General Motors To Lay Off 2,000 Workers at Two US Plants (reuters.com)

General Motors plans to lay off 2,000 employees at two U.S. auto plants in early 2017, the automaker said on Wednesday. From a Reuters report:GM said it will furlough the employees when it cuts the third shift at its Lordstown, Ohio and Lansing, Michigan plants in mid-January. The Lordstown plant builds the compact Chevrolet Cruze, whose U.S. sales through October were down 20 percent. The Lansing Grand River plant builds the Cadillac ATS and CTS, whose sales were down 17 percent through October.An anonymous reader shares an excerpt from a Washington Examiner report, "Trump has already criticized General Motors for reports that it would shift some production to Mexico, a plan that the company hasn't confirmed and didn't allude to Wednesday. The incoming Republican president also has said that he would impose a 35 percent tariff on the products of former U.S. subsidiaries that moved out of the country. When Ford announced the opening of a new factory in Mexico earlier this year, Trump called it an "absolute disgrace" and pledged to tax its imports to the U.S."

Comments

Short Lived

[110010001000]

President Trump will bring those 2,000 jobs back, and add 5,000 more. He promised. If he doesn't, he is a liar and a charlatan. Check back in 4 years to see how he did!

Re:Short Lived

[cayenne8]

Hey, he's president, at worst, you should hope he can do something.

Frankly, I have no problem with the US giving breaks and incentives to stay in the US, employ US citizens...and penalize those that leave and ship jobs overseas.

Re:Short Lived

[Oswald McWeany]

He's wanting to put tariffs on imported goods. Car manufacturers rely on imported goods. Detroit is about to get a whole lot poorer. Even if more parts were made domestically, retaliatory tariffs will make American made cars unattractive overseas. America could potentially lose most or all of its car industry. I suspect the design of cars will still be done by well trained engineers in the US, but the whole product will be assembled elsewhere to avoid extra retaliatory tariffs in the rest of the world.

(we did this whole tariff thing in the 1800's and early 1900's; abolishing it is what led to people getting wealthier)

Re:Short Lived

[Anonymous Coward]

>You can thank Obama for the lost jobs in the first place
this process has been going on since the 70's. are you going to blame him for all those years too ?

Re:Short Lived

[MightyMartian]

Without significant alterations to various trade agreements, including the WTO agreements, how would Trump start nailing such companies with a 35% tariff. This would almost certainly need Senate approval, and it isn't terribly clear that the Senate would be all that interested in basically tearing up the US's international trade agreements just so he can punish Ford and GM.

Re: Short Lived

[prefec2]

Yes of course. And the bad weather.

Re:Short Lived

[MightyMartian]

And wiping out one of the US's major manufacturing industries would help your wages how?

You understand that what tariffs actually do is raise prices for consumers. Now there may be times when tariffs are useful, particularly in response to a foreign country dumping, or where they started throwing tariffs on first, but tariffs as a general trade practice don't help the average family one little bit, and usually harm average citizens.

And as the other poster pointed out, what happens when some of these countries being targeted start throwing up retaliatory tariffs? What happens to US industries that rely on exporting?

I get it. You are very angry. You voted for Trump because your mad and you're not going to take it any more. But there are reasons the trade systems work like they do, and it is because the alternative never ultimately helps the average citizen.

Re:Short Lived

[dgatwood]

I suspect the design of cars will still be done by well trained engineers in the US, but the whole product will be assembled elsewhere to avoid extra retaliatory tariffs in the rest of the world.

At least for cars that are sold outside the United States. The most likely effect of protectionist policies is a bifurcation of manufacturing, where products for sale in the U.S. are made here and products for sale outside the U.S. are made elsewhere. The net effect on American jobs is likely to be a wash, but the effect on the cost of goods will likely be significant, with hyperinflation like we've never seen before.

Re:Short Lived

[ShanghaiBill]

He promised. If he doesn't, he is a liar and a charlatan.

This is microcosm of the disconnect in American politics.
Trump's detractors take him literally, but not seriously.
Trump's supporters take him seriously, but not literally.

His supporters don't actually expect him to build a wall, or slap tariffs on Chinese imports.
That is not why they voted for him.
But they do expect him to address immigration and outsourcing as serious issues.
THAT is why they voted for him.

Disclaimer: I didn't vote for Trump, but I understand why other people did.

Re:Short Lived

[DutchUncle]

>>> ... the alternative never ultimately helps the average citizen.

I'm sorry, did anyone think that the system exists to help the average citizen? vs. the corporations who bought the legislatures fair and square?

Re:Short Lived

[Rick Schumann]

Yeah, I imagine the threat of him bankrupting the country, like he has his own companies, and sending it into another recession, is more real than I'm comfortable with, but that's just one of a whole constellation of things he's likely to completely screw up.

Re:Short Lived

[MightyMartian]

You don't think liberal access to foreign markets helps the average person in the exporting nation? For chrissakes, the US has been a merchant power since its inception, and yet you still have people that believe it is best served by starting trade wars with trading partners?

Re:Short Lived

[Rick Schumann]

Considering that both Senate and House are also Republican controlled, I'm holding out hope that their game-plan with regards to Trump is to keep him on a short leash so he doesn't completely ruin everything he touches, and that's why so many of them have been holding their noses and keeping their mouths shut this whole time. As we've seen, however, some of the more noteworthy Republicans just couldn't stand the stench long enough and finally just said how they really felt. I do not envy any Republican politicians right now, seeing what they'll have to put up with for the next 4 years.

Re:Short Lived

[MightyMartian]

I have a feeling that in some ways the Trump presidency will resemble the GWB and Reagan presidencies, in that it will be the VP, advisers and chief allies in Congress that do much of the actual leg work. I don't think Trump really has the intellectual or emotional capacity to be a president in anything but a nominal way. He'll come into the office much like Woodrow Wilson left it.

Re:Short Lived

[PopeRatzo]

Trump's supporters take him seriously, but not literally.

That's the very definition of "feels before reals".

Re:Short Lived

[bluefoxlucid]

"Wiping out" an industry would be destructive, in the sense that suddenly destroying hundreds of thousands of jobs would be a shock that created lots of unemployment. Bleeding it out over decades isn't, if it reduces product costs, because jobs move, population changes, and the amount of consumer purchasing power increases as a result.

Now there may be times when tariffs are useful, particularly in response to a foreign country dumping, or where they started throwing tariffs on first,

Actually, if a foreign country is throwing up tariffs, they're hurting their own wealth. If we have an export, we can just keep selling it off to everyone else. It'd be nice to have that cash flow, for sure; however, tariffs in retaliation essentially say, "We're $1/hr poorer, so let's make sure we spend $1 more on everything!", which is compounding the problem.

I did a write-up on this recently. The short version is bringing manufacture back from China will cause a net loss of American jobs if we pay any more than $18/hr (GM line worker makes $21/hr), so we'd have to create the lowest-income jobs we could. All of these jobs come out of the same pool of total income over any unique time period, so we have to eliminate other American jobs--we only create more American jobs by lowering the average American income. You'd see things like a $15 pair of pants costing $50, a $350 cell phone costing $1,100, the $500 TVs costing $1,500, while the amount of income doesn't increase--people becoming poorer.

The dirty secret is I don't feel like doing the analysis right. I did it right for clothing; but TVs and cell phones are made from a lot of Chinese labor, and carry a much smaller domestic share. Shipping cost is higher (maybe 50 times higher--$3.25 instead of 6.5 cents), but the domestic costs to retail are the same. That $14.97 pair of pants had a $6.055 share of labor, a 6.5 cent share of international shipping, and a $8.91 share of domestic shipping and retail. Domestic shipping is paltry; if we overestimate it at 6.5 cents there, then what? That $500 52-inch TV? It's $12.16 of domestic labor, $487.84 of Chinese labor. By my numbers, that's $3,161.40 of American labor at $18/hr (the break-even point, where we lose no jobs), and of course it's a $3,173 TV now.

Think about what that means for TVs, cell phones, computers. You see what it means for clothes: $50 pairs of pants and no more jobs--that pair of pants might cost $25.21, if we pay $8.25/hr minimum wage; and how will these factory workers afford clothes? Well I guess a 68% bump in price isn't that bad for people making $16,500/year.

What about cars?

Seriously. Electronic fuel injection, engine management systems, radios, CD players, anti-lock brake sensors. Might bump the price of a car up a few thousand; fortunately most of the cost is just plain steel, right?

nVidia chips are fabricated in Taiwan, and may go to Korea. They're cheap! Those SOCs cost $25. Similar-complexity Intel chips manufactured in the US cost $150-$200. What happens when your $300 processor also needs a $1,500, 256GB SSD--no, that's stupid, sorry, you're buying an $800, 1TB hard disk (scaling down isn't cheaper). Let's not forget the $100 made-in-China motherboard that's now $550-$600. We're getting into $3,000+ PCs--back to 1992 with you!

People, somehow, think this will create jobs and make them richer.

Re:Short Lived

[MouseR]

You do realize all his fncking swag like Make America Great Again caps were made in china, right?

Re:Short Lived

[MightyMartian]

Thanks for this! This is a really neat writeup. I'm going to go through it later with a bit of a fine tooth comb, but I think you're making a damned good point about the state of modern manufacturing, and one I've tried to make. What Trump has promised idled Rust Belt workers (and by extension other idled groups like coal miners) is that somehow he's going to magically turn back the clock half a century.

Re:Short Lived

[ShanghaiBill]

That's the very definition of "feels before reals".

Sure. But is it better to have a president that is a bald-faced liar, or one that tells more subtle lies that people believe?

"Neither" isn't an option.

Re: Short Lived

[Anonymous Coward]

He's President ELECT

Re:Short Lived

[Rick Schumann]

That's kind of what I'm getting at. You'll note the last two elections the GOP couldn't produce a candidate that was anywhere near popular enough for anyone to get behind, therefore we got Obama, so it makes sense to me that while they've all had to hold their noses and accept Trump, they'll do everything they can to control him, or at least keep him from shooting the entire country in the foot. Meanwhile they work for the next 4 years to come up with a real candidate. Unfortunately for them they'll have to re-invent themselves to be more current with the times, because this isn't 1950 anymore, and they're completely out-of-touch.

Re:Short Lived

[LynnwoodRooster]

If he doesn't hit the promises, will you give him another 4 years like President Obama for his failed promises?

Re:Short Lived

[LynnwoodRooster]

I see the labor force participation rate climb from 1970 to 1990, flat until 2007, then fall. That decline is a pretty recent thing...

Re:Short Lived

[MightyMartian]

With Trump's commitment to roll back abortion and gay rights, he's speaking right over top of any GOP modernizers at the social conservative wing. Now maybe Trump, who I figure at his age is only likely to be a one-termer anyways, won't give a damn who he pisses off, but I'm sure there are a lot of RINOs and other centrists and modernizers rather fearful that these commitments to the social conservative wish list will tie their hands. I'll be blunt, there's a whole section of the GOP that now expects it will be able to ban transexuals from their gender-identified washrooms, will be able to throw the local town homosexuals out of their businesses, and that abortions will now be heavily restricted, if not outright banned, largely by way of putting as many Scalia clones in the Supreme Court as possible. If Trump proves as unable or unwilling to actually hold to that social conservative agenda as George W Bush, or hell, every Republican president since Roe v Wade, then the GOP has a real problem.

Re:Short Lived

[PopeRatzo]

Sure. But is it better to have a president that is a bald-faced liar, or one that tells more subtle lies that people believe?

That's more complicated than it might seem. Would you rather have a president who doesn't care whether or not you believe his lies or one who cares enough to try to lie? At least in the latter, there's a certain amount of self-awareness.

If you ask people in countries like Iraq or the former Yugoslavia, they can tell you what it's like to live under the former.

Re:Short Lived

[Rick Schumann]

I'll be blunt, there's a whole section of the GOP that now expects it will be able to ban transexuals from their gender-identified washrooms, will be able to throw the local town homosexuals out of their businesses, and that abortions will now be heavily restricted, if not outright banned

If they try to roll back the clock to the 1940's and 1950's socially, they'll weaken the entire country. Have you seen the twitter posts from actual islamic extremists? They're happy to see Trump elected, because they think it'll mean an uprising of American muslims when Trump starts taking away their rights, deporting them, and refusing to allow muslim refugees into the country. They're not wrong.

Re:Short Lived

[bluefoxlucid]

You'll find flaws. The ideas are right, but some of the facts are sloppy--those numbers I cited aren't strictly-correct. If adjusted to real-world numbers, you'd see exactly what I described: lower wages means more jobs, higher wages means fewer jobs, and higher labor costs means higher product costs. You get a trade advantage when the reduced cost of production produces prices which more-than-offset the cost of production domestically--when domestic technology or other factors (natural resources, etc.) requires more labor, when domestic wages are higher, or when foreign wages are lower.

That means outsourcing to Canada might produce lower prices, but also a net-loss of American jobs; while outsourcing to China produces a net-gain.

