Tim Cook: "I want there to be" American-made Apple products - Page 2

I want there to be Apple products that are fully functional outside the USA!

I didn't say that it was necessarily bad.

In THIS case, however, there are substantial negatives. For example:
- Trade deficit in the 9 figure range does incredible damage to our economy
- We have allowed exporting countries to become powerful enough that it is difficult for us to negotiate on a fair basis. For example, we have been unable to get China to allow their currency to float or to stop dumping products below cost or steal our IP
- It reduces flexibility of the companies who DO remain. The long supply chain requires very inefficient operation.

They do. The times that they don't work, it's usually not the fault of the Apple product, but rather an infrastructure issue - like LTE.

 

It is a misconception that a trade deficit is damaging, and that doesn't change with the scale or size of it.

 

 

 

First of all of the US trying to demand what other countries do with their currency is just a bit hypocritical. Second, China's currency manipulation boils down to the Chinese government stealing from its people to sell us cheaper goods. Bad for the Chinese people (and they should be pissed about it), but good for us. Dumping below cost is a red herring. The IP issue is also one for deeper and more serious debate.

 

 

 

I'm not sure what you mean here.

It's not a misconception. An extended trade deficit is inflationary. It also damages domestic producers and costs millions of jobs domestically.
http://www.ehow.com/info_8634053_trade-deficit-affect-economy.html (there are millions of other articles, but this will get you started).

It's not the least bit hypocritical. We have the right to control our own economy and we've allowed China to damage it, possibly irreparably.

We would have every right to impose tariffs equal to the amount of currency manipulation being practiced. If we believe in free trade, that's exactly what we should have done.

The fact that you don't understand it is a clear indication that you don't understand economics or manufacturing well enough to participate in the discussion.

Let's say that you're buying 10,000 widgets per month to use in assembling a product. If your manufacturer is 8,000 miles away and delivery is 2 months, you need to have a MINIMUM of 20,000 parts en route at any one time, and probably more to be safe. That ties up a lot of money in inventory and also makes it far more difficult to make a product change. If you find an improvement in the product, you have 2 months supply already en route and can't change very quickly. More importantly, if you find a defect, you have a couple months' supply en route and even if you can get the manufacturer to credit you, you're out of materials for 2 months. That makes it more difficult to make changes, makes inventory planning more difficult, and adds substantially to the cost.

If your supplier is local (or a couple of days away), you can turn on a dime.

Look up 'just in time inventory' for additional information.

 

I'm afraid you're mistaken. First, the trade deficit is not inflationary. Money supply expansion is what is inflationary. Second, it may costs jobs on one side of the balance sheet but creates jobs on the other. This subject is much deeper than eHow.com is prepared to deal with. (Really? eHow.com?!)

 

Here are some brief comments on this subject from an economics professor who has written books on the subject:

 

http://cafehayek.com/2011/10/common-senselessness.html

http://cafehayek.com/2011/10/omigosh-foreigners-are-investing-more-in-america.html

http://cafehayek.com/2011/10/utterly-deficient-analysis.html

 

And another more in-depth article on the subject:

 

"Does the widening US trade deficit pose a threat to the economy?"

 

And, yes, there is much more to read that can clarify this subject.

 

 

 

But the Chinese don't have the right to control theirs?! It seems the US government is demanding the Chinese manage their economy according to US priorities.
 

 

 

Wrong. The US government is the one the is damaging the US economy, possibly irreparably. Of course the Chinese may be damaging their own (long-term) through their currency manipulation. But the US does the same here.

 

 

 

Of course the US government has the power to raise the prices of goods for Americans that buy Chinese products (which is the other way of saying what you've said). Whether they have the right is a matter of philosophical debate.

 

 

 

You have a very bizarre conception of "free" trade that involves the US government forcibly raising prices for consumers of goods imported from China. That's not free trade or anything like it.

 

 

 

I'm actually very well-studied and well-informed on the subject of economics. It is you, sir, who are allowing a number of (well-known) economic fallacies to cloud your reasoning.

