China To Blame For American Workers Layoff? - Page 2 - PeachParts Mercedes-Benz Forum

DieselAddict · #16 02-10-2006, 04:05 PM

U.S. Trade Deficit Hits All-Time High
http://apnews1.iwon.com//article/20060210/D8FMDGA07.html?PG=home&SEC=news

Here are the highlights:

Quote:

By MARTIN CRUTSINGER

WASHINGTON (AP) - The U.S. trade deficit soared to an all-time high of $725.8 billion in 2005, pushed upward by record imports of oil, food, cars and other consumer goods. The deficit with China hit an all-time high as did America's deficits with Japan, Europe, OPEC, Canada, Mexico and South and Central America....

It marked the fourth consecutive year that America's trade deficit has set a record as American consumers continued their seemingly insatiable demand for all things foreign from new cars to televisions and electronic goods....

Bush, in an effort to counter the growing anxiety over America's ability to compete with such rising economic powers as China and India, unveiled a new American Competitiveness Agenda in his State of the Union address to double government spending on basic research, extend tax breaks for company spending on research and hire thousands of new math and science teachers for the nation's high schools.

But critics contend that the trade deficit will keep growing unless the administration takes a harder line against unfair trade practices in low-wage countries such as China, a country they contend has gained a huge advantage over America by artificially depressing the value of its currency, which makes Chinese goods cheaper for American consumers and American products more expensive in China....

The rising trade deficits must be financed by increased borrowing from foreigners, who so far have been happy to sell us their products and hold U.S. dollars in payment which they invest in U.S. stock, bonds and other assets. The concern is that at some point foreigners will want to reduce their dollar holdings. If the change occurs at a rapid pace it could send the value of the dollar, U.S. stocks and bond prices all plunging.

Botnst · #17 02-10-2006, 04:22 PM

Quote:

Originally Posted by elau

Hold there!! How do we know the money is still there? I bet you Bush had already spent it in Iraq. He wanted to cut Medicade and Education spending just yesterday, and asked for more money for the war effort. What make you think we have any surplus?

Oops, I forget Uncle Sam also is in printing money business. My bad.

If it were due to printing presses running then there would be significant inflation like the Smartest President did until Reagan invited him to retire to a peanut plantation.

Bot.

GottaDiesel · #18 02-10-2006, 08:38 PM

Quote:

Originally Posted by Hatterasguy

It is simple really labor costs to much in this country. Thats it.

If you had two pairs of sneakers sitting side by side. Pair A was made in China and costs $80 and pair b was made in Alabama and costs $150. Now consider both are pretty much identical as far as you can tell.

I know the answer 90% of the American public would buy and demand the cheaper shoe.

Supply and demand we demand cheap products (ala Walmart) and the market supplies them.

It also comes down to tax's and regulations. This country is highly taxed and regulated problems you don't have in other countries.

Actually with respect to the sneaker example, if the sneaker made in Alabama was made better and lasted twice as long I would buy the one made in Alabama. The real problem is that not only are the ones made in Alabama a lot more money, chances are they will last HALF as long. You see, somebody forgot to tell a lot of the fat lazy people that think they SHOULD be making $30 an hour to sew sneakers that if they want to make $30 an hour to do so, they might want to try doing it well!!!!!!

This model is the same for a lot of other American things. You can buy a shirt made in Vietnam for $3.99 and it lasts a year if you're very lucky. Wouldn't you pay $7.99 for one made in the US if it laster 3 years? I would.

Face it, we're (for the most part) a lazy bunch. Once we become as motivated and industrious as our Chinese friends (never happen) -- then we will see the changes. There will always be the stupid ones that would still pay $3.99 and buy the shirt each year. Same people that buy their knives at the dollar store and need to re-buy them every month. Should have just spend $10 and had a knife for 20 years no? That would make it half the price!

Oh well.

Take care.

raymr · #19 02-10-2006, 08:44 PM

I see the inevitable happening - a practically borderless world where business is conducted globally, and a firm's location is only determined by where its customers are. We are in the painful beginnings of it now.

But I have a feeling its going to get worse for the average American before it gets better. Living standards might drop, in order to meet the developing world half way. A lot of people are bracing for salary cuts just to hold on to their jobs, or moving to lower paying positions. I still think tariffs would help smooth the transition, but most people say they don't work.

The bright side is maybe it means an end to some of our wasteful ways as we try new things to become more efficient and practical.

Botnst · #20 02-10-2006, 08:46 PM

Quote:

Originally Posted by GottaDiesel

Actually with respect to the sneaker example, if the sneaker made in Alabama was made better and lasted twice as long I would buy the one made in Alabama. The real problem is that not only are the ones made in Alabama a lot more money, chances are they will last HALF as long. You see, somebody forgot to tell a lot of the fat lazy people that think they SHOULD be making $30 an hour to sew sneakers that if they want to make $30 an hour to do so, they might want to try doing it well!!!!!!

This model is the same for a lot of other American things. You can buy a shirt made in Vietnam for $3.99 and it lasts a year if you're very lucky. Wouldn't you pay $7.99 for one made in the US if it laster 3 years? I would.

