Back in the 1970's when I first went to Communist China, we were entertained by the state, and I saw some world class acts... many that went on to make Cirque du Soleil the success it is. At the time I recall thinking at the time, "well of course, China has some 1/6th the worlds population, they should have people among the best in every field, not just entertainment. As the communists loosened up, China has moved forward on many fronts. But here is a magic act, world class.
Friday, March 26, 2010
Proud Dad
When my daughter announced she wanted to be in the fashion business, I took her around to visit with people in the business. A common thread was "learn how to sew.." and by acclamation Seattle CEntral Community College has a world class fashion design program, difficult to get into, but quite inexpensive. One particularly creative woman allowed that it would be better than the famous New York school she had paid a fortune to send her own daughter to..
My daughter will finish the program in June, and has gotten a little press. Scroll down to the "pants" section, where you will see my advice to compete on design has clearly gotten out of hand.
Shoe String Space Exploration
For under $1000, a citizen explores space. With USA looking for places to cut expenses, getting rid of NASA would be a good start. Amateurs and Entrepreneurs would give us all we need in Space Exploration.
Thursday, March 25, 2010
Health Care Resistance
Mish Shedlock has a fascinating take on how business will respond to forced health care coverage... for many it will be cheaper to pay the fines than offer the health care. Others plan to cancel their insurance, pay the low fines, and then, because you cannot be denied for pre-existing conditions, sign up if you get sick. Why we allow some 500 people to determine all health care for all americans for all time is absurd... but it is a great diversion from events around us that are leading USA into war.
Wednesday, March 24, 2010
Gary North on Real Estate and Health Care
Dr. Gary North has a great article up on LRC today.
His first quote about Detroit housing is very good:
There is no surge of buyers to take advantage of fabulously low prices in Detroit. Can you imagine buying a home for cash for $13,600 in 2009 – a house that had sold for $98,000 six years earlier – and losing half your money? It's incredible.
Then he talks about healthcare, and what the new law will bring...
This brings me to the other subject: the health care law. It is not law yet, but it soon will be.
I know what is going to happen.
1. Cost overruns
2. Fraud
3. Additional coverage extended to groups
4. Rising deficits in the program
5. Lower payments to physicians
6. Lower payments to hospitals
7. Delays in payments
8. Rising taxes on the rich
9. Rationing by doctors, hospitals, government
10. Delays in treatment
11. More HMO care: assembly line medicine
12. A search for scapegoats
Number 12 is the big question, who will the powers that be blame (never themselves.) 1 through 11 is how they will track down and punish those who fit number 12.
High Wages, Labor Shortages In China
The HKTDC has an interesting report on the Hong Kong China economy. Of course, the HKTDC has a bit of boosterism in its reports, but the facts are rock solid.
The problem of labor shortages continues to plague China, forcing labor rates up and up. Chinese labor is nominally less expensive, but that is changing. Anyone who counts on cheap labor being a factor is going to find he is building a biz on shifting sands.
Another alarming note is Hong Kong is clearly shifting the focus form export to USA to export to China. Appreciation of the RMBY will somewhat force that, but the continued growth in China is changing the trade lanes.
The article notes China is an attractive market, but companies all over the world are looking at China, meaning China is going to get the benefit of cheap and plentiful from all over the competing world. And of course, the point is made Hong Kong best competes on design.
Tuesday, March 23, 2010
Humanitarian Aid
My position is the poor need relief from government oppression, not aid agencies. I came across a review of Michael Maren's book THE ROAD TO HELL, which I have reviewed (see on the left...) Foreign Affairs magazine contends that humanitarian aid is still the best tool for saving lives. But they would say that, wouldn't they?
Sunday, March 21, 2010
Cheap Labor Services
I am working on a project which trades services worldwide. It has been on the back burner for a decade and I am now moving it to the front burner. Trade data in services is notoriously paltry, but one can get some ideas of the players in some industries by googling topics and seeing how many hits there are:
India radiology offshoring 1,690,000 hits
Russia radiology offshoring 589,000
Swiss radiology offshoring 736,000
(Of course I could change the terms and get different responses, but the rates are similar.)
I am noticing a trend that I may have not noticed if I had not been taught way back when that cheap labor is not a factor in int'l trade (in this case, trade in services.)
The places where management of the service is inexpensive becomes the leading source; where the management is relatively inexpensive, workers are in demand and their wages go up. This process keeps going ever narrowing the gap between worker and manager. Everyone benefits, especially the customer. Int'l trade is relatively free market, and so we have this relatively beneficial process. This process I might add, as it plays out in India, is limited to the special economic zones in India, where the government has relatively relaxed rules and regs for biz within the zones (India copied the Chinese success with Special Economic Zones, built on the Hong Kong model.)
As I compare offers for the provision of services, I find that the best offers are coming from places where the prices are nominally lower than USA, for work equal to or superior to what I can get in USA.
Let's take Example A. The management is requiring less for their compensation than management anywhere else, and paying their coders better, than in Example B and Example C. (These are likely to be different countries, but it can explain the differences within one country too.) This is the winning combination.
In example B The management is requiring more for their compensation, and paying their coders less, than in Example A and Example C. This is the most common scenario and these people will not survive. I see explicit examples where the managers are paying low wage for work and charging full rate, for management. The price is the same, but the work is not up to snuff.
In example C The management is requiring more for their compensation, and paying their coders more, than in Example A and Example B. A lot of these costs are fixed overhead simply by virtue of operating in a given country. Such as USA.
In scenario A workers are better compensated and the management requiring less. These workers overseas, say making websites, have a higher standard of living than their competitors in USA that are coding websites. That standard of living just costs less there. Yes, the USA coders are paid nominally higher, but their expenses and taxes are exponentially higher. The USA coders net less, and are able to access less material benefits, than their competitors overseas. It is ironic that coders overseas are delighted with their "low wages" and coders here in USA are resentful of their lack of compensation, even though the numbers on their paychecks are real big.
I Am Not Following Health Care Legislation
Because it does not matter if it passes or not. If it passes, the money will go to democrat supporters. If it does not pass, the republicans will pass a version where the money goes to republican supporters, after the next election.
George Bush passed the largest expansion of welfare since Pres. Johnson when he passed prescription medicare. There the money went to republican fat cats. As long as we have material election fraud in USA, and we adhere to parties, within resides the source of violence in USA, we will not be free. Someone who figures out how to independently catch election fraud will get rich in usa.
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