Malthusian population growth actually lets you target labor long-term, because your population will expand to a certain amount of unemployment. Malthus said populations expand in prosperity; I've taken it further by refining the definition of scarcity beyond just "less supply than demand". Scarcity occurs when scaling production rate (volume per time) requires more-than-linear labor.

You have plenty of farmland, and 10% more population needs 10% more food, so you get 10% more farmers out of the new people; but then you run low on GOOD farmland, require more fertilizer and irrigation, and thus more time on that land. After all that, you get lower yield, and so you need to farm more land at this higher labor cost. Now to feed 10% more people, you need 10% more food, and so need 12% more farmers. As you can imagine, paying 12 people's wages costs more than paying 10 people's wages; and if those 12 people make the same amount of food as the last 10 people, that food costs more. Scarcity. Invent GMOs, grow twice as much food per land area, suddenly you're not hitting scarcity.

You might notice that there's actually not less supply than demand above. There's still demand for that much food; just the people buying food have to spend a little more, and so they can't buy as much of something else. That means food is what's scarce, but there's enough food to meet demand; and somebody who is buying food can't afford to buy a car, because food is expensive. Do you know what we call people who can afford food, but can't afford Nintendo and iPhones and non-shitty houses? Poor. You have poor people.

Your entire economy gets poorer. Some product(s) become more-expensive, and so population growth only creates a smaller middle-class and a bigger poor class. Malthusian growth stops your population from expanding as quickly.

So imagine you did outsource to China, and you actually took a small loss on jobs. Sure, the Chinese products are cheaper; but you lost 90,000 jobs and gained 70,000: you just lost 20,000 jobs.

Well, around 360,000 Americans retire every year. If your population winces a little at the economic pressure, Malthusian growth slows you down. It takes 20 years, but you do adjust to the loss, and you end up replacing those laborers with 385,000 new workers per year instead of 395,000.

Meanwhile, we have job growth by actual technical progress, constantly, in many fields. That means we normally create more jobs by laying off no-longer-needed workers, cutting the price of products back a bit, and then having all this extra money to spend. The actual buying power goes up; if it goes up 10% and your wages only keep up for 8%, well, stuff's cheaper still, you're still somewhat richer, and that other 2% can distribute to new jobs.

So technical progress can end up with everyone getting richer (things get cheaper by a total of $1,000 less spent), but with not all of that going to the current workers (inflation makes that $2,000 but you only get $1,600 more wages), and then you get more jobs (the other $400 everyone is missing pays the wages for new people). That's all confusing, and it's easier to just consider: if there are twice as many workers, people must be averaging half as muc

Re:Short Lived

[fluffernutter]

Uh, he said he could do it, he needs to do it.

Re:Short Lived

[fluffernutter]

Now that he is president I expect that this companies will suddenly start to do very well. Friends in high places.

Re:Short Lived

[fluffernutter]

The problem is that they can never be trusted to pass on the costs fairly. When their costs go up by 10% they will raise prices by 30%, throw their hands up and claim nothing else could be done.

Re:Short Lived

[Ogive17]

It is funny, I am in Mexico right now providing some support to our new automotive manufacturing facility. Unlike Ford, our facility wasn't built to replace jobs in the US, it was built to produce vehicles that are more in line with Latin American needs while also exporting these models to the US.

I have been asked by at least 20 people today what I think about Trump. I said much the same thing, if he follows through with his threats of tariffs, he's going to wreck the US industry.

I also told them that I hope Trump just made those comments to get certain voting blocks to vote for him. Once he locked up that segment of the population that have no sense of economics, he could focus on reeling in other groups.

Despite being "Republican" I suspect behind most closed doors all those Republican congresscritters are going to be telling him to back off the talk.

Re:Short Lived

[DutchUncle]

The discussion was not about selling to foreign markets; the discussion was about importing from foreign markets, which is the real action that is usually referred to as "exporting jobs". And no, I'm not interested in trade wars; I want my cheap chocolate and cookies like Colbert wants his tube socks. But in order to get that, someone overseas has a job that isn't being done here, and making money that isn't being recirculated into the economy here.

Re:Short Lived

[ArmoredDragon]

Honestly we were already bound for a recession well before the election even happened, and no matter who got elected was going to have to deal with that. Nonetheless, if Trump does pull this off, I think it's going to backfire because imports and domestic production rise and fall with one another. When your currency is fiat, having a trade deficit isn't a bad thing; essentially you're giving away poker chips in exchange for useful goods.

I think the best thing could do is roll back Obamanomics. Obamanomics being that we add extra financial burdens for employers that hire people for full time work (I'm looking at you, Obamacare) thus incomes decline, and so does the money supply along with it, hence we had a really crappy recovery.

Re:Short Lived

[laughing_badger]

Actually, quite a lot of the very technical automotive engine design stuff is done outside the US. Some is done in the UK. Citation: I used to work at a place doing it.

Re:Short Lived

[Oswald McWeany]

Historically, Republicans have been for free trade. (in the last two or three decades Democrats have been increasingly for it too, common sense winning them over).

It is very anti-traditional Republican ideals to place tariffs on goods. There again, I think Hillary is more a traditional Republican nominee than Trump is.

Re:Short Lived

[TFloore]

I see the labor force participation rate [bls.gov] climb from 1970 to 1990, flat until 2007, then fall. That decline is a pretty recent thing...

If all you are doing is talking about population distribution in age ranges, you might want to re-think your argument.

In the US we have a nice population spike right at/after WWII, we call that the Baby Boomers. Born between 1940 and 1960, or so. And, hey, now in 2016 those people are between 56 and 76 years old. So your complaint about a falling labor force participation rate starting around 2007 is when the big Baby Boomer spike started hitting 65 years old.

Definition: The civilian labor force participation rate is the number of employed and unemployed but looking for a job as a percentage of the population aged 16 years and over. (definition from http://www.tradingeconomics.co...)

You're complaining that old people are not forced to work until they drop dead on the job.

This is really the argument you want to make?

Re:Short Lived

[AutodidactLabrat]

Cite EVIDENCE!!!
Not so much as a scintilla of evidence of a massive slowdown!

Re:Short Lived

[LynnwoodRooster]

The labor force participation rate factors in demographics. It is a measure of the percentage of eligible workers versus the population as a whole. So as the population goes up and down, with "full employment" the labor force participation rate would hold steady. It drops when unemployment goes up.

You are talking about workers in the labor force which WILL fluctuate with population - but that's not the measure to look at, nor the measure that I linked. Labor force participation RATE climbed from the 70s to the 90s, leveled off for most of the 2000s, then started falling. Jobs disappeared, they did not come back - and after a certain amount of time, those still unemployed were "dropped" from the lists of unemployed so the unemployment rate could be cooked. The labor force participation rate doesn't lie...

Re:Short Lived

[publiclurker]

so apparently you prefer a planet where the sick simply crawl away into the corner and die quietly so as not to disturb the corporate owners meals.

No doubt...

[Anonymous Coward]

... the election outcome had anything to do with it? Everything repubs touch turns to shit, even before they take power. The markets plunged when it became clear Trump was going to win. Whoever came up with the notion that repubs are good for business was a liar or insane.

The important thing is that about half of the USA population got to sate its hatred of blacks, Latinos, Muslims, and women. That's the only thing that matters in the long run, who needs jobs and a stable economy?

Re:No doubt...

[Clsid]

Speak for yourself. As a latino I take no offense in Trump winning. Why would you support people that pay no taxes only and accept whatever wage is thrown at them since they have no options, which in the process reduces the job pool for a lot of people, simply because they could not find a legal path to immigrate to the US?

It seems you are too blinded by the kool-aid that the media gave you about Trump to actually see that he was the one talking about bringing jobs back and making the economy work again.

But just chill, it is politics after all. I am not expecting miracles coming from either candidate so just focus on getting better opportunities or starting your own thing.

Re:No doubt...

[__aaclcg7560]

LAIR. Not that you would ever care about the market or money (real vs fiat) - but the MARKET is up 1.39% as of now.

The MARKET tanked last night as investors were expecting a Hillary win.

http://www.forbes.com/sites/laurengensler/2016/11/09/trump-wins-election-markets-live-blog/#7bffd8149397

LIAR. YOU are the god damned wreckers - why wouldnt you want jobs in the USA? why wouldnt you want to try something besides obamanomics which has the labor force collapsed and part time and multijob and gig jobs for everyone?

You shouldn't believe everything you read on Facebook.

Re:No doubt...

[Alomex]

Why would you support people that pay no taxes only

Actually most immigrants pay taxes since they use somebody else's Social Insurance Number to collect their wages. They also pay sales tax and property tax through their monthly rent.

It seems you are too blinded by the kool-aid that the media gave you about Trump

Funny you say that, since it is you who is under the false impression that illegal immigrants pay no taxes because of Trump media kool-aid.

Re:No doubt...

[Calydor]

Judging by the sound bites we got here in Europe, Trump's plan for bringing jobs back went something like

1) Promise more jobs.
2) ???
3) Profit!

It is entirely possible that he actually HAS a working plan, I won't rule that out. But until I hear something more believable than "Because magic" or that one sound-bite going on all day of "We didn't do it. God did it!" I have very little faith in the next four years for you guys.

Re:No doubt...

[__aaclcg7560]

The MARKET tanked for a little while due to the surprise win by Trump. The MARKET has since recovered, and is UP.

DOW is UP, S&P is UP.

It would help if you replied to the right comment.

Don't be a dick. And seriously, don't use a fucking Forbes blog page to prove your point

http://www.bloomberg.com/news/articles/2016-11-09/s-p-500-reversal-is-the-biggest-since-crisis-days-of-2008-chart

So what?

Re:No doubt...

[Alomex]

Again, get your facts straight. Most immigrants take cash based jobs and bunk up when freshly arrived, but want to move up from that soon, just the same as you would. Their use of emergency rooms is no different than any other poor American and it is subsidized by your health insurance, not your taxes. Obamacare makes those free-riders contribute a portion of those costs, and any true Republican would be in favor of this, which is why Romney proposed it when he was governor in Massachusetts.

Let's see....

[Anonymous Coward]

Let's see if President Pussy Grabber actually follows through on his promises.

Because I've got a feeling he just scammed a bunch of rednecks, just like the people he scammed with Trump University...

Re:Let's see....

[Tablizer]

Grabbonomics?

Re:Let's see....

[MightyMartian]

So let's get this straight. The man the American people just elected President has no actual intention of being a functional President? So this really is going to be like all Trump's other endeavors, he'll be the face of the endeavor, the guy that comes in, shakes hands, inks the deal others have negotiated, and then is ushered out the door while the actual people running his companies go about doing the actual work.

So if this is the case, what the Americans actually have done has elected a 21st century version of a post-stroke Woodrow Wilson.

Re:Let's see....

[Rick Schumann]

President Pussy Grabber

Thanks, I needed to laugh out loud, and that did it. :-) Maybe I'll get a T-shirt made with the most unflattering pic of Trump on it, captioned with 'All Hail President Pussy Grabber!'. xD

Re:Let's see....

[fahrbot-bot]

The man the American people just elected President has no actual intention of being a functional President?

Worked for Bush and Cheney :-)

Re:Let's see....

[MightyMartian]

It might have worked better if the VP wasn't the proverbial Whore of Babylon.

Re:Short Lived - MAGA, despite the liberal shits.

[Anonymous Coward]

as usual a snarky smug liberal fucker who would rather see failure and be "right"

the fucking labor force has been collapsed and real jobs replaced for multiple gig jobs and barista-style service jobs.

Fuck you. the whole time for the last 30 years I have worked whether you fuckers were sticking your boot up my ass or not. i pay insane tax rates too and i have kids and all the EBT fuckers give me the middle finger and call me racist while I feed them? fuck you.

Re:This is totally Trump's fault!

[Anonymous Coward]

Why not? Trump blamed everything of the last 30 years on Hillary.

App Proposal

[Howitzer86]

"Wake Me Up When...", Freeze yourself until preset conditions are met!

Also... kinda funny how Slashdot turns super liberal the minute Trump wins. Where did all those supporters go? Did their last check arrive or something?

Re:App Proposal

[PopeRatzo]

Slashdot tends to criticize those in power. With the latest shift, expect more of this.

In case you didn't know, that's how journalism is supposed to work. You know, "Comfort the afflicted, and afflict the comfortable."

Re:This is totally Trump's fault!

[laffer1]

And the GOP blamed Obama exclusively for the bail out when it started under Bush!

Jobs vs. Stuff

[Tablizer]

Protectionism has mostly "worked" in Japan, at least in terms of jobs. They have a low unemployment rate compared to other countries. But many products are indeed more expensive because of it. Whether jobs or "stuff" is more important is a subjective choice.

Re:Jobs vs. Stuff

[stinerman]

Ideally you do free trade and with the comparative advantages that entails, you tax the people who win due to fair trade and give that money to the people who lose.

Re:Jobs vs. Stuff

[Tablizer]

That's assuming the so-called losers want money instead of jobs.

