What's Next? The After Time

[mnben87]

@twojarslave

An example from my career would be the trend in offshore programming we saw in the 00’s. After a few years of satisfying the bean counters with cheap offshore programming, the value brought by domestic programmers who are literate in American business language and practices became much clearer. Less rework, less testing, better outcomes in the real world.

My old company said pretty much this. It’s cheap, but delays came, management of the project was nearly impossible (somehow they thought their current local software engineers would be good at management LOL) and ultimately they took the projects back and hired local programmers.

IMO, things are going to not be exactly one way or another (completely leave or stay with China). I think some smart companies are going to dual source supplies / components to mitigate the risk from China. I think many companies are going to think twice about “just in time” inventory from China. Just in time is great until you can’t get a component you need, and only hear a week before you run out. My company ordered some Chinese components to have 6 months of inventory. That way we have a cushion of time if something happens to supply.

[twojarslave]

Offshore programming is a relatively simple example, but I think it is a good way to start thinking about hidden costs and how we aren’t very good at anticipating or understanding them until we we start experiencing the pain.

The CCP is one big, mysterious, unpredictable and hard to quantify hidden cost.

[H_factor]

@twojarslave

You really don’t think the bottom line consequences of a global pandemic, massive supply shortages and a likely global depression presents an incentive for private companies to change their behavior?

Really?

I mean I don’t think it will have zero effect or anything. Why did they move in the first place? Moving back and setting up here will be expensive. And now you’ve lost a giant extremely cheap labor source on top of that. Going to do all that while the rush to get back to being extremely profitable? They are also going to have to figure out if the two costs I mentioned and a sharp increase in what they are selling is worth it.

I hope it is, but in reality I doubt it. We already had a labor shortage and that’s before a bunch of these companies decided to move back. Who’s going to work those jobs?

Again I’m not saying I want to be right. Do I think the first thought of companies who have had diminished profit because of this is going to be “let’s bring everything back, drastically increase our labor cost, and increase the cost of our goods!”

I’m sure it will have some impact, but a ground shaking breakup between us and China I just don’t see. I do think it will get lip serviced to death but that’s been done for decades.

Although some of this was already changing due to tariffs but will anyone want to play hardball on that when the let’s all work together to get everything going again comes out? I mean maybe.

Maybe we just have our details crossed? I think trends before this continue. I think some other countries make bigger moves than we do. But some type of massive we ain’t using China no more I just can’t see. At least not on it’s own.

Maybe since we don’t give a fuck about printing money anyways we give a shit ton of money to help companies move back in mass? We move away from a service industry and go back to making more shit? Makes sense in the short term for sure as many of those willl be slow to come back in full.

[twojarslave]

@H_factor

Do I think the first thought of companies who have had diminished profit because of this is going to be “let’s bring everything back, drastically increase our labor cost, and increase the cost of our goods!”

Of course not. That would be a silly thought for a private company to have on it’s surface. Businesses aren’t monoliths, and they’re all going to act in their own ways.

To answer the question, we’ll just need to watch what happens. A company like Wal-Mart can’t upend its entire supply chain at the drop of a hat, but it will be curious to see if any of their buying patterns change over time. I imagine their business is booming right now, but who knows what their supplier confidence looks like right now?

I mean, does anyone even understand what kind of market force this virus is at this point? We’re learning as we go, because this is an unprecedented event.

The final bill will be something that historians will argue about forever.

[H_factor]

@twojarslave

I mean, does anyone even understand what kind of market force this virus is at this point? We’re learning as we go, because this is an unprecedented event.

I hope at the minimum everyone pinpoints the vital supplies and moves them back home. I do think this could happen. I do think it will require government incentives. Japan is spending billions to help companies come back.

[twojarslave]

@H_factor

I do think it will require government incentives.

And this is something I’m on board with for anything vital or strategic.

