View Full Version : BLS report - 'Jobs of Tomorrow'
Eric Stoner
06-02-2011, 11:53 AM
and GM, Ford, and Chrysler are all increasing employment and earning billions! According to the doom and gloom predictions posted by Melonie, they should all have gone out of business by now. The stock market continues to go up and up instead of collapsing like Melonie predicted with her "Hindenburg effect". Melonie's "hits kept coming" but the stock market kept going up and up and up!
Ford did not take any bailout funds.
The jury is out on GM. They still have some huge hurdles to get over before actually returning to real profitability. Most analysts say it will take FIVE years to see how GM ends up.
Chrysler is a different story thanks to the partial buy out by Fiat.
As Melonie, I and others predicted, the easy money from the Fed has given us a weak and partial recovery ( unemployment over 9 % ; a REAL rate over 15% ; 2% growth etc.) For the last two months we have seen nothing but negative economic news. About the only encouraging thing I've heard lately is that there will not be a QE III.
Melonie
06-02-2011, 02:07 PM
and here's a very apt analogy to what the Fed's easy money / Obama's stimulus program have actually done ...
(snip)" A guy at the Heritage Foundation, Brian Riedl, came up with an analogy to explain why government intervention to boost the economy doesn't work. He used a swimming pool.
Removing water from one end of a swimming pool and pouring it in the other end will not raise the overall water level. In fact, it won't change anything after a while. It might make the deeper end deeper for a brief time -- it might make the shallow end shallower for a brief, brief time -- but then it all levels out. Well, it's the same premise. If you take dollars from one part of the economy (i.e, the rich) and you distribute those dollars to another part of the economy, you're not growing anything. You're simply redistributing. And if in the process the recipients of your redistribution are getting it for not doing anything -- if there's no accompanying activity to warrant the receipt of that money other than they're just sitting there and they happen to be Democrat voters -- then you really screwing yourself. "(snip)
full discourse at
Melonie's "hits kept coming" but the stock market kept going up and up and up!
Actually US stock markets have only gone 'up and up' as measured in debased US dollars. If measured in terms of other currencies / commodities etc. the US stock markets haven't gone anywhere ...
The 'gold foil hat' crowd will tell you that one of the most insidious aspects of US dollar money printing policy is that most Americans mistakenly continue to assume that the value of the US dollar can be used as an accurate yardstick. It can't ... because the value of the US dollar has become a moving target ( in the downhill direction lately ). If the US stock market index increases by 10% as measured in US dollars, but the US dollar's value declined by 12%, US stockholders are actually LOSERS. But most of them don't realize it !
http://www.capitalstool.com/forums/uploads/post-1110-13068751681737.jpg
And the ultimate irony is that the IRS gets to collect capital gains taxes on their LOSS !
~
Eric Stoner
06-03-2011, 08:42 AM
and here's a very apt analogy to what the Fed's easy money / Obama's stimulus program have actually done ...
(snip)" A guy at the Heritage Foundation, Brian Riedl, came up with an analogy to explain why government intervention to boost the economy doesn't work. He used a swimming pool.
Removing water from one end of a swimming pool and pouring it in the other end will not raise the overall water level. In fact, it won't change anything after a while. It might make the deeper end deeper for a brief time -- it might make the shallow end shallower for a brief, brief time -- but then it all levels out. Well, it's the same premise. If you take dollars from one part of the economy (i.e, the rich) and you distribute those dollars to another part of the economy, you're not growing anything. You're simply redistributing. And if in the process the recipients of your redistribution are getting it for not doing anything -- if there's no accompanying activity to warrant the receipt of that money other than they're just sitting there and they happen to be Democrat voters -- then you really screwing yourself. "(snip)
full discourse at http://www.heritage.org/research/reports/2010/01/why-government-spending-does-not-stimulate-economic-growth-answering-the-critics
Actually US stock markets have only gone 'up and up' as measured in debased US dollars. If measured in terms of other currencies / commodities etc. the US stock markets haven't gone anywhere ...
http://stockcharts.com/freecharts/gallery.html?$SPX:$gold
The 'gold foil hat' crowd will tell you that one of the most insidious aspects of US dollar money printing policy is that most Americans mistakenly continue to assume that the value of the US dollar can be used as an accurate yardstick. It can't ... because the value of the US dollar has become a moving target ( in the downhill direction lately ). If the US stock market index increases by 10% as measured in US dollars, but the US dollar's value declined by 12%, US stockholders are actually LOSERS. But most of them don't realize it !
http://www.capitalstool.com/forums/uploads/post-1110-13068751681737.jpg
And the ultimate irony is that the IRS gets to collect capital gains taxes on their LOSS !
