From: nelson_p@apollo.hp.com (Peter Nelson)
Subject: Re: Dumping
Date: Fri, 18 Dec 1992 16:00:55 GMT
Organization: Hewlett-Packard Corporation, Chelmsford, MA

In article <!5T=C!-@engin.umich.edu> jwh@citi.umich.edu writes:
>In article <BzEr6J.Dy6@apollo.hp.com>, nelson_p@apollo.hp.com (Peter Nelson) writes:
>|> In article <1992Dec16.050512.25091@fx.com> raphael@fx.com (Glen Raphael) writes:
>|> >yodaiken@chelm.cs.umass.edu (victor yodaiken) writes:
>|> >>Getting back into the business is not a simple matter.  Suppose that the
>|> >>US auto industry dies out and imported car prices rise to absurd
>|> >>levels.
>|> >
>|> >Suppose Japanese auto makers lower their prices and US manufactures
>|> >all go broke and Japanese auto makers raise their prices. What happens?
>|> >We buy our cars from Germany and Italy and Korea and Taiwan and, heck,
>|> >Britian and Mexico. What's the chance of Japan driving the *entire* world's
>|> >auto industry under before running out of funds? Slim and getting ever
>|> >slimmer as the number of industrial nations grows.
>|> 
>|>    Victor's example isn't *quite* as absurd as you make it sound.
>|> 
>|>    Imported car prices don't have to rise because of gouging by 
>|>    foreign car makers of their monopolistically controlled US
>|>    market.   
>|> 
>|>    They COULD rise simply because if more US industries go under
>|>    we will not be exporting enough to create sufficient demand for
>|>    US dollars.   Moreover, massive unemployment and a huge national
>|>    debt could create social instabilities that could further lower
>|>    the US dollar.    Given this, I could easily see a scenario where
>|>    if the US car industry went under foreign car prices would rise
>|>    dramatically.  
>|> 
>
>Your scenario seems to preclude the building of 'foreign' cars in
>the United States. 

  That was the condition set by the earlier poster!    All I said
  was that *IF* that happened I could imaging it occurring in
  a scenario that also included huge price increases in imported
  cars *not* caused by gouging of a monopolistically controlled
  market.

>|> > We don't need the US to compete in every market, we just need
>|> > *somebody* to compete.
>|> 
>|>    We *do* need the US to compete if we want jobs, prosperity, 
>|>    and social stability in the US.    You guys are still looking
>|>    at all these things like they're single-variable problems!
>|> 
>
>You are making the assumption that because there is no U.S. company
>making a product, there are no U.S. workers making products.

  I'm saying that the trend over the last few decades has been for
  the US to give up altogether, or sacrifice major market share
  in more and more areas.   This cannot continue, without sacrificing
  jobs or standard of living unless we find new areas to dominate.
  Yesterday's Wall Street Journal pointed out that the trade deficit
  it expected to widen next year by another $15 billion.   One of the 
  interesting statistics from this latest recession that distinguished
  it from earlier ones was the ratio of permanent positions lost to 
  temporary positions lost and furloughs.   That ratio was much 
  higher than previous recessions.
                                         
>Clearly jobs are important, but in most cases it isn't really important
>if the jobs are created by 'foreign' owned companies. 

  This is wrong for two reasons:

  1.  Foreign-owned companies may manufacture here but do their R&D 
      at home.   Ford does a lot more engineering and the like in 
      the US than Honda.

  2.  The profits stay in the US where they contribute to the US tax
      base, and capital base.


> The important thing for the U.S is to make it attractive for companies
> to build and invest in this country.

  No argument here.
                   


---peter


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