[NA] Practical tariff impact

[Racerx]

There is of course a minimum competence level for a given task.

Definitely. And I'm usually upset at myself more than anything knowing I'm pushing limits. But at least try to make it a teachable moment for both parties. Nobody (usually) actively tries to screw up. Office manager asked if I was gonna yell at someone recently. Nope. What good is that gonna do. They know it's screwed up. We talked about what to do next time and move on. All yelling does is make them less likely to ask questions and less likely to want to work.

 

[rene86mx]

No measurable impact to my world yet (credit card processing)

Same industry, it will sure impact your merchants that are selling stuff from China. Some will survive but the majority won't.

 

[jesse]

Same industry, it will sure impact your merchants that are selling stuff from China. Some will survive but the majority won't.

I don't look at it with so much doom and gloom. When one business fails, another new one will take its place. The more public companies scale back jobs, the more jobs that will shift to the smaller businesses where we thrive. Small business in America is surprisingly resilient. There is certainly change that will occur but where there is change, there is opportunity (for those that look for it). You can't ever sit back in business and just say "we're going to do what we did last year" and expect to win.

 

[MauleSkinner]

I'm not comfortable leaving those people in the dust in the holy grail search for GDP, profit or savings.

I don’t think anyone is suggesting leaving them in the dust. There will always be a need that they can fill. It just may not be the same job as right now.

 

[Warmi]

This is not going to end well as it ultimately resembles another form of Luddism more than anything else.

I could understand targeted tariffs related to preserving certain level of manufacturing capacity ( high or low tech ) but this is pretty crazy and a huge gamble - besides, this is just another tax and nobody ever got rich by taxing themselves to prosperity ( normally that is the kind of argument you end up rolling out against stupidity that tends to come from the so called progressive side but hey , it is 2025 and , as crazy as it sounds, Democrats are now the party of big corporate business and Republicans appear to be trying outflank Bernie Sanders from the left side ..)

 

[flyingcheesehead]

I agree to some degree, but I always leave a little room in the premise for "the world needs ditch diggers, too". What I mean by that is our overall population may have shifted away from manufacturing jobs and into more service-oriented work, but not everyone has the cognitive ability to work those jobs. Mundane assembly line work or digging holes is often the extent to what many humans are capable of, and trying to train them to repair robots or write programming for them is outright off the table. So removing those jobs sometimes leaves a not-immaterial portion of your populace without a job. Best to have some balance in what we choose to automate. I don't think we're anywhere near toeing that automation threshold, but at some point in the future it will have a real impact.

The things "we" choose to automate (not us as individuals or a society, nor our government, but the corporations who are the would-be job creators) are going to be chosen by those things that give the most ROI, that is, the things that are easiest to automate and the things where the employees cost the most money. That will affect both entry-level jobs and higher-paying jobs.

There is always far too much focus on returning to "the good old days" and that is a recipe for failure. You have to anticipate what the future will look like and attempt to work with it. We're not going to be bringing a ton of manufacturing jobs back to the US. What we need to do, and I doubt we'll be able to in our current divisive political climate, is to ensure that corporate profits that are a result of automation vs employing Americans get taxed to a level that is enough to provide a Universal Basic Income to all Americans, and then let those who have more skill and/or more work ethic work jobs that provide them with prosperity.

Railing against automation makes zero sense.

Yep. It's going to happen whether we want it to or not, so let's figure out what we want the automated world to look like and make it happen so that we're not caught with our pants down when it inevitably does happen.

The first major law passed by the First Congress in 1789 dealt with tariffs and it stated that “it is necessary for the support of government, for the discharge of the debts of the United States, and the encouragement and protection of manufactures, that duties be laid on goods, wares and merchandise imported.” It also led to a disagreement between Alexander Hamilton, who saw tariffs as a revenue source, and James Madison, who believed tariffs could lead to trade reciprocity with Great Britain and other nations.

Tariffs quickly became the main source of the federal government’s revenue until the Civil War, when treasury notes and a wartime income tax supplemented the federal government’s income. After the war, tariffs reassumed their role as a chief revenue source.

However, in 1894, Congress passed the Wilson-Gorman Tariff Act, which lowered tariff rates and established a permanent federal income tax. The Supreme Court struck down the federal income tax imposed by Congress as unconstitutional. In Pollock v. Farmers’ Loan and Trust (1895), the Court ruled in a closely decided 5-4 decision that the tax violated Article I, Section 9 of the Constitution as a direct tax not apportioned among the states based on their populations. After 1896, tariffs were raised to record levels.