~
Melonie is RIGHT ! As usual. Yet another effect of the destruction of the dollar.
eagle2
06-03-2011, 08:33 PM
funny you should ask that !!!
http://life.globaltimes.cn/life/2011-06/661408.html
In the way of a 'serious' answer, that answer is probably ... gov't employees, 'professionals', businessmen, and the hereditary rich ... just like the rest of the world !
Again, you do not seem to understand how the economy works as a whole. You have this mistaken idea that each part of the economy is self contained and is not affected by other parts of the economy. You do not understand that a business' profit is not based solely on how low they can pay their workers. They also need to have someone to buy their products. You also don't understand that in order for a government to be able to operate and pay government employees decent wages, the government needs revenue. If most workers are earning $1 - $2 an hour, where is government going to get the revenue to pay government workers a decent wage? How much tax revenue is the government going to bring in from workers making $40 - $80 a week? In order for there to be professionals, there has to be someone to pay their salary. How are businesses going to be able to pay professionals if most people can't afford their products because they're only making $1 or $2 an hour?
Many of the products we take for granted today, are only affordable because manufacturers are able to make these products on a large scale. In order to make cars affordable, they need to be mass-produced. If 90% of the country couldn't afford cars, our auto industry would collapse.
If we were to do what you are advocating, it would be a disaster for every industrialized country. Our standard of living would go back to what it was in the 1800's.
The rest of the world does not work like that. Most of the products manufactured in China and other third-world countries are bought by high-wage workers in the US and other western countries, not just gov't employees, 'professionals', businessmen, and the hereditary rich.
Melonie
06-04-2011, 03:57 AM
How are businesses going to be able to pay professionals if most people can't afford their products because they're only making $1 or $2 an hour?
Globally speaking, they shift the employment of professionals away from high cost American professionals to much lower cost Chinese / Indian etc. professionals.
You do not understand that a business' profit is not based solely on how low they can pay their workers. They also need to have someone to buy their products
They also shift the targeted markets for their products away from America and toward China / India ( i.e. GM's Buick is the #1 selling car to 'professionals' living in China ) !
where is government going to get the revenue to pay government workers a decent wage?
It's not !!! If unskilled private sector workers wind up earning $2 an hour in terms of true added value, their public sector counterparts would obviously not be able to continue receiving $20 an hour for the same unskilled labor !!!
In all probability, what is likely to happen is that the US dollar will wind up being devalued to the point where an $8 an hour US worker of the future is paid the same amount of true value as a $2 worker at today's US dollar exchange rate / purchasing power level. That way nobody in America actually has to take a pay cut. Of course, this devaluation would also increase the prices of everything imported by a factor of four while the dollar amount of American paychecks remains about the same !!! The end result will be the same in either case ... a permanent reduction in US standard of living which re-establishes a sustainable balance between the true value of goods consumed and the true value created by US labor.
Circling back to an earlier point, what part of 'unsustainable' continues to elude understanding ? The American economy of the 50's and 60's was possible due to US 'exploitation' of the massive economic, capital equipment and skilled labor 'destruction' of WW2. The American economy of the 80's and 90's was possible due to US 'exploitation' of the US dollar's assigned role as the world's reserve currency ( thus seignorage and huge profits for Wall St international financial institutions ). The American economy of the 00's was possible due to US 'exploitation' of foreign lenders ... who are finally discovering that they will never be repaid at full value. In fact, since the great depression of the 30's the only time that the US economy was arguably not subsidized by 'exploitation' of the rest of the world was during the 70's ... which in many ways resembled today's US economic conditions ( or more accurately, tomorrow's US economic conditions ) !!!
Over that time period, the US either had the willingness to use 'force', or the ability to use 'stealth', to achieve that 'exploitation'. However, today it has neither. America no longer has the decisiveness to support a particular dictator in a foreign country that provides major economic benefits to America in return ( instead America is helping to depose them). And today China and other foreign creditors can no longer be deceived via 'stealth' actions by the US FED. There is no longer a 'free lunch' available for Americans with the Chinese / Japanese / South Americans / Arab oil Sheiks picking up the tab. Instead Americans not only face having to pay full price for their own lunch, but also paying back the creditors who loaned Americans the money to buy lunch yesterday !
~
Brigham
06-04-2011, 04:15 PM
Unfortunately, while it is true that 'stripper' is a job category that will always be in demand, this profession is also the 'victim' of H1B-'esque' / illegal labor rate arbitrage. Obviously I'm talking about the future ability of an American 'stripper' to successfully compete with an illegal alien 'stripper' who. besides being 'hot', is also willing to perform private dances at 1/2 price and/or offer reasonably priced 'extras' to American strip club customers.
