U.S. Manufacturing Is Dead, Right?

Matt Welch | December 5, 2008

Wrong, says urban theorist Joel Kotkin, in a column excoriating any kind of bailout for the Big Three automakers.

Indeed, until the globalization of the financial crisis, American manufacturing exports were reaching record levels. Overall, U.S. industry has become among the most productive in the world – output has doubled over the past 25 years, and productivity has grown at a rate twice that of the rest of the economy. Far from dead, our manufacturing sector is the world's largest, with 5% of the world's population producing five times their share in industrial goods. [...]

Fortunately, the Big Three do not represent the entire picture of American manufacturing. Even within the Great Lakes region, Wisconsin, which ranks second in per capita employment in manufacturing, has held onto most of its industrial employment due to its large, highly diversified base of smaller-scale specialized manufacturers.

If Congress and President Obama want to figure out how to restart our industrial economy, they need to travel not to Detroit but to an alternative universe that includes the South and Appalachia, where most of the new foreign-owned auto manufacturers have clustered. States like Alabama, with the second-largest per capita concentration of auto-related jobs, as well as South Carolina, Tennessee, Kentucky, Georgia and Mississippi, have been growing these high-wage jobs for a new generation. In the process, they have brought unprecedented opportunity to some of the nation's historically poorest regions.

Kotkin's reason archive here.

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Comments

Lefiti|12.5.08 @ 4:38PM|#

Yeah, this whole recession thing is a crock. Americans are eating lots of cake and whipped cream and aren't worried about a thing other than where to spend that money that's burning a hole in our pockets.

Lefiti|12.5.08 @ 4:48PM|#

Those damned foreigners are just exploiting the poorest members of society so that you libertards can drive cheap cars thereby driving the three of the greatest companies in the world into the dirt.

classwarrior|12.5.08 @ 4:50PM|#

It should be noted, as Reason has on occasion, the the southern states are among the worst at doling out corporate welfare to attract new industries, which doesn't work, except when it does.

|12.5.08 @ 4:53PM|#

Far from dead, our manufacturing sector is the world's largest, with 5% of the world's population producing five times their share in industrial goods. [...]

Worth pointing out when people complain we use 25% of the worlds energy.

Jordan|12.5.08 @ 4:57PM|#

It should be noted, as Reason has on occasion, the the southern states are among the worst at doling out corporate welfare to attract new industries, which doesn't work, except when it does.

Who the fuck said it doesn't work? We don't oppose corporate subsidies on utilitarian grounds.

ed|12.5.08 @ 5:00PM|#

Wisconsin, which ranks second in per capita employment in manufacturing, has held onto most of its industrial employment

That's it. I'm moving there. I love cheese, and as I get older I've come to appreciate large-thighed blonds. It seems like a win-win to me. Don't they also have a football team or something?

EJM|12.5.08 @ 5:06PM|#

Don't they also have a football team or something?

Yes, the team is called the Milwaukee Bombers.

(I assume that you're referring to Australian-rules football.)

Gilbert Martin|12.5.08 @ 5:21PM|#

"Worth pointing out when people complain we use 25% of the worlds energy."

When I hear people saying that, my response is that energy (i.e oil, natural gas, etc.) doesn't belong to "the world" in the first place.

It belongs to whoever has legal title to it - which would be us when we buy it to use. So we aren't using anyone else's "share" of anything. We bought it, we own it, it's ours.

We have every right to use as much energy as we can pay for and want to use.

Gilbert Martin|12.5.08 @ 5:24PM|#

"If Congress and President Obama want to figure out how to restart our industrial economy, they need to travel not to Detroit but to an alternative universe that includes the South and Appalachia, where most of the new foreign-owned auto manufacturers have clustered. States like Alabama, with the second-largest per capita concentration of auto-related jobs, as well as South Carolina, Tennessee, Kentucky, Georgia and Mississippi, have been growing these high-wage jobs for a new generation. In the process, they have brought unprecedented opportunity to some of the nation's historically poorest regions."

Yes but most of them are right to work states where the politicians are not completly in the pocket of the UAW and other labor unions. Obama and Congressional Dems, don't want to spotlight that kind of success.

Hat Trick|12.5.08 @ 5:48PM|#

Those damned foreigners are just exploiting the poorest members of society so that you libertards can drive cheap cars thereby driving the three of the greatest companies in the world into the dirt.

Uhhhh ... three of the greatest companies in the world? You can't be serious. GM, Ford, and Chrysler are, by design, inefficient. Job sharing the job banks ensure that 2.5 people are paid to do the job that one person can do alone.

That's not their only problem, and management is certainly culpable in this, but they are a long, long, long, long, long way from being "great companies."

Seward|12.5.08 @ 5:49PM|#

classwarrior,

The general point is that those companies would go there whether the goodies were given out or not. The best thing a state can do is to improve company neutral factors like roads, schools, etc. and let those be the means by which it attracts companies.

|12.5.08 @ 5:54PM|#

We have every right to use as much energy as we can pay for and want to use.

Hear, hear!

The thing that drives me up the wall is when pinkos flap their mouths about "income distribution". Income isn't distributed, it's earned. If you want to help poor people, figure out they can earn more, not how they can get the government to plunder those who do.

-jcr

|12.5.08 @ 6:00PM|#

Something that's been going through my mind a lot lately is the idea that once the Big Three are gone, it's likely to open up a new era in transportation. Foreign companies are doing fine building cars in the USA, but it seems to me that new companies could too, if they're willing to completely re-think the design and manufacturing processes.

-jcr

|12.5.08 @ 6:04PM|#

I suspect there are small manufacturers all over the midwest salivating at the thought of the smokin' deals available when GM, Ford, and Chrysler start shutting down plants and auctioning off the machine tools and other equipment. I know a guy who will, in all likelihood, be right in the front row, waving a big wad of cash.

Mad Max|12.5.08 @ 6:07PM|#

"States like Alabama, with the second-largest per capita concentration of auto-related jobs, as well as South Carolina, Tennessee, Kentucky, Georgia and Mississippi, have been growing these high-wage jobs for a new generation."

That's all very well, but in the South, if you're not careful, you might have your delicate sensibilities affronted by the sight of a Ten Commandments monument. Fortunately, the vigilance of federal courts will hopefully save the Southen people from this danger.

|12.5.08 @ 6:10PM|#

Here's a question. Since the Big 2.5 suck at automaking and are inefficient, how come more competition hasn't risen domestically? It's not labor costs, since foreign manufacturers operate here. Could there be legal barriers to entry? Or maybe the capital requirements are just too high?

|12.5.08 @ 6:13PM|#

Manufacturing sector jobs suck! Long hours, low pay, tedious repetitive work. Give me the high paying service sector jobs!

I don't know where the myth comes from that service jobs are crap low wage jobs, but it's not true. From my perspective that applies to manufacturing. Pundits and politicians act like service employees are only things like hair stylists and waiters, but they include jobs in medicine, software, media, three high paying areas where the US is leading the world.

Hat Trick|12.5.08 @ 6:25PM|#

Here's a question. Since the Big 2.5 suck at automaking and are inefficient, how come more competition hasn't risen domestically? It's not labor costs, since foreign manufacturers operate here. Could there be legal barriers to entry? Or maybe the capital requirements are just too high?

ProLib,

I think the barriers to entry are:
1. Massive capital requirements
2. Long production cycles (this feeds #1, above)
3. Access to distribution networks
4. Service/warranty requirements

No Name Guy|12.5.08 @ 6:26PM|#

Pro Lib

There are capital / legal barriers. Apparently, the feds require that auto manufacturers provide a 10 year stock of spare parts.

Also, as has been shown in my line of work (aerospace) there are significant technical barriers to entry. Witness the recent Chapter 11 of Eclipse aviation (just google it). The guy who founded the company came out of a tech company thinking he could build airplanes similar to servers, chips or software. It doesn't work when there are myriad safety requirements to satisfy that take a large experience base to understand.

I suspect there are similar technical barriers to entry in the auto business (for example, meeting Fed crash worthiness standards). That said, once the big 2.5 die off, there will be a large pool of technical workers who DO have that knowledge available at cut rate prices.

|12.5.08 @ 6:30PM|#

how come more competition hasn't risen domestically?

Good question.

Believe it or not, there are a lot of barriers to entry erected by the government.
Crash testing multiple prototypes definitely hurts.
EPA emission certification is apparently an incredibly expensive and complex process.
I believe there may be some sort of (ridiculously low) production number threshold before you become subject to the full weight of the regulations, but being a start-up auto manufacturer would be tough sledding.

Tesla might get a special break, or just fly below the radar, because they are all electric.

Lefiti|12.5.08 @ 6:32PM|#

Gee, who determines who has the legal right to what? Could it be the state?

|12.5.08 @ 6:35PM|#

Now, if you could buy a properly packaged Saturn (for example) as a going concern, you might be able to make a go of it.

|12.5.08 @ 6:35PM|#

Hat Trick,

That sounds reasonable. The only new operation of note that I can think of is Tesla, and that's backed by Elon Musk, who has enough money to also be running his own space program.

I do wonder if the legal power of the unions or the political influence of the Big 2.5 has anything to do with it, too, though I'll grant that the financial challenges are considerable.

|12.5.08 @ 6:37PM|#

Gee, who determines who has the legal right to what? Could it be the state?

Ouch! Stop hitting me!

MNG|12.5.08 @ 6:38PM|#

Whhhhaaat?

So I read this post and thought: that can't be right. I went to the US Statistical Abstract of the US, the manufacturing section, and clicked on Table 976. Look at all the negative percent change in manufacturing employment from 1990-2000 (-2.4% over all manufacturing) and 2000-2006 (an incredible -178%). Wow. Talk about not having the whole story! Shame reason, shame.

http://www.census.gov/compendia/statab/cats/manufactures.html

|12.5.08 @ 6:41PM|#

The Detroit Dinosaurs have no incentive to see any of the regulatory barriers lowered. They have already invested vast amounts of time, money, and energy getting behind them.

MNG|12.5.08 @ 6:44PM|#

"In the process, they have brought unprecedented opportunity to some of the nation's historically poorest regions."

Well yeah, companies love to relocate in any nations "historically poorest regions." The bargaining power between employer-employee is at its most unequal here and the agreements are thus less and less truly voluntary. Most people don't view that as a good thing...

|12.5.08 @ 6:46PM|#

No Name Guy,

I follow the various private space efforts, and I know that one big issue for them is getting the FAA to lighten up on some of its standards. Frankly, the government should do a lot more to encourage new industries by giving them tax and regulatory breaks, where reasonable (leaving aside my libertarian ideals for the moment).

MNG|12.5.08 @ 6:47PM|#

"The Detroit Dinosaurs have no incentive to see any of the regulatory barriers lowered."

Oh yeah, look at how hard they fought to help Ralph Nader and the like get those regulatory barriers in place!

|12.5.08 @ 6:48PM|#

MNG,

Many of those barriers aren't consumer protection regulations, I'm sure. That's the case in other industries, anyway.

MNG|12.5.08 @ 6:49PM|#

You know, if only the whole country could adopt the South's strategy of having large pockets of poverty and historically oppressed populations then our industry would take off!

Hat Trick|12.5.08 @ 6:51PM|#

Well yeah, companies love to relocate in any nations "historically poorest regions." The bargaining power between employer-employee is at its most unequal here and the agreements are thus less and less truly voluntary. Most people don't view that as a good thing...