Interesting history... But I hope we've learned something about economics in the last 250 years. In addition, the ability to transport goods great distances quickly and for a reasonable price has changed the equation anyway. We live in a global economy, whether we like it or not. A rising tide raises all boats, but someone just pulled the plug.

 

[Mikey52]

Ever done any research on the 16th amendment? It passed by 1 vote. 2 states voted in the affirmative, that weren't really states. Their state constitutions hadn't been ratified by congress yet. I believe 2 other states that voted in the affirmative, had changed the wording, which isn't allowed.

The Secretary of State at the time, I believe his name was Knox, was hit by gunfire and died the day after him certifying the vote.

If I remember correctly, Ohio was one of the states that hadn't had their constitution ratified by congress, but the Supreme Court held it was ok, retroactive to the vote on the Amendment. An ex post facto finding.

If you can find the book, written in the 80's, "The Law that never Was", it's a pretty good read for conspiracy lovers.

 

[Flatiowa]

While I will not go into specific details, yes, I am beginning to see direct effects on long term large item obligations. Currently it is just small ripples in the water, the water receding as the last warning before the latter tsunami hasn’t happened yet and hopefully doesn’t. But if I “lived on the metaphorical beach” I’d be making contingency plans to evacuate to higher ground away from the coast as soon as possible if the water level starts to drop.

 

[flyingcheesehead]

Ever done any research on the 16th amendment?

No, but you've prompted me to.

It passed by 1 vote.

How so? One vote of... What?

The house passed the resolution to send the amendment to the states for ratification by a vote of 318-14 (with 1 voting "Present" and 55 not voting). I haven't been able to find the Senate vote total yet.

I did get into the weeds on this part a bit, going so far as to read the transcript of the proceedings of Congress on the day the resolution to propose it to the States for ratification was passed. Boy, what a different age... This sort of discussion seems very lighthearted and jovial compared to the highly partisan bickering of today, even when they were talking about opposing parties:

("Mr. PAYNE" is Rep. Sereno E. Payne, R-NY, who served from 1883-1914 minus 1887-1889 in five different districts and was the first House Majority Leader from 1899-1911. "Mr. CLARK" is James Beauchamp Clark, D-MO, who served from 1893-1921 minus 1895-1897 and was the House Minority Leader at this time.)​

​

Mr. PAYNE. Mr. Speaker, I am willing to have any reasonable time for debate, if we can have a conclusive vote upon the subject today. As far as I am concerned personally, my presence is greatly desired at the other end of the Capitol, or at least it seems necessary, on account of the conference on the tariff bill.​

Mr. CLARK of Missouri. Do you know whether my presence and that of the other Democratic conferees is wanted over there?​

[Laughter.]​

Mr. PAYNE. My friend is more favorably situated, as far as that is concerned, so that he can attend to his duties in the House much more easily than I can.​

[Laughter.]​

2 states voted in the affirmative, that weren't really states. Their state constitutions hadn't been ratified by congress yet.

The amendment was ratified by 41 states and only 36 were needed. The Ohio argument is kinda silly - it rests on the lack of a proclamation recognizing the date of admission to the union back in 1803 even though Congress *did* ratify Ohio's boundaries and constitution. What was the other state?

I believe 2 other states that voted in the affirmative, had changed the wording, which isn't allowed.

Technically only four of them delivered it back unmodified in their instruments of ratification. Secretary Knox considered this, but most of the "modifications" were simple errors of capitalization, punctuation, or spelling. The Solicitor General of the State Department made a list of all the errors and considered their significance in addition to comparing them with similar errors made on other amendments and advised Knox to go ahead and declare the amendment adopted.

Interesting to consider how the much lower literacy rates prior to widespread public education may have affected this.

The Secretary of State at the time, I believe his name was Knox, was hit by gunfire and died the day after him certifying the vote.

Philander C. Knox... But no, he was never shot. He proclaimed the amendment ratified on Feb. 25, 1913, shortly before the end of the Taft administration. He returned to private law practice, then was reelected to the Senate in 1917 before dying in 1921.

If I remember correctly, Ohio was one of the states that hadn't had their constitution ratified by congress, but the Supreme Court held it was ok, retroactive to the vote on the Amendment. An ex post facto finding.

