America on its way down. Is it?

[Skybird]

http://www.spiegel.de/international/world/0,1518,druck-712496,00.html

This is a german correspondent's view on how things are going in America. While it may be just one voice, since a longer time now almost all media over here seem to point out similiar views of a general trend that is unfolding since years.

I wonder what Americans think of this foreigner's view from the outside (with being outside being both an advantage and a disadvantage). Is the perception from the outside an allout flawed one, or does the author get his points right?

But do not try to just raise a flame war on a personally unwanted opinion. Give solid reasons, if you disagree. I am not launching this to raise a heated debate. I am just curuous on how Amerians react if bein confronted with percpetions and obwsevraitons on their country that may be seen as highly contradictory to the "official" ideological self-understanding of the US. none of what the author writes is in support of what is knwon to be the "American dream".

the recent initiative by ultra-rich people in the Us to distriubute major parts of their wealth, has caused a bitter discussion in Germany, illustrating that there are significant differences not only between libertarians/conservatives and socialists, but between the two countries in principal. what is taken queer by many over here - leaving a foul taste in our mouths - is the fact that donations like those beign offered in the US can be written off from obligatory tax duties, making thes e donations maybe much less altruistic than at first glance it seems - it means that in part private people makew the community pay-by-tayes for theirn own private donations, which emans these rich people enforcing without pltiallegitimation that according moneys get invested into purposes that they as a single private person have decided for. Writing off donations from taxes is not possible in Germany to the ammount that is possible in aer America. Also voluntary, unbinding wellfare, and mandtory social security systems are one of the most obvious major differencees between european cultures and American culture in general. While in principal I prefer the obligatory nature of the system in europe,I also see this very system being hijacked, exploited and abused for ideological politcal interests - which has made me moving away from the european model - at the same time avoiding th American model, too. honstely said, I do not know what to do about these things, to me both systems are seriously porked by now. the controversy about donations versus taxes has led the left to demand that they/the state (they hope to head) should not accept such donations, but should get the money nevertheless by raising mandatory taxes - so that the same money gets collected nevertheless, but not distributed by independant private will, but is being controlled by political institutions and ideologies (a motivation that pisses me off big time). For demagogues like to be found in poltival parties of every kind today, and ideological tranch warriors, private people taking responsibility and doing things for the community outside the control and planning of parties, simply is a vital thread to their own existence - it renders them obsolete and shows how little they are needed. On the othe rhand, pirvate donators usijng the american system just to direct public money into opportunities and purposes that they decide on, also is not acceptable, since they are not politically legitimised to do so.

are those ultra-rich donators just abusing a flaw in the system to avoid mandatory tax payments that threaten to come at them anyway?

[August]

I wonder what Americans think of this foreigner's view from the outside (with being outside being both an advantage and a disadvantage). Is the perception from the outside an allout flawed one, or does the author get his points right?

Foreign people, mostly Europeans, have been prognosticating my countries imminent doom ever since it was founded. For almost two and a half centuries they have turned out to be wrong.

Hard times have come and gone in my country and they will continue to do so. Folks who believe we're in some kind of end game are either missing the point that life is what you make of it, or, like your beloved Speigel, are secretly hoping for it to be true.

[yubba]

our government and the people that we sent to Washington they forgot that they work for the american public, some where along the line they think they are royalty,and the american people are sheep too be sheared. We will be rebembering the royals in November. I for 1 don't want too see a United Socalist Rebublic of America. Only you can prevent Socalism or you can say BBbaaaaaaaaa for the rest of your life.

[Sailor Steve]

Some good questions. Economics being my weakest point, all I can give is thoughts, not ideas.

I But do not try to just raise a flame war on a personally unwanted opinion. Give solid reasons, if you disagree. I am not launching this to raise a heated debate. I am just curuous on how Amerians react if bein confronted with percpetions and obwsevraitons on their country that may be seen as highly contradictory to the "official" ideological self-understanding of the US. none of what the author writes is in support of what is knwon to be the "American dream".
Part of the problem there is human nature. I can talk about my problems all I want, but if you mention them without being asked, you are instantly the enemy. We all do that.

Your main text covers Europeans' attitudes and opinions, so I don't have a clue to any answers there.

are those ultra-rich donators just abusing a flaw in the system to avoid mandatory tax payments that threaten to come at them anyway?
I don't think so. While someone like Bill Gates pays taxes on all his income, including interest income, his actual fortune is not taxed (at least as I understand it), so new taxes can be reduced by write-offs, but it doesn't affect the money he already has. Offering several billion dollars to help those less fortunate than himself is helping, no matter what his real reasons for doing so.

Foreign people, mostly Europeans, have been prognosticating my countries imminent doom ever since it was founded. For almost two and a half centuries they have turned out to be wrong.
True, but then so have nay-sayers here as well. The bad news is we don't really know what's around the corner. As with any "crisis", warnings are based on observations which may or may not be valid, and should be at least looked at. Of course this doesn't mean turning into Chicken Little every time a leaf hits us on the head.

Hard times have come and gone in my country and they will continue to do so. Folks who believe we're in some kind of end game are either missing the point that life is what you make of it, or, like your beloved Speigel, are secretly hoping for it to be true.
Again, that's not just outsiders. The biggest opportunity to fail and die as a country came in 1929, but that was true for the rest of the world as well. We survived that, and optimism about surviving what's going on to day is well founded. Of course some unforseen problem may come along and kill us before we know what happened, but that's always the risk we take just by being alive.

I agree about some people wanting us to fail, but that is also domestic. As I said at first, I think we tend to get our backs up when someone from the outside says it.

our government and the people that we sent to Washington they forgot that they work for the american public, some where along the line they think they are royalty,and the american people are sheep too be sheared.
I think that began when Congressional salaries started outstripping the average American pay. When it pays so well it becomes a career rather than a service it starts to breed the oft-mentioned delusions of grandeur.

On the other hand, your post seems to be a specifically-aimed tirade that does little to address Skybird's questions.

[August]

I agree about some people wanting us to fail, but that is also domestic. As I said at first, I think we tend to get our backs up when someone from the outside says it.

I agree and i'd also postulate that because of today's world wide media these negative messages have a far wider ranging domestic influence than they did in previous times.

Perception can often become reality.

[Platapus]

Yup, The United States is in some pretty serous trouble in multiple levels.

But on the whole, it is still a pretty nice place to live and a good place to invest your money.

We will survive just fine. We may change, but our country has changed many times since its creation and we have done just fine.

I like it here.

[Tchocky]

Mm, doubt it. The US has, for better or worse, been the most powerful country for most of the last 50-60 years. That is changing as the world changes, and any change in the status of the US will be read by some as imminent doom.

In reponse to August I've noticed this more from Americans, but less seriously. It seems like a major theme for most political parties, "we must do X/elect X/vote X or else our American way of life will disappear", this kind of thing. Which sounds like THE END IS NIGH guys, how very surprised they must be to wake up in the morning.
What certain foreigners tend to do is look externally, Iraq/Afghanistan etc, and predict the End of America, which sort of misses the point as well as being laden with Schadenfreude

For what it's worth, the US has a strange, strange history, and it hasn't progressed or regressed to the same songbook as most countries. I figure it won't in the future, either.

[mookiemookie]

our government and the people that we sent to Washington they forgot that they work for the american public, some where along the line they think they are royalty,and the american people are sheep too be sheared. We will be rebembering the royals in November. I for 1 don't want too see a United Socalist Rebublic of America. Only you can prevent Socalism or you can say BBbaaaaaaaaa for the rest of your life.

You act like this is a recent turn of events.

[antikristuseke]

Foreign people, mostly Europeans, have been prognosticating my countries imminent doom ever since it was founded. For almost two and a half centuries they have turned out to be wrong.

Hard times have come and gone in my country and they will continue to do so. Folks who believe we're in some kind of end game are either missing the point that life is what you make of it, or, like your beloved Speigel, are secretly hoping for it to be true.

That seems to be a trend with doom callers, they somehow always end up being wrong.

[Skybird]

I agree and i'd also postulate that because of today's world wide media these negative messages have a far wider ranging domestic influence than they did in previous times.

Perception can often become reality.
Or they just adequatel describe the reality.

So the question is if that essay is right, partially right and wrong, or allout wrong. To assume that the author tells a fiction he wants to see become a reality, is just that: an assumption, maybe even a malicous attempt to reject the message by miscriditing the messenger, but if just stated without providing any hints or even evidence for the author's motivationit, then at least it even is a completely unfounded assumption, as a matter of fact.

The statistics on unemployement, shift in welath structures, social structure etc etc are hardly all becasue of wishful thinling by ameroican analysts wishing the US bad.

I think you make it too easy for yourself.

[Platapus]

That seems to be a trend with doom callers, they somehow always end up being wrong.

And the one time they will be right, no one will care. :D

[Diopos]

I'll through another idea in the bag.

"America on its way down" vs "the rest of the world on its way up"

Maybe a perculiar argument in the face of the current economical crisis but if you step back and see what was the situation outside USA in the '50s, '60s, ' 70s etc you'll get it.


.

[Bubblehead1980]

Currently we are on our way down.We have a President and political party in power that is "post American" he/they does not believe in the constitution or will of the people but tat they are royalty and somehow above it all, that they know best.Things will get better though.I believe Americans learned a lot from the Bush Presidency as well as the election of Obama and giving Democrats(any part really) that much power.

America is at a crossroads for sure, but we will recover as we always do.We have had bad leaders before, long before we were born and survived it.I hate to quote FDR but "we will endure as we have endured" and things will get better.Then perhaps we will learn our lesson and rid ourselves of the disease known as Liberalism:arrgh!:

[Platapus]

you must be a riot at parties.

[Skybird]

Some quotes to help getting this back on track. "Deletion of the social middle class", is one of the slogans.


The United States is experiencing the problem of long-term unemployment for the first time since World War II. The number of the long-term unemployed is already three times as high as it was during any crisis in the past, and it is still rising.

More than a year after the official end of the recession, the overall unemployment rate remains consistently above 9.5 percent. But this is just the official figure. When adjusted to include the people who have already given up looking for work or are barely surviving on the few hundred dollars they earn with a part-time job and are using up their savings, the real unemployment figure jumps to more than 17 percent.

