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America's 'Retail Apocalypse' Is Really Just Beginning (bloomberg.com)
An anonymous reader quotes a report from Bloomberg: The so-called retail apocalypse has become so ingrained in the U.S. that it now has the distinction of its own Wikipedia entry. The industry's response to that kind of doomsday description has included blaming the media for hyping the troubles of a few well-known chains as proof of a systemic meltdown. There is some truth to that. In the U.S., retailers announced more than 3,000 store openings in the first three quarters of this year. But chains also said 6,800 would close. And this comes when there's sky-high consumer confidence, unemployment is historically low and the U.S. economy keeps growing. Those are normally all ingredients for a retail boom, yet more chains are filing for bankruptcy and rated distressed than during the financial crisis. That's caused an increase in the number of delinquent loan payments by malls and shopping centers. The reason isn't as simple as Amazon.com Inc. taking market share or twenty-somethings spending more on experiences than things. The root cause is that many of these long-standing chains are overloaded with debt -- often from leveraged buyouts led by private equity firms. There are billions in borrowings on the balance sheets of troubled retailers, and sustaining that load is only going to become harder -- even for healthy chains. The debt coming due, along with America's over-stored suburbs and the continued gains of online shopping, has all the makings of a disaster. The spillover will likely flow far and wide across the U.S. economy. There will be displaced low-income workers, shrinking local tax bases and investor losses on stocks, bonds and real estate. If today is considered a retail apocalypse, then what's coming next could truly be scary.
Where are they? Hm?
Need I say more?
"...There are billions in borrowings on the balance sheets of troubled retailers...The debt coming due, along with America's over-stored suburbs and the continued gains of online shopping, has all the makings of a disaster."
Thousands of balloon/ARM mortgages approved for unqualified borrowers also had all the makings of a disaster back in 2008 too.
There's a common trait in the human race that spans thousands of years; a propensity to never fucking learn.
And over-stored is right. It's ridiculous just how many damn choices there are within a mile-long stretch of suburbia. No wonder so many are closing.
Here's the thing - I'm old. Not ancient, but middle-aged. So I'm probably not expected by younger people to be comfortable with the latest technologies and customs, right?
Except when I'm buying things I check Chinese websites first, because the stuff I could buy from a local retailer is generally 1/3 the cost if I get it direct from China, and it's generally the same damn item, only with a lot of unnecessary middle-men removed from the equation. Cutting out a couple of warehouses, an extra trip on a truck, and a whole chain of office and retail workers saves quite a bit of overhead.
For me that's usually just low end electronics stuff that'll fit in an international mail envelope, but there's all sorts of other stuff, too. Hell, you can get tailored clothing for the price of local off-the-rack stuff.
Retail is having the same issue the cable television industry is having - the economics have changed and they haven't found a way to adapt. I don't need to drive to a big box store or a mall to pay 300% more for something when with a bit of patience it comes to my house for a lot less.
So 6000 people lose jobs, across the nation thatâ(TM)s not that bad especially given that most of those can easily find spots in other retail stores.
The problem is lack of service, how many times can you try to go to Sears only to find a long line at the single cashier and nobody to help you with anything. Then whenever you have a $5 discount, the entire companyâ(TM)s management needs to be involved in approving it. Then returning it is an entire level of Danteâ(TM)s Inferno unto its own.
Newegg/Amazon will ship you at the discounted price and if youâ(TM)re not happy with it take it back no questions asked.
Custom electronics and digital signage for your business: www.evcircuits.com
I think the biggest change is that we are no longer really looking for stores, but showrooms. We need a place where we can go and look at the products, touch them, see if they do what they are meant to do. Then we can buy them online. These showrooms may have some small stock but their revenue will be from renting space to the company to showcase their products.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
I know I run a small soda fountain pharmacy and I find that my customers (which cross nearly all age and racial categories) seem to prefer our knowledgeable and caring staff that somehow provides more service while charging less. Maybe consumers are learning that big box stores don't actually care about them. Just my perspective.
there is a tremendous amount of real estate consumed by retail outlets, which frankly are of far diminished use than in previous decades. if someone can order something on Amazon and get it delivered to their door in a day or two, there's little reason to get in the car and drive to a store. this works well for a huge chunk of your average person's shopping.
