'Shark Tank' Inventor Loses Big to 'Buy American' Fallacy

[LibertyEagle]

I think outsourcing is bad. I think getting rid of minimum wage is bad too. We should support American made goods. Apple should have made iphone and ipad in America. They charge enough for the devices they could make them here. Kinda like the super expensive clothing that is made in foreign land. Don't tell me they could not make them in America. We should not have to compete with workers in foreign lands that have no protections that is why we should have tariffs.

The minimum wage is not helpful, because it ends up costing people the opportunity to work. Think about all those jobs that High School students used to get so readily. So many of these jobs have just gone away, because frankly, the job just isn't worth paying minimum wage for. Think about a Mom and Pop grocery store, who would hire someone to sweep up, inside and out, for a couple of hours a day, but they can't justify paying that much for it. So, they don't hire someone to do it, when they once did. There are all kinds of examples like this.

Then, remember that most jobs come from small-to-medium sized companies.

 

[jmdrake]

It isn't a good thing, but the cause of the problem isn't companies outsourcing. The problem is our currency is the reserve currency of the world. That is what gives businesses the incentive to outsource. Businesses need to make the most frugal decisions they can, otherwise another company will and then will drive them out of business. Businesses must therefore outsource to stay competitive, but it isn't their fault, it is the government's fault.

Oreck vacuum cleaners, Diamond Gusset jeans and other U.S. manufacturers say that you don't have a clue as to what you are talking about.

 

[dannno]

Seems like it. But instead we have "losartarians" complaining that Americans "lost jobs" because this guy wouldn't outsource.

Well it's partly true. This guy has done all the research and has a solid design and patents and product that is ready for market. Since he won't outsource, another company must spend time doing research and coming up with a design that will take into consideration any patenting issues and then outsource and bring that to market. Then they will inevitably run this guy out of business. The entire process I just described is what "losartarians" refer to as "inefficiency" in the market, which drives up prices. If the guy would just suck it up, as much as it sucks to outsource, and create a competitively priced product then he would be providing a very useful product to people who own trucks and do actually produce in this economy without all the inefficiency of having to fight over marketshare with a company who refuses out outsource and is inevitably going to go out of business.

 

[LibertyEagle]

It isn't a good thing, but the cause of the problem isn't companies outsourcing. The problem is our currency is the reserve currency of the world. That is what gives businesses the incentive to outsource. Businesses need to make the most frugal decisions they can, otherwise another company will and then will drive them out of business. Businesses must therefore outsource to stay competitive, but it isn't their fault, it is the government's fault.

This outsourcing and wholesale shutdown of industries in the U.S. and jobs shipped overseas happened after NAFTA, CAFTA, etc. The dollar was the world's reserve currency for a very long time before that.

Try again, please.

 

[jmdrake]

Here's someone who fought outsourcing, without government help, and won.

http://news.yahoo.com/blogs/driven/janitor-turned-owner-rescues-failing-ohio-factory-195149281.html

 

[dannno]

Oreck vacuum cleaners, Diamond Gusset jeans and other U.S. manufacturers say that you don't have a clue as to what you are talking about.

It's not impossible to produce a low cost product in the U.S. if you can mechanize the processes enough. I would venture to guess, however, that many of the components of the products put together in these manufacturing plants come from China or elsewhere.

Car parts and components are notoriously much cheaper to build in China.

 

[jmdrake]

So you claim. But U.S. manufactures prove you wrong all the time. That's why I used the term "losertarian". Quit pretending you know everything about economics. You don't.

Well it's partly true. This guy has done all the research and has a solid design and patents and product that is ready for market. Since he won't outsource, another company must spend time doing research and coming up with a design that will take into consideration any patenting issues and then outsource and bring that to market. Then they will inevitably run this guy out of business. The entire process I just described is what "losartarians" refer to as "inefficiency" in the market, which drives up prices. If the guy would just suck it up, as much as it sucks to outsource, and create a competitively priced product then he would be providing a very useful product to people who own trucks and do actually produce in this economy without all the inefficiency of having to fight over marketshare with a company who refuses out outsource and is inevitably going to go out of business.

 

[jmdrake]

It's not impossible to produce a low cost product in the U.S. if you can mechanize the processes enough.

Consumer purchasing is driven by more than low cost. I've seen that truth first hand. One of the fastest growing pie companies in the U.S. sell their products higher than the competition. People buy the more expensive pie expecting higher quality...and they get it. Or look at how overpriced the iPad is compared to comparable Androids. Or designer clothes. Not everything is a race to the bottom. Sometime researching your customer is more important than looking for the cheapest way to make something. And considering that some consumers are willing to pay extra for a "made in America label" that has to be factored in as well.

