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Cheap asian labor is the only reason that America doesn't have massive price inflation today (or plunging standards of living -- which is the other side of the same coin). What you're advocating would result in a decrease in the standard of living in both China *and* the US. China loses its export base, and America loses it's affordable products. But does America gain 'back' those manufacturing jobs? Maybe. But probably not. The retail pricepoints of products manufactured here would be unsustainable and hence those industries would likely collapse -- resulting in massive deflation.

Most people who try to run this dissembling nonsense manage to get more than a paragraph between their own contradiction that belies the fact that they're not actually arguing from a position they've thought out, but rather are afraid -- mortally so -- that America will shut off the spigot that makes THEIR scam work for them.

Was that supposed to be a counter argument?

There was no contradiction there *whatsoever*.

Many products would see massive price inflation due to increased manufacturing costs. Those tend to be products with demand inelasticity.

Many products would simply cease to exist as the price viability of those products stretched past consumer demand. Those tend to be products we can do without. In those sectors that creates a collapse.

No contradiction whatsoever Karl.

Or are you unaware that deflation can cause simultaneous price increases as supply chains collapse, and price decreases as demand collapses?

I am actually based in Chengdu and less than a few miles from a brand spanking new FoxConn plant. I have seen the workers stream out of the place and while filthy they are in general happy. Lately they have published a few stories about suicides and general strikes and the like but, and take this with a grain of salt considering the source, it is being floated by China as political not job condition related. In other words they are presented as being upset because a lot of them come from areas like Tibet.

The jobs that are there do pay better than anything they could get in their village which is why they come here in the first place. This does not excuse the bad conditions and I won't attempt to defend them as they DO suck. What I will point out though is no matter what the opinions of us Americans we will not be seen as doing the common man any favors if we shut the place down. As Apple products are popular I highly doubt this would happen without a political solution, which would be suicide to the president who advocated such a thing. Tell 50 million young adults they can't have an Ipad and watch the temper tantrums at the ballot box. I would love to live in a world where this could be addressed with honesty rather than political garbage, where people do unto others because "Hey, but for the grace of GOD that slime ball down there in the toxic cauldron with 3rd degree chemical burns could have been me" but it won't happen. If anything what banning these would do is get you a black market. China can't keep the early editions out which travel via zip line from Hong Kong so I don't think that we'd do any better.

Yes there is.

Tariffs do one of two things -- they either return the manufacturing here (in which case employment rises and thus people can buy the products, even though prices rise, and in addition social spending falls, so budget deficits fall too) OR they fund the social costs that would otherwise be occasioned.

As such they're a "push" from our perspective. What they do is cut off the exploitation in China -- either the Chinese convert to a consumption model where THEIR people earn enough to buy THEIR products, or they're screwed.

The financial problems of the USA have been well documented by KD, and widely discussed here on the forum. As bad as it is, it appears that Europe is far worse. Moreover, China may be on the brink (it's a totalitarian regime, so accurate information is tough to come by).

Does anyone see a scenario where 1) Europe crashes, which leads to 2) China crashing because of lack of demand from Europe? Does this possibly open the door to a resurgence of manufacturing here in the USA?

Also: while I've been a Mac lover for years, I'm about done with them. While their OS is a joy to use, their hardware, at least in my experience, is expensive, fragile, and non-repairable. I've got to buy a new phone and some sort of tablet for my work. If it's true that Samsung is made elsewhere than China, I think I'm going Android.

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Tariffs do one of two things -- they either return the manufacturing here in which case employment rises and thus people can buy the products, even though prices rise, and in addition social spending falls, so budget deficits fall too)

A deeply wishful thesis, Genesis. Manufacturing will not be returning to the US in any meaningful way. And assuming a direct path to reduced social spending... well... it's a nice thought, and I wish you were on to something.

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What they do is cut off the exploitation in China -- either the Chinese convert to a consumption model where THEIR people earn enough to buy THEIR products, or they're screwed.

