OT: My job's being eliminated

[PhilipW]

Gbradley,

I would buy the argument but China is a deeply totalitarian state. Some Chinese are getting very wealthy indeed, but the young Chinese couple who are my tenants next door tell a very different tale for the average person.

India is a different case, but in some ways more peturbing. An absolutely entrenched social caste system simply condemms huge chunks of their people to perpetutual poverty. In such an environment there is always someone worse off than you who will take your place in the rat race in the blink of an eye.

In both countries there is a monumental gap between the wealthy ruling classes and the vast numbers of workers living in conditions that we in the West would regard as relative slavery.

I understand your point about the kind of slavery that existed in the American South, but as degrading as it was, it was not so very much worse than the conditions the average working person in the American North had to endure at that time.

In one sense you are right, living standards are rising to a significant degree in those nations....just as one could argue that African slaves in the American South actually enjoyed better living conditions on the whole, than those who remained at home in Africa.

 

[Steve Bailey]

I understand your point about the kind of slavery that existed in the American South, but as degrading as it was, it was not so very much worse than the conditions the average working person in the American North had to endure at that time.

There was one difference that you might have overlooked.

The average worker in the American North at the time may have had to put up with working conditions that we consider abominable today, but he was not legally the property of the mill owner. Granted, there may not have been many employment options available to an uneducated mill worker, but if he chose to walk away from his job at the mill, he didn't get abducted by bounty hunters and returned to the mill owner. Nobody ever saw the need to create an underground railroad for mill workers seeking an escape route from the mills.

 

[elevmike]

I understand your point about the kind of slavery that existed in the American South, but as degrading as it was, it was not so very much worse than the conditions the average working person in the American North had to endure at that time.

Some how I missed the idea that the factories in the north had whipping posts & hot boxes, sold off the workers children (never to be seen again), used their women for *** slaves, & made it illegale to eductate them etc...

In one sense you are right, living standards are rising to a significant degree in those nations....just as one could argue that African slaves in the American South actually enjoyed better living conditions on the whole, than those who remained at home in Africa.

Thoes left behind in their native country at least had some assemblence of self determination. Thoes who were shipped to the Americas lost all hope of that. Additionally many of them did not even survive the trip.

Phillip, your comparisions are so far off base that it's almost to the point of being insulting.

 

[LadderLogic]

OT
Mentioning that America has strong environmental laws is quite incorrect. Well, everything is relative, but I must remember you Koyoto.

Well, that would be way OT, but yes, America does have very strong environmental laws and, what's more important, very effective ways of enforcing them. For such an industrialized country, it is surprisingly clean (and I've been around a bit to compare).

Kyoto in reality doesn't have much to do with environment, but rather with forced redistribution of wealth.

 

[PhilipW]

Thoes left behind in their native country at least had some assemblence of self determination.

I think you are overeacting to the emotional baggage in my comparison. Of course I understand exactly the history and brutality of slavery in that era, and I am not minimising it. But it was also in the wider context of life in a fairly brutal era anyhow. Life for many in that time was little different from slavery, and what little self-determination they had was a choice between being the effective chattel of a wealthy land/mill owner, or starvation. Look at the lot of so many working class labourers who arrived in America during that time, look at the "Company Towns", the "white slaves"...poverty has always stalked America's meaner streets...it was never something confined to just African slaves.

And yet you inadvertently hit on my main point. The difference between actual slavery and simply poverty is the possibility of self-determination. Now think of the totalitarian political regime in China, and the equally oppresive social regime in India...both of which effectively remove rights of self-determination from their millions of victims.

 

[Gerry]

....just as one could argue that African slaves in the American South actually enjoyed better living conditions on the whole, than those who remained at home in Africa.

By whose reckoning?
I suppose a plantation owner might attempt that argument, but would he care one way or the other?
Slave-owners were really altruists?
Philip, you've wandered way off the reservation.

...reminds me of a certain presidential matriarch opining on the fortunes of New Orleans residents evacuated to the Astro Dome in Houston: "they never had it so good!"

 

[Lancie1]

Steve,
That is correct. Boards of directors have been sued by shareholders for not performing with an expected profit margin. GM has got the message from Carl Ichan, a large shareholder. They are closing factories in the US and laying off 30,000. Meanwhile, they have a new factory planned to open in China.

It is pretty simple from GM's corporate viewpoint:
High US costs (labor & materials) = low profits
Low costs in China = high GM profits
This is probably a good time to load up on some more GM stock!

 

[PhilipW]

Slave-owners were really altruists?
Philip, you've wandered way off the reservation.

I am not for one instant trying to justify the slave trade, but a dispassionate examination of life in tribal pre-colonial Africa might show that life was pretty short brutal and nasty. There was no "noble savage" idyllic life for most. And as for their so called "self-determination", huge numbers of tribes peoples were sold off by their own tribal leaders.

And of course slave owners were not altruist's, but neither did they perceive themselves as Satan's spawn either. By and large they saw themselves as hardworking businessmen out to make a profit. It was not a pretty or nice business, but by the standards of the time, and most of human history prior to that time....a perfectly legitimate trade.

