Milwaukee In Decline?

[brandx]

Then just raise the minimum wage to $500/hr - we'll all be rich!

I think Chicos hacked your account!!

[tower912]

Predictable response. Why should you be allowed to target your competition for destruction through regulation rather than providing a better product? Sounds like someone is a tad insecure about his business.

Or maybe you're talking out of your ass and don't work for a real business at all.

This is how civil, interesting threads turn ugly and get locked.   Just because you disagree with a viewpoint is no reason to accuse someone of lying.   

[Hards Alumni]

Predictable response. Why should you be allowed to target your competition for destruction through regulation rather than providing a better product? Sounds like someone is a tad insecure about his business.

Or maybe you're talking out of your ass and don't work for a real business at all.

lmao, are you serious?  Not every businessman is out to destroy the competition.  I have zero desire to eliminate the competition completely in Madison.  We make great money, and don't have to kill ourselves to do it.  What is the point of expansion if I have to increase my work load?  I sure don't need more money, nor do I need to work more hours to acquire it.

Talk about a predicable response.  My business doesn't fit the narrative you push, so it must be fake.  You're awful cute.

[Lennys Tap]

I think Chicos hacked your account!!

It was a joke, brand.

[brandx]

The liberal closes in on the true purpose of regulation such as a minimum wage law: the elimination of competition in the market.

How will the taxes for your welfare programs do if no one has jobs?

Except, for the fact that it actually creates more competition, since people have more to spend. And if they are spending more, that creates new jobs.

People won't buy more widgets because you produce more. People will buy more widgets when they have the $$$ to buy them..

[mu03eng]

More money in people's pockets is always bad for business

Every dollar extra that people on minimum wage get is one more dollar driving the economy. It's not money they sit on.

That assumes the business that pays that wage can pay the wage because they are getting work.  Raising the minimum wage only works at the federal level.  City of Milwaukee creating a living wage creates a wage island that will force companies to non-Milwaukee locations resulting in a net loss for Milwaukee but relatively neutral for the SE Wisconsin region.

[Hards Alumni]

By the way, congratulations on contributing to America's uninsured problem by dumping your employees insurance. Tell me about how Obamacare is going to solve America's problem of the uninsured?

First I'm not good enough of a businessman, now I'm just to damn smart.

Which is it?

u mad?

[brandx]

It was a joke, brand.

I figured it was - and so was mine. I'm usually in agreement with most of your positions.

[mu03eng]

Except, for the fact that it actually creates more competition, since people have more to spend. And if they are spending more, that creates new jobs.

People won't buy more widgets because you produce more. People will buy more widgets when they have the $$$ to buy them..

Except the relative buying power of that extra dollar is negated by the producer having to charge more for the same widget.  So yes they are in absolute terms spending more money but it has little to no impact on overall money in the system or increasing the overall wealth of all.

[LAZER]

3D printing to reduce labor/manufacturig costs in the US?

I think we're pretty far away from that.  Its main impact will be in rapid prototyping and speed to market, but right now you can only "print" using plastic and there are serious scalability constraints.

I think easy to use and adaptable robotics/automation will have a bigger impact than 3D printing.

[Chicago_inferiority_complexes]

Certainly the fact that you want to defeat competition through regulation suggests you run a bad business. No arguments here. You're probably in an exclusively rent-seeking business, anyway. Maybe someday talk to people in a real business who have to pay for the extra costs and regulations of your president.

[mu03eng]

Certainly the fact that you want to defeat competition through regulation suggests you run a bad business. No arguments here. You're probably in an exclusively rent-seeking business, anyway. Maybe someday talk to people in a real business who have to pay for the extra costs and regulations of your president.

I'm largely on the same side of the discussion as you, but to take the kind of tone you have is totally unneeded.  Argue your point from a civil and logical standpoint and let the chips fall where they may.  Lashing out just makes you seem unsure of your arguments.

[Hards Alumni]

Certainly the fact that you want to defeat competition through regulation suggests you run a bad business. No arguments here. You're probably in an exclusively rent-seeking business, anyway. Maybe someday talk to people in a real business who have to pay for the extra costs and regulations of your president.

Keep the assumptions coming, they're easy to debunk.  

I already told you, we were outperforming our competition in metrics, and financially prior to the living wage initiation.  Our business has no political affiliation, lobbies no one, and donates no money to either political party.  Anyone who wants to can start their own company similar to ours.

