4/26/2011

Trading jobs for profits

Ralph Gomory, research professor at New York University's Stern business school, said, "...What we have seen, he said, is "a massive shift in capability from the U.S. to China. What we have done is traded jobs for profit. The jobs have moved to China. The capability erodes in the U.S. and grows in China. That's very destructive. That is a big reason why the U.S. is becoming more and more polarized between a small, very rich class and an eroding middle class. The people who get the profits are very different from the people who lost the wages." The above is an extract of an IMF article forcasting that the Chinese economy overtaking the American's by year 2016. But what is interesting is the uncanny similarities in the pathetic situation the Americans are facing and those of Singaporeans. By substituting the words Singapore/Singaporeans for US and FTs for China, it can simply apply to the situation here. "...What we have seen, he said, is "a massive shift in capability from the Singaporeans to FTs. What we have done is traded jobs for profit. The jobs have moved to FTs. The capability erodes in the Singaporeans and grows in FTs. That's very destructive. That is a big reason why Singapore is becoming more and more polarized between a small, very rich class and an eroding middle class. The people who get the profits are very different from the people who lost the wages."

5 comments:

Anonymous said...

Mr Chua;

there is no better way to draw the analogy.
It is a perfect comparison.

Sin wants to be the melting pot of the East having great envy of the US for many decades. The Sin Leadership has too wild an ambition despite the obvious limitations of landmass and resources.

patriot

Anonymous said...

Bravo, Mr. Redbean! Spot On!

Zenho

Matilah_Singapura said...

The article is almost complete nonsense.

The transistor and the TV were American inventions -- and were made in the millions in America. after sometime, the industries moved to Japan who could do it better and cheaper.

When that happened, all the factories and jobs that made those transistors and TVs went by the wayside. was there an economic 'collapse'?

No. Capital was reallocated to other uses. People went out and found new jobs.

In any modern society with reasonable economic systems, being unemployed is A CHOICE.

To say that 'jobs are traded for profits' is to set up a false dichotomy -- which is logically fallacious. Money-capital goes where it is the most productive. In certain industries, China does a far superior job to its competitors, at a much cheaper price. If you tried to make an iPod in any of those hi-tax welfare state cuntries, you wouldn't last one week in business.

Money capital is the most mobile of all the factors of production. It moves quicker than labour can, it costs less to move than raw materials, and no one has yet figured out how to move land.

To say that the middle class is being 'eroded' in S'pore is also being false. S'pore has more people in the 'middle class' now than at any time in its history – as a percentage of population. In any modern economic society, you are going to get some individuals who will out-strip the median level of 'success'. These people manage to become very rich, because they know and do more about making money than the average Jo or Jane Blow. You find most of the super-rich in thriving economies, not in shit-bucket Turd Whirled cuntries with no modern economic structure – usually signified by the lack of equity markets.

As long as your cuntry has a stockmarket, your people have some hope of increasing their wealth.

With no natural resources and a very small manufacturing base, Singapore has been set up as an 'entrepreneur's heaven'. In order to attract the world's best entrepreneurs, you have to appeal to their self-interest: i.e. make it easy for them to make money. And they will come, which means jobs and wealth will be created.

You can choose between coke or pepsi or a whole variety of other drinks, including the 'freebie' you get from the tap. No one forces you to buy or tells you how to allocate your money-capital. By the same token, no enterprise is duty-bound to allocate their money-capital by any other agency – voter, government, competitors or anyone else other than the financial managers.

You can't have it both ways. If you can choose as a consumer – what to buy, how to consume the product, so can the producers choose how they will produce the product.

Money-capital goes where it will have the best chance of making more money capital. It's fucking too damn bad if you lazy and shit-ignorant motherfuckers won't accept this as fact. Just because you don't like it, doesn't change reality. Also, neither the government or the world 'owes' you shit – including a job, just as you – the consumer – owes no single company a living.

Matilah_Singapura said...
This comment has been removed by the author.
Matilah_Singapura said...

Now for the clincher:

Ralph Gomory is a director at Lexmark, a US corporation.

Guess where Lexmark printers are made? All over the place apparently: Mexico, Philippines...and China.

Why? Cheap labour, more favourable ROE (return on equity)