I have to slightly disagree with you. Once the illegal alien stripper is in U.S., she faces the same challenges (high cost of living) an American striper faces. So it is no longer possible for this alien stripper to offer lap dances at 1/2 price. After all this alien got to eat and pay rent with American money.
Melonie
06-05-2011, 11:48 AM
Once the illegal alien stripper is in U.S., she faces the same challenges (high cost of living) an American striper faces.
well, not exactly ! The illegal alien stripper probably does not have to pay US income taxes !!!
Brigham
06-05-2011, 11:59 AM
well, not exactly ! The illegal alien stripper probably does not have to pay US income taxes !!!
IRS will not let you off the hook just because you are an illegal alien.
Melonie
06-05-2011, 12:29 PM
^^^ I was thinking along the lines of Bank of America's experience with credit cards issued to illegal aliens. Like those illegal aliens who maxxed out their credit card limit and then returned to Mexico ... only to return to the US a week later under a different fake name and fake ID ... illegal alien dancers can similarly avoid having the IRS ever 'catch up' with them for payment. Same is potentially true for illegal alien dancers ever having LE 'catch up' with them after 'skipping out' on bail from being busted for prostitution / theft / drug / whatever charges. As long as illegal alien dancers don't actually 'own' anything of serious value in the USA ( like a house ), and as long as illegal alien dancers are willing to relocate to a different US city under a different fake ID when things get 'hot', the gov't moves too slowly and with too little energy to ever catch up with them. This is something that US dancers cannot 'compete' with.
Brigham
06-05-2011, 12:41 PM
^^^ I was thinking along the lines of Bank of America's experience with credit cards issued to illegal aliens. Like those illegal aliens who maxxed out their credit card limit and then returned to Mexico ... only to return to the US a week later under a different name and fake ID ... illegal alien dancers can similarly avoid having the IRS ever 'catch up' with them for payment.
In case of Mexican strippers you may have hypothetical points. But in the case of Slavic strippers, they cannot get away with the fake ID thing because each time you enter US, you are fingerprinted. They run all sorts of scan before you are allowed into US. The fingerprint is stored in a federal database.
If we were to makeup assumptions. Then we can make the assumptions that American strippers avoid paying taxes as well. How do we know that they (American strippers) report all their earnings?
Melonie
06-05-2011, 12:45 PM
^^^ admittedly, many don't ! However, when the point arrives where US strippers wish to purchase a house, a new car, etc. all of a sudden they are no longer able to remain 'anonymous' and they are no longer able to simply switch fake ID's the way that mexican, slavic or any other nationality of illegal alien can.
eagle2
06-05-2011, 11:20 PM
Globally speaking, they shift the employment of professionals away from high cost American professionals to much lower cost Chinese / Indian etc. professionals.
They won't be able to pay Chinese/Indian professionals much money if all workers are getting paid $1 - $2 an hour.
They also shift the targeted markets for their products away from America and toward China / India ( i.e. GM's Buick is the #1 selling car to 'professionals' living in China ) !
Chinese professionals are only able to afford Buicks because of all of the money manufacturers in China are able to make selling their products to high-wage workers in the US and Europe. If it wasn't for the hundreds of billions of dollars and euros Americans and Europeans were spending on products made in China, China would still be a poor, impoverished country. If there aren't large numbers of well-paid workers available to buy products, you're not going to have successful businesses selling lots of products. Henry Ford understood this 100 years ago. One of the reasons he paid his workers twice the going rate was so that they would be able to afford to buy his cars. 100 years later, conservative ideologues still don't understand this. Conservative ideologues are not able to understand the simple concept that without buyers, you can't have sellers.
It's not !!! If unskilled private sector workers wind up earning $2 an hour in terms of true added value, their public sector counterparts would obviously not be able to continue receiving $20 an hour for the same unskilled labor !!!
In all probability, what is likely to happen is that the US dollar will wind up being devalued to the point where an $8 an hour US worker of the future is paid the same amount of true value as a $2 worker at today's US dollar exchange rate / purchasing power level. That way nobody in America actually has to take a pay cut. Of course, this devaluation would also increase the prices of everything imported by a factor of four while the dollar amount of American paychecks remains about the same !!! The end result will be the same in either case ... a permanent reduction in US standard of living which re-establishes a sustainable balance between the true value of goods consumed and the true value created by US labor.
No, what is likely going to happen is that as China becomes fully industrialized, their supply of cheap labor will run out, and wages will rise to western standards. Wages are currently rising 10 - 20% each year. With China's one child policy, the number of Chinese entering the work force is going to decrease significantly.