In its current annual report, the US Department of Agriculture notes that "food insecurity" is on the rise, and that 50 million Americans couldn't afford to buy enough food to stay healthy at some point last year. One in eight American adults and one in four children now survive on government food stamps. These are unbelievable numbers for the world's richest nation.
Even more unsettling is the fact that America, which has always been characterized by its unshakable belief in the American Dream, and in the conviction that anyone, even those at the very bottom, can rise to the top, is beginning to lose its famous optimism. According to recent figures, a significant minority of US citizens now believe that their children will be worse off than they are.

Many Americans are beginning to realize that for them, the American Dream has been more of a nightmare of late. They face a bitter reality of fewer and fewer jobs, decades of stagnating wages and dramatic increases in inequality. Only in recent months, as the economy has grown but jobs have not returned, as profits have returned but poverty figures have risen by the week, the country seems to have recognized that it is struggling with a deep-seated, structural crisis that has been building for years. As the Washington Post writes, the financial crisis was merely the final turning -- for the worse.

The boom in stocks and real estate, the country's wild borrowing spree and its excessive consumer spending have long masked the fact that the overwhelming majority of Americans derived almost no benefit from 30 years of economic growth. In 1978, the average per capita income for men in the United States was $45,879 (about €35,570). The same figure for 2007, adjusted for inflation, was $45,113 (€35,051).

Where did all the money go? All the enormous market gains and corporate earnings, the profits from the boom in the financial markets and the 110-percent increase in the gross national product in the last 30 years? It went to those who had always had more than enough already.

While 90 percent of Americans have seen only modest gains in their incomes since 1973, incomes have almost tripled for people at the upper end of the scale. In 1979, one third of the profits the country produced went to the richest 1 percent of American society. Today it's almost 60 percent. In 1950, the average corporate CEO earned 30 times as much as an ordinary worker. Today it's 300 times as much. And today 1 percent of Americans own 37 percent of the total national wealth.

Income inequality in the United States is greater today than it has been since the 1920s, except that hardly anyone has minded until now.

In America, the free market is king, and people with low incomes are seen as having only themselves to blame. Those who make a lot of money are applauded -- and emulated. The only problem is that Americans have long overlooked the fact that the American Dream was becoming a reality for fewer and fewer people.

Statistically, less affluent Americans stand a 4-percent chance of becoming part of the upper middle class -- a number that is lower than in almost every other industrialized nation.

So far, politicians have failed to come up with solutions for the growing social crisis. Washington is still waiting for jobs that aren't coming. President Barack Obama and his administration seem to be pinning their hopes on the notion that Americans will eventually pull themselves up by their bootstraps -- preferably by doing the same thing they've always done: spending money. Domestic consumer spending is responsible for two-thirds of American economic output.

But even though Federal Reserve Chairman Ben Bernanke continues to pump money into the market, and even though the government deficit has now reached the dizzying level of $1.4 trillion, such efforts have remained unsuccessful.

"The lights are going out all over America," Nobel economics laureate Paul Krugman wrote last week, and described communities that couldn't even afford to maintain their streets anymore.

The problem is that many Americans can no longer spend money on consumer products, because they have no savings. In some cases, their houses have lost half of their value. They no longer qualify for low-interest loans. They are making less money than before or they're unemployed. This in turn reduces or eliminates their ability to pay taxes.
(...)
Many people threaten to suffocate under the burden of their debt. Some 61 percent of Americans have no financial reserves and are living from paycheck to paycheck. As little as a single hospital bill can spell potential financial ruin.


I personally think that any president would be relatively helpless in adressing these things for positive effect, even more so how closely he is tied into obligations to lobby groups. Poltiical decisions, that were creating influence in the outcome that now has been acchieved, were made and are being maintained since decades. A historic fixpoint maybe would be the thematic complex of Vietnam, gold reserves and Bretton Woods.

[mookiemookie]

I'll through another idea in the bag.

"America on its way down" vs "the rest of the world on its way up"

Maybe a perculiar argument in the face of the current economical crisis but if you step back and see what was the situation outside USA in the '50s, '60s, ' 70s etc you'll get it.


.

Kind of the central argument of Zakaria's "Post American World (http://en.wikipedia.org/wiki/The_Post-American_World)." Interesting read on how China and India could be the new world superpowers in the not too distant future.

[Tchocky]

I think the author is confusing the effects of a housing/lending catastrophe with intense sociological decline.
What happens when you have millions of junk mortgages going bust? Millions of houses empty in Heartland USA. It's a visceral and highly potent image of economic mismanagement, giving stories of families living in expensive cars. What it is not is a profound new weakness in American society. The problems in the US economy are due to a highly specific set of causal factors, almost none of which are particular to the US, and has consequences which are also shared by other developed nations. America's universities are still world-renowned (if not ideally accessible - but this is probably why), it's companies employ millions abroad, it's military is still potent.

Also, pivoting a paragraph on data from the New York post and a quote from Arianna Huffington? That wouldn't get much credibility here at SUBSIM :O:

[Konovalov]

No one stays on top for ever. Anyway I'm off for a holiday to the US late next month to spend my hard earned tourist pounds. :sunny:

[August]

The statistics on unemployement, shift in welath structures, social structure etc etc are hardly all becasue of wishful thinling by ameroican analysts wishing the US bad.

I think you make it too easy for yourself.

I make it how I make it, and make no mistake Sky, regardless of what Speigel or anyone else says, I and my fellow Americans are making it. You want evidence then there it is. I don't need to rely on some unreferenced statistics of at least questionable origin and context. I'm a trade school teacher and see it myself. I deal with the very people that Speigel is talking about every day and can recite literally hundreds of success stories that I am personally acquainted with. Real people making better lives for them and their families.

As I said, if we had listened to the doubters our country would have fallen apart hundreds of years ago. They have always underestimated us and while I won't claim to know what Speigels motivations are in this particular article, I do know that the picture they are painting from 3000 miles away is not the picture that I'm seeing here with my own eyes.

[mookiemookie]

I make it how I make it, and make no mistake Sky, regardless of what Speigel or anyone else says, I and my fellow Americans are making it. You want evidence then there it is. I don't need to rely on some unreferenced statistics of at least questionable origin and context. I'm a trade school teacher and see it myself. I deal with the very people that Speigel is talking about every day and can recite literally hundreds of success stories that I am personally acquainted with. Real people making better lives for them and their families.

As I said, if we had listened to the doubters our country would have fallen apart hundreds of years ago. They have always underestimated us and while I won't claim to know what Speigels motivations are in this particular article, I do know that the picture they are painting from 3000 miles away is not the picture that I'm seeing here with my own eyes.
:salute::yeah:

[Sailor Steve]

No one stays on top for ever.
True words. And the ones who make that their prime concern are the ones most likely to precipitate the fall.

Anyway I'm off for a holiday to the US late next month to spend my hard earned tourist pounds. :sunny:
Enjoy your visit.

As I said, if we had listened to the doubters our country would have fallen apart hundreds of years ago.
What they (and a lot of us as well) don't realize is that, after all this time, The American Experiment is still just that. We're still learning as we go, and that's one lesson that's too easily forgotten, and never should be.

[August]

No one stays on top for ever. Anyway I'm off for a holiday to the US late next month to spend my hard earned tourist pounds. :sunny:

Would this be the annual Subsim meet perchance?

[gimpy117]

The fact that the Uber rich have such amounts of money that they can donate as the amount that has been pledged is astounding.

The fact of the matter is, If america has a equitable economy, one that ensured fair wages for the poor, there would be no need to pledge so much money to the poor.

Sadly, I feel that america has left its lower and middle class behind due to spiraling greed. heres nice quote from the Wall street journal

..."As a result, wages and salaries now make up the lowest share of the nation’s gross domestic product since the government began recording the data in 1947, while corporate profits have climbed to their highest share since the 1960’s. UBS, the investment bank, recently described the current period as “the golden era of profitability.”

That was posted in 2006...and im supposing it hasn't changed.

oh and here's a nice graph:
http://alanmccrindle.files.wordpress.com/2010/03/real-median-wages-usa.gif

So essentially, with wages falling...while productivity still the same and profits rising, The Companies and Uber rich have let wages stagnate or even lowered them, while taking the profits of this and putting it into their bank account.

Its becoming harder to live in this country now, the same place where in the 60's through the 70's a middle class family could have a nice car, a nice house, health care and do it on ONE INCOME. Where is that now? its gone, kaput. Sure, Back then we worked hard, But today, we still work hard...but haven't seen our wages go up at the same rate everything else has.

[Sailor Steve]

The fact of the matter is, If america has a equitable economy, one that ensured fair wages for the poor, there would be no need to pledge so much money to the poor.
Raise the minimum wage, and prices go up to compensate. The poor remain where they are.

Take from the rich and give to the poor, and you take away the incentive to be productive. And you have to use the government to do it, which means increasing the size of the government. And government workers already make far more than the average worker, so you increase the vicious circle. That is what got us into trouble in the first place, not individuals amassing wealth.

[The Third Man]

.................

[gimpy117]

Raise the minimum wage, and prices go up to compensate. The poor remain where they are.

remain where they are? you mean below the poverty line?
what about the economic benefit of...Suprise!...everybody having more money to spend instead of borrowing? Again if you know what a plutonomy is then you'll also know that having most of the money in the hands of so few is bad, and that more distributed wealth means more reliable spending and a healthier economy.


Take from the rich and give to the poor, and you take away the incentive to be productive.

or you just take away the carrot on a string.

Oh and third man, I agree that bush made it much, much worse. But it started with Reagen and was never fixed. Maybe we'll hit rock bottom and some high towers will be shaken. on a side note, I'm still miffed by all the people who defend the Uber rich to the last man when they are not Uber rich at all. Is it the dream that they can't stop hoping for? or is it just political rhetoric?

[The Third Man]

.....................

[Sailor Steve]

remain where they are? you mean below the poverty line?
Exactly. Raise the wages by government mandate and the creator of the wages has to compensate by raising prices, which means that the people at the bottom don't really gain.

what about the economic benefit of...Suprise!...everybody having more money to spend instead of borrowing?
Unless you can figure out a way to give everybody more without charging more for everything, you'll have the same situation, but with different numbers.

Again if you know what a plutonomy is then you'll also know that having most of the money in the hands of so few is bad, and that more distributed wealth means more reliable spending and a healthier economy.
And if you did a little math you would find that if we were to strip Bill Gates of his entire estate and distribute it equally, every man, woman and child in America would be a whopping two hundred dollars richer. And everyone Gates employs would now be looking for work elsewhere. But if we do the same across the board there won't be anywhere for them to look.

