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Discussion Starter #1 (Edited)
I've heard a lot lately about how brokering spots on cars is acceptable "because it's Capitalism". I disagree that it is capitalism, and I disagree that it is ok. Here's why:

Capitalism: An economic system in which the means of production and distribution are privately or corporately owned and development is proportionate to the accumulation and reinvestment of profits gained in a free market.
Capitalism is based upon production and distribution of capital. Without production, the system fails.

In a society like America, where capitalism is slowly being reduced to the distribution aspect, all the product is acquired externally.

America is slowly becoming a country of brokers of other people's products (OPP) vs. makers of product (GNP). We don't make anything, we only sell and resell for profit. We inflate prices higher and higher and support ourselves from margins.

The result is deficit. Other countries export more to the US than they import, and thus accumulate USD.

As a result, Americans own more overpriced stuff than they can afford and are financing everything at artificially low (variable) interest rates, which they pay by making money by brokering crap imported from other countries. What do YOU think is gonna happen? ;)
 

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I don't see how someone could sell the right to spot in line. It's a contract with the dealer, not a saleable item.

Of course, someone could agree to sell their Elise before its' even delivered. I don't see how that wouldn't be purely capitalist. If you think the market price is unfair, you'll have to shop harder or wait for it to come down.

As for the rest of your comments...

I think the US import/export deficit is a symptom of our prosperity. We can afford to buy alot of products from other countries. :)

And America is losing blue-collar jobs to foreign countries. But I like to think they're being replaced with higher paying white-collar jobs.

Essentially, America's physical manufacturing capacity is being replaced with the more lucrative production of intellectual property.
 

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vvtlikick said:

And America is losing blue-collar jobs to foreign countries. But I like to think they're being replaced with higher paying white-collar jobs.

Essentially, America's physical manufacturing capacity is being replaced with the more lucrative production of intellectual property.

Not to get into the rest of this... but this is not true. Not from what I have read and seen.

Off shoring of many white collar positions is becoming a flood of jobs to places like Russia, China, India. Many software, IT, engineering jobs have left USA.
 

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I'm with Randy on this one

The biggest thing now is that technical jobs are moving overseas. Computer people, architects, stock analysts, etc are all moving to other places - SE Asia, India & some areas of Eastern Europe. These are higher paying jobs, most $50k+. The people in the foreign countries are as well trained as the people here in the US, with many being educated here in the US.

What is saving the US is that we are very resourceful and adaptable as a nation. We're moving from a manufacturing based economy to service. Sadly these service jobs are lower paying. I wouldn't doubt that the middle class is going to get a lot smaller.
 

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USA exports were the highest ever in 2003, last time I checked BMW, Mercedes, Toyota, all of the big car companies were building cars here and exporting them around the world. Per capita income went up again last year, although it seems most
Americans spend it faster than they make it!
I don't know, in many cases the facts seem to contradict the beliefs about all the jobs leaving the US and all of us becoming burger cooks.
 

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transio said:

Capitalism is based upon production and distribution of capital. Without production, the system fails.
I've heard a lot lately about how brokering spots on cars is acceptable "because it's Capitalism". I disagree that it is capitalism, and I disagree that it is ok. Here's why:

In a society like America, where capitalism is slowly being reduced to the distribution aspect, all the product is acquired externally.

America is slowly becoming a country of brokers of other people's products (OPP) vs. makers of product (GNP). We don't make anything, we only sell and resell for profit. We inflate prices higher and higher and support ourselves from margins.

Actually, capital is the means by which goods are produced, not the goods themselves. Capital can include goods, but they need to be utilized for production of other goods and services.

Technically, everyone who is in the retail industry is a broker. The entire distribution chain (wholesaler to retailer) takes the same product and puts a profit margin on it.

Is Sears or Wal-Mart a broker? That's what they do. They take a product, put a margin on it, and resell it.

People right now focus on the loss of manufacturing. I believe this is misdirected to a certain extent. An economy can "produce" and remain vital based on the value that its participants can provide, or add to a good or service.

75 years ago, people thought the U.S. would lose its status as an economically vital nation because we started importing major portions of our resources. They said you could not have a basis for a sound economy when you had to import the materials needed to create the goods your economy was based on.

