President Trump Signs Order to Cut Business Regulations

originally posted by: olaru12

originally posted by: markosity1973
a reply to: olaru12

There might be a period of market readjustment as prices re-inflate back to the scales they were before China drove them all down.

But......

Once equilibrium is reached again, a lot more money will remain within US borders instead of being leached off overseas. Which means more tax income for the govt. Which means smaller (or hopefully no) deficit.

It's hopefully the beginning of the reversal of the downward spiral that many western economies are experiencing while places like Saudi Arabia, UAE, China are laughing all the way to the bank with ridiculous fortunes made off OUR money.

You're dreaming...
Trump will reinstate the neocon "trickle down" economic model; Of favoring the big corps and letting small business take it in the butt. ..

It depends on what he does in the big picture. If he just pushes through legislation to make business more expensive locally, then yes, you are 100% correct - everyone will flee offshore and those economies will flourish at the expense of local business. Which pretty much describes the last 30 years of western economic progression.

But his stated aim is to return factory jobs to America. Which means he has to make it easier for US business to compete against China.

I say watch this space - it's only week 2 of his tenure.

a reply to: markosity1973

But his stated aim is to return factory jobs to America. Which means he has to make it easier for US business to compete against China.

I know what he said....

How long will it take to rebuild a factory infrastructure. Can you wait 3+ or more years of stagflation? But more than likely runaway inflation!!
Where will we buy the equipment to rebuild the factories. China that's where...think about it. The East has a 10 year headstart. What's Trumps plan to catch up? Build a wall....lol

We used to make steel in America...now we make Chicken McNuggets.

Who's to blame for this situation we find ourselves in....ask Trumps buddies the neocons. Look at his cabinet.

a reply to: markosity1973

I wonder how those numbers are arrived at, and of course they are an average.

I can remember a refrigerator plant closing in Greenville Mich, going to mexico. The funny thing was when the new mex frigs were for sale they were the same price.
That goes for Redwing boots.
Of course apple products are sky high.
Nke is sky high.

a reply to: olaru12

You make some very good points. There are people in his cabinet that have outsourced jobs and now are expected to give a crap about Americans.?

I hope the guideline gives these psychopaths a good direction to run to.

originally posted by: seasonal
a reply to: olaru12

You make some very good points. There are people in his cabinet that have outsourced jobs and now are expected to give a crap about Americans.?

I hope the guideline gives these psychopaths a good direction to run to.

What guidelines. Trump is making it up as he goes along or is being lead by the psychopaths.

My bet is on the psychopaths. See why I'm bailing?
I've made and lost fortunes but I've never been scared. I'm scared... Now it's time to climb in the lifeboats and row like hell or get sucked down as well.

a reply to: olaru12

Trump has a punch list and talked at length about his plans during the campaign.

a reply to: seasonal

This depends on who chooses what regulations to cut. What if they cut something really useful?

a reply to: Heruactic

True, but we have to remember that before this we were crying about needing this. We got it, now some are dithering about it.

Lead or get out of the way.

originally posted by: seasonal
a reply to: markosity1973

I wonder how those numbers are arrived at, and of course they are an average.

I can remember a refrigerator plant closing in Greenville Mich, going to mexico. The funny thing was when the new mex frigs were for sale they were the same price.

This is how that fridge scenario works;

(All these numbers are fictional BTW, I am just providing a case example for you)

Polar refrigerators make and sell a fridge in the USA they retail it for say $1200. For the factory in the USA to make and send the fridge to market costs around $600 - so a $600 profit. They sell really well and the company is making good profits.

Then a wise guy CEO comes along and realises that of that $600 to make the fridge, $400 of that cost is raw materials and $200 is labour. So if he moves the factory to say Mexico he can make the fridge for $400 materials and $100 labour. He does this and once costs of relocation are recouped, the fridge can go to market for the same price, as it is still selling really well but the company is now making $700 off every fridge they sell.

The CEO is happy, because he gets a big fat bonus for increasing company profit. The shareholders and happy because they get an increased dividend on their shares.

