So, How's Globalization Working Out?

[Nbadan]

Who would have guessed that our current system which put all the world's resources into the hands of a greedy few would be fundamentally flawed?

Backlash in rich nations against globalisation
By Chris Giles in London
Published: July 22 2007


A popular backlash against globalisation and the leaders of the world’s largest companies is sweeping all rich countries, an FT/Harris poll shows.

Large majorities of people in the US and in Europe want higher taxation for the rich and even pay caps for corporate executives to counter what they believe are unjustified rewards and the negative effects of globalisation.

Viewing globalisation as an overwhelmingly negative force, citizens of rich countries are looking to governments to cushion the blows they perceive have come from the liberalization of their economies to trade with emerging countries.

Those polled in Britain, France, the US and Spain were about three times more likely to say globalisation was having a negative rather than a positive effect on their countries. The majority was smaller in Germany, with its large export base

Corporate leaders fared little better, with 5 per cent or fewer of those polled in the US and all large European economies (except Italy) saying they had a great deal of admiration for those who run large companies. In these countries, between a third and a half said they had no admiration at all for corporate bosses.

In response to fears of globalisation and rising inequality, the public in all the rich countries surveyed – the US, Germany, UK, France, Italy and Spain – want their governments to increase taxation on those with the highest incomes. In European countries, a large majority want governments to go further and to impose pay caps on the heads of companies.

Europeans still overwhelmingly support the principle of free competition within the European Union, contrary to Nicolas Sarkozy’s wishes at the recent European summit, but in France, Germany and Spain, the populations want their political leaders to play a larger role in managing their economies.

The depth of anti-globalisation feeling in the FT/Harris poll, which surveyed more than 1,000 people online in each of the six countries, will dismay policy-makers and corporate executives. Their view that opening economies to freer trade is beneficial to poor and rich countries alike is not shared by the citizens of rich countries, regardless of how liberal their economic traditions.

The issue of rising inequality is now high on the political agenda of every country and will feature prominently in the 2008 US presidential election.

Financial Times (http://www.ft.com/cms/s/2a735dd0-3873-11dc-bca9-0000779fd2ac.html)

I guess the trill-rush of buying risky Chinese products at Walmart just doesn't make up for having to work at Walmart to make ends meet...but on the bright side, when the sub-prime market inevitably crashes, the chinese are gonna lose their shirts....

[velik_m]

Globalization just means the rich (and poor) will be spread over all of the world and not just in few countries. An american will have slightly smaller chance of becoming rich and chinese a slightly larger, in reality they are both low anyway.

[mookie2001]

Globalization just means the rich (and poor) will be spread over all of the world and not just in few countries. An american will have slightly smaller chance of becoming rich and chinese a slightly larger, in reality they are both low anyway.wrong

[fyatuk]

Of course the rich countries are going to have a problem with it. Like velik touched on, globalization is about moving some opportunities to poorer countries and decreasing global poverty. Or at least that's the ideal of it.

Personally I've always wanted a relative cap on salaries (CEO's income+benefits max out at a certain multiple of the lowest paid employees income+benefits). The imbalance in salaries is preposterous, and has been since long before globalization became a buzz word.

[boutons_]

US Corps make more profits by shifting jobs overseas, and US govt picks up the tab.
Why not identify the companies that moving jobs overseas and make contribute to fund the TAA?

Anyway, why do we even care about laid-off people anway? Isn't losing jobs the "creative destruction" economists and academics (whose job don't get creatively destroyed) just inhumane capitalism enriching itself.

=====================

Aid May Grow for Laid-Off Workers

Service Jobs Lost To Global Trade Are Focus of Bills

By Lori Montgomery
Washington Post Staff Writer
Monday, July 23, 2007; A01

As part of their campaign to soothe an anxious middle class, congressional Democrats are preparing legislation that would significantly expand federal aid to the most obvious victims of the global economy: workers whose jobs move offshore or are lost to foreign imports.

Under a Senate bill to be introduced today, computer programmers, call-center staffers and other service-sector workers who make up the vast majority of the nation's workforce would for the first time be eligible for a generous package of income, health and retraining benefits currently reserved for manufacturing workers who lose their jobs to international trade.

Democrats say the expansion of the Trade Adjustment Assistance (TAA) program would begin to reweave the social safety net for the 21st century, as advances permit more industries to take advantage of cheap foreign labor -- even for skilled, white-collar work. By providing special compensation to more of globalization's losers and retraining them for stable jobs at home, they say, an expanded program could begin to ease the resentment and insecurity arising from the new economy.

A similar bill is nearing completion in the House, and Democrats hope to approve the expansion before the program expires Sept. 30. Trade Adjustment Assistance typically gets strong bipartisan support; Sen. Olympia J. Snowe (R-Maine) is co-sponsoring the bill with Sen. Max Baucus (D-Mont.).

But this year, rancorous politics have developed around broader trade issues, threatening the proposed expansion and, potentially, the program's survival.

"This is not going to be a slam-dunk," said Howard Rosen, executive director of the nonprofit Trade Adjustment Assistance Coalition.

The program, established as part of the Trade Expansion Act of 1962, is the nation's primary source of aid to workers who lose their jobs to foreign competition. Laid-off manufacturing workers must demonstrate to the Labor Department that they lost their jobs because of foreign imports or a decision to shift production to a U.S. trading partner subject to a free-trade agreement.

If their applications are approved, workers can receive two years of benefits on top of state unemployment payments, which typically last six months. The benefits include income support payments, job training, job search and relocation assistance, and a tax credit that covers 65 percent of monthly health-insurance premiums. Workers over 50 who take a new job at lower pay are eligible for wage insurance, which makes up half the difference between their old salary and the new one, up to a maximum of $5,000 a year, for two years.

Last year, the Labor Department approved 1,400 petitions covering about 400,000 workers, according to a recent study by the Government Accountability Office, though fewer than 100,000 workers sought and received benefits. The agency denied 800 petitions, mainly because the workers did not produce "an article" and hence fulfill the basic definition of a manufacturing worker. Most of the denials involved two industries, the GAO said: business services such as computer programming and airport-related services such as aircraft maintenance.

"Trade Adjustment Assistance was created in the 1960s, but today's workers live in a different world," Baucus, the bill's chief author and chairman of the Senate Finance Committee, said in a written statement. "TAA should be flexible enough to respond to workers' needs regardless of what they do or where challenges are coming from."

Baucus's proposal, in addition to extending benefits to service workers, would eliminate the rule that reserves benefits for jobs lost to U.S. trading partners. Help would be available for any worker whose job moves anywhere overseas. The bill also would streamline the application process for hard-hit industries, allowing the Labor Department to certify workers industry-wide.

The bill also would improve some benefits while making them easier to claim. The health-insurance tax credit would be increased to cover 85 percent of monthly premiums, making maintaining health coverage more affordable. And workers as young as 40 would be eligible for up to $6,000 a year in wage insurance if they accept new jobs at lower pay.

All told, the changes would double spending on the program, which cost the government just under $1 billion last year.

( hmm, only about 3% of earmarks/pork, and just a little less that the $1T in tax cut of estate taxes of the super-rich. $1B would be easily offset by forcing ultra-profitable hedge-fudge managers to pay the top income tax rate rather than %15)

Republicans as well as Democrats have long called for an overhaul of Trade Adjustment Assistance. President Bush has praised the program and promised to improve it. But the politics of trade have been complicated since Democrats took control of Congress with the help of many candidates who campaigned against further trade liberalization.

In the past, Trade Adjustment Assistance has been renewed alongside legislation granting the president fast-track authority to negotiate trade deals without congressional interference. But Bush's fast-track authority expired in June, and House Democrats have made it clear that they do not intend to restore it.

In addition, many Republicans feel scalded by Democratic delays on free-trade deals that the Bush administration has negotiated with Peru and Panama. Those agreements, and more politically divisive agreements with South Korea and Colombia, have not been brought to a vote since a deal to move them forward was made in May.

Now, even some Republican champions of Trade Adjustment Assistance say they are reluctant to sign on to its renewal unless Democrats reconsider their opposition to fast-track authority.