I don’t remember if it was you or not but right before this all hit I mentioned the strategic importance of farm subsidies, and how you can’t always compare them to other types of government pork, even though they’re often loaded with pork. That’s a separate problem to fix, IMO.

Imagine if we imported 1/3 of our food from China?

As countries go about this process of figuring out what’s vital and probably using some heavy-handed government policies to make it happen, China’s going to get hurt. Probably pretty bad, if the entire western world shuns them on business that was routine and dependable just a couple of months ago. Medical supplies and pharma is probably at the top of most lists, but we can call a lot of stuff vital, and I’m sure we will. You can take the reasoning down to very low levels, like our domestic mining and raw material production capabilities. What if we need to start cranking out tanks and ships a’la 1944 again?

What’s left are the voluntary business dealings. I wouldn’t be surprised if you see a lot of websites offering sourcing options as another filter, just like you’d shift from “most popular” to “priced high to low” on Amazon. “Country of origin” is such a good idea, someone might even decide to make it a law and force companies to put it there. Who knows?

I can’t give a lot of details about my work, but when I’m wearing my procurement hat a similar product from a domestic vendor that’s, say, 10 percent more would be a no-brainer in most cases. Tariffs already make a lot of our imports fucky, and more tariffs could make it even fuckier. They don’t kill our bottom line so much as add to the pain in the ass that goes along with getting the savings from the foreign source. Custom delays, losses in transit and the resulting claims management, arranging payment, frequency of purchase, basic customer service concerns, all kinds of things add up in that little calculation I make.

I think there’s more room to compete than people realize, and we’re probably going to see big government muscle out even more room to compete. I’m very ready to pay more for some of my widgets if it means I’m dealing with a gal in Pennsylvania than a guy in opposite time zones who barely speaks my language and only accepts paypal or wire transfers.

This incoming loss for the CCP is why I led with my original prediction. The economic war goes hot in the next decade. Who knows if it will happen or not, but that’s my prediction and I’m sticking by it. I think things will go south for the CCP both at home and abroad. I think things are probably much, much worse for the CCP right now that anyone who reports their statements as fact would have you believe.

[H_factor]

@twojarslave

Medical supplies and pharma is probably at the top of most lists, but we can call a lot of stuff vital, and I’m sure we will.

This is where I’m not so sure on. I mean we could vs we will. The fundamentals of what made China so attractive haven’t really changed. You have an asston of high and low skilled labor. Largely cheap labor. Low energy costs. Big ass ports. Low taxes. Fucking assholes hasn’t stopped us once in the past.

@twojarslave

What’s left are the voluntary business dealings. I wouldn’t be surprised if you see a lot of websites offering sourcing options as another filter, just like you’d shift from “most popular” to “priced high to low” on Amazon. “Country of origin” is such a good idea, someone might even decide to make it a law and force companies to put it there. Who knows?

Cool idea I had never thought of. I’m just not sure I see it happening though. I mean we elected a guy who had all his shit made in China and said we needed a wall to keep out illegals while employing illegals. We just on the whole don’t care too much about the specifics. Cheap shit is always gonna be better than not cheap shit to us. I mean China is an awful human rights place…but how many companies stopped buying from them? People?

Again we’ve been saying forever that China is evil, but we’ve never supported it with our wallets. I don’t see that changing. If China is where the cool shit manufacturers want their businesses because of the reasons I mentioned above we’re still buying that shit. We’re not gonna stop buying cell phones, video game shit with parts all made in China, whatever.

@twojarslave

This incoming loss for the CCP is why I led with my original prediction.

I think going back now we’re sorta arguing two different things. It seems like you think China is going to take a massive hit from almost everyone that delivers something close to a knockout. And I think they take a couple gut punches that hurt a bit, but hardly keep them from swinging.

to me nothing is more important than profit. Big businesses don’t need to think long term. They need to think short term and always will. Why didn’t airlines sock any money away and spent so much on stock buybacks? Because that’s how the rich people in charge of these companies get richer. Make stock prices rise, get CEO’s and big players paid. They have no need to think about preparing for rainy days. Our government has essentially said twice now that we will always be your umbrella. As long as “industries” remain untouchable to failure and are compromised of massive business they have no need to worry about risk. Worrying about risk is for the small guys who go broke when shit hits the fan. It ain’t for the people hosting big fundraisers

[loppar]

@H_factor

Again we’ve been saying forever that China is evil, but we’ve never supported it with our wallets. I don’t see that changing.

