Apple and other mega-corporations and the U.S. economy

[A.Nonymous]

I love how everyone is saying I am wrong, yet completely unable to provide a single product that has results in the cost to the end user going down. Love it.....

Show us a single product that was outsourced and every single penny that was saved went to executive pay. You're completely ignoring the complete picture. You can't say that a product is outsourced therefore executive pay goes up and they're directly correlated any more than I can say that the iPhone is released and the stock market crashes and they're directly correlated.

 

[nlsme]

Show me where I said every penny went to executive pay. Said that the product was not lowered in price to the end user. Your Iphone argument is nothing more than grasping at straws.

 

[mrspeedmaster]

This whole outsourcing argument is pretty much non-germane to Apple and many of smartphone manufacturers.

The problem is all of the LCD foundries are in Asia. I believe this may be the case for DRAM unless Ti is still manufacturing. Since Apple and companies like Motorola and HP have to compete against Samsung and HTC, they need to source their components as cheap as possible and this means it is from the same sources. There are only so many ARM fabrication companies.

Now, if we had companies in California or Arizona making LCDs, ARM CPUs,etc in the USA, then the whole out-sourcing argument in this thread would be topical.

You don't want to ship all your components to the US when 99% of the suppliers are in one geographical area.

 

[JimmyRayBob]

Has the cost (to consumers) of computers EVER gone down?

has the cost of televisions EVER gone down?

Has the cost of stereo equipment EVER gone down?

Obviously, the answer to these questions is: YES.

so, why didn't the executives just keep the prices high and pocket the extra money they were making? Because of competition - that's why. If they kept the prices too high - they couldn't sell their products.

You wonder why "everyone" disagrees with you yet no one can provide an example? Could it be that everyone disagrees with you because you are wrong and you just refuse to see it?

Are you waiting for someone to do a study that shows that outsourcing lowers the the cost of manufacturing and thus lowers the cost of a product to the end user? I doubt that study exists because it is so OBVIOUS that no one would waste their time on the study.

Examples have been given - you just dont' like the answers.

Isn't it time that you provide proof that prices HAVE NOT DROPPED because of outsourcing? You can't just keep making the statement that outsourcing happened and executive pay went up without showing that there is a cause / effect relationship.

TO put it another way ... the sun keeps coming up every day and executive pay has skyrocketed. That doesn't mean there is a cause and effect relationship going on.

 

[JimmyRayBob]

I just spoke with my next door neighbor – he builds houses for a living.

I asked him why he doesn’t build the entire house himself. Why does he hire carpenters, plumbers, and electricians from other companies (he outsources these jobs – not overseas, but locally). He said quite simply because if he did it himself he’d have to charge $300,000 for a house instead of $200,000 for the house. And the $300,000 house would never sell. Therefore the price of the house is LOWER because he outsourced these jobs.

There you have it – in very simple and VERY REAL terms.

 

[ElasticNinja]

Bar companies with monopolies / cartels, I would expect outsourcing of production to reduce prices of the finished product
Outsourcing profits wouldn't do much though...

 

[nlsme]

Has the cost (to consumers) of computers EVER gone down?

has the cost of televisions EVER gone down?

Has the cost of stereo equipment EVER gone down?

Obviously, the answer to these questions is: YES.

so, why didn't the executives just keep the prices high and pocket the extra money they were making? Because of competition - that's why. If they kept the prices too high - they couldn't sell their products.

You wonder why "everyone" disagrees with you yet no one can provide an example? Could it be that everyone disagrees with you because you are wrong and you just refuse to see it?

Are you waiting for someone to do a study that shows that outsourcing lowers the the cost of manufacturing and thus lowers the cost of a product to the end user? I doubt that study exists because it is so OBVIOUS that no one would waste their time on the study.

Examples have been given - you just dont' like the answers.

Isn't it time that you provide proof that prices HAVE NOT DROPPED because of outsourcing? You can't just keep making the statement that outsourcing happened and executive pay went up without showing that there is a cause / effect relationship.

TO put it another way ... the sun keeps coming up every day and executive pay has skyrocketed. That doesn't mean there is a cause and effect relationship going on.

How am I wrong? You keep giving examples that don't fit. How does the actions of the sun have anything to do with the pay of an exec? It doesn't. But, the actions of a company surely do. The fact a company has clocks on the wall, again, has nothing to do with the pay of an exec. Again, the actions of a company do. NOBODY has provided a single item that was $100 before outsourcing, and went to $90 after outsourcing. Keep grasping at straws, instead of providing an item that disproves my statement. The cause and effect has already been given. Outsourcing increases corporate profits (cause), and execs pay increases (effect). I never said it was a 1-1 gain for the execs. I only said that that savings is not passed on to the consumer.