Now it has shifted to the physical manufacturing process. But manufacturing, in a way, is no more than a "service" applied to a raw material. So is the "loss" of manufacturing really a fundamental difference from a "gain" in a service based industry?

In a free market economy, someone offers a good, another person offers a price, and if the two meet, a transaction is conducted. That is the fundamental basis. I still do not understand why reselling an Elise (or right to buy an Elise) is a violation of this basis.



DLY
 

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I understand what you're saying but the trend is there. The affects of outsourcing may be little right now but they will add up.

I know several people that have business that do nothing but outsource jobs & products to India & SW Asia. The management stays here & makes money while the people that used to do the work here are left without jobs.

Per capita income is a good measureof the median income but it would be a better if you were able to see what percent of the population is in which income bracket. Per capita income can be affected by "rich" people getting richer, and yes, poor getting poorer.

Like this:

NY Times article on Middle Class

I found some other articles on the same ideas but I am not sure of their veracity so I won't post them as "facts".
 

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transio said:
I've heard a lot lately about how brokering spots on cars is acceptable "because it's Capitalism". I disagree that it is capitalism
It is capitalism. It's the basis of capitalism. I've got something you want so pay me for it. The government doesn't have a say in how its done or who can participate. It doesn't matter if it's a physical product (i.e. a car) or a service (i.e. labor).

In true communism (not the psuedo communism in the former Russa, China & Cuba) the people decide what is available and who gets it.

In socialism certian aspect of production are decided by the government & other aspects are free market.

Defining the government's role in the economy is what the three types of economies are about, not what is bought or sold in them.
 

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Discussion Starter #10
Re: Re: Brokering & "Capitalism"

Lotus Fury said:
It is capitalism. It's the basis of capitalism.
The ability to sell products at market value is the basis of capitalism. Leeching off capitalism to skim profits from the masses is not capitalism, it's abuse of the capitalist system and the fact that the prices are currently below market value. Any broker is a capitalist leech to begin with.

Retailers and Distributors provide a value-add to manufacturers by making products available to broad markets, and they provide a value-add to consumers by making a broad amount of products available in a small space.

Brokers, however, take a single product and make it available to a single consumer, taking a slice of the pie for themselves. There's no value-add there. In most cases, the broker has to "shut out" the consumer, or make the product unavailable to him to be able to sell it at all.

In the case of cars, that means buying up early spots. In the case of real estate, that means developing a listing service unavailable to end consumers and signing contracts that prevent the seller from pursuing other avenues. Head hunters are the same way. Don't even get me started on them.

It's sickening. These people add no value to our society or the world. They survive by sucking the blood from natural capitalist processes, often making them LESS efficient.

It's not capitalism, and it's not right. Period.
 

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Ironically my experience with a car broker has been nothing short of wonderful. We've purchased my wife's last two automobiles, a Honda Accord and her current Honda Oddyssey(sp?) through an auto broker. Both times he was able to save us money over the same dealer's ($2,500 on the Accord and $700 on the Oddyssey) "best offer". He even got us an upgraded stereo on the Oddyssey. All I did was take him a check and pick up the cars at the Honda dealer. Warrantys, deliver inspect, etc. all the same, just less money.

Now that's what I call capitalism. The ability to shop around and save money.

Steve, I'll give you one nod on real estate reps though. On both of the homes we own, we located them, but because they were listed, the seller had to pay a fee. We did a "For Sale by Owner" on a house and the young couple that bought it (who by the way saw the ad in the paper) ended up paying a reduced fee (maybe 1-2%) to the rep they had hired. That's ludicrous!

Mark
 

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vvtlikick said:

Essentially, America's physical manufacturing capacity is being replaced with the more lucrative production of intellectual property.

Randy Chase said:
Not to get into the rest of this... but this is not true. Not from what I have read and seen.

Off shoring of many white collar positions is becoming a flood of jobs to places like Russia, China, India. Many software, IT, engineering jobs have left USA.
I think vvtlikick's assertion is true. Although you do see "white collar" jobs going overseas, the bulk of them are things like call-center support jobs and low level legacy engineering projects. I would hardly call these things "production of intellectual property". We have been and always will be a country of innovation and we will continue towards an economic society that values IP production more than production of goods. The UK is in a similar situation. What do they really produce? It's evolution.
 

