• This is a political forum that is non-biased/non-partisan and treats every person's position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!

All of a sudden Keynesian economics is OK by conservatives

Is EVERY job automated in the US? No.. why not? I thought automation decreases costs and increases profit?

Automation does lower production costs and thereby increase profits. But not every job can be automated. Eating fruits and vegetables will make you healthier. But you can't eat all the fruits and vegetables in the world.

Companies look to reduce costs and increase profits.. and one of those ways is through automation. However, that dynamic is influence by competition and marketshare.

A number of factors, some of which I've pointed to, can affect decisions to automate. But the presence of lower-cost competitors is not required. You originally asked:

Why do you think American companies are automating? Do you think its to compete with lower cost competitors.. like lower wage costs ?​

My response is that they automate to reduce production costs and thereby increase profits, and that they would do this independent of the presence of lower-cost competitors.


You said that Mexican manufacturers not automating "puts negative wage pressure" on US manufacturing workers.

it was not a drop in demand for workers that led to higher wages. It was an increase in demand for workers with higher level skills that led to higher wages.

It was an increase in productivity. Less productive manufacturing processes may in fact require a higher level of skill. Which job requires more skill: fashioning parts by hand or simply operating a machine that does the work for you? Computer software programs can perform tasks with a few low-skill clicks that would otherwise require higher levels of worker skill.
 
Automation does lower production costs and thereby increase profits. But not every job can be automated. Eating fruits and vegetables will make you healthier. But you can't eat all the fruits and vegetables in the world.

Yeah.. automation does NOT always lower production costs and increase profits. There are the expense of automation, constraints when it comes to maintenance, infrastructure costs, flexibility issues etc with automation. ONLY when all of these factors are taken into account and its determined that automation at that point WILL lower production costs and increase profits does automation occur.

number of factors, some of which I've pointed to, can affect decisions to automate. But the presence of lower-cost competitors is not required. You originally asked:


Why do you think American companies are automating? Do you think its to compete with lower cost competitors.. like lower wage costs ?

My response is that they automate to reduce production costs and thereby increase profits, and that they would do this independent of the presence of lower-cost competitors.

to some degree yes.., but there is not doubt that the dramatic difference in labor costs between mexico and other lower labor costs countries... like China and the US put way more pressure on US companies to automate.

You said that Mexican manufacturers not automating "puts negative wage pressure" on US manufacturing workers.

Nope.. I said that Mexican manufacturing captures marketshare without having to automate.. in other words they compete with the US workforce.. and that puts negative wage pressure on the US manufacturing workers.

It was an increase in productivity. Less productive manufacturing processes may in fact require a higher level of skill. Which job requires more skill: fashioning parts by hand or simply operating a machine that does the work for you? Computer software programs can perform tasks with a few low-skill clicks that would otherwise require higher levels of worker skill.

and in that case.. wages would decrease not increase. Why would you pay more for lower skill workers making a click that you can get really easily.. than an artisan that is very difficult to find?

You seem to think that because productivity increases.. that employers will magnanimously increase wages to the employees they have left.. instead of simply pocketing the profit. Sorry but that's just not the case.

Only when that increase in productivity requires those fewer workers to have more skills or something else that increases demand to the employer.. do wages go up. Otherwise employers simply pocket the profits from the increase in productivity.
 
automation does NOT always lower production costs and increase profits.

When it won't, or at least when it's not expected to, manufacturers don't implement it.

there is not doubt that the dramatic difference in labor costs between mexico and other lower labor costs countries... like China and the US put way more pressure on US companies to automate.

I disagree. If production costs can be lowered, and profits thereby increased, US manufacturers will automate. How does the presence of lower-cost foreign competitors affect that calculation?

Mexican manufacturing captures marketshare without having to automate.. in other words they compete with the US workforce.. and that puts negative wage pressure on the US manufacturing workers.

They can capture that market share only if their production costs are lower or if they accept lower profits. US manufacturers can typically maintain market share by automating. The Mexican manufacturing sectors that enjoy substantial market share, e.g., electronics and automobiles, have become increasingly automated.

A recent study by the Center for Business and Economic Research at Ball State University that examined US manufacturing employment found that:

Almost 88 percent of job losses in manufacturing in recent years can be attributed to productivity growth, and the long-term changes to manufacturing employment are mostly linked to the productivity of American factories. Roughly 750,000 jobs (13.4 percent of lost jobs) were due to direct imports and import substitution.​

Why would you pay more for lower skill workers making a click that you can get really easily.. than an artisan that is very difficult to find?

Because you can employ a lot fewer workers, allowing you to pay each one more. If you don't pay American workers $20 an hour to dependably operate highly productive, automated equipment effectively, your factory likely won't function smoothly.