And how do you propose to accomplish this redistribution? The power of the government? The government already spends far more than it takes in, and it only takes in what it can force from the people who actually work for it, or what it can borrow.

I'm still miffed by all the people who defend the Uber rich to the last man when they are not Uber rich at all. Is it the dream that they can't stop hoping for? or is it just political rhetoric?
In my case it's neither. In my case it's the observation that in order to make your dream come true you need to use the government, coupled with the observation that the government is worse at it than any rich man you can cite. As far as I can see your way is far more dangerous than what we have now.

[Skybird]

@ August,

If you base your view on the group of people you are teaching at that trade school, then you are basing on a very specialised audience that neither could surprise anyone with it'S attotude and interest for trade, nor is is a representative sample of the social structure of the american society.It is a highly specialised group. Is the lecturing for free or almost free (an equivalent to German Volkshochschulen), or do the courses cost money like at university? If more like the latter, then you already would have a specialisation of that group by the fact that these are exclusively people who can afford the costs of the education (which I would expect to make a difference since education in the US and Germany gets handled very differently). Which would be illusionary for a poor family where both parents have lost their jobs recently, work in three different low wage jobs both, and find their family financially floating just above the limit at the end of the month (not to mention time).

From the Congressional Budget Office, summer this year:
http://www.cbpp.org/files/6-25-10inc.pdf

A bit older, Spring 2007, from before the economy crisis, but a competent piece on the problematic trends in low wage jobs. reminds me of Germany, where we see a massive annihilation of jobs that get reduced with low wage jobs that in parts even must be payed for by public taxes (with the profit staying in private hands, of course)
http://se1.isn.ch/serviceengine/Files/ISN/57210/ipublicationdocument_singledocument/78A9433F-FF7F-43D6-BC1B-9778E5B09907/en/lowwagework.pdf

Over 40 million jobs in the United States—about one in three—pay low wages. Unlike
good jobs, most low-wage jobs do not offer employment benefits such as health insurance
or retirement accounts, tend to have inflexible or unpredictable scheduling requirements,
and provide little opportunity for career advancement. Globalization, automation,
outsourcing, and other economic forces have all contributed to a changing domestic labor
market. All too often low-wage jobs are replacing jobs that have traditionally supported a broad
middle class. While there is considerable public concern about the erosion of the middle class,
national policy-makers have done little in the last decade to improve the pay and conditions of
low-wage work.

(Identifying CEPR in it's own words: http://www.cepr.net/index.php/about-us/)

I perfectly understand how the american model was supposed to work. But the important question is if the ideology adequately decribes the reality, and this I always have put in doubt: I see a huge contrast between the historic claim how america wants to be, and how it really is. the social polarisations seem to massively increases as well, since somewhere in the 70s. The scissor between rich and poor is widening rapidly, also few and fewer people at the top become ever richer, while more and more people work more and more, but have shrinking living conditions and payments. In principle we have the same trend in Germany and throughout Europe. As I see it, massively living on tick and making debts, while not having savings, was in parts just a logical conseqeunce, becaseu for many it would not have worked otherwise anyway. And even the economy crisis was adressed by US poltiics by the same old way: making even more debts (and demanding others to do so as well).

It is a vicious circle. Companies replace jobs (with full wages and by that producing cunsom and taxes) with low wage jobs (producing drastically reduced consum and taxes - if any at all). The profit from saving wages is either kept private, or gets invested to increase the economic activity of the company on basis of low wage jobs - low wage jobs thus become a necessary precondition for creating "jobs" and economic growth. Then a structure is established where low wage jobs cannot be tackled without costing jobs and damaging the economy that has made itself depending on low wage jobs. However, where the state needs to compensate for that lack of money that low wage workers need in order to make it through the month, these payments are made by the public budget - taxes that is. In other words, low wage jobs shift things so that any gains are kept private, but any additional costs for it are made a public issue. In other words the tax payer directly finances by indirect subventions the increase in money gained by the company.

what's more, more and more workers turning into low wage workers means the state's basis for getting a tax income gets eroded. Less and less money is available to compansate for the social costs of lowe wage jobs, and indirectly financing companies switching to low wage jobs. And this is where things are heading for a heads-to-head collision. Politicians, eager to secure their election interests before anything else, have one big answer to that: increase public debts, spending on tick.

At the same time the industry becomes more and more dependant on the few and fewer rich ones to buy and to consumme. Becasue the more low wage workers oyu hve, the smaller is your populations inancial capacity to consume and by that boosting the economy. In Germany we see this trend very drastically unfolding, hacking away at our socialmiddle class: families with children. At the same time, for different reasons, the number of single parents with kids but without a partner, is drastically climbing - which in most cases feeds back on the costs for the social security network payed by taxes that are payed by less and less tax-payers: becasue more and more people work in low wage jobs and few and fewer people have children (=future tax payers).

It is social dynamite both in Europe AND America, I think. I leave out gunnar Heihnsohn's considerations on social structure of birth rates that I have linked to two or threemon ths ago. In brief it was about the huge problme of ever mnore spoical low class babies being born, but ever fewer high class or academics' babies getting born, which again has an impact on future tax incomes and costs for social networks.

[The Third Man]

..........................

[August]

@ August,

If you base your view on the group of people you are teaching at that trade school, then you are basing on a very specialised audience that neither could surprise anyone with it'S attotude and interest for trade, nor is is a representative sample of the social structure of the american society.It is a highly specialised group.

So you're claiming that an interest in improving ones situation is not representative of the social structure of American society? If so you don't know us very well.

Is the lecturing for free or almost free (an equivalent to German Volkshochschulen), or do the courses cost money like at university? If more like the latter, then you already would have a specialisation of that group by the fact that these are exclusively people who can afford the costs of the education (which I would expect to make a difference since education in the US and Germany gets handled very differently). Which would be illusionary for a poor family where both parents have lost their jobs recently, work in three different low wage jobs both, and find their family financially floating just above the limit at the end of the month (not to mention time).

The tuition of well over half my students is paid via several worker retraining programs, so they pay little or nothing. The rest are there on student loans which are granted based on a persons future earnings potential rather than their present wealth. Call it illusionary if you want but if so it's an illusion that is personified in thousands of vocational schools like mine spread across the country.

I perfectly understand how the american model was supposed to work. But the important question is if the ideology adequately decribes the reality, and this I always have put in doubt: I see a huge contrast between the historic claim how america wants to be, and how it really is. the social polarisations seem to massively increases as well, since somewhere in the 70s.

That's because you get your information from rags like Speigel and the NYT who make their livings on spreading gloom and doom, or you read the crap the political parties are always slinging at each other and think that it is gospel. Like I've said twice so far. Folks have been prognosticating our imminent doom for over 200 years. They ain't been right yet.

And on that note let me end this with a few appropriate words from the immortal American Bard Charles Daniels, Esq.:

Well the eagles been flying slow,
and the flag's been flying low,
and a lotta people say that America's fixing to fall.
But speaking just for me,
and some people from Tennessee,
we got a thing or two to tell ya all.
This lady may have stumbled,
but she ain't ever fell.
And if our enemies don't believe that,
they can all go straight to hell.

:salute:

[gimpy117]

Okay im gonna say this:

The poor make more: its will damn well gonna get spent. EVERYBODY will be happier. The economy also moves from increased spending

The rich make more: It sits in their bank account and they get to brag about how much money they make.

what do you want more? People spending, or money accruing interest in some moneybags account?

[Ducimus]

Personally, I think the article makes a damn good point. Some of what it was about I see at my work.

You know what pisses me off?

Combine all of this together:

- I haven't seen a raise in 5 years.

- I haven't seen ANY bonus in the same amount of time.

- We get this new fat cat CEO in our company, who kills our 401K matching because "nobody else is doing 401K matching in this economy". Which is bullschit, espeically considering the company has been making it's sales figures.

- Instead we get these stock options with a wishy washy letter saying, "if , when, maybe, and someday". Did i mention this is a private corporation?

- Our expenses have been climbing, because of our new CEO's travel expenses from what i hear. Apparently this guy likes to fly around and meet with "investors" . Gee, i wonder where our bonuses are going. :hmmm:

- I'm not sure I want to know how much this guy's making, or what bonuses HE's making, AT OUR EXPENSE!

- This same fat cat, has positioned himself with his own private.... everything. Eviciting the current occupents of some office areas and turning it into his own private thrown room.

- Rumor's persist that my job will be OUTSOURCED by, at, or sometime around the end of the year. All im sure, in an effort to lower expenses, so the CEO can keep his current pay level.


Executives.. It's a dirty word. A word of a money grubbing scumbag that is lower in character then an ambulance chasing lawyer. They'd sell the entire country down the river and off to china if it meant lining their pockets.

So of other American's are encountering stuff like this? I think the article makes a VERY good point.

[gimpy117]

exactly ducimis. They don't want to pay us! They see our our wages and benifits as an expenses! something that has to be reduced so they can profit.
Also august, the only reason that prices would go up for many companies is because they would want to retain their profit margins. Ducimis' company is doing exactly what any other company does when they want to make the same amount money, but start paying their executives more with static productivity. You pay your workers less, but expect them to do the same job. With the "costs" cut from actually paying worth a damn your CEO for example, can fly all over the world on what sounds like a 24/7 vacation and the company won't lose a dime in its profit margins.

I love how big companies work!

[August]

Okay im gonna say this:

The poor make more: its will damn well gonna get spent. EVERYBODY will be happier. The economy also moves from increased spending

The rich make more: It sits in their bank account and they get to brag about how much money they make.

what do you want more? People spending, or money accruing interest in some moneybags account?


And what happens when the poor are too old or feeble to make anything to spend? They'll be wishing they had that interest income. Bank accounts aren't just for "Moneybags". They're how intelligent (note I didn't say "rich") people prepare for the future.

The poor are done a far greater disservice by not having that reality stressed enough when they are still young enough to do something about it.

[August]

- I haven't seen a raise in 5 years.

- I haven't seen ANY bonus in the same amount of time.

So why do you continue to work for them? Somebody chain you to your desk or something?

[Skybird]

So you're claiming that an interest in improving ones situation is not representative of the social structure of American society? If so you don't know us very well.
That is not what I said. Wh you think I did, escapes my understanding.


