"The only thing that bugs me is any adantage the big banks have, like getting money cheap from the fed and lending it out for more. I don't understand it though. The big banks were almost bankrupt one day, then a couple years later they're super profitable again. Something fishy there..."

It's called the Golden Rule, Jerry: Them what has the gold makes the rules. ;-)

"I don't understand it though. The big banks were almost bankrupt one day, then a couple years later they're super profitable again. Something fishy there..."

Two points to consider:

One, if you have very large turnover then even a small profit margin will turn into an apparently large amount of profit quite quickly. The opposite is true too. The question though is whether the profitability of the banks in question is any higher than other companies of similar size? I know that the same question is often asked of the big retail banks in Australia, but the ROE of the banks here is apparently not that much higher than companies in a lot of other industries. Big resource companies like Rio and BHP are very similar: they have very slim margins, but when they do well the profits are enormous in real terms.

Two, the whole point of the last couple of years was to get the US banks back on their feet. If they did that by moving "toxic" assets to a different balance sheet, then it's no surprise that their balance sheets improved overnight. Remember that 99.9% of AIG was a perfectly healthy, profitable, hugely respected company: the problem was one small division in London which took enormous gambles, and lost, and their problems contaminated the rest of the company.

Edited by Arapiles on 03/10/2011 05:37:41 MST.

Has this thread digressed ...

Bringing it back to buying Chinese goods, maybe a comparison to good Mexican food is in order. How much should a person pay for a tasty meal that is essentially cheese wrapped in tortillas? What is the cost of raw materials? How much am I paying for the labor in the back vs the marketing ( "ambiance"), etc...? What about competitors and, if too high of price for tortillas and cheese, what about steak or fish instead?

For Chinese goods, Vietnamese packs, and Eastern european shoes (or even a German-branded auto which is actually made in eastern Europe or the southern US), how much premium do we pay for just brand recognition instead of actual craftsmanship (great sewing in our case) and premium materials?

If companies are saving all this money moving manufacturing overseas (not just outdoor gear), shouldn't we as consumers be seeing prices drop, especially in this economy? In economic self-interest, shouldn't consumers just wait for a sale? Once it's across the border, the onus is on the manufacturer or retailer to get rid of it.

(Disclaimer: there are some brands I love even though they manufacture in China, Mexico, etc... and even a couple I will consider buying at retail).

Good point Harold

I looked around and found example in the liberal news publication: http://www.huffingtonpost.com/peter-dreier/npr-debate-moderators-all_b_75704.html

Cost of tennis shoe is $70

Cost of Chinese labor to make it is 1% of cost

This article argued that you could double the pay to the "slave" labor and it would only raise the cost 1%

But you could also argue that if you used U.S. labor that was 10 times the Chinese cost, then you'de have to raise the price 9%.

But you'de save some shipping costs. And save some because you could respond to market easier. You'de have better control of manufactureing.

And you'de be able to market that it was made in America - that could be worth more than the 9%

I think this trade defict problem is solvable - we just have to demand it:

reverse any tax advantages to move jobs overseas, possibly have tax advantage to move jobs here

consumers need to say I'm going to look at products and give preference to made in America

"reverse any tax advantages to move jobs overseas, possibly have tax advantage to move jobs here"

Funny. You might have to cut taxes on business and stop regulating the heck out of 'em.

"Funny. You might have to cut taxes on business and stop regulating the heck out of 'em."

Oh oh, more right wing propoganda

In my opinion:

Mostly, taxes should just be fairly spread across everyone.

Most of the tax breaks are just repayments for political contributions.

Giving a small, short term tax break to encourage moving jobs here might make sense.

In China they have fewer regulations - more pollution, more workers killed, more unhealthful products

I don't think we should strive to be like them

We should reinstitute some of the regulations that have been eliminated in the last 30 years and make new regulations that make sense, we'de be better off

Nice. I didn't mention left or right.

Have you seen the regulatoins that people have to jump through? You can't have it both ways. You claim to want to encourage business but want you really want to do is the opposite. You can't have your cake and eat it too.

regulations?

for example?

"reverse any tax advantages to move jobs overseas, possibly have tax advantage to move jobs here"

examples.

There are tons of examples of regulations that cost companies lots of money. Some cost the end user, some the companies, and some put these companies at a disadvantage if they want to locate in the US.

The use of a certain amount of ethanol in gasoline in some areas for example. The Cato Institute estimated in 2007 that in some areas of CA the gasoline cost up to 60 cents more per gallon then it would have otherwise.

According to the Heritage Foundation, "the economic effects of carbon dioxide regulations found cumulative gross domestic product (GDP) losses of $7 trillion by 2029 single-year GDP losses exceeding $600 billion in some years, energy cost increases of 30 percent or more, and annual job losses exceeding 800,000 for several years. Hit particularly hard is manufacturing, which will see job losses in some industries that exceed 50 percent."



