patrick.net

http://www.examiner.com/article/dollar-no-longer-primary-oil-currency-as-china-begins-to-sell-oil-using-yuan

oops.

edvard2 says

Yet many businesses today- and in particular some in the service industry- do not treat their employees well where they pay their workers poorly and give them nary any benefits. This in turn makes for high turnover, less loyalty, and less innovation.

service industry has never been great unless your a sole proprietorship. but we wrongly still have written off the mfg sector which we need to recapture it.

dublin hillz says

hat is a good point - one of the reasons why things were bubbly in 1920's was specifically because tax policy allowed the super wealthy to keep most benjamins and they heavily speculated. Although to be fair the bubble grew even more because even regular people kept investing on margin due to promise of easy money and perhaps to keep up with the joneses in the roaring 20s.

everyone was specutling without visablity to what they were actually speculating on...

there was no visibility and standardization on quarterly and yearly financial statements until the SEC act of 1933/34. People threw money blindly into stock
they had no idea of revenues and earnings.

Dan8267 says

Honest Abe says

You can't help the poor by destroying the rich.

Worked in the French revolution.

did you forget what the French Revolution resulted in.. a blood bath, torture, dictatorship and wars.. Hey.. arent you against all that anyway ?

Did you have a change of heart...

freak80 says

For example, destruction of domestic industrial infrastructure in the name of short-term profit doesn't make the country wealthier as a whole, it only benefits the very top.

Buying up competing businesses and shutting them down in order to raise prices benefits the top vs. regular consumers.

Don't you see the contradiction between these two examples? Shutting out imports would have the same effect on the consumers of low price goods as shutting down a low price producer.

$2T divided by 150 million (half of Americans) is only a little over $13000 per person! not income but total networth! The deliberately misleading statistic is not talking about half of the entire networth of all Americans here, but the combined networth of mostly zero-networth and negative-networth segment of the population.

The real question is why the average net worth of nearly half of Americans is so low?! Perhaps the tax and welfare state promoting zero-networth and negative-networth living have a lot to do with it?!

Reality says

Shutting out imports would have the same effect on the consumers of low price goods as shutting down a low price producer.

With one *very* important difference: shutting out imports allows consumers to keep their jobs and *keep consuming*. Consumers can't buy very much if they have to work for almost nothing to compete with slave-labor policies overseas.

The "supply side" voodoo economics crowd loves to ignore the demand side of the equation.

The unemployed/underemployed person is stuck in the following catch-22: he can't work, so he can't buy anything, so he can't increase the demand for goods and services, so he can't cause the creation of a new job opening.

Sure, you're always going to have your deadbeats and low-lifes that don't want to work. But that's not our biggest problem right now. Right now, our problem is massive unemployment (and under-employment) of people who *want* to work and *want* to buy goods and services.

It's a viscious cycle that must be broken. Even more outsourcing and automation is obviously *not* going to fix the problem. The problem right now is lack of demand.

thomaswong.1986 says

service industry has never been great unless your a sole proprietorship. but we wrongly still have written off the mfg sector which we need to recapture it.

The Service industry is now the largest employer in the country. This wasn't the case in the past. As such, its one of the major contributing reasons why wages have fallen and standards are lower. If things were not great in the service industry in the past, then they need to become better for the present. I worked in the service industry for a number of years myself and few of these jobs are really viable as actual family-supporting careers.

freak80 says

With one *very* important difference: shutting out imports allows consumers to keep their jobs and *keep consuming*. Consumers can't buy very much if they have to work for almost nothing to compete with slave-labor policies overseas.

We tried shutting out imports during the 30's depression by raising Tarifs. Few people know that that single act was what caused the depression to become as severe as it was because as soon as we did that, all of the other countries did the same to us and so we lost a great deal of our exporting ability at a time when manufacturing was very strong.

Furthermore, it would be virtually impossible to do this today. It doesn't matter what you buy today, whether its a cell phone, car, TV, or even a house: Those items are all made from internationally-sourced parts. Manufacturing is now one of the most globally-dependent industries and requires international cooperation. If we were to shut out imports our own manufactures would lose the ability to actually "manufacture" much of anything.

edvard2 says

Furthermore, it would be virtually impossible to do this today. It doesn't matter what you buy today, whether its a cell phone, car, TV, or even a house:
Those items are all made from internationally-sourced parts. Manufacturing is now one of the most globally-dependent industries and requires international cooperation. If we were to shut out imports our own manufactures would lose the
ability to actually "manufacture" much of anything.

You're right. The cat is already out of the bag. We bought the "globalization is good for you" propaganda and now we suffer the (probably irreversible) consequences.

So what can be done? It looks like the average American is pretty much screwed. There's no way he can compete with slave labor and automation.

Globalism in manufacturing is nothing new. Even in the 20's and 30's many manufactured goods we made also used imported components. Either that or some of the machinery used to make what we made was imported too.

edvard2 says

Globalism in manufacturing is nothing new

the added wrinkle of the 1980s and 90s was persistent trade deficits.

http://research.stlouisfed.org/fred2/series/NETEXP

We got Japan to move off their weak yen in the mid-80s, but China took and ran with that ball.

The end result is that we've gotten a lot of stuff for less money, at the cost of millions of lost mfg jobs.

Plus the money we've saved with the cheaper goods has been taken by FIRE and health sector.

