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Thread: 'Shark Tank' Inventor Loses Big to 'Buy American' Fallacy

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    'Shark Tank' Inventor Loses Big to 'Buy American' Fallacy

    Thought you all would enjoy this article. If you haven't seen Shark Tank, it's a show where entrepreneurs/inventors bring their ideas before a panel of billionaire investors and try to get them to invest in their enterprise. Donny McCall, inventor of Invis-a-Rack, recently lost a $100,000 deal because he refused to outsource, claiming that doing so would not help his country and his hometown.

    http://hanseconomics.com/2012/02/12/...rican-fallacy/

    Thoughts? Obviously, there the idea of "Made in America" is rousing, but it can be very destructive economically.



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  3. #2
    I saw that episode and it was painful to watch the guy refuse to acknowledge what the market was willing to bear.

    He thought he was making Americans richer but in actuality he made the whole world, including Americans, poorer since we don't have access to his invention.
    Last edited by axiomata; 02-14-2012 at 12:56 PM.
    Truth forever on the scaffold, Wrong forever on the throne,--
    Yet that scaffold sways the future, and, behind the dim unknown,
    Standeth God within the shadow, keeping watch above his own.
    ‫‬‫‬

  4. #3
    He didn't even offer a defense of his position. He was very stubborn.

  5. #4
    sooooo no more jobs then?

  6. #5
    The full ramifications of outsourcing are starting to pile up. I have a friend who has a business in China doing language translation. He said because China is becoming so corrupt and it's red tape has expanded dramatically he is now losing money and will half to shut his business down soon if it does not turn around. It's one thing to deal with one countries laws, regulations, logistics, and corruption all within your home country, its another thing to half to deal with it in foreign countries.

    http://articles.latimes.com/2011/feb...ltzik-20110215

    http://www.evolvingexcellence.com/bl...ng-part-1.html
    No One But Paul

    The Statistics of Impossibility is the new radar you can't outrun.

  7. #6
    Quote Originally Posted by Mark37snj View Post
    The full ramifications of outsourcing are starting to pile up. I have a friend who has a business in China doing language translation. He said because China is becoming so corrupt and it's red tape has expanded dramatically he is now losing money and will half to shut his business down soon if it does not turn around. It's one thing to deal with one countries laws, regulations, logistics, and corruption all within your home country, its another thing to half to deal with it in foreign countries.

    http://articles.latimes.com/2011/feb...ltzik-20110215

    http://www.evolvingexcellence.com/bl...ng-part-1.html
    Obviously outsourcing can be done poorly. But outsourcing can also be done very profitably.

  8. #7
    I remember this. He sounded like a great man, but ignorant.

    He doesn't understand that if he outsourced he would create more American jobs, as opposed to doing nothing.

  9. #8
    Hopefully this guy will be successful making this product in the US.
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
    "Beware the Military-Industrial-Financial-Pharma-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
    "Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
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    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.



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  11. #9
    The Ron Paul solution is to get rid of the minimum wage.

  12. #10
    I think outsourcing is bad. I think getting rid of minimum wage is bad too. We should support American made goods. Apple should have made iphone and ipad in America. They charge enough for the devices they could make them here. Kinda like the super expensive clothing that is made in foreign land. Don't tell me they could not make them in America. We should not have to compete with workers in foreign lands that have no protections that is why we should have tariffs.
    Last edited by rockerrockstar; 02-14-2012 at 07:02 PM.

  13. #11
    Quote Originally Posted by rockerrockstar View Post
    I think outsourcing is bad. I think getting rid of minimum wage is bad too. We should support American made goods. Apple should have made iphone and ipad in America. They charge enough for the devices they could make them here. Kinda like the super expensive clothing that is made in foreign land. Don't tell me they could not make them in America.
    Stick around, and you'll learn better than to think that.
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  14. #12
    Quote Originally Posted by heavenlyboy34 View Post
    Stick around, and you'll learn better than to think that.
    pfft. free trade is incompatible with a global fiat debt currency.

  15. #13
    Quote Originally Posted by rockerrockstar View Post
    I think outsourcing is bad. I think getting rid of minimum wage is bad too. We should support American made goods. Apple should have made iphone and ipad in America. They charge enough for the devices they could make them here. Kinda like the super expensive clothing that is made in foreign land. Don't tell me they could not make them in America. We should not have to compete with workers in foreign lands that have no protections that is why we should have tariffs.
    You're wrong.

