What would Mexico's failure mean for the US?

Current Events Domestic United States Politics
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4 hours ago, Grames said:

Prices are set by supply and demand to wring the best price for the seller that the market will bear.  Lower manufacturing costs increase the profits of the manufacturer, and do not lower prices for the end purchaser.

You don’t know how the law of supply and demand works either. You also clearly never had any contact with the world of retail purchasing. It’s extremely competitive. The notion that suppliers could just ignore a growth in supply and not lower prices is almost comical to anyone who knows how the supply/retail business works in a large market like NAFTA or the EU.

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8 hours ago, New Buddha said:

I mean that Mexico’s President Enrique Pina Nieto is a chicken-shit, weak-minded, rich politician that will sell his people down the river in order to remain in power - in lieu of doing what is necessary to set Mexico on the path to prosperity.

Should we also coddle North Korean’s Kim Jong-un and the leaders of Iran?

Really?

This post is based in New Buddha’s lack of understanding of the concept of limited government: government action should be limited to the protection of individual rights.

The US limits trade with North Korea and Iran because those are states that threaten Americans’ rights. That’s what justifies those restrictions, not any kind of judgement of their political system, or their leaders.

But it would take a statist thug to try and limit trade with Mexico, or make such trade conditional on arbitrary demands he has for Mexico’s leaders. And it would take an especially deep seeded ignorance of the basics of Objectivism to call free trade with a friendly neighboring country a “coddling of the leaders of Mexico”, instead of what it is: the government respecting Americans’ right to trade freely with Mexicans.

In general, when it comes to economic matters, here’s a good way to differentiate between statists and free market advocates:

-if someone calls government INACTION an act of “coddling” the people or group of people that inaction benefits, that person is a statist;

-if someone calls government ACTION an act of coddling, that person is a free market advocate.

Quote

  Mexico’s GDP has increased six-fold, and yet 50% of Mexicans still live in very real, third-world poverty.

Income inequality is indeed the objection most socialists raise against economic freedom. Not sure why you think that would work on an Objectivist forum, though. We

  1. believe in economic freedom on principle

  2. know that government controls that attempt to fix income inequality actually just hurt everybody, including the poor

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9 hours ago, New Buddha said:

I don’t really care if you respond or not Nicky.  I’ll sleep just fine tonight.

If you don’t care about my response, why did you ask the question?

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9 hours ago, Grames said:

Lower manufacturing costs increase the profits of the manufacturer, and do not lower prices for the end purchaser.

Not directly and not immediately and not in every case. But if prices are kept at some preexisting level when lower manufacturing costs are available, won’t that (over time) invite competition which can offer equivalent goods at lower prices?

Isn’t that the (long term, wide scale) effect of lowering manufacturing costs on prices – to lower prices for the end purchaser?

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3 minutes ago, DonAthos said:

Not directly and not immediately and not in every case. But if prices are kept at some preexisting level when lower manufacturing costs are available, won’t that (over time) invite competition which can offer equivalent goods at lower prices?

Isn’t that the (long term, wide scale) effect of lowering manufacturing costs on prices – to lower prices for the end purchaser?

In this case if the competition attempts to lower manufacturing costs as well by the same means, that means the entire industry leaving the country.  Once there is once again an approximate parity on end-product price competition resumes.  

But, the entire industry is moved to the detriment of my neighbors and myself.   Decades of emptying America’s industrial heartland of industry after industry for the utilitarian collectivist ethos of “greatest good for the greatest number” has only brought into sharp focus the fact that I should care more about the welfare of the people in my country for my own selfish reasons than people in other distant countries.   

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8 minutes ago, Grames said:

In this case if the competition attempts to lower manufacturing costs as well by the same means, that means the entire industry leaving the country.  Once there is once again an approximate parity on end-product price competition resumes.

All right. I’d thought I was addressing the specific idea of lower manufacturing costs resulting in lower prices (for American consumers). And I think that, generally speaking, that’s true. By producing goods overseas, for instance, WalMart can (and does) offer lower prices than many competitors with higher manufacturing costs (sometimes accounting to producing domestically). We can agree on that, right?

I was responding in the first place, because while I’m broadly agreed with Nicky on this issue, I didn’t like how he dismissed you. You and I have disagreed in the past, and sometimes bitterly (which I regret), but I have never considered you ignorant in any way, shape or form.

8 minutes ago, Grames said:

But, the entire industry is moved to the detriment of my neighbors and myself.   Decades of emptying America’s industrial heartland of industry after industry for the utilitarian collectivist ethos of “greatest good for the greatest number” has only brought into sharp focus the fact that I should care more about the welfare of the people in my country for my own selfish reasons than people in other distant countries.   

Doesn’t most of that account to bad American policy? (Like regulations and taxes which drive up the cost of producing goods?)

I don’t blame you for caring more about the people in your country than those in distant lands, but isn’t the solution to work at repealing those policies which make America less competitive? Isn’t it a further mistake to try to rectify this situation by limiting the freedom of American companies to move abroad, or taxing imports more heavily?

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1 hour ago, DonAthos said:

Isn’t it a further mistake to try to rectify this situation by limiting the freedom of American companies to move abroad, or taxing imports more heavily?

Don,

At the start of NAFTA, 1 Peso was equivalent to  35 cents.  Now, it’s only about 5 cents.   The purposeful monetary policy of devaluating the Peso against the Dollar by the Mexican government has hurt both countries.  U.S. manufacturers cannot export to Mexico and Mexican workers salaries are worth less and less each year.  NAFTA allowed U.S. manufacturers to move assembly plants to Mexico, but the result has been unemployment in both countries. Its a race to the bottom. This same monetary policy lead to the Mexican Peso Crisis in 1994.  It was hoped that NAFTA would keep Mexico from pursuing this same policy.

In a vibrant, health economy, with low unemployment, wages go up.  Those with jobs can cross the street for a better offer, and those looking for work often have 3 or 4 offers which gives them a stronger bargaining position for wages and benefits.

But you are right in that the U.S. needs to lower it’s corporate tax, regulations, free up the energy market and make health insurance providers compete across state lines.  This will make the U.S. more attractive to foreign manufactures (Toyota, for example).  U.S. workers are still the most productive in the world.