[brandx]

I'm largely on the same side of the discussion as you, but to take the kind of tone you have is totally unneeded.  Argue your point from a civil and logical standpoint and let the chips fall where they may.  Lashing out just makes you seem unsure of your arguments.

+1

It's not that hard to 'argue' without forcing the mod to lock a thread. A little respect goes a long way.

[ChicosBailBonds]

Then just raise the minimum wage to $500/hr - we'll all be rich!

Exactly!!!  I mean if $15 an hour does no harm and is ONLY going to help everyone, crap we should raise it to $1000 an hour, since there are no consequences to this stuff...so I'm told.       There's no downside, ever.  It's all boats rise, everyone wins. 


In my next life I hope to be someone that can advocate for all kinds of expenditures and goodies for the masses and not have to pay for any of them.


And I'm following up on the joke.....

[keefe]

Not every businessman is out to destroy the competition.  I have zero desire to eliminate the competition.

My God but this is disturbing! There is no substitute for victory!

[keefe]

Not my area of expertise but a young man who virtually grew up at my house for years did business in China and is now COO/ CFO of a US company told me that skilled workers are more efficient here while low skilled jobs will continue to remain in China and elsewhere. He brought back complex manufacturing to the US: Portland, a curiously business friendly city( but weird) and surprisingly, to me, just built a plant in N.Y. State.
Just my 1 1/2 cents worth

The skill base of precision manufacturing in China has been there for more than 20 years. What we are seeing is a ramp up in capacity at the higher end in China.

The quandary for China is that their cost advantage in manufacturing is almost entirely in direct labor rate which is far less of a factor in precision tooling. Overall, China offers significant advantages in cost but that advantage is eroding. There are new labor markets beginning to become viable but lack China's mass and scale in both labor and capital infrastructure will always mean that some % of production will remain there for the next several decades. Frankly, I would much rather pay incrementally more in China than relive the growing pains by sourcing in Vietnam or Bangladesh.

We needed some prototypes built for post-combustion quench area temperature controls and ended up having them made in Thüringen because the quality mandate specified by the end-user trumped cost considerations. We haven't determined a longer term manufacturing strategy but it is clear that given the extreme temperatures at which we operate and the specialized ceramic and steel necessary for those environmentals will prioritize quality over cost. The power industry legitimately has a zero failure tolerance for numerous reasons which are all too obvious.

But as we look to the future, the EU is sponsoring programs that work collectively with business to identify technical training requirements and invest in the people and supporting infrastructure to enable productivity and innovation. That space is largely left to the private sector in the US. What we have learned is that there is no shortage of financial capital in America but there is a profound lack of competent technical staff, especially among skilled tradesmen in precision tooling and testing.

We have cities and shires in Germany and the UK courting us now and what we find compelling is not tax moratoria but their support in training the skilled work force needed to sustain competitive advantage. I have been extremely frustrated in meetings in Olympia over the past few months where we have outlined the skills needed for materials science (versus computer science) based research and compared how the EU is addressing this fundamental business issue. The politicians have demonstrated an extreme unwillingness to make any changes to current curricula in this state. The reason has nothing to do with enterprise; it is entirely about patronage and messing with sacred cows. If this attitude is being replicated in 49 other states then this country is in trouble.

   

[brandx]

The skill base of precision manufacturing in China has been there for more than 20 years. What we are seeing is a ramp up in capacity at the higher end in China.

The quandary for China is that their cost advantage in manufacturing is almost entirely in direct labor rate which is far less of a factor in precision tooling. Overall, China offers significant advantages in cost but that advantage is eroding. There are new labor markets beginning to become viable but lack China's mass and scale in both labor and capital infrastructure will always mean that some % of production will remain there for the next several decades. Frankly, I would much rather pay incrementally more in China than relive the growing pains by sourcing in Vietnam or Bangladesh.

We needed some prototypes built for post-combustion quench area temperature controls and ended up having them made in Thüringen because the quality mandate specified by the end-user trumped cost considerations. We haven't determined a longer term manufacturing strategy but it is clear that given the extreme temperatures at which we operate and the specialized ceramic and steel necessary for those environmentals will prioritize quality over cost. The power industry legitimately has a zero failure tolerance for numerous reasons which are all too obvious.

