China also is proposing a Eurasian HSR link through India, Iran, and the Balkans in exchange for natural resources. Maybe it’s the same deal China would offer a cash-strapped US that would be hard to turn down. We can’t compete with China’s money for world oil supplies; and may be obliged to go by bike, bus, and train instead of auto. It was okay for businesses to sell out; why not the government? China certainly is more functional than the US at this point. Now who’s going to bury whom, Ronald Reagan?
I must say that I agree with the comments above that are not in favor of buying railroad equipment from China. I believe we should make it here.
To answer the question about whether I would prefer to make it here even if we could get twice as much for the same price from China, I say, “Yes.” The hidden price we pay when we buy something “cheaper” from overseas is the American jobs lost because we are not buying from Americans.
Band Aid products now come from Brazil. I buy Nexcare, made in U.S.A. And I gladly pay more because I know there’s an American job on the other end of the transaction.
The reason China has money and that we owe them a lot is that we keep buying stuff from them while we are putting Americans out of work.
When we pay an American worker a dollar it can stay here, unless the worker spends it overseas. When we pay someone overseas a dollar, it’s gone. Not one penny goes to your local gas station, your grocer, your hair dresser, your doctor, etc.
Railroads made America great, and America made great railroads. We need to restore those practices, starting now.
[soapbox]
American investors want to much return on their money, too fast. American consumers believe in the God given right to have everything and at as cheap a price as possible. Too often cheap isn’t as cheap as they think.
Who gets to decide how much is the right amount?
I also think you are wrong. There is an awful lot of money sitting if FDIC insured passbook accounts - safe but earning very little. There are an awful lot of folks still paying on their underwater mortgages that they’d be better off walking away from. If the almighty $$ was all that was driving them, you wouldn’t see this behavior.
Generally, yes. This is rational behavior. If I can buy a 2x4 at Home Depot for $3 but Lowes has is for $2, I’m buying it at Lowes (unless they are all warped - so a lesser value)
People make these value judgments all the time. What we have the right to, is open markets.
Caveat Emptor. Then the purchaser suffers the natural consequences of his behavior.
The way this is supposed to work is, if everyone does what they do best, then production is maximized. if I buy trains from China, then China has money to by corn from the US. And, I have some money left over to buy some cars from Germany, so Germany can buy some beef from the US. If I buy my trains in the US, then China isn’t buying any corn and Germany isn’t buying any beef and the US doesn’t get any German cars.
I think you have your politicians mixed up. Nikita Sergeyevich Khrushchev said “We will bury you!”. Ronald Reagan said, “…tear down this wall!”
No. That’s not how free trade works. The opposite of free trade is protectionism and protectionism is exactly what made the Great Depression so, um, “great”.
If you live in GA and buy a car made in Ohio, are you putting a Georgian out of work? If you live in Cleveland OH and buy a toy made in Hudson OH, are you taking a job away from a Clevelander?
We do insist and they are happy to oblige! I don’t think it actually helps or hurts much in the long run. We still don’t have the design and manufacturing expertise. The last batch of experts are pretty much all retired and/or dead at this point. Does anyone remember all the trouble MK had building the Viewliners? They couldn’t get the car bodies to come out straight while shot welding. All the Budd expertise was gone and there apparently was more to it than it seemed.
So, we might want to develop some passenger car design and build expertise as a strategic resource - which it seems Amtrak’s purchase plans are all about - however goofy they seem otherwise.
That all is a very niave belief that it all works that way. What is a fair return? Others elsewhere seem to be more patient in the long run and will take less than what our investors believe is fair in the short run; our investors what quick huge returns as soon as possible with no long term committment to quality of product or service nor to longevity of investment. And that money in FDIC accounts means nothing to this argument: the money is being used by investment bank
I think you missed the sarcastic reversal…
Most of this does sound a little like we have become TOO conscious of our billfold. At the same time grabbing for the bigger home and ELOC and all that. Wonderful combination. Then you throw this into the mix and the kvetching begins. One other thing—find the $2.75 piece at Lowes----but in order to get it then have to drive for 20 minutes to “save” .25 cents----but how much $$$ got drained out’n the gas tank in the process?
