patrick.net

Vicente wrote:"Excuse me "Reality", when was Glass-Steagall enacted? Weren't we on a "real money" standard when that started?"

No. The Federal Reserve was put in place in 1913 with Federal Reserve Act. Glass-Steagall came in 1933, 20 years after the Federal Reserve wildly inflated the Great War bubble then the late 1920's stock market bubble and Florida land speculation bubble.

Glass-Steagall is mathematically unenforceable under a real sound money system: the government wouldn't have the specie money to bail out all the depositors. The redemption promise had to be voided sooner or later when the government promises to bail out all depositors (G-S) or to bail out all speculators (Federal Reserve Act, as "lender of last resort"). The Great War starting in 1914 only put in a few years of delay (when redemption was suspended in all western countries) . . . the Madoff-like Ponzi scheme took only the first major bubble (the 1920's) to reveal itself to be a scam. It's mathematically impossible to have a buyer-of-last-resort and honest specie redemption promise at the same time.

Reality says

No. The Federal Reserve was put in place in 1913 with Federal Reserve Act. Glass-Steagall came in 1933, 20 years after the Federal Reserve wildly inflated the Great War bubble then the late 1920's stock market bubble and Florida land speculation bubble.

No, blah unrelated blah I hate the Fed blah.

Perhaps you are going by some other definition of fiat money.

Most of the people I encounter, start talking about GOLD, which we were still on the gold standard in that era. Perhaps you are taking the more expansive "any government issued paper currency as legal tender" which was the case as far back the Articles of Confederation. Man the Illuminati conspiracy inside our government Star Chambers to wreck the country with fiat money goes all the way back to the Founders. Tricky devils! Perhaps Obama time travelled with Ponzi that far back. They really do push the poor financiers around like pawns don't they.

Vicente,

I'm talking about intelligent analysis, not blah blah or short attention span or gullibility.

How was unlimited bail out of all depositors possible when the government didn't have unlimited supply of gold? How was bail out of investors as buyer-of-last-resort possible? The government obviously had much less gold than the amount needed to honor the specie pledge and the bailout promises at the same time.

Madoff's scheme was a Ponzi scheme long before he was caught in a run-on-the-bank, by about 20 years, about the same duration from 1913 to 1933/34.

What "Illuminati" are you talking about?

Reality,

The Illuminati behind the centuries-long government manipulation required of course.

Duh!

It could not possibly be the case that financiers and bankers could wreck an economy. Even if they could, they are just too nice.

Vicente says

We had numerous quite serious depressions prior to the "Great Depression" that name was even recycled from an earlier one. Happened frequently and were devastating, to the point something had to be done. And it was.

The so-called "solution" actually made it far worse than any previous "depressions"/"recessions." Recessions are actually the free market's way of cleansing malinvestments, just like high body temperature is the human immune system's response to bad germs. Suppressing the fever without addressing the underlying disease can be fatal. The cure is worse than disease.

It's ironic you should compare free market advocacy to Soviet-style central planning. The central bank in our system is soviet-style central planning: central planning for the money supply and hence the economy as a whole. Alan Greenspan's career illustrates the axiom "power corrupts."

"Let's remove all regulations and let the banks gobble each other up until we have one GIANT bank which is "too big to fail". Then, let's let it fail and see what happens."

First of all, in a free market place, banks wouldn't be able to gobble each other up without failing first on their way to "world domination." Smaller banks with intimate local knowledge are simply more efficient in risk assessment than bureaucratic behemoth when things turn. Things do turn as new discoveries and new technology often render old capital investment obsolete! That's how free market economies progress: by creative destruction destroying incumbent big money capitalists who have grown too fat and banks too dumb and too fat to avoid lending to them. The alternative is soviet-style stagnation making 1940's cars in the 1980's.

Speaking of consolidation, the central bank has in fact created the one GIANT bank, it's called the Federal Reserve, with monopoly on mismanaging our money supply, just like soviet bureaucrats used to enjoy mismanaging their economy while doling out feudalistic privileges to the apparachik.

"Rather you try that experiment on your own country and economy, not on mine thanks."

Central Banking and central planning is an experiment, and a failed one at that. It has failed every single time it's been tried in human history, ever since the ancient times.

Vicente says

Reality,

The Illuminati behind the centuries-long government manipulation required of course.

Duh!

It could not possibly be the case that financiers and bankers could wreck an economy. Even if they could, they are just too nice.

Financiers and bankers routinely wreck economy through their control of the government. Financiers and bankers own the governments. How else do you explain why Obama, a Democrat after all, was threatening to cut off social security checks instead of cutting off the interest payment to financiers and bankers first?

Governments are essentially tax farmers working for financiers and bankers who demand a cut on the economy in the form of interest payment. Government regulations do not serve to restrain financiers or bankers, but serve primarily to reinforce the cartel and keep out would be competition.

