[NA] Practical tariff impact

[flyingcheesehead]

Sorry -- With respect I'm going to have to take the counter position to you guys.
I think you're able to say that because you've both had careers. Or you're referring to retired people who have worked for a long time and thus properly value their free time.

But what if all you had was free time your whole life?

Sounds WONDERFUL.

Take the 18 year old you, just finished high school, and now you get a check every month to do nothing. And the thing is there's no end date. It's not a gap year, or a 5 gap years. It's just what you can expect forever. No one is going to ask anything of you, nothing is expected of you, no one is asking for you to produce or contribute anything. Frankly society doesn't care what you do or don't do. You wake up when you want, plan your day how you want, do only what you want. You have no time pressure at all.

Who do you think is going to deal well with such an unstructured life where it would require significant internal discipline to live in a healthy, purposeful way?

Well, for 18 year old me... I'd have definitely sat around for a while. I wasn't a good student and didn't enjoy school from second grade onwards. I wasn't really motivated when I first went to college, it was just what was expected, and I did poorly.

But sitting around gets boring. Had the web been mature when I was 18, I'd have been online learning stuff, and trying to create stuff, and probably building up my motivation to go to college and do it even better. And I'd have probably started a company - In fact, I'm sure I would have. I had some great products in mind that I knew would sell because the whole reason I wanted to make them is that I wanted to buy them myself.

I'd have likely done much better in life than I have in reality, because I wouldn't have had to deal with going out to work a terrible job I hated for years to make enough money to finish school, and I'd have been able to spend that time instead learning and working on my products.

Because I bet the people who would do best like that are your very smart, driven people. Incidentally, not those that are going to be recipients of UBI. But that's speculation.

UBI goes to *everyone*. If it's $30K/year, the homeless guy gets $30K/yr and Elon Musk gets $30K/yr. And both of them get to choose how to live their life. Those who are smart and driven will use their smarts and drive to do things - They may be things that make money, but they no longer have to be.

Frankly, I think the best model is the sabbatical model. Every five years in your career take 12-18 months off. Enjoy yourself. Travel. Go flying. Volunteer. Spend a great year with your kids. Then go back to work and pick a new challenge. That way you don't backload all the things you want to do until you're retired. But that presupposes there is work to go back to.

Good luck doing that in the US. You either need a job that will give you a sabbatical (very rare, outside of academia and Silicon Valley) or you need to have a job lined up that will let you set your start date a year or more in the future.

For a lot of the people who would utilize UBI, there is no work. It's just forever leisure time.

And that's fine. True freedom.

First world problem. For much of human history, people worked to survive. If you didn't work, you starved.

Bingo. And we're having trouble getting out of that mindset. If we continue with our work fetish, the jobs are going to be automated out from under us anyway and we're going to have mass poverty if we don't figure out UBI.

The quality of a product is determined by the accounting and legal department, not the worker in China.

If you don't pay for inspection steps then expect poor quality.

Absolutely true. Some stuff that comes from China is crap... But iPhones come from China and are much higher quality. They will build it to your specifications - If you want cheap, you can have cheap. If you want quality, you can have quality.

but they only care about dominating a market, not making money this quarter.

One of the many things that causes dumbassery - Quarterly results, no long-term thinking.

With some farms, there is ALWAYS work to do. Every. Day. of. the. year.

And I think this was largely true of all farms in the frontier days. My wife was reading the Little House books to my son a while back and I found it fascinating to listen to how Paw built a door for the little house on the prairie after big critters threatened. No hardware store, just stuff that they got off the land and created themselves using very basic tools. Cut down a tree, split lumber, carve holes in it, whittle pegs to attach boards together, build hinges out of leather, etc... It was a significant investment of time and effort to do something relatively simple, and I think that sort of thing occupied the days of the farmers when they weren't farming quite as actively.

and what would you spend money on? no one else is working either.

Want to go sking in the winter? who is operating the ski trails, etc?

Want to go flying? how would you get to do that?

It's not a "nobody works" scenario. It's a "nobody HAS TO work" scenario. Ski trails could probably be nearly fully automated. FBOs would probably need to have a human element a while longer, but I don't think it'd be too hard to get people to work at an airport part-time for a few bucks.

OK, so the thought of the pro-UBI people is that EVERYONE wants to be on UBI and not work. That's getting paid for how exactly?

By taxing the automation that created the need for UBI in the first place. Or however else we can figure it out. But if we stick our heads in the sand and pretend that it won't become necessary, we're gonna be in for a world of hurt when it is.

I think people would be miserable because work actually gives us more than we think.

It's not just about a paycheck -- people like being needed and knowing they can contribute something meaningful. If the message from society becomes: "actually you're not really needed, here's a check" -- I don't think the outcome is some StarTrek-like Utopia where everyone pursues a path of self actualization and perfects their hobbies and lives happily ever after. My hunch is we get much higher incidence of alcoholism, drug overdoses and suicide.

There will certainly be a higher incidence of that, at least at first. But plenty of people are driven to drinking, drugs, and suicide by work pressures as well.

And I agree that work gives us more than we think... A structured schedule, an easy social network, something productive to occupy our brains. But work that one pursues because they *want* to can give us more of that; work that one pursues because it's for the good of society can give us more than that... The paycheck itself is the meaningless part, except for that our current societal structure requires it just to live.

