We have our priorities in the wrong place.  Neither party is willing to address this because they are both caught up in the short-term gravy train.

You seem like a good dude, but you are just stunningly naive about regulation if you believe what I bolded above.

Often, regulations are there because somebody lobbied to get them placed there. Businesses and industries use lobbying for new regulation as a competitive strategy.

People and politicians on the left also seem to be focused on the quantity of regulation versus the quality. In this construct, more regulation is good because it means the government "is doing its job" by reigning in business and "looking out for the little guy". Increasing the quantity of regulation is absolutely more burdensome on business, but it is possible to have huge quantities of regulation that either don't achieve the desired goals or actually make the situation worse. In fact, I'd say it is more often the case than not.

Finally, a huge amount of regulation isn't actually legislated but is put in place by executive fiat, either through presidential orders or (more likely) by rule-making bodies (often regulatory bureaucracies) that are backed by the executive branch. Bureaucracies reach out to gain more authority over time, which they generally achieve by increasing their regulatory reach through new rules and/or more complex structures of rules. Seeing a bureaucracy voluntarily reduce its reach or streamline the regulatory schema is virtually unheard of.

I would also suggest that the public-private partnership that you are seeing in China isn't one that is going to be successful over time. Businesses accepting subpar returns today in the hopes of sweetheart real estate deals from the government down the line is bad business. It is difficult to compete with because it is a long-term losing proposition.

 

[msommer]

Someone earlier in the thread mentioned Hanjin's bankruptcy in the context of shipping. That was the first I had heard of it until I saw this article today. Looks like a good explainer for dummies like me who don't know about this stuff. Any of the more knowledgeable folks have comments?

http://www.slate.com/articles/business/moneybox/2016/09/hanjin_s_bankruptcy_has_its_cargo_ships_unable_to_dock_is_global_shipping.html

A lot of hyperbole in that article. The cyclical nature of the biz is established through centuries. Putting the blame on any particular shipping line is inherently wrong as it is the fragmented nature of the biz that creates the chaos that is the market. 

The article also dramatizes the short term effect. The Hanjin vessels not sailing now have on trades where capacity is an issue already been replaced from the idle fleet, e.g. Maersk has introduced a new service already picking up 6 idle 4000 teu vessels to cater for overflow. By x-mas those vessels will have been dropped again most likely.

But the effect on SMEs with cargo stuck in  this legal nightmare can probably not be overstated

 

[RedmondLonghorn]

A lot of hyperbole in that article. The cyclical nature of the biz is established through centuries. Putting the blame on any particular shipping line is inherently wrong as it is the fragmented nature of the biz that creates the chaos that is the market. 

The article also dramatizes the short term effect. The Hanjin vessels not sailing now have on trades where capacity is an issue already been replaced from the idle fleet, e.g. Maersk has introduced a new service already picking up 6 idle 4000 teu vessels to cater for overflow. By x-mas those vessels will have been dropped again most likely.

But the effect on SMEs with cargo stuck in  this legal nightmare can probably not be overstated

Yeah, I only read the first couple of paragraphs but the tone was very sensational. Numerous tanker lines and dry bulk shipping companies have gone bankrupt over the years, yet the oil and iron ore always seems to get where it needs to go. I can't imagine that the container business would be that different.

 

[Funktrain]

Honestly not sure. But the programme is at least very popular among MBA professors. At least three of mine brought it up

It's pretty smart if you want to smoothen your cashflow and have a very good handle on your product, what goes wrong and how to fix it (as well as a global organization to handle maintenance - at least it has to span the area of operations of your customers). The fancy name is servitization

IIRC there is one other manufacturer of commercial jet engines for big planes, but the name escapes me, and I read about a Japanese cmpany (Kawasaki?) making a new engine for smaller planes but the details are very fuzzy. Not my hometurf

The main commercial jet engine producers are Rolls, Pratt/Whitney and GE.  Smaller bizjet/regional type of stuff brings in Honeywell and a few others.

 

[sbonomo]

You seem like a good dude, but you are just stunningly naive about regulation if you believe what I bolded above.

Often, regulations are there because somebody lobbied to get them placed there. Businesses and industries use lobbying for new regulation as a competitive strategy.