Now who's contradicting himself? A minute ago we were stopping our purchases of Chinese products to 'help' them. Given that we *know* mathematically that China can't yet switch to an internal consumption model, any policy designed to reduce Chinese imports is definitively doing the latter: Screwing them. If we're going to pretend to have a humanist agenda, let's measure the human cost. Your suggestion does in fact consciously screw them. And as manufacturing won't be returning here, it simply creates collapse -- making it worse for everyone.

He offers:
"Tell 50 million young adults they can't have an Ipad and watch the temper tantrums at the ballot box. I would love to live in a world where this could be addressed with honesty rather than political garbage, where people do unto others because "Hey, but for the grace of GOD that slime ball down there in the toxic cauldron with 3rd degree chemical burns could have been me" but it won't happen."

AND
He #2 also offers:
"Many products would simply cease to exist as the price viability of those products stretched past consumer demand. Those tend to be products we can do without. In those sectors that creates a collapse."
.....................

Such Apologia hold within themselves the seeds of your own destruction.
You all have simply not been around long enough to see the baked-in cynicism and inaccuracies of your own self-serving Point of View.
As KD offers above:
"...that America will shut off the spigot that makes THEIR scam work for them."

The entire Game of unlimited growth is simply unsustainable.
Have you missed the Cracks in the Veneer?
I could give you actual examples of three generations of the same product and its pricing history and the dissembly all along the Way.
But that still would not convince you, would it?

You see the West is standing on the backs of the people all over the world and have been for hundreds of years!
And that is supposed to be OK, no matter what.

CANNIBALISM!

I guess you sleep well at night....and what does that say about the State of Things?

Breton

So prices go up and not everyone can have a smart phone. All it has done is to *ussification and softness of Americans. We need to get back to our hardlabor do it ourselves roots. If we could make it that far the human race would end up like the people in Wall E. Fat floating blobs.

Our consumption of all of this stuff (from China and otherwise) has gotten out of control, driven by a combination of relatively low prices and planned obsolesence. How it can continue and what it's going too be like in 5,10,20 years, I just don't know. No wonder Bill Gates recently added to his holdings in Republic Services (the trash hauler) and now owns nearly 18% of the company.

If prices on items bought with disposable income were higher, people would have to be far more judicious in their purchases. Perhaps it would and serve to bring the system (and people's lives) back into some sort of balance.

just my anecdotal 2 cents...the chinese i've talked to on this issue are not grateful for the jobs - "foreign, mostly american, companies come here and exploit us. they should give us better wages and better work conditions." when i point out it is the reponsibility of the PRC gov to look out for the best interests of and protect their own people, the retort is "America and American companies are too powerful, we need those jobs. they come here and exploit us. they shouldn't do that." Then we usually go in a circle about who has more power & responsibility to change (therefore who's fault it is) - the PRC gov or the American companies. I learned that Chinese will always defend their gov and will always blame all their problems on America.

Bangkok: It's called a balance sheet for a reason -- it always balances.

If tariffs are imposed and your claimed "collapse" comes to America as a consequence of those higher prices, then the higher prices are exactly offset by the tariffs.

If instead the manufacturing comes back then its even better for us, but in no case is it worse. In ALL cases our capital drain ENDS.

As for China and their exploitation, that ending this results in them not being able to do it any more is their problem, not ours. If I continually transfer some part of my wealth to someone else they're "better off" (temporarily) but eventually I will run out of things to transfer.

However, it is an utter falsehood that they're "owed" this, that we have some "obligation" to continue to do it, or that we should "give" such things to the Chinese because otherwise "they'd collapse."

That's just tough **** for them -- they built this model of their own volition exploiting their people and sucking our capital dry.

It's time to stop it and if they collapse as a result that's just tough ****.

I'm still waiting for Karl's dissection and comments on the State of the Union speech.

I'll take that Chinese Lenovo off your hands ...

Tariffs are the short term answer, for sure.
It will instantly increase the cost of the stuff we buy, but so what?
The consumer economy will surely take a huge hit, which might be a good thing, since the only thing making it work is more debt.