 

[Palmpilot]

More on impacts to aircraft manufacturing:

 

[EdFred]

By taxing the automation that created the need for UBI in the first place. Or however else we can figure it out. But if we stick our heads in the sand and pretend that it won't become necessary, we're gonna be in for a world of hurt when it is.

Please tell me you are being this dumb on purpose. There is ZERO tax base in your plan. This is the economic version of perpetual motion.

 

[Bacho]

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.

People are still buying office furniture though. Where are they getting it from and why can those companies survive?

 

[MauleSkinner]

Here's a paradox:

Why is that a paradox? 25% of the population thinks they’d be personally better off working in a factory, and 80% of the population thinks that would be good for the country.

 

[CJones]

I am a blue collar employer. I will argue that part of the move towards more automation is the difficulty in finding skilled labor. Its been a societal shift and I have to figure out better more efficient ways to do the work. It just so happens the machines im acquiring do a better job. And Im able to do more with the same labor force. Adapt and move forward or die. If youre content sweeping floors in a factory and unwilling to figure out what else you might be able to do. Its not on automation when youre replace by the industrial version of a roomba. Theres a mechanic somewhere that's getting more work to fix that roomba and a company somewhere employing more people to make it.

I will be willing to bet your argument for the difficulty in finding GOOD fabricators is pay. Welders are easy to find. But there is a huge leap from welder to fabricator.

That's what I have seen in the warehousing industry since 2020. Before 2020, companies tended to automate as a cost saving measure. Post-2020, companies that hadn't really considered automation before are now jumping into the market just because they can't GET labor - or at least not consistently.

 

[Bacho]

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.

Weeks ago, the people that ran a mini storage and propane tank filling station complained to me the tariffs were killing their business. Keep in mind this is before any of these were in place.

IMO, Tariffs will get a lot of blame for killing a poor business.

 

[SixPapaCharlie]

People are still buying office furniture though. Where are they getting it from and why can those companies survive?

That's a great question. Our remaining product was bought by a company called Safavieh. I don't know much about them other than they are huge.
I know next to nothing about the furniture industry. I was just the IT director. Which turned out to be the best decision ever.
The new company has me on a retainer in case they need to know where the bodies are buried. It is not a lot but it was enough
to allow me to go get the remaining hours and ratings I needed for ATP.

I will say, our leadership was not good at pivoting. Inherited the company when their father passed.
We owned 3 warehouses (TX, PA, and NV). Once the tariffs went into place, I found companies in Mexico that sold pottery and other home furnishings that were looking for distribution in the US.
I couldn't get my leadership to pivot away from the only thing they knew. I literally tried to explain to them that we are not really a furniture company, we are a 3PL.
We can stock and ship anything and we were good at it, very fast, next day 99% on time. We can put whatever we want in our warehouses. "Nope. We are a furniture company"

So I guess in fairness, the tariffs were the last straw.
A 47 year old company that operated on debt with no cash saved up because the owners live in Preston Hallow (Google image it), run by 2 sons that were unwilling to try and navigate the storm by doing anything differently than dad taught them created a perfect storm for failure. It worked one way for so long that they felt it would keep going. My CEO would constantly say "Don't worry, this will turn around" to which I would murmur "Hope is not a plan".

So, had the Tariffs not been put in place, our company likely would have still stuck around and done fine. The company was never setup to tolerate a grenade being tossed in.
Which given how old it is was very sad. These guys had all the time in the world to save for a rainy day but they only did that personally and not at the company level.

The former owners are doing quite fine.

 

[Bell206]

IMO, Tariffs will get a lot of blame for killing a poor business.

Agree. Have seen a number of astute small business owners make the necessary adaptations to survive the tariffs in 2017 and have worked on options since last year for these potential tariffs vs wait for them and sue the govt. While not every business may have equal options to pursue, given 50% of small businesses fail in the 1st 5 years without tariffs I think its important to note the difference why a business does fail.

 

[172andyou]

Please tell me you are being this dumb on purpose. There is ZERO tax base in your plan. This is the economic version of perpetual motion.

Boy, you sure do have a pattern of insulting others when you don't understand or disagree with their point...

His proposal was to substitute the taxes currently imposed on the bone, flesh and brain workers of today with taxes on the steel, copper and electronic workers of tomorrow. Neither are a perpetual motion machine. Both are taxes on the work and value being produced. The work is just being done by robots/AI instead of expensive and failure prone humans.

Don't like that, fine. Do sales taxes.

Don't like that, fine. Do wealth taxes. (this one will likely be a big component to prevent obsene consolidation of wealth in a world that human labor devalues)

Don't like that, fine. Do VAT taxes.

And remember that the cost of goods will go down massively as well. Especially custom goods. Even today anyone can spend like $200 a get a robot that vomits PLA into interesting shapes. If you have more money you can do the same with titanium, carbon fiber, ceramics, resin, stainless steel and many other substances. You can do the same by sending specs to robots that will cut and bend almost any part you want. Heck, if you're experimental, you can even use these parts on your plane. There are robots doing food delivery in hundreds of cities, replacing pizza driver as a way tens of thousands of kids used to earn beer money at college.

But, yeah, I get it. It can be hard to wrap ones head around such a fundamental restructuring of how goods and services are produced and delivered. Better get started. It's coming.