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I disagree about low level and the future. I have been involved too much in the past 2-3 years with the direct impact of off shoring. I do product development for a living. In the 70s and 80s, there was so much work, the inside joke was that is a person could fog a mirror on exhaling, I would hire them. Some of our production ended up overseas, but so what? It was off shoring assembly labor, and those people could get other work.

We still did a lot of the tooling and prototype development here.

Late 80s, early 90s, we were finding that the plastics mold shops, metal stampers, etc in China... all were very willing and able to do their own tooling design, and they were good at it. We still did the front end design though. Specially since this was where the creativity is. Tooling design was not a big deal, those guys could get retrained and do product design. My company was so busy, I had a long backlog of work and was able to pick and choose my clients.

Late 90s, the beginning of seeing products being designed in China and India. As in the concepts fleshed out. Drawings made. These were not bad engineers and designers. The designs were fine. And they were cheap. I still had a backlog, but I noticed some other local competitors closing shop.

2000-2002 the wave of engineering work being farmed out picks up. We see the rise of places like Banglagore for technical work. I see an impact in my work. No backlog, but I am busy. I place an order for the Elise. I need $40k for it (cash) but no big deal, I can just schedule more work to be done by my company, right?

2003. I am asked to quote an engineering job that would take ~1000 hours. I am told I am bidding against an Indian and a Russian firm and just to let me know, they will be charging about $10 an hour. I don't get the job. My compay is doing 50% of the work it did 5 years earlier. The plan to get enough money to buy the Elise has hit a snag. I scramble and start a new company, because I see the trend in engineering.

It's not all doom and gloom. But I have a long list in my mind of people I know in engineering that are out of work. I also run an engineering forum... and over 75% of my new signups in the last year are from overseas. There will always be work to do, and always new things to develop, but there is a lot of news reports in the last year about companies transferring their development to overseas.

One of the things I have noticed with the trend, is that most people keep thinking that a certain segment of the industry is safe. It was just assemblers. It was just tooling. It was just low level engineering. But the bar keeps moving. And it's not like those countries aren't developing very educated and intelligent engineering people, they are**. And if they are willing to work for $10 an hour, or in some cases, $10 a day... it's hard to not consider moving your development off shore.

** for those old enough and recall the common thought in the 60s and 70s. "Oh... those clever Japanese, good thing they are not creative like us Americans. They are good at copying stuff and making it smaller though, but we have the lock on quality and creativity" Riiight.
 

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I've been working in Silicon Valley for over twenty years. Certainly have seen the trends Randy has outline. Being a hardware guy in the R&D, product development side have always been able to find work (for ~8 different companies). Changes of this nature is a fact of life in high tech, it can be painful, however you've got to be ready to adapt or move on to something eles.
 

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Discussion Starter #16
My company lost a very talented Java programmer here in the states.

We just hired THREE equally talented Java programmers in our Brasil office for the same cost.

If we had an office in India or Russia, we probably could have hired there even cheaper.
 

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Nobody that earn a paycheck is safe. They are offsourcing doctors and lawyers to India. Not to mention all the CPAs and anything that has to do with number crunching.

Remember 1995 and 1996 when only a few companies have websites, and by 2000 everyone do. Offsourcing is on the same trajectory. In another five years, I am not sure if any company will survive without offsourcing.

Let's just admit labor is being valued less and less everyday.
 

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Have to agree with Randy...

Seeing exactly these trends in the custom software development business. From what I understand, there are some places in China where I could hire 5 or 6 highly qualified s/w guys for the price of 1 here in the US! IBM, Intel, HP, etc. are all placing plenty of HIGH END jobs offshore.

I haven't been able to find it yet, but there was a very apropos cartoon around a few years ago and the caption went something like this:

"My God, now the Japanese are starting to slavishly copy things we haven't even thought of yet!"

If you keep your head in the sand, expect to be, ahem, taken by surprise...:)
 

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Re: Have to agree with Randy...

roadrunner said:

"My God, now the Japanese are starting to slavishly copy things we haven't even thought of yet!"

ROTFL!
 

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Discussion Starter #20
Re: Have to agree with Randy...

roadrunner said:
"My God, now the Japanese are starting to slavishly copy things we haven't even thought of yet!"
LOL... it's true, though. The only way to survive in the future will be to innovate. In software development that truth is already upon us.
 
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