For males it's especially difficult: our career is our #1 defining quality to society for good or bad. For women the equivalent is looks. That may not be fair either, but it's less career pressure. If a lady has looks, she doesn't have to work so hard.

Re:Jobs vs. Stuff

[MatthiasF]

Nice theory, except the way you give money to the people who "lose" is through subsidies and industries that are subsidized don't require free trade to make money. So, your logic there is actually pretty contrarian.

There's no way to balance letting jobs leave the country and keeping the country employed unless there are new types of jobs being built that the country is progressing towards and thus not needing the jobs that are leaving the country.

Which brings us to the next farce; a college education for everyone that produces an over-educated and over-leveraged (high debt) workforce unable to pay it's bills.

Re:Jobs vs. Stuff

[MightyMartian]

The reason Japan's unemployment rate is so low is because it is a demographically shrinking nation. It is at a tipping point where even its drive towards automation cannot make up for the overall losses of workers due to an aging population.

Describing Japan's policies as some sort of economic success is like describing the Black Death as a great boon for Medieval workers rights. While true on a superficial level, neither claim bears much scrutiny.

Re:Jobs vs. Stuff

[MightyMartian]

The US unemployment rate is hovering somewhere around 5%. Now we can quibble over what that means exactly, but in general, the US has not seen a drop in unemployment due to liberalized trade agreements.

If you look at the auto industry in particular, it has been in trouble since the 1970s. The idea that NAFTA or any other trade agreement somehow created this crisis is absurd. Detroit has been in a decline for about 40 years. The Rust Belt is hardly the first industrial area in an industrialized country to go into decline, and such declines almost inevitably occur because of national and global issues for which there is no actual solution. The real solution is for such areas to diversify their economy, and where the economic engine cannot sustain population levels, for those areas to depopulate, just as happened to Detroit.

Re:Jobs vs. Stuff

[dasgoober]

Who on this board doesn't have more stuff than they need?
Maybe we could use some more thought abut the stuff we buy.

Re:Jobs vs. Stuff

[Loki_1929]

Cheaper products are little solace to those with no jobs and no money to buy any of them.

Re:Jobs vs. Stuff

[Sassinak]

Protectionism works up to a point.. unemployment is low there, but the costs of living are quite high.. and salaries do not match.. + you have things that the US doesn't want to implement.. such as national healthcare.. And lets also remember, a lot of ideas don't scale very well when you just have more people (with more ideas, many of them wrong) and more land (so people on the fringe can either remain such or just become invisible because they are not in the nexus anymore) Japan is really one country.. (ONE country, many prefectures and regions and each with their own identities, histories, etc...), but FAR less fractured than the US).. each state in the US likes to believe its "quasi-independant" and will acquiesce (reluctantly) on federal rules when it suits them. So that create a LOT Of friction and needless redundancy of costs/expenses.. States themselves compete heavily for business to move/relocate, etc.. (come on, Texas is always "well, we will secede from the US because we don't like X" . California is considering it.. NY is toying with it. Concepts like that are virtually unheard of outside of the US because its just not possible.. the closest approximation is the EU and everyone is rushing to take it apart as well because "we don't like "THEM" telling "US" what to do.

Re:Jobs vs. Stuff

[Sassinak]

At the end of the day, you only need some water (free), food (you can hunt right?) and a place to sleep that won't kill you while you are doing it.. (I know some good caves in NY).. outside of that, everything else is pure "want"

Re:Jobs vs. Stuff

[bluefoxlucid]

Low unemployment is probably more to do with social behaviors that control population than anything else. Japan is subject to Malthus, but they do it differently--they breed to 2% unemployment instead of 5%.

Re:Jobs vs. Stuff

[Tablizer]

The reason Japan's unemployment rate is so low is because it is a demographically shrinking nation

You saying less kids is the solution to enough jobs? If so, a real "jobs program" would be handing out free birth control.

Describing Japan's policies as some sort of economic success is like describing the Black Death as a great boon for Medieval workers rights.

What impact did BD have on working conditions?

Every nation is different, by the way, with unique demographics of its own.

Re:Jobs vs. Stuff

[PopeRatzo]

Protectionism has mostly "worked" in Japan, at least in terms of jobs.

But the only investment they can get is from their own central bank. They're on a tremendous bubble and their monetary policy makes the Fed look downright sensible.

https://www.bloomberg.com/news...

Re:Jobs vs. Stuff

[TJ_Phazerhacki]

Wish I had points to mod you up. Instead others have them to upvote idiotic, isolationist pablum. Japan is probably the best example of why "Protectionism" is a bad thing - when you culturally isolate yourselves from the rest of the world, more people want to leave than want to move in. Your population shrinks and ages, and even if you are successful, you risk damaging social growth for decades.

Re:Jobs vs. Stuff

[bluefoxlucid]

The college education thing is more-complex than that. There are arguments for both positions; my argument against individual-responsibility college education is that businesses will get a competitive advantage by hiring, and so a skilled-labor shortage means they have to hire entrants early and leverage them effectively to stay competitive. This works out rather well: it increases productivity (new laborers are working while being developed into skilled laborers) and decreases waste (new laborers aren't all running to college on speculation about the general market, then coming out into a market that wants 400,000 programmers but has 700,000 CompSci programming graduates--that is, the labor of TEACHING PEOPLE IN COLLEGE has been wasted, and could have been used to do other things, such as teaching those people a different skill we actually need).

As for outsourcing itself, it's a trade advantage thing. I used an average Chinese worker cost of $3.50/hr, although $2.50/hr is probably more correct. I worked out that making products in America rather than China would create American jobs only if you pay the American worker less than $18/hr, and would make those products more-expensive; if you pay the American worker more than $18/hr, then you have a net-loss of American jobs (you create like 64,000 and lose 73,000, for example). The break-even point trends in the direction of Chinese wages (e.g. if Chinese labor costs $2.50, you're losing jobs an $18/hr, and you need to pay those Americans less if you want to create American jobs in the process).

That analysis kind of sucks.

Importing a 40-foot shipping container from China costs under $1,300. For men and boys's cotton trousers and shorts, that's 40,000 units, or 6.5 cents per pair. These retail for an average of $14.97, spanning $10 kids's clothes to the $70+ stuff. That $14.97 pair of pants, when adjusting the labor portion up ($6.12), becomes a $50 pair of pants if you're paying American workers $18/hr.

I like to say that your $350 cell phone will cost $1,100, your $500 TV costs $1,500 now, and so forth; but that's not true. The labor portion on the $500 TV is some $487, so you're talking about $3,200 TVs. Computers fully made-in-America would cost over $3,000 at not even the modern level of technology--remember spending $2,000 on a 386 with 8MB of EDO and a 200MB hard disk in 1992?

The long and short of it is we'd lose jobs, we'd have to pay workers less, and all of our money would buy less if we cut back trade. Trade has made America wealthy. People like to repeat that their standard-of-living has gone down as they've gotten poorer since the 90s, with wages stagnating and prices skyrocketing; meanwhile food is a smaller part of their income, cell phones and computers are smaller parts of their incomes, they buy more and better healthcare, they buy more entertainment, they eat out more, their cars have lots of complex suspensions and radios and safety systems, and so forth. People live in bigger houses, they own more stuff, and they spend a greater proportion of their income on entertainment and leisure. They spend it all until they have nothing, and then complain that they're poor. They watch inflation double prices, watch their salary quadruple, and then complain everything is twice as expensive as they conveniently forget they have four times as much money now.

Somehow, people manage to watch unemployment fall and swear we're losing jobs. They pull out some stupid shit about labor force participation rate and a conspiracy theory about the numbers being fake because we don't count everyone; yet a count of the number of employed Americans in 2016 shows it as 4.9% of the labor force, and adjusting it for a labor force size of 67% (the peak) gives under 5.3% unemployment, versus the 10% unemployment peak, and the 6% peak under Bush, and the 5.5% unemployment low-point under bush.

Yes, that's right: if our labor force participation rate was as high as it had been at its peak, right now, an

Re:Jobs vs. Stuff

[MightyMartian]

The reason many of these workers don't have jobs is because they don't have the skills needed for a changing workforce. Creating what amounts to a planned economy where the government creates factory positions that have no other reason to exist than to keep people employed is an absolutely insane solution, one that even China has been steadily moving away from.

It's ironic, but in a strange sort of way, the Republican President Elect is almost advocating for a sort of industrial Communism, and like late stage Communism in the USSR, what happened in many cases is that workers were going to factory jobs that existed simply so they would have a job to go to.

Re:Jobs vs. Stuff

[MightyMartian]

The Black Death created one of the largest labor shortages in the history of the world. It was so disruptive that the English Crown actually passed laws forcing laborers to stay at their place of employment, because the shortages were so severe that poaching of workers was making the shortages even worse.

Japan is going through a somewhat slower version of the same phenomenon, and everyone, even the conservatives and nationalists, privately know that at some point very soon they'll have to allow some form of immigration or face a protracted economic crisis.

Re:Jobs vs. Stuff

[Tablizer]

That's seems counter-intuitive. Dead people mean fewer consumers and thus need less product. Maybe the kings discovered they could export the excess for a profit and wanted to keep it going by inventing labor shortage excuses. Kind of like H1B-related "shortages": a "shortage" of minions that can be tricked into working their tail off for my profit.

As far as Japan, I wonder if there is a strong statistical correlation between birth rate and employment in nations. You have to make sure related co-factors are removed.

Re:Jobs vs. Stuff

[MightyMartian]

There were still fields that needed to be plowed and planted, since livestock that needed to be tended, still village and town economies to service, still armies to be raised and trained. Not everyone died, just a lot of them. There seems to be this fixation on the idea that an economy is purely a construct of consumerism, but an economy is a vast machine, and even the much simpler economies of Medieval Europe still required able-bodied people to make it work. Yes, less people would mean less demand in some areas, but you would still have all that infrastructure, economic and physical, that needed to be serviced.

The general rule of demographics, so far as I understand it, is that the wealthier a demographic group, the less children they have. I'd have to hunt down the source now, but I remember reading that even in Early Modern Era England, the Puritans and other Non-conformists, who were in fact the nascent middle class of England, had lower fertility rates than the poorer classes (like indentured agrarian workers). This was centuries before modern birth control, but even four or five hundred years ago, there were some means to prevent pregnancy, and the Puritans, unlike their modern Evangelical descendants, were quite so squeamish about using the means available to them to terminate pregnancies.

Now jump forward to the world of the last half century, where the birth control pill has basically severed the relationship between sexual intercourse and fertility completely. If in the pre-birth control world you still find the middle classes reducing fertility, you can see how the effect of far more effective birth control methods could lead to a crash. Now I agree that Japan may have aspects of its society that explain why its demographic crash is worse than some other countries, the fact is that even though it may be an outlier in its extremely low birth rates, almost every advanced economy in the world is seeing a similar demographic collapse. In North America in particular the Baby Boomers are exacerbating this because as they reach old age, they are putting increased pressure on health and pension systems, and also because a great deal of infrastructure was built to deal with that large post-war population boom (everything from schools to hospitals to roads to commercial enterprises), but even without that Baby Boom, many advanced economies would be beginning to experience the severe pressures of an aging demographic.

Re:Jobs vs. Stuff

[Ogive17]

I don't think protectionism is a good way to explain Japan. Japanese do prefer to purchase from Japanese companies, I will admit to that, however plenty of their products are built with components sourced from all over Asia.

The unemployment rate is so low because a majority of women leave the work force once they get married or have their first child. Very similar to how the US was prior to the 1970's.

Re:Jobs vs. Stuff

[drinkypoo]

Protectionism has mostly "worked" in Japan, at least in terms of jobs. They have a low unemployment rate compared to other countries.

Too bad about that suicide rate. I'm not trying to emulate Japan. If I were, I'd have offed myself already for being redundant to society.

Re:Jobs vs. Stuff

[drinkypoo]

and like late stage Communism in the USSR, what happened in many cases is that workers were going to factory jobs that existed simply so they would have a job to go to.

We are already literally compromising the biosphere's ability to support our civilizations by making shit we don't need. What we need is a social system where people can do less, not where we all do shit just so we can look busy.

Re:Jobs vs. Stuff

[Tablizer]

There were still fields that needed to be plowed and planted, since livestock that needed to be tended, still village and town economies to service, still armies to be raised and trained.

If there are half the people then you need half the farm land, half the cows, half the houses, etc. There may be an adjustment period, sure, to shuffle stuff around, but eventually it would settle. I suppose you still need a big military because it was a dangerous time.

Re:Jobs vs. Stuff

[Tablizer]

At least in this country, many people's social self worth is tied to work and career. It's not easy nor quick to change an ingrained cultural narrative.

Re:Jobs vs. Stuff

[Loki_1929]

Please explain how any of this matters to a 45 year old factor worker with two kids and a wife to support, a mortgage to pay, and food to put on the table. Explain what he's going to do when the job he's had since he graduated high school, the job that allowed his father and his grandfather to support their families before him, the only job he's ever known, is shipped overseas to someone who'll work 18 hours a day for $3 with no bathroom breaks. Explain why he'd vote for anyone telling him a "changing workforce", "new economy", or "rising tide" are good for him even as he sits there watching everyone he knows lose their jobs, their homes, and their ability to feed their families.