Yes, most people don't view that as a good thing. There is one exception though: the poor people in that region that now have a better job and more opportunity than they did prior to the arrival of the evil corporations tend to view it as a very good thing.

|12.5.08 @ 6:54PM|#

MNG,

I think you're going too far in reviling the South. Paying people $30/hour for semi-skilled labor in Alabama isn't quite the same as exploiting children in Indonesia, after all.

MNG|12.5.08 @ 7:04PM|#

I'm not trying to revile the South, I'm just pointing out that a strategy of "just have less well compensated workers" is not a good one to bank on or one that we should heartily endorse.

I mean, if only our nation was destitute think of how the textile industry would take off again here!

MNG|12.5.08 @ 7:05PM|#

"There is one exception though: the poor people in that region that now have a better job and more opportunity than they did prior to the arrival of the evil corporations tend to view it as a very good thing."

Yeah Hat Trick, it's a real humanitarian effort!

It has the effect of making sure that wages everywhere go down as low as possible which is a less than great effect.

MNG|12.5.08 @ 7:09PM|#

"Many of those barriers aren't consumer protection regulations"

What is the nature of these barriers then? I'm not trying to be smart, just curious. Worker protections? Environmental regulations?

A factory in in town A where the workers demand in bargaining 40 dollars an hour. In town B there is destitute poverty and the factory leaves town A and goes to town B an offers them 15 dollars an hour. Yes, things just improved for town B. Town A is now destitute. Overall employee well being is lowered, not raised. But employers love to fund libertarian think tanks to point out the 0-15 hourly raise in hourly incomes in the destitute area as if this was not some trade off from a set up which was, overall, better for labor.

|12.5.08 @ 7:18PM|#

On the regulatory front, in industries where I have more knowledge, there are often any variety of regulations that are really more barriers to entry than actual consumer protection. Licensing laws are a great example of that, but it's common in industries with a lot of political clout, particularly at the state level. In Florida, we have any number of special laws for entities located in Kissimmee that involve giant rat-like creatures. I'm sure some of those are intended to be barriers to major new competition.

|12.5.08 @ 7:22PM|#

Pro Libertate,

The problem is, there are very very few people making 30 bucks an hour in factory jobs in Alabama. Including those working in AL's new auto industry.

But there are most likely a shit load of folks in Alabama working in the new auto industry that would love to!

So the choice becomes, should we allow these workers to collective bargain? And how much power should the state have to prevent that?

It's basically a matter of infrastructure cost and low labor costs versus dropping all that infrastructure and moving to the next poor state/town that would love those 15 buck an hour jobs.

Hat Trick|12.5.08 @ 7:32PM|#

Yeah Hat Trick, it's a real humanitarian effort!

It has the effect of making sure that wages everywhere go down as low as possible which is a less than great effect.

I hate to break it to you, but wages are already as low as possible. If they were lower, people would not work.

Humanitarianism is not the intent, but the end result is more opportunity for workers in the South.

MNG|12.5.08 @ 8:20PM|#

"but the end result is more opportunity for workers in the South."

And less for the workers in the North from whence the jobs came. You forgot that.

And I meant that when a plant moves from A to B the destitute people in B work for a low amount and now the newly destitute workers in A are willing to work for much less than they did for the factory when it was in A. Read my example again.

MNG|12.5.08 @ 8:23PM|#

The poor people in the South "win" by making more than they did yes but what they make is less than the loss by the originally well off but now poor (go visit Flint) people whose jobs they got. So the overall wellbeing of workers has been eroded not raised.

So instead of, say, 1000 upper middle class workers in Flint and 1,000 poor workers in Birmingham, you get 1,000 poor people in Flint and 1,000 lower middle class people in Alabama. Net loss.

Pac|12.5.08 @ 8:53PM|#

MNG, remember you're talking to people who think sweat shop labor is an opportunity. That's some seriously deluded shit, but I'm the troll.

Pac|12.5.08 @ 8:54PM|#

Manufacturing industry is fine and dandy? Tell that to northwest indiana

Kolohe|12.5.08 @ 9:32PM|#

A factory in in town A where the workers demand in bargaining 40 dollars an hour. In town B there is destitute poverty and the factory leaves town A and goes to town B an offers them 15 dollars an hour. Yes, things just improved for town B. Town A is now destitute. Overall employee well being is lowered, not raised. But employers love to fund libertarian think tanks to point out the 0-15 hourly raise in hourly incomes in the destitute area as if this was not some trade off from a set up which was, overall, better for labor.

So instead of, say, 1000 upper middle class workers in Flint and 1,000 poor workers in Birmingham, you get 1,000 poor people in Flint and 1,000 lower middle class people in Alabama. Net loss.

Krugman got his award this year for work from a few years ago that said, 1) it's not this Econ 101 simple, and 2) it can work out as a net gain.

jk|12.5.08 @ 9:34PM|#

So instead of, say, 1000 upper middle class workers in Flint and 1,000 poor workers in Birmingham, you get 1,000 poor people in Flint and 1,000 lower middle class people in Alabama. Net loss.

The "workers" in an auto plant are robots and other automated or semi-automated machines. As automation technology progresses, there will be fewer and fewer human "workers". I suspect that it is the one-job-for-life culture, as much as the wages, that makes Detroit a troublesome place to run a manufacturing business.

SIV|12.5.08 @ 9:44PM|#

I believe one of the biggest barriers to new domestic car manufacturers is regulatory compliance(safety, emissions).The aftermarket produces the parts to build whole cars such as 1960s Mustangs.

MNG|12.5.08 @ 9:51PM|#

You know, we have a case, with the automakers, where we have some American companies doing poorly and some Japanese companies doing not as bad. So it does make sense to ask, what's different about them and then conclude that might be the cause.

The problem is that unions and good pay/benefits are not the only ways these two companies differ. The Japanese government provides support to their companies (keeping the yen low, funding R&D, keeping out imports, providing government health care, etc) in ways that would make libertarians shit their pants in anger, but I don't see anyone claiming that it is THIS difference that makes the Japanese companies perform better than the American ones.

Colonel_Angus|12.5.08 @ 9:52PM|#

MNG:

"So I read this post and thought: that can't be right. I went to the US Statistical Abstract [....] Wow. Talk about not having the whole story! Shame reason, shame."

What it means is that while employment may be lower, production can still get higher as the efficiency of these industries increases. Manufacturing more with less labor.

cuernimus|12.5.08 @ 9:53PM|#

So instead of, say, 1000 upper middle class workers in Flint and 1,000 poor workers in Birmingham, you get 1,000 poor people in Flint and 1,000 lower middle class people in Alabama. Net loss.

But at the sacrifice of living standards for some people you get an increase in the standard of living for another group and some 300,000,000 people now have the option to buy a car at a lower cost (or at the very least the company can stay competitive).

I think the bigger problem is how to keep enough people contented as more and more jobs across all wage levels become replaceable by robotics.

irate-of-late|12.5.08 @ 9:54PM|#

Lefiti - Pac - classwarrior - even non troll MNG,
the day you have to liquidate your business and the opportunity of work you have given your former employees because the regulations liberals dearly advocate make it unprofitable to continue as an independent operator is the day you drop the nonsensical support of anti-business policies you support. Happened to me three and a half years ago, but I doubt if any of you will ever fit these shoes, and thus don't have much to worry about. Why this site attracts more people hostile to freedom than those who advocate it is beyond me.

MNG|12.5.08 @ 9:55PM|#

"I believe one of the biggest barriers to new domestic car manufacturers is regulatory compliance(safety, emissions)."

And the regulatory compliance in Germany for BMW is comparitively light? I don't buy that.

~A|12.5.08 @ 9:56PM|#

MNG, I disagree with your logic.

I work for a manufacturing company that moved their assembly operations to the south. The company was paying higher union wages up north. Their options, as opposed to the ones you propose, were either lower their labor costs, or go out of business.

So, there is a net gain. If they had stayed up north, no one would have a job. Because they moved, the company is still making money, and the previously out of work textile/furniture factory workers here in the south are now happily (yes, really) employed.

Egosumabbas|12.5.08 @ 9:56PM|#

I know this is anecdotal evidence, and I can't speak for other industries, but my current job is at a manufacturing plant of flight simulators, and things are going amazingly well.

We've been hiring new workers (software, hardware, it doesn't matter) and farting out new units like there's no tomorrow.

How much you want to bet that the job losses are principally in the following sectors:

1) Housing
2) Finance
3) Local and State government

Sectors which were part of the massive bubble that finally imploded.

MNG|12.5.08 @ 9:59PM|#

"What it means is that while employment may be lower, production can still get higher as the efficiency of these industries increases. Manufacturing more with less labor."

Oh Col I agree that's how they were able to make the article seem so cheery. But if you told the American people "hey, don't worry about manufacturing, we are manufacturing a little more now than we were we are just doing it with many, many less employees" I don't think they are going to go "hot damn!." Americans give a shit about the auto industry not because we take pride in the stockholders making bigger dividends off of higher productivity resulting in laying off workers but because we are glad to see working people make good money. At least a lot of us are.

irate-of-late |12.5.08 @ 9:59PM|#

One hundred years ago the majority of workers were independent operators like I use to be, the standard of living was increasing at a rapid rate and was more equitably distributed instead of 'spottily' so as it is now. Progressivist policies have had every thing to do with this fundamental cultural change.

MNG|12.5.08 @ 10:01PM|#

"Their options, as opposed to the ones you propose, were either lower their labor costs, or go out of business."

Maybe their CEO's could have trimmed their Golden Parachutes or their big holders could have bought a used yacht instead of a new one? My point being that just as my example above is simplistic I think the "they had to either lower labor costs or go out of business" is usually far too simplistic.

Kolohe|12.5.08 @ 10:01PM|#

To expound further on my 9:32

1) I acknowledge that the trend toward equilibrium in wages (something between 15 and 40 dollars, or if China's involved something between 2 and 40 dollars) is possibly closer to the Econ 101 gut instinct with implications that would make many on both left and right squirm.

2) That said, what are going to do about it? Sure, to keep the factories here rather than China, you can point a gun to peoples' heads and say they must pay additional for anything brought in from China (more on this below). But what are you going to do to prevent a factory from closing in Flint and opening in Spartansburg? You cannot (at least per our constitution) either a) demand additional money if a widget is made in SC than if it is made in MI, or b) just mandate that your factory must stay in MI

3) Per free trade with China- maybe it would have been better to 'manage' trade with China to slow down the shift. I am skeptical. Nonetheless the horse is out of the barn. And it seems morally dubious, at best, to tell other countries - industrial revolution? no, not yours.

Pac|12.5.08 @ 10:02PM|#

Irate of late,

You don't know me, go fuck yourself.

DOn't assume you know my beliefs, sorry im not a knee jerk "free market" lover. I happen to draw a line at certain things sorry if that bums you.

MNG|12.5.08 @ 10:03PM|#

"One hundred years ago the majority of workers were independent operators like I use to be, the standard of living was increasing at a rapid rate and was more equitably distributed instead of 'spottily' so as it is now."

Brother, I'm going to have ask you to produce some evidence for that, especially the latter claim. There was more income equality in 1908?

I might buy the first claim only in the sense that when you move from a very low baseline you tend to have a high rate of increase, but that is really misleading you know.

irate-of-late|12.5.08 @ 10:05PM|#

And the regulatory compliance in Germany for BMW is comparitively light? I don't buy that.

If you are among the 'protected' in Germany with a high paying Union job you got through nepotism sure that job is gravy, otherwise you have few choices besides being on the dole.

MNG|12.5.08 @ 10:09PM|#

" know this is anecdotal evidence, and I can't speak for other industries, but my current job is at a manufacturing plant of flight simulators, and things are going amazingly well."

