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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Cary Salsberg who wrote (11141)	8/6/2004 7:54:17 PM
From: FJB	Read Replies (2) \| Respond to of 25522

It is not evident that it is a "negative" sum game or even a zero sum game when the whole world is the playing field. What is evident is that the effect in the US is negative and economic forces of the game will push standards of living in the US down towards the levels of the competitive countries. This is problematic because those levels are unacceptable and, for the most part, those levels are not being raised for very large population segments in the countries that are competing with us. I hope you are joking or ignorant. Our standard of living is excessive. If you don't believe peoples' standards of living are raised by selling to America, then check out the other options for these peoples. With the finite resources the world has, it is most likely the time to reduce everyone's wants and the world population in general.

To: Cary Salsberg who wrote (11141)	8/7/2004 10:29:58 AM
From: Sam Citron	Read Replies (1) \| Respond to of 25522

It is not evident that it is a "negative" sum game or even a zero sum game when the whole world is the playing field... This suggests that the transfer of jobs to low wage countries may be more beneficial to low wage nations than harmful to high wage nations, even though it may do little for the poorest of the poor. The second order effects of increased demand for American goods and services due to increased external purchasing power resulting from the job transfer need also be examined. You also assume that such job transfer will adversely impact our "standards of living" without considering the proportion or quality of affected jobs to total jobs, the mobility of the labor force, and the pace of "job destruction" or competition from low wage countries. I believe that you must explicitly demonstrate that an inordinate share of our "better" jobs (doctors, lawyers, engineers) is vulnerable, before your argument gains a certain potency. Many Americans already believe that there is not much future for America in standard blue collar assembly line operations. One important question is what role the US can be expected to play in advanced fields like the design and creation of semiconductors. In a previous post you suggested that access to cheap capital is more important in the fab location decision than access to cheap labor. I expect that you are right and that relatively unskilled labor is rapidly becoming an insignificant portion of the semiconductor manufacturing process. That leaves two other important factors of production: land and technology. Land is certainly much cheaper in China. As for technology, we still have the lead, but that lead is diminishing as we are producing fewer engineers relative to China and to a lesser extent India. Perhaps we should be asking the question how we can motivate more Americans to study engineering? It is also important to examine whether and to what extent such location shifts are simply a function of production moving closer to the ultimate market. For example, the Chinese automobile market is growing at rates in excess of 60% per year and cell phone growth is even higher. It would seem to be efficient for fabs to sprout up in regions of rapid demand growth for semiconductors. Another question is the relative importance of fab location to national economic welfare. How important is it that we produce semiconductors in the US rather than importing them from Taiwan, PRC or some other country? Is it a matter of security? Pride? Can you demonstrate that local semiconductor manufacturing is vital to our national interest? In the East it is well understood that nothing is permanent except for change. Think of a job as a finite task to be completed in as quick and efficient a manner as possible rather than as a permanent career with an entitlement to steady predictable earnings and benefits. If we do not remain flexible, upgrade our skills and heed the message of the market we may starve. The rest of the world already understands this very well. But Americans who have had it relatively easy don't quite get it yet. Sam