 

 

 

What you're suggesting is that because of all that stuff companies could produce these products more cheaply here and sell them for less (or garner greater profit margins). Yet they're not doing that. You're ignoring the fact that the cost all of that stuff is built into the end price of the product and all evidence appears to suggest that it is still cheaper (and thus more efficient) to do it the way they're doing it right now. If it was more efficient (in some objectively measurable way) they'd be making that stuff here.

Edited by MJ1970 - 5/30/12 at 1:13pm

Clearly the solution is another stimulus plan.

Doesn't say that trade deficits aren't bad. It simply says that histrionics are bad.


Doesn't say anything about balance of trade.


So he doesn't understand the difference between buying products and investing in businesses. Where does it say that it's OK to run a trade deficit indefinitely? In fact, he points out another problem with trade deficits. When you run a trade deficit indefinitely, you end up selling your country.

That's a great one. The author admits that his position is not widely accepted and says specifically that "Most economists are of the view that the ever-growing US trade deficit and the subsequent expanding foreign debt pose a threat to the well-being of Americans."

So your own source says that most economists agree with me. I guess you just lost the argument.



Not at all. China can do whatever they wish. But we have no obligation to buy from them.

There's a saying "your right to swing your fist ends where my nose begins". The same thing applies here. We have no right to demand anything. But we do have the right to manage our own economy and say that when currencies are manipulated, we will prevent it from damaging our economy via appropriate tariffs.

We already do this when it comes to dumping of products below cost - currency manipulation is the same thing.


In your opinion. And also irrelevant. Even if the US is damaging its economy, we should not be allowing an outside country to do it to us.

It's not philosophical at all. We have the right (and the obligation) to manage our economy. If someone engages in economic war, we have the right to respond. Read "Debt of Honor" by Tom Clancy for an idea of how it works.

Free trade is a matter of free trade without interference. The Chinese government is interfering with free trade - we have the right to correct it.

Obviously not since your own source says that most economists agree with me. And you've never proven any alleged fallacies.

That's nonsense. While it IS more efficient to have a shorter supply line, you are missing a number of key points:

1. The Chinese supply line is short. Most of the factories are close to each other. If we did it in the US, some of the parts must come from China so we have an 8,000 mile supply line. If it were possible to get EVERTHING made here, it would be easier, but that's not the case.
2. Even with savings on logistics, it won't make up for the blatant currency manipulations and all the other barriers we have that interfere with manufacturing.

The fact is that the advantages of a shorter supply line are well established. Read up on the Toyota Production System. Again, the fact that you don't recognize that means that you don't have any business even being involved in this discussion.

Maybe, just maybe, if there was less taxation across the board, there'd be less inflation in general. Just a thought. But I suppose you think the prices of things just sort of spontaneously snap into being.

 

Do you normally use fallacies in your arguments?

 

 

 

Bingo. Don't.

 

 

 

Bingo.

 

 

 

By "we" of course you mean the US government forcing US consumers of Chinese products to pay higher prices while they try to "manage" the economy.

 

 

 

OK. But you have yet to prove that China is.

 

 

 

By "we" you are referring to the US government and its alleged "right" to force US consumers of Chinese products to pay higher prices.

 

We've graduated from eHow.com to Tom Clancy novels? You're priceless!

 

 

 

Then you're not really interested in free trade. Yes, the other side is doing things that provide Americans with cheaper products and so, instead of allowing Americans to have that freedom, you propose the US government force US consumers of Chinese products to pay higher prices.

 

 

 

Your continual attempts at argument by insult notwithstanding, you are simply wrong here as I explained. But feel free to believe whatever you like.

 

I'd make a greater attempt at educating you but it appears that would be a waste of my time because you seem stubbornly committed to your current understanding of these matters and stubbornly opposed to the people of China selling us goods inexpensively.

 

P.S. I've read a ton about the TPS so your wise cracks about how much I need to be reading to "rise" to your level of understanding is a bit weak.

Edited by MJ1970 - 5/30/12 at 3:13pm

So even after I destroy your arguments, you insist on coming back for more?

Tell me how many multimillion dollar global companies you've run. Tell me how many companies you've converted to Lean Manufacturing. Tell me about your educational credentials - or ANY credentials that makes you qualified to tell the majority of economists (based on the link that YOU provided) that they're wrong.

 

Not sure how to break this to you, but you claiming to have "destroyed" my arguments doesn't make it so.

