https://www.emptywheel.net/wp-content/uploads/2016/07/Logo-Web.png00emptywheelhttps://www.emptywheel.net/wp-content/uploads/2016/07/Logo-Web.pngemptywheel2006-04-23 13:46:002006-04-23 13:46:00Jobs and Containers
Anonymous says:
Good argument, emptywheel.
The Dems need to play the politics of sound bites and make the Repubs take stands that don’t do well at an emotional level. And a election focused Rove will insure that. I am convinced this Nov will be an emotional, gut-level voting decision election. I believe people want change and what they are looking for is an alternative. So this election has to be about a referendum on Bush and the Repub Congress. The Dems have to overcome the perception they don’t stand for anything and will take any position that tests well in a focus group. They need to demonstrate character and principle, a willingness to stand up to the Bush train wreck and prevent any further disasters. Bush/Cheney will still be in the white house, so the focus ought not be big policy position papers but simple themes like what Dean has articulated. The biggie is creating momentum for change!
Anonymous says:
I like your approach, EW, and I think that this is the only way to approach this problem. But…
Dean’s biggest opponent will be Wal-Mart. Whether their name is on it or not, their influence will be felt up and down in governments from the local to the national. The pressure they will bring will be enormous, and the spectre of much higher prices will most likely scare even those who agree with us in principle. The â€American Worker†is a concept. A $35 undershirt is reality.
Key question for me is, if the presnit says we’re at war, is the public willing to sacrifice monitarily for that war without having a real-life example of port insecurity (if a bomb does go off, then port security becomes literally a radioactive issue)? Close call, I think. How Dean handles this is crucial.
Anonymous says:
Good post, ’Wheel. This is also an example of how â€common good†politics can work. Do we do what is best for the country overall or what is best for business? The GOP, when push comes to shove, always opts for Mammon over God and Money over Security.
If we force those choices more out into the open, maybe people will think about who is pulling the strings and who is profitting, and where and with whom the GOP really stands. If it really were competitive to produce more goods close to home, it would reduce oil consumption as well.
If this is a sample of how the Dems intend to use wedge issues, I’m all for it. I would just like to see it as part of a larger narratrive, but I think that is coming.
Anonymous says:
Excellent post and something that just might get blue collar families to vote Democratic again. In fact, you could apply it across the board to tax policy, foreign policy and fiscal policy. Republicans govern for the privileged few — Democrats at least try to do what’s best for the country and govern for THE GREATER GOOD.
Anonymous says:
I’m just curious: is the 6-point plan really coming from Dean, and is that customary for the DNC chair to set policy like that? Or is he changing the role of the DNC?
Anonymous says:
Interestingly enough, Yahoo posted an AP article about 45 ago which deals solely with Wal-Mart and the political arena. The piece does not touch on the issue of port security and mentions outsourcing of jobs only in passing. But it does cover what a political hot potato Wal-Mart has become.
Anonymous says:
Another post that’s right on the money (in more ways than one). This issue is such a clear winner for the Democrats, they’d be fools to pass it up. It’s easy to understand. It’s right on the principle and the politics. The Republicans have already made themselves vulnerable. Best of all, it eats away at the false perception of the Republicans as strong on national security.
Anonymous says:
landreau
Thanks for the link.
I know you’re right, that there would/will be a big stink in the â€interest†of consumers and Wal-Mart would complain mightiliy if the cost of unnecessary plastic items went up.
But think about it–how much of a case could WalMart make that raising shipping costs (because of security issues) hurt its business. Yes, the cost of its shit would go up. But so would the cost of Target’s shit.
But it would hurt Wal-Mart in two ways in particular. First, Wal-Mart caters to the most strapped consumer. By raising the cost of a t-shirt, you may force the consumer to choose between a second t-shirt or orange juice. Second, as a result of this increased cost for the marginal items, it would skew culture a little away from its current conumption-related focus. Both of which would hurt Wal-Mart. But not sure how much they’d want to talk about it.
Still, it’s the big manufacturers (like auto companies) that would be most hurt. More total shipping costs (in weight and items within the final product. It still would be felt equally among all manufacturers. But it might hurt margins enough to be the straw that breaks GM’s back.