Circling back to an earlier point, what part of 'unsustainable' continues to elude understanding ? The American economy of the 50's and 60's was possible due to US 'exploitation' of the massive economic, capital equipment and skilled labor 'destruction' of WW2. The American economy of the 80's and 90's was possible due to US 'exploitation' of the US dollar's assigned role as the world's reserve currency ( thus seignorage and huge profits for Wall St international financial institutions ). The American economy of the 00's was possible due to US 'exploitation' of foreign lenders ... who are finally discovering that they will never be repaid at full value. In fact, since the great depression of the 30's the only time that the US economy was arguably not subsidized by 'exploitation' of the rest of the world was during the 70's ... which in many ways resembled today's US economic conditions ( or more accurately, tomorrow's US economic conditions ) !!!
No, you're just making stuff up again. The American economy grew because workers were paid good wages and they were able to afford to buy products with the money they made. As I said before, by the 1960's, Europe had already been rebuilt and West Germany was an economic powerhouse. What did the state of Europe's economy have to do with the fact that we were able to make televisions and many other products in the US, that consumers in the US were able to afford?
Over that time period, the US either had the willingness to use 'force', or the ability to use 'stealth', to achieve that 'exploitation'. However, today it has neither. America no longer has the decisiveness to support a particular dictator in a foreign country that provides major economic benefits to America in return ( instead America is helping to depose them). And today China and other foreign creditors can no longer be deceived via 'stealth' actions by the US FED. There is no longer a 'free lunch' available for Americans with the Chinese / Japanese / South Americans / Arab oil Sheiks picking up the tab. Instead Americans not only face having to pay full price for their own lunch, but also paying back the creditors who loaned Americans the money to buy lunch yesterday !
~
More made up stuff. Very little of our wealth came from "exploiting" other countries. There's a reason why these poor countries were/are called "banana republics". The import of bananas never played a significant role in our economy.
eagle2
06-05-2011, 11:48 PM
IDEOLOGY ! IDEOLOGY ! IDEOLOGY !
Supply side economics did NOTHING to create our current debt. Not when revenues went UP after every round of tax cuts. Your IDEOLOGY continually tempts you into deliberately confusing tax and spending policies. Your IDEOLOGY blinds you to the regressive and self defeating nature of high tax RATES .
Supply side economics has everything to do with our current debt. All of our debt came after Reagan and Bush's tax cuts. Your statement that high tax RATES are self defeating is based on ideology, not facts. We had stronger economic growth in the 1960's and 1990's when tax rates were higher than we did in the 1980's and 2000's when tax rates were lower. This is the difference between you and me. My view is based on the fact that we had stronger economic growth when taxes were higher. Your view is based on your ideology, which states that low taxes are always better than high taxes. I just don't think you would ever acknowledge that higher taxes can be beneficial, which is why I mention ideology. It all depends on what the money is used for.
IDEOLOGY ! IDEOLOGY ! IDEOLOGY !
As has been patiently explained to you many , many times , there was this event I'm sure you have heard of called World War II. Germany, Japan, France, Italy and other European countries had most of their industrial base destroyed. Britain's was largely intact but she was transitioning from a colonial power to a welfare state with well known results. Our industry was totally intact.
That had little to do with our strong economic growth in the 1950's and 1960's. European output was very low in the 1930's, due to the Great Depression, but that didn't help our economy very much.
IDEOLOGY ! IDEOLOGY ! IDEOLOGY !
As has been patiently explained to you many , many times , there was this event I'm sure you have heard of called World War II. Germany, Japan, France, Italy and other European countries had most of their industrial base destroyed. Britain's was largely intact but she was transitioning from a colonial power to a welfare state with well known results. Our industry was totally intact.
That had little to do with our strong economic growth in the 1950's and 1960's. European output was very low in the 1930's, due to the Great Depression, but that didn't help our economy very much.
Melonie
06-06-2011, 03:17 AM
I don't have time to drudge up inconvenient facts to respond point by point.
I suggest you perform a reality check as to America's business investments / partnerships with German industry and gov't in the 1930's for starters. Try Many of America's largest corporations and wealthiest investors did a shit-ton of business with Germany both before and throughout WW2 !!!
I also suggest that you check these numbers from GM Shanghai ...
(snip)"Shanghai – The 2 millionth Buick sold in China by Shanghai GM, a red New Regal sedan, was delivered today to its owner in the southern city of Guangzhou.
"It took eight years for Shanghai GM to sell its first 1 million Buicks, but only three years to sell its second 1 million units," said Kevin Wale, President and Managing Director of the GM China Group. "This demonstrates the ongoing popularity of Shanghai GM's leading mainstream brand in what is now Buick's largest market."