Because what I saw, Tuesday, is that they're turning the course of elections in this country in the direction of whoever gives them hope that's realistic for their situation rather than condescending arrogance. Doesn't matter whether Trump will or even can deliver on much of any of it. All that matters is their best shot at putting food on the table and keeping a roof over the heads of their family.

Re:Jobs vs. Stuff

[Tempest451]

"If a lady has looks, she doesn't have to work so hard." How are you even part of this discussion?

these jobs aren't going to Mexico

[YesIAmAScript]

GM would be moving low-profit cars to Mexico, not Cadillacs.

And Trump won't be saving these jobs. Car companies will not be keeping production in Michigan and Ohio, they'll move to Southern states where there is no UAW. Even if Trump keeps them from crossing the Southern border he isn't going to force them to stick with unions.

No surprise...

[__aaclcg7560]

The Republican recession begins (again).

Re:Dumb Trump supporters

[unixisc]

Uh, while MI did vote for Trump, did they also vote in GOP house members?

we will see shortly

[WindBourne]

how trump is going to carry out all of his promises and really help the average blue collar American worker.

Re:This is totally Trump's fault!

[CajunArson]

Well, unlike Trump she has been in power in one form or another since the '90s.

Additionally, I'm pretty sure that Obama's cereal got soggy sometime this week... Bush's fault.

Re:This is totally Trump's fault!

[DogDude]

You don't think that people are planning now? Why not? Our company is making plans now, based on what just happened, and it doesn't involve more investment or jobs in the US, I can tell you that. These dummies who voted for this idiot deserve what they get: fewer jobs and a lower standard of living. Fuck 'em.

Re:Good luck with that.

[unixisc]

Trump is someone uniquely positioned to gang up w/ his former party against his current party if they try and pull stunts like this

Re:Dumb Trump supporters

[swb]

What exactly have the globalist, immigrant-friendly Democrats been doing to help people whose jobs have been offshored? Why don't I remember actual action by Obama to reduce or eliminate H1-B visas or crack down on sham job replacement "outsourcing"?

Detroit has been 98% Democrat since shortly before

[raymorris]

> the lost jobs in the first place this process has been going on since the 70's.

Since right about the time Democrats seized total control of Detroit. When you're arguing that Democrat policies work, the normal strategy is to pretend Detroit doesn't exist. Detroit is NOT an example you want anyone looking at if you're going to blindly support whatever foolishness the Democrats come up with.

Original Article was pretty short

[krelvin]

Other than it being announced after the Election, there doesn't seem to be anything political in the announcement.

Sales are down on vehicles made at those two plant and they are cutting the Third Shift at both plants.
Nothing about moving production elsewhere or even discontinuing the two other shifts at both plants.

The added on Anonymously section to the /. article is where the politics are injected with a reference to Trump and his proposed tariffs on products made outside of the US by US mgs.. which this story is not about.

Re:Original Article was pretty short

[Ogive17]

Along those lines, GM plants were notoriously inflexible for their production. The plants were designed for very specific purpose. Honda, on the other hand, designed plants that could easily switch between models to quickly change the model mix based on sales.

The result is GM often has mass layoffs when certain model sales underperform while Honda goes through short periods where they might struggle but can quickly adapt without the need to layoff thousands of workers or shut down obsolete facilities.

Most likely the new GM plant in Mexico will produce small cars that will be for all of the Americas, not just US.

Re:Original Article was pretty short

[Zontar_Thing_From_Ve]

Other than it being announced after the Election, there doesn't seem to be anything political in the announcement.

Sales are down on vehicles made at those two plant and they are cutting the Third Shift at both plants. Nothing about moving production elsewhere or even discontinuing the two other shifts at both plants.

Yeah. I can't speak to Cadillac but I can to the Chevy Cruze. A few years ago I got a Nissan Leaf on lease to use as a daily commute to work car and I had an older car I used for longer trips. I didn't really want to keep the older car but I also wasn't at the time really enthused about outright buying something, so getting a leased car was a way to take miles off the old car and think about what I wanted to get in a new car. I wanted to keep an open mind for a new car and one time I had to get a rental car and one of the options was the Cruze. It gets good mileage, so I thought I'd ask for the Cruze as my rental car and try it out. It sucked. It's really small. The interior is really crappy and cheap and unnecessarily so. And the mileage wasn't as great as I'd hoped. I crossed that off my list of potential vehicles to buy. So I totally get that sales of the Cruze are down because it's not a very good car. Chevy does make good cars but the Cruze isn't one of them.

This will be a very interesting experiment

[ErichTheRed]

Growing up in a Rust Belt city, I watched as most factory workers got thrown out of work when factories moved to the South, then offshore. The next 4 years may or may not be a very interesting economics experiment depending on how many policies Trump implements from his campaign promises. The loss of stable high-paying manufacturing jobs has a devastating effect on the locations they hollow out when those workers aren't paying taxes, buying things locally, etc.

If he does succeed in building the wall, deporting immigrants and taxing foreign imports, how much of a tariff will be necessary to convince manufacturers to make goods for the US market in the US? I know India has a similar setup -- it's very expensive to import foreign goods to India, and manufacturers are responding by setting up plants in India. Unless there's absolutely no way around it, and the tariff is set at a punitive level, manufacturers are just going to say "tough" and raise the price of their goods to cover the cost.

I know all the arguments are against me on this one, but I would definitely like to see all the manufacturing come back. People say we're one of the top countries in manufacturing output, but the reality is that this is due to high dollar items like airplanes and weapons systems. I'm an educated person, working in a non-factory job for a non-manufacturer, and I see the need for this. The country needs to be able to dump low-skilled people directly out of high school into a job that will pay enough to sustain them and their families over a lifetime. Don't concentrate so hard on educating everyone -- some people can't handle it and don't want to be...look at how many students are just barely graduating college and not actually absorbing anything. I graduated high school in 1993, and even by that time the only route to a stable life without a college degree was to get a union apprenticeship in a skilled trade. This is still viable, but only in union states and it certainly doesn't pay the same as it used to.

College should be available to those who want it at a reasonable cost, but having it be the new minimum standard to be considered for any type of employment is crazy. Bring back old school factory work, and allow those who can't handle education to work in a steel mill, shipyard or car plant.

Re:This will be a very interesting experiment

[_xeno_]

The country needs to be able to dump low-skilled people directly out of high school into a job that will pay enough to sustain them and their families over a lifetime. Don't concentrate so hard on educating everyone -- some people can't handle it and don't want to be...look at how many students are just barely graduating college and not actually absorbing anything.

While you're absolutely right that there needs to be low-skill jobs that pay a good wage - manufacturing just isn't going to be it. We already have robots to make a lot of things. As long as the cost of building things with robots is less than the cost of building them with manual labor - and thanks to the relatively high labor costs in the US, they will be - those jobs are never coming back.

Ever watch the show "How It's Made?" The answer is (almost) always robots. I remember one where they showed how modern swords are made. The first step involved a CNC machine to cut out the shape of the sword from a steel blank. The human involvement was basically limited to wrapping the handle with leather and dumping the product in a box. And that's prop swords, the definition of a niche market.

Manufacturing might come back to the US, but thanks to improvements in productivity (due to automation) the raw number of jobs is simply never going to be the same. Ever.

We need to come up with some new solutions, but I'll be honest: I have no clue what they'd be.

Re:This will be a very interesting experiment

[MightyMartian]

Exactly. What's happening now is a sort of Industrial Revolution Mark II, and in this iteration, it is automation that is playing the starring role. And if anyone feels grumpy about a dozen robots with one guy sitting at a console making sure the gears turn, jump ahead ten or fifteen years, when that level of automation means even cheap labor in China, India, Mexico and probably by that point Africa can't undercut the robots.

The fact is that the world is going through a manufacturing revolution, and has been for about three decades now, and the only way to restore manufacturing jobs wouldn't be to get rid of NAFTA or throw up massive tariffs on goods manufactured in China, it would be to have the National Guard walk into every working factory in the United States and smash all the computers and robots, and then go into almost every major R&D department and University, and throw all the engineers, programmers, technicians and other people working on next generation automation out on to the street, and then pass a law banning robotics.

Of course, no one else in the world would do that, so the net effect would be for all of US's trade partners and competitors to make massive gains in automation, which means that the US would then have to institute unbelievably large tariffs to prevent these ultra-cheap goods from putting all those make-work factories open.

This is an extreme and hyperbolic line of reasoning, but really, the fact is that cheap labor in countries like China and Mexico will soon be yesterday's problem, and even all those Mexicans and Chinese that rely on their miserly wages in industrial complexes will find themselves out on the unemployment line just like the folks who have been put out of work in the US. The fact is that human-dominant manufacturing probably only has a few decades left, and there is absolutely nothing Trump, the Alt-right, or a bunch of angry rust belt voters will ever be able to do about it. The game is up. Manufacturing is simply never going to be a major source of employment in the industrialized world again, and it won't be a major source of employment in developing economies in the not-so-distant future.

If Trump and Congress actually want to help Americans who find themselves out of work as factories close or lay off large portions of their work force, what they should do is start funding more post-secondary education, more job retraining, and probably start taking the first tentative steps towards Universal Basic Income. After all, the one thing you can do about companies that move into automation is start taxing them to pay for the needs of the citizens of the United States.

Re:This will be a very interesting experiment

[quietwalker]

The thing is, manufacturing jobs won't come back, because they're gone. In the 70's and 80's, it took 200 people to do what 3 machines running 24/7 with almost no error do now. Even if you were to set up a new factory, you'd have like 40 jobs where you used to have 1000 - enough to actually support a reasonable town. So point 1,

1. You aren't bringing the jobs back.

Here's another amusing point: even if we do get jobs, the value of them will be based against the value of that job globally - so long as businesses and currency is still traded globally, so until we have really brought the quality of life and cost of living to some sort of equilibrium world wide, these jobs will never provide the value they used to. Back when we didn't have to compete with other countries for this work, it was viable. That's no longer the case and it won't ever be. We avoid manufacturing now because it's simply not the best return on investment for a business OR an employee. So point 2,

2. Manufacturing work doesn't make enough money for the business or employee to incentivize companies or workers to do it in the US in past large numbers.

Last, you mentioned vocational skills. Surprising many who haven't looked into it, we do have some vocational training and even government programs to make it cheap and relatively available. The problem? If you churn out 70-200, let's say, air conditioner repairman from the same school, in the same location, every 6 months, you're not going to have enough jobs available for them. The only way that would work is if you got trained and then were required to move at least 20 miles from any other graduate at any point in time. So point 3,

3. Vocational training doesn't work at scale because it saturates the local markets past the point of available jobs

The end tally is this: Neither manufacturing nor vocational jobs have the ability or potential to support a nationwide middle class, nor provide economic mobility to enter the middle class in numbers greater than what we have today, with all likelihood of them actually decreasing in the future.

In layman's terms, manufacturing can't support a large middle class population.

Even China, the manufacturing king of the world, is dealing with this issue right now. It's prompting their hurried transition to a more service-based economy.

Advocating to bring back factory work, you may as well advocate to bring back rat catchers, switchboard operators and video rental stores for all the good it'll do the middle class. The reality is that we're moving towards a more maintainable, fully service-based economy and that necessitates higher levels of education to meet the ever rising bar for good paying skilled jobs if we want to maintain a large middle class. For good or for ill, the college degree is fast becoming the old highschool diploma as far as job hunting goes.

Re:This will be a very interesting experiment

[Sassinak]

But see, that's just it.. the US has LOTS of manufacturing plants.. most are just automated so you don't need nearly as many people.. heck, what used take 200 - 300 men, now takes 10 - 20. (and there are some jobs that can be done by 1 - 2).. so some is moved offshore, but a lot are still in the US, but just need less people.. (it doesn't help either way).. but this vilification of "foreigners" for "taking their jobs" is just wrong. And most of the "educational" requirements are really an attempt at weeding through people. (anyone CAN learn things, especially repetitive tasks).. Doctors, lawyers, Engineering, Chemists, etc.. these are all areas that depend highly on a wealth of backend knowledge before you can really start... most jobs do not require any of that and what they do require is unique enough to them that guess what, you get training AT the job. so I agree, this "everyone MUST go to college" really doesn't make sense. If there are basic society skills everyone should have, then make the first year or two free (no different with public schools that try to set a baseline for the population)

No easy answers but we know a lot of factors:

Companies chase profits (to make shareholders happy).. Shareholders want continued growth (something only sustained by the constant churn of goods produced AND someone to purchase said goods). As more players enter the SAME market (ex: we don't have one car maker, we have 30.. and each car maker has 20 - 30 types being sold + used + alternatives that don't require a car at all) you can't charge X anymore, you have charge X - Y% less.. but again, share holders want to see profits.. so you have to cut costs.. (labour is most often the largest cost of doing any business).. so you start with looking for cheaper labour (ie: outsourcing).. but that gets costly (time to train, possible language issues, government regulations, etc..).. and you are STILL being squeezed.. you then you automate.. (profits rise).. but more items to defend against (lawsuits, R&D, etc.. because those other 30 makers (for cars) are not sitting on their ass. so expenses rise.. which means more cuts.. and lets not forget the most basic of things.. Greed.. (something capitalism is founded upon). The CEO and others want MORE (influence, money, prestige, etc..). all of which reduce the coffers.. so again, you squeeze down below.