"On February 19, 1803, U.S. president Thomas Jefferson signed an act of Congress that approved Ohio's boundaries and constitution. But Congress had not passed a formal resolution admitting Ohio as the 17th state. Although no formal resolution of admission was required, when the oversight was discovered in 1953, as Ohio began preparations for celebrating its sesquicentennial, Ohio congressman George H. Bender introduced a bill in Congress to admit Ohio to the Union retroactive to March 1, 1803, the date on which the Ohio General Assembly first convened. At a special session at the old state capital in Chillicothe, the Ohio state legislature approved a new petition for statehood, which was delivered to Washington, D.C., on horseback, and approved that August."

"The United States continues to recognize 1803 as the date when Ohio became a state, President Thomas Jefferson having signed, on February 19, 1803, an act of Congress that approved Ohio's boundaries and proposed state constitution. The resolution regarding this admission signed by President Dwight D. Eisenhower in 1953 recognizes March 1, 1803, as the date of Ohio's admittance into the Union."

If you can find the book, written in the 80's, "The Law that never Was", it's a pretty good read for conspiracy lovers.

Well, given that every conspiracy starts with twisted "facts" I'd say it's well on its way. However, the author's assertions have been explicitly ruled to be fraudulent. The author, William J. Benson, was convicted for tax evasion and was sentenced to four years in prison. But, I've gotta admire the efforts he went to to not pay his taxes!

There's some further history on the ratification of the 16th amendment here: https://www.cato.org/sites/cato.org/files/serials/files/cato-journal/1981/5/cj1n1-10.pdf

 

[Tarheelpilot]

I am unemployed 100% because the 2018/2019 Chinese tariffs put my 47 year old Texas born company out of business.

Up until 2018, we were doing about 85 Million a year in revenue but our profits were between 5 and 8 million. Small company so plenty of money for salaries and bonuses.

I believe in 2018, "The Administration" implemented 10% tariffs on China.
Then in 2019, he added an additional 15% tariff on top of that.

We were a furniture company that started in 1976. All of our stuff came from China.
Immediately, the factories raised the prices of finished goods to us by 20% to offset the tariffs.
After the tariff was implemented, we were forecasted to have to spend about 12 million more for the same amount of product.
With profits of 5-8 million, the math is pretty easy. The only way for us to offset the cost was to increase our prices 20% on the end consumer.
We called it the "Race to the bottom" internally.
Business stalled nearly instantly. Warehouses full of millions of dollars of inventory and nobody would buy any of it at the new price.

This is irrelevant but Covid hit and for us it was a miracle. People had no choice but to buy home office furniture even though our prices were higher.
Once the demand for home furniture went back to normal, we started to fail.
Our products simply weren't worth the additional price increase to our buyers.
All of our primary competitors went out of business about the same time we did.

Our biggest competitor failed because they couldn't pay overseas suppliers.

Furniture-maker Noble House falls into bankruptcy, owes overseas suppliers millions

The company, which sells to some of the largest U.S. retailers, suffered from rising costs and disruptions in its supply chain.

www.retaildive.com

Our second biggest was "acquired" because they had the same problem.

Alto Systems subsidiary acquires Handy Living - Furniture Today

The supplier of hardware components to furniture manufacturers sold its Handy Living furniture division to HL Home Furnishings

www.furnituretoday.com

"Acquired" in the definition above is the same thing that happened to my company.
On April 1st of last year, my company's doors were virtually locked, 51 people lost their jobs and a company came in and bought $54 million of our remaining stock for $10 million so we could pay part of our bank debt.
That is what "Acquired" means.

China tariffs put a lot of furniture companies out of business. we fought for exemptions for some of our products and got bits and pieces of help from the government but it wasn't enough.

I sat on a zoom call with a group of people crying and saying 'I am going to miss you" who had been working together for 20+ years. I got to tell them they no longer had access and where to send their laptops.

YES. These tariffs will 100% impact / close American companies. Anyone who hears, believes, says it is a tariff on a foreign entity and they are the ones who pay are misinformed.

Yeah. This is truth. It’s a tax on foreign manufacturing. Not foreign based companies.

Whether or not that’s good or bad is debatable but anyone that says the tariffs don’t impact domestic companies is ignorant.

 

[Mikey52]

Flying, thanks for the update. It's been years since I read that, somewhere in the middle 80's.