 

[Steve Bailey]

Lancie,


Can you cite an actual case or are you just repeating an urban legend?

I've heard that canard used to justify all sorts of corporate shortsightednees. It's the mantra recited by the manager so he can stand to live with himself after he makes the decision to move production to the low-wage country.

"Don't blame me. I'm just exercising my fiduciary responsibility to the stockholders".

 

[PhilipW]

t is pretty simple from GM's corporate viewpoint:
High US costs (labor & materials) = low profits
Low costs in China = high GM profits
This is probably a good time to load up on some more GM stock!

So what GM is saying is that the USA is a failed country and that capitalism works best when it can tap into an effectively infinite supply of slave labour working under the rule of a brutal totalitarian regime. So much for the democracy (self-determination) experiment eh?

 

[TimMoulder]

Timothy,

Companies go into business to make a profit for the owners (shareholders). If the most profit can be made by moving the factory to xyz country, then that is what will happen in the long run. If the directors of the company did otherwise, they could be, and have been, held liable by the shareholders.

Somehow many workers have got the idea that the company went into business, and then stays in business, merely to provide jobs, health care and other benefits to the employees. Nawh, those are only perks or incentives to get the work done. Bottom line: Companies must make profits, or they move elsewhere or go out of business. That is the capitalist system, love it, hate it, or join it and become an owner (stockholder) yourself.

If you are not putting aside some money and buying into a few of those compaines that are making 15% profits every year, then you are cheating yourself out of the American Dream.

Okay, let's take a look at some of the assumptions behind this -

1. American companies require profits to remain in operation

Not true. Sure, a profit is nice, but as long as the bills are covered, any company can remain in operation. Growth is nescessary only to provide for increases in costs (including wages) and securing a war chest for emergencies

2. Shareholders are entitled to profit.

What exactly is a "share"? The economists will tell you it is a stake in the company, but look at it for what it really is - debt. It is a promissory note, entitling the bearer to cash it in for the going rate at any time they desire.

Disagree? Remember, there is no law in most coporations REQUIRING them to pay dividends - even the "interest" on shareholder debt is at the company's discretion.

3. Shareholders have a right to meddle in company operations

Well, they may have the legal authority, but if you want to really know how this goes, look at Disney. The "Survivor"-esque antics of their board of directors has become legendary. How many CEO's have they canned?

4. Company workers have no right to expect security from the company.

This idea is so wrong, so inherently off-base, and a lie so fundamental to the destruction of the American worker, I could hold it up as proof of the existence of Satan.

Here is what I would like to see happen at least once before I am forced to start learning Mandarin -

A company declares no further dividends will be paid on it's stock - ever. The stock will drop like a stone, so the company starts buying it back at reduced cost. In the end, they dis-incorporate and revert to a privately-held firm.

Having eliminated the most massive source of debt, the company now operates from positive cash flow. Since they no longer feel obliged to shore up their reputation on Wall Street with dividend checks, they turn money formerly earmarked for shareholders into items formerly regarded waste - fully paid health care, an honest-to-god pension fund, merit raises instead of just cost-of-living.

Imagine that - a company that exists to make and sell a good product, and provide jobs and benfits for it's workers. All they have to do is get OUT of the stock market, and quit letting fat bald men in smokey rooms tell them how to run their company.

Lastly, this is not far-fetched at all. There are numerous privately held investment firms that are buying out the stock of corporations and basically doing exactly what I described - up to the pay-raises part. So the capability exists now - the question is, what becomes of the cash flow?

TM

 

[rsdoran]

I will take exception to one statement, slavery was not just in the southern US at the time of the civil war. Slavery was the issue used to create the war but it was not about slavery per se, it was economics (greed) plain and simple. I will not go into detail but did you know that Abraham Lincoln was not on many of the ballots in the southern states? Look it up and do some indepth reading on the subject. Technically the Emancipation Proclomation was not worth more than the paper it was written on, Alavery was officially abolished in 1868 in the US. In 1808 a law was passed that did not allow more slaves to be brought into the US.

It was not the idea that slavery was inhumane that started countries to eliminate it, it was Enlightenment, Science and Industrial Revolution. All of these changed western society where towns became a focal point, farms were no longer where people were born, lived, worked and died. The countries were growing in population and the people (masses) needed the jobs so did not want slaves brought in.

Actually I am in agreement with PhillipW in general. I have traveled alot and what is happening in many countries is far worse than the conditions slaves "in the south" had to endure...the key difference is it was in the "owners" interest to have healthy and fed workers.

I have seen villages that were created from mud, grass, cardboard, pieces of tin (rare) or whatever was available. There is no running water, rarely a well, for many the water comes from streams or rivers. Sewage runs thru the streets with naked and barefoot children playing it it.

Where can these people go? In many cases they are uneducated either on purpose or from lack of good government. In most cases they are not allowed to leave a specific area and this may be in a country that says it is a democracy. In other countries you can not walk 50 feet without seeing armed individuals or soldiers...in some countries the soldier are overseeing marijuana or coke fields, those workers are not allowed to go anywhere.