  16. #14
    Quote Originally Posted by rockerrockstar View Post
    I think outsourcing is bad. I think getting rid of minimum wage is bad too. We should support American made goods. Apple should have made iphone and ipad in America. They charge enough for the devices they could make them here. Kinda like the super expensive clothing that is made in foreign land. Don't tell me they could not make them in America. We should not have to compete with workers in foreign lands that have no protections that is why we should have tariffs.
    /points a finger at the newbie

  17. #15
    Quote Originally Posted by Chainspell View Post
    /points a finger at the newbie
    Well this "oldbie" says the "newbie" is on the right track. While I'm against the government forcing someone not to outsource, I applaud the inventor for wanting to create manufacturing at home and laugh at those who think the Walmart jobs that (maybe) would have been created if he'd outsourced are worth a flip.
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  18. #16
    Quote Originally Posted by rockerrockstar View Post
    I think outsourcing is bad. I think getting rid of minimum wage is bad too. We should support American made goods. Apple should have made iphone and ipad in America. They charge enough for the devices they could make them here. Kinda like the super expensive clothing that is made in foreign land. Don't tell me they could not make them in America. We should not have to compete with workers in foreign lands that have no protections that is why we should have tariffs.
    Take a couple of economics classes, Comparative Advantage is the key topic you want to pay attention to. The theory essentially explains how protectionism in trade hurts Americans. It protects current American producers, but its bad for the world and bad for foreign producers and bad for American consumers. In the end, you end up with a dead weight loss, a loss of potential gains that you could have had otherwise. As much as it seems intuitive that keeping these jobs in America is the best thing for Americans, it is actually a fallacy and hurts us in the long run. It makes us less competitive in the world, increases prices, slows down advancement into new technologies and new industries.

    Here is the wiki on it which will explain the concept:

    http://en.wikipedia.org/wiki/Comparative_advantage

    A very very good book I would recommend reading is this if you want a very short, but very effective and easy to read explanation of Comparative Advantage in a less theoretical context:

    The Choice: A Fable of Free Trade and Protectionism



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  20. #17
    Quote Originally Posted by MooCowzRock View Post
    Take a couple of economics classes,
    Just wondering... the people that created our current debt crisis and economic situation, the same ones that couldn't see it coming and thought everything was great... those guys; did they take these couple of economics classes you speak of?

  21. #18
    Quote Originally Posted by specsaregood View Post
    Just wondering... the people that created our current debt crisis and economic situation, the same ones that couldn't see it coming and thought everything was great... those guys; did they take these couple of economics classes you speak of?
    Probably, but that doesn't mean they understood them...;P

  22. #19
    Quote Originally Posted by specsaregood View Post
    Just wondering... the people that created our current debt crisis and economic situation, the same ones that couldn't see it coming and thought everything was great... those guys; did they take these couple of economics classes you speak of?
    This is a subject that most economists agree on. Both free market economists and pro-govt intervention economists.

    The division of labor is a fundamental part of what makes us as humans so prosperous. International trade (and outsourcing) is simply the division of labor on a bigger scale.

  23. #20
    Quote Originally Posted by rockerrockstar View Post
    I think outsourcing is bad. I think getting rid of minimum wage is bad too. We should support American made goods. Apple should have made iphone and ipad in America. They charge enough for the devices they could make them here. Kinda like the super expensive clothing that is made in foreign land. Don't tell me they could not make them in America. We should not have to compete with workers in foreign lands that have no protections that is why we should have tariffs.
    It's not possible for Apple to make an Ipad in America and still compete.

  24. #21
    Quote Originally Posted by Jandrsn21 View Post
    It's not possible for Apple to make an Ipad in America and still compete.
    Pure dogma and opinion. There is no proof of that. There are a lot of variables.
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
    "Beware the Military-Industrial-Financial-Pharma-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
    "Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
    "Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul

    Proponent of real science.
    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.