Just for thoughts, we get a direct income tax contrary to the main body of the constitution in 1913.

The Russian revolution took place in 1917.

Then the Chinese revolution started in 1927.

A great deal of social engineering started in the early 1900's.

 

[EdFred]

ensure that corporate profits that are a result of automation vs employing Americans get taxed to a level that is enough to provide a Universal Basic Income to all Americans

Do you realize how much automation there is? Your solution is to tax the hell out of every company that uses computers vs a bunch of people on typewriters, industrial cleaning machines vs employees hand cleaning, drive through car washes vs hand washed cars, bar code scanners vs someone putting a price tag on every item and the employee looking up the price in a book to do so, trying to hand assemble and solder the circuit boards in your precious iDevices vs a machine that can place tens of thousands of parts per hour? The list goes on.

You really think that's a viable solution? Tax automation? That might be the dumbest thing I've ever read as a solution to creating jobs.

Also tell me that you don't understand that a higher tax on ~0 is still the same as a lower tax on ~0. Those savings from automation just get disbursed to retained employees and shareholders, and the net profit at the end of the year is still the same - as close to zero as one can make it.

 

[EdFred]

The problem is the cat is out of the bag and it happened 30+ years ago with NAFTA with GHW Bush and in 2000 with Clinton and China Free Trade. Now tossing a tariff (which I do agree should be in place in the name of protectionism) on it now just messes things up. It should have been tariffed from the onset, not retroactively. What SHOULD have happened back then to protect jobs is any company moving jobs to Mexico or China would have to report what it was saving by doing so, and have to pay a hefty tariff on that savings WITHOUT being able to pass it along to the consumer. That would have prevented a lot the jobs from leaving initially. Because stuff didn't get cheaper when it got sent to Mexico or China, it just became shareholder profit - which does help anyone invested in the stock market, whether it be your 401k or personal post tax investing. It greatly benefited those that didn't lose their jobs, but decimated those that did, and couldn't find an equivalent replacement. Now did it improve the overall economic health of the country top to bottom? Maybe, maybe not. Depends who you ask, and whether their favorite color is red, blue, or sometimes green.

 

[jsstevens]

On an aviation note, tetraethyl lead (TEL) is made in England. Will these (proposed) tariffs increase the price of AVgas?

 

[EdFred]

On an aviation note, tetraethyl lead (TEL) is made in England. Will these (proposed) tariffs increase the price of AVgas?

Probably not if the UK one of the countries wanting to play ball on equalization agreements. The price of crude is the big driver on the price of fuel.

 

[ateamer]

How many years will it take to get factories up and running here? They need to not just secure the buildings, but the tooking and machinery, and train the people to operate it. Most, or nearly all, of the guys who worked in the old factories and have the tribal knowledge are long since retired, or at least moved on to other careers so long ago that it will be a cold start. Would five years be a fair estimate of how long it’d take to get a factory equipped, fully staffed and operating at 100%?

 

[EdFred]

How many years will it take to get factories up and running here? They need to not just secure the buildings, but the tooking and machinery, and train the people to operate it. Most, or nearly all, of the guys who worked in the old factories and have the tribal knowledge are long since retired, or at least moved on to other careers so long ago that it will be a cold start. Would five years be a fair estimate of how long it’d take to get a factory equipped, fully staffed and operating at 100%?

One of my customers is in process of bringing back production lines from Mexico. New building (was already empty). It's basically shipping the equipment back. All the infrastructure (purchasing, HR, engineering) is already here. They just started bringing the equipment back couple weeks ago. Took about 2 months to get one line back and up for qualification. They expect to be 100% by this fall. The thing is with a lot of this overseas (and over the river) stuff, all the "brainwork" is already here. All the designing, purchasing, etc is done here and it's assembly work that's being done elsewhere. A lot of them send the problem solvers overseas from here, and when they bring it back, they bring them back.

 

[jsstevens]

How many years will it take to get factories up and running here? They need to not just secure the buildings, but the tooking and machinery, and train the people to operate it. Most, or nearly all, of the guys who worked in the old factories and have the tribal knowledge are long since retired, or at least moved on to other careers so long ago that it will be a cold start. Would five years be a fair estimate of how long it’d take to get a factory equipped, fully staffed and operating at 100%?

I’d have guessed around that but I’ve been told closer to 10 years for complex stuff like microchips. Permits etc complicate it.