The thing I also get a kick out of as well is the issue of our local knowledge base. We’ve exported a lot of that out and/or closed a lot of the apprenticeships down without thinking about what happens then. Where did all of that go? Into saving the dollar bill. Short term thinking rules over any kind of longer term ideas.
I’m not saying that saving $$$$ should be thrown out but that we may have to re-introduce SOME kind of idea based in/around the concept of “investment” IN the country. I like the idea that some kind of a market for my products exist here.
Can you imagine a market that is about 30% “poorer” than it is now? Never mind taxes and all that. Just 30-40% poorer overall. A mainly pastoral economy?
…wouldn’t be the first time…!
One other thing—find the $2.75 piece at Lowes----but in order to get it then have to drive for 20 minutes to “save” .25 cents----but how much $$$ got drained out’n the gas tank in the process?
I have seen this all too often, known people who do that kind of shopping.
Four guys wander into a bar in Ireland and see the sign, “all drinks 10 cents”. They saddle up to the bar, order four martinis, pay the 40 cents, down the drinks and reorder; still 40 cents for four martinis! The ask the bar keep what’s the deal and he explains he won the Irish Sweepstakes, was already a billionaire, so why not spread the joy. The four guys noticed that at the other end of the bar were a couple of guys not drinking. They asked the barkeep why and he replied, “Oh, they are American waiting for Happy Hour when drinks are half priced.”
Well we are #1 in freight rail, but we lack expertise in design and building of High Speed Rail. I guess if everything is done here, we should listen to the experts that know HSR.
No matter how you slice it, trying to “keep jobs here” is protectionism. Can you find me an economist who thinks protectionism is good? Can you find me one who thinks the protectionism practiced in the 30s - whose whole purpose was to “keep jobs here” - didn’t make things worse. All that’s going on in the world is manufacturing chasing cheap labor. It started right after WWII when the US had ALL the manufacturing. Then it went to Japan and Germany. Remember when “made in Japan” = junk? As Japan’s e
Don: We are talking railroad cars, ROW engineering and infrastructure. The European Union countries are able to supply their own equipment. Last I looked, they have pretty high labor costs, about equal to ours. They buy European rail because they can. They are still in the business of manufacturing and haven’t “outsourced” everything. We will have to buy upgrades for HSR abroad from abroad or hopefully from US divisions of European companies because we have largely been out of that business for years and have zero experience.
Economics teaches us that a buck spent multiplies within the economy, but only when spent primarily within that country.
Re: China. here is a link to a good article by Paul Krugman, a Nobel economist.
Yes. China is cheating.
And trade means that for every buck you send over, one comes back. If you constrain it, you sub-optimize - if everyone plays fair.
I would not constrain rail car design and build needlessly. I would go with the best value. There is no intrinsic reason that construction could not be in the US.
Balance of trade…used to be an oft touted stat but since we now import more than we export, we don’t talk about it. We do export a lot of “culture”, i.e. movies, tv shows, recorded music, “art and culture”, rather than manufacutred goods and raw materials as in days of old. I believe both the Greek and Roman Empires fell when they had to resort to exporting “art and culture” rather than manufactured goods and raw materials. Can we bring ourselve back from this precipice and save our Empire?
Don: I believe you are confounding balance of trade with balance of payments. We are running (and have done so for years) an enormous trade deficit annually. Payments balance b/c China and other nations send back the dollars to buy out public (and some private) debt. Very different matters.
Rather a glib response for a very serious concern.
I read the Krugman piece that you linked, and have a couple questions. Is China actually cheating or are they simply getting the best of us in the arena of world competition? I don’t quite follow how the charge of them cheating is made. What rules are they violating, and whose rules are they? Are they doing something they promised not to do? Are they violating international law?
Krugman’s suggestion of a 25% surcharge on Chinese imports is intended to retaliate with the aim of improving our economy. But what will that 25% surcharge do to our consumption in the U.S., and how will that drop in consumption affect our economy?
Would you prefer “not playing fair”? It’s that simple. They won’t let their currency float or otherwise value it to the market. If you want to do free trade, you need free currency. They are cheating.