 

 

So now you're rolling out the appeal to authority, circumstantial ad hominem fallacies?

 

Good job!

There are more ways to look at "suppressing wages" than simply getting less in your paycheck.  Decreasing the tax we have to pay (from top to bottom), or how about profit sharing?  You think that Hyundai, Toyota, and Honda all built plants in the US because it was more expensive?  Not so.  Maybe when the political strong arm of Reagan forced Nissan and Honda (examples, it may have not been those two) to assemble here, but not anymore.  Toyota doesn't have the UAW stronghold that Ford and GM had to deal with because they incentivized actual production with stocks and bonuses rather than cash.  Apple stock, during the last decade from $22 to $500+ could have put assess and elbows flying around production lines here in the States (or anywhere for that matter.)

They chose to assemble in China because it was more than likely the fastest way around all of the already industrialized nations' knowledge about smog, chemical pollution, and high wages.  

Those things will eventually catch up in China, and corporations will move into Africa, Latin/South America.  Rinse and repeat until all populations globally have a livable wage.  GE assembles a whole lotta stuff in South America already.  Isn't there a country down there that pretty much owns most of the supply of Lithium?  

 

I know I may have ranted a bit there, but I'm tired.  Feel free to thrash this post with actual facts and links :)  

So when there's a consensus among the experts that trade deficits are bad (using your own link) and a loud-mouthed anonymous person on AI who says otherwise, you are suggesting that we should listen to you?

Hardly.

 

Again with the insults?

 

 

 

I don't really care if you listen to me or not. You can go on thinking and believing whatever you want. It doesn't rally affect me until you propose implementing your ideas forcibly in the form of government-enforced protectionism that raise prices for me (and others.) Think and believe and listen to whoever you want. Buy American all you want. Avoid buying Chinese all you want. But as you pointed out before, your right to swing your fist ends at my (and other people's) nose. And advocating the implementation of protectionist policies starts to hit my nose.

 

So while I don't really care what you think or whether you listen to me, it's important for others reading this to know that you are simply wrong about the two primary things you are claiming:

 

1. That, all other factors included, having the supply chain closer is "more efficient." This is clearly demonstrated by the pricing of the products. The prices of things like the iPhone include all of the factors you have alluded to and if it were actually more efficient to do it all here (meaning it could be done cheaper), it would be done here. For some goods (e.g., cars) it is more efficient to make them here.

2. That trade deficits are "damaging" to the country running the deficit. This is easily demonstrable by looking at the other side of the trade equation (the capital account...the "trade deficit" is only referring to one side...the current account deficit...but there is a corresponding and balancing capital account surplus.) But it wouldn't even be damaging if those dollars did not flow back into the US. That would actually be better.

 

You're not seeing the forest for the trees on this. You need to think through this deductively. Trade deficits simply are not inherently bad when you understand what's really going on. Part of the reason is that countries don't trade with one another. People trade with each other. Businesses trade with each other. Which side of a line on map they reside is irrelevant. Apple doesn't have a "trade deficit" with Foxconn. I don't have a "trade deficit" with Apple. My employer doesn't have a "trade deficit" with me.

The "trade deficit" is a confusing and distracting macroeconomic (and political) abstraction. It's a macroeconomic (and political) red herring. The whole bit about countries and currencies is a distraction from the core of what's really going on.

 

Once you realize that it makes much more sense.

Edited by MJ1970 - 5/30/12 at 9:06pm

Are you kidding me? LTE is widely available outside the USA.

Only Apple didn't care to make an iPad that can use it. It's not an infrastructure issue - it's an Apple issue.

Any reservations I had about Tim Cook are officially gone.  In fact, I think I love this man.

 

As complicated as the issue is, we must find a way for manufacturing to return to this country.  I believe our long term survival depends on it.

I wouldn't be so sure. On the one hand, yes, the current economic conditions in america are very prohibitive to such a switch occuring, but also consider that the price of labor is rising and will continue to rise in the near future as skilled workers demand more pay and are harder to come by//replace.

 

If this trend continues, coupled with America making itself more favorable to such long term investments (which, given its current trajectory, is albeit very unlikely).

 

 

One can hope, though, can't one