That's never going to go away unless EVERYONE involved has a different litmus test for success and a different motive (other than wealth) to achieve it.

Re:This will be a very interesting experiment

[MightyMartian]

An interesting statistic that was rattled off during the election was that 38 US states have Canada as the largest foreign trading partner. You start creating any kind of pinch points in that economic pipeline, you will end up with a whole lot of people in a helluva lot worse position than they are now.

Re:This will be a very interesting experiment

[0100010001010011]

It's Industry 4.0: https://en.wikipedia.org/wiki/...

Re:This will be a very interesting experiment

[MightyMartian]

We may need less people in an economic sense, but if we set a decent rate of taxation on corporations, then fund UBI, we don't need some bizarre march towards forced sterilization. Besides, almost all industrialized nations are suffering pretty serious demographic declines, to the point where countries like Spain and Japan, probably the two most effected, are facing some serious medium and long term economic woes.

Automation has never meant an end to workers, but it has meant that workers have had to learn new skills. The steam engine and the cotton gin didn't just throw a whole lot of jobs on the scrap heap, it also opened up jobs for different kinds of workers. And thus far that is what automation has done, pushed more blue collar jobs into the white collar and service industry worlds.

Now, in the long term, those workers are going to face a similar scenario, but the only reason I can think of to depopulate the world is because corporations that have moved to automation don't want to pay more tax, but then again, if you allow major population declines, those companies won't have anybody to buy their goods. A falling population is just as bad as a population that is rising. The balance in a modern economy is to have fertility at a replacement level (about 2.1 children per female), and the fact is most developed economies are well below that, some of them, like Japan, so far below it that it is creating a labor shortage crisis that not even major pushes towards automation can adequately deal with.

Re:This will be a very interesting experiment

[Goragoth]

The manufacturing jobs are never coming back. If companies decide to build factories in America it will be modern and almost entirely automated factories with very few workers (like Tesla's gigafactory). The age of American manufacturing is over for good. The world has changed and we need to move on. Nostalgia won't solve a damn thing.

Re:This will be a very interesting experiment

[Tempest451]

"What do you suggest doing with the people that do not have the capacity to participate fully in our new economy?" The last administration supported retraining through trade schools, but Congress didn't want to pay for such socialist policies.

Re:This will be a very interesting experiment

[michael_wojcik]

Even China, the manufacturing king of the world, is dealing with this issue right now. It's prompting their hurried transition to a more service-based economy.

Yes. And China artificially delays the problem by restricting migration to the cities, hiding a huge part of the underemployed poor in its vast rural territories. The US, of course, also has a great deal of rural space with low population density, high un- and under-employment, low incomes and poverty - which is why so much of the election map is red - but because we make migration easier, the lack of entry-level manufacturing jobs is more evident.

Unfortunately, the service sector doesn't scale either. Entry-level service jobs (things like food and cleaning) are limited by population density and require other upstream wealth-generating industries. So in small-town America, there will never be a lot of those jobs, by definition. White-color service jobs, everything from data-entry to financial and legal, is less local, and so in theory could move out to the small cities and towns; but it generally doesn't, because it's more convenient to keep those jobs near corporate HQ or locate them in the medium-size cities, where there's a glut of cheap commercial real estate and an educated but still cheap workforce (all those fresh college grads, second-career parents, etc.). And the mobility of those white-color jobs also means they're prone to going to other countries or being automated.

Service-sector industries that are both local and bring in outside dollars, like medical care and tourism, aren't going to get big enough to help much. And of course they tend to be regionally specific ("Tour the cornfields of Illinois!") and/or heavily dependent on government support, which means you're just reallocating GDP.

I don't know that there's a solution for the red counties in middle America. Trump (or rather whoever's pulling the strings in his administration; the man's never done a lick of honest work in his life, so it won't be him making the real decisions) sure as hell won't find one, even with a Republican Congress to rubber-stamp whatever the Executive branch tries. The economics that made it feasible to spread across the continent are no longer in place. It's more efficient now, particularly for the oligarchs, to concentrate the wealth; and concentrate it will.

Re:This is totally Trump's fault!

[AvitarX]

Pretty sure this was happening either way, but they didn't want to announce until today so that Trump couldn't say "see, Mexico, blah".

This closing has nothing to do with the election though.

Little early to be calling Trump's bluff

[Photonmaker]

Seems a bit more than coincidence that GM announces layoffs the day after the election. Their way of letting people know that this is good old capitalism, and there is little the politicians can actually do about it. When (if..) Trump does hit GM with a 35% tariff for pieces/parts imported from Mexico will it make Japanese car manufacturers that build here more competitive? Irony will be when he drives the US car makers out of business with his lack of understanding of anything more complex than building hotels.

Re:Little early to be calling Trump's bluff

[__aaclcg7560]

When the Republicans shut down the government in October 2013, the CEO at the company I worked for used it as an excuse to lay off 10% of the workforce, cancelling my contract and giving himself a 60% raise for having a lousy fiscal year. Just business, folks. Nothing personal.

Re:Little early to be calling Trump's bluff

[Kagato]

He can cancel NAFTA, but he can't do the 35% tariff without an act of congress. These are the same anti-tax, free trade republicans that have been there for years. Trumps experience in getting a good deal is based on not living up to his side of the bargain.

Re:Still waiting

[AvitarX]

I enjoy the political stuff. /. brings relatively intelligent people with different opinions to discuss the stuff that matters.

Re:Short Lived - MAGA, despite the liberal shits.

[Anonymous Coward]

All the real manufacturing jobs got replaced with robots. There's nothing Trump can do to fix that. The dream of 9-5 in a factory tightening bolts all day for $20/hour is dead and gone and won't come back. But hey, blame it on Democrats. Simple answers are best, after all.

Re:This is totally Trump's fault!

[Tablizer]

Sig: Only an out-of-touch idiot like Romney would ever think that Russia is our enemy! -- Hillary Clinton [roughly paraphrased]

According to Trump, Russia is not. The "problems" between us and them are caused by OUR bad negotiating, in Trump's view.

Side note: believing 90% of polls saying Trump would lose, a minor part of me was sad because I thought it would very curious to see how somebody as bombastic as him would deal with world problems. Looks like we are gonna find out...

Re:Good luck with that.

[MightyMartian]

He can gang up all he wants, for the next two years at least he'll have damned little leverage. And even in two years, what's he going to do, campaign for third parties and Democrats?

The system has been set up so that while a President is very powerful, he is also very vulnerable, and if he decides to make enemies of the majority of those folks on the Hill, they can make his life an absolute misery. While someone like Obama has the wit to navigate an unfriendly Congress to at least get something done, if Trump is as idiotic a blowhard as he acted on the campaign trail, he'll find his nominal position of head of the GOP to be a pretty worthless coin.

Re:Good luck with that.

[MightyMartian]

The powers of Congress were designed explicitly by the Founding Fathers to deal with a president like Trump. You may call it dysfunctional, I call it it the ultimate check on power. If Trump tries to push through the more absurd aspects of his agenda, Congress will do what the Constitution intended it to do, prevent him from doing significant harm to the interests of the people of the United States.

He Has the Same Problem As Obama

[Kagato]

So, y'all realize the same people that that have controlled the house of representatives are still there right? The people elected the same bunch of Do-Nothings that have been in place for the last 12 years or so. They are anti-tax and free-trade. So unless they all of sudden have decided to become socialists these ideas of having massive taxed on companies that move production overseas is a no go. What Trump can do is Exit NAFTA. But doing that would all of a sudden make millions of materials produced in the US more expensive to North America.

There will be winners and losers. Most of the losers are likely down South.What's left of the US Textile industry (mostly makers of denim and other bulk fabrics) would likely go out of business. It's economically viable to produce the fabric in the US and ship it to Mexico for production into clothing and then ship the finished product to the US. When that goes away it's do you think the they'll make it all in the US? No. They'll ship raw cotton to one of the super low cost countries in Asia. It will all get done over there and shipped back here because that's cheaper and works under existing tariffs that have ZERO to do with NAFTA and Trump can't easily change.

This will be a reply of the last time the GOP had control over all three houses. Screw over the poor, cut taxes on the rich, privatize a bunch of stuff that actually runs fairly well, line the pockets of big donors, spend a bunch of money on some bullshit war and then wonder why the budget is out of control. Rinse and Repeat.

Re:He Has the Same Problem As Obama

[Streetlight]

Not only cotton fabric exported to Asia to make clothing but trees exported to Asia to make plywood and returned to the US for building and repairing houses and anything that uses plywood.

Re:He Has the Same Problem As Obama

[Kagato]

Yeah, Chinese MDF. We had some come into the shop. Nearly ruined the CNC machine because they pressed a bunch of gravel into it. Pass.

Can't wait to see the H1B caps

[Kagato]

Let's not forget the house has been trying to move on removing all H1B caps for a while now. Trump has no love loss for college educated voters, but he does like white males. So that's going to be a toss up.

Re:Can't wait to see the H1B caps

[whoever57]

Trump is going to want to increase the H1-B cap so that his future wife can enter the country.

Re:Can't wait to see the H1B caps

[__aaclcg7560]

His current wife worked illegally so not sure that's even necessary.

Trump will trade his current wife for younger model when it comes time to run for re-election.

Re:Can't wait to see the H1B caps

[Calydor]

But does he have to import her?

Re:Can't wait to see the H1B caps

[__aaclcg7560]

But does he have to import her?

He likes Eastern European models.

Re:Can't wait to see the H1B caps

[jrumney]

She'll just come on a tourist visa and start working like his last one.

Re:Short Lived - MAGA, despite the liberal shits.

[DutchUncle]

The labor force was collapsed by CAPITALISTS, the people owning and running businesses, and they tend to associate "conservative" and "Republican" rather than "liberal". They replaced people with machinery, rather than the utopian vision of the 1950s in which people would just work half-time with the help of machinery and get paid the same - a vision that anticipated automation as "better power tools" rather than "INDEPENDENT power tools that don't need an operator thank you goodbye". BTW I'm a software engineer, and my last job vanished because of technological obsolescence and management failure to diversify in parallel with supporting legacy installations. Those jobs - that whole company - is never coming back either.

Re:Short Lived - MAGA, despite the liberal shits.

[110010001000]

Of course it is the "smug liberal fuckers" who have collapsed the labor force right? You know, like CEOs of steel industries. They are real "liberals" arent they. That is the problem, you guys think that the "liberals" did this.

I cannot imagine

[Okian Warrior]

He's wanting to put tariffs on imported goods. Car manufacturers rely on imported goods. Detroit is about to get a whole lot poorer. Even if more parts were made domestically, retaliatory tariffs will make American made cars unattractive overseas.

You mean car manufacturers will have incentive to make things locally?

Heavens!

What will the car manufactures do without overseas workers?

I simply cannot imagine how this will be good for the country! Our GDP will drop at the expense of creating all those jobs!

Re:I cannot imagine

[Oswald McWeany]

You mean car manufacturers will have incentive to make things locally?

Heavens!

What will the car manufactures do without overseas workers?

There is something called economy of scale. The US, whereas a large market is small compared to the rest of the world. Industrially, it becomes cheaper to make things per unit, the more of them you make. Car manufacturers would sill use giant mega-factories like they do today, they just won't be based in the US. They'll swallow the tariff coming into the US rather than on cars leaving the US to a larger market.

Jobs will leave and price of cars will go up. There is a reason most of the world has been embracing free trade agreements for the last number of decades. It helps.

Re:Good luck with that.

[stabiesoft]

Expect trump to re-usher the age of McCarthyism. Remember his mentor was Roy Cohn and how can we forget his transition team guy is Christie, you know the guy who took out a bridge for payback. I expect it is going to be ugly, very very very ugly. It is who trump is. The old proverb about the frog carrying the scorpion across the river comes to mind. Neither did well, but it was in the scorpion's nature to kill. I'm not sure the frog will survive as a democracy. Would not surprise me if trump tries to pull a putin, you know his idol.

Think About It...

[sycodon]

If you believe that companies should be able to move their production overseas, you are tacitly approving of working conditions( wages, safety, environmental, etc.) that, were they in effect here in the US, would have SJWs lighting themselves on fire in the public square in protest.

If Mexico or any other nation imposes the same regulations as the US, then moving to another nation would be no different than moving to another state. Absent that, it provides an unfair advantage to outsourcing companies at the expense of the employees of the overseas plant.

This is 100% against what most Democrats believe.