Shanghai GM, GM's flagship joint venture in China with SAIC, began manufacturing and selling Buick products in 1998. Shanghai GM has built a portfolio of more than 40 Buick models and variants, making it one of the most comprehensive brands sold in China today. It also has been recognized for its pioneering Buick Care aftersales service.
Leading the way for Buick are the Excelle and GL8 families. Since the Excelle's introduction in 2003, more than 900,000 Excelle sedans, Excelle HRV hatchbacks and Excelle Station Wagons have been sold, including more than 94,000 in the first five months of 2009. Shanghai GM also has sold more than 240,000 GL8 and GL8 FirstLand executive wagons since the product's introduction in 1999, making the GL8 the undisputed leader in the segment."(snip)
The argument can be made that auto sales in China follow labor / pay patterns in China. There is a small percentage of 'higher earning' individuals buying Buicks ... and there is a larger percentage of 'middle earning' individuals buying Geely's ( and dozens of other brands of Yugo-esque shitboxes ) ... and a still larger percentage of 'lowest earning' individuals who cannot afford to buy a new car at all. Ultimately, this is where the 'global value equation' will eventually take America.
Eric Stoner
06-06-2011, 07:25 AM
Supply side economics has everything to do with our current debt. All of our debt came after Reagan and Bush's tax cuts. Your statement that high tax RATES are self defeating is based on ideology, not facts. We had stronger economic growth in the 1960's and 1990's when tax rates were higher than we did in the 1980's and 2000's when tax rates were lower. This is the difference between you and me. My view is based on the fact that we had stronger economic growth when taxes were higher. Your view is based on your ideology, which states that low taxes are always better than high taxes. I just don't think you would ever acknowledge that higher taxes can be beneficial, which is why I mention ideology. It all depends on what the money is used for.
That had little to do with our strong economic growth in the 1950's and 1960's. European output was very low in the 1930's, due to the Great Depression, but that didn't help our economy very much.
That had little to do with our strong economic growth in the 1950's and 1960's. European output was very low in the 1930's, due to the Great Depression, but that didn't help our economy very much.
You just love circular argumentation and continual re-hashing of the same stuff, don't you ?
You would be right about the Reagan tax cuts IF we assume that A. they had no effect on economic growth and B. that revenues declined. The FACTS are that revenues intially went down and then went way up. Especially after Reagan's cuts were fully implemented and even more so after the Tax Reform of 1986. Unemployment went DOWN after hitting well over 10%.
Yes, we had wonderful economic growth in the 1960's AFTER JFK's tax cuts and in the 1990's we rebounded from a mild recession and Clinton CUT capital gains and business taxes. That is where the revenue increases REALLY came from to put us into surplus.
I don't care as much about tax rates as I do about revenue flow. History teaches that with a lower rate and WITHOUT corporate welfare , among all the other credits , exemptions and deductions, we get MORE revenue. We get MORE economic growth. We get MORE people working. We get LESS people on Food Stamps and FEWER who are eligible for Medicaid.
Why is the following SO difficult for you to understand ? : BEFORE it can be taxed, somebody has to make the money. They need a salary , a bonus, interest income, dividends or a capital gain. The more people doing those things and the more they put in their pockets means MORE money that can be taxed. You insist on putting the cart before the horse and like many a liberal then scramble for explanations as to why we never get anywhere. If all you do is raise rates then WHY would anyone with money be more interested in making more money as opposed to sheltering what they have.
The history books say that thanks to FDR and the Fed, the U.S. lagged well behind Europe in emerging from the Great Depression.
We had good growth in the 1950's. We also had the Korean War and three recessions under Eisenhower.
Krill_
06-06-2011, 10:06 AM
Supply side economics did NOTHING to create our current debt. Not when revenues went UP after every round of tax cuts.
In absolute dollars, during periods of economic growth tax revenues indeed did go up after the Reagan and Bush Jr. tax cuts. As a share of GDP revenues plummeted though.
http://i.imgur.com/rzjts.png
Why does this matter? Isn't it just moving the goal post, so to speak? Well first of all it's a metric that better gauges revenue without consideration of inflation, be it actual or nominal. Second, if we're actually to believe that government debt should paid down during periods of economic expansion the government should necessarily be taking in much higher revenue. Third, as we've clearly seen over the past three years it has a catastrophic effect on revenues during recessions.
Instead of staking out ideological positions I think we should be asking why Germany, Austria, Switzerland, Denmark, The Netherlands, Sweden and Norway are sitting at acceptable levels of unemployment and deficit spending while many other countries, including the US are in full scale fiscal disaster mode with higher unemployment.
