The End of Cheap Chinese Labor July 9, 2010
Posted by Michael in Economics.26 comments
SHANGHAI (AP) — Factory workers demanding better wages and working conditions are hastening the eventual end of an era of cheap costs that helped make southern coastal China the world’s factory floor.
A series of strikes over the past two months have been a rude wakeup call for the many foreign companies that depend on China’s low costs to compete overseas, from makers of Christmas trees to manufacturers of gadgets like the iPad.
Where once low-tech factories and scant wages were welcomed in a China eager to escape isolation and poverty, workers are now demanding a bigger share of the profits. The government, meanwhile, is pushing foreign companies to make investments in areas it believes will create greater wealth for China, like high technology.
Many companies are striving to stay profitable by shifting factories to cheaper areas farther inland or to other developing countries, and a few are even resuming production in the West.
Hmm, somebody here at IB told Geoff a long time ago that the Chinese export-driven economy is really not so much of a threat to America. It is based on artificial exchange rates. Their military build-up is dependent on a balance of trade surplus that can’t be maintained.
They are also facing the demographic decline of an aging population, crippling environmental issues, an underdeveloped and very poor internal market, and political instability.
Who said stuff like that?
*scratches head*
Oh yeah, that was me.
“China is going to go through a very dramatic period. The big companies are starting to exit. We all see the writing on the wall,” said Rick Goodwin, a China trade veteran of 22 years, whose company links foreign buyers with Chinese suppliers.
“I have 15 major clients. My job is to give the best advice I can give. I tell it like it is. I tell them, put your helmet on, it’s going to get ugly,” said Goodwin, who says dissatisfied workers and hard-to-predict exchange rates are his top worries.
It’s all about the exchange rate for the yuan.
Sure, the Chinese can stage the most impressive military parade on the planet, featuring some pretty hot women showing legs and wearing sexy stompy boots:
So, that video raises an issue, and I want your opinion.
But, you just cannot defy economic reality indefinitely. The short term benefits of artificial exchange rates and too much foreign debt will catch up with you.
Beijing’s decision to stop tethering the Chinese currency to the U.S. dollar, allowing it to appreciate and thus boosting costs in yuan, has multiplied the uncertainty for companies already struggling with meager profit margins.
In an about-face mocked on “The Daily Show with Jon Stewart,” Wham-O, the company that created the Hula-Hoop and Slip ‘n Slide, decided to bring half of its Frisbee production and some production of its other products back to the U.S.
At the other end of the scale, some in research-intensive sectors such as pharmaceutical, biotech and other life sciences companies are also reconsidering China for a range of reasons, including costs and incentives being offered in other countries.
“Life sciences companies have shifted some production back to the U.S. from China. In some cases, the U.S. was becoming cheaper,” said Sean Correll, director of consulting services for Burlington, Mass.-based Emptoris.
via Companies brace for end of cheap made-in-China era – Yahoo! Finance.
Fashion Tutorial or Sick Plot? July 9, 2010
Posted by kevlarchick in Ballistics, Women Ranting.7 comments
Made especially for street fighting. It’s all about the lycra crotch panel.
Does Michael own a pair?
Don’t Fear The Reaper — Street Version July 8, 2010
Posted by Michael in Music.8 comments
Needs more cowbell.
The Tax Man Cometh July 7, 2010
Posted by geoff in News.14 comments
You remember how they said that Tea Partiers were foolish for protesting taxes in a time when the tax rate was relatively low? And we replied that with the rate of deficit spending and the expansion of long-term entitlement commitments, the Tea Partiers were perfectly correct to be concerned about inevitable tax increases.
Today Ironman at Political Calculations takes a look at the Obama administration’s forecasts for tax revenues, noting that the projections starting in 2012 are well above the historical average, and they stay that way through the end of the projection. [Yeah, he's got a pretty nice-looking chart there. I'm not envious, though. Not one little bit. Really.]
So basically, by 2020 we’re going to have a government which will grow accustomed to gorging itself at some rate north of 19.5%, versus the 1980-2007 average rate of 18.4%. That’s certainly the wrong direction as far as libertarians and conservatives are concerned. Of course, it’s all supposed to be paid for by eliminating the Bush tax cuts on the rich. But as the ‘rich’ respond to their increased taxes by moving their money around to minimize their tax burden, and raising prices on their goods to restore their take-home income levels, it will fall upon the middle class and upper middle class to pick up the slack.
As usual.
Still Unclear on the NASA Mission July 6, 2010
Posted by geoff in News.30 comments
The administration just doesn’t get it. Here’s their response to criticisms over the “top 3 NASA goals” flap:
“The President has always said that he wants NASA to engage with the world’s best scientists and engineers as we work together to push the boundaries of exploration . Meeting that mandate requires NASA to partner with countries around the world like Russia and Japan, as well as collaboration with Israel and with many Muslim-majority countries.”