But as we look to the future, the EU is sponsoring programs that work collectively with business to identify technical training requirements and invest in the people and supporting infrastructure to enable productivity and innovation. That space is largely left to the private sector in the US. What we have learned is that there is no shortage of financial capital in America but there is a profound lack of competent technical staff, especially among skilled tradesmen in precision tooling and testing.

We have cities and shires in Germany and the UK courting us now and what we find compelling is not tax moratoria but their support in training the skilled work force needed to sustain competitive advantage. I have been extremely frustrated in meetings in Olympia over the past few months where we have outlined the skills needed for materials science (versus computer science) based research and compared how the EU is addressing this fundamental business issue. The politicians have demonstrated an extreme unwillingness to make any changes to current curricula in this state. The reason has nothing to do with enterprise; it is entirely about patronage and messing with sacred cows. If this attitude is being replicated in 49 other states then this country is in trouble.

Excellent post - but this isn't a new phenomenon. I think American businesses have always been this way. Rich, established companies do not take risks here - I think, more so than in other countries. There is a reason it was Microsoft, Google, etc that were the innovators rather than IBM.

When you look at the richest people this country has produced, they mainly come from just a couple 5-10 year spans. Because whether it was the industrial revolution or the computer revolution, it was young aggressive people who led the charge over the status quo. I don't think this was the case so much in Europe.

I'm reading a book about the rise of the airplane industry and, again it was the same thing. By the time Lindbergh crossed the Atlantic, regular passenger flight between major cities was already in place in Europe, but nowhere to be found in the U.S.

[forgetful]

Excellent post - but this isn't a new phenomenon. I think American businesses have always been this way. Rich, established companies do not take risks here - I think, more so than in other countries. There is a reason it was Microsoft, Google, etc that were the innovators rather than IBM.

When you look at the richest people this country has produced, they mainly come from just a couple 5-10 year spans. Because whether it was the industrial revolution or the computer revolution, it was young aggressive people who led the charge over the status quo. I don't think this was the case so much in Europe.

I'm reading a book about the rise of the airplane industry and, again it was the same thing. By the time Lindbergh crossed the Atlantic, regular passenger flight between major cities was already in place in Europe, but nowhere to be found in the U.S.

Part of this is logistics, and applies equally to the thread on internet being faster/more accessible in Europe.  People often forget how small each of the European countries are and how close these major cities are located.  That allows for infrastructure to be built quickly (internet) and in the airplane industry, allowed easy short flights to connect major cities.

That isn't the case in the US, where we have much more land and hence laying cable or making flights is more costly and less efficient.

As for Keefe's long post.  Agree well written.  One aspect that he doesn't mention though is a change in the mentality of many of the Chinese bests minds.  It used to be that they came to the US/EU to get educated and then wanted to stay.  These same individuals are now returning home and ones that have established successful careers are also returning to China.

That will mitigate some of the effects of the decreasing cost advantages of moving production to China, they will start to develop more and more home grown technologies that will efficiently compete with the US on a global scale.  This could lead to a new round of rampant growth in China and further erosion of the Western dominance in many fields.

[wildbill sb]

Actually, what about the prediction that China's lack of natural resources may reduce them to third world status in the not-too-distant future?

[keefe]

Actually, what about the prediction that China's lack of natural resources may reduce them to third world status in the not-too-distant future?

I wouldn't factor that as heavily as I would several other concerns. A far more significant risk management issue for China is forex exposure. The RMB is grossly undervalued, similar to the Yen until the mid 80's. What happened to Japan was not that they were entirely dependent on imported resources (which China is NOT) but that the Reagan administration tired of Japanese intransigence on trade.

MITI argued with a straight face that Japan could not import US beef, tomatoes, or rice because of Japanese intestinal concerns. Reagan called bull sh!t on Tokyo and in a span of 6 months the Yen strengthened from Y360:USD1 to Y120:USD1. And remember that Reagan and Nakasone had a great personal relationship.

People might not realize it but it was Japanese industry that brought American manufacturing to its knees, from which our industrial base has never recovered. But it was American Treasury policy that brought the Yen into alignment with its proper value. And while America's economy shifted towards services Japanese industry shifted its manufacturing from the Homeland to other Asian markets in order to maintain its competitive edge. It was Japanese capital that developed China's modern industrial base. The degree of integration between those two economies is significant.