Anonymous says:
Ms Wheel – I so appreciate the Wal-Mart comment above. Part of the problem, a part that drives Republicans up the wall with rage, would be what they call – horror! – a reduction in choice. They want to offer choice in everything but birth. They want to offer color choice of what plastic patio dishes, what pattern linen for the patio table, what decorative motif we can choose. For them, choice (except about birth) is â€what makes this country greatâ€. They actually see a lessening of choice in a gew-gaws an assault on capitalism itself. And those of us on their left, to one degree or another, see so much choice about consumption part of the problem that could go a way toward being solved by making choice about gew-gaws a little pricier, while at the same time wining us the GWOT, employing a hell of a lot more Americans by making the price of tee shirts and plastic shit made in So. Carolina more realistic, not to mention all those new jobs created by actually inspecting the cargo coming into this country. Whew, that is a long and unwieldy sentence, but WTF, y’all know what I’m talkin’ about.
Anonymous says:
Driving home the sound bite of 100% inspection makes more sense than trying to nuance the number for the statistically correct level. Everybody knows that the less than 5% level were currently using is woefully low, almost guaranteed to invite disaster. The correct number is probably a good random selection of some higher level, say 25%. That’s a five-fold increase, but the average voter isn’t going to be able to understand the difference in cost or effect, particularly after the Republicans spin their story to justify their inaction. The only way to highlight the difference in concern and policy is to hammer home the 100% concept. Strip away the mirage and force the Republicans to defend their lack of attention and action on real homeland defense
Anonymous says:
Praha
Well, let Dean hammer the 100% number. Let the next President, whoever he or she is, hammer the â€more inspections.†That way, 100% dosen’t become the next â€No new taxes†pledge.
Anonymous says:
New Orleans wasn’t protected from flooding because building adequate levees was â€too expensive.†The total cost of Katrina — to taxpayers, insurance companies, individuals…. — will make that â€too expensive†look like pocket change.
Anonymous says:
â€It’s that remarkably low fee that makes the whole arrangement possible. Because if it cost a lot of money to ship t-shirts from China, then we wouldn’t be buying our t-shirts in China, we’d be buying them in South Carolina. American t-shirt makers would be able to compete, even in spite of the much cheaper wages those Chinese t-shirt workers make.†And really, THAT is the crux of the bisquit.
Anonymous says:
Not to mention that the plastic junk itself is made from oil.
Anonymous says:
Re your previous post on how did Israel know about the war so fast, no need for anybody to call.
Israeli communications firm installed and/or manages cell phone/blackberry coms for Congress, WH, and part of the Pentagon. Whew! I feel safer now.
Anonymous says:
It would be useful to develop some actual costs for an individual container filled with a low cost consumer goods. From a fantastic Wired.com piece, â€The 20-Ton Packet†(http://tinyurl.com/hzaod):
â€â€¦Assuming there’s a modest $20,000 worth of shoes, shirts, clock radios, and computers in each 20-foot container, a fully loaded 6,000-TEU ship is hauling $120 million worth of cargo. Since each ship costs about $120 million itself, that’s about a quarter-billion dollars afloat. At 5 percent interest, that’s nearly $33,000 ticking away each day on just the inventory and the ship’s value. That’s why efficiency matters. And efficiency can be increased in only a limited number of ways.â€
Republicans are going to focus on the billions of dollars of cost to the consumer.They may even call it a tax! But if you assume there are 4000 $5 items in each container and each individual container can be inspected for $500 (likely far less) Democrats should ask, â€The GOP thinks paying .13 cents more for a t-shirt Made in China is too much to secure our ports from nuclear terrorism. Do you?â€
Anonymous says:
More on my estimated $500 per TEU security cost.
A TEU is a standard unit of capacity, twenty-foot equivalent units – named for the standard container size 20’ x 8’ x 8’6â€. Most containers are actually 40 feet and have a capacity of 2TEUs. A 6,000-TEU ship would have incur $3 million dollars in inspection costs each time it offloaded at $500 per container. That is 2.5% of the value of the merchandise on board. So inspecting a ship full of $10,000 cars would increase the cost to $10,250 each. Inspecting a ship full of ten dollar lamps would make them $10.25 each.