Re:Think About It...

[Anonymous Coward]

Funny thing, he doesn't believe in global warming but bringing manufacturing to the US with stricter environmental requirements would do more to help than the carbon tax sham.

Re:Think About It...

[mark-t]

Enlighten me as to what working conditions in Canada would you be referring to, exactly?

Or did you somehow think that countries like Canada would be immune to this?

Re: Think About It...

[mark-t]

I'm sorry (I'm Canadian, I can't help it), but how is that relevant to my question? Was the question incomprehensible to you that you would conclude I am an idiot, or is it your conclusion that Canadians are just generally idiots, and so you felt some need to assert that point without any context at all?

Re:Think About It...

[sycodon]

Is Ford moving manufacturing plants to Canada?

Re:Think About It...

[mark-t]

Ford isn't... but the poster to whom I was asking the question did not specify that he was referring to car companies, specifically, and just said "companies" in general. There are lots of companies that produce stuff in Canada, but are based in the USA. The film industry, most notably, is pretty big up here, but I'm not aware of any actually unfavorable work conditions that SJW's would oppose.

Re:Think About It...

[Mashiki]

The reason that many companies produce things in Canada is because it's: A close market, that market can afford the things you're selling without a huge markup. The products, and productivity is at, the same or above the same in the US. The lower dollar actively creates a higher margin if profit when selling them to the US. Let's go with a car. You make a car, it costs $6800. You can sell that Car in Canada for $35k, or in the US for $33k and still walk away with a nice tidy profit.

In the end, there's no unfavorable conditions that whiny leftist regressives could cry over though.

Re:Think About It...

[davester666]

But he also wants to get rid of all those useless regulations. The EPA is just a bunch of busy-work, not actually doing anything of value.

Re:Dumb Trump supporters

[Chris Mattern]

Of Michigan's 14 House seats, 9 went to Republicans and 5 went to Democrats. Michigan did not have a Senate seat up for election this year. Their seated Senators are both Democrats.

Got it!

[Okian Warrior]

GM would be moving low-profit cars to Mexico, not Cadillacs.

And Trump won't be saving these jobs. Car companies will not be keeping production in Michigan and Ohio, they'll move to Southern states where there is no UAW. Even if Trump keeps them from crossing the Southern border he isn't going to force them to stick with unions.

No other course of action will succeed, and in this particular case it won't matter anyway.

We understand. Your rationalization is pretty clear. We got it.

Re:This is totally Trump's fault!

[__aaclcg7560]

What he said is that a lot of the things she was promising to do as President were things she ALREADY COULD HAVE DONE during her 30 years of public service, but hadn't bothered because she is one of the least effective politicians to ever hold an office.

Funny you should mentioned that. NY Times article ran an article that started off with that scenario from Trump and ended with Senator Hillary Clinton voting to close the loophole that he used to avoid paying taxes for 20 years.

http://www.nytimes.com/2016/11/01/us/politics/donald-trump-tax.html

interesting conclusion

[YesIAmAScript]

It's your own. It's not what I said at all.

He won't be saving these jobs. He might save American jobs, he won't be saving these. I understand those in Michigan and Ohio who are upset about losing jobs, but voting for Trump isn't going to save them. Unless they want to move to South Carolina, they might be able to follow their jobs as they move there.

Re:interesting conclusion

[PopeRatzo]

South Carolina jobs are moving to Mexico, too.

we need more trades schools and less college. ITT

[Joe_Dragon]

we need more trades schools and less college. ITT and others like it where good but they got stuck in the college traps as well high costs.

Also Devry was better but they moved to more online and less hands on classes.

Community college is hit or miss and some times the 4 year colleges make you repeat classes that you took already.

4-6 Years of pure class room is way to much for most jobs and they have big skill gaps.

It's not just low-skilled people there are also lines of work that college is a poor fit for.

Why should some one who went to a 4 year party to get a piece of paper be better ranked then some who went a 2 year tech / trade school with more hands on classes then some 4 year colleges.

Well rounded is nice to have but not at today's pricing levels.

No longer being paid

[Okian Warrior]

You're the one who wanted to collect my bitter tears of regret, right?

The campaign is no more, you're no longer getting paid for her opinions.

Go ahead and get it out of your system, but I cannot imagine how spending time like this is of any benefit.

Not that I care.

Re:Dumb Trump supporters

[whoever57]

I wish the residents of Michigan well, when the regulations that Trump and his cohorts are removed and another disaster like Flint happens.

Re:Good luck with that.

[unixisc]

Point is that Democrat party is leaderless, aside from Schumer, Pelosi and probably Kaine. From what I understand, Trump does have a past relationship w/ Schumer, which got overshadowed by his rivalry w/ both Obama and Hilary. But w/ both of the latter gone, he can use Schumer as a backup in case Republicans like McCain go rogue. From the leadership of the GOP, he may not have problems in the senate, since McConnell is somewhat genuinely conservative, but too gun shy in the last senate to confront Obama in 2014-2015, until Justice Scalia's death. From the house, he may have problems w/ Ryan, but he can still gang up w/ the Freedom Caucus.

Anyway, on the issue of lobbyists, there is nobody better capable than him of exposing Congressmen who block him at the behest of lobbyists. The last thing any congressman will wanna do is incur the public wrath after facing exposure. The GOP will undergo some major political realignment, as this election has resulted in Trump having the strongest hand, McConnell unchanged and Ryan eroded a bit for sitting on the fence wrt Trump. And the 2 senators who ran from Trump - Mark Kirk of IL and Kelly Ayotte of NH - either lost their seats (in Kirk's case), or are on the verge of losing it (in Ayotte's case)

Re:Detroit has been 98% Democrat since shortly bef

[PopeRatzo]

Since right about the time Democrats seized total control of Detroit. When you're arguing that Democrat policies work, the normal strategy is to pretend Detroit doesn't exist.

Just so you know, GM is moving it's plants from Lansing, Michigan and Lordstown, Ohio.

Detroit has nothing to do with it.

In fact, Ford, Chrysler and GM started moving production out of Detroit in the period from 1945 to 1957.

It IS news for nerds

[Traf-O-Data-Hater]

Nerds are and should be interested in many things, politics being one of them.
And Oh Boy this is stuff that MATTERS.
Since when did 'News for nerds' imply Slashdot should cover technical stories only, as you seem to think it does?

Re:This is totally Trump's fault!

[Clsid]

But the fact is Russia is not your enemy though. Think hard about why Russia did what they did. Crimea annexation and Russian support for Eastern Ukraine rebels only happened after the US/EU sponsored Ukraiine coup d'etat. Syria, kind of like the same deals. Russia has had military bases on those countries for a long time. You cannot rattle a cage like that and expect nothing will happen. Democrats have been so cynical about it that they are saying it was all Russia's fault.

Putin is not precisely a democratic leader, but he is a legitimate leader of a sovereign country. So that line where Trump says more cooperation instead of conflict looks like a spot on foreign policy, which is much better than the quagmire of Libya, Iraq, Syria and whatnot and the crapload of displaced people.

Why blame Trump?

[slapout]

Why not blame, oh, I dunno, G.M.? Maybe their management had something to do with it. This quote from the summary might have something to do with it "Chevrolet Cruze, whose U.S. sales through October were down 20 percent". Why were their sales down? According to Hillary and Obama, the economies great so it could be that. And to say otherwise would be sexists.

Re:Why blame Trump?

[Tempest451]

Um maybe the car isn't that popular. or do you blame Obama for peoples taste in cars too?

Re:Short Lived - MAGA, despite the liberal shits.

[Sassinak]

The US is a CAPITALISTIC democratically elected (Theoretically) Republic.. so if you argument is CAPITALISTS are the issue, then I suggest you toss your hat in the ring for Communism or Monarchy or whatever else you want to use. In a capitalist society, their notion of every man for himself has always been at the crux of it.. heck, half the people voting for Trump like him because they feel he is the very embodiment of capitalism and as such, any actions are first and foremost for him.. (and if it happens to help you too, then.. "yeah, I meant to do that".)

Re:Short Lived - MAGA, despite the liberal shits.

[plopez]

there's no such thing.

Re:This is totally Trump's fault!

[Sassinak]

As secretary of state, her role/and duty is very specific, IE: outward.. and as a senator, she can try to effect change in her state.. but the reality is the nature of the US governent is you can't wave a hand and make ANYTHING happen. Heck, you can't even get 3 people in the same room that LIKE each other to agree on where to eat lunch.. try it with several hundred people that have their own agendas and some of which are just plain.. I won't work with you because I'm running later and I'm on the other team.

Politics WORKS when people put others (the masses) interests first and their own second.. but that is NEVER how it actually works.. and its only gotten worse over the last 10-11 years.

Re:Still waiting

[PopeRatzo]

I enjoy the political stuff. /. brings relatively intelligent people with different opinions to discuss the stuff that matters.

Who you calling relatively intelligent? You wanna fight or something?

WTO troubles

[accessbob]

That something is likely to get him into trouble with the WTO. It may save some auto jobs in the short term, but US expert will be hit in the medium term as the WTO will authorize retaliatory tariffs to compensate foreign businesses.

You can put anti-dumping tariffs in place, not protectionist ones.

Of course, the US could quite the WTO, but that would have massive impact on US exporters.

Re:WTO troubles

[Man On Pink Corner]

That something is likely to get him into trouble with the WTO

Chief of Staff: "Mr. President, we're seeing some pushback from the WTO in Geneva with regard to our recent establishment of protectionist trade tariffs. Do you have a response for the Secretary of State to convey?"

President: "Sergeant, bring me that briefcase they were telling me about. The one with all the buttons and lights and handcuffs and whatnot."

Marine guard: "I beg your pardon, sir?"

President: "And where's Geneva, again? That's in Wisconsin, right?"

Re:WTO troubles

[mark-t]

That something is likely to get him into trouble with the WTO

I don't think he particularly cares what anyone else thinks.

And besides, what can they do to him, exactly?

Re:WTO troubles

[accessbob]

Tax US exports in affected countries making them noncompetitive.
And that will likely cost more US jobs than it saves.

Re:WTO troubles

[mark-t]

Taxing US exports won't hurt him, though... and I've yet to see any indication that he seriously cares about anyone or anything other than himself and his own money.

Re:WTO troubles

[mark-t]

I was talking about Trump, specifically... I have yet to see any evidence that he actually cares about anyone in the USA except to the extent that it is somehow profitable for him, personally.

Re: WTO troubles

[Frankzy]

Just a small nitpick but the EU is actually bigger in terms of gdp.

Re:This is totally Trump's fault!

[Sassinak]

Actually for my companies (I own several) this was planned as contingency (in case he won).. and we are now just executing it (we will take our 30K jobs and put them in other countries).. and I know at least 100 other multinationals that are reevaluating their relationship with the US and deciding if its worth the hassle.. most I can assure you are on the "no its not" camp.

Remember, the ENTIRE US economy (both internally and externally) is based on the BELIEF of stability and growth.. When you remove those.. investments go away FAST. And one thing we know that a Trump presidency is going to being is instability.. growth we will have to wait and see. Most of the APAC groups I know (I'm very close to many investment groups, and other multinationals in APAC and EMEA) are looking at shifting their investments to other countries/regions.. (LATAM is a rapidly growing sector, as is APAC and EMEA and reducing their investments in the US).

Re:Still waiting

[AvitarX]

I'm not entirely disagreeing, but the conspiracy discourse seems even worse on the web at large.

Re:This is totally Trump's fault!

[Sassinak]

A the end of the day, EVERY company has to make plans based on worst case scenarios and what is likely.. we all saw for the past YEAR who he is.. and what he says and would like to do.. Only a fool waits until the water is at his waist to say "maybe I should abandon ship".

Re:Dumb Trump supporters

[Loki_1929]

Best thing Trump and the GPO can do is announce an infrastructure investment plan that begins with replacing all the bad pipes in Flint. After that, come up with an agreement with Carrier to reverse the moving of 1,400 jobs to Mexico. Wouldn't take very many victories like that to secure blue collar Dems for another 8 or 12 years. Let's see the Democrats try to win anything better than town dog catcher without that group.

Re:This is totally Trump's fault!

[Xenographic]

> Why not? Trump blamed everything of the last 30 years on Hillary.

You mean she wasn't First Lady, a Senator, or Secretary of State for that time?

Re:This is totally Trump's fault!

[bluefoxlucid]

Actually, while job outsourcing was happening either way, fewer jobs isn't a thing that's caused by that, in general. Our standard-of-living and our employment rate have increased in a large part due to trade; the other part is due to straight technical progress.

Technology and trade are essentially the same thing: we found a way to do something cheaper. "Cheaper" generally means "with less labor", although in the real world it's labor cost (people tell me cows aren't spherical; this is why they're not). In the long run, "Cheaper" absolutely means "with less labor".

The assembly line made more things-per-hour with the same number of working hands than the artisan process. Seven men carving and producing chairs makes chairs slowly compared to a series of seven men each producing chair parts with the last guy on the end assembling those parts. You only need as many chairs as the chairmakers used to make? Well, we don't need as many chair makers! If chairmaker wages don't increase, well... we're paying less in wages. Cost falls.