Face it, we're (for the most part) a lazy bunch. Once we become as motivated and industrious as our Chinese friends (never happen) -- then we will see the changes. There will always be the stupid ones that would still pay $3.99 and buy the shirt each year. Same people that buy their knives at the dollar store and need to re-buy them every month. Should have just spend $10 and had a knife for 20 years no? That would make it half the price!

Oh well.

Take care.

If folks believe they get value for a premium price then they'll pay the premium price. ie, Mercedes for 60 years.

But if people are asked to pay a premium price but there is no significant difference in quality, then they'll buy the cheaper product. ie, Mercedes for the past decade has lost considerable market share to Infinit, Lexus, Acura, etc.

GottaDiesel · #21 02-10-2006, 08:57 PM

Quote:

Originally Posted by Botnst

If folks believe they get value for a premium price then they'll pay the premium price. ie, Mercedes for 60 years.

But if people are asked to pay a premium price but there is no significant difference in quality, then they'll buy the cheaper product. ie, Mercedes for the past decade has lost considerable market share to Infinit, Lexus, Acura, etc.

I think you're trying to say that we agree.

GottaDiesel · #22 02-10-2006, 09:01 PM

Quote:

Originally Posted by raymr

I see the inevitable happening - a practically borderless world where business is conducted globally, and a firm's location is only determined by where its customers are. We are in the painful beginnings of it now.

But I have a feeling its going to get worse for the average American before it gets better. Living standards might drop, in order to meet the developing world half way. A lot of people are bracing for salary cuts just to hold on to their jobs, or moving to lower paying positions. I still think tariffs would help smooth the transition, but most people say they don't work.

The bright side is maybe it means an end to some of our wasteful ways as we try new things to become more efficient and practical.

Tariffs in the SHORT TERM do work. And they work well. For example, say you tell the US Automakers. For 5 years we will charge a xx% tariff on foreign autos. After that 5 years it will be reduced, or eliminated. This gives the US time to compete and protect the US interests (jobs). Problem is the US automakers don't do their part and build cars that people want so the customers go to people who DO... the Japanese, etc.

On the other hand, think about pick-up trucks. That tariff has been in place for ever... and as a result the US makers still have that market.

Odd world, economics, ain't it!

aklim · #23 02-10-2006, 09:19 PM

Quote:

Originally Posted by Botnst

If folks believe they get value for a premium price then they'll pay the premium price. ie, Mercedes for 60 years.

But if people are asked to pay a premium price but there is no significant difference in quality, then they'll buy the cheaper product. ie, Mercedes for the past decade has lost considerable market share to Infinit, Lexus, Acura, etc.

I'm not too sure about that. Seems to me like Mercedes used to be built to last forever but today, I can't seem to help feeling like they are still good but moving towards the disposable car. Take a look at the Bic lighter. Keep using it and you will end up paying more than a zippo which is refillable but why do so many smokers go for a bic?

DieselAddict · #24 02-10-2006, 09:31 PM

Quote:

Originally Posted by aklim

I'm not too sure about that. Seems to me like Mercedes used to be built to last forever but today, I can't seem to help feeling like they are still good but moving towards the disposable car. Take a look at the Bic lighter. Keep using it and you will end up paying more than a zippo which is refillable but why do so many smokers go for a bic?

Isn't that pretty much what Bot was saying?

aklim · #25 02-10-2006, 09:34 PM

Quote:

Originally Posted by DieselAddict

Isn't that pretty much what Bot was saying?

Bot thinks people will pay premium prices for premium products. I don't believe that would be the way most of the population goes. We seem to be more into the "here and now" rather than keeping something for long term.

Botnst · #26 02-10-2006, 09:56 PM

Quote:

Originally Posted by aklim

Bot thinks people will pay premium prices for premium products. I don't believe that would be the way most of the population goes. We seem to be more into the "here and now" rather than keeping something for long term.

I think you shortened my attempt at description such that it becomes almost without meaning. Let me have another go at it and see if I can make it more clear.

People who value a premium product and can afford it will usually choose it. They at least of the freedom to make the choice, whichever they choose.

Folks who don't have the wherewithal to make the choice, don't.

In between are a wide spectrum of people who have varying degrees of ability to make the choice.

Mercedes and other premium marques make their profit by returning value to the consumer that cannot be had for a lesser price. So long as that contract between buyer and seller is valid there will be a market for Mercedes products. However, if another product comes along that offers equal or greater value then the person who would have chosen the Mercedes without question is suddenly faced with a reasonable choice.

The two things that kept Mercedes customers returning, at least in the USA, was a far greater value in terms of two factors that everybody prizes in every product we buy: Safety and reliability. No domestic product came close. Historically, Mercedes engineered for those factors and essentially veneered luxury over the world-class, and world-envied German engineering.

However, the past ten years or so has seen a decline in the fundamental engineering and an increase in luxury and complexity. Concomitantly, the Japanese have gone full-bore into competition on the very things that Mercedes owners have always invested pride and satisfaction: Engineering excellence. The result has been an erosion of confidence in Mercedes and a move from Mercedes to Japanese marques.

From what I read recently, Mercedes has improved quality and basic engineering in the past few years. They have gotten a handle on managing complexity.

Golly I hope so. I look forward to buying another one of these cars and I want one in which I will feel as much pride of ownership as I do for my W124. What a fine old car it is!

B

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