 

[dannno]

So you claim. But U.S. manufactures prove you wrong all the time. That's why I used the term "losertarian". Quit pretending you know everything about economics. You don't.

I am a Business Analyst for a company who actively pursues manufacturing products in China and Taiwan, our profit margin is nearly double for items manufactured overseas. If we didn't do it, our competitor would be in business and we would not. It is not our decision to manufacture overseas.

Oreck machines are either assembled in the United States with parts manufactured in China or imported fully assembled.

http://en.wikipedia.org/wiki/David_Oreck


Toyota has assembly plants in the US, too, but the components aren't built here.

 

[John F Kennedy III]

I think outsourcing is bad. I think getting rid of minimum wage is bad too. We should support American made goods. Apple should have made iphone and ipad in America. They charge enough for the devices they could make them here. Kinda like the super expensive clothing that is made in foreign land. Don't tell me they could not make them in America. We should not have to compete with workers in foreign lands that have no protections that is why we should have tariffs.

I am not a fan of outsourcing or minimum wage. Of course these are both just symptoms of the corrupted system we live in. To heal the patient we must treat the cause of what is ailing him. Not give him cough drops for a broken leg. Especially when those cough drops were stolen from someone else's medicine cabinet.

 

[angelatc]

Thanks for the breakdown. I've never watched the show and now I'll be sure not to watch it. Hey, someone should "outsource" their stupid show. Make it in China with dubbing like a good old fashion 1970s Shaw Brothers kung fu flick.

We actually imported in from Canada.

 

[weilian]

Consumer purchasing is driven by more than low cost. I've seen that truth first hand. One of the fastest growing pie companies in the U.S. sell their products higher than the competition. People buy the more expensive pie expecting higher quality...and they get it. Or look at how overpriced the iPad is compared to comparable Androids. Or designer clothes. Not everything is a race to the bottom. Sometime researching your customer is more important than looking for the cheapest way to make something. And considering that some consumers are willing to pay extra for a "made in America label" that has to be factored in as well.

Comparing a pie company to a tech company?

Take the ipad you mentioned. How much more would it cost just to assemble it state side? But why stop there, why only assemble the parts? Why not make all the parts of an ipad in america? The capacitve touch screen, the processor, ic chips, resistors, capacitors, memory, transistors, batteries etc... How much do you think it would increase the cost of an ipad? One can only guess but the costs would surely be astronomically more than the market could bare and it can no longer compete with other companies that use cheaper parts. What then? Ask the government for help and block foreign products from entering or tax them so much they cost the same? At which point and from whats parts do you choose to source from foreign companies to make it more affordable while still making you feel warm and fuzzy inside, having thoughts of 'made in america'?

 

[TheTexan]

We should support American made goods.

We should support Americans. By giving them access to high quality products at affordable prices.

If that means outsourcing to China... then so be it. If you choose to "Buy American" that's your choice, but me.. I fucking love my cheap chinese shit.

 

[dannno]

Consumer purchasing is driven by more than low cost. I've seen that truth first hand. One of the fastest growing pie companies in the U.S. sell their products higher than the competition. People buy the more expensive pie expecting higher quality...and they get it. Or look at how overpriced the iPad is compared to comparable Androids. Or designer clothes. Not everything is a race to the bottom. Sometime researching your customer is more important than looking for the cheapest way to make something. And considering that some consumers are willing to pay extra for a "made in America label" that has to be factored in as well.

If we had a level playing field, currency-wise, it wouldn't be cheaper to manufacture everything overseas because the cost to ship would most likely be greater than any real benefits we saw in reductions in cost of labor. It might be cheaper to manufacture some things overseas, if they are REALLY good at manufacturing that particular "thing" or if the resources used to make that thing come from that country. However the same thing would go in reverse - we would have a situation where we were exporting at a similar rate to what we import - and that would be highly beneficial.

LE is blaming it all on NAFTA and CAFTA, which in fact helped large corporations and governments cooperate more easily on trading by creating government mandated standards for trade. In a free market, those standards would be created and upheld by individual businesses and shipping companies. We would have still become a big trading nation, but in a free market it wouldn't have been lop-sided and we would have benefited from it because it would have created wealth for our country among driving up consumption - instead we got the consumption while decreasing our wealth.

 

[John F Kennedy III]

The minimum wage is not helpful, because it ends up costing people the opportunity to work. Think about all those jobs that High School students used to get so readily. So many of these jobs have just gone away, because frankly, the job just isn't worth paying minimum wage for. Think about a Mom and Pop grocery store, who would hire someone to sweep up, inside and out, for a couple of hours a day, but they can't justify paying that much for it. So, they don't hire someone to do it, when they once did. There are all kinds of examples like this.