in terms of the employment impact: those affected skew young or low income. and the jobs aren't merely shifted to a different country or location -- most of them are no longer necessary at all. for now, at least, most warehouses and shipping hubs rely on human labor, but that work represents a small fraction of the manpower a proportional retail store would have employed.
it's a problem, but in my opinion, likely a short-term one. i foresee a dramatic upswing in remote, online employment across the board, as online communication and interaction tools mature, and a willing and capable labor pool emerges -- a pool of young people to whom this technology is as effortless and natural as walking.
an optimist might even suggest that this would allow people to more easily aspire to niche occupations and careers that they would have otherwise been unlikely to achieve due to geography. In the past, if you wanted to work in the pinball industry, you had to live in Chicago. If your passion was recording music, you'd almost have to move to Los Angeles or NYC to make a living at it.
Today, there are artists who draw playfields for Stern Pinball without setting foot in Chicago. and my brother does mixing and mastering remotely over the internet for people all over the world.
just like those brick and mortar sales, the job market isn't going away. it's just going online.
i could live a little longer in this prison
Apple stores are doing just fine. But Apple stores are about the experience, much like a movie. Going to Sears or Target or Walmart is like taking a dump. You have to do it so just get it over with and get back to your life.
One reason restaurants are still hot is because they can be an experience. If more small retailers began to understand that it's not about inventory it's about the experience maybe we can get things turned around. Adding things like customer education (advice on accessories for clothing, for example), and of course competent employees (who are actually permitted to help the customer) are always welcome too.
"Well, good luck finding a judge that doesn't run a bestiality site."
If the going is good why not expand. Bacteria do it, humans do it, companies do it, shares dealers do it. Once the border of the petry dish is reached a collapse or correction occurs. There is a desire to get out of the boost/bust cycle but similar to forest fires - keeping small ones away makes the next one an all destroying monster fire. In a sense boost moment is just a point where a heap of crap collected for quite some time exceeds its physical capacity to hold together and collapses. The question is: at what point you intervene and how (that are 2 questions actually). Completely preventing them you can - by enforcing a regime like in NK I suppose that works too only for limited length of time.
You compared prices in foreign countries not on par with labor in your own.
You subverted Tariffs that would have protected domestic value to an appreciable degree.
You bought something of casual or leisurely nature, ignoring the state of the arts locally around.
I was guilty of these upto the Year 2012, when I realized the divide in value concerns durrability and a service industry; I can dumster-dive and repair damaged chassis and component form-factor products and commit an equal exchange to boot; tha's all we can do, work from home, to correct the problem since nobody can industrially compete to the international economic violenve that China commits against Americans & Affricas, and Eurapeons.
On the weekends, Costco usually has 10 lanes of cash registers with 10 people in line each, with baskets loaded to the top, followed by long long lines to pass by receipt checkers to exit the building...The downfall of "retail" isn't all about Amazon.com and online clicks, it also includes the rise of these warehouse stores that sell superior quality produce and products (except for their accidentally unauthorized jewelry and slightly obsolete electronics) as well as buying basic household goods in bulk to reduce cost in a country that has had depressed wages for twenty years. Because of the lower overhead, warehouse stores can be a much cheaper way to buy things than ordering online from Amazon and still offer some of the seasonal and local customizations that Department stores once did.
Trade them all for bison dollars. After I kidnap their queen each one will worth five British pounds,
Wanna buy a shirt?
https://www.redbubble.com/people/stealthfinger/shop?asc=u
Or hot dogs... "They'd be so abundant, they'd become our currency! 20 hot dogs would equal roughly a nickel. Depending on the strength of the yen, I'm not quite sure, but...you know what, I'm getting ahead of myself. Let's just keep praying that we can clone one of these hot dogs."
If the going is good why not expand. Bacteria do it, humans do it, companies do it, shares dealers do it.
One of these things is not like the other.
When ruthless Greed is compared to mindless bacteria that only know how to do one fucking thing, the real disease that will destroy us, is Ignorance.
One would have thought the most advanced species on the planet would be more capable of preventing it's own destruction. Guess not.
You didn't mention the estate tax repeal. Think of all the factories and jobs to be created when the new wave of Paris Hiltons arrive.
>>... unemployment is historically low...
Total bollocks. It's only listed that way because the feds lie about how they count unemployment.
If you include the total, real world number of those who have been out of work for longer than a year, forced to work part time, and those on public assistance, the number is in the double digits.