Are people ready to buy one electronic gadget per year? Plan their yearly expenditure to include a sizeable chunk of their income for one single gadget?

Not mindlessly click on Amazon to buy it on a whim?

The 30 year wage stagnation in the Western world was glossed over with cheap consumer goods made in China. Are people willing to forego that?

@twojarslave

Probably pretty bad, if the entire western world shuns them on business that was routine and dependable just a couple of months ago.

That’s why they’re on a massive charm offensive. Not to mention their investments in Africa.

[anon50325502]

@loppar

Are people ready to buy one electronic gadget per year? Plan their yearly expenditure to include a sizeable chunk of their income for one single gadget?

Not mindlessly click on Amazon to buy it on a whim?

The 30 year wage stagnation in the Western world was glossed over with cheap consumer goods made in China. Are people willing to forego that?

Unfortunately, no. Not without another depression, imo.

[H_factor]

@loppar

Are people ready to buy one electronic gadget per year? Plan their yearly expenditure to include a sizeable chunk of their income for one single gadget?

It’s not just average Joe’s toys. It’s Uncle Sam’s toys. The industries that help build our military use a ton of shit from China. And again I just don’t see all these place stopping that profit driven mindset. Unless of course we pay them to do it.

The perfect time to do it, just like tackling the debt was the years the economy was booming.

[twojarslave]

@anon50325502

Unfortunately, no. Not without another depression, imo.

I think the roughly 1980 and earlier birth years will find a way to cope.

I’m still on my first smartphone, going five years strong. I bought it with an Otterbox case and a good screen protector. It has survived everything, still on the original screen but the 2nd battery.
64 GB and still perfectly viable for what I need the glowing rectangle in my pocket to do for me.

Get off my lawn. Bring it on China. I’m ready to revert to a pager!

[H_factor]

I think it’s an issue for all generations. Oddly the much maligned millennials aren’t that bad with money compared to a gen x dude like me or my parents in many ways. My mom is 68 and has far newer technology than me and uses it more!

I am also prepared to fight your get off my lawn war. My newest car is 2013, got my phone I think 5 years ago which phones are like dog years, my wife the same and she drives a 2009. We have two TVs one that is about 5 years old and another that is probably 11.

https://www.vox.com/sponsored/13219620/chase-newsroom-generational-money-talk-charts-millennials

[mnben87]

@H_factor

My newest car is 2013, got my phone I think 5 years ago which phones are like dog years, my wife the same and she drives a 2009. We have two TVs one that is about 5 years old and another that is probably 11.

This isn’t a place for bragging about your almost new cars and multiple TVs. I drive an 05 focus, and have one TV (no cable either). My phone is only about 2.5 years old, but was a budget model at $185, which in smart phone dollars isn’t very much.

[anon50325502]

@twojarslave

I think the roughly 1980 and earlier birth years will find a way to cope.

I actually think it will be the opposite. I think the mid-80s on will cope much better having already gone through the Recession at a young age and many of us dealing with significant debt with less assets than previous generations.

@twojarslave

I’m still on my first smartphone, going five years strong. I bought it with an Otterbox case and a good screen protector. It has survived everything, still on the original screen but the 2nd battery.
64 GB and still perfectly viable for what I need the glowing rectangle in my pocket to do for me.

If we’re going by anecdote, my 70-year-old Uncle waits in line for the newest iPhone every single time it comes out.

[twojarslave]

@anon50325502

I actually think it will be the opposite. I think the mid-80s on will cope much better having already gone through the Recession at a young age and many of us dealing with significant debt with less assets than previous generations.

