[quote=“Durins Bane”]Don’t know much about economics (about the only I thing I know is how to make and spend money ) but I think irresponsible spending habits in America is also big trouble. Lots of folks going into debt for crap. Getting into debt for stuff they can do without.
It seems to me that it is more important to have a credit rating than actual money back in the States.[/quote]
Personal debt is, of course, a bad thing in general, but there are many ways to look at it. Part of what makes the American economy so strong is that the American consumer spends and spends and spends. This not only keeps the American economy afloat, but has more than once kept the world economy humming along. If everyone saves, no one spends. This is what happened during the Great Depression, which was essentially a vicious cycle of nonspending. Only with massive spending by the U.S. government to finance WW2 was this cycle broken.
Americans have a superb financial system. Look at the U.S. system as one that allows American consumers to get the most enjoyment out of their money. While the lack of a savings cushion can sometimes lead to trouble for some people, in the vast majority of cases it does not. People generally know their limits and they do a good job of working within them.
Is is better, by the way, that Chinese have a high savings rate, when that money is confiscated in state-owned banks that are insolvent because they lend to state-owned enterprises that are unproductive?
how many americans are in prison today? about two million.
how many US dollars does the PRC buy per day in propping up the greenback? IIRC, about 600,000,000 US dollars per day. that is china alone. do americans directly elect their president? no.
we have already seen americans sneaking into china. what else is a yank coming to taiwan on a tourist visa to teach english to be classified as by the UN?
Cold front …I hear what you are saying. My sister and her husband are doing all they can to help the US economy. He makes $100,000+ a year and they are constanly whinging about money. Of course, they have a lot of toys…
I get queasy when I hear them talk about their spending habits.
You need to keep focused on the subject at hand. You seem to think that throwing out various statistics about the U.S. says something about the American empire in this debate when all it says is that your mind has a good deal staying on the topic.
The high prison population of the U.S. is irrelevant to any national comparison of strength because it’s statistically insignificant. If the U.S. had three million people in jail would it be weaker? No. If it had only 500,000 in jail would it be stronger? No. That’s because when you have a population of more than 280 million, a million here or there becomes insignificant to any broad comparison of national power. The U.S. has had a comparatively high prison population for years, but this hasn’t affected its national strength in any noticeable way.
So? Besides being an interesting fact, do you have any idea what this means in practical terms for national strength? Do you think hoarding U.S. dollars (and then sending them back to us to finance our deficits) has any practical significance for that question? If anything, it shows the weakness of Asian financial markets. For years, countries like Japan, South Korea, Taiwan, Hong Kong, and SE Asian countries have been doing the same thing: running trade surpluses that allow them to build up their stores of U.S. dollars, which they then turn around and invest in U.S. Treasury bonds (for the most part) or the U.S. stock market.
English teachers in Asia are U.S. cultural exports. The high demand for English teachers is a reflection of the strength of the U.S. system, not a weakness. (Some of the people who come here to teach are so pathetic, one wonders why anyone in their right mind would pay them anything.)
I don’t recall having mentioned anything about “unfair” trade, and I can’t quite see what you are interpreting as a “lament”. I think it is perfectly fair that, if goods can be manufactured more cheaply in China than in the U.S. without sacrificing quality, then China is where the goods should be manufactured. Then China prospers and the U.S. loses out until it can either find a way to compete with China in the same industries (unlikely) or develop new industries in which it has a competitive advantage.
The same applies to those back-office white-collar jobs – if Indians can do them at one-tenth the salary of their American counterparts and do them just as well, then India is where they should be done now that we have the technology to make that practicable.
I’m totally in favour of a free and open global trading regime (in goods and services alike), and am strongly opposed to protectionist lobbies in the U.S. and anywhere else. Indeed, I fear that, when the U.S. economy really starts to suffer from not being able to compete on an even playing-field with other countries, Washington will start putting up more and more protectionist barriers (as Bush has already shown he’s more than willing to do at the slightest excuse). That can only end up exacerbating their own problems and causing great harm to the whole world.