Ill keep it short. Where are MERCEDES made? In GERMANY right? Thats right. And they will ALWAYS BE made IN Germany. Where are "american" cars made???? Mexico and Canada. Odd that Honda, Toyota, and Nissan are MADE IN THE USA. I wonder for how long.

I agree government is ALWAYS to blame.

We are all however just pawns in bigger hands.

Look on your currency:

Reality says

Governments are essentially tax farmers working for financiers and bankers who demand a cut on the economy in the form of interest payment. Government regulations do not serve to restrain financiers or bankers, but serve primarily to reinforce the cartel and keep out would be competition.

OK you got me there. I surrender sir.

However government can regulate and has done so in past. Particularly bold leaders and/or voters have whacked the banker jungle back. Sure it grows back, but you keep whacking and next thing you know you're raising cattle on former rainforest. OK not my preferred imagery but still.

Glass-Steagall IMO actually worked. I'm not sure we can put the genie back in the bottle, but trying it would be a hoot.

BEN! Glad to see you are still around ole bean. You need to watch yourself in public though this is disgraceful for a man of your station:

Drunken Ben Bernanke Tells Everyone At Neighborhood Bar How Screwed U.S. Economy Really Is

Bernard says

I think we should look to the German model. Their workers are the highest paid and they are busy. It means a more socalized economy, but it also means that everyone has a high standard of living.
How do they do it? Well they did not do it by dismanteling the government, which seems to be the Republican plan, that the Democrats are passively accepting.

They did it by being a major exporter. Obama-nomics isn't going to make the US a major exporter.

Vicente says

OK you got me there. I surrender sir.

However government can regulate and has done so in past. Particularly bold leaders and/or voters have whacked the banker jungle back. Sure it grows back, but you keep whacking and next thing you know you're raising cattle on former rainforest. OK not my preferred imagery but still.

Glass-Steagall IMO actually worked. I'm not sure we can put the genie back in the bottle, but trying it would be a hoot.

BEN! Glad to see you are still around ole bean. You need to watch yourself in public though this is disgraceful for a man of your station:

Funny photo.

As for wacking, the JFK experience illustrated who does the wackign and whom gets wacked, when it comes to wacking.

Liberty and freedom do not flow from high above doled out by a sagacious leader. Sagacious leaders who managed to get up there either get corrupted or get wacked. Power nexus do not dole out liberty any more than the ring to rule all rings can be used for good.

Liberty and freedom thrive when the nexus of power is reduced.

Reality says

As for wacking, the JFK experience illustrated who does the wackign and whom gets wacked, when it comes to wacking.

You're a JFK conspiracy nutter, got it.

Yes they did it by being a major exporter, but how do they remain a major exporter, when their wages are the highest? By creating an environment where people are working together. Its what is not happening here in the US. It is not cheaper in the long run to ship our industry to China. It may profit the people at the very top quite handsomely in the shorter run. But in the long run everyone is much worse off.

If you've lived in Europe you would know that the Germans have a very high standard of living. Tri tip is more expensive, but you pay less for housing. You're taxes at a middle class level are not much higher than we pay here in CA, and for poorer people are much less. But they get services for their taxes, which we don't get here. Our tax dollars are squandared on a military industrial complex we dont need, and a prison industrial complex that hobbles the poor. Oh yes and lets not forget Both of George Bush's wars.

Needless to say Germans look at America with a little justifiable contempt these days. They may not say it directly, but you can feel it. Because they can see what is going on here in the US, and they'd never allow that to happen over there. Lets face it we've been sold down the river by the Reagan republican agenda. And the current depression we are in is a result of this short sighted agenda. And even when there is a political will to change the game back towards a more egalitarian model, its going to take a long time to do its not going to happen over night. So eat hearty cause you're gonna be pickin that cotton all day long.

night0wl says

We still have the following high end industries:
1) Aircraft manufacturing (Boeing)
2) Medical devices (GE Healthcare)
3) Biotech R&D
4) Energy Turbines (Gas, Oil, & Wind)
5) Some appliance manufacturing.
Ok, so I used to work at GE...but I remember we were still manufacturing in the states. My job was to provide ERP systems for those facilities.

Its not like we have a global monoploy in any of these industries. For every US mfg there are a couple Asian/Euro mfg to compete with. Would that ERP system be SAP by any chance.

Strangewalk says

millenium generation

The MGs are hooked on their Facebook, Iphones, and Zynga crap, unable to comprehend real industries that matter in Silicon Valley... Semi, Storage, Servers and Software.