 

[172andyou]

Agree. Have seen a number of astute small business owners make the necessary adaptations to survive the tariffs in 2017 and have worked on options since last year for these potential tariffs vs wait for them and sue the govt. While not every business may have equal options to pursue, given 50% of small businesses fail in the 1st 5 years without tariffs I think its important to note the difference why a business does fail.

Totally fair. I will say this though. I was talking with a friend yesterday who has had a general store for 32 years. She's been through multiple economic downturns and always survived. She's concerned right now.

Her general store generated about half its income from its restaurant.

The other half is from the assortment of clothes, toys, kitchen goods and other stuff in the store side of the operation.

She's getting squeezed hard.

On the restaurant side, she has a loyal customer base and can get away with increasing prices some to account of increased cost of inputs. Her problem is that she's a breakfast and lunch place and eggs are a big part of her dishes. It's not even that she has to increase prices, it's that she can't get them predictably. There are other shortages as well, but eggs are an easily understandable example.

Then, on the store side, she's enormously exposed to China. The vast majority of her goods come from there. Between the cost of acquisition and the unpredictability of when things will be delivered, she's getting to the point of not knowing if the entire operation is viable anymore.

So, yeah, small businesses fail for lots of reasons. Lots of them fail early (I've done this a couple times myself). And I agree that we should be sure to place blame where it lies and not make an intellectually lazy argument.

That said, tariffs will indeed help ruin some businesses.

 

[Ventucky Red]

You can in other countries. That's our problem.

Being able to do a ribbon stitch on a pair of jeans, or put a battery in a smart phone isn't skilled labor..

Being able to program and run a milling machine is.... the issue we have is people don't want to do this kind of work.

 

[Ventucky Red]

Then, on the store side, she's enormously exposed to China. The vast majority of her goods come from there. .

Bingo...

I didn't have an MBA, and surely did not graduate Phi Betta Kappa from the Harvard School of Rocket Surgery, but even I knew way long ago in business to never put all your eggs in one basket (see what I did there...) with your supply chain.

 

[brcase]

The quality of a product is determined by the accounting and legal department, not the worker in China.

If you don't pay for inspection steps then expect poor quality.

Say Samsung is designing a new freezer. 100,000 units initial run. You can bet that they will use a lighter gauge metal to save money as you are talking hundreds of thousands of feet of material. Same for copper tubes and wires. If you can save $1 in metal per fridge that's $100,000 more profit you just made... and the worker in Shenzhen had NOTHING to do with it.

I worked on the Ford EV capacitor line at DENSO. If any part was dropped, it was scrapped, no questions asked. I personally put a few grand worth of MOSFET spacers in the trash one day. No one got in trouble. On a good day we made 300 units in 12 hours. Now ask why Denso was charging $8k per unit.

I once spent the afternoon talking with a engineer that designed and tested electrical switches for Boeing. He was explaining how the switches were specified to be reliable to -25F and up to 150F (IIRC) Visible from various angles and lighting, Smoke in cockpit conditions etc. Maintain the correct colors over time and reliable for a certain number of cycles. I don't recall what he said they cost Boeing but it was a lot, but then you want then you don't want an unreliable switch when you are go to start your F-18 or 777, or most any other function on these kinds of aircraft.

 

[172andyou]

Bingo...

I didn't have an MBA, and surely did not graduate Phi Betta Kappa from the Harvard School of Rocket Surgery, but even I knew way long ago in business to never put all your eggs in one basket (see what I did there...) with your supply chain.

The market dictates, for example, what toys are popular. She needs to stock those toys. It's not like she can choose to get the same toy from China, Mexico or Alabama. If that toy is made in China, that's where she has to buy it from.

Clothing, in the abstract, is a commodity. Actual clothing purchases are made of particular styles or brands. Again, she can't decide to buy the same piece of clothing from China, Bangladesh or Guatemala. If the shirt in demand is made in China, that's where she has to buy it from.

And, as it turns out, an enormous percentage of the popular things are made in China.

That might change. Indeed, the claim of those who support tariffs is that they will manifest that change. But even if they work, they will take down many businesses like this one during the transition.

 

[172andyou]

I once spent the afternoon talking with a engineer that designed and tested electrical switches for Boeing. He was explaining how the switches were specified to be reliable to -25F and up to 150F (IIRC) Visible from various angles and lighting, Smoke in cockpit conditions etc. Maintain the correct colors over time and reliable for a certain number of cycles. I don't recall what he said they cost Boeing but it was a lot, but then you want then you don't want an unreliable switch when you are go to start your F-18 or 777, or most any other function on these kinds of aircraft.

And even in many cases like this, a lot of times the product comes from China and is tested or remanufactured to meet the standards because it's still cheaper to do that than to completely onshore the manufacturing process.

 

[Bell206]

but even I knew way long ago in business to never put all your eggs in one basket (see what I did there...) with your supply chain.

Back in 2017 I was told that is where we are on a national scale and covid proved that to an extent.

But even if they work, they will take down many businesses like this one during the transition.