I think there’s some truth here too. My parents were born in the late 40’s and got to ride the wave of postwar prosperity all the way to early retirement.

I sometimes have to remind my mom that i wasn’t able to buy multiple homes that tripled in value in under a decade. That’s not a thing that happens anymore.

@anon50325502

If we’re going by anecdote, my 70-year-old Uncle waits in line for the newest iPhone every single time it comes out.

So does my mom, oddly enough.

In reality a hardship like smartphone price increases is something the overwhelming majority of people would easily adjust to. Life with a 5 year old smartphone is fine, trust me. Buying patterns would change, people would probably take better care of them but nobody’s ending up in a van down by the river because their phone doubled in price.

[anon50325502]

@twojarslave

In reality a hardship like smartphone price increases is something the overwhelming majority of people would easily adjust to. Life with a 5 year old smartphone is fine, trust me. Buying patterns would change, people would probably take better care of them but nobody’s ending up in a van down by the river because their phone doubled in price.

Agreed. People will adjust pretty easily if push comes to shove. The difficult part will be convincing people increasing prices on modern conveniences will be a good thing for the US long-term. In today’s political climate that’s going to be especially difficult, imo.

[mnben87]

IMO, there are thrifty people in all generations, and big spenders too. In my neighborhood, some people have overflowing garbage filled with product packaging every week. I often skip weeks bringing my garbage out to the curb, because it seems like a waste of time to have them pick it up for one bag.

I have two cars an 05, and 06, and fix them myself (combined I have put 150,000 miles on them and paid a total of $4300 for both). If I need something or want something I try to buy it used. One because I don’t like spending money, and two because I don’t like the idea of manufacturing cheap items that get discarded after a couple of years (so I buy high quality used usually for a fraction of the price of the low quality new item).

I make more money than my luxury car driving, consumer friends, and they think I am crazy. That’s okay. I would rather have investments passively making me money than a new car.

[anon50325502]

Ya, I’m just speaking generally. We have friends that just bought a brand new Truck and are now buying a couple thousand dollar playset during a spike in unemployment we haven’t seen in a long-time. Does not compute to me, but whatever…

[twojarslave]

My uncle is a retired (well, he still volunteers) physician. His wife is a retired anesthesiologist. They’re sitting on millions, living in a modest home they bought in the late '80’s. She’s driven Jeep Cherokees since 1984 and gets a new one roughly every 10 years. My uncle drives an '05 Dodge Caravan.

I’m certainly not sitting on millions, but I’m doing well. When I look at some of my friends and family who aren’t they almost all have newer phones than me, nicer clothes than me, jewelry I don’t wear, expensive vehicles and a few semester’s worth of tuition tattooed on their body.

To each their own, I suppose. Priorities will definitely be shifting for a lot of people, and I think we’ll come out the other side of this with significant differences in buying patterns.

[mnben87]

@twojarslave

My uncle is a retired (well, he still volunteers) physician. His wife is a retired anesthesiologist. They’re sitting on millions, living in a modest home they bought in the late '80’s.

IME, the actual wealthy people usually live modest lives. There are exceptions obviously.

@twojarslave

I’m certainly not sitting on millions, but I’m doing well.

Me neither. I have enough that I don’t really have to worry about losing my job as I could take my time finding something else. I guess the stress reduction from not living pay check to pay check is worth more to me than the material items I could acquire. I would like to be financially independent from work in the next decade. I would probably choose to work, but I like the idea of being able to walk away if I want.

@twojarslave

To each their own, I suppose. Priorities will definitely be shifting for a lot of people

I think on average people would be happier if they lived a bit simpler. I see so much that parents want their children to be going to Ivy league pre-school, and involved in horse back riding, tennis lessons and such. They run around like crazy people IMO. I had a happy childhood playing in the swamp catching frogs and turtles. I sure sound 40 years older than I am.