"Frankly, TAA is a very integral part of our efforts to reduce barriers and expand trade . . . and my view is they ought to go together," said Sen. Charles E. Grassley (R-Iowa), the senior Republican on the Finance Committee.

The Bush administration was actively working on a reauthorization proposal for Trade Adjustment Assistance when fast-track expired, the program's advocates said. Now, the administration appears to have backed off to recalibrate its strategy.

Last week, White House spokesman Tony Fratto declined to comment on the Democratic proposals for expansion, except to question their cost and the wisdom of covering service workers. With those job losses, he said, "it becomes impossible to draw lines that show the displacement is owing to trade."

Some TAA advocates worry that, in this hostile atmosphere, two months is too little time to pass legislation to extend the program and double its size. Others are confident that even disgruntled Republicans will be reluctant to abandon the chief source of federal aid for victims of globalization.

"The results of the last election, the polling, everything as we move into the next election cycle continues to indicate significant angst, frustration and anger from working people around these issues," said Bruce G. Herman, executive director of the National Employment Law Project, which promotes the rights of low-wage workers. "Trade-impacted workers are not concentrated in blue states or blue districts. They're in everybody's district."

[velik_m]

Why do you hate developing countries boutons? People there want work too.

[Extra Stout]

Of course the rich countries are going to have a problem with it. Like velik touched on, globalization is about moving some opportunities to poorer countries and decreasing global poverty. Or at least that's the ideal of it.

Personally I've always wanted a relative cap on salaries (CEO's income+benefits max out at a certain multiple of the lowest paid employees income+benefits). The imbalance in salaries is preposterous, and has been since long before globalization became a buzz word.
The problem is not that other countries are getting opportunities -- their opportunities in turn create new opportunities for the wealthy nations. The problem is that the system is being manipulated so that a small cabal of robber barons screw over the entire world.

Forget "reform." Those parties should be identified and assassinated.

[boutons_]

"Why do you hate developing countries boutons?"

where do you get that from?

globalization should help manual/low-end labors in undeveloped countries.

There's already a trend of many people with skills in those countries, esp tech and medical, to emigrate to developed countries.

Ask those people why they hate their own countries.

[DarkReign]

To Dan,

While I may agree with the surveys, they are by no means a study of factual evidence. Average citizens were asked their opinion.

So really, that whole take is an opinion. I may agree with it, but it isnt factual in any way.

[Nbadan]

Not convinced Yet? Let's examine this topic further then...

Corporate accountability is on the move...


Two years ago, when companies received a big tax break to bring home their offshore profits, the president and Congress justified it as a one-time tax amnesty that would create American jobs.

Drug makers were the biggest beneficiaries of the amnesty program, repatriating about $100 billion in foreign profits and paying only minimal taxes. But the companies did not create many jobs in return. Instead, since 2005 the American drug industry has laid off tens of thousands of workers in this country.

And now drug companies are once again using complex strategies, many of them demonstrably legal, to shelter billions of dollars in profits in international tax havens, according to their financial statements and independent tax experts.

In one popular accounting move, companies declare their foreign markets as far more profitable than their American businesses — even though drug prices are typically higher in the United States than anywhere else in the world.

Drug makers are not the only American multinationals using tax loopholes to declare large portions of their income beyond the reach of the Internal Revenue Service. The Brookings Institution estimates that multinational companies are using overseas tax shelters to lower their payments to the Treasury by about $50 billion a year.

NY Times (http://www.nytimes.com/2007/07/24/business/24drugtax.html?hp)

[velik_m]

where do you get that from?

globalization should help manual/low-end labors in undeveloped countries.

There's already a trend of many people with skills in those countries, esp tech and medical, to emigrate to developed countries.

Ask those people why they hate their own countries.

i see. Good for doing the dirty work, not good enough for the rest.

[boutons_]

"Good for doing the dirty work, not good enough for the rest."

You know as well as I and everybody does in developed countries is that globalization encourages export of labor-intensive jobs in high-cost countries to low-cost labor countries. Don't take it personally. Economics and corporations don't GAF about you or anybody else.

What we see in India and similar countries is that they have developed medical and technical skills equal to the US and still much cheaper, so if you're "good enough", you can snag some $$$ "for the rest".

[xrayzebra]

"Good for doing the dirty work, not good enough for the rest."

You know as well as I and everybody does in developed countries is that globalization encourages export of labor-intensive jobs in high-cost countries to low-cost labor countries. Don't take it personally. Economics and corporations don't GAF about you or anybody else.

What we see in India and similar countries is that they have developed medical and technical skills equal to the US and still much cheaper, so if you're "good enough", you can snag some $$$ "for the rest".

You mean like this boutons?




http://i191.photobucket.com/albums/z273/xrayzebra/boutondnitemaer.jpg

[DarkReign]

You mean like this boutons?
http://i191.photobucket.com/albums/z273/xrayzebra/boutondnitemaer.jpg

Adjusting for inflation, you were GROSSLY, UNEQUIVOCALLY waaaaaaaaaaaaay overpaid for what you did for a profession, Ray.

So, if you feel no pity for the plight of a current working American, do corporate America and our government a favor and just go ahead and mail 40% of every dollar you ever made right back where you got it.

The people of your generation, and my parents generation, had life so good and so damn easy its almost sickening. People around here (Michigan) wouldnt even graduate high school in the 60s, yet grab a job in the auto sector and make enough money to afford a big house, a cottage, a boat, 2 cars, 1 recreational vehicle and still have money left over to invest. That doesnt include the money they drank, ate, wasted and otherwise enjoyed life with.

This lifestyle was not some minority, it was the norm. Good luck being a high school dropout these days and make more than $20,000 a year (save the rags to riches story...theyre exceptions, not rules).

[xrayzebra]

Adjusting for inflation, you were GROSSLY, UNEQUIVOCALLY waaaaaaaaaaaaay overpaid for what you did for a profession, Ray.

So, if you feel no pity for the plight of a current working American, do corporate America and our government a favor and just go ahead and mail 40% of every dollar you ever made right back where you got it.

The people of your generation, and my parents generation, had life so good and so damn easy its almost sickening. People around here (Michigan) wouldnt even graduate high school in the 60s, yet grab a job in the auto sector and make enough money to afford a big house, a cottage, a boat, 2 cars, 1 recreational vehicle and still have money left over to invest. That doesnt include the money they drank, ate, wasted and otherwise enjoyed life with.

This lifestyle was not some minority, it was the norm. Good luck being a high school dropout these days and make more than $20,000 a year (save the rags to riches story...theyre exceptions, not rules).

Oh, My! Now you are the one to tell me what I am
worth. Move, you can always come to Texas. Now
if you are a high school dropout, don't blame me, blame
yourself. It was your decision.

As far as me sending 40 pecent of what I made back
to someone, don't think so. Hell you would just
blow it on a big macs and overpriced Starbucks coffee.

Have a nice life, I have a nice one.

[DarkReign]

Oh, My! Now you are the one to tell me what I am
worth. Move, you can always come to Texas. Now
if you are a high school dropout, don't blame me, blame
yourself. It was your decision.

As far as me sending 40 pecent of what I made back
to someone, don't think so. Hell you would just
blow it on a big macs and overpriced Starbucks coffee.

Have a nice life, I have a nice one.

So you didnt address the fact that you and your ilk were vastly overpaid for what you did?

Its not even close, Ray. If you made $20k back in the day, thats like (total guess here) 60k by today's standards. What is it you did that warranted that sort of pay?

[xrayzebra]

So you didn't address the fact that you and your ilk were vastly overpaid for what you did?

Its not even close, Ray. If you made $20k back in the day, that's like (total guess here) 60k by today's standards. What is it you did that warranted that sort of pay?