The same is true of power tools, the power loom, automation, and even project management. We find ways to invest less time in making things. This has happened since man learned to hunt more-effectively than the first man--and then again with the spear, with the stone-tipped spear, with the bronze age, with the hot-blast furnace (84,000 tonnes of iron produced with the same labor required to produce 400 tonnes by the prior process), with rail shipping (made possible by the hot-blast furnace), and with electricity and then power tools and computers.

Because of how economies work, how markets shift, and the mathematical dissimilarity in changing costs, it's both logistically and mathematically impossible for businesses to just take profit. Even simpler than that, we've eliminated almost every job that's ever existed; why are there so many jobs today? It's because money given to the top doesn't trickle down; but productivity causes shifts in economics that distribute additional wealth unevenly to everyone.

The average American family in 1950 had some $4,200 of annual income, and spent $1,400 of it on food. Today, the average American family has $55,000 of annual income, and spends $6,600 on food. Compare those. 55,000 / 4,200 ~= 13; 13 * 1,400 = $18,200. You don't spend $18,200 on food! Not only that, but the very-poor (minimum wage) spend about 16% of their income on food ($2,600, instead of $5,400).

If American companies are now bailing and leaving jobs behind, or if Americans are now forced to pay for American labor for some things and have less to spend on other things (fewer jobs, and less stuff bought with all your money), then Americans are becoming poorer--and that's not normal. Trade and technical progress are what create wealth. Protectionism like this--tariffs and other trade barriers--reduce it.

Do note this is all dependent on time. Prices don't come down automatically when costs come down; the economy is complex, and it causes pressure on prices. A robust economy will lose jobs to technical progress in many fields at once, while old laborers retire, and while new laborers enter the workforce. Over 360,000 Americans retire every year; slightly more enter the workforce (population growth). Imagine GM losing 10,000 employees per year. 10,000 retiring factory line workers, 10,000 new computer programmers. That's essentially masking that the loss of GM line workers (and their spending money) is coming as the prices for something else that laid off workers are finally coming down to their resting point, and so people are buying Netflix and Spotify with the extra money (hence the computer programmers). It looks stable, but it's really just diversified.

If you suddenly automate 100% of the domestic freight truck industry in 6 months with self-driving cars, your economy goes into an enormous recession as unemployment goes through the fucking roof.

Avoiding this involves reducing immediate risk

Re:This is totally Trump's fault!

[SeaFox]

I mean, everything else bad that has ever happened is now being blamed on Trump even though some other guy that nobody cares about is supposedly the president right now.

Sounds like pot-calling-kettle. Who's been blaming Obama for everything for the last eight years, even government programs started by Regan?

Re:Short Lived - MAGA, despite the liberal shits.

[LynnwoodRooster]

When you have companies that are "too big to fail" you no longer have a free market. You privatize success, and socialize failure. That's not free market.

Re:Detroit has been 98% Democrat since shortly bef

[mrbester]

A mea culpa response seems called for from Ray. He could even put his hands up if he wants.

Re:Thanks Trump

[PopeRatzo]

Am I doing this right? Do I have to wait until January to do this?

No. Republicans didn't wait for Obama to be sworn in to start blaming him for the recession.

Both Parties Guilty [Re:Dumb Trump supporters]

[Tablizer]

The difference between both parties on trade and borders is relatively small such that in general they're BOTH guilty.

While GOP publicly complains about leaky borders, in practice they've dropped the ball when they've had legislative opportunities to do anything about it, such as when W had GOP in both houses, and again when Obama wanted to increase the number of border guards a couple of years go. GOP voted it down saying it would add to the debt, and some other silly complaint about immigration judge rules that had nothing to do with guard quantity.

This is because businesses want cheap labor and legally bribe the GOP and Democrats to keep cheap labor flowing via campaign donations. GOP gives lip-service to their base about cracking down on undocumented workers, but then do nothing and point fingers.

Re:Both Parties Guilty [Re:Dumb Trump supporters]

[MightyMartian]

How much do you want to pay for a tomato?

Re:Both Parties Guilty [Re:Dumb Trump supporters]

[Tablizer]

Without cheap labor, they'd probably automate it by now. R&D for such is expensive, but would be worth while for co's if human labor went up.

Re:Both Parties Guilty [Re:Dumb Trump supporters]

[MightyMartian]

So, in other words, in the long run it would make no difference to the domestic labor pool whether cheap immigrant labor picked the tomato or a robot.

Re:Both Parties Guilty [Re:Dumb Trump supporters]

[Tablizer]

Yip. But politics is usually guided by shorter term concerns, for good or bad

Re:Detroit has been 98% Democrat since shortly bef

[MightyMartian]

Thank you! Detroit is a symptom of the same deindustrialization pressures that hit parts of Canada and the UK. There are other rust belts over the last three or four decades who have been hit by severe declines. The notion that you can blame what is an issue suffered by a number of industrial areas in a number of different countries on an American political party is stunningly absurd. I'm sure there are many Thatcherites that would be thrilled to blame the industrial decline in Northern England on the Democrats of the 1980s!

Re:Dumb Trump supporters

[MightyMartian]

And then, once the cheap loans and subsidies have been eaten up, the companies that were bought off still move to Mexico...

Handing subsidies to companies to keep their facilities in your area is just another iteration of the race to the bottom. If the only way a job can be tenable is by handing company money (directly or indirectly), then the job isn't really tenable at all, and all that happens is that other sectors of the economy have to underwrite untenable and unsustainable jobs.

Look at Venezuela. That's the best example of how throwing money at non-viable sections of the economy ends up. Simply put, a responsible government and a responsible society recognizes when buggy whip manufacturers need to be allowed to die. That's not to say that money can't be spent to help the people, which is why most countries have job retraining programs.

Ford doing same thing

[WillAffleckUW]

It was buried in the pages of the Wall Street Journal today

Check out the 1930 Smoot-Hawley tariff consequence

[Streetlight]

In 1930, in order to raise revenue the Republican Congress passed the Smoot-Hawley increased import tariffs on 20,000 imports. Trading partners did the same for US imports and a trade war started. US imports decreased to about a third and exports decreased by about 61%. The US GDP was cut in half. Was this act the cause? Other things were going on, but the increase in tariffs is blamed by many economists as part of the cause of deepening the Great Depression. Since the end of WW II there has been a continuing process of reducing tariffs and though we've had ups and downs in economic progress the trend has generally been up.

In this particular situation, if GM decides it can't make the Cruze economically in the US and the tariff would make it price uncompetitive then it could just stop making the car. Not only would no US workers make the car and dealers not have it to sell and make a profit, but there would be no Mexican workers making it either. This would be good news for foreign car makers producing similar sized cars made overseas. Another option is to build the car completely using robots. GM knows a lot about industrial robotic car assembly.

Economics is complicated and dramatic, swift changes in policies can have many unintended consequences.

Another of the same, then

[raymorris]

> Just so you know, GM is moving it's plants from Lansing, Michigan

  Thanks for the info.

Would that would be the same Lansing, Michigan where there hasn't even been a Republican CANDIDATE for mayor for the last twenty years or so, because only Democrats have any chance of getting elected? Yet another example of the great success that is Democrat rule?

Re:Another of the same, then

[PopeRatzo]

Would that would be the same Lansing, Michigan where there hasn't even been a Republican CANDIDATE for mayor for the last twenty years or so, because only Democrats have any chance of getting elected? Yet another example of the great success that is Democrat rule?

I notice you failed to mention that Lordstown, Ohio has a Trump-supporting, Republican city council, a Republican congressman, a Republican senator and a Republican governor. Oh yeah, and Ohio is a "Right to Work" state.

And their plant is moving to Mexico, too. I notice you failed to mention that.

Re:Another of the same, then

[sethstorm]

Oh yeah, and Ohio is a "Right to Work" state.

Actually, no. Unlike Michigan, Ohio has soundly rejected RTW.

On the other hand, Ohio is an at-will state, which is a different matter.

Re:Another of the same, then

[PopeRatzo]

Actually, no. Unlike Michigan, Ohio has soundly rejected RTW.

I guess you're right. It looks like Ohio adopted some very limited version of "right-to-work".

From Findlaw:

"Although Ohio is part of America's "Rust Belt," with a long history of labor organizations, the state has adopted a very limited right-to-work law. Specifically, the law states that union membership or non-membership employment conditions are "contrary to public policy and void." So employees are not required to join a union."

Re:Another of the same, then

[sethstorm]

When did this happen? Unless you're referring to the 1950's era law that was smote down (and took a lot of Republicans with it) from the law books, I'm not aware of one in current existence.

Re:Another of the same, then

[PopeRatzo]

http://statelaws.findlaw.com/o...

Re:Short Lived - MAGA, despite the liberal shits.

[Anne Thwacks]

All the real manufacturing jobs got replaced with robots. There's nothing Trump can do to fix that.

Hell, yeah - Trump will replace the robots with sexbots!

Re: This is totally Trump's fault!

[Xenographic]

She's considered one of the most influential First Ladies.

http://americanhistory.about.c...

And let's not ignore being a Senator or Secretary of State.

If I thought Trump would do what he said

[rsilvergun]

or could for that matter I might want to get on the Trump Train. Lord knows H1-Bs have bit into my career mightily and I'll wager many /.ers can concur. But he's literally taken every possible position during the campaign. I wasn't expecting much from Hilary, but I knew what I was getting into. Just a tinsy bit of progress and things more or less holding together. With Trump I've got no idea, and I've got Mike Pence behind him doing God knows what to my daughter's access to Birth Control and health services...

Re:Marmaduke

[fluffernutter]

shrill, insulting, cheating, and at times criminal

I thought that was a large part of the curriculum in ivy league schools these days.

Re:Dumb Trump supporters

[whoever57]

Simply put, a responsible government and a responsible society recognizes when buggy whip manufacturers need to be allowed to die.

There is a lot of hate in the UK for Margaret Thatcher over that issue and the coal mines.

Re:This is totally Trump's fault!

[fluffernutter]

Shelter is as important as food.

Re:Short Lived - MAGA, despite the liberal shits.

[stoborrobots]

Umm, so what your saying is that the robots are not taking all the CNC operator jobs, they're only taking 90% (nine out of ten) of them, since 1 machinist + robots can do the job of 10?

Re:Short Lived - MAGA, despite the liberal shits.

[DutchUncle]

I was reacting to the AC post which - as I read it - seemed to be suggesting that "liberal" positions led to the workforce collapsing. Liberals are not the ones exporting jobs to cheap labor overseas; that's being done by the owners (managers?) of the companies.

Re:Dumb Trump supporters

[Loki_1929]

Please explain how any of this matters to a 45 year old factor worker with two kids and a wife to support, a mortgage to pay, and food to put on the table. Explain what he's going to do when the job he's had since he graduated high school, the job that allowed his father and his grandfather before him to support their families, the only job he's ever known, is shipped overseas to someone who'll work 18 hours a day for $3 with no bathroom breaks. Explain why he'd vote for anyone telling him a "changing workforce", "new economy", or "rising tide" are good for him even as he sits there watching everyone he knows lose their jobs, their homes, and their ability to feed their families.

Because what I saw, Tuesday, is that they're turning the course of elections in this country in the direction of whoever gives them hope that's realistic for their situation rather than condescending arrogance. Doesn't matter whether Trump will or even can deliver on much of any of it. All that matters is their best shot at putting food on the table and keeping a roof over the heads of their family.

No bailouts...

[galabar]

I'm guessing no bailouts this time...

Re:No bailouts...

[michael_wojcik]

Hard to say. Trump's addicted to relieving his own debts; he might enjoy waving other people's away, as long as they're properly fawning about it.

And while the Republican Party is notionally opposed to the idea, most of the individual politicians like buying influence and votes just as much as anyone else. Some will stand on principle (for some value of "principle"), and some will be taking revenge or counting coup. But few, I'd wager, will spend much time considering whether a proposed bailout (of whatever failing entity) is good public policy.

Re:Good luck with that.

[Tempest451]

Let me quote "Good Luck With That" You have a Republican House and Senate who signed a pledge to support their candidate. Any one who doesn't fall in line will see their re-election bids vanish as Trump outs them to their constituents. Lets see how those checks and balances hold up against a "Mandate"

Re:This is totally Trump's fault!

[bluefoxlucid]

Shelter is actually interesting.

Housing prices generally don't change: people are willing to pay a certain amount per month, following inflation. At the same time, housing is highly-speculative: people will perceive that houses will become more-expensive, and so will pay more for them, for a time, thus putting themselves into debts with bigger payments and larger total costs.

When mortgage prime rates fall, housing sale prices increase to match. The 2000s market was essentially a big dialogue of "Housing prices are going to go UP UP UP, so buy now and it's an investment!" and people talking about doubling and tripling their money. This happened while interest rates kept falling lower and lower--I got my house for 2.875%, and I only bought it when the housing market was shaken, and then I bought it in a low-income area for $50,000. When you look at the general trend, though, you find that housing prices tend toward a stable point where the sale price plus the interest come to the same total cost, and thus the mortgage payments are the same.