Check out this link from Democracy Now! Not only is the corporatocracy outsourcing to China for cheap labor; they even get cheaper labor ($0.20 an hour) using the huge domestic prison population to make all kinds of stuff. It makes sense now why they put so many people in prison for minor offenses.

http://www.democracynow.org/2011/8/5/new_expos_tracks_alec_private_prison

proudtobegenx says

Democracy Now!

Thats a Great Fuck Head Liberal TV program!

Reminds me of how the liberals managed to pretty much destroy our economy back in the 70s with their policies. Result ? The Japanese and Europeans managed to replace our industries.

Manufacturing also produces a multi-level knowledge base.
A society that makes things shares all the spinoffs of research, development, invention, not to mention of course, the total amount of employment created by production.
I think a society loses not only financially, but also a lot of pride when they stop the process of creating truly home-grown brands.
Historically, Spain went down the tubes (in spite of all the New World's stolen wealth) when they blew it all on fantasies and enchantments back in the 16th century, figuring they could just buy everything from someone else.
They wound up making nothing (except bulls.)

Interesting - how this affects particularly, the middle class.
Perhaps a by-product of this development is that weird notion that middle-class was "supposed" to become truly white-collar...just sitting in a cubicle and poking at a keypad.
God forbid we wear grease-stained blue collars anymore.
But at one time, that was the real backbone of the economy.

Germany has avoided this mistake, largely because its workers can afford to pay domestic prices (what a novel concept) - and has of course, also maintained its manufacturing knowledge base.
What I can't figure out, is how a whole nation swallowed the idea that this knowledge base wasn't important, anymore?
But then...that kind of thinking fits in perfectly with so much of what has warped our economy out of shape. Wealth isn't created anymore, just intercepted.
Just like that Catcher in the Rye, the Big Wall Street Mitt grabs every hopeful attempt....

j.merzetti says

Historically, Spain went down the tubes (in spite of all the New World's stolen wealth) when they blew it all on fantasies and enchantments back in the 16th century, figuring they could just buy everything from someone else.
They wound up making nothing (except bulls.)

BINGO. The Elites and Middle Classes in Spain were only interested in obtaining land in order to live the life of a Nobleman. They imported everything from Holland, Italy, etc with their New World Gold and Silver. Eventually the economy was hollowed out as no investment or tariff was there to advance or protect domestic industry. Same shit happened in Mexico.

Wherever policies that emphasize landed wealth and unearned income trump an industrial policy based on production, you see a few very rich but many poor people.

China has stiff tariffs, as does Malaysia, South Korea, Japan and all the current or former Asian Tigers.

Unjailed Traitors have a hard time finding a free trade country that developed from the 3rd world that is larger than a single city in a strategic location by highly trafficked waterway. That is, it doesn't work for "real" countries.

thomas.wong1986 says

We "Started" to lose in mfg long before RR came to office.

Right around the time we embraced "Free Trade" in the early-mid 70s after nearly 200 years of robust tariffs.

thomas.wong1986 says

We "Started" to lose in mfg long before RR came to office.

Indeed. It first started with the electronics industry. In 1967 the US made something like over 65% of the electronics sold internationally. In the 30's-50's RCA was one of the biggest corporations on earth. As mentioned before, I collect vintage tube powered radios. ALL of them were made in the US. So too is basically everything else you can think of: appliances, toasters, TV sets, clothes, shoes, and light bulbs to name a few.

We lost our electronics industry primarily due to cheap Japanese products. Just like it is now, US companies either couldn't compete with cheaper Japanese goods or they simply shut down their factories and shipped the work overseas. We basically haven't been in the consumer electronics biz for the better part of 40 years.

You've got to remember that by the time Reagan got elected the Japanese car industry was wiping the floor. Their cars were 200% better than anything Detroit spewed out. I distinctly recall how truly awful my Dad's 82 Buick Riviera was. That thing was in the shop more than it was on the road. The Camry we replaced it with ran forever with no problems.

I think there are some good stories out there. GM and Ford are now in my opinion making some really good products. GM is now back to being No.1. They both make competitive small cars that people- especially people in urban areas- want to buy.

To be honest I make it a point to not buy anything new if I can help it. Almost all new items are junk- plain and simple. Today I bought a 60's vintage Osterizer blender. Its built like a tank, weighs a ton and is totally plated in chrome. Its built like things were typically built like. It makes anything made today- even the "fancy" brands look like disposable crap. And sadly, that's about the only way you can buy American made anymore.

thunderlips11 says

Right around the time we embraced "Free Trade" in the early-mid 70s after nearly 200 years of robust tariffs.

That's odd, I seem to remember NAFTA being signed by Bill Clinton in the 90's. Perhaps you are talking about GATT which the US initiated and pushed hard for. That was 1947. What "Free Trade" agreements were made in the 70's?

This can be quite a topic.

We're always going to have some manufacturing because of a number of factors. Proximity, dependency and of course preference.