However the US factory workers are not happy because they have just been done out of a job and still have a life filled with bills to live.

There are multiple reasons why a company chooses to move offshore with manufacturing, but it all started with someone doing it in the exact way I described in that scenario. It then becomes a ripple effect because another a competitor, perhaps a Mexican company who has seen many trucks of fridges heading across the border thinks to themselves 'Hey, I can sell fridges over there for $1150 instead of $1100 and I'll make a fortune.

So in comes 'El Polaro de Mexico' fridges at a cheaper price and the market goes nuts because they can get the same thing, but cheaper. Polar fridges has to respond and lower their prices to say in the game and the race to the bottom with pricing has just started.

In the end prices become so low that it is absolutely impossible for a local manufacturer to exist because the labour prices over the border or overseas are much lower. And at the end of the day, it's the labour prices that kill local manufacturing because most raw commodity prices are the same globally.

a reply to: markosity1973

Except no one lowers prices on refrigerators.

originally posted by: markosity1973

In the end prices become so low that it is absolutely impossible for a local manufacturer to exist because the labour prices over the border or overseas are much lower. And at the end of the day, it's the labour prices that kill local manufacturing because most raw commodity prices are the same globally.

Yay for capitalism.

How does this tie into Trump's new EO?

originally posted by: seasonal
a reply to: markosity1973

Except no one lowers prices on refrigerators.

Don't they?

www.homedepot.com...

You'll also notice that there are a variety of prices there. I just purchased a home fridge at 20% off RRP 2 weeks ago.......

It costs very little to make a fridge larger - They only have a couple of different sizes in compressors and evap plates.

The only real difference in pricing in those fridges is electronic gadgetry (very cheap to make) and compressor design - again not a lot of difference in price to manufacture.

a reply to: seasonal

This isn't a EO to cut regulation. It's a shortcut. It's very similar to a CEO to issue a 20% budget reduction to all departments without understanding enough about his company to know that his Finance department needs a 40% cut while his R&D needs an additional 10% budget.

It is an ignorant way to force change.

a reply to: Zanti Misfit

Nope.. the correct amount of regulation. Not all regulations are bad. This isn't basic arithmetic where all regulation is created equally. We need less regulation but give this the attention it deserves rather than trying to check a campaign box.

originally posted by: Annee

originally posted by: markosity1973

In the end prices become so low that it is absolutely impossible for a local manufacturer to exist because the labour prices over the border or overseas are much lower. And at the end of the day, it's the labour prices that kill local manufacturing because most raw commodity prices are the same globally.

Yay for capitalism.

How does this tie into Trump's new EO?

One of the issues of doing business in developed countries is the cost to even get the business open. It's not just a case of build a bicycle factory and open the doors. One has to meet building safety codes, safety codes on the machinery, pay company tax just to exist, register their trade name so nobody else uses it, and on and on it goes. The red tape means it costs more.

In places like China you simply open your factory and employ people. You pay them what you want and safety is not really a priority as long as you are not killing workers on a daily basis. Which is another part of why it is cheaper to do business in other countries and what leads to scenarios like the one I presented.

a reply to: seasonal

no, it`s always about profits, higher manufacturing costs equal higher price to the consumer to maintain profits.

if regulations don`t affect prices then we should be for more regulations.

Generally Id like to see less business regulations for small businesses. In practice, a lot of them have no practical effect beyond costing time and money to comply with endless paperwork. Some of the more ridiculous regulations literally require hiring a lawyer to jump through the hurdles, thus preventing small businesses from competing in the marketplace with the corporate giants.

But, to know if this is going to be a good thing, we would need to know what regulations. Not all regulations are the same and some serve important functions. I just want less red tape bs. I want less hurdles for people to start their own small businesses because that is the way to have upward economic mobility in society.

a reply to: Tardacus

Higher manufacturing costs can and in the past been absorbed.

I have sat in meeting with all the components, labor, admin and transportation costs, depending on the product, there can be a 600% profit. Now I did not have tax costs this is for a well established company.

I think and have seen with my own peepers that moving a company does NOT necessarily mean a cheaper price.