The tuition of well over half my students is paid via several worker retraining programs, so they pay little or nothing. The rest are there on student loans which are granted based on a persons future earnings potential rather than their present wealth. Call it illusionary if you want but if so it's an illusion that is personified in thousands of vocational schools like mine spread across the country.
Ah, worker retraining programs we have en masse in Germany, to, arranged by the socalled Job-Centres, the former state-run employment offices. Our statistics show us that many graduates get channeled thorugh such prgams in order to count them out oif the official unemployment statistics, while the majority of them do not get jobs after such training programs even if they get send to two or even three such programs in line. that is not because the programs leave them too incompent, but because jobs do not get created by these courses and thus they still have the problem of not finding work.

I want to call it nothing (your illusory-remark), I do not know why you so often must think that I have meant or said things that I did not say and have not meant. It does not make it easier to communicate with you.


That's because you get your information from rags like Speigel and the NYT who make their livings on spreading gloom and doom, or you read the crap the political parties are always slinging at each other and think that it is gospel.
Aha. I stand corrected.


Like I've said twice so far. Folks have been prognosticating our imminent doom for over 200 years. They ain't been right yet.

Somehow I think you always take it personal and emotional immediately when somebody - not necessarily me only - asking something that puts the wanted picture into question. The statisticsI linked in my last time - ignored. the arguments they hold - cleaned of the table. An essay from an outside observer that hints and points at things - just wishing bad to the US.

Well, at least this behavior pattern also could be taken as an answer to my orignal question at the very beginning - although it is none based on argument and counter-argument.

Have you ever taken into account the possibility that the dog you think wants to bite you and that you chase away by throwing stones, in fact does not mean to bite and maybe is just approaching you for - curiosity? ;)

Well, i leave it to this.

[Sailor Steve]

Okay im gonna say this:

The poor make more: its will damn well gonna get spent. EVERYBODY will be happier. The economy also moves from increased spending

The rich make more: It sits in their bank account and they get to brag about how much money they make.

what do you want more? People spending, or money accruing interest in some moneybags account?
And you will "fix" this how?

[gimpy117]

start paying people more and we will spend more. Were supposed to drive the economy but we have no money to do it with!

[HundertzehnGustav]

low wage jobs and the economic down spiral...
gonna packj my bags now and get my lazy arse out of here. to a place like africa or siberia, where my life will be spent in mabour, no electricity; no internet... and i will never see anything of the world starting a WWIII.

except the rising clouds of the nuke explosions. and the radioactive rain killing me.

at least a guy can still step out of the system, if he wants to...

[August]

Have you ever taken into account the possibility that the dog you think wants to bite you and that you chase away by throwing stones, in fact does not mean to bite and maybe is just approaching you for - curiosity? ;)

And have you ever taken into account the possibility that the rejection of your proposals do not also mean a personal rejection of you?

I mean you like to advance these editorial criticisms, then when people tell you that it's conclusions not matched by their personal knowledge of the situation you claim "perfect" understanding (read "better than theirs") and dismiss their opinion as non typical, often taking their disagreement personally even when they aren't, like now, meant that way.

In any case, if this experiment in talking to each other can be at all salvaged, i'd really like to know what about the mechanic, medical assistant, building trade, electronic installer and similar jobs that we teach makes our students so unsuitable as a "representative sample of the social structure of the American society"?

[The Third Man]

America is going down as the protector of countries in Europe. NATO is a shell, and only a very few realize the danger.

[Castout]

It's a year old video but

for some minutes I thought it was a joke

http://www.youtube.com/watch?v=_yiQXPOO1Yo&feature=grec_index

Then it dawned on me that life could be one too :D

[Aramike]

start paying people more and we will spend more. Were supposed to drive the economy but we have no money to do it with!So when more people have more money and there's a greater strain on resources, what happens?

Oh yeah, inflation. Prices go up. Now the "more money" that people have as less buying power, and that's what ultimately matters.

So the rich stays rich and the poor stays poor.

Dude, do you really think that if you gave everyone enough money to buy sports cars there would be enough of them to go around? Of course not. So what happens? The prices rise.

$1,000,000 doesn't mean a thing if milk costs $200,000.

[mookiemookie]

start paying people more and we will spend more. Were supposed to drive the economy but we have no money to do it with!

Well it's not really a question of simple wage increases. As Aramike points out, if you just raise wages, you'll end up spurring inflation (which actually might not be a bad thing with the risks to deflation that we're facing.) You need to bolster confidence - and the only thing that's going to do that is people feeling relatively confident that their job will be there tomorrow and their house is going to have a steady value. If people are fearful for what happens tomorrow, their wallets will remain shut.

[Aramike]

Well it's not really a question of simple wage increases. As Aramike points out, if you just raise wages, you'll end up spurring inflation (which actually might not be a bad thing with the risks to deflation that we're facing.) You need to bolster confidence - and the only thing that's going to do that is people feeling relatively confident that their job will be there tomorrow and their house is going to have a steady value. If people are fearful for what happens tomorrow, their wallets will remain shut.Very true, even though I think that any worries we have of deflation (especially due to housing) are more than compensated for with the additional money printing being done in the name of stimulus.

Otherwise, great point.

[Sailor Steve]

start paying people more and we will spend more. Were supposed to drive the economy but we have no money to do it with!
Economic considerations aside, I was asking how you intend to make employers pay more?

[gimpy117]

well yes getting employers to pay better is tough. But honestly, what makes a consumer more confident than having more money? Consumers are now starting to realize that they really are "just scraping by" and that makes them less apt to spend, borrow, or otherwise drive the economy via their pocketbooks.

[Bilge_Rat]

outsiders have been announcing the downfall of the USA for years.

I live in canada, but have travelled extensively through Europe and the USA since the 70s.

Its fashionable up here to criticize the US, but whenever I travel to america, I am struck by the can-do attitude of Americans.

I was in Las Vegas a few months back. It has been especially hard hit by the recession, hotels are empty and slashing room prices, construction projects were abondoned mid-stream, every taxi driver seemed to be a layed-off engineer, yet everyone radiated a positive, self-reliant, optimistic attitude.

There is an energy to the USA and Americans that you dont see anywhere else. It is one of the most politically stable country on earth.

I dont see it going down any time soon.

[August]

There is an energy to the USA and Americans that you dont see anywhere else.

This is what I was trying to explain to Skybird.

Before you can do anything you must first believe that you can. A person may not succeed at everything he attempts but failure is a self fulfilling prophesy.

[Skybird]

This is what I was trying to explain to Skybird.

Before you can do anything you must first believe that you can. A person may not succeed at everything he attempts but failure is a self fulfilling prophesy.
I do not deny this. I just insist on pointing out that this does not automatically lead to an argument that if only you believe in yourself and try, you automatically get rewarded success. Too many people try and try, and then try more - and still must fail. Because life is not fair, or unfair, nor is it offering everybody the same and equal chances.

That you increase your chances does not mean that there is a treshhold beyond which you atomtaically succeed. You can try and give your best and work like crazy - and still not getting a chance. Or simply being unlucky (yiu get sick or have an accident, or a job that you needed to gets tarted simply is not available.

And I would say that for a relative majority of people trying to imporve from social downfalls it is like this - in america as well as in Germany.

The american dream is not that causally acchievable or even enforcable as it is being suggested. Else there would be almost exclusively millionaires. Instead we have more and more poor, and a shrinking middle class, growing debts, growing unemployment, and a policym without realistic orientation or vision. For every winner there seems to be at least a two digit number of loosers, many of whom tried as hard or even harder than the single winner. The rules and the chances and the starting conditions - they all are not the same for everybody.

I would also say that nowhere and never there is a constant, endless, infinite trend upwards, unlimited growth, and such. In a likmited sphere of something, no matter what, unlimited quntities of something simply is not possible, physically. Its one of the big myths of economic theory - and one of the reasons that have led us to the crisis we are in.

Sol nothing in wrong in trying your share to improve your chances, yes. Just to be noted that just becaseu you placed four bids imnstead of just one does not mean that know you automatically become a winner.

However, this all already is a bit off topic. let's get back to the statements of the original essay, or the additional links I gave.

[Konovalov]

Would this be the annual Subsim meet perchance?

I wish but unfortunately not. I'm treating the Mrs to a weeks holiday over there. Hopefully I can get to a subsim meet because they look like a great thing to do.:rock:

[Gerald]

outsiders have been announcing the downfall of the USA for years.

I live in canada, but have travelled extensively through Europe and the USA since the 70s.

Its fashionable up here to criticize the US, but whenever I travel to america, I am struck by the can-do attitude of Americans.

I was in Las Vegas a few months back. It has been especially hard hit by the recession, hotels are empty and slashing room prices, construction projects were abondoned mid-stream, every taxi driver seemed to be a layed-off engineer, yet everyone radiated a positive, self-reliant, optimistic attitude.

There is an energy to the USA and Americans that you dont see anywhere else. It is one of the most politically stable country on earth.

I dont see it going down any time soon. just far enough, the world is full of people who complain but who does not act, and when it really counts,nothing in the world can replace endurance.Perseverance and determination far railing It is to know me no indication that the U.S. is going down, rather long-term upward :yep:

[August]

Instead we have more and more poor, and a shrinking middle class, growing debts, growing unemployment, and a policym without realistic orientation or vision. For every winner there seems to be at least a two digit number of loosers, many of whom tried as hard or even harder than the single winner.

All of those problems have existed in my country for hundreds of years yet we still endure.

The rules and the chances and the starting conditions - they all are not the same for everybody.

They never have been, ever, in any human society ever created. You have a choice to overcome adversity or to surrender to it.

However, this all already is a bit off topic. let's get back to the statements of the original essay, or the additional links I gave.

Go ahead. I have already addressed them to my satisfaction.

[Bilge_Rat]

However, this all already is a bit off topic. let's get back to the statements of the original essay, or the additional links I gave.

I dont see anything new in the Spiegel article which has not been seen in every other recession. The article is just a series of meaningless anecdotes by a writer with pre-conceived notions.

I have a lot of anecdotes also if that is what you are looking for.

Over the past decades, I have seen many Canadians, friends and acquaintances I know, move to the states to seek their fortune, armed with nothing more than a university degree. Very few came back.

Right now, I know many canadian businesses which are investing in the USA, getting into position for the recovery and the next boom.

Pre-2008, I met many ex-pat canadians, now living in the USA, all earning more money then they would have made here, paying less in taxes and enjoying a higher standard of living because everything costs less in America. yes, many have had to change jobs or downsize because of the recession, but that is the price you pay to be an american.