[quote=“Durins Bane”]Cold front …I hear what you are saying. My sister and her husband are doing all they can to help the US economy. He makes $100,000+ a year and they are constanly whinging about money. Of course, they have a lot of toys…
I get queasy when I hear them talk about their spending habits.[/quote]
Hahaha! I know what you’re saying. If it helps to ease your queasiness, think of them as patriots who are just doing their best to keep the national economy spinning.
Not complaining, but merely pointing to the impact this will inevitably have on the job market in the U.S. It’s something that a lot of Americans (and those who govern them) have good cause to be worried about.
Worrying about where you will find work is fine, but it’s not like this is an unprecedented situation. A century ago, most Americans worked on farms. Fifty years ago, most worked in manufacturing. About thirty years ago, the high productivity gains in manufacturing and trade began to cause a shift in employment towards the services. Within the service sector recently, there has been a churning towards certain segments of the service sector.
All of this is quite natural in a capitalist economy and all of it has taken place in the context of steady growth and an increase in productivity.
[quote=“Cold Front”]A century ago, most Americans worked on farms. Fifty years ago, most worked in manufacturing. About thirty years ago, the high productivity gains in manufacturing and trade began to cause a shift in employment towards the services.
All of this is quite natural in a capitalist economy …[/quote]
Employment shifting from agriculture to industry to services is undoubtedly the normal progression of modern economic develpment. But after that, there is no other sector to shift into. Having a majority of GDP and employment generated by the service sector is characteristic of a mature economy. So when the service sector jobs start to leak away, that’s a sign of big trouble to come.
[quote=“Omniloquacious”][quote=“Cold Front”]A century ago, most Americans worked on farms. Fifty years ago, most worked in manufacturing. About thirty years ago, the high productivity gains in manufacturing and trade began to cause a shift in employment towards the services.
All of this is quite natural in a capitalist economy …[/quote]
Employment shifting from agriculture to industry to services is undoubtedly the normal progression of modern economic develpment. But after that, there is no other sector to shift into. Having a majority of GDP and employment generated by the service sector is characteristic of a mature economy. So when the service sector jobs start to leak away, that’s a sign of big trouble to come.[/quote]
The service sector is infinitely malleable. Thirty years ago, the U.S. service sector had very few jobs in the computer industry and no jobs in what we would now call e-commerce or anything involved with the internet. Biotechnology was just a gleam in a few scientists’ eyes. The revolution in financial information hadn’t begun yet. All of these service sectors were primarily developed in the United States and American workers have been the prime beneficiaries of them. Not the Chinese. Not the Filipinos. Not the Indians. Not the Japanese. Not the Europeans. But Americans. And given the superb universities and research-oriented facilities in the United States, that will be the case for the foreseeable future.
What you think of as a normal progression of modern economic development has, in the past, not been thought of as normal at all. People have complained for years that somehow the U.S. is producing or pricing itself out of work. These critics fail to see that technology continues to transform economic development in modern countries.
The single best statistic which reflects an economy’s strength is its productivity increases. Over the last eight years, the U.S. has undergone remarkable growth in its productivity (output per hour, annual average % change).
From the 1800s to 1940, the U.S. averaged about a 1% increase a year in productivity.
From 1945 to the 1973 were America’s golden years: productivity growth was at nearly 3% a year.
From 1973 to 1995, the U.S. reverted to type, averaging about 1% a year.
From 1995 to the present, the U.S. has averaged better than 2% in productivity increases, not quite as good as the fifties and sixties, but better than other period in American history.
Economists believe there is a close correlation between productivity increases and wages. If productivity doubles, wages generally double. It doesn’t happen within the same year or two, but it’s close enough.
I don’t think the politicians WANT to solve the problem – because solving it usually means getting the government out of the picture.
Funny you should mention medical insurance. I found a bill from two years ago while cleaning; it was almost exactly half of what the bill is now – $1812/year vs. $3612/year. It’s doubled in, literally, I kid you not, two years.