But is the $3 million per 6,000-TEU security inspection cost reasonable (based on $500 per TEU)? Assume each container required 6 hours of labor to inspect at $50/hour total (benefits, admin, etc.). That’s $300 per TEU in labor costs. That leaves $1.2 million per 6,000-TEU ship offloaded to spend in infrastructure improvements to increase security and offset delay in container clearance caused by inspection with things such as improved access roads to ports and modernization.
The Port of Newark handled 2,334,393 loaded TEUs in 2001. About 70% of that was imports. So that’s 1.634 million TEUs for inspection in Port of Newark. Is it going to cost $817 million dollars to inspect all of Newarks cargo in a given year? These figures sound high to me and I suspect some kind of 100% inspection program could be had for 1/3 of my cost estimates but I’ll stick with $500 for the sake of arguement.
After 9/11 the airlines instituted security surcharges that were instantly accepted. The smart thing politically is to call this a security surcharge and adjust the cost per TEU. A container inspection program that added a security fee of 1% of declared value (w/$500 minimum per TEU) would be very palatable to the voters and provide hundreds of millions of dollars to individual ports to provide local solutions with national standards to keep us secure.
Why is the GOP fighting this so hard? Because the average freight fee per TEU is only about $1300 (see P&O Nedlloyd link). So even a lowball estimate of $130 per TEU security costs is a 10% increase in shipping costs. Ocean shipping is CHEAP. But that’s the relative cost of security-to-ocean freight shouldn’t be an issue. Democrats need to equate the security surcharge for passenger flight with a security surcharge for freight and they will prevail.
Anonymous says:
joejoejoe
Thanks for the real numbers. I was looking myself. Found a really cool stat about how you can send a whole bale of used clothes to Africa for about $400 dollars (because the container owners are just giving the outbound space away, literally). But not inbound price.
The numbers of items are likely much much higher (t-shirts at that stage are worth 1.25 each). But the problem is inspections would likely create a bottleneck, so the cost (the interest) could be more than $500.
Still, the cost is mostly negligible at the individual t-shirt level. The Walton clan would have to cut back on their unearned billionaire fun. For something like car parts, though, the cost would be higher.
But as I said (and in today’s post), part of the point is to factor in all the costs we’re currently externalizing, then let the market decide whether it’s efficient to produce things globally or not. Add in those costs, and t-shirts will probably still be coming from China. But car parts might not be.
Anonymous says:
And let’s assume that $10,000 car is a civic (Well, it’d be closer to 14,000 but still). The cost in port security would not even make up for the $1500 difference that Ford or GM pays into health care. So it’s not like it’d put Honda out of business. But it’d probably reflect a slight increase on new cars across the industry that would raise margins for the companies that use American labor.
Anonymous says:
ew – â€so the cost (the interest) could be more than $500.â€
I understand there are some hidden costs in interest and compliance that will be incurred by the shipping line, shipper and port operator but those costs are hard to articulate in a GOP talking point – Democrats just need to develop ammo to fire back when Republicans say â€it’s too expensive to do itâ€. All the secondary benefits you highlight so brilliantly with regards to trade and protection of US manufacturing are merely secondary benefits related to the primary focus of inspecting all the freight. Republicans say we can’t afford to spend .13 cents more on a t-shirt to prevent nuclear terrorism – what do the voters you say?
Inspect all cargo? The GOP can’t do it. Build world class levees in New Orleans? The GOP can’t do it. Deliver food and water to the Superdome in less than 5 days? The GOP can’t do it. Healthcare for all Americans? The GOP can’t do it. Engage our enemies in talks like Reagan did at his many summits? Today’s GOP can’t do it. Capture Bin Laden? And so it goes…
Republicans are good at buying a half billion dollars worth of trailers from a crony and then delivering them to Arkansas, 445 miles from New Orleans. It was Democrats who built Social Security, built Medicare, and landed on the Moon. Democrats electrified rural America. Herbert Hoover was a Republican but it was Democrats who finished the Hoover Dam. That’s how Democrats have to talk – focus on the positive achievements of Democrats and when the GOP counters with about how much these things cost respond with how much imcompetence costs – the reconstruction waste in Iraq, and crony costs of Katrina.