Then, remember that most jobs come from small-to-medium sized companies.

I've been thinking about this the past few days:

In the current situation I'm in now, it would be absolutely worth it and I'd even jump at the chance to work for $3-4 an hour. It is WAY better than the $0 I have now.

 

[Seraphim]

Dragon's Den.

We actually imported in from Canada.

 

[jmdrake]

Comparing a pie company to a tech company?

You're right. A high tech company can afford to have even higher prices. People don't buy the iPad because it's cheap. It isn't. They didn't buy the iPods because they were cheap. They weren't. You can buy mp3 players for 1/4 of the price of what an iPod cost. But iPods outsold cheaper alternatives. It's the same principle in place only in spades and the pie company I mentioned doesn't have the star power Apple had with Steve Jobs or the advertising budget.

Ask the government for help and block foreign products from entering or tax them so much they cost the same?

^That is a straw man argument. I didn't say a thing about government so get off your stupid high horse.

 

[Seraphim]

This whole argument is rather silly.

BOTH sides are losing (compartively) because the money changers are skimming so much off the top.

This is something everyone here should know already.

Free and open trade is HIGHLY beneficial for both sides - in the modern world it just so happens that the sides are the elite and the rest don't matter. There is NO free market - there is NO free trade.

There is oligarchical mega trading blocks controlled by 2 primary factions;

The miliary and the counterfitting banking cabal.

The fact that the SERFS squable over which serfdom territory is getting screwed over more is laughable.

DIVIDE AND CONQUER, FOLKS.

Free trade in the real world is a GOOD thing. Free trade agreements that are NOT free trade (only by name) are ...guess what... NOT free trade.

Ross Perot's giant sucking sound was/is the result of the MONEY CHANGERS skimming off all of the excess wealth generated by the agreements through forex manpulation and DEBT SLAVERY.

GET IT? GOT IT?

Good.

 

[weilian]

You're right. A high tech company can afford to have even higher prices. People don't buy the iPad because it's cheap. It isn't. They didn't buy the iPods because they were cheap. They weren't. You can buy mp3 players for 1/4 of the price of what an iPod cost. But iPods outsold cheaper alternatives. It's the same principle in place only in spades and the pie company I mentioned doesn't have the star power Apple had with Steve Jobs or the advertising budget.



^That is a straw man argument. I didn't say a thing about government so get off your stupid high horse.

No straw man here. If you had addressed the rest of my post...

Ipod/ipad.. They charged a premium even when its parts and assembly is all made overseas. Imagine it was assembled here. Imagine its parts where made here.... How well do you think it will be outselling cheaper alternatives. Get a clue son.

 

[jmdrake]

If we had a level playing field, currency-wise, it wouldn't be cheaper to manufacture everything overseas because the cost to ship would most likely be greater than any real benefits we saw in reductions in cost of labor. It might be cheaper to manufacture some things overseas, if they are REALLY good at manufacturing that particular "thing" or if the resources used to make that thing come from that country. However the same thing would go in reverse - we would have a situation where we were exporting at a similar rate to what we import - and that would be highly beneficial.

Regardless of all of that, your claim that consumer purchases are made solely on the basis of cost is provably wrong. People will pay more for a comparable (or in some cases even crappier) product because they are conditioned to do so via Madison Avenue. Why do you think there's this big push for intellectual property outside of patents? Sure, someone could go to China, manufacture imitation Nikes, make them at the same sticking factory, and put a different design and a different name.....and they wouldn't sell nearly as well as Nikes. Why? Because people who want to buy Nikes....want to buy Nikes. People who want to buy iPods want to buy iPods. I agree that there are things about our government that need to change. But there are still people who can and do manufacture in the U.S. even though they could make the product cheaper elsewhere. And don't give me that "They can lower the price in American through mechanization" crap, because the same mechanization you can do in America you can do in China.

LE is blaming it all on NAFTA and CAFTA, which in fact helped large corporations and governments cooperate more easily on trading by creating government mandated standards for trade. In a free market, those standards would be created and upheld by individual businesses and shipping companies. We would have still become a big trading nation, but in a free market it wouldn't have been lop-sided and we would have benefited from it because it would have created wealth for our country among driving up consumption - instead we got the consumption while decreasing our wealth.

Yep. Free markets are great. And in our current less than free market the inventor in the OP should be applauded to sticking to his guns the same way Ron Paul is applauded for sticking to his.