But however long, the investors have to believe conditions will remain profitable long enough to get it built AND recoup the investment plus a reasonable return . That seems problematic.

 

[jsstevens]

One of my customers is in process of bringing back production lines from Mexico. New building (was already empty). It's basically shipping the equipment back. All the infrastructure (purchasing, HR, engineering) is already here. They just started bringing the equipment back couple weeks ago. Took about 2 months to get one line back and up for qualification. They expect to be 100% by this fall. The thing is with a lot of this overseas (and over the river) stuff, all the "brainwork" is already here. All the designing, purchasing, etc is done here and it's assembly work that's being done elsewhere. A lot of them send the problem solvers overseas from here, and when they bring it back, they bring them back.

Makes sense if you have the building and it’s already basically set up. And I’m sure across the river is easier than 1/2 way around the world. Especially if you’ve provided the expertise from here. Probably the best case scenario. I wonder what the labor cost impact will be?

 

[EdFred]

Makes sense if you have the building and it’s already basically set up. And I’m sure across the river is easier than 1/2 way around the world. Especially if you’ve provided the expertise from here. Probably the best case scenario. I wonder what the labor cost impact will be?

Well, I know a few years back (same industry different point in the supply line) they moved to Mexico, only stayed there a couple years, and brought everything back because the theft losses on raw were $20,000-$30,000 per day. DAY. It was cheaper for them to bring it back AND pay union level wages. Receiving would leave it out on the dock and tell their amigos that there would be stuff left there overnight. When they came in the next morning it was miraculously gone. Timelines are going to vary among industries, and area depending how many permits you need, how many palms to grease, etc. Find a place where they WANT jobs and if there's buildings available, it can easily be under a year. Now, if you want to build a steel plant from scratch...yeah, gonna be way longer than that.

 

[flyingcheesehead]

Just for thoughts, we get a direct income tax contrary to the main body of the constitution in 1913.

The Russian revolution took place in 1917.

Then the Chinese revolution started in 1927.

A great deal of social engineering started in the early 1900's.

The world was changing an awful lot with the industrial revolution too. I wouldn't be surprised if the changing world not only changed businesses, but governments as well.

Do you realize how much automation there is? Your solution is to tax the hell out of every company that uses computers vs a bunch of people on typewriters, industrial cleaning machines vs employees hand cleaning, drive through car washes vs hand washed cars, bar code scanners vs someone putting a price tag on every item and the employee looking up the price in a book to do so, trying to hand assemble and solder the circuit boards in your precious iDevices vs a machine that can place tens of thousands of parts per hour? The list goes on.
You really think that's a viable solution? Tax automation? That might be the dumbest thing I've ever read as a solution to creating jobs.

New automation. The point isn't to create jobs, the point is to ensure that the loss of jobs to automation doesn't just give us a bunch more poor/homeless people.

But it's awfully similar to the idea of a tariff on the savings of shipping a job overseas. Hmm, where have I heard that one?

What SHOULD have happened back then to protect jobs is any company moving jobs to Mexico or China would have to report what it was saving by doing so, and have to pay a hefty tariff on that savings WITHOUT being able to pass it along to the consumer.

Oh, right! That was your idea! I've thought along similar lines for a long time.

Companies saved a bunch of money by screwing their workers in the name of profits for shareholders. Companies exist to make a profit, but if they aren't regulated or taxed in such a way as to prevent them from causing societal problems, those profits are coming off the backs of the rest of us.

But frankly, I really don't care if taxing automation is how it's paid for, I think automation is going to cause a need for UBI within the next generation. Countries that figure it out will be sitting pretty, and countries that don't are going to be the ones having the aforementioned revolutions.

 

[mandm]

Is it just me? I rather be flying than reading this crap…

Ejection seat me to the airport babe!

 

[EdFred]

The world was changing an awful lot with the industrial revolution too. I wouldn't be surprised if the changing world not only changed businesses, but governments as well.


New automation. The point isn't to create jobs, the point is to ensure that the loss of jobs to automation doesn't just give us a bunch more poor/homeless people.

But it's awfully similar to the idea of a tariff on the savings of shipping a job overseas. Hmm, where have I heard that one?


Oh, right! That was your idea! I've thought along similar lines for a long time.

Companies saved a bunch of money by screwing their workers in the name of profits for shareholders. Companies exist to make a profit, but if they aren't regulated or taxed in such a way as to prevent them from causing societal problems, those profits are coming off the backs of the rest of us.

