Welcome Guest [Log In] [Register]


Reply
  • Pages:
  • 1
  • 9
The Australian economy according to David Llewellyn-Smith; Rallying call to his perma-bear audience to get the hit count up?
Topic Started: 30 Sep 2013, 11:10 AM (7,298 Views)
Kulganis
Member Avatar


That mindset will change rather rapidly I'm afraid.

China may have larger facilities, but that is only because western businesses sent their manufacturing to them years ago.

Quote:
 
Perhaps the biggest factor bringing manufacturing back to the U.S. is rising labor costs abroad. CNN Money recently published an article by Emily Jane Fox that evaluates the labor and wage situation in China.

“In 2000, the average worker was making 58 cents an hour in China. Today, it’s a little over $4,” said Mike Zinser, a partner at BCG who co-authored a survey that asked over 100 companies about overseas manufacturing. “If you continue to play that out, by 2015, it will be over $6 or $7. The economic advantage is shrinking.”

The survey found that 70% of companies agreed that “sourcing in China is more costly than it looks on paper.” Zinser cites unforeseen headaches that come up with shipping, product quality and complicated supply chains.

And with the widely experienced uncertainty over the quality of Chinese production, it is small wonder that businesses are seeking to produce locally.

http://www.smartcontrols.com/services/manufacturing/
Quote:
 
According to the mainstream narrative of the Australian political elite, trade deregulation has been a marvellous success. It has improved consumer choice and lowered prices for manufactures. In that claim, the reformers are undeniably correct.

What they ignore, however, is the other side to the coin. Trade deregulation has caused a rapid decline of manufacturing and set Australia well on the way to becoming a dropout from the ranks of the advanced industrial nations. Ours is a place gifted to us by our colonial history, but very difficult to recover from the debased state towards which we are heading.

It has caused a massive rise in welfare costs through hidden unemployment and an increase in the size of government. It has led to a reliance on commodity exports and a risky over-specialisation of the national economic base. It has caused a massive increase in net foreign debt, which in turn has required interest rates to be higher than would be the case in a balanced trade scenario.

Despite the short-term gains from lower prices on manufactured imports, it has, by the destruction of the industrial base upon which future innovation and technological development are most likely to be grounded, virtually ensured a decrease in national income over the long term.

From this point of view, the trade-liberalising reforms that the governing class and its acolytes pride themselves on have been no success at all. Rather, they have been a national disaster.

http://newsweekly.com.au/article.php?id=4263
"If man is to survive, he will have learned to take a delight in the essential differences between men and between cultures. He will learn that differences in ideas and attitudes are a delight, part of life's exciting variety, not something to fear." - Gene Roddenberry

"Balloon animals are a great way to teach children that the things they love dearly, may spontaneously explode" -- Lee Camp
Profile "REPLY WITH QUOTE" Go to top
 
barns
Member Avatar


Kulganis
2 Oct 2013, 10:14 AM
Yet, with all the sand we have, we don't have wafer manufacturing.

I see no problem with mining, but we shouldn't be sending the raw material overseas to be made into products that are then sold back to us, we should be manufacturing these final products and making the profits ourselves, we have more than enough smart people to do this.
There is nothing great about manufacturing:

1. it will be done more and more by robots in the future.
2. you make better profits from selling raw materials than manufacturing.
3. manufacturing jobs are predominately low level and boring.

Out of these leaders in their respective fields which would you rather be; Apple, Foxconn or BHP? Which of those would you put last in your preferences?

If mining royalties could be invested into R&D and design that sounds sensible, however, government lead R&D and design (other than a few exceptions that get touted about) is pretty much a waste of money. You are better to let the chips fall where they may.

“You Keep Using That Word, I Do Not Think It Means What You Think It Means” - Inigo Montoya
Profile "REPLY WITH QUOTE" Go to top
 
Veritas
Default APF Avatar


barns
2 Oct 2013, 11:56 AM
Kulganis
2 Oct 2013, 10:14 AM
Yet, with all the sand we have, we don't have wafer manufacturing.

I see no problem with mining, but we shouldn't be sending the raw material overseas to be made into products that are then sold back to us, we should be manufacturing these final products and making the profits ourselves, we have more than enough smart people to do this.
There is nothing great about manufacturing:

1. it will be done more and more by robots in the future.
2. you make better profits from selling raw materials than manufacturing.
3. manufacturing jobs are predominately low level and boring.