[quote=“Cold Front”][quote=“Omniloquacious”]MaPoDoFu and Tomas’s concerns about employment prospects are only too valid. The U.S. is set to lose millions of white-collar jobs to countries like India and the Philippines in the near future – the Internet is proving to be even more of an economic leveller than many had envisaged. With manufacturing taken over by China, and farming more and more in the hands (or rather, machines) of giant agro-industrial enterprises, just where will the average American be able to look to earn a living? The incomes of whatever jobs remain will continuously shrink, the consumer spending bubble will pop, tax revenues will be vastly insufficient, and the U.S. will be in very deep trouble.
I wonder when we’ll start to see the first waves of American emigrants trying to sneak illegally into China and elsewhere in East Asia?[/quote]
How about never.
Americans will find their living where thay have always found their living: by creating the new industries that spur productivity and growth. Do you think trade with poor countries is something new under the sun? Many poor countries, of course, have the same lament as you have: that trade with wealthy countries is unfair to them because they can’t compete with the machines and high productivity found in the West.
Generally speaking, free trade is a lubricant for higher standards of living to all who are involved in it. Certainly trade can be hard on some segments of the U.S. economy, but it’s a boon for other segments, and those segments are usually better paying than the traditional ones.[/quote]
Yeah, I used to sing the “Free Trade Rag” a lot too. I still do, since it seems like it’s the only way a lot of people can afford to buy crap from Wal-Mart any more. But the jobs that we’re losing now are kinda core. They’re all the white-collar stuff that everyone aspired to: accountant, IT staffer, actuary, stock analyst, engineer. The call centers that used to set up in rural areas (cheap labor, just gotta speak English) have moved to India (much cheaper labor, just gotta speak English and make up a cute story about how you’re from Smallville, Indiana and went to West Ridge High School and have a cat named Muffy and a used Dodge Neon – no shit, these Indian call centers train their employees with just such stories so that people in the U.S. think their call is being handled at least within the country).
Biotech research is still happening in the U.S., but a lot of the gruntwork is being done outside the U.S., both because regulations are looser and because labor is so much cheaper.
There’s no “next wave” coming up. Biotech was supposed to be it, but it’s not going to need even a tenth of the people that computing soaked up. Manufacturing is gone, low-grade service positions are gone or being eliminated.
I can see space industries becoming popular, once we get a beanstalk up. But the earliest projection I’ve heard on that is fifteen years, and that’s assuming we don’t turn away from space. Too late for me in any case; I’ll be fat and fifty by then.
Au contraire, I believe I am taking the Internet bubble into account. I see it as being very similar to the Japanese bubble. Huge amounts of money were flushed down the toilet – I know this first-hand, since I helped eat some of the sushi and drink some of the champagne. I fondly remember four of us going out to dinner on a late worknight, spending $200+ on the dinner, and putting it all on the company’s tab – and the company paid up without even the slightest “what the hell did you guys spend $200 on??” I remember weekly parties with more microbrews, scantily-clad female coworkers (hired more for cleavage than for brains), and expensive eats than you could shake your stick at.
One could say that this “working through the excesses” is EXACTLY what I’m considering when I write that the U.S. economy is on its way to collapse. Japan pretty much did, and I am concerned that the U.S. economy may as well.
But I think the core problem is that eventually, a high-flying country becomes too expensive to have work done in. Japan simply couldn’t extract Y20000 per hour out of everyone in the country; some people are only worth Y1000/hour before it becomes cheaper to import a a Mexican, or an Indian, or use North Korean slave labor, or buy a robotic dog and train it, or whatever. Or export the job and shake off some janitors and secretaries while you’re at it.
Shedding higher-valued jobs is often just a matter of communications. We’ve got 'em now, so use 'em. And the U.S. doesn’t have the national-identity baggage that Japan does, where it’s practically treasonous to hire a non-Japanese. In the U.S., companies are overjoyed to be able to fly in some Bangladeshi and pay him minimum wage, instead of paying an American an average wage.
But I guess I digress. I gaze into my crystal ball and I see increasing gloom as people aren’t getting hired back. I see consumers pulling back on spending this Christmas – most of the people I know are planning on cutting back on gifts, because they have to. I see increasing job losses next year, and I see falling interest rates, and I see deflation as even low rates can’t get industries to invest any more, because with the crappy economy, people don’t want to buy another antenna-ball assortment as a joke gift for their cousin.