So rise up, all ye lost ones, as one, we'll claw the clouds.
... I buy things on the internet that I thinki Wal-Mart wouldn't stock like rare card games or cheap cables of any sort.
If Wal-Mart simply stocked cheap USB cables, etc they would get tons of business from that alone. Even if it were a loss leader!!
Lee Holman and Greg Buzak authored a report published in August of this year: "Debunking the Retail Apocalypse" in which they stated:
" Over 4,850 more stores are opening than closing among big chains, and when smaller retailers are included the net gain is well over 10,000 new stores. As well, through the first seven months of the year, retail sales are up $122 billion, an amount roughly equivalent to the total annual retail sales of The Netherlands.â"
Get the full report at:
http://www.centromarca.pt/fold...
You seem to have overlooked the robots that will be doing a significant chunk of the work.
Tear down the zombie strip malls and rezone the properties for apartments/condos.
Sears kicked ass for years because they owned their own real estate and they were able to offer competitive prices. They'd already have gone under if they hadn't kept their trucking fleet, although they had to change the name on the side of the trucks because nobody wanted to see a Sears truck.
They were already failing before they started selling real estate, though, which they started doing specifically because they couldn't cover their operating expenses otherwise. And they were failing not because they couldn't compete with the internets, but because they didn't try. They compromised customer service, which was what got people through the door. They also compromised quality, for instance Craftsman tools have been going downhill for years. So why would you bother to go in there?
I also wonder how much money Sears has spent on their agonizingly awful e-commerce site. It does tend to carry pretty much everything, but it has pretty much everything at the highest prices anywhere. When you add to this the fact that it's one of the worst sites on the interwebs, it's easy to see why nobody uses it.
I, for one, fell out of love with Sears years ago, when I was just getting acquainted with powered yard equipment and found that they wanted about 400% of reasonable parts prices. More recently, I had a problem with them not wanting to honor a warranty. Sears changes model numbers on products which haven't actually changed every year so that they don't have any stock to make warranty replacements with, so that they can dick you around. Is that really cheaper than just doing business properly? Who knows. But fuck 'em.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Not for the working class though. That would be corminizzem!
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
Sounds a lot like trickle-down theory. Did I just get transported back to the 1980s?
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
So why has this suddenly become a problem?
Too Big To Fail. Sears is large enough to where if it goes under, it takes thousands and thousands of jobs with it, and impacts everyone in the country and lots of other people besides. Sears closing will literally cause a noticeable increase in crime, since we have no meaningful safety net in America.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Now, if this tax cut can take place, things will change. Those people already working those burger flipping and big box retailer jobs are going to see a dramatic rise in the help wanted ads for manufacturers that are adding 2nd and 3rd shifts due to the dramatically lower corporate income taxes that allow those companies to make money with factories inside the USA.
This is only true if tax rates are what is driving companies to move manufacturing overseas. I would be interested to see that demonstrated. I think that taxes are only part of it, while tariffs, cost of wages and environmental and labor laws make up another sizable part of the equation. Those are governed more by trade deals than tax policy. Even so, US taxes would have to be lower than those in Bangladesh (for example) to have an impact. And the difference would have to be greater than the difference in labor and regulatory compliance costs between the two countries. Again, I'd be curious to see that demonstrated.
Passing the Fair Tax could do it in spades, the economy would sprout rocket engines under the Fair Tax as manufacturing would be done in an income--tax-free environment in the only developed country on the planet where that could be done. Foreign business people would injure themselves in the stampede to build factories here in the USA. We would probably actually experience a fairly severe labor shortage, which would spiral wages further. We could probably actually allow more immigrants because we could put them to work and the country would prosper.
Has it been demonstrated that a sales tax can make up for the tax revenue lost by abolishing all other taxes? I'm not sure it has. Sure, there are theories but has it been done in practice?
But either way, it all depends on stopping the stealing, or greatly reducing it. Income taxes in any form are stealing, and the more stealing that goes on, the more the economy suffers.
How is a sales tax not stealing too? I have to buy things to be able to live. I must have food, shelter and transportation and the government would be forcing me at gunpoint to pay a tax. How is that not theft?
"What the American public doesn't know is what makes them the American public." -Ray Zalinsky (Tommy Boy)
Wait... You want to use tax policy to discourage capital investment and reduce mobility of investment to its best use?