Errrr…..no. We don’t want to “engage with the world’s best scientists and engineers.” We want to be the world’s best scientists and engineers. Working with other countries used to be a diplomatic gesture of goodwill, not a necessity to patch shortfalls in our own diminishing capabilities.
But maybe I’m too much of a jingoistic technology guy. After all, there are some benefits to collaborating with Muslim countries in space exploration ==> (click to see Barbara).
“New” Krugman Sinks While Clinging to Weak Study July 6, 2010
Posted by geoff in News.4 comments
[This may be a bit dry, but I'd do anything to push that picture down the page]. King Bainan over at Hot Air had a nice post on the 2 faces of Paul Krugman: “unemployment benefits increase the duration of unemployment” Paul; and “unemployment benefits have a negligible effect on unemployment” Paul. I.e., “New” Paul vs. “Old” Paul.
Apparently Dr. Krugman was basing his thinking on a recent ‘study‘ by a couple of people from the Federal Reserve Band of San Francisco. I put ‘study’ in scare quotes, because there’s not much to their work, and what little there is is poorly done.
How can I be so blithely critical of the experts? Here’s exactly, precisely how.
Something About This Girl Does Not Look Right July 5, 2010
Posted by Michael in Crime, Pop Culture, Stupid shit.23 comments
Oh, now I see it. She is not correctly accessorized. Look, she does not have any big hoop earrings to complete her fashion statement.
Hey, Big Boy, do I look like the mother of your children? Huh?!?
Freedom! What Does This Mean? July 4, 2010
Posted by Cathy in Ballistics, Heroes, History, Honor, Music, News.58 comments
Ben Franklin said that anyone who would trade freedom for security deserves neither.
My freedom is a gift from God Almighty who freely gives love and grace.
No one can, nor will, take freedom from me unless I give it up or trade it in.
I will fight for it — and for yours — if I’m called to.
That’s my plan, and I’m stickin’ to it.
My insides ache as I ponder my love for God and each of you.
Happy Independence Day, Folks. Celebrate it!
You Want a Piece of Me? July 2, 2010
Posted by daveintexas in Art, Ballistics, Economics, Food, Law, Movies, Philosophy, Religion, Sidebar Flag Bullshit, Terrorist Hemorrhoids.15 comments
Bring it, sucka. I’ll lick your face clean off.
I bet your face would taste pretty good with a little barbecue sauce
(I know. We need something to lighten up the awesome economic news.)
June 2010 Unemployment Numbers: They’re Real and They’re Spectacular! July 2, 2010
Posted by geoff in News.34 comments
Yes, the June unemployment numbers were released just minutes ago by the BLS, and, as expected/unexpected (depending upon your party affiliation), they are not so good. Sure the unemployment rate went down to 9.5%. But:
650,000 people left the workforce in June.
Here, for completeness’ sake, is The Chart:
Not very representative of what’s going on. Here’s a better way to get a sense of things – take a look at the number of employed people:
You can see that over the past 2 months we’ve started dropping from the April ‘peak.’ Losing 300,000 jobs and losing more than half a million people from the workforce – that’s the real unemployment news.
Initial Unemployment Claims Getting Uglier July 1, 2010
Posted by geoff in Economics.28 comments
The Department of Labor released the unemployment claims data for last week, and it ain’t pretty. Unemployment claims went up from 459,000 to 472,000. That means that improvement in the unemployment situations has completely stagnated. See for yourself:
Yep, it just levels off and sits. And let’s take a closeup look at the period since the peak:
Every week that I put this up, that line on the right hand side gets more and more horizontal. From March through October last year, unemployment claims were dropping at 560/day, or about 17,000 per month. Since then they’ve been dropping at 78/day.
That’s about 2500 per month. Piddly. Doodly squat. Hardly worth mentioning. At that rate it will take us 4 years to get back to where we were in 2007. [Ed Morrissey at Hot Air shows that if you just look at the last quarter, unemployment claims are increasing. That means we'll get back to 2007 levels in, well, never.]
Meanwhile Joe Biden is running around the country chirping, “We have turned this economy around, we have turned this economy around.” I don’t think this administration has realized that the jobs picture isn’t moving at all.
And that’s scarier than the jobs picture itself.
PS. Tomorrow the Bureau of Labor Statistics releases the unemployment rate for June. I don’t think it will look very good. Predictions are for -100,000, due mostly to layoffs of temporary Census labor. Whaddaya wanna bet it’s worse than that?