Yes, that's the problem with anecdotal evidence. Check the link I supplied above, manufacturing, at least as indicated by employment, has taken a beating for decades. You're the exception.

Kolohe

I agree that this thing, once it gets rolling, is hard to fight. I would say you could federalize things in some ways to combat the move from Flint to Spartanburg, but I think its thornier than this because if you do not allow your domestic companies to follow the cheap labor both within and outside of the US then you can't stop their foriegn competitors from doing that (making cars in low labor costs nations) and then you've priced the domestics out of competition. Then the only alternative would be a tariff to "equalize" things, but that has a lot of stinky consequences too as I'm sure you probably are much aware of...

I guess my position is that there is not much to do about it, but I don't have to celebrate it as wome wonderful thing for poor or working people around the nation either...

economist|12.5.08 @ 10:10PM|#

"The poor people in the South "win" by making more than they did yes but what they make is less than the loss by the originally well off but now poor (go visit Flint) people whose jobs they got."
As a Georgia resident working at one of those relocated plants (albeit not on the floor), I have one thing to say: boo-fuckity-hoo.

Pac|12.5.08 @ 10:11PM|#

God I hate my life!

MNG|12.5.08 @ 10:12PM|#

irate
Your making my point. People here say, American companies are doing worse than Japanese and German companies and the difference is that American companies have high wages and unions so it must be that which is the cause. But my argument is that Japan and German companies are different in other ways that might matter: they get a lot of support from their governments.

Then SIV says "well American production must suffer from our regulatory environment." But I pointed out BMW because surely Germany has, as you seem to acknowledge, MORE regulation and big welfare state stuff and yet BMW does well.

irate-of-late|12.5.08 @ 10:12PM|#

Pac | December 5, 2008, 10:02pm | #
Irate of late,

You don't know me, go fuck yourself.

DOn't assume you know my beliefs, sorry im not a knee jerk "free market" lover. I happen to draw a line at certain things sorry if that bums you.

I don't need to know you, don't want to know you, and believe me, you sure as hell don't want to know me.

I've read enough of your silly posts to know that you make Bambi before the momma killing look jaded in the breath of you naivite.

MNG, I appreciate that you would like to see the hard evidence, not in any condition to produce it for you tonight. Promise to get back to you on that when I can.

MNG|12.5.08 @ 10:13PM|#

economist
I did not know you are in Georgia.

I'm sorry, man, I truly am. I'm here for you.

economist|12.5.08 @ 10:14PM|#

MNG,
You're skating dangerously close to the "broken windows" fallacy with your obsession with the share of employment that is in manufacturing. Higher per-worker productivity really isn't such a bad thing. In fact, it's a healthy sign of techonological progress. And increasing efficiency. Of course, if we want to go by a luddite view...

MNG|12.5.08 @ 10:14PM|#

Yeah pac, that was quite harsh quite quickly doncha think?

economist|12.5.08 @ 10:15PM|#

MNG,
Georgia isn't the worst. All you have to do is think about the fact that you could live in some godforsaken third-world hellhole, like Mississippi.

jk|12.5.08 @ 10:16PM|#

I think the bigger problem is how to keep enough people contented as more and more jobs across all wage levels become replaceable by robotics.

I was surprised to learn that deflation is a big worry for our overlords in this current economic crisis. The high-tech sector of the economy has always been deflationary. So what would happen if automobiles or houses became less expensive over time, like computers have?

Maybe people wouldn't have to work as hard to get enough money to pay for the goods and services that make them content.

economist|12.5.08 @ 10:17PM|#

"And it seems morally dubious, at best, to tell other countries - industrial revolution? no, not yours."

You could always just say it's because they put lead in dog food or something.

MNG|12.5.08 @ 10:18PM|#

I'm not trying to argue against higher productivity. I don't want 75% of our nation working on farms, I like that 3% of our nation can produce more food than the 75% who worked on farms 100 years ago had to.

I just think all of these car companies can afford to pay their workers Big 3 Northern money but they don't in return for excessive $ to management and holders. Management and holders need to make money too, but a model more like the Japanese companies where management doesn't make so much more than the the average worker would be more acceptable. Yes economist, I want this problem solved by raising your wages to GM Yankee standards.

economist|12.5.08 @ 10:18PM|#

jk,
It's all of a conspiracy. No, I'm not like LoneWacko. Stop! No, NOT THE STRAITJACKET!

Kolohe|12.5.08 @ 10:20PM|#

The problem is that unions and good pay/benefits are not the only ways these two companies differ. The Japanese government provides support to their companies (keeping the yen low, funding R&D, keeping out imports, providing government health care, etc)

The glib, but mostly correct, response is you left off a key part of how the companies differ: the Japanese companies are creating cars people want, the Americans not so much.

We are also comparing cars built in America, I thought, so the yen manipulation and home country import restrictions are a bit of red herring - but not excessively so. (two additional asides 1) the Japanese cars have not competed on price in many years, although the Koreans defintely do. But most Japanese cars are more expensive than their American counterparts and have been since the early 90's 2) I am skeptical that the Japanese govt provides much direct R&D support to their industries, but don't have any data)

But back to the point - you cannot blame anyone but the big 3 management itself why they don't have something like the prius rolling off the lines in Detroit or Atlanta which even with the downturn in economy and gas prices, dealers can't keep in stock. (To be fair, the Honda Insight does seem to be something of an Edsel)

MNG|12.5.08 @ 10:20PM|#

I'm mostly kidding about GA. I don't like their politics and they were in the wrong at some historical points (just like every state I can think of), and Georgian people can be very nice. I don't care much for the heat.

But yeah, Mississippi is like the Devils Asshole. We shoud cede that baby to Mexico or Guatemala and be done with it.

economist|12.5.08 @ 10:21PM|#

MNG,
It may be that the big three are failing because they give too high of wages to management. Having seen managers in action myself (and having worked in a semi-managerial capacity) I can safely say that it probably doesn't merit that much higher pay. And who knows? Maybe that's why the big 2.5 (3?) are getting their asses kicked by Japanese companies. Markets tend punish irrational pay structures.

irate-of-late|12.5.08 @ 10:22PM|#

economist | December 5, 2008, 10:15pm | #
MNG,
Georgia isn't the worst. All you have to do is think about the fact that you could live in some godforsaken third-world hellhole, like Mississippi.

I agree, the Atlantic coast Southern states are not bad, and you can travel up and down the coast and see the wheels of industry and progress churning things out 24/7. Mississippi however is the ass end of everywhere.

Lefiti|12.5.08 @ 10:22PM|#

Hat Trick | December 5, 2008, 5:48pm | #
Those damned foreigners are just exploiting the poorest members of society so that you libertards can drive cheap cars thereby driving the three of the greatest companies in the world into the dirt.

Uhhhh ... three of the greatest companies in the world? You can't be serious. GM, Ford, and Chrysler are, by design, inefficient. Job sharing the job banks ensure that 2.5 people are paid to do the job that one person can do alone.

Spoofer 1; Hat Trick 0

economist|12.5.08 @ 10:22PM|#

"We shoud cede that baby to Mexico or Guatemala and be done with it."
Do you hate Latin Americans, MNG? Because that's the only reason I can think of to saddle Mexico or Guatemala with Mississippi.

MNG|12.5.08 @ 10:23PM|#

Point taken Kolohe. Bad, bad management and unwise union decisions aplenty in the Big 3.

But my point is (dealing with the overall success of Japanese automakers and American automakers) that the fact that one has unions and the other does not is not the only difference that might matter between them, just the most talked about one around these parts...

btw-giving the home companies advantages in their own markets can then help them have a competitive advantage in US markets, right?

economist|12.5.08 @ 10:23PM|#

Lefiti,
Real Lefiti or fake Lefiti?

economist|12.5.08 @ 10:25PM|#

MNG,
I'm fully aware that unions aren't the only difference between Japanese and US auto companies. The Japanese are also crazy smart (mild Japanophilia).

Spoofer|12.5.08 @ 10:26PM|#

Real Lefiti or fake Lefiti?

Does it matter?

economist|12.5.08 @ 10:26PM|#

And they all work, like, 23 hours a day (severe ignorance).

economist|12.5.08 @ 10:26PM|#

"Does it matter?"
Good point.

MNG|12.5.08 @ 10:27PM|#

I think the ratio of CEO pay to avg. worker pay in Japan is 50 to 1 and in the US it is like 400 to 1. Maybe that is why our companies are getting it handed to them.

As always Kolohe, economist and others it's been nice, but I gotta go sleep now. Be back tomorrow.

kinnath|12.5.08 @ 10:29PM|#

The Big 3, back then, celebrated a major victory when they convinced the UAW to accept future retirement benefits in lieu of current wages.

Three decades later, the current Big 2.5 are fucked by their prior victory.

Que Sera Sera

irate-of-late|12.5.08 @ 10:31PM|#

economist | December 5, 2008, 10:25pm | #
MNG,
I'm fully aware that unions aren't the only difference between Japanese and US auto companies. The Japanese are also crazy smart (mild Japanophilia).

I have a friend who is such a Japanophile he moved there and works as an artist in the video game industry. He tells me though that his Japanese coworkers are unbelievably inefficient. They make work all day, and then they stay many more hours than they need to and pretty much live their lives on campus. The American click of designers at the company
however, tend to structure their days so they can get every thing completed that needs to be completed in an eight to ten hour time frame so they can get the hell out of the office, and enjoy the big city.

economist|12.5.08 @ 10:31PM|#

Well, now that MNG has left, there's no intelligent opponent to argue with. Just Lefiti-bot.

economist|12.5.08 @ 10:32PM|#

irate,
Thanks for shattering my illusions.

Kolohe|12.5.08 @ 10:32PM|#

they don't in return for excessive $ to management and holders.

I'm not going to argue that management is overpaid, but the 'holders' (I presume you mean stockholders) have been almost wiped out. A 25 dollar stake in GM in 1978 (the furthest google finance goes back) is now worth 4 bucks.

Including dividends, which by a quick glance looks to be about a buck fifty per year for a stake that size - and only since 87 - so ignoring time value of money, another 30 bucks over the last few decades, a net then of 30-25+4 = plus 9 dollars.

Spoofer|12.5.08 @ 10:33PM|#

I can be intelligent.

What do you want to argue about?

economist|12.5.08 @ 10:36PM|#

As to MNG's final post, I can actually believe that a lopsided CEO to average worker pay could contribute to companies failing. Which is part of the reason why people shouldn't be up-in-arms for the government to "do something" about the pay disparities. If they really are a huge problem, they tend to work themselves out.

kinnath|12.5.08 @ 10:36PM|#

I'm touch myself while drinking the dole

irate-of-late|12.5.08 @ 10:36PM|#

economist | December 5, 2008, 10:31pm | #
Well, now that MNG has left, there's no intelligent opponent to argue with. Just Lefiti-bot.

True that. I'd play devil's advocate, but I'm too drunk right now to advocate for ideas I believe in much less than those that I don't.

kinnath|12.5.08 @ 10:37PM|#

I hate myself

economist|12.5.08 @ 10:37PM|#

Spoofer,
That depends. Since you spoof Lefiti, you probably agree with me on the topic of this thread.

Do you read a lot of science fiction?

economist|12.5.08 @ 10:37PM|#

Who's spoofing kinnath?

|12.5.08 @ 10:38PM|#

If Congress and President Obama want to figure out how to restart our industrial economy, they need to travel not to Detroit but to an alternative universe that includes the South and Appalachia, where most of the new foreign-owned auto manufacturers have clustered. States like Alabama, with the second-largest per capita concentration of auto-related jobs, as well as South Carolina, Tennessee, Kentucky, Georgia and Mississippi, have been growing these high-wage jobs for a new generation.

