Depends. Yes, we have much bigger fish to fry as a nation than meddling in foreign affairs. Look what Iraq/Afghanistan cost us.
As a people resisting an oligarchic regime, one that pushes everyone down as far as possible to maximize profits, we are frying the same fish. In Tunisia, Egypt, and Libya, the governments all followed the globalism handbook from the IMF and Wall Street: "open" markets, anti union, anti small business. The exact same approach is applied here. It is a common enemy. I see those three countries as the tip of the spear in a global counter resolution against The Money Party boys.
In each of those revolutions, one component was, "If the Tunisians, etc. an do it, so can we." Maybe we'll catch on here.
I'm writing from the PNW where all the politicos were lining up to take credit for the Boeing contract and honk about American Jobs and so on. Meanwhile those of us who know how the world works were sitting there going, "We'll just see how many of those jobs stay in the US."
The union jobs stand of chance of staying locally rooted, though of course those workers will be shoved at gunpoint into concessions that erode their positions and standard of living as well. And they will be vilified, hated, and run down, just as is happening to unionized public workers in Wisconsin, the supposed hotbed of La Follette (Republican!) progressivism (which is in fact more like a hotbed of Hate Your Neighbor First).
I too have to wonder why there is so little push back. I grew up in the Rust Belt, where I watched relatively progressive Republicans like my father take until the '70s to see the writing on the wall where their jobs and families and communities were on the line, because their employers were managing everything for profit skimming for a global plutocracy. My father and his cohort organized and finally got a union in. Then he died a couple years later of asbestos. If it hadn't been for the union, my mother would have starved in that first two difficult years. The people who owned his industry destroyed it, rather than share the profits with the workers. So now Korea and China own global shipbuilding, and the US is sitting here hoping for greeter jobs at Wal-Mart.
It seems that people just simply worship the rich, as Reagan taught them to. And hate themselves, as advertising schooled them.
US financial firms hold all of the questionable paper, and you are correct that changes in FASB accounting rules have made it more difficult to ascertain their true value.
However, total US corporate debt relative to earnings, assets, and equity is within historical norms. Corporate balance sheets are actually healthy and improving, especially compared to household balance sheets.
The four primary metrics of measuring corporate debt are the debt-to-equity ratio; current ratio; the leverage ratio; and the interest coverage ratio.
Theodore Gilliland of Fisher Investments breaks down each one in this short article: http://www.marketminder.com/c/fisher-investments-how-strong-is-corporate...
Why hasn't Boeing volunteered to do this? Are they hoping that if they stay silent for a few months and they can quietly send many of these jobs overseas?
Considering what we let companies do with barely a protest or whimper, they might be able to do that. And that's even sadder. The seemingly endless passivity of the American worker continues to astonish me.
There are numerous projections China's GDP will exceed the U.S. in < 5 years and I believe it...that said, it's export driven. I like to call it the "mythical consumer market" as if people in India, China, Brazil are going to become immediate conspicuous consumers and per capita. ....and then, even if that happens, China in particular, would not be selling their own cars and advanced technologies to those new consumers..
i.e. the JVs of GM are seriously Chinese.
I'm sorry, but I don't have revenue/workforce data by sector.
In a recent Project Syndicate piece, Jim O'Neil explains how how emerging markets will dominate global growth going foward, "Indeed, at some point during this decade, the BRIC economies combined will become as big as the US economy, with China’s GDP alone reaching about two-thirds that of the US. The four countries will be responsible for at least one-half of real GDP growth in the world, and possibly as much as 70%."
link: http://www.project-syndicate.org/commentary/oneill2/English
Mr. O'Neil's projection may be overstated, but he is the EE expert.
Thank you for offering to help me learn how to format.
Where are you getting those numbers from with 2/3rd of MNC's workforce being in the U.S. as well as overall revenue streams?
Any breakdown by sector, industry? Also, the EE 70% global growth assumption, where is that stat coming from?
The reason I ask is I suspect EE's are yet another "bubble/herd" mentality for fast money and this mythical consumer market is in the end, going to be serviced by that nation's domestic producers. (i.e. China and India as policy).