Note I said "trend": the market is volatile, and there isn't a dollar-amount "correct price". In theory, that $120,000 house at 10% mortgage rates is a $1,053/month, 30-year, $379,000 house, and at 4.25% it's going to have a sale price of $215,000 (with a $1,057 payment and $380k total cost). In practice, when people think that house is going to sell for $450,000 two years later, they might actually pay $250k for it and make $1,229 payments, expecting to net $200k (forgetting about the $20k-$40k of interest and closing costs and such, and the risks, but it'd still be a good $150k, right?).

So let's say housing prices don't change like that. Interest plus sale price comes out to the same, regardless of interest rate; houses follow inflation and other economic factors.

We're still left explaining why people paid 28% for housing in 1950 (including utilities) and 33% in 2003.

The average new single-family home in 1950 was 982sqft; in 2003, the average new single-family home size was 2,300 sqft. Note that, to be "average", the market average has to be buying these homes: those 2,300sqft weren't going to the 1% while the middle-class bought hovels. Houses actually got bigger; and, if you look at square footage, the actual cost of housing went down.

That is to say: per 1,000 square feet of shelter, people paid a smaller fraction of the average income.

So why do this? Why spend more of your money on bigger housing? Don't you only need shelter, and the same shelter that always sufficed?

Dude, we're wealthier. We make more shit with the same labor-hours. We buy computers, giant wardrobes of clothing, TVs, appliances, couches, the works. A sprawl of living space is nice, and a luxury we can afford, and so we buy it; and we also simply need bigger houses in which to store all this new crap we can buy.

Over the past century, food, clothing, and personal care items have become a smaller portion of our spending. At the same time, we actually spend more on houses, medical care, and entertainment. We buy or rent larger spaces, we buy more and better medical care (although our medical system has serious issues and is inefficient and expensive--it's just better than 50 years ago), and we still have all this income left over to buy tons and tons of crap like Xbox games and in-home gyms and TVs in every room.

All very interesting. The big take-away is that trade and technical progress increase wealth over time; and I always emphasize that rate is important, because rapidly creating unemployment through new trade and new progress causes economic recessions and other horrible shit. We need progress; but progress requires us to eliminate some jobs while not eliminating the production they provided, and we need to care for the displaced worker (welfare) and let the economy adjust and provide new jobs for them (time). Progress can come only as rapidly as recovery, else you ruin your economy.

Re: This is totally Trump's fault!

[fluffernutter]

What bank lowers the principal amount as the interest rates go up? Will the global economy keep them down forever? A lot of people will be challenged to make payments. That is when things don't just 'balance out'

Re: This is totally Trump's fault!

[bluefoxlucid]

Prices don't go down because banks and businesses are nice; they go down because of demand.

If interest rates rise, that $350,000 house with the $1,200 mortgage payment becomes a $300,000 house with a $3,600/month mortgage payment. Note that interest rates aren't part of money; who do you think is going to buy all these houses now?

Banks don't set principle amounts, either. Once you buy a house, your interest rate is fixed (ARM-agreements aside, and even then, it's usually 1% per adjustment period--7/5 ARM is 1% per 5 years after the first 7 years, for example). The sale prices drop because a seller goes to sell his $350,000 house and the same buyers are coming, with maybe $1,500/month available, looking for a $1,200/month house, and you're trying to get them to buy it for $3,600/month.

So now you have the same houses and the same buyers; but many fewer buyers can buy. You can't sell unless you lower the price. In realtor speak, your home value plummets.

You seem to be trying to argue that banks will raise your interest rate as prime rates go up, and your payments will skyrocket. That happens only in ARM contracts, and you can control those contracts in a number of ways--like getting a fixed rate to start with. The interest rates affect new sales, and people walking in with $5 aren't going to be able to buy the Hope Diamond.

Re: This is totally Trump's fault!

[fluffernutter]

No, I'm arguing that interest rates go up and someone who has maxed themselves out on a mortgage is in trouble on the second or third term of they do.

Re: This is totally Trump's fault!

[bluefoxlucid]

It doesn't work that way. If you got a 30-year fixed mortgage in 1993 at a rate of 2.875%, and rates go up to 35% in 1995, guess what? You pay 2.875%.

If you have a 7/5 ARM, then your rate goes up to 3.875% in 2000, 4.875% in 2005, 5.875% in 2010, and so forth, until it's paid off or reaches the current prime rate. In 1993, the nominal median income was $30,404; in 2000, it was $41,446, or 36% higher. The actual purchasing power increase was 14.5%; the 36% happens because of inflation--each dollar is worth less, and there are more than enough additional dollars to compensate (this happens because of trade and technical progress making each labor-hour capable of producing more, thus a given wage will be capable of purchasing more per hour worked).

So the ARM loan's mortgage goes up by 1%. Payment goes from $622/month in 1993 to $688/month in 2000, an increase of 10.6%. Income should be roughly 36% higher; even minimum wage went from $4.25 (1993) to $5.15 (2000), an increase of 21.2%.

So maybe you should be careful with ARM loans--especially 3/1 loans or 5/1 loans. In general, ARM loans can give you an enormous advantage if handled properly; whereas if you're doing a 3/1 because you think you're flipping the house in 2 years, and then house prices crash because of a mortgage rate hike, you're going to get fucked.

The most-popular mortgage is the 30-year fixed mortgage, and fixed rate mortgages make up almost 90% of all mortgages. ARM loans make up 11% of new mortgages; and unfortunately, the most popular ARM loan is the 5/1, rather than the more-stable 5/5 or 7/5. ARM loans typically limit rate increases to 1% per term; The /5 ARM loans give time for your measly 2%-per-year raise to keep up, while the 7/5 loans give you a 7-year delay so as to improve your financial position and give you inflation leverage against the ARM when the rates adjust. /1 loans will fuck you up.

So no, most people aren't going to get screwed over by their mortgage rate suddenly skyrocketing; although the popular 5/1 ARM puts you in that dangerous position. Even with a 5/5 or 7/5 ARM, the early low-interest rate would lower your payments compared to a 30-year fixed, and would leave the increase in payments after adjustment terms lagging behind the increase in income even at minimum wage. If you can afford the 30-year fixed, taking the 5/5 or 7/5 ARM and making the 30-year payment will pull your balance down further, giving you a stronger position against the 1% rate increases at each adjustment term.

Your argument seems kind of akin to the thinking that we should ban alcohol because people aren't responsible enough to take care of their bodies and will drink too much. You're also completely-ignoring the market of new buyers, and by extension the next generation. I described why housing prices fluctuate as they do, and how much people end up paying for shelter, and how shelter costs change over long spans of time--say, 1900 to 1950 to 2000; you started arguing about things that happen when you're financially-irresponsible and get yourself into bad contracts, which has little to do with the price of housing (and, in context, has to do with changes in mortgage prime rates, but nothing to do with the absolute value of a mortgage prime rate on its own).

What exactly are you trying to do? You seem to be jumping away from topics at hand and arguing that some other ideal would cause a problem. That looks like an attempt to imply the original assertion was wrong--even though the original assertion was on a different matter of fact. It's not a very good attempt, considering your new assertions are factually-wrong.

Re: This is totally Trump's fault!

[fluffernutter]

Ok well it works differently where I am. If you buy a house for 350k at 2% interest and then interest goes up to 5% in the next five years, you're paying 5% on your next term.

Re: This is totally Trump's fault!

[fluffernutter]

Also, this has nothing to do with responsibility.. you can't choose what you buy a house at, you can only hope there is a house that is at the right price and you win the bid.

Re: This is totally Trump's fault!

[bluefoxlucid]

Well don't buy an adjustable-rate mortgage. What country do you live in that makes you enter a 30-year contract that involves a lot of debt and give the seller the right to change how much you're contractually-obligated to pay?

Re: This is totally Trump's fault!

[fluffernutter]

I'm Canadian.. Here banks only offer 5 year tems.

Re: This is totally Trump's fault!

[bluefoxlucid]

You have 100% control over the loan terms. US Bank offerings include conventional (fixed) and ARM. Penfed has better offerings, with 15/15 and 5/5 ARMs. Penfed's 5/5 ARM declares the following:

Rate is variable and can increase by no more than 2 percentage points after the initial five year period and at each subsequent rate adjustment, with a lifetime maximum adjustment of 5%

So a Penfed 5/5 ARM taken in 2015 at 4% can increase to 6% in 2020, 8% in 2025, and only 9% in 2030; that loan would be contractually-prohibited from increasing at a faster rate, and from increasing above 9%. Penfed's 3/1 ARM also allows 2% adjustments, to a maximum of 6%. Their 15/15 can increase by a maximum of 6% points, once, at 15 years (e.g. a 2015 mortgage at 4% can increase to 10% in 2030, but no higher).

The choice is yours.

Re: This is totally Trump's fault!

[bluefoxlucid]

Ah okay. That seems strange; Canada doesn't seem like a country that would have weak enough regulations for that. Managing interest risk is a huge and complex topic, and most consumers aren't well-educated on the topic; if you were well-educated on every such topic, have 19 Ph.D.s.

In America, banks take interest risk when they give you a fixed-rate mortgage: a change in interest rates means the bank can sell your loan to another bank for more or less money. That means the bank's assets change, and it means capitalization by selling a loan works differently. If interest rates go up and you hold a low-interest loan, then the value of that loan falls. This is important because a loan is an asset: it's an Accounts Receivable, meaning the balance belongs to the bank, and so the bank owns that money. Interest is income, and the portion of your payment that pays the loan down isn't income. The bank can sell that loan to another bank for a portion of the expected interest and take a capital gain, allowing the bank to immediately access liquid funds; but the buyer will want a bigger discount if the interest rate is lower than current rates.

In the U.S., we have 30-year and 15-year fixed-rate mortgages. You pay a higher interest rate on a 30-year than a 15-year; and you pay a higher interest rate on a fixed-rate loan than you do on an adjustable-rate mortgage. This is because a 15-year loan takes a risk across 15 years; the 30-year loan takes risks 15 years beyond that, which are harder to predict, and thus more dangerous.

ARMs are cheaper. A 30-year fixed rate might be 4.25% while a 5/5 ARM is 4.125%. When you buy an ARM, you and the bank make a contract: you agree to a certain exposure to risk, and the bank agrees to limit your risk. For Penfed's 5/5 ARM, the limits are that your interest rate can adjust only once every 5 years, only increase by 2% in any adjustment, and only increase by a total of 5% above the original interest rate over the entire life of the loan. The bank takes interest risk in that every 5-year span following an adjustment is subject to market fluctuations yet does not subject your loan to interest rate adjustments, and that the amount of adjustment they can make is limited. This is better for the bank than zero adjustment, and it's better for you than the bank changing the interest rate however they want whenever they want.

You can take an ARM when you think you can manage the risk. For example: a 3/1 ARM exposes you to a hell of a lot of risk; while a 5/5 ARM with a 2% or 1% maximum adjustment lets inflation and pay increases more-effectively diminish both the buying power and the proportion of your income represented by the increased payments at each adjustment term. A 15/15 ARM exposes the bank to more risk, and costs you more; but it also lets you get a full 15 years of inflation and pay increases before a larger (6%) adjustment comes. You might also plan to use the lower payments on a 5/5 loan to make extra payments, bringing you under the cost of a 30-year fixed even with maximum adjustments.

If you don't know any of this shit, you essentially pay the bank to cover your risk. The bank charges you more interest and takes bigger payments, and in return they assume 100% of the interest rate risk.

That means a fixed-rate loan allows a wholly-ignorant consumer to avoid planning long-term financial management and preparing for financial risk events over periods spanning decades, instead telling some highly-skilled statisticians at the bank to figure out how much risk there is and adjust it into the loan. The uneducated consumer just has to ask, "Can I afford this, and is my income probably stable or growing over the next 15 or 30 years?" He doesn't have to look at ARM adjustment periods and lifetime maximums and determine what his income will look like and how he can mitigate any increases to improve his financial position. He also doesn't risk being wrong--such as by determining he'll come ahead with an increase up to 1.4% in 5

Re: This is totally Trump's fault!

[fluffernutter]

Well.. You have more people losing their houses than we do so obviously Canadian regulations are right somehow. The point behind the limit on five year teams is so that you are not beholden to a certain institution. Why would anyone ever want a long mortgage in the US if it could be sold from a bank that they like to a bank that will treat them like crap? Generally citizens here trust the government to manage the interest rate and look out for their best interests and not allow it to rise too quickly.

Re: This is totally Trump's fault!

[bluefoxlucid]

No, US people are just dumber than the rest of the world and were sold a line about houses doubling in value every 2-3 years and making them rich as all hell if they bought and then sold in 2 years.

When a bank sells debt, they're still the contracted collector for the income; they simply owe the income on the bond to the purchaser.