Of course, that would entail recognizing that these red states that don't coddle unions like Michigan attract jobs and prosperity. Somehow I don't think that politicians salivating at the prospect of passing a national card-check law will find it politically expedient to have that epiphany.

economist|12.5.08 @ 10:38PM|#

irate,
If you're too drunk to play Devil's Advocate, that's all right. I'm too drunk to think straight. Ahh, Friday nights.

economist|12.5.08 @ 10:38PM|#

I AM

kinnath|12.5.08 @ 10:38PM|#

this is the first time I've ever been spoofed by anyone.

I'm getting a little teary-eyed.

economist|12.5.08 @ 10:39PM|#

prolefeed,
Preaching to the choir, son.

Spoofer|12.5.08 @ 10:39PM|#

Do you read a lot of science fiction?

off and on for about 4 decades.

economist|12.5.08 @ 10:39PM|#

Wait a minute, now I've been spoofed!

irate-of-late|12.5.08 @ 10:40PM|#

economist | December 5, 2008, 10:32pm | #
irate,
Thanks for shattering my illusions.

Look at the bright side, the gist I got from it, is efficient American workers are sought at a premium.

economist|12.5.08 @ 10:40PM|#

Spoofer,
So, what's your opinion of Heinlein? Or do you prefer more recent sci-fi?

economist|12.5.08 @ 10:41PM|#

irate,
It doesn't bother me that much, actually, to know that the average Japanese worker is just as lazy and inefficient as my coworkers. I was starting to develop the paranoid Japan-domination fear.

economist|12.5.08 @ 10:41PM|#

About a decade after most people stopped worrying about it.

Spoofer|12.5.08 @ 10:42PM|#

Old school:

1st place, Arther Clarke
2nd place, Asimov
3rd place, Heinlein

More recent

Stephen Donaldson & Terry Pratchet

economist|12.5.08 @ 10:44PM|#

"Somehow I don't think that politicians salivating at the prospect of passing a national card-check law will find it politically expedient to have that epiphany."

If the union reps want to come to my home to "encourage" my support, my .22 will be happy to negotiate.

Spoofer|12.5.08 @ 10:44PM|#

I read every sci-fi on the bookshelf in the high-school library. The librarian would hold new books for me before putting them on the shelf.

30 years later, the only ones I could really tell you about would be Clarke, Asimov, and Heinlein.

Read all the Dune books too.

|12.5.08 @ 10:44PM|#

I think the ratio of CEO pay to avg. worker pay in Japan is 50 to 1 and in the US it is like 400 to 1. Maybe that is why our companies are getting it handed to them.

I believe if you add up the cost of CEO pay, versus the cost of UAW pay, you'll find that one of these two numbers is an order or two of magnitude higher than the other.

Now, if you're arguing that the CEOs running the Big 2.5 into the ground are grossly overpaid relative to their performance, no argument here. But when you have a company losing $5B per month, a couple of seconds of rational thought involving math will reveal that CEO pay is not a major contributor to the red ink they're bleeding.

economist|12.5.08 @ 10:44PM|#

Spoofer,
Damn, I was hoping to have grounds for an argument there! How about you find something we might disagree on?

economist|12.5.08 @ 10:45PM|#

"Read all the Dune books too."
Sorry about that. My opinion is that only the first one is worth reading.

Spoofer|12.5.08 @ 10:46PM|#

How about you find something we might disagree on?

You're ugly ;-)

Spoofer|12.5.08 @ 10:47PM|#

My opinion is that only the first one is worth reading.

Well, one can always hope lightning strikes twice.

economist|12.5.08 @ 10:47PM|#

prolefeed,
CEO pay probably isn't a huge issue. Still, I tend to think upper management is overpaid (Not a political issue with me, more of "Gee, this seems like a bad practical policy" issue).

economist|12.5.08 @ 10:48PM|#

Spoofer,
"You're ugly"
Yeah, well, you're a towel!

economist|12.5.08 @ 10:48PM|#

Slow night here on H&R.

economist|12.5.08 @ 10:49PM|#

With regards to my 10:47 post:
I, however, am not overpaid. In fact, I'm grossly underpaid!

economist|12.5.08 @ 10:51PM|#

"Krugman got his award this year for work from a few years ago that said, 1) it's not this Econ 101 simple, and 2) it can work out as a net gain."

Wow, and I always thought he was a hack.

economist|12.5.08 @ 10:51PM|#

I've killed the thread, haven't I?

|12.5.08 @ 10:52PM|#

I guess we should just go back to our heyday when everyone was a farmer, since some of the people here are hostile to improved productivity if it will cost jobs in that area. If we never got more productive at the expense of jobs in farming we would all be farmers still and there would have been few manufacturing jobs to be had anyway. As we become more productive in certain areas people move on to jobs in other areas, many of which are in new industries. That is what happens, a new industry starts and starts getting employees from other industries that are either dying or improving productivity beyond demand. At first this new industry just keeps adding jobs and then at some point productivity of employees increases faster then new demand and the industry starts shedding jobs. Finally at some point the industry dies because it is replaced with something better. Jobs are just shifted from one industry to another. We have gone from a mainly farming to mainly manufacturing to now more of a service based job force. There is nothing wrong with this. In fact this is a good thing as we are staying ahead of the curve. China and India and others are where we were sixty years ago. Sixty years from now they will likely have more of a service job force instead of manufacturing and hopefully we will have moved on to the next type of job force staying ahead of the curve. If not our standard of living will have dropped significantly.

Spoofer|12.5.08 @ 10:53PM|#

Goodnight economist.

I must put the dogs out one last time, then join the wife in bed.

economist|12.5.08 @ 10:58PM|#

"I must put the dogs out one last time, then join the wife in bed."

I'm gonna get a little more drunk, find a movie to watch, and fall asleep halfway through.

Kinnath|12.5.08 @ 11:00PM|#

OMG, they nerfed my warlock

J Golden|12.6.08 @ 12:31AM|#

US manufacturing is NOT dead!

Check http://vltor.wordpress.com for more info.

Gary|12.6.08 @ 6:00AM|#

We keep hearing of the doom and gloom if taxpayers don't prolong the life of the 'big three'. Jobless figures in the auto sector will however be far lower than is continuously reported....the broken up companies will still design, market and manufacture (for the most) part in the U.S.A. It's not as if every person currently working in the U.S. auto industry will be out of a job overnight.

MNG|12.6.08 @ 9:18AM|#

"I believe if you add up the cost of CEO pay, versus the cost of UAW pay, you'll find that one of these two numbers is an order or two of magnitude higher than the other."

If you go to the website below you will find GM's executive compensation for only its top 5 positions and it totals over 38 million. Now, let's say that all management is similarly overpaid. Now you are getting an amount that certainly could be the factor we are talking about. But the media talk about the laborer pay and benefits much more than the management compensation (I can't even find a figure for all management, just at the executive Pres-VP level).

http://www.companypay.com/executive/compensation/general-motors-corp.asp?yr=2008

MNG|12.6.08 @ 9:20AM|#

I mean, there must be thousands of management positions other than the top five throughout GM. Now you're getting serious dough.

|12.6.08 @ 9:21AM|#

I for one am tired of all these bailouts "handouts". These rich, multi BILLION dollars corporations made their own bed now they must sleep in it. Its Main Street America that is suffering and should be the ONLY concern of Government!

jess
www.privacy-tools.at.tc

Neu Mejican|12.6.08 @ 11:55AM|#

Read all the Dune books too."
Sorry about that. My opinion is that only the first one is worth reading.

For me, you need the wrap up from the second one...but after than, pure shite.

|12.6.08 @ 11:57AM|#

"I believe if you add up the cost of CEO pay, versus the cost of UAW pay, you'll find that one of these two numbers is an order or two of magnitude higher than the other."

If you go to the website below you will find GM's executive compensation for only its top 5 positions and it totals over 38 million. Now, let's say that all management is similarly overpaid. Now you are getting an amount that certainly could be the factor we are talking about. But the media talk about the laborer pay and benefits much more than the management compensation (I can't even find a figure for all management, just at the executive Pres-VP level).

Nice job of moving the goalposts. I was talking about the one (1) CEO per company, whose pay is minimal compared to the red ink each company is bleeding. Since I've proven that particular assertion wrong, now you're trying to drag in thousands more employees and saying, hey, here's the problem. And yet, that's still wrong.

The Big 2.5 have lots and lots of problems, but the biggest problems contributing to their losses are

1) not producing cars that are as desirable as Japanese cars

2) Wrong product mix, and the inability to quickly change said mix in response to market conditions

3) Unionized workers being paid more than their competitor's workers

4) "Job banks" where people get paid almost their full salary to NOT work.

If you cut the pay of all the high-level executives to ridiculously low levels that no one in their right mind would accept, say $1 per year, the Big 2.5 would still be bleeding red ink like crazy. The fact is that the UAW is in one form or the other by far the biggest contributor to these losses. Instead of waking up and saying, hey, we're out of a fucking job if we don't work with management to end the bleeding right now, they're trying to drag out a sweet deal for their members for another couple of years (or months) before their employers go bellyup.

|12.6.08 @ 12:32PM|#

MNG,

"the regulatory compliance in Germany for BMW is comparitively light?"

It absolutely is, in fact, because of BMW being a smaller, more 'specialized' manuf., their regulatory load in the US is lighter as well. German safety standards are much more lax than the US's, furthermore, when we import BMW's, they choose to pay the regulatory penalties because it's cheaper to do that than it is to retrofit their cars to meet US standards.

|12.6.08 @ 12:39PM|#

prolefeed,

"not producing cars that are as desirable as Japanese cars"

If the US automakers could spend that ~$3000 per car on design rather than UAW benefits the cars would be plenty competitive.

MNG|12.6.08 @ 1:07PM|#

"I just think all of these car companies can afford to pay their workers Big 3 Northern money but they don't in return for excessive $ to management and holders."

That's from a post earlier than the one you quoted from which I replied to prole. My overall point has been that management in general could be the ones overpaid, the one post you quote from using CEO pay was a marked example. So the goal posts are right where I left them thank you, read upthread before overconfidently doing your touchdown dances because the play may have been whistled dead 50 yards back (I'm getting ready for the ACC championship, can you tell?).

"but the biggest problems contributing to their losses are"

You state your conclusions, but as I've pointed out there are many other ways that American automaker's competitors have advantages over them that do not fit into your libertarian lenses. Why are they not the cause but the differences you cite are? All are logically edges for the competitors. In other words you have to supply some arguments and evidence for your conclusions.

"German safety standards are much more lax than the US's"

Really? Germany's workplace protections, environmental regulation, employee protection (vacation, overtime, collective bargaining) mandates, tax burdens, industry subsidies, import protections etc are all lower than the U.S? Because these are all differences which would give one nations companies a competitive edge over another. Brother I'm going to need some heavy citing before I believe that one.

left_nut_right_nut|12.6.08 @ 1:08PM|#

what tha fuck is money?
the concept makes my head hurt!

what do you mean leave the island?
press all the buttons at the same time!
i don't know what it means, i'm just a kid!

The Angry Optimist|12.6.08 @ 1:41PM|#

Let me guess that at some point in this thread, MNG pulled out "economic coercion" or some tired retread thereof.

I'm *shocked*.