  25. #22
    Quote Originally Posted by rockerrockstar View Post
    I think outsourcing is bad. I think getting rid of minimum wage is bad too. We should support American made goods. Apple should have made iphone and ipad in America. They charge enough for the devices they could make them here. Kinda like the super expensive clothing that is made in foreign land. Don't tell me they could not make them in America. We should not have to compete with workers in foreign lands that have no protections that is why we should have tariffs.
    Most of the reasons/justification for outsourcing boils down to profit margin. How much is necessary. Well that depends on who is running the company. Yeah there are some products that cannot compete with virtual slave labor found in the foreign countries. But there are many that are, it all depends on WHO is determining what the minimal profit margin is necessary. But moraless CEO's sitting around $50,000 rare wood conference tables know their jobs and bonuses depend on them getting the maximun profit margin possible. One area that is often overlooked in these discussions is trade agreements. We do not trade with every country in the world and they do not all trade with us. We have no true Free Market/Trade system. All imports and exports are determined by trade agreements. No country has the RIGHT to sell their goods in our lands and vice versa regardless if their company headquarters is located in America, regardless if they can produce it cheaper than us. Trade agreements skewed by selective tariffs which determines what type of Free Market we have and all that cheap labor benefits overseas will go right out the window along with their arguments if no trade agreement is reached with that country. Free Market then dictates that its better to make goods in America at higher price because the lower cost products cannot be sold here. Trade Agreements come first, then Free Market principles. Trade Agreements are the RULES that Free Markets half to follow.

    All Trade Agreements that the US makes should be in whats in America citizens best interest. But they are not and have not been for a long time and I have no interest in defending such a rigged Free Market system which inherently puts American workers LAST because of American worker wage requirements. I don't recall any part of the Constitution that says we have to trade with ANY country let alone ones that cheat. We are not required to raise the living standards of foreign workers. There is no higher law that says American workers MUST adopt a pay wage that is comparable to the rest of the worlds wage rate. Most of the world has a virtual SLAVE labor wage. Just because you can get virtual slave labor wages in foreign countries does not mean they should be allowed to sell in America under the guise of Free Markets because we have a rigged Free Trade system with countries cheating and not playing by the same rules that we are. You think other countries are gona allow their workforces to be decimated because American workers can do it better and/or cheaper.

    America is one of the only DUMB ASS countries that allows the backbone of their economy to be destroyed like this and yell from the roof tops that the Free Market is working. You have countries practicing in currency manipulations, back room deals with our leaders to sell out our workers in trade agreements, a system now designed to redistribute American wealth overseas because HONEST labor cannot compete with virtual SLAVE labor. But if it has any hint of Free Market in it then it must be defended at all costs. We have NO truely Free Market in the world, the system is rigged against American workers. Trade Agreements come before Free Market principles, and all of Americas Trade Agreements have sold out American workers because our leaders have sold us out for their personal gain and ideology. The powers that be are using the so called Free Market (rigged against US workers) to redistribute American wealth overseas because the labor is cheaper and using the Free Market as a smoke screen so the rich and powerfull can get the biggest dividend on their stocks porfolios.
    No One But Paul

    The Statistics of Impossibility is the new radar you can't outrun.

  26. #23
    Quote Originally Posted by rockerrockstar View Post
    I think outsourcing is bad. I think getting rid of minimum wage is bad too.
    The least you can be paid is zero. The minimum wage laws are intended to see more people get that: zero. It does gain votes as more classes of labor are beholden to the govt for temporary economic security.

  27. #24
    Quote Originally Posted by rockerrockstar View Post
    I think outsourcing is bad. I think getting rid of minimum wage is bad too. We should support American made goods. Apple should have made iphone and ipad in America. They charge enough for the devices they could make them here. Kinda like the super expensive clothing that is made in foreign land. Don't tell me they could not make them in America. We should not have to compete with workers in foreign lands that have no protections that is why we should have tariffs.
    you are not "thinking" at all.
    The ultimate minority is the individual. Protect the individual from Democracy and you will protect all groups of individuals
    Rightful liberty is unobstructed action according to our will within limits drawn around us by the equal rights of others. I do not add 'within the limits of the law' because law is often but the tyrant's will, and always so when it violates the rights of the individual. - Thomas Jefferson
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  29. #25
    Quote Originally Posted by rockerrockstar View Post
    I think outsourcing is bad. I think getting rid of minimum wage is bad too. We should support American made goods. Apple should have made iphone and ipad in America. They charge enough for the devices they could make them here. Kinda like the super expensive clothing that is made in foreign land. Don't tell me they could not make them in America. We should not have to compete with workers in foreign lands that have no protections that is why we should have tariffs.
    The minimum wage is not helpful, because it ends up costing people the opportunity to work. Think about all those jobs that High School students used to get so readily. So many of these jobs have just gone away, because frankly, the job just isn't worth paying minimum wage for. Think about a Mom and Pop grocery store, who would hire someone to sweep up, inside and out, for a couple of hours a day, but they can't justify paying that much for it. So, they don't hire someone to do it, when they once did. There are all kinds of examples like this.