It *should* be majority U.S. workforce for U.S. multinationals, I'm thinking about FCDC's most of their employees, or a good portion, even when operating in the U.S. are their home country citizens, until one moves to the "worker bees". But in spite of how great it is they are hiring "worker bees" for U.S. manufacturing, because that scales, creates domestic jobs....
I know there are some businesses that literally displace U.S. workers while operating in the U.S. I think the worst examples would be the BPO and tech industries....
It's clear from their employment rosters of national origin as well as immigration status of employees, this is what they are doing. i.e. 85% of employees, working in the U.S. are of Indian nationality, citizenship as an example.
Then, how about a nation like Germany with a trade surplus? Their percentages of hiring Germans for their MNCs must be way higher than the U.S. and they are managing to generate a trade surplus...
They also "hire local" as obvious from the various German FCDCs operating in the U.S.
In other words, it seems the U.S. policy by MNCs is to screw the U.S. worker, whereas a nation-state like Germany is "doing it right" or "righter" and they are winning at this globalization game yet not winning by screwing over their nation or German workers.
BTW: This site hosts graphs, images, but one needs to know how to use the site, format...
if you have excel data on the above, I can help create graphs offline. First up is to learn how to format a URL.
Firstly, it's rude to put someone's name over and over again in a comment, when the comment authors are listed. This is why user's names are listed and there is a reply button. There are over 1300 people on this site who are registered, active users and we also have many anonymous comments.
Thirdly, this original post is very weak in content, continually promoting one concept, with little analysis, and is quite old. Therefore comments will be locked on this thread.
If you wish to participate, please comment appropriately on some of many posts on trade, GDP, offshore outsourcing, globalization, insourcing, labor arbitrage...there are over 4500 posts on this site.
Robert Oak, a federal VAT would to some extent mitigate but not significantly reduce USA’s trade deficit because it would be equally applicable to both domestic and imported products.
Foreign producers pay VAT to their governments for their domestic sales but that tax is waived for their exported sales. VAT nations collect VAT for products imported into their nation. Their VAT revenues derived from imports have a dual purpose; they are additional government revenues and they prevent what would otherwise be significant tax advantages for importers of products into their nations.
Because our major federal tax revenue is derived from income taxes and we have no federal consumption tax, we do not identify and waive federal taxes upon USA’s exported products. USA producers of exported goods pay full federal taxes and importers of USA products pay their full share of VAT to foreign governments. This tax disadvantage is one of the many disadvantages that confront attempts to export USA products.
Many of USA’s imported products derive from nations utilizing VAT as a major source of their government’s revenues. Those nations waive VAT upon their exported products. We have no federal consumption tax and states cannot tax products directly imported into their states from foreign nations.
USA’s domestic producers whose pay their full share of federal state and local taxes must compete with foreign producers enjoy a significant tax discount from their own governments. A product reaching a USA producers’ shipping platform is then at significant tax disadvantage to a similar imported product reaching the dock at a USA port of entry.
Additionally, foreign nations are unable and/or unwilling to properly compensate their workers and the USA attempts to generally practice absolutely “pure” free trade. USA producers cannot compete if we tie down both of their arms.
Large US companies are less dependent on American consumers than they are American workers, but it varies by sector. The largest US multinationals derive more than half of their revenue from overseas, but two-thirds of their global workforce is still employed in the US.
In the next decade, 70% of global growth will come from the emerging markets--and US multinationals want to capture market share. The best way to do that is through an orderly decline in the dollar and abnormally high unemployment---which will put an anchor on labor costs and inflation.
Also, the highy unequal income distribution creates unequal consumption patterns. In the US, the top 5% of income earners contribute 35% of total consumer sales. The middle is getting wiped out, and it is reflected in the consumer market: Wal-Mart just reported their seventh straight quarter of declining same store sales. By contrast, Louis Vuitton, Hermes, and Coach are doing great---and at the other end---Family Dollar, Dollar Tree thrive. Plutonomy reigns in most countries, but US inequality stands out among developed countries.
A Blumberg Business Week magazine article by Michael Mandel contends USA’s production growth is being statistically overstated within the gathering of for calculating USA’s GDP.
The profits of global corporations are real but that too often, (if not more often) do not increase actual investments (rather than transfers of wealth) within the USA. Too often those global corporate profits do not increase, and often are at a cost of decreasing net jobs and wages within the USA.