I think it will be more subjective in how "many businesses" are defined. I've been following a small but diverse number of businesses that have weathered the 2017 tariffs, covid, and now this. Business longevity is not a precursor to survival but proper planning is. However, there are businesses out there who knew this was coming for a long time yet their only course of action was to sue the govt when the tariffs were issued. I wish all businesses good luck during these times, but as in most things, most of that "luck" rests in the hands and minds of the owners themselves and how they apply it.

 

[172andyou]

I've been following a small but diverse number of businesses that have weathered the 2017 tariffs, covid, and now this. Business longevity is not a precursor to survival but proper planning is. However, there are businesses out there who knew this was coming for a long time yet their only course of action was to sue the govt when the tariffs were issued. I wish all businesses good luck during these times, but as in most things, most of that "luck" rests in the hands and minds of the owners themselves and how they apply it.

The 2017 tariffs were borderline rational and survivable compared to 2025. So I'm going to disregard that part.

But you raise a very interesting point about covid. One might argue that a lot of businesses that managed to survive that crisis might also have the business acumen to survive this one.

 

[Bell206]

The 2017 tariffs were borderline rational and survivable compared to 2025. So I'm going to disregard that part.

Well, it isn't being disregarded by a number of people as they are crediting those tariff actions for giving them the kick or initiative that is allowing them to handle these tariffs. For others these tariffs are reopening a path for various industries to once again grow that was closed years ago due to foreign imports. So I guess it depends on your viewpoint.

But you raise a very interesting point about covid. One might argue that a lot of businesses that managed to survive that crisis might also have the business acumen to survive this one.

Not really. A lot of poorly run businesses should have closed during covid except they got PPP and other money to stay open. As I mentioned, the odds of a business surviving are minimal and thats without any tariffs. The one thing that has always been resilient is desire to become your own boss which will survive and present opportunities to those who want.

 

[ArrowFlyer86]

Well, for 18 year old me... I'd have definitely sat around for a while. I wasn't a good student and didn't enjoy school from second grade onwards. I wasn't really motivated when I first went to college, it was just what was expected, and I did poorly.

But sitting around gets boring. Had the web been mature when I was 18, I'd have been online learning stuff, and trying to create stuff, and probably building up my motivation to go to college and do it even better. And I'd have probably started a company - In fact, I'm sure I would have. I had some great products in mind that I knew would sell because the whole reason I wanted to make them is that I wanted to buy them myself.

I'd have likely done much better in life than I have in reality, because I wouldn't have had to deal with going out to work a terrible job I hated for years to make enough money to finish school, and I'd have been able to spend that time instead learning and working on my products.

The issue I have with this viewpoint and 172andyou's, is, respectfully -- that I think it suffers from the "curse of knowledge". You're speaking from the experience of someone who has had a career working, albeit sometimes in jobs that didn't give much satisfaction. But overall you've accrued the wisdom of having direction and purpose so you have a good idea of how you would spend that time using the benefit of hindsight. Younger people don't have that. Those without marketable skills, without experience, without a resume -- those are the first people going on UBI (I know in theory we all receive UBI, but by "going on it", I mean those foregoing work and relying on it permanently as sole means of income). Those people are not wise, often listless, lacking direction/purpose.

Alternatively, let me put it like this... Let's assume you have kids that are high school age. And let's also assume you have a big pot of money from your career. You're not going to give them an inheritance, instead you're going to pioneer a family form of UBI since it's a desirable thing.

Would you be willing to sit down with your kids their senior year of HS and promise to write them each a $50,000 post-tax check (+health insurance), adjusted for inflation each year, so they can follow their dreams, with the only stipulation that they can never have a job?
There's no bonus payment for working harder, no deduction for destructive behavior. You want them to have freedom after all, not burdened by the tyranny of employment or external standards. That's enough money where they don't have to worry about their needs, but they're also not going to get rich. Do you think that would harm them or help their personal development? How do you think they'll be doing 2, 5, 10 years after the experiment starts?

Because I'd wager that you will see TERRIBLE results quickly. And if the kids survive 5-10 years in, they'll be depressed, unmotivated and suffering existential crises in their mid 20s. Personally, I'm confident I would have ended up as a permanent fixture at a local bar and would have been dead by 25.

But that would be a really good introduction for those who would be actually dependent upon UBI. It's a sad consolation prize that tells them "thanks for playing, but you don't have the skills the world really needs". It's a terribly depressing message to convey to someone.

And I hate to say it, but even for those that would adjust to it, you can only travel so many places, volunteer for so many church events, strum on the guitar for so many hours, try your hand at other hobbies painting/reading/star-gazing -- until you start to get terribly bored. What makes those hobbies gratifying is that time is scarce, so you value them more. "Absence makes the heart grow fonder" and such. It's a very different feeling when you're living the retired lifestyle at 18 without all the intermediate development acquired over a normal lifetime.

But that's just my $0.02. I won't continue to beat the dead horse and subject all of you to my novel length pontifications

 

[172andyou]

You're speaking from the experience of someone who has had a career working, albeit sometimes in jobs that didn't give much satisfaction. But overall you've accrued the wisdom of having direction and purpose so you have a good idea of how you would spend that time using the benefit of hindsight.

Nah. Work isn't what gave me any of that. The stuff I want to do in retirement is mostly the same as the stuff I wanted to do at 18.

What work did give me is excitement about the impending end of work being a thing for most people. This is going to be bigger than the industrial revolution.