Anonymous says:
And, as I suggested above:
Build a multibillion dollar fence between us and Mexico (or buy a fleet of ATVs Bush can go do a photoop on), that they’ll do. Not because it’s effective or even because they want to increase security. But because it feeds their racist base.
But invest to make sure we have an effective means of security against all measure of illicit exposure. Nope, no can do.
Good argument, emptywheel.
The Dems need to play the politics of sound bites and make the Repubs take stands that don’t do well at an emotional level. And a election focused Rove will insure that. I am convinced this Nov will be an emotional, gut-level voting decision election. I believe people want change and what they are looking for is an alternative. So this election has to be about a referendum on Bush and the Repub Congress. The Dems have to overcome the perception they don’t stand for anything and will take any position that tests well in a focus group. They need to demonstrate character and principle, a willingness to stand up to the Bush train wreck and prevent any further disasters. Bush/Cheney will still be in the white house, so the focus ought not be big policy position papers but simple themes like what Dean has articulated. The biggie is creating momentum for change!
I like your approach, EW, and I think that this is the only way to approach this problem. But…
Dean’s biggest opponent will be Wal-Mart. Whether their name is on it or not, their influence will be felt up and down in governments from the local to the national. The pressure they will bring will be enormous, and the spectre of much higher prices will most likely scare even those who agree with us in principle. The â€American Worker†is a concept. A $35 undershirt is reality.
Key question for me is, if the presnit says we’re at war, is the public willing to sacrifice monitarily for that war without having a real-life example of port insecurity (if a bomb does go off, then port security becomes literally a radioactive issue)? Close call, I think. How Dean handles this is crucial.
Good post, ’Wheel. This is also an example of how â€common good†politics can work. Do we do what is best for the country overall or what is best for business? The GOP, when push comes to shove, always opts for Mammon over God and Money over Security.
If we force those choices more out into the open, maybe people will think about who is pulling the strings and who is profitting, and where and with whom the GOP really stands. If it really were competitive to produce more goods close to home, it would reduce oil consumption as well.
If this is a sample of how the Dems intend to use wedge issues, I’m all for it. I would just like to see it as part of a larger narratrive, but I think that is coming.
Excellent post and something that just might get blue collar families to vote Democratic again. In fact, you could apply it across the board to tax policy, foreign policy and fiscal policy. Republicans govern for the privileged few — Democrats at least try to do what’s best for the country and govern for THE GREATER GOOD.
I’m just curious: is the 6-point plan really coming from Dean, and is that customary for the DNC chair to set policy like that? Or is he changing the role of the DNC?
Interestingly enough, Yahoo posted an AP article about 45 ago which deals solely with Wal-Mart and the political arena. The piece does not touch on the issue of port security and mentions outsourcing of jobs only in passing. But it does cover what a political hot potato Wal-Mart has become.
Another post that’s right on the money (in more ways than one). This issue is such a clear winner for the Democrats, they’d be fools to pass it up. It’s easy to understand. It’s right on the principle and the politics. The Republicans have already made themselves vulnerable. Best of all, it eats away at the false perception of the Republicans as strong on national security.
landreau
Thanks for the link.
I know you’re right, that there would/will be a big stink in the â€interest†of consumers and Wal-Mart would complain mightiliy if the cost of unnecessary plastic items went up.
But think about it–how much of a case could WalMart make that raising shipping costs (because of security issues) hurt its business. Yes, the cost of its shit would go up. But so would the cost of Target’s shit.
But it would hurt Wal-Mart in two ways in particular. First, Wal-Mart caters to the most strapped consumer. By raising the cost of a t-shirt, you may force the consumer to choose between a second t-shirt or orange juice. Second, as a result of this increased cost for the marginal items, it would skew culture a little away from its current conumption-related focus. Both of which would hurt Wal-Mart. But not sure how much they’d want to talk about it.
Still, it’s the big manufacturers (like auto companies) that would be most hurt. More total shipping costs (in weight and items within the final product. It still would be felt equally among all manufacturers. But it might hurt margins enough to be the straw that breaks GM’s back.