You seem to think that because productivity increases.. that employers will magnanimously increase wages to the employees they have left.. instead of simply pocketing the profit.

No, not because of magnanimity, but rather the self-interest associated with employing a competent and satisfied workforce.
 
When it won't, or at least when it's not expected to, manufacturers don't implement it.

.

Bingo.

I disagree. If production costs can be lowered, and profits thereby increased, US manufacturers will automate. How does the presence of lower-cost foreign competitors affect that calculation?

Because it has to do with that dynamic of whether its worth it or not.

Say you are company that has a good marketshare.. you are making good money.. things are going smooth. You have flexibility in your work force.. etc.

now.. you look at "could I automate and make more money"... possibly... but its a gamble. You have the cost of implementing it.. the loan expense to do it. Problems with the union if you have to deal with a union. And you are looking at increasing your costs at least initially.. with the idea that down the road.. it will be more cost effective from reduced labor cost. And then you may lose some flexibility to respond to demand changes.

And right now.. you are making good money. Is the risk worth the gain down the road? It becomes a question... and not one easy to answer. Most likely.. you aren't going to take the risk.

Now.. you throw in the added factor of a competitor that's now bleeding away your marketshare because their costs are substantially lower and they are undercutting your prices.. stealing your marketshare and you are watching your profit shrink.

NOW.. that automation looks a lot less risky. now its a matter of survival. You must be able to compete or there is no money to be made.

that added competition is the tipping factor.

They can capture that market share only if their production costs are lower or if they accept lower profits.
Well.. not only that way.. they can capture market share with a higher quality product. Better marketing and better brand loyalty.

Because you can employ a lot fewer workers, allowing you to pay each one more. If you don't pay American workers $20 an hour to dependably operate highly productive, automated equipment effectively, your factory likely won't function smoothly.

Yeah that's bull. "allowing you to pay each more"... you act as if these companies are altruistic. They are not. One hand.. you think they automate to lower labor costs and make more profit.. and then you think they are going to then altruistically pay remaining workers MORE simply because "they can".

no.. They pay those workers more because they have more skill etc that means they command a higher price in the workforce. If there are tons of folks that can do the job.. then the wages don't increase.
 
The idea that we can make the economy run more efficiently by increasing the portion of it that is run by politicians continues to strike me as ridiculous, and has been repeatedly disproven.

Don't confuse (or conflate) increased government spending with bigger government bureaucracy. It's a tag conservatives tend to place on liberals/progressives when the spending is done on programs they don't like yet are gleeful when the spending goes towards project they do like.

Conservatives and liberals both agree that our infrastructure is in serious need of repair. The crazy thing was conservatives condemned Pres. Obama when he begged for billions in American Jobs Act (and to a degree, in the Stimulus bill) to go toward infrastructure rebuilding including those so-called "shovel ready" projects. But now many of these same conservatives are in support of federal spending for the same "shovel-ready" infrastructure projects.

IMO, the problem Obama faced was in trying to be too transparent with federal spending. While it was great to limit what the states could do with stimulus dollars and for the public to be able to monitor how each state was utilizing the money given (re: "Recovery.gov" website which is no longer available), the problem Obama ran into was his attempts at transparency itself.

Politicians (pundits and well as strident supporters) wanted the public to see how the money was being spent. However, the very act of trying to bring accountability into the equation by setting restrictions and/or spending limits (i.e., "rules/regulations") - oversight - slowed the efficiency of the Stimulus program. In short, he couldn't win for losing.

If he had just put the money up for grabs for any construction or "investment/research" project out there, Right-wing politicians certainly would have decreed "bigger government/more out-of-control, wasteful, unaccountable government spending". So, he tries to keep the public and his detractors informed of how much money is being spent and how it's being utilized and bring accountability into the equation and now he's marked being part of a government that's too slow to react to the needs of the private sector. What was crazier to me was how Republicans continued to demand that the private sector be "incentivized" to spend more and yet when the American Jobs Act provided generous tax credits for everything from employing combat and/or wounded veterans to material procurement and/or technology upgrades that were business-related on top of maintaining the Bush tax cuts AS-IS, they balked! But now, here we are...and Pres. Trump is asking for BILLIONS on the very same infrastructure projects - the same projects that during the era of Obama were deemed too expensive, too expansive, too much government when much of the money would've gone to the private sector...:doh

The man just couldn't win for losing when it came to the Right.
 
cpwill said:
The idea that we can make the economy run more efficiently by increasing the portion of it that is run by politicians continues to strike me as ridiculous, and has been repeatedly disproven.
Don't confuse (or conflate) increased government spending with bigger government bureaucracy.