Wait, you think that's what the finance industry does? Maybe it did at one time. But HFT doesn't give a fuck about any of that.
"What the American public doesn't know is what makes them the American public." -Ray Zalinsky (Tommy Boy)
In 2004, Malcolm Gladwell accelerated depreciation as to why so many malls were built in the first place. I just now added this to the Wikipedia article.
I hope retail lasts a while. Not because I particularly like shopping in person, but because online shopping is creepy from a privacy perspective. You have to use electronic payment and tie purchases to your identity and address. Meaning that the profile that retailers, marketeers, governments, and health insurers have on you gets even bigger.
Even if you have nothing to hide, assuming price restrictions and community rating on health insurance are repealed, how long before health insurers start billing you based on the food, drinks, and snacks you buy? The data will be out there and available to everyone who can buy it -- US has weak data-protection laws.
Fortunately, I'm moving to a part of my city that has a strong cash economy (due to immigrant population), so retail won't die there for another 30+ years...
There must be 3 different starbucks knockoffs in my area... seriously?
love is just extroverted narcissism
I've seen that some once thriving area's are now shrinking - people have moved to new areas. And maybe those stores need to close.
It feels more like Refactoring. Close the ones that aren't working and open new ones that will work.
Economics says that this will take care of itself. I don't think Amazon is the cause. Yes - Sears has done a lot to hurt itself. But they started out as a catalog store - able to service areas without having to build a giant store. And many feel they failed to react quickly enough to changing landscape.
As for being a made up media hype - could be. But I don't read the news anymore. It's all fake... right?!
As has been the norm for several decades now, as a generalization most things are made in China for next to nothing. This and globalization has been a boon for retailers for a long time, in that they buy from said dirt cheap retailers, import the products, mark it up 5000% all for fun and profit. Fast forward to the inevitable result of sustained globalization combined with advances in online markets, and you have consumers with other options. Basically the same crap but without the 5000% markup. Now the slight markup for profit exists at the point of origin, or at an online clearinghouse such as Amazon or others, who more often than not just let the seller mark it up, and they take a percentage for using these online services and branding.
I mean it was different when there were different products of greater quality, but for large retailers that more less doesn't exist anymore. The small guys, that exist in the quality brand niche, will do just fine, as there will always be a demand for that, so long as that quality divide exists and people are willing to pay for it. However it is pretty easy, and has happened to me, and everyone else really, where you see a product on a shelf of a retailer that is the EXACT same product, cheaply re-branded with a stamp, or box, or whatever as a product on some Chinese website for about 1/10 or 1/20th the cost. About the only drawback is that you need to wait for it, but I think many people are willing to do exactly just that. Even now, the postal and distribution services are cutting that down every year.
Bottom line, is they had it good for a long time, but in the end you reap what you sow, and the chickens are coming home to roost.
Anyway it doesn't effect all retailers the same way, as certain product types are less impacted.
No, I kinda ignore it 'cuz there's still a whale of a lot of people that traipse in and out of any US car manufacturer's factory in spite of the fact that they are some of the most automated factories in the country. So, it seems that they still need people for SOMETHING, implying that there's lotsa stuff that can't be automated. Yet. Sure, robots will do more and more, but I'm waiting for someone to show me one that can walk thru the factory, hear the bearings going bad in a 50 hp motor on a press about 25 feet up in the air, go get a lift and a spare motor, get up there and change it out, remove the old motor back to the shop and rebuild it with new bearings and maybe brushes, and put it back in stock as a spare for the next time. Find me a robot that can do that. There aren't any. There aren't going to be any truck driver robots that can jump out and change a flat on the inside dual, either, for a long time. People will always be necessary up until its so automated that we can all use personal slaves who are robots, and never again have to do a damned thing that we don't want to do. It may never be seen by anyone alive today, 'cuz that's still a lot of tech to be invented.
Almost like Ikea but without the checkout.
Thats a great idea.
Sometimes when buying online I wish I could view it in person first. I guess I'm already doing that at brick and mortar stores but they just don't have everything I'm looking for.
Bruce Bartlett is a leftist shill whose opinions are manufactured to support whatever globalist / communist theory that the left thinks they need supported. The left especially doesn't like the freedom from governmental interference that comes with something like a Fair Tax, so he attacks and attacks it. He is simply wrong.