Out of these leaders in their respective fields which would you rather be; Apple, Foxconn or BHP? Which of those would you put last in your preferences?

If mining royalties could be invested into R&D and design that sounds sensible, however, government lead R&D and design (other than a few exceptions that get touted about) is pretty much a waste of money. You are better to let the chips fall where they may.

Jobs, Jobs, Jobs!

The main advantage of manufacturing is that it is labour intensive ( Although I take your point about robots)

What many people forget, especially right wingers, is that not everybody is cut out to be a wheeling and dealing entrepreneur or software whizz kid.

Therefore, if you allow an economic system to develop that does not provide opportunities for everyone, the system has failed- not the people who get left behind.

Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?

The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly.
Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
Profile "REPLY WITH QUOTE" Go to top
 
barns
Member Avatar


Veritas
2 Oct 2013, 12:05 PM
Jobs, Jobs, Jobs!

The main advantage of manufacturing is that it is labour intensive ( Although I take your point about robots)

What many people forget, especially right wingers, is that not everybody is cut out to be a wheeling and dealing entrepreneur or software whizz kid.

Therefore, if you allow an economic system to develop that does not provide opportunities for everyone, the system has failed- not the people who get left behind.

I'm sure that those people that would hate their factory jobs could equally hate serving coffee, mowing lawns and cleaning cars of wheeling dealing entrepreneurs, software whizz kids and miners. At least with service jobs the 'unskilled' have the opportunity to own their own business and employ others - it's hard for an unskilled factory worker to start a factory = potentially more opportunity in an economic system that doesn't encourage people to become career subsidised industry drones (eg Aussie car industry).
“You Keep Using That Word, I Do Not Think It Means What You Think It Means” - Inigo Montoya
Profile "REPLY WITH QUOTE" Go to top
 
Veritas
Default APF Avatar


barns
2 Oct 2013, 12:13 PM
Veritas
2 Oct 2013, 12:05 PM
Jobs, Jobs, Jobs!

The main advantage of manufacturing is that it is labour intensive ( Although I take your point about robots)

What many people forget, especially right wingers, is that not everybody is cut out to be a wheeling and dealing entrepreneur or software whizz kid.

Therefore, if you allow an economic system to develop that does not provide opportunities for everyone, the system has failed- not the people who get left behind.

I'm sure that those people that would hate their factory jobs could equally hate serving coffee, mowing lawns and cleaning cars of wheeling dealing entrepreneurs, software whizz kids and miners. At least with service jobs the 'unskilled' have the opportunity to own their own business and employ others - it's hard for an unskilled factory worker to start a factory = potentially more opportunity in an economic system that doesn't encourage people to become career subsidised industry drones (eg Aussie car industry).
Any job practically is better than no job.

Ask the millions of unemployed in the US and Europe.

90% of the jobs created in the State since 2009 have been part time.

In Europe, it could be a decade or more before they return to anything close to full employment.

And to think that we have, somehow, avoided this trend is naïve in my opinion.
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?

The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly.
Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
Profile "REPLY WITH QUOTE" Go to top
 
Kulganis
Member Avatar


barns
2 Oct 2013, 11:56 AM
There is nothing great about manufacturing:

1. it will be done more and more by robots in the future.
2. you make better profits from selling raw materials than manufacturing.
3. manufacturing jobs are predominately low level and boring.

Out of these leaders in their respective fields which would you rather be; Apple, Foxconn or BHP? Which of those would you put last in your preferences?

If mining royalties could be invested into R&D and design that sounds sensible, however, government lead R&D and design (other than a few exceptions that get touted about) is pretty much a waste of money. You are better to let the chips fall where they may.
I would rather see employed people in Australia, doing boring jobs than sending boring jobs to low economic countries just for a little extra margin.

Yes, more robots, we could have had robotic engineers and technicians, it could have been Australian's who produced Honda's Asimo (http://asimo.honda.com/) instead of Japan.

You may make better profits selling raw materials, but what if we could do both? I'm sure we have enough resources to have done that.

China used to be a really inexpensive country to mass produce cheap goods in, it isn't so much now, businesses are finding that it could be better to produce locally.