1. Bigger government spending does come with bigger government bureaucracy.
2. The point I was making was that increasing the share of the economy that is centrally directed doesn't make that economy run more efficiently. If you take a chunk of the economy out of where it was being allocated by the market according to market incentives, and give it to politicians, who allocate it according to political incentives, you haven't increased the effectiveness of that wealth, you've decreased it.

Conservatives and liberals both agree that our infrastructure is in serious need of repair.

No, Republicans and Democrats both agree that they like getting credit in their home districts for big expensive projects financed by people other than their constituents.

The crazy thing was conservatives condemned Pres. Obama when he begged for billions in American Jobs Act (and to a degree, in the Stimulus bill) to go toward infrastructure rebuilding including those so-called "shovel ready" projects. But now many of these same conservatives are in support of federal spending for the same "shovel-ready" infrastructure projects.

Nor should you conflate the Trumpkin/Bannerites with Conservatives. Conservatives are aghast at things like a Trillion dollar "Porkulus II".
 
First.. you do realize that one of the reason that wages are higher in the US than Bangladesh is because of regulation right?

Second.. regulation does have other costs.. and those costs also affect the reason that companies decide to go overseas with production.

And that's in part due to regulations.

It has nothing to do with regulation. No amount of deregulation here in the US is going to allow any American and their whole family to live on $5 a day. The cost of living in Bangladesh is much lower. That's the main reason the jobs are leaving the US. As long as that difference remains so dramatic, American workers will not be able to compete with them- at least not in a completely free market. That's why they are looking to Trump to protect their jobs with big government regulations and imposed taxes and tariffs.

Cutting regulations will certainly allow more net corporate profits. But the current Trump supporters and Tea Party types are never going to see any of that. And without them, who is going to be left voting "conservative"? Perhaps only Charles Koch and his brother.
 
Last edited:
It has nothing to do with regulation. No amount of deregulation here in the US is going to allow any American and their whole family to live on $5 a day. The cost of living in Bangladesh is much lower. That's the main reason the jobs are leaving the US. As long as that difference remains so dramatic, American workers will not be able to compete with them- at least not in a completely free market. That's why they are looking to Trump to protect their jobs with big government regulations and imposed taxes and tariffs.

Cutting regulations will certainly allow more net corporate profits. But the current Trump supporters and Tea Party types are never going to see any of that. And without them, who is going to be left voting "conservative"? Perhaps only Charles Koch and his brother.

And yet you think by forcing Walmart and McDonalds to pay $15 per hour people will have enough money to live on.
 
Keynesian economics have been embraced by Conservatives for years. Think of Teddy Roosevelt, for example.

Free marketers, right-winged libertarians, for example, abhor Keynesian economics.
Heck, they refer to the Fed as a classic example of Keynesian economics because the Fed constantly pushes for inflation in the economy while reducing the effects of inflation's devaluation of the dollar's spending power.
 
It has nothing to do with regulation. No amount of deregulation here in the US is going to allow any American and their whole family to live on $5 a day. The cost of living in Bangladesh is much lower. That's the main reason the jobs are leaving the US. As long as that difference remains so dramatic, American workers will not be able to compete with them- at least not in a completely free market. That's why they are looking to Trump to protect their jobs with big government regulations and imposed taxes and tariffs.

Cutting regulations will certainly allow more net corporate profits. But the current Trump supporters and Tea Party types are never going to see any of that. And without them, who is going to be left voting "conservative"? Perhaps only Charles Koch and his brother.

Of course regulation plays a part. American companies do compete with overseas labor at "5 dollars a day". We do it by automation.. increasing productivity and efficiency. So yes.. our labor cost? Higher. But our output and efficiency? Also higher.

BUT.. regulation also plays a part as due all other costs and business factors. Regulation too high... well then.. it tips the scales and now suddenly its better to outsource.

You keep saying that Americans can't compete.. well that's a bald face lie. Of course American companies compete... heck.. we still manufacture in the US now don't we. Well the Bangladesh didn't just start a 5 dollar a day wage.

Cutting regulations will certainly allow more net corporate profits

Exactly.. which helps tip the scales to companies STAYING HERE.. rather than outsourcing or closing.
But the current Trump supporters and Tea Party types are never going to see any of that.

Maybe.. maybe not.. there are many other factors that effect wage pressure and wages. However.. what you can be certain of.. is that if companies DO NOT MAKE PROFIT.. then there is ABSOLUTELY NO WAY.. that any trump supporter or liberal democrat is going to benefit when a company loses profit or closes.
 
Back
Top Bottom