Would it surprise you to know that I didn't make anywhere
near 20K back in "my day". Hell, most professionals,
doctors, lawyers and others made about 12K tops. Most
working folks made about 4-5K a year. And yes I was
worth every damn penny of it. I was about ready to
retire before I made 60K a year. But I did make that much
for a few years. But we learned how to handled our
money and what money was worth. And government
didn't interfere with people's life back in those days. Hence
things were reasonable in cost. Get government involved
and hang on to your pocketbook. Like when people
say conservation, duck, cause you are gonna pay and
pay dearly. The so called war on poverty is such a
program. Not in direct payroll taxes but on "fees" imposed
on the real necessities of life. Gas, water and electricity.
Nothing more than taxes. I have no idea where you live,
but here in San Antonio people's eye's should really be
opened when they look at their water bill. No one has
watered at all this summer, yet water bills, for just
everyday things, like drinking water, washing, bathing
are over 30 bucks for a two person household. Look at your
phone bills. Fees are over 20 bucks. Wise up my friend.
In "my" day Mom could, and did, stay home and take
care of the home-fire, while Dad made the living. Now
it takes two to make ends meet. I could write a long
dissertation on why that occurs, but never mind.

[fyatuk]

Not in direct payroll taxes but on "fees" imposed
on the real necessities of life. Gas, water and electricity.
Nothing more than taxes. I have no idea where you live,
but here in San Antonio people's eye's should really be
opened when they look at their water bill. No one has
watered at all this summer, yet water bills, for just
everyday things, like drinking water, washing, bathing
are over 30 bucks for a two person household. Look at your
phone bills. Fees are over 20 bucks.

I agree with you on this. Of course, right now I'm more annoyed at minimum charges than anything. I actually get charged for twice as much usage as I have because of minimum amounts by SAWS (and I believe CPS as well, but not sure).

A few years ago I added it all up, income tax, sales tax, property tax, payroll tax, and all the little taxes and fees on products and services I used charged by the various governments. Not really surprisingly it came out to somewhere around 50% of my income. I'm not sure how that relates to back in the day, but when the government takes half the income of someone who is in the lower middle class area (or maybe upper lower class), it's no wonder most families need either 2 working members or help from the government.

[xrayzebra]

I agree with you on this. Of course, right now I'm more annoyed at minimum charges than anything. I actually get charged for twice as much usage as I have because of minimum amounts by SAWS (and I believe CPS as well, but not sure).

A few years ago I added it all up, income tax, sales tax, property tax, payroll tax, and all the little taxes and fees on products and services I used charged by the various governments. Not really surprisingly it came out to somewhere around 50% of my income. I'm not sure how that relates to back in the day, but when the government takes half the income of someone who is in the lower middle class area (or maybe upper lower class), it's no wonder most families need either 2 working members or help from the government.

Amen. Couldn't agree more.

[DarkReign]

Im not a high school dropout. But nor am I college educated either.

I make a damn fine living, but thats more to do with how I started than where I am.

Im your typical white, middle class, semi-educated nobody who happened into a very good job.

Yet, in my position I have to see the never-ending revolving door of good people looking for honest work. Guys who were making $17 an hour who are now willing to work for $8, full-well knowing it isnt going to pay their bills.

Two of my friends from adolescence, both are married, both have 2 jobs. The one guy I still talk to regularly works from 6am-4:30pm, goes home, showers and goes to his next job from 6pm-12am. Sleeps, wakes up and does this shit 6 days a week.

His wife has a job in the morning while their child is at school. Thats three paychecks a week for them and it BARELY pays the bills. Thats atrocious. Hes a hardworking man not exactly blessed with the greatest intelligence or aptitude for higher education. That doesnt mean he should work himself to death.

Its not fucking fair, and your generation never had anything remotely approaching this sort of crisis. At least not in Michigan (I should stick to speaking about areas I know about). The world was simple and easy, now its complicated and difficult.

[Spurminator]

Two of my friends from adolescence, both are married, both have 2 jobs. The one guy I still talk to regularly works from 6am-4:30pm, goes home, showers and goes to his next job from 6pm-12am. Sleeps, wakes up and does this shit 6 days a week.

His wife has a job in the morning while their child is at school. Thats three paychecks a week for them and it BARELY pays the bills.



http://img.slate.com/media/1/123125/122953/2139046/2145161/060717_GW_bushEX.jpg

"Uniquely American, isn't it? I mean, that is fantastic that they're doing that. Do they get any sleep?"

[xrayzebra]

Im not a high school dropout. But nor am I college educated either.

I make a damn fine living, but thats more to do with how I started than where I am.

Im your typical white, middle class, semi-educated nobody who happened into a very good job.

Yet, in my position I have to see the never-ending revolving door of good people looking for honest work. Guys who were making $17 an hour who are now willing to work for $8, full-well knowing it isnt going to pay their bills.

Two of my friends from adolescence, both are married, both have 2 jobs. The one guy I still talk to regularly works from 6am-4:30pm, goes home, showers and goes to his next job from 6pm-12am. Sleeps, wakes up and does this shit 6 days a week.

His wife has a job in the morning while their child is at school. Thats three paychecks a week for them and it BARELY pays the bills. Thats atrocious. Hes a hardworking man not exactly blessed with the greatest intelligence or aptitude for higher education. That doesnt mean he should work himself to death.


Its not fucking fair, and your generation never had anything remotely approaching this sort of crisis. At least not in Michigan (I should stick to speaking about areas I know about). The world was simple and easy, now its complicated and difficult.

Once again, someone who "thinks" they have all the
questions and answers. You have no idea what people
of my generation faced. And your statement: Not
fair. Fella, I have no idea how old you are, but life is
not fair. And that is a fact. Live with it. No one gives
you anything for nothing, well except maybe your
Mom and Dad. How bout the fact that you "buddies"
may have gotten in over their heads and are now
paying the price. You think they are unique. They
aren't. Everyone does it and should learn from it. I
did and I learned. I never did it again.

I will tell you one damn thing for certain. It is not
governments job to guarantee that you have a life
that YOU want or YOU think YOU are entitled to. YOU
get what you earn. Pure and simple.

[Spurminator]

I will tell you one damn thing for certain. It is not
governments job to guarantee that you have a life
that YOU want or YOU think YOU are entitled to. YOU
get what you earn. Pure and simple.



Unless you're rich, in which case they work very hard to make sure you can stay rich with minimal effort.

[Spurminator]

I will tell you one damn thing for certain. It is not
governments job to guarantee that you have a life
that YOU want or YOU think YOU are entitled to. YOU
get what you earn.


Within strictly specified guidelines which determine HOW you can earn.

[xrayzebra]

Unless you're rich, in which case they work very hard to make sure you can stay rich with minimal effort.

I wouldn't know. I am not rich. But I am comfortable.
Funny thing. You complain about a country that has
enough jobs that your friends can have two. Wonder
what they would do if they didn't have that opportunity?

And you might just be surprised how many "rich" people
go broke and how many broke people become rich. And
rich is in the eyes of the beholder. What do you consider
rich? One of my friends used to say: When I make
enough money my wife cant spend all of it.

Government is what WE allowed it to become. And
most of activism has occurred in my lifetime. Look at
where most of the Taxes are spent.

Welfare......


Federal Budget (http://www.federalbudget.com/)

[fyatuk]

What do you consider rich?

It really is in the eye of the beholder, isn't it? I, rather pathetically most likely, consider someone making 50k a year quite rich. But that probably has to do with me being used to living on what most would consider unlivable wages since high school.

Considering I know it's possible to live quite comfortably here on 20k (even with the government taking 40-50% of it), I get annoyed at a lot of people's complaints ;)

[xrayzebra]

^^Something that has to be taken into consideration is age.
When you are young and single it is one thing. When you are
young and raising a family is another thing and when your kids
are gone and you are in your prime earning period it is another
thing. Before I get blasted, their are exceptions to all things.
Except those like the Kennedy's who inherit a ton of money.
Or the high income professionals/entertainers. I am speaking
of the run of mill working people. And believe it or not, many
of those of whom I speak do very well.

[fyatuk]

Quite true. I can survive comfortably on 20k by myself (any single person should here in SA). Needs go up with more to worry about of course, but to me that's an issue of responsibility and not getting in over your head.

I was just saying there are people who annoy me greatly. Like my friend and his gf. Both work, and combined they make somewhere around 60k a year, yet they somehow manage to always be worrying about money. Their bills are actually LESS than mine. That's just stupidity.

I know as late as 1996 or so a single mother and two young sons (and even the gf of one of them) could survive off 16k a year with no help from anyone. That number would be significantly higher now though.