This particular line of the link caught my eye, “But phantom GDP can be created by the introduction of innovative new imported products or by the offshoring of research and development, design, and services as well--and there aren't enough data in those areas to take a stab at a calculation”.
I, (similar to most others) are quickly latch on to what we believe supports our own contentions”.
It’s generally difficult if not impossible to objectively assess the values of information passing within entities or between mutually agreeing entities. Relationships of transferring goods, services and information over national boundaries and dealing with differing national laws, regulation and common practices add to assessment complexities.
It is not unlikely that “off-shoring of research and development, design, and services” or the transfer of such information from the USA to offshore entities beyond our borders are to a great extent ignored or undervalued and it’s likely that they are not fully reflected within the prices of globally traded products.
Robert, I boastfully refer to the posting (Sat, 02/26/2011 - 09:08) within this thread entitled “Trade imbalances affect upon GDP is understated”.
How does this square with the contention of people like Mish and Brett Arends that if we were to mark these corporations' assets to market/include their debts, they would, even with all these new profits, be insolvent?
"A look at the facts shows that companies only have "record amounts of cash" in the way that Subprime Suzy was flush with cash after that big refi back in 2005. So long as you don't look at the liabilities, the picture looks great. Hey, why not buy a Jacuzzi?"
This is what a real representative of the people would pursue. Will we get anywhere near this? I seriously doubt it. But right is right and when these people leave like Mubarak did, then maybe we'll get some justice.
Well, of course it's the campaign contributions. Plus I heard Geithner agree with Senator Hatch that more high tech temp work visas were needed.
Of course the obvious question is why?
How do these companies expect to survive when we have First World (kinda) social services and third world incomes except for the top few percent of rich and superrich? Do our elites really want their kids and grandkids to grow up living behind barbed wire?
It seems to me the rich have to give up a lot on the road from normal greed and exploitation. to extraordinary greed and exploitation. Wonder how many have thought of that?
Robert Oak, you introduced another facet to this discussion when you referred to importing raw materials, tools and equipment for production of more products.
(The version of the trade policy I advocate would exclude the values of specifically listed scarce or precious minerals integral to the goods being assessed. This is for both economic and political reasons).
Unfortunately USA’s trade deficits have not been due to imports for increasing USA’s GDP. If that were the case we wouldn’t be suffering consistently increasing trade deficits of goods for over a half century.
Under this proposal the USA would increase exports or decrease imports of consumer goods or produce more consumer goods domestically or make do with less consumer goods.
Since this trade policy is market driven, we would not expect the USA to limit ourselves to any single one of these choices. The global and USA markets would behave in a manner that would result in a “mix” of these activities.
Robert Oak, if you’re contending that there’s a difference between similar imported or domestic products’ post-production contributions to GDP, I disagree.
Certainly there’s a difference in prices of products arriving at shipping platforms of domestic producers and similar imported products arriving at the receiving dock of a USA port of entry. That’s why USA has lost so many industries. After those points have been reached, that’s what I describe as the products post-production contribution to USA’s GDP.
Some contributions are proportionate to the price, but seller’s generally more concerned with their percentage rather than their mark-up per unit. To them lesser price doesn’t mean lesser profits because if they can’t move more of the same products, it free cash to carry additional inventory products.
Some post-production GDP contributions are actual similar amounts for similar imported or domestic products. Regardless of how much cheaper it was to produce a foreign washing machine, the shipping, handling, maintenance and (in later years), repairing of similar machines will per unit contribute similar amounts to the GDP.
Similar imported or domestic products’ post-production contributions to GDP are also similar.
Depends. Yes, we have much bigger fish to fry as a nation than meddling in foreign affairs. Look what Iraq/Afghanistan cost us.
As a people resisting an oligarchic regime, one that pushes everyone down as far as possible to maximize profits, we are frying the same fish. In Tunisia, Egypt, and Libya, the governments all followed the globalism handbook from the IMF and Wall Street: "open" markets, anti union, anti small business. The exact same approach is applied here. It is a common enemy. I see those three countries as the tip of the spear in a global counter resolution against The Money Party boys.
In each of those revolutions, one component was, "If the Tunisians, etc. an do it, so can we." Maybe we'll catch on here.