Naga Sadow, resident of Missis|12.6.08 @ 1:52PM|#

I smell smoke . . .

|12.6.08 @ 2:19PM|#

The UAW for a long time held a monopoly on auto manufacturing labor negotiations in the domestic auto industry. The UAW wasn't worried when Packard, Studebaker, and Americam Motors went belly up because they still had that monopoly on American auto production labor negotiations. The Packard and AMC workers would be absorbed by the big three, so no concessions were made to ailing companies and they went belly up.

Not seeing the competition over the horizon, the big three management (and the UAW) were all fat dumb and happy with the situation. Content with their huge market share and the practice of essentially identical labor contracts for their competitors, management found it all to easy to give in to UAW demands rather than endure a long strike while the other two continued to compete. These concessions would raise the competition's costs the same amount it raised the target company costs, because of the UAW monopoly.

It took management far too long time to realize they were on the road to extinction with the current method of doing business. It has taken the UAW even longer. I'm not sure Gettlefinger has gotten it to this day.

I live in Detroit Michigan. Not the 'burbs, Detroit. If GM goes Chapter 11 it will likely presage the breakup of the company and it will really suck around here. I don't like the prospect of it really sucking in the city I live and love.

Still, I oppose the big 2.5 bailout. Chrysler was bought by Cerebrus as speculation, and all of the left side of the spectrum should love seeing Cerebrus getting it speculative ass handed to them.

GM is actually the worst off. They were the fattest, dumbest and happiest so they were the last to make serious changes. Pontiac and Buick should have been terminated with extreme prejudice along with Oldsmobile. They compete with Chevy for chrissakes. Sales are down industry wide and GM dfoesn't have the money to weather the storm, can't enginneer/blockbuster model their way out either. Absent a bailout, checks will start bouncing in the first qurter of '09. Chapter 11 would be the only viable option.

Ford is the best equipped to survive this recession, but to again become the profit machine it once was, UAW concessions, there's no need to go over the obvious ones here, are going to be required. Remember those 7K bonus checks to Ford line workers? It was not too lang ago.

I was against the wall street bailout in all of it's various forms. I'm against proposed bailouts out home owners (borrowers in default actually). It's gonna suck bigtime around here if congress actually starts holding people accountable with the Big 2.5, but medicine usually tastes like shit, doesn't it?

|12.6.08 @ 2:21PM|#

You guys keep leaving consumers out of the equation.

The fight isn't between Alabama workers and Michigan workers. Or CEO's vs. unions. It's between consumers who want to buy better cars for less, and workers who want to get paid more for them.

Consumer choice also tends to promote evolution in car design. While auto manufacturers and their workers would be happier producing the same cars over and over without updating production lines.

Naga Sadow|12.6.08 @ 2:36PM|#

J sub D,

If Detroit goes to shit like you say, I'll buy a bar up there. Everything on tap is up for grabs for ya.

MNG|12.6.08 @ 2:43PM|#

Ah, TAO is back from what I can only assume, judging from the quality of his arguments as of late, was a much needed detox stay. I hope you have the clarity that sobriety can bring my optimistic friend.

I'm hoping they let him have a medical leave from his law school (maybe Regent law school?). Wonder if he's found that chapter in his law books on adhesion contracts yet? Or how about prosecutors being officers of the courts with duties to demonstrate innocence as well as to argue for guilt?

Naga Sadow|12.6.08 @ 2:47PM|#

MNG,

You're thinking of Jaime Kelly. TAO is this boards Moses. Handing down the LORDS commandments on manufacturing.

MNG|12.6.08 @ 2:52PM|#

Back in my undergrad business law class they gave a good example of economic coercion the law would recognize as negating the "voluntariness" of a contract. I've since seen it under "questions" in casebooks.

A guy runs out of gas in the middle of bumbf*ck. He walks for miles and arrives at a gas station with gas can in hand. The slimy owner comes out and this guy, dying (not literally mind you) of thirst and knowing his wife and kids are back in the hot sun says "how much for a coke and a gallon of gas?" The owner, noting the out of town accent, the gas tank and the sweaty, dusty appearance of the man, says "fifty dollars for the coke, one hundred for the gas." The hapless motorist sadly accepts and signs his name to a written contract with those terms.

Now, TAO, if your law prof gave you this hypo and asked if any court would enforce that contract and you say yes be prepared for that prof to laugh and laugh, catch himself against the lectern, and then laugh some more.

No such thing as economic coercion, indeed.

My hand is going to get sore spanking you if you want to go down this road son.

MNG|12.6.08 @ 2:54PM|#

Naga
Judging from the shape of Flint you might just want to open up a crackhouse. Lots of return customers, less puke.

Naga Sadow|12.6.08 @ 2:57PM|#

MNG,

Let me get this straight. Some yokel gas station attendant would make him sign a contract? Bullshit. He would ask up front for it. Lets see him taken to court of it.

Naga Sadow|12.6.08 @ 3:00PM|#

MNG,

There's a war on drugs, or haven't you heard. LOL! Plus crack dealers don't like other crack dealers. I'm a lover, not a fighter.

MNG|12.6.08 @ 3:02PM|#

" can actually believe that a lopsided CEO to average worker pay could contribute to companies failing. Which is part of the reason why people shouldn't be up-in-arms for the government to "do something" about the pay disparities."

economist
I strongly oppose government placing some kind of limit on compensation pay. Corporations should be free to assign whatever compensation to executives that they think they are worth. Having said that, there is a lot of neat proposals from corporate law profs and econ profs about what could be done in corporate law to solve the "principal agent" problem that often allows boards and officers to circumvent the actual wishes of stockholders in hiring and compensating executives. What needs to happen is to foster real markets where holders can hold corporate officers accountable for mismanagement of their money.

MNG|12.6.08 @ 3:05PM|#

Naga
It's a hypo. This goes back to TAO claiming that economic coercion was inconcievable and oxymoronic. I just need to demonstrate it is conceptually possible to shoot that crap down. But if it makes it more believable to you the gas station owner asks for a check, or IOU, etc.

"There's a war on drugs"

Those cops in Flint are going to be hurting too, they'd look the other way for a small donation.

"Plus crack dealers don't like other crack dealers. I'm a lover, not a fighter."

Tru dat! Good point. Stick to the suds.

The Angry Optimist|12.6.08 @ 3:07PM|#

No surprise. MNG is manufacturing emotionally outrageous hypotheticals with the express purpose of blostering his advocacy for the application of force in freely-made agreements. To him, any and all "inequality" in the starting points of the bargainers must mean that the contract was not voluntary.

Would you rather the "slimy owner" not sell what the man needs at all?

Naga Sadow|12.6.08 @ 3:10PM|#

MNG,

The "principle agent" yarn is a recurring problem. They used to be paid based on size, market share, value, etc. Starting about 20 or so years ago it was believed that giving officers and board members stock options was a good way to tie them in with stockholders interest. I leave it to you to decide what you think is best. As for holding officers and board members accoutable . . . you can't. I believe you can not even sue due to hiding under the "bad business decision not fraud" escape clause.

The Angry Optimist|12.6.08 @ 3:10PM|#

The owner, noting the out of town accent, the gas tank and the sweaty, dusty appearance of the man, says "fifty dollars for the coke, one hundred for the gas." The hapless motorist sadly accepts and signs his name to a written contract with those terms.

So, what's the price point of each good that crosses from "hard bargaining" to so-called "coercion"?

Let me guess: you'll let your emotions dictate that, right?

The Angry Optimist|12.6.08 @ 3:12PM|#

My hand is going to get sore spanking you if you want to go down this road son.

Get over yourself, you third-rate drunken hack.

Naga Sadow|12.6.08 @ 3:15PM|#

MNG,

It just sounds like one of those Jack Bauer arguments for torture. Thats all. "One guy has information about a terrorist attack that will kill thousands. He must talk. We must make him talk at any cost." I'm not going into how ridiculous the torture argument is in that little scenario. You should have mentioned mechanics and their shady methods. You would have been on steadier ground.

MNG|12.6.08 @ 3:28PM|#

C'mon TAO, is the agreement in my hypo "voluntary?" What would your law profs say if you told them it would be enforceable?

These are one word answers.

Now, if the answer is anything but yes to number one, then I guess economic coercion is not conceptually nonsense, now is it?

If you need to get a pillow before you sit down to answer I understand.

MNG|12.6.08 @ 3:31PM|#

My hypo is a very common one in law classes and casebooks, but of course there are a million variations on it. That kind of proves my point, that economic coercion is easily concieved by most normal people.

One common set of problems with the agent principal thing is how corporate officers are elected, proxy rules, and the like. Officers often pick the boards that then pick them and they travel in the same circles. As a result the holders often don't have nearly as much direct say as they should on this.

The Angry Optimist|12.6.08 @ 3:32PM|#

What would your law profs say if you told them it would be enforceable?

How is that relevant? Do you know anything about the jurisprudence behind certain decisions, or do you just hear what you want to hear from certain segments of academia and then spit it out, like a robot?

I doubt that you have the requisite mental capacity to actually analyze why I think certain decisions are right or wrong.

Let me give you a hypo: Company A sends Company B 50K worth of poorly made goods. Company B says that it will not pay for the nonconforming shipment. Company A says "yes, you will, or you will lose the 1 million dollars in projected business we send to you in a year."

Economic coercion?

C'mon TAO, is the agreement in my hypo "voluntary?"

I already answered with a question, but let me spell it out for you again: At what price point does the sale of the goods go from "hard bargain" to "coercion"?

The Angry Optimist|12.6.08 @ 3:35PM|#

That kind of proves my point, that economic coercion is easily concieved by most normal people.

It is not conceived. It IS emotionally-governed by the Justice Stewart form of reason: "I'll know it when I see it."

As proven by the fact that you refuse to set a price point where the gasoline and soda prices go from hard bargain to coercion. It's because you don't know; you only know what the lizard portion of your brain tells you.

MNG|12.6.08 @ 3:36PM|#

"I believe you can not even sue due to hiding under the "bad business decision not fraud" escape clause."

The business judgment rule, yes. But in theory you vote these guys out, but the way the elections are usually held in practice makes this incredibly rare. But I'm unangrily optimistic that this can be fixed and shareholders empowered without the government trying to "limit" CEO pay which would be a stupid, stupid move.

"So, what's the price point of each good that crosses from "hard bargaining" to so-called "coercion"?"

Oh goody this numerical thing, maybe we'll get a re-run of TAO's hilarious "what is harm on a mathematical scale" performance.

What's the time amount of influence where influence becomes undue influence? What's the number of blows (or amount of damage) I have to deal before assault becomes aggravated assault? What, no number, they must be meaningless! lol.

MNG|12.6.08 @ 3:38PM|#

"I already answered with a question, "

That in itself says a lot about the strength of your position lol!

The Angry Optimist|12.6.08 @ 3:45PM|#

Keep using "lol", MNG, instead of responding. It makes you look smart.

We have statutory definitions of "aggravated assault", MNG. You could look them up. Or you could keep "lol-ing".

So, again, what if I sold the guy the gallon of gas for 20 bucks? How about 10? How about 5?

The Angry Optimist|12.6.08 @ 3:45PM|#

maybe we'll get a re-run of TAO's hilarious "what is harm on a mathematical scale" performance.

It mocks what it does not understand.

Maybe you should just go back to calling Rush Limbaugh a "fat fag", MNG. You were at least entertaining then, if not any more "intelligent".

Naga Sadow|12.6.08 @ 3:56PM|#

MNG,

For Christ's sake! Do you not recognize a tradeoff versus coercion when you argue it?

Here's a "hypo" for ya! Your wife won't give you any till you mow the lawn. What are ya gonna do? Scream "Pussy Coercion" and rape your own wife? Or decide there is a simple tradeoff to meet her "price"?