It's no accident that the more we saved buying Chinese-made stuff, the higher our medical costs got.

thomaswong.1986 says

Dan8267 says

Honest Abe says

You can't help the poor by destroying the rich.

Worked in the French revolution.

did you forget what the French Revolution resulted in.. a blood bath, torture, dictatorship and wars.. Hey.. arent you against all that anyway ?

Did you have a change of heart...

No and no. And neither contradicts my point.

Bellingham Bill says

It's no accident that the more we saved buying Chinese-made stuff, the higher our medical costs got.

That connection is not obvious and warrants explanation. Please elaborate.

Dan8267 says

Bellingham Bill says

It's no accident that the more we saved buying Chinese-made stuff, the higher our medical costs got.

That connection is not obvious and warrants explanation. Please elaborate.

He's probably saying that as our purchase power relative to consumer goods increased that medical sector came in to take the populace to the cleaners. But then we can say the same thing about colleges and landlords if we follow down that path.

dublin hillz says

He's probably saying that as our purchase power relative to consumer goods increased that medical sector came in to take the populace to the cleaners. But then we can say the same thing about colleges and landlords if we follow down that path.

It is certainly true that health care, housing, and college are consuming way too much of the typical American's income and thereby starving all other industries. And it is true that this is a prime reason the economy is bad.

It is also true that America has sold off much of its infrastructure to China and India, thereby decreasing our ability to produce wealth and export goods to other nations. And it is true that this is another prime reason the economy is bad.

But what I'm not seeing is how the two are intrinsically related. They seem like independent problems to me.

Dan8267 says

But what I'm not seeing is how the two are intrinsically related. They seem like independent problems to me.

Agree.

Dan8267 says

It is also true that America has sold off much of its infrastructure to China and India, thereby decreasing our ability to produce wealth and export goods to other nations. And it is true that this is another prime reason the economy is bad.

That's the thing. Earlier generations realized that industry was part of the national infrastructure like roads, railroads, canals, power plants, and military bases.

Then the boomers came along and realized they could sell off our industry to China and India for short-term profit and totally fucked over the next generation(s). And where the industry goes, so goes the technology.

freak80 says

Even more outsourcing and automation is obviously *not* going to fix the problem.

LOL, you are quite correct in relating outsourcing with automation. Your objection to both however is due to the Luddite in you peeking out.

The problem right now is lack of demand.

Supply creates its own demand. As outsourcing and automation drive down prices, more and more human wants become qualified demand.

dublin hillz says

He's probably saying that as our purchase power relative to consumer goods increased that medical sector came in to take the populace to the cleaners. But then we can say the same thing about colleges and landlords if we follow down that path.

ayup

http://research.stlouisfed.org/fred2/graph/?g=mC8

weeks of work required to pay annual per-capita health care costs

Cheap chinese imports gave everyone another $200 or more per month to spend.

Did we buy more stuff (or put the money in the bank) with that, or did other prices -- gasoline, health care, housing -- rise to take that extra spending power?

Same thing with the Bush tax cuts -- the extra spending power went right into higher costs of high-rent necessities: housing, energy, health care.

freak80 says

Then the boomers came along and realized they could sell off our industry to China and India for short-term profit and totally fucked over the next generation(s). And where the industry goes, so goes the technology

No.. it was the Japanese who dumped products below production costs on the world market which prompted NOT only US manufactures but also Europeans to move factories to Tiger nations like Singapore Taiwan HK and So Korea... else they would have gone bankrupt. This was long long before India and China.

You do recall how the Japanese grew their economy so rapidly ?

so today.. India is accusing China of dumping below cost on Indian markets killing their economy...

India accuses China of dumping silk | China Economic Review
www.chinaeconomicreview.com/node/30065‎
Indian trade officials ruled in March that China was dumping low-cost silk in India and a final order.

U.S. rivals accuse China of dumping solar panels | Reuters
www.reuters.com/article/.../us-solar-imports-idUSTRE80O2AB20120125‎
Jan 25, 2012 - (Reuters) - Chinese solar panel makers flooded the U.S. market with their products at the ... U.S. rivals accuse China of dumping solar panels ...

China slaps anti dumping probe on an Indian chemical's imports ...
articles.economictimes.indiatimes.com › Collections › Indian Companies‎
Aug 23, 2013 - BEIJING: China has launched an anti-dumping investigation into imports of ... TBHQ producers, accusing Indian manufacturers of dumping the ...

India initiates anti-dumping investigation against China and the US ...
www.pv-tech.org/.../india_initiates_anti_dumping_investigation_against...‎
Nov 28, 2012 - India initiates anti-dumping investigation against China and the US. The CSE accused
US manufacturers of taking advantage of a loop hole in ...

China investigates Indian TBHQ dumping - Xinhua | English.news.cn
news.xinhuanet.com › Home › China‎
Aug 22, 2013 - MOC has received requests from domestic TBHQ producers, accusing Indian manufacturers of dumping the product on the Chinese market and ...

China Accused of 'Dumping' Solar Panels in U.S. - WSJ.com
online.wsj.com/.../SB1000142405297020448530457664129200589932...‎
Oct 20, 2011 - Solar Firms Seek Duties in China Dumping Case ... SolarWorld accused Chinese manufacturers of selling solar panels at less than half of what ...

Reality says

Supply creates its own demand. As outsourcing and automation drive down prices, more and more human wants become qualified demand.

Automation does not drive down prices.. why do autos costs more..

capital equipment is very costly to maintain and very complex to produce...