"If man is to survive, he will have learned to take a delight in the essential differences between men and between cultures. He will learn that differences in ideas and attitudes are a delight, part of life's exciting variety, not something to fear." - Gene Roddenberry

"Balloon animals are a great way to teach children that the things they love dearly, may spontaneously explode" -- Lee Camp
Profile "REPLY WITH QUOTE" Go to top
 
barns
Member Avatar


Veritas
2 Oct 2013, 12:17 PM
Any job practically is better than no job.

Ask the millions of unemployed in the US and Europe.

90% of the jobs created in the State since 2009 have been part time.

In Europe, it could be a decade or more before they return to anything close to full employment.

And to think that we have, somehow, avoided this trend is naïve in my opinion.
Thanks, that is correct. Any job is better than no job and with around 6% unemployment we don't need a large manufacturing sector to mop up those unemployed unskilled workers as there isn't many of them. Personally I think they are better off working in service orientated small businesses and retail than in a factory somewhere. It's likely more rewarding (I'm not talking $$) and more anti-fragile.

In the emergence from any recession it's the part-time jobs that appear first as businesses are still nervous about taking people on full-time. This will change as the recession fades.

Europe is problematic. Europe has had its best days. Its importance in the world will continue to diminish. It will remain a good tourist spot.
“You Keep Using That Word, I Do Not Think It Means What You Think It Means” - Inigo Montoya
Profile "REPLY WITH QUOTE" Go to top
 
miw
Member Avatar


Kulganis
2 Oct 2013, 10:14 AM
Yet, with all the sand we have, we don't have wafer manufacturing.

I see no problem with mining, but we shouldn't be sending the raw material overseas to be made into products that are then sold back to us, we should be manufacturing these final products and making the profits ourselves, we have more than enough smart people to do this.
The issue is one of comparative advantage. Australia has a comparative advantage in mining, the production of food and being a destination for tourism and education. So naturally a large amount of human and capital resource goes into these endeavours.

Wafer manufacturing and chip fabrication is incredibly capital-intensive and pretty low-margin, so it's no great surprise that it is done in places like Korea and Taiwan where most of the capital is controlled by a few families and which have pretty-much no other advantages.

Why would you spend $4B on a fab when you could put it into a mine and get many times the return?
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
AREPS™
Profile "REPLY WITH QUOTE" Go to top
 
barns
Member Avatar


Kulganis
2 Oct 2013, 12:21 PM
I would rather see employed people in Australia, doing boring jobs than sending boring jobs to low economic countries just for a little extra margin.

Yes, more robots, we could have had robotic engineers and technicians, it could have been Australian's who produced Honda's Asimo (http://asimo.honda.com/) instead of Japan.

You may make better profits selling raw materials, but what if we could do both? I'm sure we have enough resources to have done that.

China used to be a really inexpensive country to mass produce cheap goods in, it isn't so much now, businesses are finding that it could be better to produce locally.
As mentioned in my last post there is not a large pool of unskilled workers to work in these imagined factories.

We could design robots and have robotic engineers and technicians. This could still happen. Having a large manufacturing industry where a whole bunch of people glued screens onto iphones for minimum wage or sat on a machine that squirted plastic into a mould wouldn't help us with that. Once the robots are designed other robots can build them.

We do not have enough human resources to mine, provide services and manufacture. Unless we really open the borders (he says calling moops to the thread).
“You Keep Using That Word, I Do Not Think It Means What You Think It Means” - Inigo Montoya
Profile "REPLY WITH QUOTE" Go to top
 
Sydneyite
Member Avatar


Kulganis
2 Oct 2013, 12:21 PM
Yes, more robots, we could have had robotic engineers and technicians, it could have been Australian's who produced Honda's Asimo (http://asimo.honda.com/) instead of Japan.
Australia has some very advanced and successful enterprises in this sort of space - check out this company in Sydney that designs and produces robots for police/military training purposes - oh and look they EXPORT to the US! Who would have thunk it???: http://www.marathon-targets.com/

There are so many tech start-ups like this in Sydney in particular, that hardly anyone not in-the-know is aware of - but then we only ship dirt and leverage into houses right? :dry:
Edited by Sydneyite, 2 Oct 2013, 12:54 PM.
For Aussie property bears, "denial", is not just a long river in North Africa.....
Profile "REPLY WITH QUOTE" Go to top
 