A guy who served under Reagan and Bush I is a "leftist shill"?
What about the side of the curve that is never shown. Tax revenues falling on the right side of the curve so far that potholes get proper nouns for names.
...and David Stockman, in his book, The Great Deformation, points out repeatedly the dangers of leveraged buyouts and the coming consequences of those buyouts.
E Proelio Veritas.
There's a common trait in the human race that spans thousands of years; a propensity to never fucking learn
It's hard when you keep dying. A person learns something, then he dies so his descendants forget it. That's why writing (imo) is the most significant technology of all history.
"First they came for the slanderers and i said nothing."
I think that retailers seem to be trying to reduce their inventory and as a result they no longer stock a wide enough variety of products to keep the customers coming to the store. I think there is a feedback loop here that the PHBs (Pointy Hair Bosses) don't understand. When I go to a store and want to buy something that they no longer carry and that I can't find elsewhere locally, I order it on line and usually never look for it from a local store again. I think a lot of people are doing this and this is at least one factor driving local retail stores out of business.
Did you just make all that up, or do you have actual facts to support it?
Wow. For a fairly active topic with lots of room for interesting comments, I am still amazed at how low Slashdot has sunk.
Not ONE comment moderated as funny. In my admittedly mostly random searching, I couldn't even find an attempt at humor.
Only 5 moderated as insightful. That should be a surprise, too, but it's worn out. Even less surprising that the insights were spread between trivial and imaginary.
So I considered where as-yet-unmoderated "insight" should lie. Obviously "profit" is involved. Only 5 mentions, but nothing insightful there. Another key aspect would involve "efficiency", but that didn't get a single mention.
Maybe there's something hidden in the AC stuff I can't see (without lots of favorable mods)? I doubt it.
In conclusion, there are some insights on the interesting topic, but why would I invest the time seeking (or sharing) them on Slashdot?
I always prefer to close on a positive note, but even that seems too pointless now. Search for the #1 problem that deserves the highest priority? I've already noted (repeatedly) that it's the financial model, but the borken (sic.) moderation is also not helping.
Freedom = (Meaningful - Coerced) Choice != (Speech | Beer^2), and sad sock puppets' bad mods avail them naught.
Income taxes in any form are stealing
Just like downloading music is stealing, right?
Words have meaning. You're lying in precisely the same way the RIAA/MPAA does to try to support their campaign of bankrupting grandmothers. An income tax is an income tax. Stop playing word games to suggest that your desire to take less money from the wealthy and more money from the poor is somehow morally defensible.
Passing the Fair Tax could do it in spades, the economy would sprout rocket engines under the Fair Tax as manufacturing would be done in an income--tax-free environment in the only developed country on the planet where that could be done. Foreign business people would injure themselves in the stampede to build factories here in the USA. We would probably actually experience a fairly severe labor shortage, which would spiral wages further. We could probably actually allow more immigrants because we could put them to work and the country would prosper.
This is a really amazing fantasy - sounds like the Fair Tax could cure cancer too, right? Here's my question: what evidence do you have that cutting taxes has ever had anything near that impact on any economy? During the 1950's, we had a top marginal tax rate of about 90%, and that's one of the most prosperous times in American history. We actually paid down the massive war debt thanks to those high tax rates, and also witnessed a widely distributed increase in wealth across our society.
On the flip side, the Reagan tax cuts are about the closest thing we can compare to in the U.S. for the kind of cuts you advocate, and they didn't turn the nation into your libertarian utopia - they DID, however, manage to send our national debt skyrocketing again after several decades of decline.
Either provide evidence to back up your economic fantasies, or stop making such ludicrous claims.
One would have thought the most advanced species on the planet would be more capable of preventing it's own destruction. Guess not.
The mice are doing just fine, and are still looking for the question.
First law of people: People are generally stupid.
I kind of view economies as being on a continuum between capitalism on one end and socialism/communism on the other. This is maybe not the best way to view them, but I am no economist.
Having said that, what do you call a market that is capitalistic in nature but strongly bound by lots and lots of governmental regulation? Also where some market components (I'm thinking infrastructure, here) are owned by the government?
I call it Keynesian, but there was a lot more to his thinking than that.
a propensity to never fucking learn.