The USA has always had a boom or bust, radical free enterprise ethos. You make more money and enjoy the good life in bullish times, but don't expect to have much of a social safety net when the bear rolls in.

It's not good or bad, it is just the way they choose to live. If you want the government to take care of you from the cradle to the grave, to have your life mapped out from the moment you are born, you don't live in the U.S.A., you move to Sweden...or maybe Germany..:D

[Gerald]

I dont see anything new in the Spiegel article which has not been seen in every other recession. The article is just a series of meaningless anecdotes by a writer with pre-conceived notions.

I have a lot of anecdotes also if that is what you are looking for.

Over the past decades, I have seen many Canadians, friends and acquaintances I know, move to the states to seek their fortune, armed with nothing more than a university degree. Very few came back.

Right now, I know many canadian businesses which are investing in the USA, getting into position for the recovery and the next boom.

Pre-2008, I met many ex-pat canadians, now living in the USA, all earning more money then they would have made here, paying less in taxes and enjoying a higher standard of living because everything costs less in America. yes, many have had to change jobs or downsize because of the recession, but that is the price you pay to be an american.

The USA has always had a boom or bust, radical free enterprise ethos. You make more money and enjoy the good life in bullish times, but don't expect to have much of a social safety net when the bear rolls in.

It's not good or bad, it is just the way they choose to live. If you want the government to take care of you from the cradle to the grave, to have your life mapped out from the moment you are born, you don't live in the U.S.A., you move to Sweden...or maybe Germany..:D had it been a long time ago, sure there are safety nets in many other countries also in the world,but things have changed and are not as many people think that welfare is a huge generous life at least not in Sweden, and so there will be, which was more for approx 20 years ago.

[Skybird]

All of those problems have existed in my country for hundreds of years yet we still endure.
"We"? You leave many of your people behind. and their numbers are growing, indicate your own statistics by your own offices.


They never have been, ever, in any human society ever created. You have a choice to overcome adversity or to surrender to it.
Overcoming adversity is not a choice. you can only to try that - but even if you try your best you may fail due to factors outside your reach and responsiblity. I agree that there are people, though, who choose to surrender. this may be for different reasons. They can be the often bashed sopcial parasites. They can also be people who have tried in vein for so long that courage has lost them. Not everybody is a superman with unlimited reserves of optimism and energy. Sometimes some people simply give up. Not because they are parasites or are lazy or bad characters, but simply because at some point enough is enough, and there is no going on without a helping hand.

Sometimes, help is needed. Where help gets abused and exploited - that is where I start to have problems with it.

[August]

"We"? You leave many of your people behind. and their numbers are growing, indicate your own statistics by your own offices.

Yeah that's right "we". America has always been a place where you earn your living and thank God for it. Sure, there are going to be people who don't do as well in hard times as they do in good times but that doesn't mean that "American is on it's way down".

Besides, you've never believed our governments statistics before Skybird, why do you suddenly take them as gospel now?

[FIREWALL]

Don't you guys get tired of being Skybirds Lab Rats ? :haha:

[Tchocky]

I think the "American Dream" that's being put out in this thread is somewhat romanticised, and not something that's in current play, or has been for some time.

Death of a Salesman, anyone?

Yes, in America people rise and fall faster than elsewhere, the relative lack of state/social supports is balanced out by a dynamism that those same supports can throttle. Economic booms boost stronger, and depressions hit harder. 'twas ever thus.
The curious situation now is that there is a weakness in almost all economic and social sectors, brought on by a financial crisis that was proportionally more destructive due to the increased interlinking of the economy as a whole.

Yes there are serious concerns regarding equality, no the current trend is not socially optimal (certainly in my view of what America is about). But on the way down? Doubt it very much.

EDIT - bloody hell that's unreadable

[heartc]

What they (and a lot of us as well) don't realize is that, after all this time, The American Experiment is still just that. We're still learning as we go, and that's one lesson that's too easily forgotten, and never should be.

And I think it's the God damn best experiment in the world, ever.
Maybe this has to do with the nature of freedom - as the saying goes: The price of freedom is eternal vigilance. Maybe it is a job that can never be declared "finished". Because it is a constant, re-occurring challenge / experiment.

And look at just this thread for example: On the one hand, walls of text, explaining how America cannot really work, or cannot really function, or must have a doubtful future, or will fail tomorrow - and on the other hand, just simple common sense, showing how it does work *anyway*. From one day to the next. Step by step. And for a few hundred years by now.

Maybe this is really the point: If it would have been tried to be thought through from the beginning to the end - with all the pessimism that history would demand - for it to be NOT an experiment, it might have been declared impossible, and might have never been started. But by NOT kaput-thinking it, and instead by just living from one day to the next - this experiment *does* work. One step after another - no big dogmas, no Führer, just normal people with common sense, trying to live free.

Again: Best experiment in the world. Don't let it be strangled into dogmatic cages. That would be its downfall.



And btw. I'm not an American and thus not too familiar with domestic politics. But I find this guy pretty intriguing and I wanted to bring up this topic since a while now, to maybe get some opinions from the American audience here:

http://www.youtube.com/watch?v=yAjvF1XEa3w&feature=related

He claims himself an independent. And I find his views rather interesting and authentic. He makes an "original American" impression on me, or what I understand of America. Like some modern Thomas Jefferson guy or something. Or he might just be a good actor. But which politician isn't.

You see, for the last 10 years or so, I found myself mostly siding with the "conservatives", i.e. Republican side of American politics. But looking at it now, this was mostly motivated by the rampant Anti-Americanism in my country, which was totally irrational for the most part. And since the US president was Republican, I ended up defending Republican view points in my quest to relate American foreign policy etc. to my people, who were mostly on a witch hunt to feel better about themselves and our past (i.e. "Ha ha, look, now America got its own little Hitler with Bush Jr., so we're not so bad after all, are we? And before, Clinton had that slut in his office, ha ha! And Reagan wanted to start WW III, ha ha!"), instead of rationally debating the issues.

But looking at it in retrospective, there are some things which I would never agree to, either, if I were an American, like the infringements on citizen rights by the Patriot Act for example.
I know Jesse Ventura is a bit extreme in some of his views, and he got that conspiracy show running - but I think he is a good example of how American politics is NOT necessarily just a two party stalemate, and he has some good points indeed. Foremost, he calls out the Republicans on what he sees as treason to the American ideals, while *not* sounding like a traitor himself at the same time, like some Democrats do. For example, he's anti-torture (and anti word games in this context), but pro gun ownership, for the original reason of the citizenship protecting itself against tyranny. Very good. I often wonder if the Gestapo / SS / SA had run around as they did if every Joe and his uncle would have had a gun handy.

Anyway, I'll keep an eye on this man. Maybe he's going to run for 2012. ;)

[Aramike]

well yes getting employers to pay better is tough. But honestly, what makes a consumer more confident than having more money? Consumers are now starting to realize that they really are "just scraping by" and that makes them less apt to spend, borrow, or otherwise drive the economy via their pocketbooks.How does having more money increase confidence in the wake of skyrocketing prices?

[August]

How does having more money increase confidence in the wake of skyrocketing prices?

My Grandfather used to tell a great story about the perils of runaway inflation in Germany during the Great Depression. It was about a man, a ditch digger by trade, who was paid his daily wages with an entire wheelbarrow full of money.

On his way home he stopped at the local Gasthaus. Parking the wheelbarrow just outside the door he went in and had a beer (some things the Germans will always have money for). When he came back outside he found that someone had stolen the wheelbarrow! But only after they first dumped out the money onto the sidewalk, it was that worthless.

To illustrate his point he gave me a 50 million mark bill. Apparently in those days it wasn't even worth the cost of loaf of bread.

[Tribesman]

My Grandfather used to tell a great story about the perils of runaway inflation in Germany during the Great Depression.
Good story, but the great depression was several years later, German hyperinflation came in at the tail end of the post war reccession

[gimpy117]

well you don't just give everybody 100,000 a year, but wages need to begin to turn around at a rate that is slightly over inflation.

[Aramike]

My Grandfather used to tell a great story about the perils of runaway inflation in Germany during the Great Depression. It was about a man, a ditch digger by trade, who was paid his daily wages with an entire wheelbarrow full of money.

On his way home he stopped at the local Gasthaus. Parking the wheelbarrow just outside the door he went in and had a beer (some things the Germans will always have money for). When he came back outside he found that someone had stolen the wheelbarrow! But only after they first dumped out the money onto the sidewalk, it was that worthless.

To illustrate his point he gave me a 50 million mark bill. Apparently in those days it wasn't even worth the cost of loaf of bread.Excellent story, August. Very poignant.

[Aramike]

well you don't just give everybody 100,000 a year, but wages need to begin to turn around at a rate that is slightly over inflation.Doesn't work like that. The word is value. As soon as, say, minimum wage increases, the people who are making over min. wage want to make more as they believe they are more valuable than min. wage workers. And so on up the ladder.

Ultimately, everyone is making more money and you have inflationary earnings. The value of money decreases, and we are right back where we started.

Like Mookie said (and we haven't agreed upon much lately) it's about confidence. Paying people more isn't the key - taking steps to make people feel secure in that they will continue to be paid in the first place is what matters. And making sure that they understand that they are being paid in REAL money (not government allotment) goes a long way towards that goal.

[Sailor Steve]

Good story, but the great depression was several years later, German hyperinflation came in at the tail end of the post war reccession
And how exactly do you propose to make this happen? You keep having good thoughts, but some answers that will actually work would be nice.

[antikristuseke]

My Grandfather used to tell a great story about the perils of runaway inflation in Germany during the Great Depression. It was about a man, a ditch digger by trade, who was paid his daily wages with an entire wheelbarrow full of money.

On his way home he stopped at the local Gasthaus. Parking the wheelbarrow just outside the door he went in and had a beer (some things the Germans will always have money for). When he came back outside he found that someone had stolen the wheelbarrow! But only after they first dumped out the money onto the sidewalk, it was that worthless.

To illustrate his point he gave me a 50 million mark bill. Apparently in those days it wasn't even worth the cost of loaf of bread.

I think the Zimbabweans got them beat
http://static.guim.co.uk/sys-images/Guardian/Pix/pictures/2009/3/25/1237999328897/Zimbabwe-One-Hundred-Tril-001.jpg

Their inflation hit 231 000 000% (official, July 08) at its best

[Gerald]

I think the Zimbabweans got them beat
http://static.guim.co.uk/sys-images/Guardian/Pix/pictures/2009/3/25/1237999328897/Zimbabwe-One-Hundred-Tril-001.jpg :roll:

[Tribesman]

And how exactly do you propose to make this happen?
Make what happen, the post war hyperinflation that hit germany at the start of the 20s or the great depression that hit the world at the end of the 20s?