But maybe I’m overly pessimistic. I dunno. I was promised a recovery by the end of 2001, and I saw no sign of any recovery even before psychos started crashing jets into the WTC. I was told there would be a recovery in 2002, and nothing appeared. Now it’s nearly 4Q03 and I see mixed signals – good one week, bad the next.
I plan to watch the Christmas retail sales information closely. If it’s disappointing, watch out below.
I hear bankruptcy attorneys are needed. And English teachers in Taiwan. Gee’up! Wagons ho!
I don’t follow your reasoning. If you lose your job, you can’t go to Wal-Mart. Either you believe free trade has some sort of positive value or you do not. If you believe core U.S. jobs are being lost because of trade, then you should obviously be against it.
Why would anyone in their right mind want their national economy to corner the market on call centers? That’s simply grunt work. Farm it out and let the developing nations of the world take it up.
Have you any proof that significant numbers of good U.S. jobs – stock analysts, engineers, etc. – are going to the Philippines and India? Some engineering and analysis, by the way, is not much better than grunt work and can effectively be farmed out by U.S. firms, but even then, I doubt it’s substantial.
The U.S. dominates the biotech field. The number of U.S. biotechnology companies is something like 75% of the world total and those have their offices and labs in the U.S. There are a few examples of areas (like human cloning or research on fetal tissue) where the U.S. legal system is an obstacle, but in general the U.S. is biotech friendly, and third world countries are simply not going to take the lead in this area.
Unless you somehow believe that technology stopped developing in the 1990s, there’s always a new wave, even though it’s impossible to identify what exactly that wave will be. I threw out biotechnology as an example. Biotechnology may not be it. Or perhaps only one area of biotechnology may be it. Or perhaps a revolution in financial business. Or perhaps space. Or perhaps the oceans. Or perhaps in energy. Nobody really knows. If even Bill Gates was underestimating, as late as the second half of the 1990s, the impact of the internet on the economy, then it’s unlikely we here in Forumosa will be able to pinpoint exactly what direction technology will go. But technology is not going to stop, period. On that, there’s no serious argument. There’s always some sort of development on the technological frontier and the U.S. is uniquely qualified to take advantage of it first.
Most service positions (low-grade or otherwise) are not being eliminated. Try having a Filipino or Indian (who’s not in the U.S.) cut your hair, cook your steak, clean your house, wash your car… or on the higher end, sell you a car, build your house, etc. A huge percentage of service jobs are simply not transferrable.
Fat fifty-year olds can’t invest in the economy? The U.S. national economy is run by fat fifty-year olds.
There’s no real comparison between the U.S. and Japanese economic bubbles. Paul Krugman likes to sensationalize the similarities, but the U.S. economy is much more flexible than the Japanese economy, and the IT revolution in the U.S. was real, even if it was hyped up to an unsustainable point.
I’m shocked, shocked! that no one has called that idiot who said that jazz came from France on his apalling ignorance. Jazz was an artform invented in the late 19th/early 20th century by African-American musicians. Louis Armstrong and Scott Joplin were not Frenchmen. Period.
And yes, rock’n’roll is an indigenous American folk art-form as well. The British musicians like the Rolling Stones and the Beatles gladly admitted their inspiration came originally from imitating black American musicians like Chuck Berry and Motown and the great bluesmen. This idiot mentioned “Pink Floyd” apparently unaware that this U.K. band’s name was taken in homage to one of those ancient African-American blues figures that most of the bands in Britain were slavishly worshipping at the time. Hit this man with a cluestick until he understands the history of his own culture.
Mapodofu, Arcosanti was designed by some Italian dude, unless you mean the hippies who live in it now.
Ishmael2, the U.S. unemployment rate UNDERSTATES problems in that it only counts as unemployed (a) people who are actively looking for a job, as opposed to having long since thrown up their hands in despair, and (b) people who have no job whatsoever. Of course, defining “underemployment” is problematic given the number of aspiring actors forced to wait tables, but surely we have to have SOME way to take into account the fates of those whose apparently realistic career expectations didn’t pan out.