Ms Wheel – I so appreciate the Wal-Mart comment above. Part of the problem, a part that drives Republicans up the wall with rage, would be what they call – horror! – a reduction in choice. They want to offer choice in everything but birth. They want to offer color choice of what plastic patio dishes, what pattern linen for the patio table, what decorative motif we can choose. For them, choice (except about birth) is â€what makes this country greatâ€. They actually see a lessening of choice in a gew-gaws an assault on capitalism itself. And those of us on their left, to one degree or another, see so much choice about consumption part of the problem that could go a way toward being solved by making choice about gew-gaws a little pricier, while at the same time wining us the GWOT, employing a hell of a lot more Americans by making the price of tee shirts and plastic shit made in So. Carolina more realistic, not to mention all those new jobs created by actually inspecting the cargo coming into this country. Whew, that is a long and unwieldy sentence, but WTF, y’all know what I’m talkin’ about.
Driving home the sound bite of 100% inspection makes more sense than trying to nuance the number for the statistically correct level. Everybody knows that the less than 5% level were currently using is woefully low, almost guaranteed to invite disaster. The correct number is probably a good random selection of some higher level, say 25%. That’s a five-fold increase, but the average voter isn’t going to be able to understand the difference in cost or effect, particularly after the Republicans spin their story to justify their inaction. The only way to highlight the difference in concern and policy is to hammer home the 100% concept. Strip away the mirage and force the Republicans to defend their lack of attention and action on real homeland defense
Praha
Well, let Dean hammer the 100% number. Let the next President, whoever he or she is, hammer the â€more inspections.†That way, 100% dosen’t become the next â€No new taxes†pledge.
New Orleans wasn’t protected from flooding because building adequate levees was â€too expensive.†The total cost of Katrina — to taxpayers, insurance companies, individuals…. — will make that â€too expensive†look like pocket change.
â€It’s that remarkably low fee that makes the whole arrangement possible. Because if it cost a lot of money to ship t-shirts from China, then we wouldn’t be buying our t-shirts in China, we’d be buying them in South Carolina. American t-shirt makers would be able to compete, even in spite of the much cheaper wages those Chinese t-shirt workers make.â€
And really, THAT is the crux of the bisquit.
Not to mention that the plastic junk itself is made from oil.
Re your previous post on how did Israel know about the war so fast, no need for anybody to call.
Israeli communications firm installed and/or manages cell phone/blackberry coms for Congress, WH, and part of the Pentagon. Whew! I feel safer now.
It would be useful to develop some actual costs for an individual container filled with a low cost consumer goods. From a fantastic Wired.com piece, â€The 20-Ton Packet†(http://tinyurl.com/hzaod):
â€â€¦Assuming there’s a modest $20,000 worth of shoes, shirts, clock radios, and computers in each 20-foot container, a fully loaded 6,000-TEU ship is hauling $120 million worth of cargo. Since each ship costs about $120 million itself, that’s about a quarter-billion dollars afloat. At 5 percent interest, that’s nearly $33,000 ticking away each day on just the inventory and the ship’s value. That’s why efficiency matters. And efficiency can be increased in only a limited number of ways.â€
Republicans are going to focus on the billions of dollars of cost to the consumer.They may even call it a tax! But if you assume there are 4000 $5 items in each container and each individual container can be inspected for $500 (likely far less) Democrats should ask, â€The GOP thinks paying .13 cents more for a t-shirt Made in China is too much to secure our ports from nuclear terrorism. Do you?â€
More on my estimated $500 per TEU security cost.
A TEU is a standard unit of capacity, twenty-foot equivalent units – named for the standard container size 20’ x 8’ x 8’6â€. Most containers are actually 40 feet and have a capacity of 2TEUs. A 6,000-TEU ship would have incur $3 million dollars in inspection costs each time it offloaded at $500 per container. That is 2.5% of the value of the merchandise on board. So inspecting a ship full of $10,000 cars would increase the cost to $10,250 each. Inspecting a ship full of ten dollar lamps would make them $10.25 each.
But is the $3 million per 6,000-TEU security inspection cost reasonable (based on $500 per TEU)? Assume each container required 6 hours of labor to inspect at $50/hour total (benefits, admin, etc.). That’s $300 per TEU in labor costs. That leaves $1.2 million per 6,000-TEU ship offloaded to spend in infrastructure improvements to increase security and offset delay in container clearance caused by inspection with things such as improved access roads to ports and modernization.