Who needs to learn? Most of the folk generally considered to have influenced or caused the crash in 2008 made out like bandits. And those same people are currently lobbying to remove the protections Obama put in place to try and prevent another such crash, which they'll probably succeed at (and I think already have partly) given how much Trump loves undoing everything Obama did, without knowing or caring about the purposes for any particular regulation -- simply having Obama's name on it is enough for Trump to hate it.
The people I'm talking about did learn. They learned that they can get rich off of the suffering of the masses, and then when that goes belly up they learned that the government will give them another $700bn to try and undo all of the problems they caused, much of which they also just pocketed.
All us average people with no political and almost no economic influence have learned is that those people are scum who will happily screw over the entire world for a dollar, and that there's pretty much fuck all we can do about it when they try again.
These days, yes. Sad though it may be. Trump makes Reagan look positively communist.
I had a roommate who worked at an auto factory. He had to quit when he almost sliced his thumb off. His job was to slice off plastic tabs from some plastic part. He admitted that the only reason those plastic tabs existed was because the union mandated they continue to be part of the manufacturing process so that a job would exist removing them. It was literal makework, enshrined in contract. Not saying all auto factory jobs are like that, it has to be just few enough that it's cheaper to keep the humans than to fully automate.
Corruption is convincing someone that the selfless ideal is the same as their selfish ideal.
That worked like a charm when they closed the sears hardware by me. Everything was long gone by the time the real discounts appeared.
[sigh] I remember when Sears Canada sold hardware. Good quality Craftman hand tools and power tools. Then sometime in the late 1990s, all the Sears stores in Canada seemed to drop their great hardware and tools, and from there it was a competitive race to the bottom selling appliances (against Best Buy, Leons, Bad Boy, The Brick, Home Depot, Lowe's) and women's fashions (against the rest of the tenants in the shopping mall).
Sears, at one point, couldn't be beat. It used to be that if Sears sold it under the Kenmore name, it was good stuff with top-notch after-sale support. It used to be that if Sears sold it under the Craftsman name, it was good stuff... again, with top-notch after-sale support. By staff who gave a shit. And a great house brand is unbeatable in retail: you never have to price match the Kenmore against the Whirlpool which rolled off the same assembly line, and Kenmore had more brand recognition and brand admiration than the company that actually made it.
Hell, isn't Craftsman-style architecture literally named after Sears mail-order house kits?
Part of the problem might be the way the Sears Electronics 12" black-and-white TV I had was made in Korea in 1978 by a little company no one had ever heard of. It was great quality, great price, served me well for many years. Being an electronics geek kid I took the lid off and found a now-familiar name on the label on the picture tube and the chassis: Samsung. Likewise, an Eaton Viking (Canadian house-brand, now defunct Eatons Department Stores) TV had Gold Star labels everywhere - You know that manufacturer now as Lucky Gold Star - LG. Apple should take note of its relationship with Foxconn.
I've also got to give Sears a shoutout for one particular piece of AMAZING customer service. In the 1980s, as a kid on my paper route, I found a classic 1950s Sears Craftsman lawnmower. The deck was cast aluminum, the engine was two-stroke, and I managed to get it running almost immediately, it was built like a tank and almost could have mowed down the annoying fire hydrant on your lawn. I copied down the model number, went to my local Sears store just to ask about it. Two weeks later, a large manila envelope showed up at my place, return address was Chicago. Inside, copied from microfiche, was the entire Owner's Manual and Service Manual for that 1951 Craftsman lawnmower. That lawnmower (with that envelope tucked under the deck) now hangs restored in an automotive museum.
Sears Canada is finally officially dying. But I've missed them for years. I wish nothing but the best for the rest of Sears, they always provided a great product with great support at at fair price for both parties.
Thank you, Sears Canada. I loved you.
Fire and Meat. Yummy.
This particular lie needs to die. The top rate was 90% ON PAPER ONLY.
So what you're saying then, is that it isn't a lie? I never claimed what the effective rate was. The marginal tax rate was 90% then, which you don't dispute, even though the effective tax rate was indeed lower. Just as now, the top tax bracket is around 40%, and the wealthy still pay a lower overall rate (the top 1% pays something like 25% effectively). The point stands, though - higher taxes are demonstrated historically to be compatible with widespread economic prosperity, AND were used to pay down a massive war debt. The people suggesting that tax cuts for the rich are going to improve our economy or overall prosperity are either blatantly malicious or profoundly stupid.
