A thought to ponder Anyone?
- Thread starter finance77
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I think people and economists began saying exactly the same things after the Korean War ....and they've been saying over and over and over and over .....
And strangely, the US hasn't collapsed and, equally important, it's standard of living keeps climbing.
"The sky is falling! The sky is falling!"
Baron Max
And strangely, the US hasn't collapsed and, equally important, it's standard of living keeps climbing.
"The sky is falling! The sky is falling!"
Baron Max
What did people say in 1929?
The Depression was not caused by the lack of competitiveness with foreign nations of the world ...which is what the topic is all about.
Baron Max
A few people have stated that. The majority haven't.
All it takes is for people to take Economics 101 in highschool or university/college to realize why the US endures.
Even though it is losing a lot of jobs overseas, this is all a part of competitive advantage, specialization, and trade.
At the same time, this is also the reason why American won't always be at the top of the food chain forever. There will come a time (probably some time this century) when China or India will be #1. But that's just the way the world, business, and economics works.
Our standard of living will fall if our productivity falls. Not slows, actually falls, as in, enter a recession/depression.
Productivity isn't linked very closely to export for America, the US has the world's biggest economy, and imports far more than it exports. Exports just aren't that important for us.
Productivity isn't linked very closely to export for America, the US has the world's biggest economy, and imports far more than it exports. Exports just aren't that important for us.
That seems like a relatively easy fact to look up, rather than going on faith.
I looked it up once. Productivity in the US is higher than in Europe, but only because they work longer and have less holiday.
Feel free to have a higher productivity.
Feel free to have a higher productivity.
This is a good point often overlooked. Perhaps it explains why Brazil is, As Charles de Gaulle said,: "The land of the future, and it always will be!"
Most weeks seem to have some holiday. All the standard ones of most western countries, one day for many of the Catholic Church's saints, all sorts of special days (mother, children, farmers, workers, presidents, city birthdays, lovers, black pride, etc. etc.). This week is carnival, so nothing functions.* The same is true when major football titles are being decided. (There are many such titles.) Local calendars have holidays (and Sundays) marked in red, but Sundays only give slightly more than half of the red color to them!
But as you imply - the people are happy, even if poor.
The US makes most of the weapons of war and dominates the global export of them. (All just get destroyed, eventually.) To sustain this, it is necessary for Americans to have few holidays, more stress, unhappy neurotic people, etc. One must wonder if it is worth it.- I did while watching 12 very exuberant and nude (except for huge purple feathers sporting from their heads and backs) women dance in the carnival parade (just the largest of many such groups in competition for honors). In paper next day, I read that they had an average of 400cc of silicone in each breast. Breast implants may be the only area that Brazil now leads the world as the US has just passed Brazil in alcohol production (why your cost of corn is up 86% in 12 months).
As thread says, it is a thought to ponder.
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*The parades start about 11PM and go until nearly dawn. (It is hot, - end of summer here now) Government of Sao Paulo city gave out 100,000 rubbers free, in this year's anti-aids campaign. During the day, many are too hung over to work, trying to sleep, (or re-use one of the government's free gifts), even if their place of employment were not closed.
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Umm, not exactly. Productivity is usually measured on a per-hour basis, so the total number of hours worked per year has no bearing. What's actually true is that both America and Europe have very similar per-hour levels of productivity, but because Americans work more hours per year, the American GDP per capita is much higher.
Hmmm. US manufacturing accounted for 24% of the world total in 2000. In 2006 it accounted for 24% of the world total. This is with 5% of the world's population. Since 1982, the average for the United States has been around 24% of the world total.
When people say that the US is no longer manufacturing, they are making stuff up and lying through their teeth. It is lies spread to promote a bizarre ideology of hatred towards the United States. Give it up.
http://www.iht.com/articles/2005/09/05/yourmoney/make.php
http://www.petersoninstitute.org/publications/papers/paper.cfm?ResearchID=315
Here's the simple fact: We can produce more with less people. It is a RISE in productivity, not a decline. You are lying and making stuff up. Shame on you.
The same thing happened to agriculture at the turn of the 20th century, when we went from having 40% of jobs in agriculture to 5% (it is currently around 2%). When our ignorant politicians tried to stop this natural (and GOOD) process, they created the Great Depression, and they blamed it on industry instead of on themselves, the real culprits.
Manufacturing is going through the same GREAT, BLESSED process that agriculture went through, and we should be dancing and celebrating, not making up lies and trying to scare old ladies. Shame on you. Learn some economics and some history you silly jeremiad.
I think you will find, that more of what is made in US is producing profits for, and directed by, foreigners like Toyota, displacing GM and possibly Hundi buying Chrysler, etc. Every year recently and certainly in the foreseeable future, the foreigners gaining dollars from the US deficit will be buying up more of the US productive base, as the confidence in the dollar as a "store of value" is rapidly eroding. - Better to buy a US company, or stocks in one, than to hold dollars dropping in value. - part of reason why US stock are at all time high. (Americans, with some foresight and cash are getting it out of the US. - This is what W.Buffet and I have done and why other stock markets are also at near highs.)