The Port of Newark handled 2,334,393 loaded TEUs in 2001. About 70% of that was imports. So that’s 1.634 million TEUs for inspection in Port of Newark. Is it going to cost $817 million dollars to inspect all of Newarks cargo in a given year? These figures sound high to me and I suspect some kind of 100% inspection program could be had for 1/3 of my cost estimates but I’ll stick with $500 for the sake of arguement.
After 9/11 the airlines instituted security surcharges that were instantly accepted. The smart thing politically is to call this a security surcharge and adjust the cost per TEU. A container inspection program that added a security fee of 1% of declared value (w/$500 minimum per TEU) would be very palatable to the voters and provide hundreds of millions of dollars to individual ports to provide local solutions with national standards to keep us secure.
Why is the GOP fighting this so hard? Because the average freight fee per TEU is only about $1300 (see P&O Nedlloyd link). So even a lowball estimate of $130 per TEU security costs is a 10% increase in shipping costs. Ocean shipping is CHEAP. But that’s the relative cost of security-to-ocean freight shouldn’t be an issue. Democrats need to equate the security surcharge for passenger flight with a security surcharge for freight and they will prevail.
joejoejoe
Thanks for the real numbers. I was looking myself. Found a really cool stat about how you can send a whole bale of used clothes to Africa for about $400 dollars (because the container owners are just giving the outbound space away, literally). But not inbound price.
The numbers of items are likely much much higher (t-shirts at that stage are worth 1.25 each). But the problem is inspections would likely create a bottleneck, so the cost (the interest) could be more than $500.
Still, the cost is mostly negligible at the individual t-shirt level. The Walton clan would have to cut back on their unearned billionaire fun. For something like car parts, though, the cost would be higher.
But as I said (and in today’s post), part of the point is to factor in all the costs we’re currently externalizing, then let the market decide whether it’s efficient to produce things globally or not. Add in those costs, and t-shirts will probably still be coming from China. But car parts might not be.
And let’s assume that $10,000 car is a civic (Well, it’d be closer to 14,000 but still). The cost in port security would not even make up for the $1500 difference that Ford or GM pays into health care. So it’s not like it’d put Honda out of business. But it’d probably reflect a slight increase on new cars across the industry that would raise margins for the companies that use American labor.
ew – â€so the cost (the interest) could be more than $500.â€
I understand there are some hidden costs in interest and compliance that will be incurred by the shipping line, shipper and port operator but those costs are hard to articulate in a GOP talking point – Democrats just need to develop ammo to fire back when Republicans say â€it’s too expensive to do itâ€. All the secondary benefits you highlight so brilliantly with regards to trade and protection of US manufacturing are merely secondary benefits related to the primary focus of inspecting all the freight. Republicans say we can’t afford to spend .13 cents more on a t-shirt to prevent nuclear terrorism – what do the voters you say?
Inspect all cargo? The GOP can’t do it. Build world class levees in New Orleans? The GOP can’t do it. Deliver food and water to the Superdome in less than 5 days? The GOP can’t do it. Healthcare for all Americans? The GOP can’t do it. Engage our enemies in talks like Reagan did at his many summits? Today’s GOP can’t do it. Capture Bin Laden? And so it goes…
Republicans are good at buying a half billion dollars worth of trailers from a crony and then delivering them to Arkansas, 445 miles from New Orleans. It was Democrats who built Social Security, built Medicare, and landed on the Moon. Democrats electrified rural America. Herbert Hoover was a Republican but it was Democrats who finished the Hoover Dam. That’s how Democrats have to talk – focus on the positive achievements of Democrats and when the GOP counters with about how much these things cost respond with how much imcompetence costs – the reconstruction waste in Iraq, and crony costs of Katrina.
And, as I suggested above:
Build a multibillion dollar fence between us and Mexico (or buy a fleet of ATVs Bush can go do a photoop on), that they’ll do. Not because it’s effective or even because they want to increase security. But because it feeds their racist base.
But invest to make sure we have an effective means of security against all measure of illicit exposure. Nope, no can do.