[BradLohaus]

The increased size and scope of all levels of government is part of the reason why everything is more expensive now. But here's the main reason that the standard of living of the working class has dropped.

http://en.wikipedia.org/wiki/Image:Components_of_the_United_States_money_supply .svg

New money generally enters investment markets first, like the stock market. It enters the labor market last. There would be absolutely nothing wrong with that if the dollar maintained its value over time. But with the way that monetary policy works in this country today, the prices of the things that people need in order to live increase faster than and before most people's incomes do. It has become a game of catch up, while getting more and more behind.

As each dollar moves through the economic food chain it loses value because inflation is now a permanent fixture in our financial system. Who are the winners in this system? The people at the top or near the top of the pyramid: banks, governments, major corporations, and the people highly affiliated with those institutions. Banks like the inflationary system because they issue the money. The government likes it because it allows them to spend money like a drunken sailor, which is what governments love to do. Big business likes it because of what it means to their value to be first in the new money cycle of an inflationary monetary system - a (seemingly) perpetually rising stock market.

It's just a question of whether your benefits from a liquidity pumped investment system outweigh the costs of an ever devalued dollar. Really, the central banking system that basically the whole world lives under is just the biggest pyramid scheme in human history. Each level supports the level above it, and the central banks are at the top, owned by private banks and creating money out of nothing. Ever smaller benefits make their way down the pyramid until they run out and turn into costs for the rest of the levels. We do not live in a free market, competitive, and capitalistic economy; no one does anymore. We live under a centrally planned money monopoly. [/weekly Fed rant]

[DarkReign]

Once again, someone who "thinks" they have all the
questions and answers. You have no idea what people
of my generation faced. And your statement: Not
fair. Fella, I have no idea how old you are, but life is
not fair. And that is a fact. Live with it. No one gives
you anything for nothing, well except maybe your
Mom and Dad. How bout the fact that you "buddies"
may have gotten in over their heads and are now
paying the price. You think they are unique. They
aren't. Everyone does it and should learn from it. I
did and I learned. I never did it again.

I will tell you one damn thing for certain. It is not
governments job to guarantee that you have a life
that YOU want or YOU think YOU are entitled to. YOU
get what you earn. Pure and simple.

I dont know how it is in Texas, but here in Michigan youre either living in the burbs, or youre next to the ghetto. So, theoretically, my friend could move further south (closer to Detroit) to offset the cost of living in the burbs, but with that he sacrifices his security, his daughter's education, his property investment and his standard of living.

His situation is one of many. I mentioned him because I can talk about it with accuracy. Nevermind the literally endless stream of men and women who walk thru my door at work looking for a job as "general labor" when theyre clearly overqualified to do the work at the highest shop positions. Guys who were bridgeport operators, CNC operators, OD grinding, ID grinding, JIG grinding, MIG/TIG/ARC welders, etc, etc all want jobs for $8 an hour.

And somehow, this is their fault. Their fault that they spent their lives learning valuable skilled trades that just arent here in the States anymore because India's/China's/Butt-fuck Egypt's cost of living is DRASTICALLY less than America's, so they do it for beans in comparison.

Thats what I was talking about Ray, when I said "your generation". Those skilled trades, those things that you still need an education to be certified, are not here anymore because "globalization" has farmed it out. Your generation didnt have that competition. At all, in any way shape or form. You competed with other Americans. That just isnt the case anymore.

[DarkReign]

I dont have any firm idea what factors affect cost of living, but that is by far the greatest problem with the US. It just, flat out, costs too much to live here in comparison to other countries.

[Extra Stout]

I dont have any firm idea what factors affect cost of living, but that is by far the greatest problem with the US. It just, flat out, costs too much to live here in comparison to other countries.
Your experience in Michigan does not apply to the entire country. In Michigan, the economy is in depression due to the impending collapse of the U.S. auto industry. There is no demand for skilled labor.

Down in Houston, Texas, there is an enormous shortage of skilled labor, even with all the Mexicans floating around, and last year during shutdown season, welders with their own machines could draw $50-$60 an hour.

[boutons_]

"costs too much to live here in comparison to other countries."

Not really. People in other developed countries spend a higher percentage of their income on housing, food, gasoline, local/income taxes. The US is moving that direction, mostly due to corporate greed, but there's still a ways to go.

Where other industrial countries have an advantage is that they have much cheaper national health programs (and college education, but where entrance is usually more restricted to those who are truly qualified) and are free from the threat of poverty or bankruptcy from a medical catastrophe. ie, they have expanded their citizens' rights to include the right of access to medical care whose cost is spread across the entire citizenry.

[DarkReign]

"costs too much to live here in comparison to other countries."

Not really. People in other developed countries spend a higher percentage of their income on housing, food, gasoline, local/income taxes, college education. The US is moving that direction, mostly due to corporate greed, but there's still a ways to go.

Now this, I did not know. Learn something new every day, I say.

[DarkReign]

Your experience in Michigan does not apply to the entire country. In Michigan, the economy is in depression due to the impending collapse of the U.S. auto industry. There is no demand for skilled labor.

Down in Houston, Texas, there is an enormous shortage of skilled labor, even with all the Mexicans floating around, and last year during shutdown season, welders with their own machines could draw $50-$60 an hour.

Hmmm, very good point. I'll just start pointing them all south and say "Dont stop till you hit the Gulf!"

[xrayzebra]

"costs too much to live here in comparison to other countries."

Not really. People in other developed countries spend a higher percentage of their income on housing, food, gasoline, local/income taxes, college education. The US is moving that direction, mostly due to corporate greed, but there's still a ways to go.

Where other industrial countries have an advantage is that they have much cheaper national health programs and are free from the threat of poverty or bankruptcy from a medical catastrophe. ie, they have expanded their citizens' rights to include the right of access to medical care whose cost is spread across the entire citizenry.


Except in many cases many industries in those foreign
countries are moving whole production facilities into
the United States. Like Toyota and Sony. They have
invested heavily in the U.S. And they do provide health
care to their workers.

What ES says is true. But, and I know I am opening
up a can of worms, the unions brought much of their
workers woes upon themselves. Greed. boutons
speaks of corporate greed, but union greed, plays a
big part of the U.S. Auto problems. You have not only
skilled people that were overpaid, but people who
screwed a nut on a wheel drawing big bucks. And
people sitting around drawing big bucks doing nothing
because of no layoff rules. And of course this affects
all the industries that support the auto manufactures.

[DarkReign]

But, and I know I am opening
up a can of worms, the unions brought much of their
workers woes upon themselves. Greed. boutons
speaks of corporate greed, but union greed, plays a
big part of the U.S. Auto problems. You have not only
skilled people that were overpaid, but people who
screwed a nut on a wheel drawing big bucks. And
people sitting around drawing big bucks doing nothing
because of no layoff rules. And of course this affects
all the industries that support the auto manufactures.

Thats no "can of worms" at all. Its completely true. My father, uncles, aunts, etc were/are all Union. They cut their own throats.

But those professions I named earlier were not union jobs. Skilled machinists making $16 an hour PLUS is not uncommon or unfeasible. Trust me, I employ them.

Your reference to the Union guys is spot on. Literally, janitors were making $50k, the "screw this nut on this bolt for 8 hours a day" guy were making $60k+.

It was ridiculous. Its being corrected.

[xrayzebra]

Thats no "can of worms" at all. Its completely true. My father, uncles, aunts, etc were/are all Union. They cut their own throats.

But those professions I named earlier were not union jobs. Skilled machinists making $16 an hour PLUS is not uncommon or unfeasible. Trust me, I employ them.

Your reference to the Union guys is spot on. Literally, janitors were making $50k, the "screw this nut on this bolt for 8 hours a day" guy were making $60k+.

It was ridiculous. Its being corrected.

DR, unfortunately, some skills become "over populated"
in some areas. And the only solution that I know of is
to go where the jobs are. I know Toyota here in San
Antonio pays a good wage, for this area. It more than
likely wouldn't for your area. I can't really speak
with any authority on what they pay, I only know what
the paper prints and I know the Chamber of Commerce
view comes into play. But I think they were putting out
that workers would be making around 40K a year. But
that the plants feeding their products into Toyota would
be making considerably less. Anyhow, the Eastern
part of the US is suffering in some areas because of
changing times. But it is and was not unheard of. Like
the mills in New England. There are any number of
industries that have gone out of business because of
changing times.