I'm writing from the PNW where all the politicos were lining up to take credit for the Boeing contract and honk about American Jobs and so on. Meanwhile those of us who know how the world works were sitting there going, "We'll just see how many of those jobs stay in the US."
The union jobs stand of chance of staying locally rooted, though of course those workers will be shoved at gunpoint into concessions that erode their positions and standard of living as well. And they will be vilified, hated, and run down, just as is happening to unionized public workers in Wisconsin, the supposed hotbed of La Follette (Republican!) progressivism (which is in fact more like a hotbed of Hate Your Neighbor First).
I too have to wonder why there is so little push back. I grew up in the Rust Belt, where I watched relatively progressive Republicans like my father take until the '70s to see the writing on the wall where their jobs and families and communities were on the line, because their employers were managing everything for profit skimming for a global plutocracy. My father and his cohort organized and finally got a union in. Then he died a couple years later of asbestos. If it hadn't been for the union, my mother would have starved in that first two difficult years. The people who owned his industry destroyed it, rather than share the profits with the workers. So now Korea and China own global shipbuilding, and the US is sitting here hoping for greeter jobs at Wal-Mart.
It seems that people just simply worship the rich, as Reagan taught them to. And hate themselves, as advertising schooled them.
US financial firms hold all of the questionable paper, and you are correct that changes in FASB accounting rules have made it more difficult to ascertain their true value.
However, total US corporate debt relative to earnings, assets, and equity is within historical norms. Corporate balance sheets are actually healthy and improving, especially compared to household balance sheets.
The four primary metrics of measuring corporate debt are the debt-to-equity ratio; current ratio; the leverage ratio; and the interest coverage ratio.
Theodore Gilliland of Fisher Investments breaks down each one in this short article:
http://www.marketminder.com/c/fisher-investments-how-strong-is-corporate...
Everything you point out is true of course.
Why hasn't Boeing volunteered to do this? Are they hoping that if they stay silent for a few months and they can quietly send many of these jobs overseas?
Considering what we let companies do with barely a protest or whimper, they might be able to do that. And that's even sadder. The seemingly endless passivity of the American worker continues to astonish me.
The problem can be solved by us the individual. b4U - b4US - b4USA.com
There are numerous projections China's GDP will exceed the U.S. in < 5 years and I believe it...that said, it's export driven. I like to call it the "mythical consumer market" as if people in India, China, Brazil are going to become immediate conspicuous consumers and per capita. ....and then, even if that happens, China in particular, would not be selling their own cars and advanced technologies to those new consumers..
i.e. the JVs of GM are seriously Chinese.
U.S. multinationals employ 10.1 million workers abroad, and 21.1 in the US.
The data is in the article--source note #11, tax analyst Martin Sullivan. here is the link http://taxprof.typepad.com/taxprof_blog/2010/09/sullivan-.html
I'm sorry, but I don't have revenue/workforce data by sector.
In a recent Project Syndicate piece, Jim O'Neil explains how how emerging markets will dominate global growth going foward, "Indeed, at some point during this decade, the BRIC economies combined will become as big as the US economy, with China’s GDP alone reaching about two-thirds that of the US. The four countries will be responsible for at least one-half of real GDP growth in the world, and possibly as much as 70%."
link: http://www.project-syndicate.org/commentary/oneill2/English
Mr. O'Neil's projection may be overstated, but he is the EE expert.
Thank you for offering to help me learn how to format.
Where are you getting those numbers from with 2/3rd of MNC's workforce being in the U.S. as well as overall revenue streams?
Any breakdown by sector, industry? Also, the EE 70% global growth assumption, where is that stat coming from?
The reason I ask is I suspect EE's are yet another "bubble/herd" mentality for fast money and this mythical consumer market is in the end, going to be serviced by that nation's domestic producers. (i.e. China and India as policy).
It *should* be majority U.S. workforce for U.S. multinationals, I'm thinking about FCDC's most of their employees, or a good portion, even when operating in the U.S. are their home country citizens, until one moves to the "worker bees". But in spite of how great it is they are hiring "worker bees" for U.S. manufacturing, because that scales, creates domestic jobs....
I know there are some businesses that literally displace U.S. workers while operating in the U.S. I think the worst examples would be the BPO and tech industries....
