America on its way down. Is it?

[mookiemookie]

Originally Posted by 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.


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Kind of the central argument of Zakaria's "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

[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.

[August]

Originally Posted by Skybird

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]

Originally Posted by August

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.

[Sailor Steve]

Originally Posted by Konovalov

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.

Enjoy your visit.

Originally Posted by August

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]

Originally Posted by 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.

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:


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]

Originally Posted by gimpy117

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.

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[gimpy117]

Originally Posted by Sailor Steve

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.

Originally Posted by Sailor Steve

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?

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[Sailor Steve]

Originally Posted by gimpy117

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/File...owwagework.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.

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