[Extra Stout]

Skilled machinists making $16 an hour PLUS is not uncommon or unfeasible. Trust me, I employ them.
Since the border patrol started cracking down a bit this year, you can't find a top-quality Mexican machinist who will work for less than $16 an hour. They are banking. Mamacita back home in San Luis Potosí is opening a new restaurant, an OXXO store, and buying shares in Cemex with the proceeds from all the wire transfers.

Do Michiganders work as hard as Mexicans?

[DarkReign]

Since the border patrol started cracking down a bit this year, you can't find a top-quality Mexican machinist who will work for less than $16 an hour. They are banking. Mamacita back home in San Luis Potosí is opening a new restaurant, an OXXO store, and buying shares in Cemex with the proceeds from all the wire transfers.

Do Michiganders work as hard as Mexicans?

Its a bit of a pride thing here.

One of my customers has aplant in Toledo, OH. They also have a plant in Franklin, KY.

They hire people from the Toledo plant to work in the Kentucky plant, paying the relocation fee because the people from the north work harder than the south. This isnt just a "one time" conversation I have had in passing with the plant manager from Toledo either, its an ongoing problem that this particular company has been dealing with for years (and I get to hear them complain about it).

Also, my brother moved to the south for work (hes back, fucking alcoholic), the first thing he noticed, the people dont work. I worked with my brother for a good portion of my early life, so I know his ethic. If he says "I work circles around these fucking people.", then there is something wrong. Another friend of mine moved from here to Lousiana for work (he was union construction). He couldnt believe he was being paid almost 3x a much down there for half the work.

Mind you, both my brother and (old) friend said the same damn thing "I wish I could have a crew of Mexicans, those fuckers WORK!" Neither of them likes slacking as I recall, so they very much preferred working with Mexicans because it was refreshing to work at a pace they were used to up here (sometimes, a faster pace).

Both wanted to learn Spanish so they could run an all-Mexican crew. Because they knew theyd get shit done and no job would be late, which means alot less stress from the boss.

My uncle lives in Texas (soon moving to Vegas). Hes the most xenophobic hillbilly I know. Even he says he wants to learn Spanish so he can run an all-Mexican crew. Hes just sick and tired of hearing the boss bitch because some schmuck on your crew doesnt want to work, while youre busting your ass picking up his slack.

So, I dont want to make generalizations or anything, but it would seem to me that, yes indeed, people from the north work much harder than the natives in the south. Because we seem to have more in common with Mexicans than Southerners when it comes to work ethic, (generally speaking.

[DarkReign]

DR, unfortunately, some skills become "over populated"
in some areas. And the only solution that I know of is
to go where the jobs are. I know Toyota here in San
Antonio pays a good wage, for this area. It more than
likely wouldn't for your area. I can't really speak
with any authority on what they pay, I only know what
the paper prints and I know the Chamber of Commerce
view comes into play. But I think they were putting out
that workers would be making around 40K a year. But
that the plants feeding their products into Toyota would
be making considerably less. Anyhow, the Eastern
part of the US is suffering in some areas because of
changing times. But it is and was not unheard of. Like
the mills in New England. There are any number of
industries that have gone out of business because of
changing times.

All true. Our governor has lobbied hard for Toyota/Honda/et all to open plants in Michigan, but they wont (and I dont blame them).

Its a union state. Until Michigan becomes a "right to work" state, we'll never recover the manufacturing jobs we lost (its approaching the 1 million mark).

BUT! The manufacturing industry is anything but stupid. They know if they open a plant in some other state, they wont have the ingrained and trained workforce they would if they opened in Michigan. So what do they do?

Have hiring seminars downtown. They (Toyota/Honda/et all) regularly have seminar where they interview people for jobs in other states. And its working like a charm.

Industry is so old and ingrained here, finding a guy who can run a CNC from start to finish isnt exactly difficult. Im not talking about some guy that just changes the part in a machine that is pre-set, Im talking about a guy who can program (MasterCAM usually), design (toolpaths, tool change, etc) and run (noticing the errors in the program and making necessary changes for the next part, troubleshooting, etc) a CNC to make finished parts.

JIG grinders, OD/ID grinders, surface finishing. All of these and more are skills walking from door to door looking for work here.

[xrayzebra]

All true. Our governor has lobbied hard for Toyota/Honda/et all to open plants in Michigan, but they wont (and I dont blame them).

Its a union state. Until Michigan becomes a "right to work" state, we'll never recover the manufacturing jobs we lost (its approaching the 1 million mark).

BUT! The manufacturing industry is anything but stupid. They know if they open a plant in some other state, they wont have the ingrained and trained workforce they would if they opened in Michigan. So what do they do?

Have hiring seminars downtown. They (Toyota/Honda/et all) regularly have seminar where they interview people for jobs in other states. And its working like a charm.

Industry is so old and ingrained here, finding a guy who can run a CNC from start to finish isnt exactly difficult. Im not talking about some guy that just changes the part in a machine that is pre-set, Im talking about a guy who can program (MasterCAM usually), design (toolpaths, tool change, etc) and run (noticing the errors in the program and making necessary changes for the next part, troubleshooting, etc) a CNC to make finished parts.

JIG grinders, OD/ID grinders, surface finishing. All of these and more are skills walking from door to door looking for work here.


I find your comments interesting. I run into an
Englishman some months back who is working here
in San Antonio. He was a machinist who had been
hired out of England to run some sort of computerized
machine here in San Antonio. As you can tell I am not
anywhere near an expert on machinist. Anyhow he was
on some sort of contract because they could not find
anyone to operate this equipment from anywhere
around. No one was qualified. It makes me wonder
why they didn't go to your part of the country. I doubt
he would work for less money since England, no days,
is not a low cost of living country and workers have
all kinds of bennies. Including transportation allowances
to get to and from work. I have no idea how much he
was being paid since he didn't volunteer the information
and I didn't ask. But still it is interesting we, an
American employer, would go outside the U.S. to hire
someone when he could more than likely find qualified
people in your part of the country.

[Extra Stout]

Its a bit of a pride thing here.

One of my customers has aplant in Toledo, OH. They also have a plant in Franklin, KY.

They hire people from the Toledo plant to work in the Kentucky plant, paying the relocation fee because the people from the north work harder than the south. This isnt just a "one time" conversation I have had in passing with the plant manager from Toledo either, its an ongoing problem that this particular company has been dealing with for years (and I get to hear them complain about it).

Also, my brother moved to the south for work (hes back, fucking alcoholic), the first thing he noticed, the people dont work. I worked with my brother for a good portion of my early life, so I know his ethic. If he says "I work circles around these fucking people.", then there is something wrong. Another friend of mine moved from here to Lousiana for work (he was union construction). He couldnt believe he was being paid almost 3x a much down there for half the work.

Mind you, both my brother and (old) friend said the same damn thing "I wish I could have a crew of Mexicans, those fuckers WORK!" Neither of them likes slacking as I recall, so they very much preferred working with Mexicans because it was refreshing to work at a pace they were used to up here (sometimes, a faster pace).

Both wanted to learn Spanish so they could run an all-Mexican crew. Because they knew theyd get shit done and no job would be late, which means alot less stress from the boss.

My uncle lives in Texas (soon moving to Vegas). Hes the most xenophobic hillbilly I know. Even he says he wants to learn Spanish so he can run an all-Mexican crew. Hes just sick and tired of hearing the boss bitch because some schmuck on your crew doesnt want to work, while youre busting your ass picking up his slack.

So, I dont want to make generalizations or anything, but it would seem to me that, yes indeed, people from the north work much harder than the natives in the south. Because we seem to have more in common with Mexicans than Southerners when it comes to work ethic, (generally speaking.
So I guess we are looking at a future where northerners and Mexican immigrants run the country billingually in right-to-work states, while unemployed lazy rednecks get their kicks in the boonies finding new ways to oppress blacks.

[DarkReign]

So I guess we are looking at a future where northerners and Mexican immigrants run the country billingually in right-to-work states, while unemployed lazy rednecks get their kicks in the boonies finding new ways to oppress blacks.