Eric Stoner
06-06-2011, 10:46 AM
1. Revenue as a % of GDP OUGHT to be roughly 18 %. More or less; give or take.
2. I have repeatedly posted that Reagan and especially Bush The Dumber were reckless about SPENDING.
3. None of the countries you cited have had anything remotely resembling the period of economic growth thatc we have experienced since 1981. None have had anything remotely resembling our defense budget. None have as many illegal immigrants as we do. ALLhave lower corporate tax rates than we do.
eagle2
06-07-2011, 06:43 AM
I don't have time to drudge up inconvenient facts to respond point by point.
No, you can't drudge up inconvenient facts because the facts don't support you. All you can do is make stuff up.
I suggest you perform a reality check as to America's business investments / partnerships with German industry and gov't in the 1930's for starters. Try http://www.thirdworldtraveler.com/Fascism/Trading_Enemy_excerpts.html Many of America's largest corporations and wealthiest investors did a shit-ton of business with Germany both before and throughout WW2 !!!
None of this has any relevance at all to the fact that in the 1950's and 1960's, we were able to manufacture products in America that were bought by Americans.
I also suggest that you check these numbers from GM Shanghai ...
(snip)"Shanghai – The 2 millionth Buick sold in China by Shanghai GM, a red New Regal sedan, was delivered today to its owner in the southern city of Guangzhou.
"It took eight years for Shanghai GM to sell its first 1 million Buicks, but only three years to sell its second 1 million units," said Kevin Wale, President and Managing Director of the GM China Group. "This demonstrates the ongoing popularity of Shanghai GM's leading mainstream brand in what is now Buick's largest market."
Shanghai GM, GM's flagship joint venture in China with SAIC, began manufacturing and selling Buick products in 1998. Shanghai GM has built a portfolio of more than 40 Buick models and variants, making it one of the most comprehensive brands sold in China today. It also has been recognized for its pioneering Buick Care aftersales service.
Leading the way for Buick are the Excelle and GL8 families. Since the Excelle's introduction in 2003, more than 900,000 Excelle sedans, Excelle HRV hatchbacks and Excelle Station Wagons have been sold, including more than 94,000 in the first five months of 2009. Shanghai GM also has sold more than 240,000 GL8 and GL8 FirstLand executive wagons since the product's introduction in 1999, making the GL8 the undisputed leader in the segment."(snip)
The argument can be made that auto sales in China follow labor / pay patterns in China. There is a small percentage of 'higher earning' individuals buying Buicks ... and there is a larger percentage of 'middle earning' individuals buying Geely's ( and dozens of other brands of Yugo-esque shitboxes ) ... and a still larger percentage of 'lowest earning' individuals who cannot afford to buy a new car at all. Ultimately, this is where the 'global value equation' will eventually take America.
You continue to ignore the fact that the Chinese are able to earn enough to buy cars by exporting goods to countries where workers have high wages. You don't understand the concept that if you don't have people with money to buy products, businesses aren't going to be able to sell products. You seem to have this idea that businesses can lower wages to poverty level without having any effect on sales. You don't understand the relationship between worker wages and overall business sales.
Melonie
06-07-2011, 07:31 AM
None of this has any relevance at all to the fact that in the 1950's and 1960's, we were able to manufacture products in America that were bought by Americans.
^^^ almost entirely based on the ability of American manufacturers to export products to the rest of the world on a near monopoly basis ... which in turn allowed American manufacturers to dictate prices thus allowing American workers to be 'overpaid'. The clear reasons for this were that A. German / Japanese / foreign manufacturing facilities were for the most part bombed back to the 'stone age' thus unable to produce competing products, and B. that an entire generation of German / Japanese / foreign skilled young workers needed to operate said non-existant factories became casualties of war.
You seem to have this idea that businesses can lower wages to poverty level without having any effect on sales.
Of course there is an effect on sales. The effect will be that unskilled workers who have been unable to afford the 'niceties' of a house, new car, large screen TV etc. all along will no longer be able to obtain undeserved credit to purchase such 'niceties', and can no longer transfer the consequences of their inability to pay for said 'niceties' to the US taxpayer ! Reference FNM/FRE losses, GM / Ally bank losses, credit card underwriting bank losses etc. that already have been / will soon be transferred to the US FED / taxpayer ( if packaged bonds full of deadbeat mortgage / auto / consumer loans are ever 'marked to market' ). I'm basing my point on actual 'value' creation, where your point rests on the availability of ( undeserved ) credit which can never be repaid at full 'value'.
Melonie
06-07-2011, 08:53 AM
and by pure coincidence, this little example was published today ... which again raises the point that SOMEBODY always winds up paying the price to subsidize US jobs where the mandated pay rate of US unskilled labor cannot be reconciled against the 'added value' that US labor actually produces. However, usually those being stuck with the subsidy costs are most probably unaware of them !!!
from
(snip)"If you are looking for an archetype of disgusting protectionism – benefiting special interests, pillaging consumers, and impoverishing foreigners – the case of the catfish gets my vote.
