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Thread: Why Free Trade Rocks

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    Default Why Free Trade Rocks

    http://money.cnn.com/2010/12/16/news...pest/index.htm

    NEW YORK (CNNMoney.com) -- It may not seem like it when the credit card bill comes due, but many popular Christmas presents are at their cheapest level of all time.

    Toys are 55% cheaper today then they were in 1980, according to the Consumer Price Index. And that's a raw number, not adjusted for inflation. If a toy was $100 in 1980, it's $45 now -- never mind the fact that $100 then would be worth $265 today.

    Same is true for small appliances like coffee makers and toasters -- they're down almost 30% since 1998, the earliest year numbers are available.

    Electronics are a particular bargain. Televisions are 93% cheaper now then they were in 1980. Radios and speakers are half what they were when Reagan was elected.

    "What it means for us, as consumers, is we get to buy more crap" said John Norris, director of wealth management at Oakworth Capital Bank in Birmingham.

    The reasons for the plunging prices have to do with advances in technology, manufacturing, retailing, and the global economy.

    Technology advances are particularly important in electronics. The newest and best stuff is the most expensive, partly because companies are trying to recoup their R&D costs and partially because demand for the latest model is so high.

    But that means models that are a year or two old -- which is often perfectly fine for the average consumer -- see huge price discounts.

    And as companies gain experience making the microchips and other components for DVD players or digital cameras, they can make them faster and cheaper.

    This is true not just in manufacturing electronics, but goods like toys and clothes as well.

    Clothing prices climbed from 1980 to the mid 90s, then nose-dived. While not at an all-time low, they are still 15-20% cheaper than they were 15 years ago.

    Manufacturing advances may have played a role in bringing down the price of clothes, but it's also no coincidence that 15 years ago was when globalization entered the world's lexicon. With globalization came an explosion in world trade, and cheap labor from the developing world.

    "If you look at the flood of imports, especially from China, there's been tremendous pressure to keep prices down," said Paul Liegey, an economist at the Bureau of Labor Statistics that analyzes clothing prices for the CPI.

    Changes in retailing are also giving consumers the cheapest Christmas ever. The scale and model of big box stores like Target (TGT, Fortune 500) or Wal-Mart (WMT, Fortune 500) means they can more efficiently buy, move, store and ultimately sell the same product for a cheaper price than can a mom-and-pop shop downtown.

    This isn't to suggest cheaper is better.

    As Norris pointed out, often times the service and product knowledge is better at a mom-and pop than a big box.

    "If you go in looking for a camera, you better know exactly what you want," he said of the big box.

    And just because stuff is cheaper doesn't mean our total bill will be less. We simply buy more of the cheap stuff. Plus, the really high-end stuff hasn't fallen in price, and that's always tops on anyone's wish list.

    "Have you seen what Uggs cost," said Norris. "And Steve Jobs is not discounting the iPad." To top of page

    ******************************

    This is the point of free trade. The idea that we can get stuff cheaper then we otherwise would have. Who wants to pay twice as much for the same item?

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    Quote Originally Posted by Lewkowski View Post
    Who wants to pay twice as much for the same item?
    Lewkowski, oblivious to the hidden costs...

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    Toys... toys that break in less than a year! Junk!

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    Quote Originally Posted by agamemnus View Post
    Toys... toys that break in less than a year! Junk!
    I've not heard of wide spread destruction of TVs within a year of purchase. There exists varying degrees of quality of course but the idea that major electronic purchases like TVs break often doesn't seem to fit. I've certainly not seen stories of it in the media or experienced it personally. Feel free to link me to something and I'll take a look.

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    SEÑOR Member Aimless's Avatar
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    It's a good thing TVs are getting cheaper, otherwise no-one would be able to afford eg. insulin ps. can anyone spare some rare earth metals pls?
    “Humanity's greatest advances are not in its discoveries, but in how those discoveries are applied to reduce inequity.”
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    That's no moon. EyeKhan's Avatar
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    Hello someone who know's something! Is this really the point of free trade, so we can get stuff way cheaper?
    The Rules
    Copper- behave toward others to elicit treatment you would like (the manipulative rule)
    Gold- treat others how you would like them to treat you (the self regard rule)
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    Senior Member RandBlade's Avatar
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    Quote Originally Posted by EyeKhan View Post
    Hello someone who know's something! Is this really the point of free trade, so we can get stuff way cheaper?
    Yes

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    First off there have been many variables that affect the future price of similar goods, and I don't think it's fair to say if it werent for Free Market things wouldn't be cheaper. Yes I think free market accelerated the process and helped to make it low. However, with or without free market the price would have went down as they perfected the technology in making it. Perhaps that would take longer without the free market, but the price change is not 100% the free market.

    I am very pro free market, I'm also anti-monoply, it sounds lame to me to punish people for being to good, but it's worth it to me advance and accel society faster. Lastly, the point of the free market isn't lower prices that's more of a side effect, it's more to allow a situation that each person can open and operate their own goods while trading to make advantages for themselves as they please. I think that at its core is the goal of the free market.

