Into Pooor Folks' Billfolds

Discussion in 'Politics, Religion, Social Issues' started by Desertrat, Sep 26, 2006.

  1. Desertrat macrumors newbie

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    #1
    I'm late to the party of S. 295, the Schumer/Graham Tariff Bill.

    From: http://schumer.senate.gov/SchumerWebsite/pressroom/record.cfm?id=263073&&year=2006&

    "The Schumer-Graham Bill (S. 295) allows for a 180-day negotiation period between the United States and China on currency revaluation; if the negotiations are not successful, a temporary across the board tariff of 27.5% will be applied to all Chinese products entering the United States. If the President certifies to Congress within 180 days of enactment that China has made a good-faith effort to revalue its currency upward, he may delay the imposition of the tariffs for an additional 180 days. If at the end of that 180-day period the President determines that China has developed and started actual implementation of a plan to revalue its currency, the President may delay imposition of the tariffs for an additional 12 months."

    The Renmimbi has gone from just over 8.1 or so to the dollar to this morning's 7.91--in the last two or three years. That's in free-market international currency trading. Apparently Schumer/Graham, by "upward", mean that the Renmimbi should be artificially moved back above 8:1. (In real-world parlance, that would actually be a downward move for the renmimbi.)

    Historically, governmental screwing around with currency rates has always had bad results. And, I can't help remembering the effects of the Smoot/Hawley tariffs and the Great Depression, not that I'm claiming a recurrence because of S. 295...

    A 27.5% tariff on Chinese goods is a tax on the buyer of those goods. In the U.S., that's the lower strata of our economic pyramid. Poor folks. The tariff won't affect those who shop on Rodeo Drive or at Neiman Markup.

    The downside risk is that China might start repatriating all that US debt that they hold.

    'Rat
     
  2. Ugg macrumors 68000

    Ugg

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    #2
    Ah, so wal martization is good for the country then? Seems to me that most people would willingly forgo walmart in order to have their good paying jobs back. It could squeeze the poor but it would squeeze walmart even more so, for all intents and purposes, this bill ain't going anywhere. Walmart won't let it.

    I agree that currency manipulation can have unintended and disastrous consequences, but allowing the chinese to keep the renmimbi so low is also disastrous. Actually, it wouldn't be a bad idea if the Chinese did repatriate some of that money, the US is overextended and forcing us to cut back on spending and needless tax breaks to the rich and cut back on corporate welfare.

    While Neiman Marcus would be affected less than most, your should take a spin around the store and see how many labels there say "made in China", probably a lot more than you think.
     
  3. Desertrat thread starter macrumors newbie

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    #3
    Wal-Mart, Harbor Freight, Dollar General, and on and on: Their foreign-made items ENABLE a standard of living that can't be had from Sears&Sawbuck. And some of these items come from China.

    Go argue with George Will, not with me:

    "By lowering consumer prices, Wal-Mart costs about 50 retail jobs among competitors for every 100 jobs Wal-Mart creates. Wal-Mart and its effects save shoppers more than $200 billion a year, dwarfing such government programs as food stamps ($28.6 billion) and the earned-income tax credit ($34.6 billion)."

    "...allowing the chinese to keep the renmimbi so low is also disastrous."

    Is that not a bit arrogant? "allowing"? Where is it written that the U.S. of A. can control the value of another country's currency? And, I note that the Euro has moved from $0.85 to $1.28 per each--which is a vastly larger move than that of the renmimbi. Did we "allow" that? Or did the value of the U.S. currency drop like a rock?

    The Chinese as usual are pursuing a very-long-term policy with respect to their currency. To date, it has benefitted both countries. They've generated a trade surplus which allows them to buy US Treasuries--with which to buy oil, steel and cement, among other things. We've had the benefit of somebody else buying our federal debt.

    The Chinese will, someday, maybe, hold those Treasuries over our heads if we get too rambunctious with them over foreign policy. Damfino; speculation.

    Still, the bottom line of all this is the targeted consumer group: As usual, the group which can least afford the hickey.

    'Rat
     
  4. zimv20 macrumors 601

    zimv20

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    #4
    i don't think it's maybe and i do think it'll be sooner rather than later. the only good thing about bush's M.E. misadventures is that he hasn't had the time to piss off china.
     
  5. Desertrat thread starter macrumors newbie

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  6. pseudobrit macrumors 68040

    pseudobrit

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    #6
    Well, when all the manufacturing jobs dry up and the unskilled workers have no money, they'll be happy to know they can buy cheaply made Chinese electronics to feed their kids, put gas in their cars and pay their medical bills.

    Since sending so much money to China to buy goods which allow this higher "standard of living" (I thought more discretionary income was a better sign of a higher standard of living, not a $50 DVD player in every house) ends up costing us jobs in the manufacturing sector, where real goods are produced and good wages can be had by common un/semi-skilled laborers, the question isn't whether they can they afford to spend more on competitively-made goods not from China.

    The question is: can they afford to save so much?
     
  7. solvs macrumors 603

    solvs

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    #7
    They're going to have to. Who's going to stop them? America wants cheap, we don't care what it costs us. Pretty soon we won't have a choice.

    And for the record, we've gone from 1st to 6th in global economic competitiveness, which is probably not so good.
     