Serious or not, that shit is funny. Like I said, I dont speak for anything I dont have at least second-hand knowledge of. 3 seperate people working 3 seperate places in the south all say the same thing.

The plant manager for a multi-national company having to transfer people from the north to the south every month to meet demands that the current workforce cannot.

One way or the other, thats hilarious.

[BradLohaus]

Here's something interesting. I was reading The Economist today and they had a graph that showed the average US hourly wage from 1997 to today. The average hourly wage was $16 in '97 and about $18 today. So I fired up the US inflation calculator http://www.westegg.com/inflation/ and it turns out that $18 today is equivalent to $14.50 in '97.

Then I found this chart on Average Weekly Earnings (in 1982 constant dollars) for all private non farm workers in the US from 1964 - 2004.

http://www.workinglife.org/wiki/Wages+and+Benefits%3A+Real+Wages+%281964-2004%29

The chart doesn't quite jive with the inflation calculator because the real wage chart has real wages higher in '04 than in '97, but that isn't a big deal because it is probably due to differences in the way that the inflation calculator measures inflation vs. the way that the workinglife site measures it. The message that the real wage data reveals is disturbing. There are alot of minus signs in front of the %change numbers from year to year.

[UV Ray]

The increased size and scope of all levels of government is part of the reason why everything is more expensive now. But here's the main reason that the standard of living of the working class has dropped.

http://en.wikipedia.org/wiki/Image:Components_of_the_United_States_money_supply .svg

New money generally enters investment markets first, like the stock market. It enters the labor market last. There would be absolutely nothing wrong with that if the dollar maintained its value over time. But with the way that monetary policy works in this country today, the prices of the things that people need in order to live increase faster than and before most people's incomes do. It has become a game of catch up, while getting more and more behind.

As each dollar moves through the economic food chain it loses value because inflation is now a permanent fixture in our financial system. Who are the winners in this system? The people at the top or near the top of the pyramid: banks, governments, major corporations, and the people highly affiliated with those institutions. Banks like the inflationary system because they issue the money. The government likes it because it allows them to spend money like a drunken sailor, which is what governments love to do. Big business likes it because of what it means to their value to be first in the new money cycle of an inflationary monetary system - a (seemingly) perpetually rising stock market.

It's just a question of whether your benefits from a liquidity pumped investment system outweigh the costs of an ever devalued dollar. Really, the central banking system that basically the whole world lives under is just the biggest pyramid scheme in human history. Each level supports the level above it, and the central banks are at the top, owned by private banks and creating money out of nothing. Ever smaller benefits make their way down the pyramid until they run out and turn into costs for the rest of the levels. We do not live in a free market, competitive, and capitalistic economy; no one does anymore. We live under a centrally planned money monopoly. [/weekly Fed rant]

That was a great post.

Question: However unlikely, how would the current economic situation have to evolve to result in deflation?

[BradLohaus]

However unlikely, how would the current economic situation have to evolve to result in deflation?

It's theoretically possible, but it almost certainly won't happen, I'd say. Deflation would cause a viscious cycle of loan defaulting and unemployment; it always does in a modern economy. The Fed has the power to keep that from happening, and it would not be in its best interest to see that happen; inflation is the fuel that keeps the debt system churning.

But if it did happen, it would be caused by the Fed increasing the discount rate (the rate that it lends money to its member banks, thereby effectively setting the interest rate for all money) substantially in both amount and time. That would be a very politically unpopular thing to do; it would result in a huge and prolonged recession and a tanked stock market. The dollar would recover some value, but the powers that be don't care about that at all because it means nothing to them; their benefits from inflation infinitely outweigh the costs from the devalued currency that the rest of us feel. I can't think of a realistic scenario that would result in the Fed either allowing deflation, or being powerless againt it. And they can't either.

http://www.federalreserve.gov/boarddocs/speeches/2002/20021121/

There would have been deflation after the bursting of the dot-com bubble if Greenspan hadn't have re-inflated like crazy; there is no debating that. By the way, if you didn't reap large rewards from that Fed engineered stock market boom, then you paid for it with decreased purchasing power. You won or you lost, like all pyramid schemes.

[UV Ray]

It's theoretically possible, but it almost certainly won't happen, I'd say. Deflation would cause a viscious cycle of loan defaulting and unemployment; it always does in a modern economy. The Fed has the power to keep that from happening, and it would not be in its best interest to see that happen; inflation is the fuel that keeps the debt system churning.

But if it did happen, it would be caused by the Fed increasing the discount rate (the rate that it lends money to its member banks, thereby effectively setting the interest rate for all money) substantially in both amount and time. That would be a very politically unpopular thing to do; it would result in a huge and prolonged recession and a tanked stock market. The dollar would recover some value, but the powers that be don't care about that at all because it means nothing to them; their benefits from inflation infinitely outweigh the costs from the devalued currency that the rest of us feel. I can't think of a realistic scenario that would result in the Fed either allowing deflation, or being powerless againt it. And they can't either.

http://www.federalreserve.gov/boarddocs/speeches/2002/20021121/

There would have been deflation after the bursting of the dot-com bubble if Greenspan hadn't have re-inflated like crazy; there is no debating that. By the way, if you didn't reap large rewards from that Fed engineered stock market boom, then you paid for it with decreased purchasing power. You won or you lost, like all pyramid schemes.

Thanks for the response. I had always wondered why the Japanese had such a difficult time recovering from deflation. The Federal Reserve link you provided is very informative and an easy read.

[Peter]

Globalization has worked out pretty well if you are a US consumer.

[BradLohaus]

Globalization has worked out pretty well if you are a US consumer.


Nope.

"Of workers in seven educational categories -- high school dropout, high school graduate, some college, college graduate, nonprofessional master's, Ph.D., and M.B.A./J.D./M.D. -- only those in the last two categories, with doctorates or professional graduate degrees, experienced any growth in mean real money earnings between 2000 and 2005. Workers in these two categories comprised only 3.4 percent of the labor force in 2005, meaning that more than 96 percent of U.S. workers are in educational groups for which average money earnings have fallen. In contrast to in earlier decades, since 2000 even college graduates and those with nonprofessional master's degrees -- 29 percent of workers in 2005 -- suffered declines in mean real money earnings."

http://www.foreignaffairs.org/20070701faessay86403/kenneth-f-scheve-matthew-j-slaughter/a-new-deal-for-globalization.html

(the quote is on page 3)

Foreign Affairs is the magazine published by the Coucil on Foreign Realtions, a group that is one of the biggest architects of globalization. They are freaking out because people are starting to realize that globalization is not good for the country. Apparently, the proposed solution is a "New Deal" for globalizaion - redistibute some of the gains to the people that globalization screws over. Since that is almost everyone in the United States, I find it hard to believe that the globalization power brokers will be willing to part with enough benefits to matter to the rest of us.

And to all the conservatives out there: Fred Thompson is in the CFR :lol
Ron Paul is not :toast

[Peter]

What about the cost of living? Anyways, if we want to ensure that wages remain stagnant going forward we can follow the protectionist course.

Also, '00 to '05? I'd say the period selected had a bit to do with that study's findings.

[BradLohaus]

What about the cost of living?
It's rising. Inflation + lower real wages = higher cost of living


Anyways, if we want to ensure that wages remain stagnant going forward we can follow the protectionist course.
The globalists have made quite an effort to get people to believe that. But even if it was true, stagnant real wages (don't forget the "real" part) would be an improvement over the declining ones that globalization has given us.


Also, '00 to '05? I'd say the period selected had a bit to do with that study's findings.
The study was done by an organization that has alot of influence and has used it to push globalization ever forward. So don't think that they are trying to hide any benefits of globalization. There are benefits; we just don't get them. A small percentage gets them, and we get the costs. If the writers of the article thought that '00 to '05 was an anomaly for some reason, then they wouldn't be worried about a protectionist backlash that would slow down globalization, and they wouldn't be proposing a New Deal for globalization.

Think about what was going on when the original New Deal was put in place. "New Deals" don't get proposed for systems that are going well for everybody.

[Peter]

It's rising. Inflation + lower real wages = higher cost of living


When you exclude the fact that the average consumer had access to cheap credit plus the fact that those official income statistics exclude unrealized gains on assets, then sure.