Maybe people are more reluctant to spend their weekends wandering like zombies around shops to buy some Chinese-made junk that they could have bought online in half the time and half the price. Maybe I shop in the wrong places but I rarely have interactions with shop staff that make the mark-ups worth it.
"I'm waiting for someone to show me one that can walk thru the factory, hear the bearings going bad in a 50 hp motor"
You only notice that because you've been trained to notice it
I've walked through a bunch of factories as an observer and noticed a ton of motors with bearings going bad - the people running the show have ALWAYS been surprised when I pointed it out. Sometimes I've been ignored and the motors invariably shat themselves a few weeks later.
Noticing bearings going bad isn't difficult and you don't need a robot for it. Simple piezo sensors will detect it long before they're audible to a human _if_ the makers or maintainers can be bothered to fit them (the other ways of detecting them are looking for extra heat, power draw or decrease in RPM and I've seen them all in use from makers who care about such things)
Automotive factories in the USA, EU and Japan have all had limits imposed on their automation by unions (yes, even in Japan). Robots are accepted in the dirty, dangerous or repeatable precision areas but people dug their toes in when they started shifting to the rest of the line.
Worse, whilst unions are essential to protect worker rights, if they gain too much power then the people at the top start playing politics and force "make work" employment policies "to save jobs" which invariably result in the employer losing out to more efficient/better quality manufacturers - at which point _everybody_ loses their job, instead of just some people.
As a result, the only way to "automate more" is to build a _new_ factory in a _new_ area and hire a _new_ workforce - which also means that _everybody_ loses their job in the old one. This is the primary motivation for building new factories in mexico, china and eastern europe, not cheaper labour. Inexperienced workers tend to turn out poor product for the first 4-5 years - that got proven multiple times in the UK when the government mandated during the 1960-70s that makers put factories in areas where the workforce had little experience assembling cars (This was done to "reduce unemployment" in those areas)
The "highly automated" factory in Detroit employing 10,000 people (down from 25,000 in the 1970s) became a "very automated" factory in Mexico with higher output volume and higher build quality whilst only employing 1500 people. If forced to bring manufacturing back into the USA then carmakers will probably build an uber-automated factory in New Mexico employing fewer than 500 people. Each iteration allows fewer people to be employed even if supply lines become longer and thinner (but the supply chains are even more increasingly automated, therefore employing fewer people for more output)
Oh, the "people in charge" don't know about the bad bearings? You must mean the managers.... yeah, the managers don't know s***, but the journeyman factory worker does. Why they weren't fixing it I can't guess.
As for automation, the bottom line is that they're still going to be employing some people. If it's 500 instead of 20,000, that's still 500 people. We'll make it up due to the overwhelming return of jobs from other countries if we just lower the damned taxes. The US taxes are why companies have fled the USA, not wages. If you study the Fair Tax, you find that their research pegged the US income tax burden at 22% of the selling price of anything built in this country. Meanwhile, building a car in this country takes 30 - 33 man-hours. Since the car companies were telling us that their cost per worker was $78 / hr in 2007 when they were going bankrupt, and wages have been stagnant, multiplying that out gives around $2500 of worker cost per vehicle, while for a $40K SUV, the tax burden is around $8,800. That's why the FairTaxers want to get rid of the income taxes, but even if we just lower the corporate income tax, that'll help. The ultimate key to putting rocket engines on the economy is abolition of the income taxes, but for now we need to take what we can get.
There is a need to tax empty property heavily to avoid such behaviour, a change which local communities could easily introduce.
There must be 3 different starbucks knockoffs in my area... seriously?
When it comes to the bean-sucking masses who insist they don't have an addiction problem, there's not much to say.
The strongest drug in the world is denial.
"The US taxes are why companies have fled the USA"
Most companies didn't "flee" the USA. They simply found that you can extract more value in the short term if you drop R&D, sweat your assets and buy in stuff from a 3rd party, then sell it with a markup.
This has nothing to do with taxes and _EVERYTHING_ to do with the myopic focus on quarterly profits to the exclusion of everything else. It's a slightly larger shell game than day trading but has the same outcome (innovation is stifled, and without innovation you can only rest on your laurels for a short period unless you can rely on protectionism)
Yeah, there's all kinds of corporate sins of short term profit reigning supreme, as well as most businesses not leaving the USA. But, a whale of a lot of MANUFACTURING left the USA, and that's important because those are one of the big 3 - agriculture, mining, and manufacturing that produce real wealth. That makes them also capable of providing the best jobs. Many miners in W. Va. that Obama nuked with his extreme global warming agenda were making $95K a year. That's good money, probably equivalent to working 4 Walmart jobs at $11 / hr.