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    Quote Originally Posted by RandBlade View Post
    Yes
    Again, hidden costs. They are cheaper monetarily.

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    Quote Originally Posted by RandBlade View Post
    Yes
    Profit trumps low price.
    .

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    Quote Originally Posted by Lewkowski View Post
    I've not heard of wide spread destruction of TVs within a year of purchase. There exists varying degrees of quality of course but the idea that major electronic purchases like TVs break often doesn't seem to fit. I've certainly not seen stories of it in the media or experienced it personally. Feel free to link me to something and I'll take a look.
    No link for youse. Cheap TVs and computers are generally less reliable overall than they were decades ago... but decades ago, there were no cheap TVs and computers. So you have a choice to buy junk now.

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    I have a special fondness for lead paint in toys I give kids.

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    Administrator Dreadnaught's Avatar
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    Interestingly, credit card debt has expanded as well. So while people can consume more on Christmas, they also just use that "savings" to spend more throughout the year.

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    Quote Originally Posted by Dreadnaught View Post
    Interestingly, credit card debt has expanded as well. So while people can consume more on Christmas, they also just use that "savings" to spend more throughout the year.
    Well sure. Many people in the modern world don't seem to understand the concept of delayed gratification. Either way they were going to spend money. Now instead of having just a TV they can have a TV, PS3, new camera AND a toaster. This still makes them better off then just having a TV.

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    Nihilist Nessus's Avatar
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    Quote Originally Posted by RandBlade View Post
    Yes
    While destroying the human dignity of the assembly line, but what was I trying to say anyway since you *personally* blew so many developing countries.

    Never mind the fact that when the assembly line wakes up, as it is eventually going to, due to people such as yourself *personally* helping the brown people rise from their destitute lives, the globe cannot cope with the environmental load

    We cannot feed 7 billion people with pork and boiled veggies

    But I'm sure you've *personally* raised several pigs and what was I trying to say anyway?

    Ugh
    In the future, the Berlin wall will be a mile high, and made of steel. You too will be made to crawl, to lick children's blood from jackboots. There will be no creativity, only productivity. Instead of love there will be fear and distrust, instead of surrender there will be submission. Contact will be replaced with isolation, and joy with shame. Hope will cease to exist as a concept. The Earth will be covered with steel and concrete. There will be an electronic policeman in every head. Your children will be born in chains, live only to serve, and die in anguish and ignorance.
    The universe we observe has precisely the properties we should expect if there is, at bottom, no design, no purpose, no evil, no good, nothing but blind, pitiless indifference.

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    Quote Originally Posted by Nessus View Post
    While destroying the human dignity of the assembly line, but what was I trying to say anyway since you *personally* blew so many developing countries.

    Never mind the fact that when the assembly line wakes up, as it is eventually going to, due to people such as yourself *personally* helping the brown people rise from their destitute lives, the globe cannot cope with the environmental load

    We cannot feed 7 billion people with pork and boiled veggies

    But I'm sure you've *personally* raised several pigs and what was I trying to say anyway?

    Ugh
    Hidden costs, partially outlined above.

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    SEÑOR Member Aimless's Avatar
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    hidden costs, externalities, madness and suffering it's bizarre how incredibly one-tracked some minds are the free market is dumb

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    Open a bank account, get a free crappy toaster made in China. Retail value $9.99. And most Ugg boots are pretty damn ugly.

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    The free market is the best system out there, and it is the most natural system. If your going to complain people are working on assembly lines, they're getting paid to work on assembly lines it's a trade off, one they're choosing. I bet their working conditions are also far better than before, in addition to them making electrical items of similar quality that are cheaper. What do you want out of the world, a stress free environment where everyone can do whatever they want, and have everything they need. Maybe one day when the technology is there, but even then free market will have its role .

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    Quote Originally Posted by Illusions View Post
    Again, hidden costs. They are cheaper monetarily.
    What hidden costs?

    They're not just cheaper monetarily, but a far superior quality.

    Anecdote alert: Was surprised watching Home Alone the other day as the TV that family used was a small black and white one. I'm the same age as Macauley Culkin (sp?) and our TV then was colour but was still very small compared to now, I did know people with B&W ones still though. Now I was watching the film in HD on a large plasma screen that you can get quite cheaply now. Hidden costs? Bah, cheaper and better quality more like it.

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    Quote Originally Posted by Aimless View Post
    It's a good thing TVs are getting cheaper, otherwise no-one would be able to afford eg. insulin ps. can anyone spare some rare earth metals pls?
    Despite the name rare earth elements aren't rare at all.
    Greece shows us that there is a kind of politician worse than the ones that break their election promises; the ones that keep their election promises.

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    Senior Member GGT's Avatar
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    Quote Originally Posted by RandBlade View Post
    What hidden costs?
    Social costs. Not so much hidden as slow to be revealed or realized.

    They're not just cheaper monetarily, but a far superior quality.
    Depends on the item. I've still got the 1960's phone with curly cord, works like a charm. Can't count the other cheap phones I've gone through since then, or small household appliances. They're so cheap that repair shops have vanished---just throw things out and buy a new one. We've become a disposable society.

