From: irvine@uxh.cso.uiuc.edu (Brent Irvine)
Subject: Re: DOES AMERICA SAY YES TO JAPAN? - Off track!!
Organization: University of Illinois at Urbana-Champaign
Date: Fri, 18 Dec 1992 01:11:54 GMT

In article <1992Dec17.123430.24528@hellgate.utah.edu> llarsen%peruvian.cs.utah.edu@cs.utah.edu (Loren Larsen) writes:
>In article <BzExLy.7IH@news.cso.uiuc.edu> irvine@uxh.cso.uiuc.edu (Brent Irvine) writes:
>
>Sense?  Okay, let's suppose you own a business and you have just a few
>big customers and one of those customers is much bigger than the rest.  So
>you decide to get together with your board of directors and design a plan to
>put your biggest customer out of business.  Who in their right mind would
>do that?  So now, explain to me what the Japanese have to gain by putting
>out of business their strongest customer, in fact their only strong
>customer.

The Japanese strategy to date was to become specialized in exports, then
use all means, illegal or otherwise, to dominate in that one market.  Since
they have spread, but it is mainly in electronics and Cars, both have
pretty big margins.  They don't want to bankrupt the US, just get a
cartel in their markets of interest and bleed that market indefinately.
[with no substantial competition domestically due to their illicit
buisness prectices and bribes, so on]

>BZZT! WRONG!  Consider that almost 80% of all Honda cars are made from
>the ground up in the US.  Seems to me that injects quite a bit of money
>into our economy.  More and more manufacturing by Japanese firms is moving

But not nearly the level of having a native company operate here [it has
been documented that it would generate about 2x more than transplants].

>to the US.  Why?  The cost of transportation is a very large portion of the
>final cost of a product now.  Why?  Advances in manufacturing have been
>tremendous over the past decade.  Advances in transportation have been much
>less.  Airplanes are no faster and not much bigger, neither are the boats
>that transport them.  The labor to load goods has just increased.  So it
>is much to the advantage of the Japanese to move their factories right next 
>to their best customers.  Besides that, we have a resource they don't have,


>land.  What do the Japanese do with their profts?  They invest it in America.
>Only about 2% of the profit from a Honda motor car goes back to Japan.  Of
>course they buy land in the US which we can tax at our discretion.  We can
>tax them the full property price each year in taxes if we want because they're
>Japanese.  They don't vote.  

Yes, but they have donations that are much more effective than one vote.

>
>so let's suppose American's lose jobs because of tough Japanese competition.
>What does that mean?  First, it means our process of designing, building and
>delivering a product was inferior to theirs.  So now the produce instead of

OR the Japanese are selling their goods at a loss.  Like if a Sony TV cost
$250, and Zenith cost $350, or even $251 who would get the most sales?
And lets say Sony said, to their marketing staff to price the TVs 10%
lower than Zentih no matter what, pretty soon Zenith is out of buisiness,
and Sony then can charge whatever price they want because there is no
more competition.

You are assuming that everyone is playing fair.  The Japnaese have not, and
as far as i can tell do not plan on doing so.  They may be quick to market,
but that is a direct result of having a lot of operating capital - something
their soaring land prices and free bank loans have allowed them to do [as
well as the exploitation of captured markets].

>us.  What does it mean when people lose their jobs?  Is society and more poor?
>Nope, the good is still being produced and probably for less money because
>more frequently than anything their job was eliminated because the need for
>that person's work output has now been automated or made more efficient 
>through technology.  

In the VERY long term, yes.  In most cases, it was due to short term cost
cutting, because the bank or shareholders are knocking on the door asking
why do you have negative cash flow?  Why are you losing market share?
So a company scales back operations, in hopes of the sales-output lag
will allow extra cash [see not paying workers, but inventories have not
fallen to new capacioty levels] from sales to allow the firm to survive another
quarter.

>So we have the same output AND we have freed up that
>person to do something else.  Society has gained.  That person has not gained
>though, at least not immediately.  Now they can go start a business, learn a

How nice and neat you make it seem.  NO NO NO, you are confusing long term
labor shifts [which are ok] with short term cuts which cause huge disloactions
and rising unemployment.

>new skill which will advance technology even more.  THE problem is that people
>don't believe the last sentence.  THE problem is that we don't as a country
>provide training for people to go and learn new things.  THE problem is we
>expect that when we lose our job that we are going to find another one just
>like it.  

So, for instance, when Silicon Valley lays off 30,000 Electrical Engineers,
it is because their skills have become obsolete and should pursue new
careers?  WRONG!  
A lot of people try to start buisnesses after a big layoff, but because
these layoffs come about from SHRINKING INDUSTRIAL CAPACITY, there is very
little capital to DO ANYTHING!  If it were so cut and dry as you said, 
layoffs and the other dislocations would not be so serious.


-- 
+-------------------------+--------------------------------+-----------------+
| Brent L. Irvine         | For a mere $50 these personal  | I will be gone: |
| irvine@uxh.cso.uiuc.edu | opinions can also be yours!    | 20 Dec - 4 Jan  |
+-------------------------+--------------------------------+-----------------+
From: lou@hpkslx.mayfield.HP.COM (Lou Kvitek)
Date: Thu, 3 Dec 1992 18:37:12 GMT
Subject: Re: Is Santa Clara worth it?
Organization: HP Response Center Lab