But of those that DID leave, taxes were the biggest culprit. You can't have the gov't coming thru the door like Jesse James and demanding 35% of the profit when all the company has to do to avoid that is move out of the country.
Our best move would be to stop taxing income in all its forms - individual, corporate, capital gains, self employment, alternative minimum, estate, gift, yada yada and replace them with the Fair Tax, which has a monthly "prebate" to keep from taxing the poor, who would just show up at a welfare office to recover the money you'd be stealing from them anyway, in order not to starve. The Republican's tax plan will help somewhat, in the manner of the Fair Tax, just less effectively.
> Oh, the "people in charge" don't know about the bad bearings? You must mean the managers.... yeah, the managers don't know s***, but the journeyman factory worker does. Why they weren't fixing it I can't guess.
You assume "factory" = full of mechanists (not operators). This is only a minority of the cases.
In particular this was mostly garment factories and in one case the bearings were shrieking so badly you had to shout to be heard over it.
You really are barking up the wrong tree on this, to the point of buffoonery.
Company and personal taxation has nothing to do with industrial competitiveness. Look at Germany for one example.
What makes the most difference is institutionalised corruption.
The USA has amongst the lowest effective company taxation rates in the world and the highest protectionist trading barriers.
It also has the worst healthcare availablity and population lifespan averages in the OECD - both stats are still falling.
It is failing to maintain infrastructure and primary/secondary education for the general population is amongst the poorest in the world
It has an increasing level of poverty, currently unmatched since the end of the 1930s depression, but still getting worse.
It has a _myriad_ of damaging legislated monopolies (especially in the telecommunications sector(*)) which act as a handbrake on local economies as do the multitude of trading barriers the USA has erected over the years in an era when the rest of the world is tearing their ones down (here's a clue: "Free trade" works in both directions. At the moment the USA is screaming about that from the rooftops, demanding open access for its businesses in other countries, whilst preventing companies from other countries having the same open access into the USA)
(*) all the CLECs are gone. AT&T may not sell phones anymore, but it has reassembled itself in ways the antitrust laws can't touch, without all the pesky universal service obligations imposed in the 1930s antitrust settlements. As for the US mobile market, that has no effective competition across most of the country.
This has happened against a background of "lowering taxes" since the 1980s and at the moment USA company tax rates are the lowest effective level they've been for over 100 years. Coupled with that, personal effective taxation for the rich has declined radically - to the point where the number of loopholes enacted means that most of the USA Fortune 100 pay NO tax whatsoever and many of the rich pay an _effective_ rate of 1-2% at most. (forget marginal rates, what matters is the effective rate)
There has been a political lurch to the right that's been going on since the end of the 1960s and accelerated markedly towards facism after 2001. The term "inverted totalitarianism" is worth looking up.
You're living in a new Gilded Age, but without the increasing industrialisation and citizen participation in government which characterised the last one. Rather tellingly, the Progressive Reforms which undid many of the inequities of the Gilded Age are being deliberately destroyed for the benefit of a privileged few. Furthermore, over the last 70 years a particularly nasty and quite zealous religious sect has managed to insinuate itself into all levels of USA government and is now actively trying to tear down the constitutional barriers that were written to try and prevent any religious interests from achieving this kind of undermining of the secular state.
As someone living outside the USA, your self-inflicted social problems, religious extremism and increasing parochialism provide me with amusement and increasing employment opportunities. Quite frankly after 60 years of the USA stomping around the world many of us are quite happy to kick back with popcorn and watch your country implode, however we'd prefer that the resulting mess didn't take the rest of the world down with it and we'd prefer someone sane was looking after the nukes.
We are in the 3rd industrial revolution and you either need to adapt or become another footnote in history. Complacency and yearning for the old days are not an option. You are no longer the largest economy in the world and well on the way to becoming number three, nor are you the most politically influential country anymore and the mantle of 'most free country' left for other shores many years ago - The USA doesn't even make the top ten in most scales - and you're even down to #38 on the scale of human rights.