After communism vanished in Vietnam in the 1990s, entrepreneurs started exporting its catfish. The stuff was so good that it threatened US producers. So in 2003, Congress legislated against the imported fish. It can't be called catfish; it must be called swai and basa. Also, a pricey tariff applies.
Then the US catfish industry started spreading Stalinesque propaganda about the evils of Vietnamese fish. It is nasty, dirty, and disease ridden. As an appeal to goofy American sentimentalism, they claimed that the industry was violating fishes' rights by putting them in too-small tanks. They even claimed that Vietnamese fish puts the United States at risk of "bioterrorism."
But swai and basa wouldn't be stopped. The catfish industry demanded a series of other changes. Jurisdiction must be moved from this bureaucracy to that. And then the industry discerned that the regulation would actually be tighter if the imports were called catfish after all, and so they demanded that.
It didn't work. Vietnamese fish is everywhere these days. Consumers are figuring out the racket and going for the better price.
The war is ongoing. Last night I inadvertently found myself on the front lines. The fish counter at the local grocery carried both at the same time! And get this: The catfish was $7 per pound. The swai was $4 per pound.
That isn't exactly a small price difference! That is gigantic. And imagine if the tariffs and quotas were removed from these Vietnamese fish. We would probably be able to pick them up for $1 a pound!
Maybe it is not as good as US catfish? That's what the industry claims. If so, the industry has nothing to worry about, right? The fight can be fair – and may the best fish win. However, if Vietnamese swai is as good as US catfish, it is a done deal: we are going to be importing our fish in the future.
So, faced with the opportunity to perform a taste test, I went for it. I bought one swai and one US catfish. This was only after the lady behind the counter argued with my claim that swai was just another name for catfish. No, no, she insisted. Swai is something else entirely; it is a strange foreign fish of nowhere near the quality of the great American catfish. She would never buy anything but American-grown fish.
I quickly showed her on my iPhone that scientists all recognize swai as one of 2,000-plus varieties of catfish. She backed down quickly and admitted that her choice was based on the desire to "support America."
Failing to see how a gang of mercantilistic fish farmers wanting to tax me constitutes a proxy for America, I bought both.
I quickly assembled a tasting team. We put both fish in a cast-iron skillet with salt and pepper and butter – nothing fancy so that we could taste the difference. I made the test completely blind so that the tasters couldn't know.
The results: the US catfish is light and flaky with delicate flavors. The Vietnamese swai is tender, textured, and moderately rich in flavor. The catfish flavor is obvious in both, but the difference is also evident. The assembled tasters loved both, but half voted for US and half for Vietnamese.
I was the only taster who was not tasting blind, but to me there was no contest. The Vietnamese fish was far better: rich and nutty with a more intact texture. The American variety seemed wimpy and tasteless by comparison. In any case, no matter how you look at it, it is a close contest.
The biggest difference of course is price. There is no product that cannot be driven out by an equivalent competitor selling at less than half the price. If the government would get out of the way, the price would fall lower and lower until we could get catfish for $1 or $0.50 per pound. This would be reflected in the price we would pay at Captain D's or Red Lobster or the local fish hangout.
In the South, fried fish is something enjoyed by all classes of people. This is particularly nice in a world where classes and races (and even sexes) are often divided by eating establishment. At the fish restaurant we find all groups together in the same place. But the big problem is the price. Liberalizing catfish imports would change that dramatically.
Vietnam embraced free markets long after American troops, supposedly there to liberate these people, had gone home. Vietnam currently has markets that are getting freer and freer – a movement bred from within rather than imposed from without.
Vietnam's fish farmers and workers are people too, struggling to make a profit while bringing yummy food to all people in the world. They are playing an essential role in the progress of the world from rudimentary survival to high civilization.
It is the everlasting disgrace of the American catfish guild that it would stand in the way, taxing us to feed their desire for illicit gain – and the disgrace of politicians that they would listen to the mercantilists rather than the demands of liberty.
It comes down to this. Who should decide which fish is better: consumers, or politicians backed by a protected monopoly?"(snip)
eagle2
06-08-2011, 07:31 AM
^^^ almost entirely based on the ability of American manufacturers to export products to the rest of the world on a near monopoly basis ... which in turn allowed American manufacturers to dictate prices thus allowing American workers to be 'overpaid'. The clear reasons for this were that A. German / Japanese / foreign manufacturing facilities were for the most part bombed back to the 'stone age' thus unable to produce competing products, and B. that an entire generation of German / Japanese / foreign skilled young workers needed to operate said non-existant factories became casualties of war.