  8. Ugg macrumors 68000

    Ugg

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    #8
    George Will is a very biased supporter of walmart and he makes no bones about it. It's doubtful of course that he's ever shopped there or even knows anyone who does. Talke about Ivory Castles.

    What's not taken into account is the quality of those jobs. Are they all full-time, do they have benefits, retirement programs? Of course there's no union representation.

    While it may be saving American consumers to shop at walmart they also end up buying largely inferior products that aren't meant to last. They're also encouraged to buy more than they need. Of course wm isn't the only retailer guilty of this.

    'Rat, this past year I've helped both my parents clean out their houses. The amount of absolutely useless junk that they've both collected has absolutely sickened me. Much of it comes from places like Walmart and much of it they've been led to believe they need in order to be happy.

    Nobody's ever going to convince me that buying a $89 bicycle at walmart is saving consumers money. First off, we don't respect cheap stuff, if it rusts or breaks, our attitude is, "oh, well" it was cheap I can replace it. After the 4th time of replacing it, we've ended up spending the same that we would have on a decent quality bike by a manf. like Trek. One, made in part in the US.

    Your arguments about the need for walmart sound like the adage "penny wise, pound foolish"
     
  9. mactastic macrumors 68040

    mactastic

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    #9
    This is the key point. Assuming WalMart actually replaces 50 jobs with 100, those 50 jobs lost are paying higher wages and offering better benefits, and are possibly unionized. The 100 new WalMart jobs are not. Also places like WalMart will take advantage of the fact that they now have 100 part-time jobs to replace 50 full-timers so as to deny or reduce benefit coverage to people who work under 32 hours a week, or some other arbitrary number.

    The issue goes beyond strictly quantity of jobs, it includes quality of the job.
     
  10. solvs macrumors 603

    solvs

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    #10
    You guys are missing the big picture. So what if those 50-100 people are now barely scraping by with the non-increasing minimum wage and many more are out on the streets. Rich people are getting even richer! So it all evens out.

    Duh.
     
  11. mactastic macrumors 68040

    mactastic

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    #11
    Ah yes, you mean average wages are increasing? ;)
     
  12. zimv20 macrumors 601

    zimv20

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    #12
    i hear bill gates is pretty busy going from bar to bar :)
     
  13. solvs macrumors 603

    solvs

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    #13
    Bingo. Therefor the economy is doing well. So now we just have to lower taxes on those at the top because it's an unfair burden.

    Makes perfect sense.
     
  14. Desertrat thread starter macrumors newbie

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    #14
    High-paid manufacturing jobs will keep going away, generally, whether or not Wal-Mart, et al, exist. The discount-store sort first became successful (Remember Gibson's Discount Centers?) because they could cater to those who were already at the bottom of the economic pyramid. Because of the labor shift in the world of smokestack industries, the discounters have become even more successful.

    I know personally from "crossover" employees who worked for a time for my wife and for a time at Wal-Mart, back and forth as they wanted fulltime or parttime work, the Wal-Mart in Thomasville, GA, is a little bit above prevailing wages for that kind of work. Pretty much the same at Wally's in Del Rio, Fort Stockton and Odessa, Texas. I asked.

    Back to the topic: Tariffs inhibit trade; they reduce business activity. They cost the consumer more money that he would otherwise have paid. In this particular case, since it's low-cost goods from China, it's poor people who would be hurt.

    Another example from some forty years back: The shoe manufacturing in New England was being hurt by Italian imports. A tariff on Italian shoes was then imposed to "save our jobs". While I have no clue how the economic analysts determine the numbers, I read a few years later an estimate that for every $28k/yr job saved, the public paid some $32k for shoes over what they'd have paid without the tariff.

    It may all be moot. This morning's news had an article that said Schumer and Graham were reconsidering. SecTreas Paulson spoke with them following his return from China, where he'd been jawboning about exchange rates.

    'Rat
     
  15. pseudobrit macrumors 68040

    pseudobrit

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    #15
    They can also protect sensitive areas from unfair competition. What if, say, the Vietnamese gov't decided to flood the U.S. market with heavily subsidized seafood for a one-year period of time after Katrina so's to destroy the vulnerable Louisiana and Mississippi fish industry?

    Your argument (tariffs bad!) could also be made about taxes. Taxes inhibit spending, reduce business activity and tourism, and they -- gasp! -- hurt the poor. So if we got rid of all taxes, we'd all be better off, right?

    This isn't the black and white issue you make it out to be, and no one here is taking the "black" side to your "white".
     
  16. rdowns Suspended

    rdowns

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    #16
    While hardly a supporter of Wal-Mart, this reaks of a lack of personal responsibility. It's Wal-Mart's fault your parents buy a lot of junk? Come on.
     
  17. Ugg macrumors 68000

    Ugg

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    #17
    Nope, it's not walmart's fault, it's their gullibility to Madison Avenue's come ons, walmart just aids and abets them in a very big way by selling things that have no longevity.
     
  18. Desertrat thread starter macrumors newbie

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    #18
    From the 10/02/06 Newsweek, Samuelson article, the MinWage group is 5% of the workforce. FWIW.

    But, pseudobrit, we're not talking about tariffs on a specific item. We're talking about all products from a country--a different matter entirely.

    IMO, you used a bad example, anyway. Anything that reduces the commercial harvest of seafood is by and large an improvement over today's over-harvest of way too many species. Just to drift off-thread. :)

    'Rat
     

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