    Then, remember that most jobs come from small-to-medium sized companies.
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  30. #26
    Quote Originally Posted by LibertyEagle View Post
    The minimum wage is not helpful, because it ends up costing people the opportunity to work. Think about all those jobs that High School students used to get so readily. So many of these jobs have just gone away, because frankly, the job just isn't worth paying minimum wage for. Think about a Mom and Pop grocery store, who would hire someone to sweep up, inside and out, for a couple of hours a day, but they can't justify paying that much for it. So, they don't hire someone to do it, when they once did. There are all kinds of examples like this.

    Then, remember that most jobs come from small-to-medium sized companies.
    I've been thinking about this the past few days:

    In the current situation I'm in now, it would be absolutely worth it and I'd even jump at the chance to work for $3-4 an hour. It is WAY better than the $0 I have now.
    I am the spoon.

  31. #27
    This whole argument is rather silly.

    BOTH sides are losing (compartively) because the money changers are skimming so much off the top.

    This is something everyone here should know already.

    Free and open trade is HIGHLY beneficial for both sides - in the modern world it just so happens that the sides are the elite and the rest don't matter. There is NO free market - there is NO free trade.

    There is oligarchical mega trading blocks controlled by 2 primary factions;

    The miliary and the counterfitting banking cabal.

    The fact that the SERFS squable over which serfdom territory is getting screwed over more is laughable.

    DIVIDE AND CONQUER, FOLKS.

    Free trade in the real world is a GOOD thing. Free trade agreements that are NOT free trade (only by name) are ...guess what... NOT free trade.

    Ross Perot's giant sucking sound was/is the result of the MONEY CHANGERS skimming off all of the excess wealth generated by the agreements through forex manpulation and DEBT SLAVERY.

    GET IT? GOT IT?

    Good.
    "Like an army falling, one by one by one" - Linkin Park

  32. #28
    Quote Originally Posted by Seraphim View Post
    The fact that the SERFS squable over which serfdom territory is getting screwed over more is laughable.
    You say, "Hey kids! Did you know that if Jigsaw hadn't kidnapped a bunch of victims and put them into a macabre "WOULD YOU RATHER" torture game--you wouldn't be having this conversation at all?"

    To which their dull eyes give you vacant stares, with cud that is chewed just a bit slower for a moment...until they turn back away and start bickering with each other again over what would be best decisions to make--in Jigsaw's puzzle--which they take for granted as 'normal'.

    It's one the damnedest things in the world, but it makes me understand why all regimes are possible, regardless how insane, at all times.

  33. #29
    Quote Originally Posted by rockerrockstar View Post
    I think outsourcing is bad. I think getting rid of minimum wage is bad too. We should support American made goods. Apple should have made iphone and ipad in America. They charge enough for the devices they could make them here. Kinda like the super expensive clothing that is made in foreign land. Don't tell me they could not make them in America. We should not have to compete with workers in foreign lands that have no protections that is why we should have tariffs.
    I am not a fan of outsourcing or minimum wage. Of course these are both just symptoms of the corrupted system we live in. To heal the patient we must treat the cause of what is ailing him. Not give him cough drops for a broken leg. Especially when those cough drops were stolen from someone else's medicine cabinet.
    I am the spoon.

  34. #30
    Quote Originally Posted by rockerrockstar View Post
    We should support American made goods.
    We should support Americans. By giving them access to high quality products at affordable prices.

    If that means outsourcing to China... then so be it. If you choose to "Buy American" that's your choice, but me.. I $#@!ing love my cheap chinese $#@!.
    Last edited by TheTexan; 12-05-2012 at 05:21 PM.
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