The globalists have made quite an effort to get people to believe that. But even if it was true, stagnant real wages (don't forget the "real" part) would be an improvement over the declining ones that globalization has given us.


That period started with the end of the .com boom and ended in '05. Of course if you looked solely at real wages you'd see something to that effect. Anyways, my claim was in regards to the average consumer and it's rather obvious that the '00 to '05 period was a net positive for them.




The study was done by an organization that has alot of influence and has used it to push globalization ever forward. So don't think that they are trying to hide any benefits of globalization. There are benefits; we just don't get them. A small percentage gets them, and we get the costs. If the writers of the article thought that '00 to '05 was an anomaly for some reason, then they wouldn't be worried about a protectionist backlash that would slow down globalization, and they wouldn't be proposing a New Deal for globalization.

Think about what was going on when the original New Deal was put in place. "New Deals" don't get proposed for systems that are going well for everybody.

And the article pointed out that the groups which did not see a real wage increase in that time period were subject to the full weight of the federal payroll taxes.

Anyways, referencing federal tabulated income when the topic is the consumer's welfare misses half of the story, at least.

[Nbadan]

When you exclude the fact that the average consumer had access to cheap credit plus the fact that those official income statistics exclude unrealized gains on assets, then sure.

...but it's only a real gain if you move to a cheaper neighborhood or city or downsize...there are no real unrealized gains when you have to move to a new home that is equally over priced because of the burgeoning bubble in the same neighborhood...you may feel richer because someone says your $150K home is now worth $225k, but it's still the same house....

[Nbadan]

That period started with the end of the .com boom and ended in '05. Of course if you looked solely at real wages you'd see something to that effect. Anyways, my claim was in regards to the average consumer and it's rather obvious that the '00 to '05 period was a net positive for them.

Really, how so? it must be our negative average saving rate when baby-boomers should be saving at record levels for retirement? Or, perhaps its the $7000 per household in avg. new debt that most families now carry...the $500/month average car payment? Nah, it's gotta be the house value and that's sure to keep going, up....up...up....right?

[BradLohaus]

When you exclude the fact that the average consumer had access to cheap credit plus the fact that those official income statistics exclude unrealized gains on assets, then sure.
Those things don't factor into the cost of living, and having access to cheap credit and experiencing unrealized asset gains doesn't mean that a person has benefited from globalization.


That period started with the end of the .com boom and ended in '05. Of course if you looked solely at real wages you'd see something to that effect. Anyways, my claim was in regards to the average consumer and it's rather obvious that the '00 to '05 period was a net positive for them. If a person's gains from an increase in their rate of income and appreciated assets outweighed the costs of the inflation rate and their interest payments on debt during that period, then yes they benefited. That does not mean that they benefited from globalization and that globalization is good for the country, though.


Anyways, referencing federal tabulated income when the topic is the consumer's welfare misses half of the story, at least.

True, real wage data is not the whole story. But it is the whole story for people who live paycheck to paycheck or close to it. Those people get raped by globalization and the inflationary monetary sytem. There are alot of people who live that way.

Of course having 96% of the population experiencing real wage decline over a period does not mean that all of the people in that 96% are worse off, but the people that did not experience an increase in their income rate and asset value big enough to overcome their costs in inflation and interest payments are certainly worse off. And no, that does not mean that globalization is entirely responsible for the shape of those people. But the article admits that there have been winners and losers from globalization, and that the benefits go to too few winners, and something has to be done to change that or else the process of globalization will be slowed down.

This isn't a question of whether or not the average consumer was better off overall in '05 vs. '00, it's about whether or not the process of globalization is good for most people in the US. If it was a good thing then the Foreign Affairs article talking about a New Deal for globalization would have never been written because you can be certain that the CFR does not want to criticize the process of globalization anymore than they have to.

[Peter]

Lower interest rates don't factor into one's cost of living?

[BradLohaus]

The cost of living index is really just the inflation rate, generally accepted as the CPI index (although it is greatly manipulated by the government to reflect lower than reality inflation rates). So you were right to say that interest rates do factor in, but the effects of interest rates on inflation are already taken into acount for cost of living by the inflation rate itself. So I shouldn't have said that cheap credit doesn't factor in; I should have said that its effects are already factored in with the inflation rate.

However, investments, including homes, are not considered in the CPI. So your point about the benefits of cheap credit relating to unrealized asset gains not being included in the cost of living is valid, but that assumes that the gains will be realized and that the gains will continue and not evaporate, like Dan mentioned. It also assumes that a person has a sufficient amount of appreciated assets to overcome the inflation rate, a situation that a large percentage of the population is not in. This means that they actually lose under a cheap credit, inflationary system, although they may not know it.

Here's the graph of the CPI since the Federal Reserve was established. Keep in mind that all ties of the dollar to gold were cut in 1971. It's no coincidence that the average CPI line takes off at that point. There are winners and losers because of this.

http://en.wikipedia.org/wiki/Image:US_Consumer_Price_Index_Graph.svg

[Peter]

The cost of living index is really just the inflation rate, generally accepted as the CPI index (although it is greatly manipulated by the government to reflect lower than reality inflation rates). So you were right to say that interest rates do factor in, but the effects of interest rates on inflation are already taken into acount for cost of living by the inflation rate itself. So I shouldn't have said that cheap credit doesn't factor in; I should have said that its effects are already factored in with the inflation rate.

The CPI doesn't capture items such as the benefits from refinancing a home. A homeowner is able to reduce their monthly payments by refinancing at a lower rate and their cost of living doesn't decline?

In addition, a component of the CPI are medical costs, yet consumers do not bear the total impact of medical inflation as they pay for a fraction of the actual cost of their care.

And the CPI doesn't account for changes in product and service quality well. For example, the price of the average TV might go up a little, but now consumers can buy a flat panel HD set in the same price range as an inferior CRT set 10 years ago. Are they really worse off?



However, investments, including homes, are not considered in the CPI. So your point about the benefits of cheap credit relating to unrealized asset gains not being included in the cost of living is valid, but that assumes that the gains will be realized and that the gains will continue and not evaporate, like Dan mentioned. It also assumes that a person has a sufficient amount of appreciated assets to overcome the inflation rate, a situation that a large percentage of the population is not in. This means that they actually lose under a cheap credit, inflationary system, although they may not know it.


A majority of Americans are homeowners. Those gains make it easier to refinance a home at a lower rate.

Also, are we assigning energy inflation in total to "globalization"?

You also need to account for the changes in product quality and product choices due to trade over the last few decades. You're basically saying that there are not any great gains from trade and that flies in the face of centuries of economic evidence.

As for the agenda of the CFR and Foreign Affairs, that particular journal has rountinely contained disparate points of view so I think it's a bit much to say that just because it contains a particular article that represents a change in the view of the journal's editorial staff or what not.

[Yonivore]

Meanwhile:

Consumer Confidence Hits 6-Year High (http://biz.yahoo.com/ap/070731/consumer_confidence.html?.v=6)

[boutons_]

Clinton's economic progress over 8 years was much better than dubya's has been.

[fyatuk]

Clinton's economic progress over 8 years was much better than dubya's has been.

Clinton also had the benefit of an periodic technology boom sustained economy while Bush started with a slow recession caused by the bursting of the .com bubble and one of the worst economic tragedies in recent history.

Since 2003 most key economic indicators are significantly better under Bush than Clinton (the main negative being income differential between high ranking management and low-level workers).

[xrayzebra]

Clinton's economic progress over 8 years was much better than dubya's has been.

In who's era did the .com era occur? Just thought I would
ask.

[boutons_]

"Bush started with a slow recession"

dubya had his tax cuts as the first priority of getting elected, a priority WAY ahead of terrorism and AQ, which he ignored.

Then he had the govt expenditures of many 100s of $Bs of DHS and MIC expenditures pumping up the economy, and the $Bs spent on hurricanes reconstruction.

There has been essentially NO job creation under dubya's watch except in health care.

If a President can claim any responsibility that his policies caused creation of wealth, then Clinton is way out in front of dubya.

[fyatuk]

"Bush started with a slow recession"

dubya had his tax cuts as the first priority of getting elected, a priority WAY ahead of terrorism and AQ, which he ignored.

