Thursday, 28 April 2016

A Link for Mr DBCR (and me)

Here. (Apologies, I know it's the Torygraph - again).

This broadly confirm my opinion that the USA is as bad as the EU, maybe worse. Which would explain Obama's interventions.

22 comments:

Mark Wadsworth said...

As regards foreign policy, the USA is infinitely worse than the EU.

Lola said...

MW Yes. USA - viciously incompetent. EU - just incompetent?

DBC Reed said...

I was an off-and-on adherent of a futile rabble that fought the last referendum in favour of a Common Market formed from the Commonwealth Countries. That we were being forced to join the EC by the USA because they had robbed us of our protected Imperial markets during the war and we subsequently needed parking somewhere out of the way was pretty much an article of faith.
My point about Obama was, and remains, that the US would not let us trade as we want if we were to Brexit, so we get more guaranteed Free Trade in Europe than out.

Lola said...

DBCR
"My point about Obama was, and remains, that the US would not let us trade as we want if we were to Brexit, so we get more guaranteed Free Trade in Europe than out.. Fair point, but I don't think it's valid. Because. The USA is declining in trade power. The combined trading value of the Commonwealth plus everyone else, especially emerging economies, will make it harder and harder for a US hegemony.

Which is one of the reasons why I am for out.

DBC Reed said...

Free trade areas only work with constituent countries with much the same wage levels: otherwise countries with loads of capital site their factories in the low wage countries (USA > Mexico ; UK Cadbury's> Poland) and end up with Zilch production at home (Trump is blustering he will get the factories back from Mexico).NB The $ is a world reserve currency;the £ no longer so.

Lola said...

DBCR. nope. Again. Free trade areas work whatever. Wage disparities disappear under free trade and they level up, not down. The lower wage/lower investment areas benefit from investment and hence greater productivity per worker, hence higher wages.

Also, ignore international borders pro tem. Is it a good thing that Halifax has free trade with London? Of course it is. Therefore why isn't a good thing for Hanoi have free trade with London?

DBC Reed said...

When Ross Perot was running for President in the 90's he said the NAFTA (North American Free Trade Agreement) would create "a great sucking sound" (has its own Wikipedia entry)as jobs were sucked into Mexico ,where auto workers could be paid $1 an hour, from the US where they were paid $10.Trump is making the same point now, ( when he can concentrate).I don't know why you disrespect the views of such straightforward billionare businessmen as yourself.
Halifax/Hanoi are you kidding?"Free" Trade built up Halifax's woollen industries, no doubt dependent on Australian wool, importing labour from other parts of Britain, then Kashmir (because they were less averse to working nights),then dumped it down when other countries became more competitive. The big Mackintosh confectionery company got taken over by Nestle.Halifax is in receipt of grant aid from the EU Regeneration fund (for economic basket cases)
If you are seriously proposing that British workers wait for wage rises until what used to be called "coolie labour" wage levels have caught up, then you need to reconsider your whole position (Being polite: try packing it in.)Its the innocence of it all that is really frightening.

Lola said...

DBCR. It's still Nope. You know full well that wages are 'high' (as in high cost) in the US (and the UK) due to high rents - actual high rents and high taxes. With lower rents labour in the western world would be lower cost, payroll costs would be lower. On top of which the existing plant (in your auto manufacture example) would make those local workers very productive. The costs of relocating factories is very high. No-one wants to do it he can help it. (I have just moved offices which I would not have done if I could have helped it as the costs were very high - relatively.) So what capitalist are doing is arbitraging payroll costs, not wages.
We all want the world to be richer, especially the poor bits. The best way to achieve that is universal free trade.

paulc156 said...

Obviously for free trade to really benefit everyone across the globe and not just multinationals you need complete freedom of movement. Or else the claims made for free trade are neither honest nor coherent.

DBC Reed said...

@paulc The logic of the free movement of impoverished people from really poverty-stricken places to anywhere near him appears to have stemmed Lola's flow .Many thanks.

Bayard said...

p156c, if you had no barriers to trade, then free movement should not be a problem. Most people's gripe against immigrants, apart from racists and anti-religionists, is that they are "taking our jobs" and "taking our benefits". However, in the absence of barriers, the immigrants would not be able to work for less than the locals. The "taking our benefits" problem, however, is a inescapable part of having a welfare state.

DBCR, there is no reason at all that immigrants would go to rural East Anglia where Lola lives, any more than they do already. All the current and historical evidence is that immigrants end up in the big cities.

Mark Wadsworth said...

B: "The "taking our benefits" problem, however, is a inescapable part of having a welfare state."

Nonsense. We can make up any rules we like on how long somebody has to have lived here legally before entitled to benefits.