People and politicians on the left also seem to be focused on the quantity of regulation versus the quality. In this construct, more regulation is good because it means the government "is doing its job" by reigning in business and "looking out for the little guy". Increasing the quantity of regulation is absolutely more burdensome on business, but it is possible to have huge quantities of regulation that either don't achieve the desired goals or actually make the situation worse. In fact, I'd say it is more often the case than not.

Finally, a huge amount of regulation isn't actually legislated but is put in place by executive fiat, either through presidential orders or (more likely) by rule-making bodies (often regulatory bureaucracies) that are backed by the executive branch. Bureaucracies reach out to gain more authority over time, which they generally achieve by increasing their regulatory reach through new rules and/or more complex structures of rules. Seeing a bureaucracy voluntarily reduce its reach or streamline the regulatory schema is virtually unheard of.

I would also suggest that the public-private partnership that you are seeing in China isn't one that is going to be successful over time. Businesses accepting subpar returns today in the hopes of sweetheart real estate deals from the government down the line is bad business. It is difficult to compete with because it is a long-term losing proposition.

Dodd's Frank in banking is a perfect example of this.  There is a reason why former lender like GE have walked away from lending and big banks are more and more handcuffed. 

 

[bueno]

The two things that sent red flares up in my mind was seeing food and wood coming from China.

Now, I can understand a widget.  Cheaper materials and labor...sure.

But food?  It's cheaper to ship food from China now?

And wood?  You can't tell me we can't grow trees.  And I'm talking about plywood especially.  How is it remotely possible to make plywood in China and ship that heavy crap here...and it's still lower in price than our own U.S. made plywood?

I know our labor costs are insane but isn't there tariffs and just straight up shipping costs and fuel that makes up the difference?

There's something wrong there on the shipping and taxes side of the equation when it comes to China.

And whatever happened to us not liking Communist regimes?  We put a lock down on Cuba for decades but make China our partner in everything manufactured.  Hypocritical nonsense.

Tariffs? With "free trade agreements?" You know eventually China will be part of the TPP

 

[bicycle_seat_sniffer]

No, no they won't (guessing you just can't spell and that is eventually).  Shows your complete lack of Asian culture and history.  Economies of scale will change the playing field like it has everywhere else, but otherwise industry revolves around means of production and processes.  China controls the means of production, it's not a free market by any means.  They will remain an industrial power for a long time, but since they can't really produce premium products, they'll never reach their ceiling like the U.S. or Germany did.  Keep an eye on India, if you know where that is. 

stalk much? have you won the innerweb yet? you certainly are trying the hardest

 

[Vanilla Guerrilla]

Dodd's Frank in banking is a perfect example of this.  There is a reason why former lender like GE have walked away from lending and big banks are more and more handcuffed. 

IMO, most of the bank issues could be solved by actually holding them accountable to rules and laws in existence.  Massive fraud and management incompetence is usually met with a slap on the wrist fine.  If they actually went after rule-breakers and punished them enough to more than offset the gained revenue, the larger banks might actually behave.

Putting more laws on the books that no one adequately enforces isn't going to solve it.

 

[RedmondLonghorn]

IMO, most of the bank issues could be solved by actually holding them accountable to rules and laws in existence.  Massive fraud and management incompetence is usually met with a slap on the wrist fine.  If they actually went after rule-breakers and punished them enough to more than offset the gained revenue, the larger banks might actually behave.

Putting more laws on the books that no one adequately enforces isn't going to solve it.

Fewer regulations targeted at things that really matter and have real teeth is exactly the kind of model I am thinking of. 

A simple leverage ratio limit, rather than the crazy risk-adjusted nonsense that was in place, would have saved us a lot of headaches during the financial crisis.

Regulators not pushing banks to make loans they shouldn't have ever made in the first place would also have been helpful. 

 

[RokNRole]

Fewer regulations targeted at things that really matter and have real teeth is exactly the kind of model I am thinking of. 

A simple leverage ratio limit, rather than the crazy risk-adjusted nonsense that was in place, would have saved us a lot of headaches during the financial crisis.

Regulators not pushing banks to make loans they shouldn't have ever made in the first place would also have been helpful. 

But weren't those loans guaranteed?