[Sailor Steve]

Make what happen, the post war hyperinflation that hit germany at the start of the 20s or the great depression that hit the world at the end of the 20s?
:damn::damn::damn:

Panic in the misquote department! I thought I quoted Gimpy!

Sorry about that. Fixed.

No, not fixed. That would only screw up the flow of the thread. I'll repost it below.

Stupid Steve! Stupid! Stupid! Stooopid!

[Sailor Steve]

well you don't just give everybody 100,000 a year, but wages need to begin to turn around at a rate that is slightly over inflation.
And how exactly do you propose to make this happen? You keep having good thoughts, but some answers that will actually work would be nice.

I hope I got it right this time.

[August]

You keep having good thoughts, but some answers that will actually work would be nice.

I hope I got it right this time.

Yeah I thought it was kind of odd that anyone would actually attribute "good thoughts" to Tribesman... :DL

[Tribesman]

Wow August the troll, what a surprise

[gimpy117]

And how exactly do you propose to make this happen? You keep having good thoughts, but some answers that will actually work would be nice.

I hope I got it right this time.

that falls in the lap of employers. sadly...i don't see that happening with some companies out there.

second of all...I don't think it all confidence. Our household dept is/ was approaching our GDP. thats unsustainable. Either we keep borrowing and busting, or we fix he problem of the middle class and poor not having enough money. Trickledown and giving big companies more money is a nice thought...but it doesn't work. Under that system they're supposed to give all this money right back to use poor rabble. except the don't as fast as it need to happen for it to be viable.

I think it's time we try it the other way around. but im sure Steve will just give these vague "oh that won't work" answers.

[Sailor Steve]

that falls in the lap of employers. sadly...i don't see that happening with some companies out there.

second of all...I don't think it all confidence. Our household dept is/ was approaching our GDP. thats unsustainable. Either we keep borrowing and busting, or we fix he problem of the middle class and poor not having enough money. Trickledown and giving big companies more money is a nice thought...but it doesn't work. Under that system they're supposed to give all this money right back to use poor rabble. except the don't as fast as it need to happen for it to be viable.

I think it's time we try it the other way around. but im sure Steve will just give these vague "oh that won't work" answers.
:rotfl2:

Where have I been vague? And where have I said one thing or another won't work. I don't know that it won't work, and I don't claim to have any answers. But you keep sayihng that workers need to be paid more, then admit that employers aren't likely to do this on their own. All I've done is ask you to explain how you want to make this happen. Once again you say that one thing won't work, so we should try the opposite. But you don't say how you want to accomplish this. So, which of us is being vague here?

[Aramike]

I think it's time we try it the other way around. but im sure Steve will just give these vague "oh that won't work" answers.Like Steve said, there's be a decided lack of vagaries with regards to your suppositions. Your notion that everyone must simply make more money doesn't work with any accepted economic theory.

Furthermore, this idea that employers must pay more only accounts for half of the equation. Employers aren't hoarders of some mystical, unlimited fund of cash which could potentially solve the problems of the world's laborers. To pay more simply for the sake of it means that one person will be recieving money that belonged to someone else. That's called redistribution of wealth.

Think: one man owns a small business which employs 20 full-time hourly workers. Should that business do well, he makes excellent returns. Should it do poorly, it is HIS money that takes the hit. On average he makes $100k a year. It is completely his risk. His hourly workers will make the same regardless.

With his average earnings, he pays a mortgage, sends his 2 children to private school, and vacations twice a year. He's assumed the complete risk of his business, and is enjoying the fruits of his success.

Now, let's say we take those 20 full time employees and give them a $1/hour raise. A simple math check says that works out to $41,600 per year. Where do you think that comes from?

Now this man is only making, on average, $58,400 annually. On that he's supporting his wife and children. $58K is not all that much money, really. His wife must now find a job. He can no longer afford to send his children to excellent schools.

And when his business has a bad year, that comes out of HIS money. Maybe he can't even pay his mortgage, one year. Business closes down.

21 people out of work.

Or, more likely, that raise will just prompt him to reduce his workforce to allow him to continue to make the money that justifies his RISK in continuing to run a business.

In any case, your idea costs jobs.

And now, what about corporations? Same principle, except now the money comes out of the markets (including, say, retirement funds). Shareholders demand dividends equal to their earnings prior to this raise everyone gets, when it comes to publically traded companies.

Again, jobs are lost.

I'm not certain what your position on this is, but it seems as though you would be one to resent the very corporations that employ so many Americans in that they simply don't compensate well enough. However, small businesses remain heavy employers. Now, you could demand the corporations simply pay more and exempt the small businesses, and just wish those small business owners luck then in finding quality people. Or maybe you can demand across the board raises for all employees nationwide, thusly giving yet another incentive for small businesses to shut down due to their owners not seeing the proper reward-to-risk ratio and seeking the more secure life of corporate work.

In any case, your theory that, somehow just having people make more money holds absolutely no water whatsoever. Ultimately money is the measurement of production (hence the terms Gross Domestic PRODUCT and Gross National PRODUCT). If you raise the amount of money in motion without proportionately increasing the amount of production that money represents, you cause inflation, meaning you've given no one a thing. Rather, you've redistributed the production from certain sectors to whichever other sectors are most in a position to benefit from said redistribution, without regard to their true long term value which can most adequately be determined through production TRENDS and not production SPIKES.

On other words, you would weaken necessary industry while strengthening boutique industry in the name of redistributing wealth ... you'd be destroying one sustainable, small business owner who employs 20 people and replacing him with another positioned to profiteer temporarily upon that displacement, who hires maybe 5 people due to your policies.

Pardon the wall of text, but I hope that was specific enough for you to at least attempt to give context to your arguments.

[Takeda Shingen]

Wow August the troll, what a surprise

I don't think that August is a troll.

[The Third Man]

I don't think that August is a troll.

That would be me. lol :salute:

[Takeda Shingen]

To illustrate his point he gave me a 50 million mark bill. Apparently in those days it wasn't even worth the cost of loaf of bread.

:o I remember hearing those stories, but always figured that it was exaggeration. Looks like I was wrong.

[Jimbuna]

Interesting story August, the one I read in a history book during my school years was.....at the height of the depression, people would queue with a barrow full of money to purchase a loaf of bread.

Looks like barrows were necessary in those days simply to be able to move around with enough money to buy something tangible :DL

[August]

I'll scan the bill if I remember tonight and i'll post it here if anyone is interested in seeing it.

[Tribesman]

I'll scan the bill if I remember tonight and i'll post it here if anyone is interested in seeing it.

Scanning it for al to see is fine, it doesn't change the fact that it is years off from the event you relate it toand comes from an exceptionaly unique set of circumstances.
To add insult to injury it undermines Aramikes claim about "REAL" money(caps lock stikes again:up:) as the emergency currency backed by goods that were either not in existance or already under different ownership plus deeds that were practcly valueless were not of any worth anything at all until the government backed it as credtable(even though their credit rating was through the floor).

[Jimbuna]

I'll scan the bill if I remember tonight and i'll post it here if anyone is interested in seeing it.

Yeah, I wouldn't mind seeing it matey :up:

[Tribesman]

Yeah, I wouldn't mind seeing it matey

A 50 million mark note


http://en.wikipedia.org/wiki/File:50_millionen_mark_1_september_1923.jpg
no longer legal tender by the time of the great deppression.
I wonder how many of them would fit in a wheelbarrow or how many you have to take into a pub for a stein while leaving the price of a loaf outside in an incredibly valuable asset?:doh:
Nice story, but pure bull.

[gimpy117]

Like Steve said, there's be a decided lack of vagaries with regards to your suppositions. Your notion that everyone must simply make more money doesn't work with any accepted economic theory.

Furthermore, this idea that employers must pay more only accounts for half of the equation. Employers aren't hoarders of some mystical, unlimited fund of cash which could potentially solve the problems of the world's laborers. To pay more simply for the sake of it means that one person will be recieving money that belonged to someone else. That's called redistribution of wealth.

Think: one man owns a small business which employs 20 full-time hourly workers. Should that business do well, he makes excellent returns. Should it do poorly, it is HIS money that takes the hit. On average he makes $100k a year. It is completely his risk. His hourly workers will make the same regardless.

With his average earnings, he pays a mortgage, sends his 2 children to private school, and vacations twice a year. He's assumed the complete risk of his business, and is enjoying the fruits of his success.

Now, let's say we take those 20 full time employees and give them a $1/hour raise. A simple math check says that works out to $41,600 per year. Where do you think that comes from?

Now this man is only making, on average, $58,400 annually. On that he's supporting his wife and children. $58K is not all that much money, really. His wife must now find a job. He can no longer afford to send his children to excellent schools.

And when his business has a bad year, that comes out of HIS money. Maybe he can't even pay his mortgage, one year. Business closes down.

21 people out of work.

Or, more likely, that raise will just prompt him to reduce his workforce to allow him to continue to make the money that justifies his RISK in continuing to run a business.

In any case, your idea costs jobs.

And now, what about corporations? Same principle, except now the money comes out of the markets (including, say, retirement funds). Shareholders demand dividends equal to their earnings prior to this raise everyone gets, when it comes to publically traded companies.

Again, jobs are lost.

I'm not certain what your position on this is, but it seems as though you would be one to resent the very corporations that employ so many Americans in that they simply don't compensate well enough. However, small businesses remain heavy employers. Now, you could demand the corporations simply pay more and exempt the small businesses, and just wish those small business owners luck then in finding quality people. Or maybe you can demand across the board raises for all employees nationwide, thusly giving yet another incentive for small businesses to shut down due to their owners not seeing the proper reward-to-risk ratio and seeking the more secure life of corporate work.

In any case, your theory that, somehow just having people make more money holds absolutely no water whatsoever. Ultimately money is the measurement of production (hence the terms Gross Domestic PRODUCT and Gross National PRODUCT). If you raise the amount of money in motion without proportionately increasing the amount of production that money represents, you cause inflation, meaning you've given no one a thing. Rather, you've redistributed the production from certain sectors to whichever other sectors are most in a position to benefit from said redistribution, without regard to their true long term value which can most adequately be determined through production TRENDS and not production SPIKES.