 

[nlsme]

I just spoke with my next door neighbor – he builds houses for a living.

I asked him why he doesn’t build the entire house himself. Why does he hire carpenters, plumbers, and electricians from other companies (he outsources these jobs – not overseas, but locally). He said quite simply because if he did it himself he’d have to charge $300,000 for a house instead of $200,000 for the house. And the $300,000 house would never sell. Therefore the price of the house is LOWER because he outsourced these jobs.

There you have it – in very simple and VERY REAL terms.

Your neighbor "outsources" those jobs because HE is NOT a plumber, electrician. They are both jobs that require a license. I know more than one homebuilder that employs them directly, in house. Their houses are not 1/3 MORE expensive because of it, they are actually cheaper. Why? Because an out of house electrician, plumber, actually costs MORE than an in-house electrician/plumber. Again, your example is wrong.

I am not wondering why everyone thinks I am wrong, more than one person has agreed with me. I am wondering why those that claim I am wrong, are unable to prove me wrong....

 

[copestag]

I just provided a specific example...... EVERY product that has been outsourced..... hard to get more specific than 100%

 

[JimmyRayBob]

How am I wrong? You keep giving examples that don't fit. How does the actions of the sun have anything to do with the pay of an exec? It doesn't. But, the actions of a company surely do. The fact a company has clocks on the wall, again, has nothing to do with the pay of an exec. Again, the actions of a company do. NOBODY has provided a single item that was $100 before outsourcing, and went to $90 after outsourcing. Keep grasping at straws, instead of providing an item that disproves my statement. The cause and effect has already been given. Outsourcing increases corporate profits (cause), and execs pay increases (effect). I never said it was a 1-1 gain for the execs. I only said that that savings is not passed on to the consumer.

I have provided EXACTLY the same amount of proof for my example (the sun rising / executive pay goes up) as you have for your assertion that savings provided by outsourcing DON'T lower the costs of goods and services.

 

[JimmyRayBob]

Your neighbor "outsources" those jobs because HE is NOT a plumber, electrician. They are both jobs that require a license. I know more than one homebuilder that employs them directly, in house. Their houses are not 1/3 MORE expensive because of it, they are actually cheaper. Why? Because an out of house electrician, plumber, actually costs MORE than an in-house electrician/plumber. Again, your example is wrong.

I am not wondering why everyone thinks I am wrong, more than one person has agreed with me. I am wondering why those that claim I am wrong, are unable to prove me wrong....

Gee ... do you think that Matt (my non-fictitious neighbor) doesn't consider licensing, etc. maybe he doesn't have licenced people, maybe he does. And we were just talking .. not grabbing our computers running estimates. The fact of the matter is simply what he said ... if he didn't outsource jobs to those people that can do it more efficiently, then his house would cost MORE than the market would bear. And he couldn't sell them. So the DIRECT consequence of his OUTSOURCING his lower house prices.

That's an example you CANNOT LOGICALLY ARGUE WITH OR DISAGREE WITH, NO MATTER HOW HARD YOU TRY.

If this is not the case - WHY THE HELL WOULD ANYBODY OUTSOURCE ANYTHING? They do it to save money - which lowers the costs of goods and services.

 

[JimmyRayBob]

I just provided a specific example...... EVERY product that has been outsourced..... hard to get more specific than 100%

Yes you did and you are 100% correct.

 

[JimmyRayBob]

Please respond:

Isn't it time that you provide proof that prices HAVE NOT DROPPED because of outsourcing? You can't just keep making the statement that outsourcing happened and executive pay went up without showing that there is a cause / effect relationship.

 

[lordofthereef]

I think the point is that it is tough to say EITHER WAY for sure. What we can say is that executive pay is ludicrously high. Many of these executives could make 10% of what they are currently making and still pull in more than 99% of all Americans.

In either case, relying on an economy as heavily outsourced (with no sign of turning back) can only be bad. If we continue this route, we will only have manual labor jobs left; those that physically can not be done outside state lines.

 

[nlsme]

I just provided a specific example...... EVERY product that has been outsourced..... hard to get more specific than 100%

But they haven't. Not ONE has the price decreased after it was putsourced. You can say, HYPOTHETICALLY, that the price would be higher if it wasn't outsourced. I don't take hypotheticals. I want an actual product where the price was higher before it was outsourced, and that price went down after it was outsourced. You have failed to do that.

 

[nlsme]

I have provided EXACTLY the same amount of proof for my example (the sun rising / executive pay goes up) as you have for your assertion that savings provided by outsourcing DON'T lower the costs of goods and services.

No, the sun rising has nothing to do with the price of business. Company profits have everything to do with executive pay. Keep grasping at straws....