Politically, it is one question. Actually, assuming a flat rate CI of about £80 a week or £12 a day, it doesn't really matter, that is only just enough to live on, the money would be spent straight back into the economy so it doesn't really matter. For a fixed total CI spend, the result would be that 'everybody' is slightly worse off but businesses selling to the new arrivals would be better off.

Lola said...

P156. DBCR. No flow stopping. Just working. Anyway MW and B have put you straight for me. Again.

Bayard said...

"We can make up any rules we like on how long somebody has to have lived here legally before entitled to benefits."

We could if "benefits" were a handout from a beneficent state to a deserving citizenry. AFAICS, they are not. They are there to prevent people becoming starving and desperate and hence a threat to law and order, so either we keep immigrants out or we pay them benefits.

Bayard said...

"However, in the absence of barriers, the immigrants would not be able to work for less than the locals."

Is it done to quote one's own comments? Having re-read this, I'm going to disagree with myself. If the locals are enjoying high wages because of a labour shortage then an influx of labour from outside might well well bring those wages down. However, I am not sure that is the point p156c wanted to make. I would expect that the sort of people that DBCR imagines Lola is would be delighted if the cost of labour came down.

Mark Wadsworth said...

B, as a politician, I'd say that people can't claim benefits until they have been here for (say) five years.

But for various reasons - including the one you mention - it would be simpler to pay people from Day One,- far more important is only allowing people in who want to fit in and will be accepted as fellow citizens by the incumbents.

DBC Reed said...

@B In Lola's stomping ground, East Anglia, the locals have to be paid a lot to do seasonal agricultural work, so migrant labour is very much the norm with small towns bursting with Portuguese in consequence.These migrants are not taking the locals' work, because the latter do not want it at the going rate, but they are stopping them getting bigger money for it,or raising the going rate till it becomes attractive.
It appears that MW is generously suggesting that migrants should get a CI after 5 years " probation" in UK.As there won't be any common system throughout Europe, it would appear likely that it this will be wildly distortionary and lead to the kind of migrant flow that Lola secretly fears but ostentatiously proclaims is impossible.

Bayard said...

DBCR, in your first paragraph you suggest that Lola can't leave his front door without tripping over half a dozen migrants and in the second you say he's afraid of them. What are they going to do, murder him in his bed? Whatever they threaten, they aren't being very prompt about it, are they?

Mark Wadsworth said...

B, as far as DBC is concerned, there is such a thing as Schrodinger's Little Englander, who can simultaneously welcome immigration because it pushes down wages and pushes up rent and also hate immigration because he's racist.

Lola said...

FWIW. As an employer I care nothing at all about where my employees come from, what sex they are, what God they worship (or none), the colour of their skin, their sexual orientation, their out of work hobbies and passions, abled/disabled, old/young or whatever. Quite frankly they could be Martians. As long as they can do the Damn' job, and - my only prejudice - have a fine sense of the ridiculous. I will then pay them as well as I can, or rather as well as their productivity permits. If I were to discriminate on things that were not related to their productivity potential, my savvy competitors would certainly take them on and out-compete me.

DBC Reed said...

That's the most obvious feature of the higher class of UKIP& Tory supporter: double standards. On the one hand they go bananas about immigrants; on the other, they profiteer from their cheap labour.In Northampton the only manufacturing businesses pissed off to Poland at the earliest opportunity years ago having built up their businesses by paying low Northampton wages for decades.

Random said...

"If I were to discriminate on things that were not related to their productivity potential, my savvy competitors would certainly take them on and out-compete me."

That argument is based on the assumption that employers won’t discriminate against certain types of employees because there is a shortage of “good” employees, and those who discriminate will deprive themselves of a sufficient supply of “good” employees.

If conversely there is an oversupply of “good” employees there is likely little or no impact on the employers that discriminate, as they can still get all the “good” employees they want from the pool of people they don’t discriminate against.

Suppose for example that there are two employers, each wanting to hire 10 “good” employees, and one of them wants to hire only those of asian origin because they think that european ancestry arer lazy and ignorant.

Then if there are 80 applicants shortlisted for the 20 jobs, and of the 80 applicants 30 are asian and 50 european, and there are 15 “good” asian employees and 20 “good” european ones, the company that discriminates against europeans will be able to hire 10 “good” asian ones and no europeans, and the company that does not discriminate will hire 4 “asian” and 6 european “good” employees.

That cost disadvantage only exists if there is a huge undersupply of “good” employees, so that the discriminators cannot hire as many “good” employees as they want from the categories they don’t discriminate against.

That means a really tight labour market, which is not happening anytime soon.

IMO think the main thing that stops discrimination is *consumer boycotts*