On other words, you would weaken necessary industry while strengthening boutique industry in the name of redistributing wealth ... you'd be destroying one sustainable, small business owner who employs 20 people and replacing him with another positioned to profiteer temporarily upon that displacement, who hires maybe 5 people due to your policies.

Pardon the wall of text, but I hope that was specific enough for you to at least attempt to give context to your arguments.

Oh boy the "small business defense" that one hasn't been run into the ground.
Im not necessarily talking about the tiny companies out there. Small business owners like my boss aren't really to blame. Im not talking about them. heck, my boss pays me more than the union says he has to. Im talking about the large companies that Make the vast majority of the money but have been cutting positions, benefits, wages...you name it for profit.

may i remind you all that the ratio of wages to the GDP is the LOWEST it has been since the started keeping track in 1947. Obviously something is wrong.

[The Third Man]

America is on the way down. Now Europe can try to care for themselvses.

there will be blood.

[Takeda Shingen]

Yeah, I wouldn't mind seeing it matey :up:

Me too, if you have time.

[Sailor Steve]

Oh boy the "small business defense" that one hasn't been run into the ground.

Oh boy, the "run into the ground put-down". That one hasn't been run into the ground as well?

may i remind you all that the ratio of wages to the GDP is the LOWEST it has been since the started keeping track in 1947. Obviously something is wrong.
Believe it or not, we all agree that there is a problem. The nature of the problem and the solutions are up for debate. At the risk of becoming redundant, I'll ask again: What is your solution? I know you want employers to pay more, but how exactly do you mean to make them pay more?

[Aramike]

Oh boy the "small business defense" that one hasn't been run into the ground. I also mentioned large corporations and pubically traded companies.

However, small businesses employ over half of Americans so it is relevant. Now, do you have an actual reason you disagree with that argument or would you prefer to simply dismiss it because it doesn't fit what you WANT to believe?Im not necessarily talking about the tiny companies out there. Small business owners like my boss aren't really to blame. Im not talking about them. heck, my boss pays me more than the union says he has to. Im talking about the large companies that Make the vast majority of the money but have been cutting positions, benefits, wages...you name it for profit. I addressed that as well. Furthermore, I addressed how if larger businesses were required to pay more, why would higher-qualified individuals want to work for/run small business? Furthermore, why would a company continue to employ as many people even though it is hurting their bottom line?

Or are you going to require them to employ a certain number of people? Sounds like socialism to me.

Profit is not a bad thing. Profit is taxed. Good profits encourage hiring. Good profits pay retirement benefits.

Yes, the economy is stagnant. Okay, we get it - you think people should just be paid more. Please share specifics on how that would happen.

I tend to agree with Mookie that it is a confidence problem. Furthermore, I believe that inflation caused by across the board pay raises would increase inflation, and decrease confidence.

I have ideas for solutions but I'm waiting to hear yours first, backed up with specifics as to how the steps you propose would actually effect the economy.

[gimpy117]

you don't get it though. why would a company want to divert their "good profit" to anywhere but the pocketbooks of the top if they can get away with it? They cut benefits, trim workforces by offshoring, and put their money overseas to avoid all 3 of what you just said.

by no means should a company be required to have x amount of people, but things like what GM did in the 80's for pure profit are sick.

secondly, Why is it always about bottom line? Im sorry but there should be more important things than money.

About what we need to do. Im not some economist I'm going to say that straight up. But unless you are then you are no more qualified than i am. we need to get pay away from the current stagnation if were going to see real growth in this economy. Money needs to be spent, but nobody can spend enough without going into debt. and then we risk another meltdown because of the huge household debt. Even if consumers become "more confident" Many are just going to go back to spending money they don't have, and thats wht got us into this mess anyways.

There was a time not too long ago in america where people had a good living and business was booming. Now companies are making even more but people aren't living so well. I truly believe that a happy middle ground can be found where companies can make good profits and Americans can live well.

[August]

you don't get it though. why would a company want to divert their "good profit" to anywhere but the pocketbooks of the top if they can get away with it? They cut benefits, trim workforces by offshoring, and put their money overseas to avoid all 3 of what you just said.

Ever hear of "Brain Drain"? Companies that don't want to pay get the kind of workers who can't get anyone else to hire them. The best will always follow the money.

[Aramike]

secondly, Why is it always about bottom line? Im sorry but there should be more important things than money.So you want to legislate people's priorities?

Sounds tyrannical to me.About what we need to do. Im not some economist I'm going to say that straight up. But unless you are then you are no more qualified than i am. we need to get pay away from the current stagnation if were going to see real growth in this economy. Just because I'm not an economist doesn't mean that perhaps I don't know more about how it works that you do, because clearly I do, as you are clearly unwilling or unable to present specifics, whereas I can.

[gimpy117]

So you want to legislate people's priorities?

Sounds tyrannical to me.Just because I'm not an economist doesn't mean that perhaps I don't know more about how it works that you do, because clearly I do, as you are clearly unwilling or unable to present specifics, whereas I can.


I was talking about society in general not calling for legislation.

oh...and i didn't know you were an internet genius. All were going to say is conjecture, and all you say is conjecture that you THINK is right and can make up little stories that HAVE to be true because they came from you.

so what i don't have a masters degree in economics, Just because I can't come up with every step to make my ideas happen does not mean what I'm saying is incorrect, neither does it validate your arguments.

[Aramike]

I was talking about society in general not calling for legislation.

oh...and i didn't know you were an internet genius. All were going to say is conjecture, and all you say is conjecture that you THINK is right and can make up little stories that HAVE to be true because they came from you.So again you decide to ignore the actual points being made in favor of a simpleton's "you THINK you're right but you're actually wrong" argument.

I'm pretty sure my formal education included quite a large amount of study in economics. Furthermore, I'm pretty sure I've been fairly specific in my postulations. If you have a specific disagreement, I suggest you get to what it is before you continue further down the road of making a fool of yourself simply because you're so blindly tied to a certain flawed ideology which thinks simply paying people more will solve anything, while completely ignoring the ramifications of doing so.

So far your posts consist of nothing more than "you think you're right, but you're not". Nice rebuttals, chief. Seems as though most people from both sides of the political spectrum thinks I'm right. They may differ on solutions, but at least we all agree on the facts. You're involved in neither.

If you have the first clue as to what you were talking about, you'd address how you'd get companies to pay more. You'd address how you'd counter the invariable increase in inflation. You'd address where that money would come from.

[Aramike]

This clip sums of your argument quite nicely, gimpy:

http://www.youtube.com/watch?v=_Ojd13kZlCA

Going to pay people more with the stash?

(That link is worth its own thread)

[gimpy117]

I don't think ur right because wage stagnation is a very very bad thing.
The CPI seems to be going up and every graph of the real wages seems to be going down. I don't care what they do to fix it. Its not my line of work, and it's not yours...but i want to see that change.

as we've learned over the meltdown, whats good for wall street is not always good for main street. I think its time we ought to fight for better wages for the american people as a way of ensuring our economy is strong. An economy is based off of the individual consumer (or at least an economy as Dependant on spending as ours). The stronger the everyday american buyer, the stronger and more stable our economy is.

[Aramike]

I don't think ur right because wage stagnation is a very very bad thing. Who said anything about wage stagnation?The CPI seems to be going up and every graph of the real wages seems to be going down. I don't care what they do to fix it. Its not my line of work, and it's not yours...but i want to see that change.Actually, it's kind of close to my line of work.

CPI is generally always going to outpace wages in a recession. The reason is that, when jobs are lost, the higher paying jobs are usually the first to go. That causes the average wage to fall, but that has fairly little impact upon the disposable income of the employed middle class.

CPI can only be reduced when demand is reduced or its on the tail end of supply shortages (i.e. a CPI spike), and that's not likely to happen. The only time when the CPI related to real wages should be worrisome is if there's a sharp increase of unemployment (5% or more) over a very short period. The best way to address that is to incentivize job creation, and asking employers to pay more does not do that.as we've learned over the meltdown, whats good for wall street is not always good for main street. I think its time we ought to fight for better wages for the american people as a way of ensuring our economy is strong. An economy is based off of the individual consumer (or at least an economy as Dependant on spending as ours). The stronger the everyday american buyer, the stronger and more stable our economy is. That sounds almost word for word like an Obama stump speech. In case you haven't noticed, both Wall Street and Main Street are getting their asses kicked right now.

[Bilge_Rat]

all very good points Aramike.

Another issue is the dynamic nature of the now worldwide economy.

In 1945, with most of Europe and Asia basically in ruins, the USA was by far the biggest industrialised state and american workers were able to demand higher wages which employers had no choice but to pay.

In 2010, highly skilled workers in the USA are now competing with workers in China and India that can do the same work for 1/10th the pay. I even read an article recently that big US law firms are starting to farm out certain legal work to law firms in India. That puts a downward pressure on all wages around the world.

Governments are very limited in their ability to intervene since capital is now highly mobile and will move to the country with the lowest wages, lowest taxes, etc.

[Aramike]

all very good points Aramike.

Another issue is the dynamic nature of the now worldwide economy.

In 1945, with most of Europe and Asia basically in ruins, the USA was by far the biggest industrialised state and american workers were able to demand higher wages which employers had no choice but to pay.

In 2010, highly skilled workers in the USA are now competing with workers in China and India that can do the same work for 1/10th the pay. I even read an article recently that big US law firms are starting to farm out certain legal work to law firms in India. That puts a downward pressure on all wages around the world.

Governments are very limited in their ability to intervene since capital is now highly mobile and will move to the country with the lowest wages, lowest taxes, etc.That's an excellent point.

My biggest fear is that we're moving more and more towards a service-based economy where your average American's value is far more derived from what we do for each other than what tangible good we provide to each other. I'll elaborate more on what I mean by this later, but in general my point is that when you produce a good, that good retains some value and can often be sold. When you provide a service, that service's value is generally completely lost upon its conclusion.

A service based economy has little ability to retain value, thus my fear.

[August]

That's an excellent point.

My biggest fear is that we're moving more and more towards a service-based economy where your average American's value is far more derived from what we do for each other than what tangible good we provide to each other. I'll elaborate more on what I mean by this later, but in general my point is that when you produce a good, that good retains some value and can often be sold. When you provide a service, that service's value is generally completely lost upon its conclusion.

A service based economy has little ability to retain value, thus my fear.