 

[EdFred]

Boy, you sure do have a pattern of insulting others when you don't understand or disagree with their point...

His proposal was to substitute the taxes currently imposed on the bone, flesh and brain workers of today with taxes on the steel, copper and electronic workers of tomorrow. Neither are a perpetual motion machine. Both are taxes on the work and value being produced. The work is just being done by robots/AI instead of expensive and failure prone humans.

Don't like that, fine. Do sales taxes.

Don't like that, fine. Do wealth taxes. (this one will likely be a big component to prevent obsene consolidation of wealth in a world that human labor devalues)

Don't like that, fine. Do VAT taxes.

And remember that the cost of goods will go down massively as well. Especially custom goods. Even today anyone can spend like $200 a get a robot that vomits PLA into interesting shapes. If you have more money you can do the same with titanium, carbon fiber, ceramics, resin, stainless steel and many other substances. You can do the same by sending specs to robots that will cut and bend almost any part you want. Heck, if you're experimental, you can even use these parts on your plane. There are robots doing food delivery in hundreds of cities, replacing pizza driver as a way tens of thousands of kids used to earn beer money at college.

But, yeah, I get it. It can be hard to wrap ones head around such a fundamental restructuring of how goods and services are produced and delivered. Better get started. It's coming.

You say insulting. I say calling it like it is. Neither of you get it. Both of you have said/hinted that EVERYONE would be on UBI given the chance. Fine lets put everyone on UBI and in that case you have zero workers. Zero workers = zero tax base. NONE. No pilots, no service workers, no business owners (that's work), no line workers when the power goes out, no EMTs, no doctors, no veterinarians, no FBO workers, no mechanics, etc. You can't automate everything, but everyone is on UBI. So where is any of this tax revenue coming from when THERE. IS. NO. TAX. BASE.

Economic perpetual motion.

 

[172andyou]

You say insulting. I say calling it like it is.

Yep. Totally on brand. Calling people 'dumb' is absolutely insulting. Doubling down on it and insisting that it's objectively true, well...

So where is any of this tax revenue coming from when THERE. IS. NO. TAX. BASE.

You asked this already and it was answered by two different people.

 

[MIFlyer]

Nah. I have tons of retired friends. I don't have a single one that says, "man, I sure wish I had worked longer".

I'm sure there are some out there, but I don't know a single one.

There might be benefits to being busy or getting out of the house or having a social network. Traditional work does provide all of those to varying degrees. And I, even, mostly like my job. But there is a 100% chance I would find other ways to satisfy those needs in some fashion other than making my boss rich if I didn't need the money.

I think youth needs a purpose a little different than us older folks that have families/hobbies. I have seen young men absolutely transformed by having some purpose in life. As much as I don't want folks to work just to work, we need to replace it with something that gives them purpose, agency and duty.

 

[Flatiowa]

So.. a fully automated society, UBI, everyone is living a life of leisure.. one massive solar flare latter society collapses and the Amish inherent the world. ( being a smart a#%, but this is really drifting from the original topic). Let’s not get this thread locked, it can serve as a valuable means of communication in real time if it can be kept on topic.

 

[172andyou]

As much as I don't want folks to work just to work, we need to replace it with something that gives them purpose, agency and duty.

Yep. That will be the difference between a successful and unsuccessful transition.

 

[Ventucky Red]

The market dictates, for example, what toys are popular. She needs to stock those toys. It's not like she can choose to get the same toy from China, Mexico or Alabama. If that toy is made in China, that's where she has to buy it from.

Clothing, in the abstract, is a commodity. Actual clothing purchases are made of particular styles or brands. Again, she can't decide to buy the same piece of clothing from China, Bangladesh or Guatemala. If the shirt in demand is made in China, that's where she has to buy it from.

And, as it turns out, an enormous percentage of the popular things are made in China.

That might change. Indeed, the claim of those who support tariffs is that they will manifest that change. But even if they work, they will take down many businesses like this one during the transition.

I know a few retail business owners whose inventory philosophy is, "if you can get it a Walmart, you won't find it here..."

My remark is more macro and towards the people supplying her.

Nike figured this out and started to migrate away from China for this and a few other reasons, one being "cleans go out the back door to the grey-market..."

 

[pfarber]

I once spent the afternoon talking with a engineer that designed and tested electrical switches for Boeing. He was explaining how the switches were specified to be reliable to -25F and up to 150F (IIRC) Visible from various angles and lighting, Smoke in cockpit conditions etc. Maintain the correct colors over time and reliable for a certain number of cycles. I don't recall what he said they cost Boeing but it was a lot, but then you want then you don't want an unreliable switch when you are go to start your F-18 or 777, or most any other function on these kinds of aircraft.

That switch can be made anywhere. But because of the US regulatory burden of PMA and other FAA/Gov't a part that can be made anywhere is now weighed down by useless regulations. Ever look up the process of PMA approval? It has nothing to do with actually making the part! For GA its even more hilarious. Absolutely no part in pre 2000's aircraft are under patent. Anyone can make a part.. but without the burdensome regulations of the FAA no one wants to make them due to the limited market.

Boeing would be smart to invest in 'PMA incubator' that have all of the useless boilerplate the FAA wants to see done and factoring that cost into the parts run.

