We can’t compete with China on price, but do we need to? I don’t think it matters if our cars are more expensive than Chinese cars, what matters is: can Americans afford to buy American cars? If Americans can’t afford to buy American made products, our industrial renaissance will fail.
Labor is usually one of the biggest costs of making things. Our laborers need to make more than Chinese laborers because our cost of living is higher. We went from a country that made stuff to a country that generated a lot of its growth from inflating the value of assets and charging rents. As a result, the cost of living, especially housing, has gone up considerably, relative to wages. If we bring down the cost of living, housing especially, it will prevent labor costs from ballooning out of control. But, while this will help with affordability, it won’t be enough on its own. We’ll have to find other ways to cut costs, as well.
There is a lot of waste and bloat in our economy, we need to streamline. We need to eliminate inefficiencies wherever possible. We need to eliminate needless middlemen who just jack up prices, and we need to allow consumers to buy directly from manufacturers. We also need to reign in executive pay, and we need to get rid of shareholders who do nothing but sit back and collect passive income. We need to boost productive work and reduce, or eliminate, all of the non productive, rent seeking behavior.
It is becoming a problem as China expands its manufacturing capacity in that it is rapidly hitting a point where China becomes mostly self-sufficient in all manufactured goods and only relies on the rest of the world for natural resources. For some economies, this affectively means they don’t have anything of value to trade with China.
Last time this was a major problem, the British went into the opium trade.
We can’t compete with China on price, but do we need to? I don’t think it matters if our cars are more expensive than Chinese cars, what matters is: can Americans afford to buy American cars? If Americans can’t afford to buy American made products, our industrial renaissance will fail.
Labor is usually one of the biggest costs of making things. Our laborers need to make more than Chinese laborers because our cost of living is higher. We went from a country that made stuff to a country that generated a lot of its growth from inflating the value of assets and charging rents. As a result, the cost of living, especially housing, has gone up considerably, relative to wages. If we bring down the cost of living, housing especially, it will prevent labor costs from ballooning out of control. But, while this will help with affordability, it won’t be enough on its own. We’ll have to find other ways to cut costs, as well.
There is a lot of waste and bloat in our economy, we need to streamline. We need to eliminate inefficiencies wherever possible. We need to eliminate needless middlemen who just jack up prices, and we need to allow consumers to buy directly from manufacturers. We also need to reign in executive pay, and we need to get rid of shareholders who do nothing but sit back and collect passive income. We need to boost productive work and reduce, or eliminate, all of the non productive, rent seeking behavior.
It is becoming a problem as China expands its manufacturing capacity in that it is rapidly hitting a point where China becomes mostly self-sufficient in all manufactured goods and only relies on the rest of the world for natural resources. For some economies, this affectively means they don’t have anything of value to trade with China.
Last time this was a major problem, the British went into the opium trade.