Again, you're just making stuff up. Our trade surplus was less than 1% of gdp in the 1960's.
Of course there is an effect on sales. The effect will be that unskilled workers who have been unable to afford the 'niceties' of a house, new car, large screen TV etc. all along will no longer be able to obtain undeserved credit to purchase such 'niceties', and can no longer transfer the consequences of their inability to pay for said 'niceties' to the US taxpayer ! Reference FNM/FRE losses, GM / Ally bank losses, credit card underwriting bank losses etc. that already have been / will soon be transferred to the US FED / taxpayer ( if packaged bonds full of deadbeat mortgage / auto / consumer loans are ever 'marked to market' ). I'm basing my point on actual 'value' creation, where your point rests on the availability of ( undeserved ) credit which can never be repaid at full 'value'.
More made up stuff. Most workers in America can afford houses and cars. The problem over the past decade was many Americans were buying much bigger and more expensive homes and vehicles than in the past.
Eric Stoner
06-08-2011, 07:41 AM
Again, you're just making stuff up. Our trade surplus was less than 1% of gdp in the 1960's.
More made up stuff. Most workers in America can afford houses and cars. The problem over the past decade was many Americans were buying much bigger and more expensive homes and vehicles than in the past.
Careful now. It depends what you mean by "afford". In the old days you needed a 20% down payment to buy a house and a rough equivalent to buy a car with an auto loan. There were no teaser rates or ARM's. By THOSE standards ( which we ought to get back to btw ) how many Americans can afford to buya house or car ?
eagle2
06-08-2011, 08:00 AM
If all Americans lived responsibly and within their means, they could save enough money to make a down payment on a house. One of the reasons housing got so expensive is because many Americans were taking out mortgages with no down-payments. If we kept the regulations we had in place in the 1960's and 1970's, and home-buyers weren't able to buy homes they couldn't afford, housing never would have gotten as expensive as it became this past decade.
Eric Stoner
06-08-2011, 08:45 AM
If all Americans lived responsibly and within their means, they could save enough money to make a down payment on a house. One of the reasons housing got so expensive is because many Americans were taking out mortgages with no down-payments. If we kept the regulations we had in place in the 1960's and 1970's, and home-buyers weren't able to buy homes they couldn't afford, housing never would have gotten as expensive as it became this past decade.
ALERT THE MEDIA ! Eagle gets it ! He REALLY gets it. I knew if Mel and I kept at it long enough, Eagle would end up agreeing with us as to one of the root causes of the housing bubble.
Who changed those regulations we had in place in the 60's and 70"s ? Who came up with "no down payment" mortgages and was lauded for it by Maxine Waters and other mentally challenged members of Congress ? Franklin Raines at Fannie Mae. That's who.
When Bush The Dumber ( in one of his few lucid intervals ) and John McCain wanted to put on the brakes and restore sanity to government guaranteed mortgages, who stopped them ? Maxine, Barney Fwank and Chris Dodd with healthy dollops of accusations of racial motivation in their proposed reforms.
Who almost totally ignored this story while it was happening ? The lamestream media.
eagle2
06-08-2011, 08:54 AM
My position has always been the same. There is nothing that you or Melonie said that changed anything. It was the Alternative Mortgage Transaction Parity Act, passed by Reagan that allowed no down-payment mortgages. When states tried to pass laws anti-predatory lending laws, the federal government, under George W Bush, overruled the states.
Eric Stoner
06-08-2011, 11:26 AM
My position has always been the same. There is nothing that you or Melonie said that changed anything. It was the Alternative Mortgage Transaction Parity Act, passed by Reagan that allowed no down-payment mortgages. When states tried to pass laws anti-predatory lending laws, the federal government, under George W Bush, overruled the states.
Correct but as usual with your stuff, incomplete. It was Raines et.al. at Fannie Mae who both agreed to guarantee no money down mortgages and increased their availability. Plus he over leveraged Fannie beyond any sensible parameters.
So much so that they had to be taken over by the Feds. And NOBODY yet knows what the final price tag will be.
You are correct about Bush The Dumber preempting SOME state lending statutes. What you leave out are the Senate Dems who threatened to filibuster every one of his attempts at reform. At the time he was accused of being too easy on the lenders and too tough on the borrowers. Gasp ! As though it were unfair to restrict lending to those with reasonable prospects of actually paying it back. An admittedly radical concept. There were certainly sound arguments for having one Federal standard instead of as many as 50 different state standards on such things as predatory lending. Thanks mostly to the Dems ( and enough typical stubborness by The Dumber) we got neither and came a cropper.