But that takes time and effort. CEOs and VPs just want parts to appear... and that's not the world we live in right now.

 

[Bell206]

But because of the US regulatory burden of PMA and other FAA/Gov't a part that can be made anywhere is now weighed down by useless regulations.

You do realize Boeing does not need a PMA for any part it puts on their aircraft. They could easily select any switch anywhere and install it or sell it. Same way Piper runs over to the nearest NAPA grabs a Gates brand V-belt, then slaps a Piper sticker over the Gates and triples the price. No different. PMAs are needed by every else outside an OEM like Boeing or Piper. On the flip side, you as an A&P can go to the same NAPA, buy the same V-belt for $15 and legally install it on any appropriate Piper. No PMA needed.

 

[cowman]

So, I have been working on and off on an always in progress possibly never to be finished sci-fi novel and while not all of this stuff is directly in the book, I have a lot of 'universe design' relevant to this discussion. This is sort of my idea of how things might work in the semi-distant future and while it's absolutely fiction I think something similar might be how things turn out. If you're not interested in speculative sci-fi fantasy concepts scroll on.

In this time automation is at a very high level, energy (at least in amounts needed by most people) is as abundant as water. Humanity lives and works in space within our solar system and there are colonies on several worlds/moons as well as space stations and orbital habitats. Everyone is guaranteed housing and food but the free housing is likely a tiny windowless space the size of a dorm room on some orbital habitat. Housing on Earth is in high demand with limited supply so it's expensive. Likewise the free food is going to be something akin to cafeteria food. This is all less of a product of any social movent than it is a reality that it just doesn't cost much for this future society to build another space station and house people in it so they might as well do it. That said, most people want a better life than living in the free housing so they take up some level of employment.

Most unskilled labor jobs as we know them don't exist. Restaurants are automated- you sit down at a table, order from your phone, and a drone brings your food out. Retail as we know it isn't really a thing either. They have fabrication machines(think really advanced 3D printers or a star trek replicator). If you want say a chair, you go online and pay a license/royalty fee for the pattern and either 'print' out the item at home or pick it up at a public facility nearby. One of the most common jobs is to be a repair technician for all of this machinery. These individuals work on an on-call basis and essentially work as much or as little as they want. Sort of like an Uber driver except instead of picking up passengers they get paged to go repair the ice cream machines. There are restaurants with waitstaff and people who sell things but these are more speciality/novelty/ultra high-end sorts of things not the norm. There is also mining and transportation for feeding the fabrication machines raw materials so that's another form of employment although again that's more of a job overseeing the automated mining equiptment not physcially doing the work.

Another big employer(and the one I'm more focused on in the story) is the United Sol Space Service. Something like Star Trek's Starfleet. They serve mostly aboard ships generally acting like a space coast guard for the most part. They get a pension for their service- the more years in the bigger the pension. A small number of people in this service are there to get into one of the deep space exploratory missions- these would be the sorts of people doing it for the adventure/advancement/etc not the money. They're a rare breed though.

There are also plenty of people/groups operating ships independtly for various reasons- transport of speciality goods, passenger services, raw material transport, mining, and just people/small groups who do their own thing independent of the overall economy.

Healthcare as we know it doesn't exist for them. With the exception of certain people who have religious objections, most individuals have self-replicating nanites in their blood that pretty much take care of any typical healthcare needs. For emergencies they have medical pods that can repair just about any injury short of severe brain damage if someone gets them into the pod in time.


My theme here if it's not obvious is that advancements in technolgy are what will make these sorts of things possible or even inevitable moreso than any political/social movement. I can't see why we'd want to develop all these things if we're not going to use them to reduce the amount of labor a typical person needs to do. That said, most people need some kind of purpose. Some of us have no problem finding that on their own, others need something more structured. To me an idealized future society would have a place for all kinds and the flexibility/freedom for anyone to pursue any sort of life they want.

 

[172andyou]

One of the most common jobs is to be a repair technician for all of this machinery. These individuals work on an on-call basis and essentially work as much or as little as they want.

Another big employer(and the one I'm more focused on in the story) is the United Sol Space Service. Something like Star Trek's Starfleet. They serve mostly aboard ships generally acting like a space coast guard for the most part. They get a pension for their service- the more years in the bigger the pension. A small number of people in this service are there to get into one of the deep space exploratory missions- these would be the sorts of people doing it for the adventure/advancement/etc not the money. They're a rare breed though.

As someone who likes to write and also enjoys books and movies, I get that you have to have humans in the story and both the above are useful conflict points.

But, aside from moving a story forward, neither will be necessary in the future economy. Robots will repair the other machines. Unmanned spacecraft will do the patrolling.

I do kind of like the idea that one form of entertainment might be going on deep space missions though. That could be a thing! Especially with the medical problems solved.

 

[cowtowner]

That's a great question. Our remaining product was bought by a company called Safavieh. I don't know much about them other than they are huge.
I know next to nothing about the furniture industry. I was just the IT director. Which turned out to be the best decision ever.
The new company has me on a retainer in case they need to know where the bodies are buried. It is not a lot but it was enough
to allow me to go get the remaining hours and ratings I needed for ATP.