Tradeoff involves pricing.
Coercion involves guns.

MNG|12.6.08 @ 4:53PM|#

Still no answer, wow. Pathetic.

Uhh, yeah we have statutes defining the elements of aggravated assault and we have case law defining the elements of unconscionable contracts and adhesion contracts. I'm not sure what point you are hoping to make (to be fair I imagine you are not either).

There's a point where the economic stances and needs of the parties leads to economic coercion just as there is a point where one has the intent to commit or did commit "serious" bodily harm versus just normal bodily harm. Neither are mathematical points and neither are therefore meaningless.

Naga
I'm a pussy lover but I don't need pussy the way that guy needs a drink and some gas (and I doubt TAO's business owner needs that million dollars of business as bad as that guy needs the gas and drink). The difference is the level of pressure, which speaks to the voluntariness of the transaction.

Look, I bet you think fraud is wrong. Why? It doesn't invovle guns. For that matter when does the use of the gun become coercion? I mean, you could at the threat of being shot still say no technically and take your chances. You are "free" to say no in cases of physical coercion and take your beating (unless you are talking about cases where they guy literally grabs your hand and makes you sign something). But we tend to think that making a guy choose between taking a bullet or a beating and signing on to something is not a voluntary one. Likewise the choice between not having gas to get your wife and kids out of the hot desert (or to buy your kids needed asthma medicine, or pay your back rent to avoid eviction in Nov., etc) and signing on to something you don't want is not free either. Getting your ass beat is bad, getting shot is bad, but as a father I can tell you not having medicine for your kids that they need or leaving them stranded in bumbf*ck would be far worse.

The Angry Optimist|12.6.08 @ 5:03PM|#

Still no answer, wow. Pathetic.

Tell me about it. What price point, MNG? I've stipulated to the facts of your entire hypothetical, except I am asking one simple question: what price makes it economic coercion?

YOU came up with the hypo, so clearly you have this all thought out, so it is incumbent on YOU to say where coercion exists and where it does not.

Look, I bet you think fraud is wrong. Why? It doesn't invovle guns.

Fraud disables man's ability to bargain.

I sense I am about to get more lifeboat hypotheticals and crocodile tears for the "hungry". "No man can truly be free on an empty stomach!"

Yeah, we get it. Go away.

The Angry Optimist|12.6.08 @ 5:06PM|#

The difference is the level of pressure, which speaks to the voluntariness of the transaction.

Why did the guy run out of gas in the first place? Did his failure to plan cause this pressure?

(or to buy your kids needed asthma medicine, or pay your back rent to avoid eviction in Nov., etc)

Why doesn't this person have the money for these things? Presumably his child didn't just now develop asthma. Presumably he knew that the rent was going to be due every month (it's not a surprise, goddamn.)

You're engaged in rank context-dropping, MNG. You invent these hypotheticals just to emotionally bludgeon people into accepting more and more state control.

|12.6.08 @ 5:08PM|#

Less MaunderingNannyGoat, more LefitiSpoofs, plz.

The Angry Optimist|12.6.08 @ 5:16PM|#

Ha, I wish. MNG is one of your more sophisticated trolls.

Trolls are recognizable by the fact that they have no real interest in learning about the topic at hand - they simply want to utter flame bait.

MNG|12.6.08 @ 5:21PM|#

TAO do you still not understand what it means to make a conceptual claim as you did that the concept of economic coercion is nonsense and oxymoronic? Hypotheticals, as long as they are conceivable, no matter how empirically improbable and for whatever the "reason" the person is in the situation, defeat such claims. You've been bested son. And you don't even know it because I guess you don't understand the nature of your own claim and my refutation of it. This is why you are going off asking me for empirical examples or delving into the responsibility of the people in the hypos (!), because you are foundering in a sea you don't know.

"Fraud disables man's ability to bargain."

Holy shit, what the fuck does THAT mean? Nitpickers like yourself should not come up with such broad platitudes (glass houses and stones)...

I answered your question a while back:

"There's a point where the economic stances and needs of the parties leads to economic coercion just as there is a point where one has the intent to commit or did commit "serious" bodily harm versus just normal bodily harm. Neither are mathematical points and neither are therefore meaningless."

And you've yet to answer mine...Essentially you are in the situation of when a guy asks "Do you think X is wrong" and you answer "well, how much of X makes X wrong,, at what point does X become wrong?" The reason this is a poor answer is because the overall debate is about whether X could concievably EVER be wrong, that's the doofus claim you got yourself into friend. Don't ask me to get you out of it!

My hand is really smarting here...

MNG|12.6.08 @ 5:25PM|#

"Fraud disables man's ability to bargain.'

I'm still chuckling over that one. Hell, I guess I could have avoided all this discussion and just said:

Economic want disables man's ability to bargain.

Checkmate, dude!

"MNG is one of your more sophisticated trolls.

Trolls are recognizable by the fact that they have no real interest in learning about the topic at hand"

And what are you willing to learn about on this topic? Notice the long conversation me and economist had on this topic. Both of us agreed at times and stood our ground at times. He's certainly a libertarian and I'm not.

You're the troll TAO, how's life under the bridge? Watch out for billy goats...

The Angry Optimist|12.6.08 @ 5:28PM|#

you act like a child when asked to explain yourself. You should grow up.

"Full of sound and fury, signifying nothing."

What is it about your hypothetical that makes the owner's actions wrong, MNG? Have you asked yourself that yet?

Like I said, you proffered the hypo, I figured that you had it all worked it out. Clearly not.

You've been bested son.

you believe whatever you need to stroke that little fragile ego of yours.

The Angry Optimist|12.6.08 @ 5:29PM|#

Economic want disables man's ability to bargain.

No, it doesn't. Economic desires are exactly what is needed *to* bargain, MNG. Are you really this dumb? How would one bargain without ever wanting anything?

The Angry Optimist|12.6.08 @ 5:33PM|#

My hand is really smarting here...

I guess that's what happens when you're engaged in intellectual masturbation and patting yourself on the back too hard.

economist|12.6.08 @ 6:28PM|#

"What would your law profs say?"
Not being a law student or a lawyer, I cannot comment. However, having gone to a fairly conservative university, and having personally known some of my physics, chem, and math profs, they probably would say "tough".

*This statement is not in any way relevant to the thread. Feel free to criticize on that basis.

economist|12.6.08 @ 6:32PM|#

"you act like a child when asked to explain yourself. You should grow up."

MNG's not childish. He just has a worldview colored heavily by his emotions, which could also be considered womanish.

My worldview is heavily colored by cynicism.

economist|12.6.08 @ 6:35PM|#

Actually, why would law school profs condemn the gas station owner? In my experience, many professors enjoy having arbitrary power over other people. Unless they're research-oriented. In which case they consider teaching an unfortunate intrusion.

Teh CONCerneD OBSERveR|12.6.08 @ 6:51PM|#

Everyone knows that outsourcing is bad because big corporations outsource josbs and big corporateoins are bad because tey are big and they make money off the little people whcih is why I hate George Bush and Bob Barr and Ron Paul and all the other wingnuts in the world becaus tehy support the big corporations in their attempts to ccontrol the pporr through economic coercion like the type described by MNG. We need more regulations to stop this kind ob behavior if we are going to have any measure of equality in our society.

Edward, teh Most ConCERned obS|12.6.08 @ 6:53PM|#

I hate you guys. You guys are assholes. Especially economist. I hate economist. He's not even a real economist. Paul Krugman is a great economist. ALmost as great as john galbraith. ive decided that puncturation and capitalisation and propers speaaling are tools ofour capitulistt oferlordz which is Y i will no loneger employ these (gRammaTical) decives of capitolist cuntrohol.

|12.6.08 @ 6:55PM|#

Edward sounds like an illegal immigrant. This is why illegal immigration is bad. Suport the border fence!

More Concerned Than Thou (with|12.6.08 @ 6:57PM|#

Everyone knows that our problems can be traced back to the accumulation of political power by the capitalist class.

MNG|12.6.08 @ 7:27PM|#

economist-they'd laugh because unconscionablility is a commonly accepted doctrine legal doctrine and TAO knows no court in the US would enforce that contract. TAO first claimed he was unaware of cases of economic coercion in his casebook and then when they were pointed out claimed it didn't count because he just doesn't think these cases were decided right, or something (he never has said whether the hypo bargain was voluntary, he answers a question with a question like most trolls, he has no real honest desire to converse).

"He just has a worldview colored heavily by his emotions, which could also be considered womanish."

Wow, my wife always said women are usually right, I guess she was right in that...I must say if I'm womanish I'm a lesbian for sure. But seriously this is bullshit, libertarians like to think of themselves as rugged cynics and everyone else as crybabies, but start talking about gun control or eminent domain and some womanish emotions start to fly from them.

TAO

"What is it about your hypothetical that makes the owner's actions wrong, MNG?"

Jesus, this is a print forum so I guess spelling it out won't help: it's because the agreement is not truly voluntary, as I've said over and over. The guys choice is to pay the price or have harm come to his kids, he would never pay such a price if his kids were not in harms way. Hence it is not "voluntary." I mean hey TAO if someone threatened to kill someone's kids if he didn't sign a certain contract I guess you would not find that to be wrong either. I mean, he is free to say no, as free as my guy, he just has to accept his kids will probably be harmed by his no, just as my guy.

"Economic desires are exactly what is needed *to* bargain"

Cute equivocation TAO, but you know by "want" I meant need (look at any dictionary if your vocab is so limited you don't know that want means "to be needy or destitute" as well as " to have a strong desire for."

want
Function: noun
Date: 13th century
1 a: deficiency , lack b: grave and extreme poverty that deprives one of the necessities of life
2: something wanted : need , desire
3: personal defect : fault
synonyms see poverty


You've found yourself at odds with the majority of mankind, the precepts of the common law, logic and heck now the English language itself in your need to close your eyes to the concept of economic want. And I'm the troll. yeah, right.

Off to dinner and then the Oklahoma-Mizzou game (let's hope Mizzou keeps it close for a half at least). Maybe I'll return and spank you some more for old times sake ;).

The Angry Optimist|12.6.08 @ 7:46PM|#

Maybe I'll return and spank you some more for old times sake

Shut the fuck up.

I mean hey TAO if someone threatened to kill someone's kids if he didn't sign a certain contract I guess you would not find that to be wrong either

That's called "threat of force", MNG.

The guys choice is to pay the price or have harm come to his kids

And why is that? Why is the guy in the situation he is in and why does that suddenly override the property rights of the gas station's owner? Did the owner put this guy in that spot?

Do you know the difference between active threats and passive refusal to help? The gas station's owner is under no obligation to do this guy any favors. He didn't contribute to the guy's situation.

The only reason you throw "wife and kids" in there is because you're trying to play to people's emotions; it's emotional bludgeoning and it's fucking sickening.

The Angry Optimist|12.6.08 @ 7:48PM|#

MNG -

Did you know there are children starving in Africa? How do you sleep at night in your nice house with food and heat and A/C knowing that?

FYI, I think what the gas station owner is doing in your hypo is a douchebag move. But it's his stuff and he has a right to be a douchebag, especially since he is no way responsible for the (presumably) self-inflicted plight of your "poor sod".

e answers a question with a question like most trolls, he has no real honest desire to converse

Fuck off. You're going in the filter again.

|12.6.08 @ 8:01PM|#

MNG, it's not like workers in the deep south are starving to death. So you can't really say that they are "coerced" into accepting a mere $30 per hour for their labor.

If they got paid more, consumers would probably switch to buying cheaper imports.