China today has a huge trade surplus with every other post-industrial nation, in much the same way Japan did 30 years ago. And like the 1985 Yen the RMB is grossly undervalued. The strategic Achilles Heel for Beijing is in managing its forex exposure. And if you notice, who is the leading investor of capital in Africa? China. They are preparing for the day they no longer have that artificial structural benefit.

Compounding the situation for Beijing is the fact that Washington, London, Berlin, Canberra, Ottawa, et al genuinely dislike China for many valid reasons. Human rights is just the starting point. Chinese capital funds nuclear weapons development in a number of places we would prefer the local leaders not have such capability. And Chinese weapons keep turning up in the hands of Iranian Quds, Taliban hajis, and Abu Sayef militia - all groups actively killing American forces. Beijing's strategic political risk is very real and it should be.

[4everwarriors]

Forex as in natural lamb skin condoms?

[mu03eng]

I wouldn't factor that as heavily as I would several other concerns. A far more significant risk management issue for China is forex exposure. The RMB is grossly undervalued, similar to the Yen until the mid 80's. What happened to Japan was not that they were entirely dependent on imported resources (which China is NOT) but that the Reagan administration tired of Japanese intransigence on trade.

MITI argued with a straight face that Japan could not import US beef, tomatoes, or rice because of Japanese intestinal concerns. Reagan called bull sh!t on Tokyo and in a span of 6 months the Yen strengthened from Y360:USD1 to Y120:USD1. And remember that Reagan and Nakasone had a great personal relationship.

People might not realize it but it was Japanese industry that brought American manufacturing to its knees, from which our industrial base has never recovered. But it was American Treasury policy that brought the Yen into alignment with its proper value. And while America's economy shifted towards services Japanese industry shifted its manufacturing from the Homeland to other Asian markets in order to maintain its competitive edge. It was Japanese capital that developed China's modern industrial base. The degree of integration between those two economies is significant.

China today has a huge trade surplus with every other post-industrial nation, in much the same way Japan did 30 years ago. And like the 1985 Yen the RMB is grossly undervalued. The strategic Achilles Heel for Beijing is in managing its forex exposure. And if you notice, who is the leading investor of capital in Africa? China. They are preparing for the day they no longer have that artificial structural benefit.

Compounding the situation for Beijing is the fact that Washington, London, Berlin, Canberra, Ottawa, et al genuinely dislike China for many valid reasons. Human rights is just the starting point. Chinese capital funds nuclear weapons development in a number of places we would prefer the local leaders not have such capability. And Chinese weapons keep turning up in the hands of Iranian Quds, Taliban hajis, and Abu Sayef militia - all groups actively killing American forces. Beijing's strategic political risk is very real and it should be.

I agree with most of this assessment.  China is essentially playing a shell game at this point, hoping to maintain the status quo as long as possible.  They are essentially following the Wal-Mart model with foreign investment, using foreign moneys at an extremely favorable ratio to develop internal consumer demands to the point that it can be self-sustained once the foreign demand moves to another location.  It's a delicate balance because as they develop their internal demand that increases the cost of living demands within the country which negatively impacts the attractiveness of the labor rate.  At least 50% of the facilities in China we've put equipment into in the last 12 months have been focused on delivering products to the China market not the "outside" world.

This is also why China has purchased so much US debt, as a hedge and influence on US economic policy to limit the possibility of the "Japan scenario" you've detailed.  If QE infinity were ever to end and be replaced by a sensible, non-enabling monetary policy that would put significant pressure on China to revalue the RMB.

[ChicosBailBonds]

I'm reading a book about the rise of the airplane industry and, again it was the same thing. By the time Lindbergh crossed the Atlantic, regular passenger flight between major cities was already in place in Europe, but nowhere to be found in the U.S.

Yes, but this is like the wired argument people make about Japan or Korea....size matters.  I could fall out of bed in Europe and be in another country they are so closely tied.  One day on a train and I'm in several countries.  This isn't the case in the States, a land mass far far greater with millions of square miles of rural land that Europe just doesn't compare to.

[ChicosBailBonds]

This is also why China has purchased so much US debt, as a hedge and influence on US economic policy to limit the possibility of the "Japan scenario" you've detailed.  If QE infinity were ever to end and be replaced by a sensible, non-enabling monetary policy that would put significant pressure on China to revalue the RMB.

With Yellen at the controls, I don't see QE ending anytime soon....unfortunately.   Got to keep the peeps thinking the recovery is real and stable.  Cheap money.