 

[nlsme]

Gee ... do you think that Matt (my non-fictitious neighbor) doesn't consider licensing, etc. maybe he doesn't have licenced people, maybe he does. And we were just talking .. not grabbing our computers running estimates. The fact of the matter is simply what he said ... if he didn't outsource jobs to those people that can do it more efficiently, then his house would cost MORE than the market would bear. And he couldn't sell them. So the DIRECT consequence of his OUTSOURCING his lower house prices.

That's an example you CANNOT LOGICALLY ARGUE WITH OR DISAGREE WITH, NO MATTER HOW HARD YOU TRY.

If this is not the case - WHY THE HELL WOULD ANYBODY OUTSOURCE ANYTHING? They do it to save money - which lowers the costs of goods and services.

Sorry, I own a business. My brother is an electricion. He would never charge less to a business, than what that company pays their electrician. Your making stuff up.

 

[nlsme]

Please respond:

Isn't it time that you provide proof that prices HAVE NOT DROPPED because of outsourcing? You can't just keep making the statement that outsourcing happened and executive pay went up without showing that there is a cause / effect relationship.

I already put out the caiuse/effect relationship. So has LOTR. When a comapny outsources, they get the product at a cheaper rate. That savings is NOT passed along to the consumer. It goes to the companies profits. The execs then get a pay raise, based on the fact that they increased profits. Pretty simple concept....

 

[nlsme]

Please respond:

Isn't it time that you provide proof that prices HAVE NOT DROPPED because of outsourcing? You can't just keep making the statement that outsourcing happened and executive pay went up without showing that there is a cause / effect relationship.

Isn't it about time to show proof that prices have dropped because of outsourcing. Making the claim over and over, does not equate you being right. You have TRIED to provide examples, but have failed. Prove me wrong.

 

[lordofthereef]

Does anyone else think the topic of outsourcing should perhaps be within another thread? I am putting in a request now.

 

[lordofthereef]

Isn't it about time to show proof that prices have dropped because of outsourcing. Making the claim over and over, does not equate you being right. You have TRIED to provide examples, but have failed. Prove me wrong.

I think this is important. It needs to be shown that prices have, in fact dropped, rather than the other way around. Otherwise companies will continue using this excuse so long as people believe it. "We outsource so that we can bring better value to our customers". All the while they are laying off skilled/educated workers.

 

[Frisco]

Does anyone else think the topic of outsourcing should perhaps be within another thread? I am putting in a request now.

Outsourcing would be a good thread subject in the forums.. go ahead and start one if you want to, lordofthereef.

We'll leave this thread as is.. seems to be moving along ok, no danger of locking it appears.

 

[nlsme]

I think this is important. It needs to be shown that prices have, in fact dropped, rather than the other way around. Otherwise companies will continue using this excuse so long as people believe it. "We outsource so that we can bring better value to our customers". All the while they are laying off skilled/educated workers.

If the prices on everything that was outsourced has dropped like some claim, then it should not be hard to cite a specific product where the price before outsourcing was higher than the prices after outsourcing. So far, nobody has been able to do it.

 

[noah way]

That's an example you CANNOT LOGICALLY ARGUE WITH OR DISAGREE WITH, NO MATTER HOW HARD YOU TRY.

Wanna bet?

Your assumption is that subcontracting some services reduces the price of a house. An equally valid assumption is that it increases the builder's profit.

If this is not the case - WHY THE HELL WOULD ANYBODY OUTSOURCE ANYTHING? They do it to save money - which lowers the costs of goods and services.

Why? To increase profits, of course. Assuming a 20% profit margin: if production cost is reduced 25% and retail cost is reduced 10%, profit is increased 50%.

But this is all immaterial because your friend isn't outsourcing the work to foreign lands, eliminating jobs, reducing tax revenue those jobs would have generated, reducing demand for services that those jobs would have generated, reducing tax revenue from untaxed foreign investment, etc.

 

[nlsme]

Wanna bet?

Your assumption is that subcontracting some services reduces the price of a house. An equally valid assumption is that it increases the builder's profit.



Why? To increase profits, of course. Assuming a 20% profit margin: if production cost is reduced 25% and retail cost is reduced 10%, profit is increased 50%.

But this is all immaterial because your friend isn't outsourcing the work to foreign lands, eliminating jobs, reducing tax revenue those jobs would have generated, reducing demand for services that those jobs would have generated, reducing tax revenue from untaxed foreign investment, etc.

The real problem with his "example" is, a outside electrician charges more than an in-house electrician. 100% of the time. Just like a temp, being brought in to cover my secretaries duties when she is on vacation. Cost about 30% more for me to "outsource" her job two weeks a year, every year.