Here is an article I just googled up for you, http://www.pnwlocalnews.com/south_king/tuk/opinion/117416658.html

The Obama administration is trying to curb the tax advantages from moving jobs overseas

http://www.whitehouse.gov/the_press_office/LEVELING-THE-PLAYING-FIELD-CURBING-TAX-HAVENS-AND-REMOVING-TAX-INCENTIVES-FOR-SHIFTING-JOBS-OVERSEAS/

Several of these are:

Companies can immediately deduct expenses but defer profits - the Obama administration wants to only allow deductions after profits have been taxed

Companies can claim a credit on foreign taxes paid, but they are allowed to artificially inflate or accelerate these credits

Companies can shift income to foreign subsidiaries, for example a subsidiary set up in the Bahamas soley to facilitate this, and thus avoid paying taxes.

It goes on and on...

Okay, your turn, what are some unnecesary regulations?

I'm sure there are zillions of them and it might be interesting to discuss (or maybe not?) and anything that has no good purpose should be eliminated

I don't care for Obama's plan. It seems more like he is trying to punish those that leave instead of making it more attractive to work here.

We have so much tax money spent up in funding agency's and they are all running around regulating everybody!

I don't really have time to discuss specifics right now. I'd think we agree that much like the convoluted tax code, the entire system could use an overhaul with simplification?

My point to you was to put it simply, companies have a large burden following regulations in place. You would probably like most of them since you see it as protecting the environment and populace from polution, negative externalities, etc...

But that leaves the companies here at a relative disadvantage compared to China, etc.

Here is one thing I can think of really quick. Not exactly what I had in mind but is illustrative. I had a conversation with a guy in the paper businesss.

He had to have a lot of paper that was x% recycled. Now you would probably say that is good because we are recycling?

But this cost him more money. Recycled goods were more expensive. He also pointed out that the old paper had to be leeched clean of all the ink. To do this nasty chemicals were created and used.

So to get to the laudable goal of recycled paper being a certain percentage of his paper, it ended up costing him more and polluting more.

"I don't care for Obama's plan. It seems more like he is trying to punish those that leave instead of making it more attractive to work here.

We have so much tax money spent up in funding agency's and they are all running around regulating everybody!

I don't really have time to discuss specifics right now. I'd think we agree that much like the convoluted tax code, the entire system could use an overhaul with simplification?
"

If it's just a feeling you have, that you don't like Obama's plan, or that corporations are overtaxed, then there's nothing to talk about.

If you want to talk specifics, I think you'll find that corporations don't pay their fair share and that's a big part of our current fiscal problem

It p..... me off that the Democrats are so willing to cut the pitifully small amount that we spend to help poor people pay for heating oil rather than address this corporation tax avoidance problem

In social science, especially economics, decisions often have unintended consequences.

Let's make homes affordable to everyone. Lower standards. Make more loans. Demand for houses increases. Home values increase. Booming housing industry creates jobs - main street happy. Create investments by securitizing the loans, create derivatives, create risk insurance - wall street happy. All is good and nothing can go wrong - right?

USA textile mill labor cost rises in Northeast. Move mills to South. Labor cost rises in South. Move mill to other country. No issues - correct?

Whale oil is great. Build ships. Go get whales. Whales harder to find. Petroleum discovered in PA. Oil is great. Drill in TX,CA, etc. Oil harder to find. Buy other peoples oil. Great ideas - are there any problems?

Pick any big RIGHT or LEFT thing that has happened in the past and look at the unintended consequences. Think about what you are arguing for and why. Consider if anything just might not go as planned.

"If it's just a feeling you have, that you don't like Obama's plan, or that corporations are overtaxed, then there's nothing to talk about."



Not saying that really. I am saying without fully researching it in order to offer an informed opinion, that I'm quite leary of it on the surface because of how it appears to me.

Does that make sense? I have been busy at work or I'm sure I'd have a better founded opinion of it by now. :)

"He had to have a lot of paper that was x% recycled. Now you would probably say that is good because we are recycling?"

The problem is there are lots of costs of using virgin goods. Carbon dioxide put into the atmosphere. Degradation of environment. Costs of putting stuff in the landfill.

All of us pay these costs. Your papermaking friend does not.

By requiring x% recycled, it's a way to push back some of those external costs.

Another thing is that all papermakers (except the ones in China) have the same requirement so he is in no competitive disadvantage.

We are all better off with this requirement.

This is a good example of regulation.

We maybe should put a tariff on Chinese paper if they have a competitive advantage because of this.

"Does that make sense? I have been busy at work or I'm sure I'd have a better founded opinion of it by now. :)"

The right wingers that control the CATO institute and Heritage Foundation are propogandizing you.

They want you to vote against your own best interest and against the best interest of the country.

Don't fall for it.

If you look at the specifics I think you'll agree.

By the way, I don't think I'll convince anyone of this but I am just so p...ed off how the country is going down the tubes and the least I can do is to speak up.

Now it's time to go for a nice walk and feel the breeze.

-"Another thing is that all papermakers (except the ones in China)
-have the same requirement so he is in no competitive disadvantage.

-We are all better off with this requirement.

-This is a good example of regulation.

-We maybe should put a tariff on Chinese paper if they have a
-competitive advantage because of this."

But the Chinese one isn't. And if you put a tariff on the Chinese paper, they put a tariff on US widgets. Then the US widget exporters are unhappy and at a disadvantage.

Jerry, why if it is from a conservative source is it only "propaganda" and only liberal sources can tell us the truth?