1 user reading this topic (1 Guest and 0 Anonymous)
ZetaBoards - Free Forum Hosting
Create a free forum in seconds.
Go to Next Page
« Previous Topic · Australian Property Forum · Next Topic »
Reply
  • Pages:
  • 1
  • 9



Australian Property Forum is an economics and finance forum dedicated to discussion of Australian and global real estate markets and macroeconomics, including house prices, housing affordability, and the likelihood of a property crash. Is there an Australian housing bubble? Will house prices crash, boom or stagnate? Is the Australian property market a pyramid scheme or Ponzi scheme? Can house prices really rise forever? These are the questions we address on Australian Property Forum, the premier real estate site for property bears, bulls, investors, and speculators. Members may also discuss matters related to finance, modern monetary theory (MMT), debt deflation, cryptocurrencies like Bitcoin Ethereum and Ripple, property investing, landlords, tenants, debt consolidation, reverse home equity loans, the housing shortage, negative gearing, capital gains tax, land tax and macro prudential regulation.

Forum Rules: The main forum may be used to discuss property, politics, economics and finance, precious metals, crypto currency, debt management, generational divides, climate change, sustainability, alternative energy, environmental topics, human rights or social justice issues, and other topics on a case by case basis. Topics unsuitable for the main forum may be discussed in the lounge. You agree you won't use this forum to post material that is illegal, private, defamatory, pornographic, excessively abusive or profane, threatening, or invasive of another forum member's privacy. Don't post NSFW content. Racist or ethnic slurs and homophobic comments aren't tolerated. Accusing forum members of serious crimes is not permitted. Accusations, attacks, abuse or threats, litigious or otherwise, directed against the forum or forum administrators aren't tolerated and will result in immediate suspension of your account for a number of days depending on the severity of the attack. No spamming or advertising in the main forum. Spamming includes repeating the same message over and over again within a short period of time. Don't post ALL CAPS thread titles. The Advertising and Promotion Subforum may be used to promote your Australian property related business or service. Active members of the forum who contribute regularly to main forum discussions may also include a link to their product or service in their signature block. Members are limited to one actively posting account each. A secondary account may be used solely for the purpose of maintaining a blog as long as that account no longer posts in threads. Any member who believes another member has violated these rules may report the offending post using the report button.

Australian Property Forum complies with ASIC Regulatory Guide 162 regarding Internet Discussion Sites. Australian Property Forum is not a provider of financial advice. Australian Property Forum does not in any way endorse the views and opinions of its members, nor does it vouch for for the accuracy or authenticity of their posts. It is not permitted for any Australian Property Forum member to post in the role of a licensed financial advisor or to post as the representative of a financial advisor. It is not permitted for Australian Property Forum members to ask for or offer specific buy, sell or hold recommendations on particular stocks, as a response to a request of this nature may be considered the provision of financial advice.

Views expressed on this forum are not representative of the forum owners. The forum owners are not liable or responsible for comments posted. Information posted does not constitute financial or legal advice. The forum owners accept no liability for information posted, nor for consequences of actions taken on the basis of that information. By visiting or using this forum, members and guests agree to be bound by the Zetaboards Terms of Use.

This site may contain copyright material (i.e. attributed snippets from online news reports), the use of which has not always been specifically authorized by the copyright owner. Such content is posted to advance understanding of environmental, political, human rights, economic, democratic, scientific, and social justice issues. This constitutes 'fair use' of such copyright material as provided for in section 107 of US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed for research and educational purposes only. If you wish to use this material for purposes that go beyond 'fair use', you must obtain permission from the copyright owner. Such material is credited to the true owner or licensee. We will remove from the forum any such material upon the request of the owners of the copyright of said material, as we claim no credit for such material.

For more information go to Limitations on Exclusive Rights: Fair Use

Privacy Policy: Australian Property Forum uses third party advertising companies to serve ads when you visit our site. These third party advertising companies may collect and use information about your visits to Australian Property Forum as well as other web sites in order to provide advertisements about goods and services of interest to you. If you would like more information about this practice and to know your choices about not having this information used by these companies, click here: Google Advertising Privacy FAQ

Australian Property Forum is hosted by Zetaboards. Please refer also to the Zetaboards Privacy Policy