But frankly, I really don't care if taxing automation is how it's paid for, I think automation is going to cause a need for UBI within the next generation. Countries that figure it out will be sitting pretty, and countries that don't are going to be the ones having the aforementioned revolutions.

My stance is that a US owned company should not have any out of country facilities unless necessary for operations like transportation. NAFTA and China were not necessary for business. Neither is offshoring all 800 number jobs where I can't understand what they are saying. I also said if we wanted to save jobs on the tariffs. There was a qualifier, not that I was for or against.

Any new automation? so if I write some code that automates something, I should be taxed on it?

 

[FastEddieB]

“The Daily” podcast had an episode about the draconian effects the tariffs are having on one small business owner.

“Her business was thriving. Then came the tariffs.”

 

[flyingcheesehead]

My stance is that a US owned company should not have any out of country facilities unless necessary for operations like transportation.

While I do agree with the sentiment... What if they sell outside the US as well? That would put US companies at a severe disadvantage in other markets, as anything with much of a labor cost would be priced out of most other markets.

Any new automation? so if I write some code that automates something, I should be taxed on it?

It was just an idea, not a fully formed bill ready for Congress to vote on.

IMO, if it automates something that makes your employees' lives easier and more productive, great. If it completely automates your employee out of a job, not so much. But again, figuring out and funding UBI is much more important than targeting automation. If you've got a better idea, let's hear it!

 

[cowman]

IMO this is something we probably needed to do and probably should have done a long time ago... but not like this. It would have been far better to start with small tariffs that increased according to an understood long term schedule so that industries had time to adapt. I realize there are political reasons why this might be the only way we can do it but man.... I am so glad I'm not in any business that directly relies on imports(or exports) right now. One day you're looking at an insanely high tariff the next maybe it's rescinded/paused or maybe in a week renegotiated to something more reasonable. The uncertainty of it must be stomach churning.

But this is something I've thought of for a long time- it's crazy what we can go out and buy things like a computer or TV or toaster oven for today compared to the 90s. Most things have more than doubled in price but a lot of those types of durable goods are actually cheaper now than they were then. A lot of them won't last 1/4 of the time those older products did either. My little region of rural IL is full of small towns that used to have a couple of small factories in them that went away in the 80s and 90s and left the towns in varying degrees of decay and decline. I think it would mean a lot to the country if we could bring back good jobs to these areas. We've got communities with low crime, affordable housing, and room to build ready to go just add the jobs and the old American dream can still happen here. I'd be ok with giving up cheap sneakers and toaster ovens if we could make that happen.

 

[EdFred]

While I do agree with the sentiment... What if they sell outside the US as well? That would put US companies at a severe disadvantage in other markets, as anything with much of a labor cost would be priced out of most other markets.


It was just an idea, not a fully formed bill ready for Congress to vote on.

IMO, if it automates something that makes your employees' lives easier and more productive, great. If it completely automates your employee out of a job, not so much. But again, figuring out and funding UBI is much more important than targeting automation. If you've got a better idea, let's hear it!

Well, if they sell outside the US, make it the best damn product that it blows other out of the water. Quality has gone to crap once NAFTA and CFT went into effect. I have a fridge at the office that was built in 70's or 80's. I took it out when I moved in and use it here. It's still running. I've gone through three fridges at the house in that same time. Or cut costs, but doing that would require a massive overhaul of the entire economic system.

If you want to drive inflation through the roof, by all means implement UBI. Don't believe me? Look at what happened with COVID and the money that was paid out. All that's going to do is drive up costs because you're going to have low wage people say "F it, why work?" Now, you gotta pay more for those jobs to get people to work at them. Which then drives up the pay of the next tier of jobs, and the next, and the next, which raises the costs of...everything. Until the UBI isn't enough, so we have to raise it again, and repeat the process. UBI isn't the solution, taxing automation isn't the solution, cart-out-of-the-bag-tariffs aren't the solution. A complete overhaul of the system is the only way. And I mean complete, from USSC rulings that allowed companies to be a person, lawsuit limits, tort reform, zoning mandates, corporate housing ownership, federal subsidies, etc... The economy is such a massive spiderweb of cause and effect there is no way to just say "we can fix this part of the web by doing [idea]." No. We can't. Because doing x affects y and z, which tumbles the whole alphabet of points. Anyone who thinks that "this one simple trick that economists hate" will fix the problem is living in a fantasy world. A real fix would require stripping the constitution down to a blank page and starting over.