To which you would probably reply that import tariffs should be imposed. So that consumers would be forced to buy American-made cars, so as to support the incomes of domestic workers.

Which would set off a round of retaliatory trade restrictions around the globe. Which would really turn this into Great Depression 2.0.

Also, restricting foreign imports would have the side effect of limiting competition and forcing consumers to buy cars that are less desirable in various ways. So the consumer gets hit with a double whammy: First, more expensive cars. Second, fewer choices that less closely match individual needs and desires.

The Angry Optimist|12.6.08 @ 8:05PM|#

Hazel - don't bother. Assclown never thinks through the ramifications of anything. He's governed by pure emotion and nothing else.

"economic coercion - I know it when I see it! And I want to throw people in jail for it!"

The Angry Optimist|12.6.08 @ 8:07PM|#

Consider that he conflates "wants" with "needs", because equivocation of that magnitude justifies forcing people to give up property they earned for some vague "needs".

|12.6.08 @ 8:30PM|#

Back in my undergrad business law class they gave a good example of economic coercion the law would recognize as negating the "voluntariness" of a contract. I've since seen it under "questions" in casebooks.

A guy runs out of gas in the middle of bumbf*ck. He walks for miles and arrives at a gas station with gas can in hand. The slimy owner comes out and this guy, dying (not literally mind you) of thirst and knowing his wife and kids are back in the hot sun says "how much for a coke and a gallon of gas?" The owner, noting the out of town accent, the gas tank and the sweaty, dusty appearance of the man, says "fifty dollars for the coke, one hundred for the gas." The hapless motorist sadly accepts and signs his name to a written contract with those terms.

Re: Crow Eating Dumbass' hypo: considering that he's stipulated that the Coke is not needed to stave off imminent death, the rational thing for the motorist to do is to tell the gas station owner no thanks, not that thirsty.

And, the other rational thing to do is to say, fuck no, not gonna pay you $100 for a gallon of gas either, and point at the sign advertising the price of gasoline (the contractual offer) and go over to the gas pump and start pumping gas (the contractual acceptance), then pay the gas station owner the amount on the meter.

After getting back to his car and pouring the gallon of gas in, the car's owner can then drive to the gas station, where he suddenly has way more leverage in negotiating for that coke, and even for the gas -- or driving past and going to the next station down the road.

And, to pre-empt the next scenario: there are incredibly rare situations where a Coke would save your life and be worth $50, and same for the $100 gallon of gas. Short of that, the rational thing to do would be to either give a counteroffer ("fuck you, I'll walk to the next station down the road instead of getting ripped off like that" and see if they flinch), or calculate that even at the inflated prices, that price was cheaper than the cost of your next best alternative and thus you should pay it.

I suppose next you're going to say that we should be getting refunds from the oil companies for gas bought when crude was $150 a barrel, because now that it's down to $40 a barrel we have established a "fair price"?

|12.6.08 @ 8:34PM|#

MNG, it's not like workers in the deep south are starving to death. So you can't really say that they are "coerced" into accepting a mere $30 per hour for their labor.

Or that they don't have other employment possibilities, or for that matter can't pack up and move somewhere else where they can get paid a higher market rate for their particular skill set.

The Angry Optimist|12.6.08 @ 8:53PM|#

but prole, the guy has a child. IT'S FOR THE CHILDREN!!!!

The Angry Optimist|12.6.08 @ 9:04PM|#

The United States has about 1 gas station per 18.95 square miles (~200,000 gas stations for 3.79mm square miles).

Given that they run in clusters, the odds that you're going to find *one* stand-alone gas station, in the middle of nowhere, with absolutely *no other* sign of civilization, are so small as to be infinitesimal.

Of course, any statist is going to cling to lifeboat ethics, instead of actually considering the context of reality.

|12.6.08 @ 10:03PM|#

It's a motnh since the election.
Isn't Crow Eating Dumbass supposed to change his name back to whatever it was before?
(I forgot.)

|12.6.08 @ 10:05PM|#

TAO:
Actually ...

This one time, I broke down near Bakersfield, Texas, on the I-10. The only thing there was a small independently run gas station. It had a cardboard sign in the window listing miles to different locations. For Stockton: 20 miles. Midland: 110 Miles. San Antonio: 200 Miles. ....
etc.

economist|12.6.08 @ 10:37PM|#

"Wow, my wife always said women are usually right, I guess she was right in that"

I think not. I can't say this with certainty, since I would have to know you in real life to speak definitively on it, but you might be whipped.

I personally think it's bullshit. Women are "right" because they browbeat you until you "admit" your error (ie, say they're right so that you don't have to argue any more). Eventually, if you disagree too often, it becomes intolerable, and there's no more living with them after that.

economist|12.6.08 @ 10:38PM|#

Hazel Meade,
Present company excluded from the views expressed in my last post, of course.

economist|12.6.08 @ 10:39PM|#

"economic coercion - I know it when I see it! And I want to throw people in jail for it!"

Exactly my thoughts on porno. Except the latter part.

economist|12.6.08 @ 10:41PM|#

"Did you know there are children starving in Africa? How do you sleep at night in your nice house with food and heat and A/C knowing that?"

Don't tell MNG that. He might actually give away all his wealth and starve to death. This is like telling an extremely suggestible child who can't swim to jump in a lake.

economist|12.6.08 @ 10:45PM|#

AO,
I'm holding you responsible if MNG sells his house, car, and other goods and travels to Africa to give away all his money, and starves to death *snark*.

Seriously, you shouldn't have said that to him.

economist|12.6.08 @ 10:58PM|#

AO,
Despite your handle, you shouldn't get quite so angry at MNG. While he has an unfortunate habit of sometimes thinking with his amygdala, at other times he can be quite reasonable. He's like the mental patient who is utterly looped one day and perfectly fine the next. Remember that he was probably raised with the values that he expresses here, and it's hard to shake the values one was raised with (I'm going to take a wild guess and assume that your parents were not left-populists).

In this case, of course, his behavior was largely the typical leftist tack, which can be quite annoying. Certainly, leftists like to point out unlikely hypotheticals (a guy must pay whatever price the gas station owner demands, or he, his wife, and his kids die a slow, painful death by dehydration) to point out how libertarian principles wouldn't lead to a world of sunshine and roses, and then get annoyed whenever libertarians point out their own hypotheticals (for example, a bunch of people are clamoring for you to give them your food, and if you give it to them, you'll starve yourself.) They always say "you're just making that up" or "that's unrealistic", as if they're scenarios were any more likely. So there I sympathized with your frustration.

|12.6.08 @ 11:40PM|#

Given that they run in clusters, the odds that you're going to find *one* stand-alone gas station, in the middle of nowhere, with absolutely *no other* sign of civilization, are so small as to be infinitesimal.

....


Actually ...

This one time, I broke down near Bakersfield, Texas, on the I-10. The only thing there was a small independently run gas station. It had a cardboard sign in the window listing miles to different locations. For Stockton: 20 miles. Midland: 110 Miles. San Antonio: 200 Miles. ....
etc.

The reality is, virtually all gas stations are located in at least a small town or some other cluster of residences or small businesses, because they'd go out of business if there was * no * one to buy their gas. Even if you're catering almost exclusively to people passing through, common sense would dictate trying to locate somewhere where you'd have at least a few local customers to add to your sales. So, if the gas station owner is a dick, you can threaten to go to the nearest residence and explain the situation to the people there, and expect that they're almost certainly more compassionate than the owner, or at least willing to underbid the outrageous price and still score a hefty profit. Hell, you could probably negotiate a ride back to your stranded car plus a gallon of gas and a big jug of cold water for considerably less than $100.

So, the short answer is, in virtually every situation this would crop up in, you'd have some negotiating clout. In the rare, once-in-a-lifetime situation you don't, pay up and accept that you still got a better deal than all your other options available, or else you would have taken one of them instead. You're still better off than if the gas station owner hadn't existed, since then you might be * dead *. Overcharged / paying what the market will bear beats dying.

Of course, to liberals who think that goods and services have a "natural" or "fair" price, no amount of argumentation or facts will cause them to rethink their failure to grasp reality.

Naga Sadow|12.7.08 @ 2:34AM|#

MNG,

Fraud is coercion now? Damn . . . now I feel like I've coerced women into sleeping with me by telling them things like "Your beautiful", "I love only you", and of course the preemptive "Can you believe that skank is wearing that? Does she have no self esteem?" when I've been caught staring at the odd, random skank.

Naga Sadow|12.7.08 @ 2:38AM|#

Oh, and what prolefeed said.

MNG|12.7.08 @ 9:25AM|#

"Given that they run in clusters, the odds that you're going to find *one* stand-alone gas station, in the middle of nowhere, with absolutely *no other* sign of civilization, are so small as to be infinitesimal."

See how retarded TAO is? He makes a conceptual claim (that economic coercion is unimaginable or nonsensical under any circumstances, like a married bachelor) and then when a concievable hypo is presented he retreats to an empirical claim ("well, this is unlikely"). He doesn't know what he's talking about he's just emotionally threatened that what he thought was an ideological set that would answer all questions in life for him neatly has been overturned here. He's clinging for all he's worth (which is not much I'd guess, hey the market has spoken). And of course if he were older than 25 and got out of his mom's basement and traveled anywhere in the US he'd know there are tons of places where the road goes for miles and miles with no gas station (as Hazel noted soon after TAO's post).


Prole-you are stuck in the same mud so to speak. OK, let's say the hypo won't happen much, let's say it only happens this one time (and let's say the prices for gas are not listed, hey it's my hypo) and there are no neighbors. Now, is the agreement voluntary or not? You guys are running from the hypo screaming how unlikely it is because I think you know the answer to the question "is this transaction voluntary?", including TAO who to this point has still not answered yes or no to the question. Because it's clearly not voluntary and such a situation is at least possible in today's world and your ideology does not allow for it.

Of course my hypos will have extreme feels to them because economic coercion involves a level of economic want, that is almost by definition one party is in a desperate plight. That's what it means fellows, c'mon.

"If they got paid more, consumers would probably switch to buying cheaper imports."

"Hazel - don't bother. Assclown never thinks through the ramifications of anything. He's governed by pure emotion and nothing else."

What's hilarious about this is that me and economist, a non-troll libertarian who actually reads what people who disagree with him wrote and converses, unlike trolly-McTroll TAO, already had this conversation with me upthread. Dec. 5th 10:09 post I addressed this question finishing with:

"Then the only alternative would be a tariff to "equalize" things, but that has a lot of stinky consequences too as I'm sure you probably are much aware of..."

Wow, that's real troll there, the trolly leftist concluded that a tariff would be terrible and there is no moral or practical way to stop outsourcing. You can really see the inflexibility there!

MNG|12.7.08 @ 9:38AM|#

Naga

It's not that fraud is coercion, but fraud, coercion (physical and economic and psychological in some cases) vitiates the voluntariness of a transaction thus making it morally dubious.

And yes we've all probably committed fraud in order to "get some" but hey, we've all fallen short of the Glory of God...

And one more thing with McTrolly TAO:
"Do you know the difference between active threats and passive refusal to help? The gas station's owner is under no obligation to do this guy any favors. He didn't contribute to the guy's situation."

Uh, yes I do know the difference between active threats and passive refusal to help, but when the imminent consequences are the same I'm not sure the differences are that morally helpful, and either way I'm talking about the difference between threats to cause physical harm through physical action and threats to knowingly allow physical harm to occur through deliberate withholding of some physically needed thing with the intent to exploit for gain and there I don't see much moral difference. Hence my original assertion that economic coercion can be wrong like physical cocercion is wrong. The guy who is told "sign or I beat your kids ass" is in a situation in which his signature is coerced; the man who is told "I know you need this gas (or food, or medecine, or whatever) or your kids will be harm so sign or I will withhold it from you" when the man is in no position to get the needed item elsewhere is in the same boat. And you know it. You just want to think it doesn't happen much.