I will say, our leadership was not good at pivoting. Inherited the company when their father passed.
We owned 3 warehouses (TX, PA, and NV). Once the tariffs went into place, I found companies in Mexico that sold pottery and other home furnishings that were looking for distribution in the US.
I couldn't get my leadership to pivot away from the only thing they knew. I literally tried to explain to them that we are not really a furniture company, we are a 3PL.
We can stock and ship anything and we were good at it, very fast, next day 99% on time. We can put whatever we want in our warehouses. "Nope. We are a furniture company"

So I guess in fairness, the tariffs were the last straw.
A 47 year old company that operated on debt with no cash saved up because the owners live in Preston Hallow (Google image it), run by 2 sons that were unwilling to try and navigate the storm by doing anything differently than dad taught them created a perfect storm for failure. It worked one way for so long that they felt it would keep going. My CEO would constantly say "Don't worry, this will turn around" to which I would murmur "Hope is not a plan".

So, had the Tariffs not been put in place, our company likely would have still stuck around and done fine. The company was never setup to tolerate a grenade being tossed in.
Which given how old it is was very sad. These guys had all the time in the world to save for a rainy day but they only did that personally and not at the company level.

The former owners are doing quite fine.

The tariffs didn’t put your former company out of business. Poor leadership and poor cash management did. If they were running in RLOC after 45 years while not growing, they sucked every dime out they could.

I would guess the interest rates doubling for lines of credit had more to do with the failure than the tariff.

They probably owned those warehouses, not leased. Which is why they didn’t care. The real estate value of the company was enough for their families to be set for life.

I have 2 kids and another guy that might as well be my kid that work for me. They do everything from unloading containers to meet with high value clients

When I’m dead, will they “run it the right way”. I hope so. Because I’m still working as hard as I am for them. Not for me. I could sell just our real estate and lease it back and be set for life

Who knows. Maybe I’m stupid. My wife thinks I should walk away and let them do it all. But then I’d go crazy with nothing to do.

Plus. I love the challenge. This 145% tariff is just another challenge in a lifetime of them. When I get to the other side of this one in a week, a month or a year, I’ll sit back and smile and say. Yeah, I still got this

 

[AV8R_87]

As much as I don't want folks to work just to work, we need to replace it with something that gives them purpose, agency and duty.

Easy. They must be enrolled in some form of education program until, let's say, age 30. Some courses are mandatory, most are optional. Pick whatever you're interested in. Get passing grades on the exams, if not, take another course and pass it. If forces you to open your mind instead of doing nothing.

 

[MauleSkinner]

forces you to open your mind

Based on what I’ve seen, I don’t think anyone can be forced to open their mind, and they can still get passing grades.

And you can’t convince me otherwise.

 

[EdFred]

Yep. Totally on brand. Calling people 'dumb' is absolutely insulting. Doubling down on it and insisting that it's objectively true, well...


You asked this already and it was answered by two different people.

No it wasn't. You both dodged the question. IN your utopias, there are no workers of any kind. There's absolutely no one to tax. NO workers = no companies. So you have no tax base at all. Ar you getting the tax money from money trees?

Your answers have been tax the robots. Where are the robots getting the money to pay taxes?

 

[Piperonca]

Your answers have been tax the robots. Where are the robots getting the money to pay taxes?

From genetically engineered money trees.

 

[Flatiowa]

From genetically engineered money trees.

Hey, don’t be picking fights with genetic engineering, they are getting close to bringing back mammoths, I’ve said it before and I’ll say it again, if primitive man was willing to hunt a 14 ft tall animal with tusks, a prehensile trunk, and inches think hide like armor to extinction with a rock tied to a stick.. they must taste absolutely delicious lol.

 

[murphey]

So far no one (except 172and you) has mentioned the one industry that just might get the biggest benefit from the no-work concept. Entertainment. Singing, dancing, acting, symphonies, and so on. But wait! There must be theaters, sound, light, props, etc to support all this. Which means factories to produce the infrastructure, people to design everything and how are people going to learn to design? Someone's got to teach them, ChatGPT isn't viable for everything.

What about that plumbing leak in the kitchen...what type of robot is going to fix it?

 

[Racerx]

So far no one (except 172and you) has mentioned the one industry that just might get the biggest benefit from the no-work concept. Entertainment. Singing, dancing, acting, symphonies, and so on. But wait! There must be theaters, sound, light, props, etc to support all this. Which means factories to produce the infrastructure, people to design everything and how are people going to learn to design? Someone's got to teach them, ChatGPT isn't viable for everything.

What about that plumbing leak in the kitchen...what type of robot is going to fix it?

Exactly. At a certain point in this theoretical utopia it becomes a chicken or the egg scenario.

 

[flyingcheesehead]

Please tell me you are being this dumb on purpose. There is ZERO tax base in your plan. This is the economic version of perpetual motion.

That's not true at all... But let me slap in your other posts before I explain:

Neither of you get it. Both of you have said/hinted that EVERYONE would be on UBI given the chance. Fine lets put everyone on UBI and in that case you have zero workers.

Nope. That's not at all what I'm saying. UBI isn't there so that nobody works. UBI is there so nobody HAS TO work. It would be set at roughly the poverty level. If you do nothing, you get just enough to be able to eat, have health care, and live in the most basic housing.