It won't create much in jobs at home, though, if we tried to "move" the production on-shore. Even Foxconn (who is Taiwanese) is looking at fully automated factories, as their meager profit margin (only 1.5%) means they need to build volume and make it work 24/7 without a hitch, and you can't do that with human labor. CSR is not even on their radar screen.

Manufacturing is a labor-reduction/productivity game everywhere, it has no future when it comes to job creation.
But, if we build stuff at home (without much labor), the benefits are more far reaching.
Logistics and services around that will be needed (jobs).
Construction and maintenance will be needed (jobs).
Engineering and design (jobs)
Exports (jobs)
USD hegemony and minimise reliance on communist dictatorships
less pollution
I guess you can make the benefits a long list. But adding "factory jobs" is a non-starter.

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Apple wants college-educated workers, but the pay it offers for that college education is $22 a day

This is every company's boardroom dream.

Didn't China require companies to manufacture there is they wanted to sell their country? Seems like a simple requirement.

I've never bought an Apple product because I couldn't friggin' care less about them.

Why these particular products are sooo important to people, I cannot grasp.

Running out to purchase the "latest and greatest" every time they come out with a new product seems to have become another type of extracurricular activity for many people.

Wow. What a life!

Two Tickers ago KD wrote..

We hold that all individuals have the right to exercise sole dominion over their own lives

There's your first principle.

You either believe and intend to live to this, or you do not. It is a binary choice with no shade of gray.

In this Ticker, KD wrote..

We won't work for $22/day with a college degree -- in fact, such a wage is illegal in the United States.

It seems to me that portraying minimum wage laws in a positive light is inconsistent with the belief that individuals hold sole dominion over their lives, but perhaps I'm missing something here.

-Uwe-

I did not hold that minimum wage laws were proper.

However, if a law is proper then we should uphold its impact on all goods and services sold here. If they are not proper then we should abolish them.

The same holds true for environmental laws. They are either just or they are not.

Tariffs are peaceful? Who knew?

12bolt, that sounds like me. I'm in IT as well and many of my colleagues REALLY like Apple. I've been considering getting an iPod, but the labor issues that Karl is citing have been discouraging me from it.

That said, I can't find a competing product that has the nice MP3 player and all the little accessories that would be nice to have. For instance, it's pretty easy to find a sound system with an iPod dock, but I haven't had any luck finding anything with a dock for something else. I'd rather get something else anyway, as it is less expensive. Any suggestions?

If their was one thing I have learned reading tickers and analyzing our situation over the last few years is that business owns government top to bottom.

Therefore, if business decides tariffs are good for business, we will get tariffs, If not, we won't.

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Gen -
We won't allow a company to have two industrial dust explosions in less than a year without someone winding up in serious trouble -- and perhaps in prison --

And yet we DO allow bankster scumm to bilk the AmeriKan people out of trillions of $s, and we celebrate them.... whoda thunk?!?!?!

When you talk to the left-of-center people about this issue, they have a couple different responses.

One is environmental - let those dirty factories stay overseas because we don't want that kind of pollution here.

A second is elitist - If factories were brought back to America there would only be blacks and Mexicans who would work there and that would be racist so leave them overseas and let the blacks and Mexicans get welfare.

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12bolt, that sounds like me. I'm in IT as well and many of my colleges REALLY like Apple.

My friends who work in IT (coders, system/network engineers, database admins) are split almost evenly between Android and iOS. Some of them absolutely love their MacBooks for general laptop use and iPads that they bought their parents. The Android users love the added flexibility and Android app development.

I had an iPhone 3GS a few years ago, but switched to Android with 2.2 for many reasons (cost, increased flexibility) and haven't looked back. Android is still a little quirky but will get much better in the future.

So animals die and the environment of the other animals that they live in is made toxic.

Does that really matter when a snot nosed non-employed teenage girl needs to update her face book wall?