The Angry Optimist|12.7.08 @ 12:44PM|#

"is this transaction voluntary?"

Yes. There you go. Now prove me wrong.

when the man is in no position to get the needed item elsewhere is in the same boat.

He can go somewhere else to get it. He's not entitled to the property of someone else at the price he demands because he's placed himself in a tough spot.

Naga Sadow|12.7.08 @ 2:03PM|#

MNG,

More Jack Bauer logic. Sorry. Your premises and hypotheticals are weak. Lets agree to disagree. Props to you on the "Glory to God" phrase, though. I haven't heard it since I was roughly 8 or 9.

The Angry Optimist|12.7.08 @ 2:40PM|#

Jack Bauer logic. Heh. I am going to have to use that one.

Naga Sadow|12.7.08 @ 2:52PM|#

TAO,

There's a reason I've never watched a full episode of 24 yet.

|12.7.08 @ 4:32PM|#

MNG,
Well okay, then we agree that you can't really stop business from chasing cheap labor.

I'd have to agree there are winners and losers in free markets. In this case, the Michigan auto workers are the losers. Consumers are workers in other areas are winners. Southern workers may not win as much as Detroit workers lose, but there's a broad net gain when you factor in car prices, quality, and selection.

However, I can't feel too sorry for them seeing as how they kind of brought the situation on themselves. The unions basically priced themselves out of the labor market, not to mention fighting automation tooth and nail until other countries outpaced us in that area.

I tend to the think that one of the great overlooked features of the free market is not just cost efficiency, but the ability to make rapid adaptations to consumer desires. When the "workers" control the "means of production" too much, they tend to prefer making the same shite they've always been making, oblivious to what consumers really want and need. The big labor alliance with the automakers is a kind of case in point. As long as the unions and the automakers were cozy and protected, they didn't improve their designs, didn't introduce automation, and didn't make efficiency improvements. The labor unions were perfectly happy with that arrangement, in exactly the same way state owned industries are happy with it in socialist countries. If people have no other option besides your product, why bother making it better or different? It was competition from the Japanese that forced them to start making better cars. Or in other words, the free market permits consumer choice to drive production instead of treating consumers as a captive funding source for the salaries of the workers.

|12.7.08 @ 5:28PM|#

Prole-you are stuck in the same mud so to speak. OK, let's say the hypo won't happen much, let's say it only happens this one time (and let's say the prices for gas are not listed, hey it's my hypo) and there are no neighbors. Now, is the agreement voluntary or not? You guys are running from the hypo screaming how unlikely it is because I think you know the answer to the question "is this transaction voluntary?", including TAO who to this point has still not answered yes or no to the question. Because it's clearly not voluntary and such a situation is at least possible in today's world and your ideology does not allow for it.

Crow Eating Dumbass -- Yes, it is voluntary. The gas station owner is not putting a gun to the person's head and telling them "buy my gas or I shoot you". The person out of gas can decline to purchase the gas. It may not be in his best interest to do so. It may be that, given his other alternatives, the gas at $100 for one gallon is the best deal he can strike, and that he is either unable (or incapable) of using negotiating tactics to lower the price of the gas.

Sometimes, in extremely rare "lifeboat" circumstances, gas is worth more than $100 for a gallon to that particular prospective purchaser in that particular circumstance.

In gold rush Alaska about a century ago, the prices for goods were exorbitantly high, compared to elsewhere on the continent. But, people paid those prices because the alternatives were, from their perspective, worse. They could starve -- they could abandon lucrative gold fields -- or they could pay the prices for goods. So they paid. It was a rational decision.

Is an ounce of marijuana buds worth the current street price to someone who enjoys it, even though in the absence of coercive laws outlawing its growth and distribution the cost would drop to virtually nothing?

There is no cosmic "fair" price for anything. There is only what a given economic and political system interacting with the particular circumstances of a particular buyer and seller values something at.

And a laissez faire free market system tends to produce the lowest prices and most prosperity overall, much as your ideology would lead you to believe in government interference somehow making things better overall.

Read Thomas Sowell's "Basic Economics", please, and then if you disagree with the points he makes we can then have a more useful discussion about how you think he doesn't understand economics and you do.

MNG|12.7.08 @ 6:02PM|#

Uh, prole, I don't know how to break this to you, but Sowell is one of thousands of PhD economists and he is not exactly the stuff of Nobel Prize winning intellect in the subject. Now Paul Krugman on the other hand...

"The person out of gas can decline to purchase the gas."

Uhh, yeah, and the guy with the gun to his kids head can say "go ahead and shoot." He's "free" to do so the same way the guy at the station is "free" to do so. Both the actions of the gun holder and the gas station attendant will produce the same consequence: harmed people. Both have morally wrong reasons for what they do (I hope that you can at least say that a man who, when recognizing the dire need of another man for a product of which only he can supply jacks the price up to much higher than he would if he knew the man could afford otherwise is at least being a jerk, and therefore is in the wrong, whether government should do something or not).

"He can go somewhere else to get it."

Not without dire harm to his family. That's the hypo (or I can easily change it to that and my point stands). Just like the guy confronted with "sign this or I beat your ass" is free to run, or defend himself, or take a beating.

"Now prove me wrong."

I just did, again, in the previous sentence.

MNG|12.7.08 @ 6:06PM|#

BTW I don't know where TAO gets this stuff about me wanting to jail the owner. I am merely claiming the transaction is not completely voluntary. While an assaulter and this gas station owner are both in the wrong the assaulter's wrong deserves greater governmental sanction. For the dick gas station owner I'd just refuse to enforce his contract, heck I'd even make the guy pay him whatever the local fair market value of the gas was (and I'd let the owner argue any particular circumstances which would justify a higher price than FMV and I'd enforce that, i.e. that it was one of his last gallons of gas and he wanted to use it for something that day). This is kind of how the UCC does it.

MNG|12.7.08 @ 6:08PM|#

Hazel

I will note this though: nations like Japan, who use tariffs more than we do, have the car companies that are kicking our free trading butts. Just saying.

MNG|12.7.08 @ 6:48PM|#

"because he's placed himself in a tough spot.'

Yeah TAO, when someone breaks down where he didn't he expect to he "placed himself" in that tough spot. You sir have the dickheadedness that usually only comes with youth.

And you're not very adept at this kind of thing, are you? All I have to do is tweak the hypo slightly: let's say that an evil communist anarchist hid behind a rock and shot a hole in his gas tank as the guy drove by. That's why he ran out of gas.

You couldn't see that coming? You did have to take a philosophy class as part of gen ed in undergrad prior to law school didn't you? If you had the flexibility to take the other side's point of view you would do better at this kind of thing by being able to anticipate me slapping you down so easily and thus formulating your arguments to protect yourself. But religious fanatics rarely have that ability...

The Angry Optimist|12.7.08 @ 7:26PM|#

Still no proof, evidence or a demonstrable case. All you did was restate "this is not voluntary" with no evidence as to how or why.

Yet again, you're conflating difficult circumstances with force. When I force you to do a thing, that abrogates your will. You seem to think that the gas station owner is somehow forcing the man to buy his gas at 100 dollars, and that just isn't so.

Merely restating your "case" with more insults isn't proof.

The Angry Optimist|12.7.08 @ 7:27PM|#

let's say that an evil communist anarchist hid behind a rock and shot a hole in his gas tank as the guy drove by. That's why he ran out of gas.

And the gas owner did what again to contribute to this fellow's plight?

The Angry Optimist|12.7.08 @ 7:27PM|#

Yeah TAO, when someone breaks down where he didn't he expect to he "placed himself" in that tough spot.

Running out of gas =/= breaking down.

|12.7.08 @ 7:29PM|#

MNG, I suspect that's because their auto industry is (was) so export oriented, hence lack of domestic competition probably wouldn't have affected the overall industry as much as the global export market would have. They aren't selling the majority of their cars within Japan.

By comparison, most US made cars are (were) sold in the US. Export markets for US cars are inevitably a smaller percentage of their total sales, and thus exert less influence on production.

Just speculating though.

economist|12.7.08 @ 10:47PM|#

TAO,
Did you take my advice and just point out the incredibly small probability of MNG's scenario?

economist|12.7.08 @ 10:55PM|#

"and then when a concievable hypo is presented he retreats to an empirical claim"

MNG,
In response to your hypo:
No, the hapless traveller has not been coerced. He wants something that the gas station owner rightfully owns. Ergo, if he wants it, he must secure the consent of the gas station owner to obtain it. This includes paying an unpleasantly high price. Yes, it sucks ass, and yes the gas station owner is being a dick, but ultimately if "being a dick" was a criminal or civil offense, then everyone here (myslef included) would rightfully face prison or lawsuits.

That said, your scenario is unlikely. I could point out more likely scenarios centering around what would happen if people could demand money back not because they were physically coerced or were defrauded, but because they feel that a transaction wasn't voluntary, wholly because they "really really needed" the thing being sold.

economist|12.7.08 @ 10:56PM|#

"You sir have the dickheadedness that usually only comes with youth."
Only somebody who doesn't deal with middle-aged and old people 75% of the time would say that. Believe me.

economist|12.7.08 @ 11:00PM|#

Unfortunately, principled libertarianism occasionally involves defending the freedom to be a dick. The statist side, of course, has no principles, and thus can easily claim to modify them so "nothing bad happens". And, lo and behold, statism usually involves something bad happening. Since bad things are going to happen either way, since some people are going to assholes either way, I'll stick to my principles.

economist|12.7.08 @ 11:02PM|#

Okay, I admit it, I can't really call people in their mid-50's "old" anymore. I hate getting old.

economist\'s monologue|12.7.08 @ 11:10PM|#

To be a libertarian or...
Not to be a libertarian.
Whether 'tis nobler, in the mind, to suffer
noncoercive yet unpleasant behavior
from others
Or to take arms against anything that annoys
him, and by opposing, end it?

OK, it sucks. Gad, everyone's a critic.

I walked on the sidewalk,
But it was owned by THE PUBLIC.

No pavement beneath my feet,
only daggers of tyranny.

Manuel Garcia O\'Kelly Davis|12.7.08 @ 11:12PM|#

Some cobbers are striking out for the asteroids. Perhaps I'll join them. I'm not even a hundred yet.

MNG|12.8.08 @ 7:39AM|#

"You seem to think that the gas station owner is somehow forcing the man to buy his gas at 100 dollars, and that just isn't so."

Not necessarily, I'm just pointing out that the transaction is not voluntary. That's not the same as saying that any party "forced" another. This is why I don't advocate throwing the station owner in jail, just not enforcing the onerous terms of the bargain. This is what courts do all the time in such circumstances (and economist these cases [well, maybe not so extreme, but again as I'm making a conceptual point I can make it as extreme as I want] abound empirically, just take a stroll through lexis nexus cases on this topic to see just the ones that make it to court).

Again, if the guy with the gun to his kid head says no his kid is harmed, if the guy refuses to buy the gas his kid is harmed. In both cases the guy is not really free to say no. In both cases we have dicks, though I'd only advocate throwing the former in jail. But in both cases I'd toss that contract in court without hesitation.

And, I would support laws (like a gouging law or in more nuanced cases fair labor standards, renters protection, etc.) in both cases to prevent these cases from occurring.

econommist-love the monologue.