It's clear from their employment rosters of national origin as well as immigration status of employees, this is what they are doing. i.e. 85% of employees, working in the U.S. are of Indian nationality, citizenship as an example.
Then, how about a nation like Germany with a trade surplus? Their percentages of hiring Germans for their MNCs must be way higher than the U.S. and they are managing to generate a trade surplus...
They also "hire local" as obvious from the various German FCDCs operating in the U.S.
In other words, it seems the U.S. policy by MNCs is to screw the U.S. worker, whereas a nation-state like Germany is "doing it right" or "righter" and they are winning at this globalization game yet not winning by screwing over their nation or German workers.
BTW: This site hosts graphs, images, but one needs to know how to use the site, format...
if you have excel data on the above, I can help create graphs offline. First up is to learn how to format a URL.
Firstly, it's rude to put someone's name over and over again in a comment, when the comment authors are listed. This is why user's names are listed and there is a reply button. There are over 1300 people on this site who are registered, active users and we also have many anonymous comments.
Secondly, I linked to the posts, written by me, on Phantom GDP in the comments already. I'll link to it again, Productivity, Phantom GDP, Jobs & Outsourcing.
Thirdly, this original post is very weak in content, continually promoting one concept, with little analysis, and is quite old. Therefore comments will be locked on this thread.
If you wish to participate, please comment appropriately on some of many posts on trade, GDP, offshore outsourcing, globalization, insourcing, labor arbitrage...there are over 4500 posts on this site.
Robert Oak, a federal VAT would to some extent mitigate but not significantly reduce USA’s trade deficit because it would be equally applicable to both domestic and imported products.
Foreign producers pay VAT to their governments for their domestic sales but that tax is waived for their exported sales. VAT nations collect VAT for products imported into their nation. Their VAT revenues derived from imports have a dual purpose; they are additional government revenues and they prevent what would otherwise be significant tax advantages for importers of products into their nations.
Because our major federal tax revenue is derived from income taxes and we have no federal consumption tax, we do not identify and waive federal taxes upon USA’s exported products. USA producers of exported goods pay full federal taxes and importers of USA products pay their full share of VAT to foreign governments. This tax disadvantage is one of the many disadvantages that confront attempts to export USA products.
Many of USA’s imported products derive from nations utilizing VAT as a major source of their government’s revenues. Those nations waive VAT upon their exported products. We have no federal consumption tax and states cannot tax products directly imported into their states from foreign nations.
USA’s domestic producers whose pay their full share of federal state and local taxes must compete with foreign producers enjoy a significant tax discount from their own governments. A product reaching a USA producers’ shipping platform is then at significant tax disadvantage to a similar imported product reaching the dock at a USA port of entry.
Additionally, foreign nations are unable and/or unwilling to properly compensate their workers and the USA attempts to generally practice absolutely “pure” free trade. USA producers cannot compete if we tie down both of their arms.
Respectfully, Supposn
Large US companies are less dependent on American consumers than they are American workers, but it varies by sector. The largest US multinationals derive more than half of their revenue from overseas, but two-thirds of their global workforce is still employed in the US.
In the next decade, 70% of global growth will come from the emerging markets--and US multinationals want to capture market share. The best way to do that is through an orderly decline in the dollar and abnormally high unemployment---which will put an anchor on labor costs and inflation.
Also, the highy unequal income distribution creates unequal consumption patterns. In the US, the top 5% of income earners contribute 35% of total consumer sales. The middle is getting wiped out, and it is reflected in the consumer market: Wal-Mart just reported their seventh straight quarter of declining same store sales. By contrast, Louis Vuitton, Hermes, and Coach are doing great---and at the other end---Family Dollar, Dollar Tree thrive. Plutonomy reigns in most countries, but US inequality stands out among developed countries.
Robert oak, I don’t know how to find your link to “phantom GDP” so I googled the term.
Refer to http://www.businessweek.com/magazine/content/07_25/b4039001.htm .
A Blumberg Business Week magazine article by Michael Mandel contends USA’s production growth is being statistically overstated within the gathering of for calculating USA’s GDP.