All steel makers can sell all the can make now (mainly to China, which is world's largest producer with 43% of the total, and yet needs import more!) but a few years ago the old US plants needed government tariff protection to survive; (and got it at cost to tax payers and purchasers of cars, washing machines, etc.)
Yes there is reason to locate plants near markets and America, with customers leading the world in buying on credit, per capital debt, etc. is still a great market to sell in; (But now that buyers can not get more cash to spend by re-financing house at lower rate, that may be ending.)
I guess "turn-a-bout" is only just/fair. For years foreigners worked to send goods to US in exchange for green pieces of paper. Now, more and more Americans will be working to make goods for foreigners and for foreign owned companies. As dollar decline in value accelerates, it may even cause production in US to climb above the historic 24% you quote, but fewer Americans will be able to afford to continue their current levels of consumption (eat as much meat etc - corn already up 86% in price in last 12 months, etc.) Either directly thru taxes or indirectly by printing press dollars, the war and other deficits must be paid for.
Also do not for get Social Security is a "pay as you go" system and the next decade will see ALL of the Baby Boomers cease to "pay in" and instead "take out," as the first retiring wave of them is already doing.
You are wrong to think a realistic look at the current trends is not ample grounds to worry. Do not blame it all on "people hating America." Look honestly at these facts and trends. Being an ostrich with your head in the sand only makes you feel good untill the Asian dragon eats you.
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Because of union concessions! This is the same thing that is killing American air carriers and American auto makers. Execs promised greedy unions huge concessions so that the union leaders wouldn't cry "Strike". Now they are seeing that the concessions which they promised are unfeasable based on a changing buisiness model.
You're right, of course. The unions, in the beginning, were a good thing for both the industry and for the worker. But the damned pendulum swung much too far, much too fast.
In fact, I see the union issue much like the issue we have no in the USA for the city police forces. Human rights and individual rights were a good thing, but that pendulum has swung so far now that criminals have all of the rights, and the cops hands are tied.
Baron Max
All of what you say is possible. It is also possible that Italy will be the next manufacturing superpower that will take over the world. There is just as much evidence both ways.
So, nice theory. Great scare-tactics. Just like the ones that other jeremiads in the past have used regarding Germany, Japan, India, Mexico, etc... Call me when you have evidence more substantial than any of your past brethren had. Right now I see an investment bubble in China, with regular Joe's borrowing to invest, that threatens to implode that market the same way the Japanese market imploded.
The United States will be the world economic leader for at least the next 100 years. Not because they deserve to be, or because Americans are superior people, but purely for psychological reasons. America is stable. It has been for over 130 years. No other country is as trustworthy with your investments as the United States. Which is why private investors will keep pouring more money into this economy than any other.
Billy, I like you a lot, but you tend to oversimplify global economics the same way that USA Today does. You talk about "China" pulling their money out of the United States and "Countries" doing this and that. China doesn't trade with the United States. Individuals in both countries do that. And the individuals in other countries are not going to pick another place to put all of their eggs until they see economic stability of the variety that the United States has. Simple as that. There is no global conspiracy out there, just a bunch of people trying to make a buck and improve their lot. And they have watched the European countries founder, and the Asian Tigers languish, and the Japanese market stall, meanwhile... the United States roars through a tech bubble, a terrorist nightmare, rising fuel prices, an expensive-as-hell war, and keeps growing its economy.
There jeremiads have been wrong dozens of times a year for the past 50 years, while the sober economists have been correct. Please tell me why you are different from the rest of the over-generalizing pessimists.
Fraggle Rocker
Staff member
My evaluation of this statement is that it is rooted in the economics of the Industrial Era. Why do you kids need to have someone old enough to be your grandfather remind you that you're living through a Paradigm Shift? All the concepts of economics like supply, demand, resources, and "productivity" will be redefined... or more likely supplanted by the new concepts of an Information Age economy. This is like someone in 1500CE predicting what the world economy will be like after the Industrial Revolution. Or someone in 2500BCE and the world economy after the invention of steel. Or someone in 9000BCE and the world economy after the invention of cities.
The most important commodity in the coming era is information, and unlike the commodities of our era information can be duplicated and distributed at almost zero cost. This will turn economics on its head.
No not the reason. Steel is a capital intensive industry, not labor intensive. At the time the tariffs were put in place, most of world (Japan being a strong exception) had higher cost of capital, so the cost factors of production were actually to the US advantage. What was killing them was mainly the fact many were pre-WWII technology* - just terribly inefficient producers. In fact the special "loop hole" that allowed the US to place the tariffs on for a max of 3 years was built on this fact. (The WTO does allow tariffs for three years to modernize if the reason you cannot compete is your production facilities are obsolete.)
Your anti-labor bias has misled you. Actually, labor unions are very much less important, much weaker, etc. today than when America was the world leader in all fields of production. In part because US heavy industry (even light industry like making tractors etc.) now has a relative minor role in the US information and service economy.
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*If I remember correctly, US steel’s biggest facility is in Gary Indiana and still more than 75 years old!