What we, western civilization, had we are losing. We have become strong and imposed our will upon on others or had wars....well the weak and impoverished nations just waited and now they are destroying us with numbers...ie people. They want their piece of the pie and if you look at it, history will show, they will get it.

If at anytime you think people from other countries, especially 3rd world, have a choice or self determination then you need to visit something besides the beach resorts.

Phillip is right.

 

[Doug_Adam]

To PhilipW et al.

This seems to be a cool rant topic.
How to bash people from poor countries......

As technical professionals, we tend not to look at history except for a few of us (like me) for which it is a hobby. This is bad, since if we did we would realise that what is happening now has happened many times in the past. The fear of the rich that they will be swamped by the poor has always been with us. As is the fear of the peasant that once they leave the land, they will not be able to grow food anymore and will thus starve. Your fears are illusionary, they are not real.
Economics is not a zero sum game. A dollar in someone else's hand is not a doller that you missed out on. What happens, and its happened in the past to Japan, Singapore, Tiwan and elsewhere, is that the cheap labour brings in the jobs. With jobs, they can start to afford a better standard of living, and as this goes up, so do the wages. This increases the global market share, everyone has more money and everyone is better off.
We have seen this in Australia, where jobs moved off shore, then other jobs came right back. We have lost manufacturing then had it come back and re-establish itself. Over all that time, living standards have increased. OK, some jobs have disappeared. Just remember, we also don't go around growing our own grain to feed our family on a one acre plot of land anymore either. The loss of that job dosen't seem to have caused much grief.

 

[rsdoran]

Tim I can not believe you said some of this.

Okay, let's take a look at some of the assumptions behind this -

1. American companies require profits to remain in operation

Not true. Sure, a profit is nice, but as long as the bills are covered, any company can remain in operation. Growth is nescessary only to provide for increases in costs (including wages) and securing a war chest for emergencies.
The simple facts are that without a profit you will not do most of what you just stated. In general someone had to provide the cash to operate, why provide it if it will not generate interest.

2. Shareholders are entitled to profit.

What exactly is a "share"? The economists will tell you it is a stake in the company, but look at it for what it really is - debt. It is a promissory note, entitling the bearer to cash it in for the going rate at any time they desire.

Disagree? Remember, there is no law in most coporations REQUIRING them to pay dividends - even the "interest" on shareholder debt is at the company's discretion.

3. Shareholders have a right to meddle in company operations

Well, they may have the legal authority, but if you want to really know how this goes, look at Disney. The "Survivor"-esque antics of their board of directors has become legendary. How many CEO's have they canned?
I am going to combine 2 and 3. I am not sure what you mean about Disney CEO's being canned. Michael Eisner became CEO in 1984 and retired in Sept.2005 and was replaced by Robert Iger.

The other aspect is when a company goes public the shareholders are the "owners", if there is a major problem then the shareholders have the ability to take over the company..hence the term hostile takeover. What is the point of "being an owner" if you do not get paid?

4. Company workers have no right to expect security from the company.

This idea is so wrong, so inherently off-base, and a lie so fundamental to the destruction of the American worker, I could hold it up as proof of the existence of Satan.
Technically they do not. There are regulations that vary from state to state on some issues. If a company just closes a plant/store etc then the people have to be told in advance. If the company goes bankrupt the company can just close the doors. Technically they can fire anyone at any time without probable cause.

A company declares no further dividends will be paid on it's stock - ever. The stock will drop like a stone, so the company starts buying it back at reduced cost. In the end, they dis-incorporate and revert to a privately-held firm.
That is illegal, its similar to what Martha just went to prison for. To do this they would technically be using company assets which the shareholders are entitled too.


TM

 

[PhilipW]

What happens, and its happened in the past to Japan, Singapore, Tiwan and elsewhere, is that the cheap labour brings in the jobs. With jobs, they can start to afford a better standard of living, and as this goes up, so do the wages.

At first I was willing to buy that arguement; I would have argued it myself for years. But underlying it is the assumption that in those countries something like a normal labour market existed. China is NOT a normal labour market...it added 10 million new workers to it's industrial base in the last 12 months, and will do so again next year and the year after....for at least another 50 years.

Of course the picture is more complex than I am painting here. Absurdly enough the Chinese are experiencing a short-term lack of skilled middle managers and some trades, and other aspects such as the financial, legal and accounting professions are way under developed.

I cannot predict the future, and equally I do not know the minds of the CCP leaders and what their intentions are. Maybe their goal is to defeat the American capitalists...by buying them!

What changed my mind was looking at the absurdly cheap prices of Chinese goods. Not half the price....with time one might expect that gap to be bridged... but oftentimes a 1/10th the price. Remember how cheap that first generation of Toyota's and Nissan's were, 20-40% less than the equivalent Amercian or European's. But quickly enough their labour costs rose and although the Western automakers were hit, they learnt something of a lesson (but not all of it) and recovered.

But what happens when some Chinese GM floods our markets with $2000 new cars....for decades?