And then, if you want more, you get a job, or you create one! I would expect it'd be about 50/50, workers vs. non-workers. However, I would expect that a significant portion of the workers will be less than full-time (by today's standards), or possibly do multiple part-time gigs. If I could create cool gadgets Monday and Tuesday, fly on Wednesday, volunteer on Thursday, and play music on Friday, that would be great! Or do something completely different. And I'd likely experiment some because I wouldn't have to worry about failure putting me on the street.

Zero workers = zero tax base. NONE.

Also not true. There are still corporations. There's still property and real estate. There's still investors and capital gains. There's still trade and tariffs. How do you think we got on before the 16th amendment was passed in 1913?

No pilots, no service workers, no business owners (that's work), no line workers when the power goes out, no EMTs, no doctors, no veterinarians, no FBO workers, no mechanics, etc.

Again, that's not how it works. You can still have all those people, they're just not slaves to a job. Automation will never replace 100% of humans.

Weeks ago, the people that ran a mini storage and propane tank filling station complained to me the tariffs were killing their business. Keep in mind this is before any of these were in place.

IMO, Tariffs will get a lot of blame for killing a poor business.

Wow. You have to be pretty bad to fail at storage.

The issue I have with this viewpoint and 172andyou's, is, respectfully -- that I think it suffers from the "curse of knowledge". You're speaking from the experience of someone who has had a career working, albeit sometimes in jobs that didn't give much satisfaction. But overall you've accrued the wisdom of having direction and purpose so you have a good idea of how you would spend that time using the benefit of hindsight. Younger people don't have that. Those without marketable skills, without experience, without a resume -- those are the first people going on UBI (I know in theory we all receive UBI, but by "going on it", I mean those foregoing work and relying on it permanently as sole means of income). Those people are not wise, often listless, lacking direction/purpose.

You know, the only time in my life that I ever blindly followed the expectations of the rest of the world was when I went to college straight out of high school... And I'd have probably done better in life if I *hadn't* done that. There are plenty of (rich) kids who take a "gap year" and backpack through Europe or whatever. Imagine if everyone had that opportunity to take some time to figure themselves out and THEN decide what they want to do with their life.

I don't think that working has given me any of the things you think it has. Wisdom comes with experience, but not just WORK experience. In fact, most of the wisdom I have comes from experience interacting with people. Some of them were coworkers, but I think I've gotten more wisdom from those who weren't.

Alternatively, let me put it like this... Let's assume you have kids that are high school age. And let's also assume you have a big pot of money from your career. You're not going to give them an inheritance, instead you're going to pioneer a family form of UBI since it's a desirable thing.

Would you be willing to sit down with your kids their senior year of HS and promise to write them each a $50,000 post-tax check (+health insurance), adjusted for inflation each year, so they can follow their dreams, with the only stipulation that they can never have a job?
There's no bonus payment for working harder, no deduction for destructive behavior. You want them to have freedom after all, not burdened by the tyranny of employment or external standards. That's enough money where they don't have to worry about their needs, but they're also not going to get rich. Do you think that would harm them or help their personal development? How do you think they'll be doing 2, 5, 10 years after the experiment starts?

First of all, that's much higher than UBI would be. Like I said, poverty level. And you can absolutely have a job and work harder and be rewarded for it. There's still a deduction for destructive behavior, but it just makes you go back to the starting square, it doesn't kick you out of the game.

And how is that different from all the kids who are living in their parents' homes right now because they've figured out that the world sucks and they don't want to play the game? Or they're trying to play the game and losing?

Did/will you kick your kids out of the house at 18 to fend for themselves? Or did/will you help them find direction and purpose in life? Did/will you help them with college or tech school expenses? If these are all "Did", you've already done the "Family UBI" experiment. How'd they turn out?

And I hate to say it, but even for those that would adjust to it, you can only travel so many places, volunteer for so many church events, strum on the guitar for so many hours, try your hand at other hobbies painting/reading/star-gazing -- until you start to get terribly bored. What makes those hobbies gratifying is that time is scarce, so you value them more. "Absence makes the heart grow fonder" and such.

I vehemently disagree.

There are OODLES of places I'd love to travel, and not just for a weekend/week vacation, but enough time to really experience them and get a feel for the place. I was lucky enough to live in the Netherlands for a year when I was growing up. I went to first grade there and learned how to read and speak Dutch with other kids my age and it was a wonderful experience. I have many fond memories of that year, and we went to lots of other places in Europe because of the luxury of proximity. I got to see the crown jewels, Big Ben, the Eiffel Tower, Anne Frank's hiding spot, windmills, castles, museums of many kinds, ride on a hovercraft and a hydrofoil that were both big enough to ferry cars (both across the English Channel, before the Chunnel), and experience other cultures.

If I had the time (and money...), I'd love to spend some time in Japan, South Korea and other "western" Asian countries, Australia and New Zealand, parts of South America (my family lived in Brazil for a few months before I was born and my BIL lived in Chile for a while), Puerto Rico and the rest of the Caribbean... I could easily take five years of my life just for travel and nothing else.

As it is, right now I'm down to playing with a quartet for an hour maybe once a month on average. I'd much prefer an hour or two a week, and to have time available to do more arranging for the group... Or even just arranging for other types of groups and learning other musical instruments so I could overdub and create recordings on my own.

I would like to fly all the airplanes to all the places.

I could be granted an entire second lifetime and never get bored.