    Anecdote alert: Was surprised watching Home Alone the other day as the TV that family used was a small black and white one. I'm the same age as Macauley Culkin (sp?) and our TV then was colour but was still very small compared to now, I did know people with B&W ones still though. Now I was watching the film in HD on a large plasma screen that you can get quite cheaply now. Hidden costs? Bah, cheaper and better quality more like it.
    He was watching black and white old movies.

    Now let's see if your HD plasma big screen will last a few decades, before some part dies and can't be replaced, and it's 'cheaper' to just buy a new one.

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    Why would we want to have a TV for a few decades? New and better picture quality/features (like 3D) are coming out all the time.

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    Because it costs energy to manufacture them. Because we're gifting away all our valuable elements to developing nations by dumping our electronic waste there, causing irreparable damage to the environment in the process.
    In the future, the Berlin wall will be a mile high, and made of steel. You too will be made to crawl, to lick children's blood from jackboots. There will be no creativity, only productivity. Instead of love there will be fear and distrust, instead of surrender there will be submission. Contact will be replaced with isolation, and joy with shame. Hope will cease to exist as a concept. The Earth will be covered with steel and concrete. There will be an electronic policeman in every head. Your children will be born in chains, live only to serve, and die in anguish and ignorance.
    The universe we observe has precisely the properties we should expect if there is, at bottom, no design, no purpose, no evil, no good, nothing but blind, pitiless indifference.

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    Senior Member RandBlade's Avatar
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    Quote Originally Posted by GGT View Post
    Social costs. Not so much hidden as slow to be revealed or realized.
    TV's have a social cost? Please explain.
    Depends on the item. I've still got the 1960's phone with curly cord, works like a charm. Can't count the other cheap phones I've gone through since then, or small household appliances. They're so cheap that repair shops have vanished---just throw things out and buy a new one. We've become a disposable society.
    So what? Yes, phones are dirt-cheap why on Earth should I pay someone to repair it? It would cost more to do that than to replace it so that would be stupid.
    He was watching black and white old movies.
    Ah
    Now let's see if your HD plasma big screen will last a few decades, before some part dies and can't be replaced, and it's 'cheaper' to just buy a new one.
    It's lasted me 5 years next month so that's a long time. I'll have replaced it with a 3D TV in another 5 no doubt. No harm in replacing it. My TV when I bought it cost £850, I could replace it now with a much newer version for a third of that.

    I believe strongly in recycling and have done all my life, that to me is the most important environmental issue that I can do anything about, not climate change.

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    Quote Originally Posted by RandBlade View Post
    Hidden costs? Bah, cheaper and better quality more like it.
    I'm actually pretty angered by this response as it shows a complete lack of thought going into this reply. Basically the hidden costs I was referring to are that in order for your product to be as cheap as it is, the costs of its production have to be reduced, which includes paying the workers who manufacture it pretty meager wages, having them work longer hours, or both, cutting corners on the disposal of the waste associated with the product's production, etc. You were able to pay less because of this. The product was cheaper, monetarily, but there was still a cost to produce it. Instead of having you absorb those costs via paying more money, other people, or even the environment were made to take them. China is pretty notorious for these things.
    Last edited by Illusions; 12-19-2010 at 06:09 PM. Reason: Redundancy removed

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    Senior Member GGT's Avatar
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    What Nessie (*and Illusions) said.

    We don't have recycling for things like electronics, let alone fridges. Even Salvation Army won't accept older TVs, even if they work. They end up at the curb for heavy trash pick-up, and if they don't end up in a landfill, some sweat shop is paying women (with small hands) to gut the innards and retrieve any metals.
    Last edited by GGT; 12-19-2010 at 06:17 PM. Reason: *

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    Quote Originally Posted by Nessus View Post
    Because it costs energy to manufacture them. Because we're gifting away all our valuable elements to developing nations by dumping our electronic waste there, causing irreparable damage to the environment in the process.
    Pfft.
    Last edited by Illusions; 12-19-2010 at 07:18 PM. Reason: Double Post Merged Into One

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    Nihilist Nessus's Avatar
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    In the future, the Berlin wall will be a mile high, and made of steel. You too will be made to crawl, to lick children's blood from jackboots. There will be no creativity, only productivity. Instead of love there will be fear and distrust, instead of surrender there will be submission. Contact will be replaced with isolation, and joy with shame. Hope will cease to exist as a concept. The Earth will be covered with steel and concrete. There will be an electronic policeman in every head. Your children will be born in chains, live only to serve, and die in anguish and ignorance.
    The universe we observe has precisely the properties we should expect if there is, at bottom, no design, no purpose, no evil, no good, nothing but blind, pitiless indifference.

  30. #30
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    Quote Originally Posted by Lewkowski View Post
    Pfft.
    This is a valid concern, and your reply doesn't exactly explain why you think it isn't. Is there some logic to pollution being okay, or the short sighted saving of money by dumping said electronic waste in their countries while ignoring the long term implications of doing so?

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