The profits of global corporations are real but that too often, (if not more often) do not increase actual investments (rather than transfers of wealth) within the USA. Too often those global corporate profits do not increase, and often are at a cost of decreasing net jobs and wages within the USA.
This particular line of the link caught my eye, “But phantom GDP can be created by the introduction of innovative new imported products or by the offshoring of research and development, design, and services as well--and there aren't enough data in those areas to take a stab at a calculation”.
I, (similar to most others) are quickly latch on to what we believe supports our own contentions”.
It’s generally difficult if not impossible to objectively assess the values of information passing within entities or between mutually agreeing entities. Relationships of transferring goods, services and information over national boundaries and dealing with differing national laws, regulation and common practices add to assessment complexities.
It is not unlikely that “off-shoring of research and development, design, and services” or the transfer of such information from the USA to offshore entities beyond our borders are to a great extent ignored or undervalued and it’s likely that they are not fully reflected within the prices of globally traded products.
Robert, I boastfully refer to the posting (Sat, 02/26/2011 - 09:08) within this thread entitled “Trade imbalances affect upon GDP is understated”.
Respectfully, Supposn
How does this square with the contention of people like Mish and Brett Arends that if we were to mark these corporations' assets to market/include their debts, they would, even with all these new profits, be insolvent?
"A look at the facts shows that companies only have "record amounts of cash" in the way that Subprime Suzy was flush with cash after that big refi back in 2005. So long as you don't look at the liabilities, the picture looks great. Hey, why not buy a Jacuzzi?"
http://globaleconomicanalysis.blogspot.com/2010/08/are-corporations-sitt...
Good post, though.
This is what a real representative of the people would pursue. Will we get anywhere near this? I seriously doubt it. But right is right and when these people leave like Mubarak did, then maybe we'll get some justice.
Oh my, what an overwhelmingly good and devastating writeup.
Because I am crazy I can say I am looking forward to many more.
Welcome aboard, Mark Provost!
Well, of course it's the campaign contributions. Plus I heard Geithner agree with Senator Hatch that more high tech temp work visas were needed.
Of course the obvious question is why?
How do these companies expect to survive when we have First World (kinda) social services and third world incomes except for the top few percent of rich and superrich? Do our elites really want their kids and grandkids to grow up living behind barbed wire?
It seems to me the rich have to give up a lot on the road from normal greed and exploitation. to extraordinary greed and exploitation. Wonder how many have thought of that?
Robert Oak, you introduced another facet to this discussion when you referred to importing raw materials, tools and equipment for production of more products.
(The version of the trade policy I advocate would exclude the values of specifically listed scarce or precious minerals integral to the goods being assessed. This is for both economic and political reasons).
Unfortunately USA’s trade deficits have not been due to imports for increasing USA’s GDP. If that were the case we wouldn’t be suffering consistently increasing trade deficits of goods for over a half century.
Under this proposal the USA would increase exports or decrease imports of consumer goods or produce more consumer goods domestically or make do with less consumer goods.
Since this trade policy is market driven, we would not expect the USA to limit ourselves to any single one of these choices. The global and USA markets would behave in a manner that would result in a “mix” of these activities.
Respectfully, Supposn
Robert Oak, if you’re contending that there’s a difference between similar imported or domestic products’ post-production contributions to GDP, I disagree.
Certainly there’s a difference in prices of products arriving at shipping platforms of domestic producers and similar imported products arriving at the receiving dock of a USA port of entry. That’s why USA has lost so many industries. After those points have been reached, that’s what I describe as the products post-production contribution to USA’s GDP.
Some contributions are proportionate to the price, but seller’s generally more concerned with their percentage rather than their mark-up per unit. To them lesser price doesn’t mean lesser profits because if they can’t move more of the same products, it free cash to carry additional inventory products.
Some post-production GDP contributions are actual similar amounts for similar imported or domestic products. Regardless of how much cheaper it was to produce a foreign washing machine, the shipping, handling, maintenance and (in later years), repairing of similar machines will per unit contribute similar amounts to the GDP.
Similar imported or domestic products’ post-production contributions to GDP are also similar.
Respectfully, Supposn
# G = –0.31 Excellent post. It is so comprehensive, I actually feel informed.
very helpful for us non-economists. EP is one of the best sites for this kind of clear, comprehensible information.
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