I'd have to hear more of your theory. While I generally agree with you on the importance of a healthy manufacturing sector, it seems to me that services like a professional installation, or a proper repair, or a thorough cleaning for example have real lasting value while manufactured goods often become obsolete and nearly worthless in a relatively short time.

[mookiemookie]

The only time when the CPI related to real wages should be worrisome is if there's a sharp increase of unemployment (5% or more) over a very short period. Or when you see a spike in wage inflation. Wage inflation always precedes CPI inflation.

That's an excellent point.

My biggest fear is that we're moving more and more towards a service-based economy where your average American's value is far more derived from what we do for each other than what tangible good we provide to each other. I'll elaborate more on what I mean by this later, but in general my point is that when you produce a good, that good retains some value and can often be sold. When you provide a service, that service's value is generally completely lost upon its conclusion.

A service based economy has little ability to retain value, thus my fear.

This is the natural progression of an economy and a country as it becomes more affluent and educated. As people gain wealth, they have the discretionary income to spend on services - housecleaning, lawnmowing, accountants, plumbers, etc - that you would not otherwise have the money to spend on if you were just scraping by. More wealth = more demand for services = more services.

And as for manufacturing, the real value is in the front and back ends of the product design. Think about it - you're designing ipods. Your engineers come up with the design and function of the device. You send the schematics to China for manufacture. The products are made and shipped over here for sale. Your sales force sells them, as well as the accessories for the ipod. Your service technicians fix them when they break. Where's the value here? Who is contributing most to an economy? Is it the design engineers earning $150,000 a year? Or is it the Chinese assembly line worker earing $1.50 a day? Is it the $1.50 a day assembly line worker or is it the service tech earning $75,000 a year? Who's going to contribute more to an economy through consumption? The higher paid worker or the lower paid one? Is specialized knowledge more valuable than manual labor? Of course it is.

[August]

Is specialized knowledge more valuable than manual labor? Of course it is.

You're right but we have way more people needing jobs than we have need for specialists.

[mookiemookie]

You're right but we have way more people needing jobs than we have need for specialists.

That I have no answer for. In the midst of a major systemic economic shift such as moving from an agrarian to manufacturing economy, or a manufacturing economy to a service or high tech economy, there's always going to be people left behind. Those with skills that are obsolete or not in demand anymore will have a tougher time of it than new workers who have been trained in specialized fields entering the workforce.

[August]

That I have no answer for. In the midst of a major systemic economic shift such as moving from an agrarian to manufacturing economy, or a manufacturing economy to a service or high tech economy, there's always going to be people left behind. Those with skills that are obsolete or not in demand anymore will have a tougher time of it than new workers who have been trained in specialized fields entering the workforce.

It's not skills that I'm talking about but rather the availability of positions. We have way more people than we have service jobs for regardless of skill level.

[Aramike]

I'd have to hear more of your theory. While I generally agree with you on the importance of a healthy manufacturing sector, it seems to me that services like a professional installation, or a proper repair, or a thorough cleaning for example have real lasting value while manufactured goods often become obsolete and nearly worthless in a relatively short time. I think we've discussed this before in another thread where I had posited that, at some point a quasi-socialist economy may be necessary, and you alluded to my point with this:It's not skills that I'm talking about but rather the availability of positions. We have way more people than we have service jobs for regardless of skill level. And I agree that the service industry has value, but my point is that such value expires at the completion of the service.

For example, let's say you build cars. That car is an economic asset for however many years it is capable of being sold. Now, compare that to installing satellite dishes. That installation which was purchased is now worthless to any other user wishing to install something.

My point is that the service industry provides no real sustainable commodity other than the industry itself. The problem with that is ultimately that the service industry is in essence an artificial construct built around catering to convieniences, and in general works the opposite of commodities - the value of service tends to decrease in proportion to the value of actual commodities.

Think computers - as software companies develop more user friendly and stable products, the currently moderately high demand for PC technicians will invariably fall (consider: do you know of any TV repairmen still around?). Also, as the efficiency of manufacturing computer products continues to rise, their cost decreases, working towards making the PC service industry less and less valuable.

Ultimately, technology is determined to meet all of our demands both industrial and services. However, when you produce something through industry, you have an actual THING of value. The service industry does not provide that. Commodities ebb and flow. The ability to produce commodities are always in demand. Services, on the other hand, can be completely outgunned by technology.

Therefore, in a nutshell, ownership becomes the key - if you own the ability to produce products and evolve to produce other products, you have a leg up on the service industry in that it cannot truly own anything other than access to labor (which both industries can have).

I'm trying to simplify this in order to not write out 100 pages of economic theory, so please forgive me if I'm being unclear or ambiguous, but I imagine you get my point.

[Aramike]

Or when you see a spike in wage inflation. Wage inflation always precedes CPI inflation. Agreed. But I think that becomes a chicken/egg scenario, ultimately.This is the natural progression of an economy and a country as it becomes more affluent and educated. As people gain wealth, they have the discretionary income to spend on services - housecleaning, lawnmowing, accountants, plumbers, etc - that you would not otherwise have the money to spend on if you were just scraping by. More wealth = more demand for services = more services. You're exactly right. But try to understand my point - I cannot name a single national economy which has ever survived this evolution long term.

Can you?

Think about it: now those providing services are enriched, requiring more service. And so on. Ultimately your economy is based upon service and production is impacted. And now you have nothing with which to trade for commodities.And as for manufacturing, the real value is in the front and back ends of the product design. Think about it - you're designing ipods. Your engineers come up with the design and function of the device. You send the schematics to China for manufacture. The products are made and shipped over here for sale. Your sales force sells them, as well as the accessories for the ipod. Your service technicians fix them when they break. Where's the value here? Who is contributing most to an economy? Is it the design engineers earning $150,000 a year? Or is it the Chinese assembly line worker earing $1.50 a day? Is it the $1.50 a day assembly line worker or is it the service tech earning $75,000 a year? Who's going to contribute more to an economy through consumption? The higher paid worker or the lower paid one? Is specialized knowledge more valuable than manual labor? Of course it is. I must give credit where it's due, and I agree completely. In fact, I base my entire understanding upon economic theory on the very principle of impact value.

[August]

I think we've discussed this before in another thread where I had posited that, at some point a quasi-socialist economy may be necessary, and you alluded to my point with this:And I agree that the service industry has value, but my point is that such value expires at the completion of the service.

For example, let's say you build cars. That car is an economic asset for however many years it is capable of being sold. Now, compare that to installing satellite dishes. That installation which was purchased is now worthless to any other user wishing to install something.

My point is that the service industry provides no real sustainable commodity other than the industry itself. The problem with that is ultimately that the service industry is in essence an artificial construct built around catering to convieniences, and in general works the opposite of commodities - the value of service tends to decrease in proportion to the value of actual commodities.

Think computers - as software companies develop more user friendly and stable products, the currently moderately high demand for PC technicians will invariably fall (consider: do you know of any TV repairmen still around?). Also, as the efficiency of manufacturing computer products continues to rise, their cost decreases, working towards making the PC service industry less and less valuable.

Ultimately, technology is determined to meet all of our demands both industrial and services. However, when you produce something through industry, you have an actual THING of value. The service industry does not provide that. Commodities ebb and flow. The ability to produce commodities are always in demand. Services, on the other hand, can be completely outgunned by technology.

Therefore, in a nutshell, ownership becomes the key - if you own the ability to produce products and evolve to produce other products, you have a leg up on the service industry in that it cannot truly own anything other than access to labor (which both industries can have).

I'm trying to simplify this in order to not write out 100 pages of economic theory, so please forgive me if I'm being unclear or ambiguous, but I imagine you get my point.


I get your point but think you underestimate the value of service. Take the satellite dish example that you mentioned. Once the dish is mounted it is there for the use of the next tenant or owner. "Satellite equipped" is a sale point. It goes beyond that though. The professional satellite installation tends not to create the leaks and associated damage often found in homeowner installations.

You call it paying for convenience but I call it paying to have the job done right so it doesn't cost you more down the line.

[gimpy117]

Agreed. But I think that becomes a chicken/egg scenario, ultimately.

the trick might be getting the chicken and the egg to appear at the same time :DL

[Aramike]

I get your point but think you underestimate the value of service. Take the satellite dish example that you mentioned. Once the dish is mounted it is there for the use of the next tenant or owner. "Satellite equipped" is a sale point. It goes beyond that though. The professional satellite installation tends not to create the leaks and associated damage often found in homeowner installations.

You call it paying for convenience but I call it paying to have the job done right so it doesn't cost you more down the line.I don't think I'm underestimating the value of the service - I'm not really focused on that. I'm more concerned with the long term economic impact on an economy heavily reliant upon service.

In a world economy, service isn't a good with which we can trade. So, the more and more service-based our economy becomes, the less focused we will be on creating products which can then be traded to acquire other goods. I think that's dangerous because now we've raised the mean income without proportionately raising the nation's buying power.

[mookiemookie]

In a world economy, service isn't a good with which we can trade.

Of course it is. Accounting, consulting, engineering...those are all examples of services that aren't constrained by borders. Think bigger than Otto the electrician or Eduardo the landscaper.

[Aramike]

Of course it is. Accounting, consulting, engineering...those are all examples of services that aren't constrained by borders. Think bigger than Otto the electrician or Eduardo the landscaper.I am thinking larger than simple tradecraft - as I said, I was using simplified examples. None of those will ever be a large, sustainable industry like, say, grain exports.

In any case, those are not the services of the context of this discussion anyway. We were discussing the increase of demand in services caused by the enrichment of the general populace, and surely that generally precludes engineers in favor of waitresses...

Again, where's a SINGLE example of a long term, large economy sustained primarily by the service industry? The only time it would be possible for that to occur is if the demand for one nation's service output can account for a substantial enough amount of commodity import.

In other words, a nation would have to be supported almost wholly by outside nations by virtue of it's services being considered THAT vital...

Can you imagine how at the mercy any such nation would be to those who actually HAVE the commodities?

Hence my fear...

[Happy Times]

Im personally getting out of this wheel of fortune, i should be without debt by next summer.:salute:

Reading alot lately and this one fits here.

Systemic Crisis of the World Economy: Global Geopolitical Dislocation
http://www.globalresearch.ca/index.php?context=va&aid=19814

Im also recently started to like Ron Paul :O:
Ron Paul Calls for Audit of US Gold Reserves
http://www.infowars.com/ron-paul-calls-for-audit-of-us-gold-reserves/