When I worked in retail it was like the OP said but I worked for the same things but later on. Many goods there are made in China and other countries. When I worked for a work clothing company there was really no assures that a product came from anywhere. If you wanted US made it would take a large order and it would have to be manually picked from the source and take much longer.

Make no mistake we can make anything in the USA. But it comes with a price. Everything we want to add onto the price of manufacturing gets added into the cost of selling it. Health insurance for employees, ergonomics for employees, environmental friendly packaging, community relations etc. It's like the concept of an environmentally friendly cleaner. Look at what is the primary vs the secondary. We ask for too much from some businesses these days.

And of course the consumer generally wants things dirt cheap.

The reasons why other countries can be cheaper are multifold. To use China as an example it is a unitary state. There is no local/state or provincial government to deal with (UK is the same way) It makes it simple once you enter the country but at the same point it can also mean that other areas of the country might not be cheaper. In the USA laws vary wildly on the state..gambling and same sex marriage come to mind immediately.
China and Taiwan also have the Hukou system which is weird to say the least
http://en.wikipedia.org/wiki/Hukou_system
it is attempting to prevent massive influxes of unemployed people to cities (picture grapes of wrath). The permit system can actually prevent people from sending their children to school in areas they work. In a sense one might argue that they are illegal within the own country and thus the wages are lower. In looking at the currency some argue that it is fixed but at the same point when we took ourselves off the gold standard it contributed highly to the OPEC embargo.

It should be noted that much of what is made is not really designed in those countries. There is no Ivy league in Asia. The Asian way of teaching predominantly is instruction. Asking a teacher/professor a question or implying something is wrong is unheard of.

Sometimes inventors have odd ideas of their inventions. Thomas Edison supposedly hated the idea that the phonographic record would be used for music. He wanted it to be used to have audio books for the blind and to teach people foreign languages. But the money in it was in the music and that is what it is known for.

Countries generally HAVE to make goods at first because they might not have the method or means to buy goods. Heck you start with a bartering system then establish the concept of credit. Much of the gains that the developing world is making are marginal. By that I mean it is a one time gain. A family only needs one fridge, one washer, one drier, one microwave etc. The gains of more are less the more that they have.

Once an economy develops more and more actually consumption can go down. I would say the most dependable consumption is food followed by energy and then maybe followed by clothing.

"Today I bought a 60's vintage Osterizer blender. Its built like a tank, weighs a ton and is totally plated in chrome. Its built like things were typically built like. It makes anything made today- even the "fancy" brands look like disposable crap"

But that is also a paradox. If you make products that last forever then you aren't going to sell them again to the same customers. If you make products that break down you STILL aren't going to get the same customers since the quality was poor.

The problem with mass production of any good is that the more people have that given item the less it is worth. Microwaves at one point were a metric for how developed a country was. Now they are so cheap people in public housing have one.

The Heritage Foundation issued a paper that illustrates what amenities that poor people have vs those better off
www.heritage.org/research/reports/2007/08/how-poor-are-americas-poor-examining-the-plague-of-poverty-in-america
The objective isn't so much to illustrate that people are not "poor" but that our standard for "poor" is higher than most of the planet.

The other thing to keep in mind about manufacturing is that factory work is not always that sophisticated. Some honestly think those laid off from auto plants were somehow mechanics...they aren't. I had a great aunt that put together spark plugs decades ago (50's and 60s). Same action every 15 or so seconds..every day is the same..every week is the same..every month is the same. Stable work but there is no variance. I have a grandmother that worked for a beer company (go for the gusto!) again same thing..no variance (except the smell from when bottles cracked and that it was amplified in the summer)

Some of the reasons why we miss manufacturing is that at the time it did not appear to be that sophisticated and did not require (at first) standards. On the job training was enough. Now manufacturing is much more automated and sophisticated than before.
http://www.msnbc.msn.com/id/41349653/ns/business-us_business/t/despite-chinas-might-us-factories-maintain-edge/#.Tj6pXSwQ-Sw

Bah the point of heritage foundation is to paper over a huge and worsening wealth gap and propagandize poor to accept their place.

Regarding Spain, don't forget they spent a big bulk of their ill gotten gains from the cieglo del oro, on an ideological war called the Spanish inquisition.

Reminds me of Empire day in "The meaning of Life" To commemorate all those brave souls who selflessly gave their lives to help keep China British.

Also reminds me a little of both of George Bush's wars. I mean since we're going to loose them anyway, and I don't think the point was ever to win. Coulden't we just cut our costs by simply mugging everybody in the streets by some jackbooted fedral thugs and then giving the loot to Blackwater, and Haliburton. Saves those poor Iraqi's from getting shot and raped by the USMC. Put the army where it belongs, on the streets of America.