Protectionism works in the short term, and fails in the long term.
Attempts to protect local jobs by imposing tariffs have the additional effect of maintaining artificially high prices for those who *buy* the goods those workers make. One of the questions I tend to ask in discussions of job loss is "Would you be willing to *pay* more for what you buy to insure it was made by American workers? How *much* more?" I often get emotional "yes" answers to the first, and *no* answers to the second.
It also has the effect of making protected industries increasingly uncompetitive, and damaging the overall economy. (Take a look at the current gyrations in the Euro zone for some graphic examples of the problems resulting.)
We're all in favor of creating American jobs, and perhaps bringing jobs back to America, but what sort of jobs are we speaking of? Do we *want* the sort of low-end rote assembly line jobs that have increasingly moved to places where workers can be paid less to do them?
Or are we better served to try to innovate, and look at what other sorts of jobs we can create that will have a higher value?
Value is relative. Something is worth what someone else is willing to pay for it. That includes the value of the worker's labor. The challenge for the worker is performing labor that is worth a higher price, and the challenge for the society is creating jobs like that for the workers to do. The problem for many workers is that the market is effectively saying "What you do isn't worth what you want to be paid."
In case you don't know, this was actually tried by a guy name Vlad. His country had 3-4 models of everything. Not much foreign trade, and full employment.
People willingly pay gardeners a doctor's salary. And theirs was a real paradise.
I guess you must be an American.
The solution for the western countries is rather simple. Forget free trade. Put a 30% to 50% tariff on all imports. This will bring enough jobs back. Western countries should formulate policies to prevent excessive market fragmentation so mass production economies can be attained. We don't need 300 models of automobiles for example; 20 or so should be enough. If imports become a bit expensive, that should not be a problem. People willingly pay 10 times or more for non trade services like barber's, gardener's, car wash and a zillion others. It hurts only when you have choice.
Constantly introducing new designs is the real problem for developed countries. Unfortunately in a capitalistic system there is no discipline to prevent market fragmentation due to the dog eat dog principle on which it is based.
Well that's their plan.
You can reduce basic fuel cost to $2/gl (US) and the cost of everyone doing business dramatically.
By time the consumer gets his product, inflating fuel costs drive prices up, and affecting the public at each step in the chain.
We should take our oil off the common market, by decree, to preserve and enhance America's future.
It is in their power, they just aren't willing.
Tariffs on competing industries, products and the like would seem only normal. And yield a lot of revenue for the State.
Reviving advanced manufacturing of consumer electronics in the US is technically a piece of cake. The problem lies with Wall St. with its arrogant and un democratic MBAs who would rather invest in China with its regimented low cost labor.
Flexible ( capable of quick product change ) artificial vision based robotic lines were developed over 20 years ago at a US Corp. that once used to lead the world in Pagers, Cell Phones ( and even made the micro-processors for Apple ) and went into production at multiple US sites . That was -- back in 1992 !
Poor Management ( after the Dad stepped down to make room for his idiot son under the influence of sycophants ) gradually killed that Corp. which once used to employ 130 k people worldwide and had an annual revenue of $ 45 billion. Advised by these sycophants this Corp. committed corporate harakiri ( yes happens in the US too ) by chasing after the China market and in the process got lured by the Chinese into giving all know how ( base station design, wafer fab ,.. ) away. They decided to shut down the Robotic lines in middle of America so as to create more jobs in China ( per demands by the PRC Govt. as quid pro quo for contracts for Cellular Infrastructure that never came and Hua wei STOLE the technology )!
It costs a cap investment of just $ 450 k to replace 3 shift workers in Electronic assy. who ea. earn $ 70 k per year ( incl. decent US style Benefits ). Every 5 worker is replaced by one Tech who looks after both sofware & hardware ( tooling, end - effectors ).
Automation levels the labor costs in *assembling* the products. It doesn't change all of the *other* components of Cost Of Goods Sold.
How much does it cost to build that automated factory? What must you pay for the land it's on? What will your taxes on the land be? What are the salary levels for the people who work there, and their associated fringe costs? (Managers, designers, engineers, technicians...) What are your raw materials costs? What are your transport costs?
The list goes on, but they are all things that will vary by where you are, and they are likely to be higher in the US than elsewhere.
China is getting expensive with wage inflation and indifference to product quality, has zero respect for intellectual Property rights, as well as having shipping costs defeating their supposed economic advantage for Euro and US markets. They are fumbling the ball. It's good to see US and Euro companies make the grab with automation.
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