At least if you want some utopia where everyone is equal in all aspects. No matter how skilled/unskilled dumb/smart they are. At some point you punish people for success.

 

[Ed Haywood]

It will be way more than 20% more if manufactured here. We looked into it.

How about 125% more?

 

[brcase]

Back in welding school my first instructor made this point. A robot probably creates more and better jobs than it replaces

I think that is a bit of a hard argument to make... Cost really always translates into the amount of labor required to produce a product. If a robot can do it cheaper it means less labor is required for the final product.

 

[EdFred]

I think that is a bit of a hard argument to make... Cost really always translates into the amount of labor required to produce a product. If a robot can do it cheaper it means less labor is required for the final product.

So it takes 0 people to make a robot?

 

[geneseib]

I kinda brushed a lot of the tariff talk off as just news noise -- but I'm seeing that was probably naive this time around. I'm wondering if I already know 3 people who are feeling pain not even 2 weeks in, just how widespread this is going to be.

Certain areas will be hit harder than others for the short term. I believe that in the long term things will balance out and overall, our nation will have a net benefit. Unfortunately, today's society wants instant results.

 

[Bob Noel]

So it takes 0 people to make a robot?

you never watched iRobot?

 

[brcase]

Home ownership rates are higher now than the 60s-70s, real wage growth is higher. (though the top tier has gained a lot more than the middle/bottom. its still a net gain)
People have been sold this bill of goods that back in the good old days people had one factory job a pension and could survive on one income. While ignoring with that income that house was 8-900 square feet on a quarter acre lot with no AC one car and vacation was a road trip to visit family. Clothes were hand me downs and pennies were pinched.

Someone can live a 1960s life on minimal income nowdays but we seem to have experienced a lifestyle inflation expectation.
Things like average house prices are up but thats also because the average house nowdays is more than double the sq footage of the 1960s
Car prices aren't that bad especially when you consider traffic deaths per capita have dropped 40% fuel economy and reliability is way up. Figure in 1960 adjusted for inflation average car was almost 28k which a new honda civic will smoke a sports(or luxury ) car from then in all metrics and get 250k miles trouble free.

Right now we have essentially full employment (hell almost 500k unfilled manufacturing jobs and a projected 2 million manufacturing employee shortage by 2033) We make more money, we have access to better and cheaper goods through the magic of comparative advantage, and we seem willing to throw that away because...

Like the comedian said everything is amazing and nobodys happy. So I'd say both sides are true. Yes housing is more expensive but the average person nowdays is also buying much more house and a cost per sq ft has essentially mirrored inflation. Combined with increased real wages and more nimbyism (min lot size min sq footage building rules) as well as increased home ownership would account for the rest of the increase.

So people will complain its unatainable but if you offer them my grandparents pittsburg 3 bed 1 bath 1100sq ft home with no AC and oil heating for an "affordable" price they'd look at you with disgust.

I agree all of this... except maybe the housing part.

house was 8-900 square feet on a quarter acre lot with no AC one car and vacation was a road trip

This was the 1950's house I bought in the early 90's. for 50K. I added Central AC and sold it for $375,000 4 years ago. I was offered a really good deal on it. I wasn't planning on moving or selling. It actually sold at auction last year for about $275,000.If it had followed the inflation rate it would be worth about $110,000-$120,000 now. I think even a recently as about 2018 it was only appraising at about $100,000 to 120,000.

Brian

 

[172andyou]

So it takes 0 people to make a robot?

That's not what he said. What he said was that the argument that it takes more people to make robots than robots displace is obvious nonsense or the robots wouldn't be economically competitive.

 

[ArrowFlyer86]

Well, if they sell outside the US, make it the best damn product that it blows other out of the water. Quality has gone to crap once NAFTA and CFT went into effect. I have a fridge at the office that was built in 70's or 80's. I took it out when I moved in and use it here. It's still running. I've gone through three fridges at the house in that same time. Or cut costs, but doing that would require a massive overhaul of the entire economic system.

If you want to drive inflation through the roof, by all means implement UBI. Don't believe me? Look at what happened with COVID and the money that was paid out. All that's going to do is drive up costs because you're going to have low wage people say "F it, why work?" Now, you gotta pay more for those jobs to get people to work at them. Which then drives up the pay of the next tier of jobs, and the next, and the next, which raises the costs of...everything. Until the UBI isn't enough, so we have to raise it again, and repeat the process. UBI isn't the solution, taxing automation isn't the solution, cart-out-of-the-bag-tariffs aren't the solution. A complete overhaul of the system is the only way. And I mean complete, from USSC rulings that allowed companies to be a person, lawsuit limits, tort reform, zoning mandates, corporate housing ownership, federal subsidies, etc... The economy is such a massive spiderweb of cause and effect there is no way to just say "we can fix this part of the web by doing [idea]." No. We can't. Because doing x affects y and z, which tumbles the whole alphabet of points. Anyone who thinks that "this one simple trick that economists hate" will fix the problem is living in a fantasy world. A real fix would require stripping the constitution down to a blank page and starting over.

At least if you want some utopia where everyone is equal in all aspects. No matter how skilled/unskilled dumb/smart they are. At some point you punish people for success.

It's kind of a tough pill to swallow, but I do think you're correct in many ways. Our country inherits a lot of historical baggage. To its credit, a lot of that baggage is what helped get us here in the first place as an economic superpower. But what's good for the country's economic prowess isn't necessarily good for its people. At least not equally.

To be captain obvious, the engineering problem we have is that we can't start over as a clean sheet republic... so we gotta make lemonade out of some jacked up lemons. There's so many interaction effects between the regulations, players and other countries that there is no singular fix. Everything comes with a price and anyone telling you it doesn't, or that only people higher up the financial totem pole will bear the price, is selling economic snake oil.

If it completely automates your employee out of a job, not so much. But again, figuring out and funding UBI is much more important than targeting automation.

I agree, I don't want to see our country overrun with "unneeded people" who can't afford necessities and basic enjoyable elements of life. It'd be great if the rising tide could lift all boats (though it's OK that some are lifted more than others), but I don't know what that's going to look like in practice.

At an almost philosophical level I'm against UBI because I don't think it solves the emotional need for work. We all **** about jobs at some point, but money aside -- people with a job have higher life satisfaction and purpose than people without. A job really is more than a paycheck for most people, it gives a sense of earning, contribution and being needed. Inflationary effects aside of a policy like that, I'm not sure handing everyone money in their mailbox is going to fulfill that need and lead to a positive outcome. That's a whole lot of idle time for a whole lot of people, and idle time is not humanity's friend. And I don't think everyone is going to use that idle time for self-actualization and betterment of themselves and others.

 

[asicer]

So it takes 0 people to make a robot?

It's trending in that direction.

 

[Racerx]

That's not what he said. What he said was that the argument that it takes more people to make robots than robots displace is obvious nonsense or the robots wouldn't be economically competitive.

Perhaps my point wasnt clear. But the sum of jobs created in totality not just end user is way closer than you probably think.

If end user eliminates 3 assembly line welders, but adds a programmer and maintenance position, sure they're down one position. But upstream, the people designing and building the the automation are able to eat too.

 

[cowman]

Unfortunately, today's society wants instant results.

That's a real weakness of our system/political climate. Big changes in economic or even social policy can take many years if not decades to pan out but any plan enacted may be upended in 2-4 years if a different party gets voted in. So much gets oriented towards short term gains to bolster the next election rather than building on any kind of cohesive long-term plan. The closest thing we have to any consistency is when the opposition party quietly leaves measures from the last administration in place.

 

[EdFred]

That's not what he said. What he said was that the argument that it takes more people to make robots than robots displace is obvious nonsense or the robots wouldn't be economically competitive.

Those people aren't just making 1 robot or just robots. Critical thinking.

 

[172andyou]

Perhaps my point wasnt clear. But the sum of jobs created in totality not just end user is way closer than you probably think.

If end user eliminates 3 assembly line welders, but adds a programmer and maintenance position, sure they're down one position. But upstream, the people designing and building the the automation are able to eat too.

I'm absolutely willing to review anything you might care to cite to support a claim that automation creates more jobs than it displaces in the economy at large.

But, that said, at the end of the day, I'm far more concerned that the proletariat are already being displaced and many don't have the intellectual capacity to do the jobs that replace them. Further, I'm very concerned that we're at the precipice of a 25, 50 or 100 year trend where human labor becomes unnecessary and we, as a global community, lack the economic structure to feed and house billions of people who don't need to waste 2040 hours a year toiling.