Then he had the govt expenditures of many 100s of $Bs of DHS and MIC expenditures pumping up the economy, and the $Bs spent on hurricanes reconstruction.

There has been essentially NO job creation under dubya's watch except in health care.

If a President can claim any responsibility that his policies caused creation of wealth, then Clinton is way out in front of dubya.

As of Jan 2007, Bush had a net gain of 4.7 million jobs. Unless all 4.7 million of those are in health care, you're a little off there.

Bush did not really push any tax cuts until 2 million jobs were lost because of 9-11. His policies encouraged investments in stocks and real assetts, aka increased spending by individuals and companies alike, which is why there was such a quick economic recovery from 9-11. Unfortunately, his policies did redistribute wealth a bit more away from the middle (both the poor and the rich had more while the middle had less, inflation has since killed the gains the poor made early on).

And just because I can't think of a single thing besides the balanced budget, what exactly were Clinton's policies that led to his economic boom?

[boutons_]

"Bush did not really push any tax"

The first priority and action of the Repug Congress was railroading through huge tax,cut esp for the rich, well before Sep 2001, like in June:

http://www.whitehouse.gov/news/releases/2001/06/20010607.html

That total reason fo getting elected accomplished, the WH relaxed, congratulated itself, and then did NOTHING else, in the face of the chatter and flashing red lights, until 12 Sep 2001.

[fyatuk]

"Bush did not really push any tax"

The first priority and action of the Repug Congress was railroading through huge tax,cut esp for the rich, well before Sep 2001, like in June:

http://www.whitehouse.gov/news/releases/2001/06/20010607.html

That total reason fo getting elected accomplished, the WH relaxed, congratulated itself, and then did NOTHING else, in the face of the chatter and flashing red lights, until 12 Sep 2001.

You're right, I forgot that. Let's see, it lowered tax rates across the board, much more significant drops for the lower portions of wage earners (and increased the deductions for couples). It increased child tax credits, as well as tuition credits, etc. Lowered capital gains taxes 2%, increased allowable contributions to retirement accounts and made them more accessable for pre-tax contributions. It reduced the maximum estate tax rate from 55% to 45%. And reduced the gift tax rate.

I see it also phased out limits on itemized deductions, etc. It also killed a few deductions only the rich could take.

I can see where it was "railroaded", since only about 15% of democrats in the House and 25% in the Senate voted for it, though.

Unfortunately, since other tax cuts stemming from 9-11 shortly followed, we can't really see the effect of these. I know the combined effect of this and the next two tax cut legislations was the rich's tax burden decreased slightly (I believe less than 1%, but I don't remember), the poor's a bit, and the middle class's increased to compensate.

EDIT: I was a little bit off. The 2001 tax cuts (and whatever other factors) reduced the burden on the top 1% by slightly less than 2%, and reduced the tax burden on the bottom 80% by over 3%. The top 1%'s tax burden significantly increased the following year, while the bottom 80% continued to drop. As far as individuals go, anyway. (http://www.taxfoundation.org/blog/show/2120.html)

[boutons_]

"Recent job gains lag far behind historical norms

President Bush has noted that 2 million jobs were created over the course of 2005 and that we have added 4.6 million jobs since the decline in jobs ended in May 2003. But does that mean the labor market is getting back to normal?

Unfortunately, no. Recent job gains lag far behind historical norms. Last year's 2 million new jobs represented a gain of 1.5%, a sluggish growth rate by historical standards (see chart below). In fact, it is less than half of the average growth rate of 3.5% for the same stage of previous business cycles that lasted as long. At that pace, we would have created 4.6 million jobs last year. If jobs had grown last year at the pace of even the slowest of the prior cycles—2.1% in the 1980s—we would have added 2.8 million jobs. Over the last half century, the only 12-month spans with job growth as low as 1.5% were those that actually included recession months, occurred just before a recession, or were during the "jobless recovery" of 1992 and early 1993."

http://www.jobwatch.org/

There this, from Socialist Weekly:

http://www.businessweek.com/magazine/content/06_39/b4002004.htm

[BradLohaus]

The CPI doesn't capture items such as the benefits from refinancing a home. A homeowner is able to reduce their monthly payments by refinancing at a lower rate and their cost of living doesn't decline?
No, because buying a home is an investment. Refinancing generally just means a lower monthly payment for a longer period of time for that investment. If a person rents their home and their rent goes down, then their cost of living is lower. The next time that I hear of that happening for the exact same house/apartment will be the first time.


In addition, a component of the CPI are medical costs, yet consumers do not bear the total impact of medical inflation as they pay for a fraction of the actual cost of their care.
Consumers pay the cost of all medical care through direct payments, insurance payments, and taxes to the government. Some people gain from that (the poorer, the more likely) and some people lose from that (the richer, the more likely) and some people come out about even. Overall, consumers bear the total impact of medical inflation.


And the CPI doesn't account for changes in product and service quality well. For example, the price of the average TV might go up a little, but now consumers can buy a flat panel HD set in the same price range as an inferior CRT set 10 years ago. Are they really worse off?
If the change in quality is greater than the change in price, then yes they are better off.


A majority of Americans are homeowners. Those gains make it easier to refinance a home at a lower rate.
I don't think the majority of Americans own their homes free and clear. The majority of Americans may be homebuyers, but signing on the line for a mortgage doesn't mean that person owns the home. The majority of homes in America are owned by credit lenders.


Also, are we assigning energy inflation in total to "globalization"?
I don't think energy inflation has anything to do with globalization, as far as trade, open borders, etc. goes


You also need to account for the changes in product quality and product choices due to trade over the last few decades. You're basically saying that there are not any great gains from trade and that flies in the face of centuries of economic evidence.
Don't give all of the gains in product quality and choice to trade; almost all of those gains belong to technological progress. People like to say that trade gave us better TVs, or whatever product. We could have banned every Japanese TV since WW2 and we'd still be watching Spurs games on HD flatscreens. The only reason that those TVs are now made in Japan is because the Japanese have benefited greatly from trade.

Notice I didn't say free trade. The Japanese put large tariffs on American products, like TVs, and we let in Japanese products tariff free or close to it. Throw in much lower Japanese wage rates over the decades and its pretty easy to see why we don't make TVs anymore. So the Japanese not only made higher profits, but they used their lower wage advantage to contribute much more to R&D. That's why they eventually destroyed certain sectors of the American electronics industry.

There are great gains from trade; the Japanese got plenty of them. The owners of American manufacturing plants who get to move their manufacturing bases south of the Rio Grande and to Asia and pay the workers there considerably less than American workers also benefit greatly.


As for the agenda of the CFR and Foreign Affairs, that particular journal has rountinely contained disparate points of view so I think it's a bit much to say that just because it contains a particular article that represents a change in the view of the journal's editorial staff or what not.

CFR=globalization. They only differ on the best way to move the process along.

[BradLohaus]

To you guys arguing about which president was better for the economy: the power of the president over the economy is dwarfed by the power of the Chairman of the Federal Reserve. Whatever the specific question is about that economic period, the answer is Greenspan.

[Peter]

No, because buying a home is an investment.

....and housing. This is one of the major flaws in the CPI and why most economists are moving away from it as a tool. It doesn't reflect reality. It's an industrial age tool for industrial age thinking.



Refinancing generally just means a lower monthly payment for a longer period of time for that investment. If a person rents their home and their rent goes down, then their cost of living is lower. The next time that I hear of that happening for the exact same house/apartment will be the first time.


So the cost of living is lower as the outstanding balance is amortized at a lower rate over those years. Also, the PV of those payments in 2035 or so are inconsequential to the consumer today. The consumer benefits today. In the long run, we're all dead, to summon a dead economist.




Consumers pay the cost of all medical care through direct payments, insurance payments, and taxes to the government. Some people gain from that (the poorer, the more likely) and some people lose from that (the richer, the more likely) and some people come out about even. Overall, consumers bear the total impact of medical inflation.


Consumers do not bear the total impact of medical inflation on those products and services they consume.




If the change in quality is greater than the change in price, then yes they are better off.


Well, there you go.



I don't think the majority of Americans own their homes free and clear. The majority of Americans may be homebuyers, but signing on the line for a mortgage doesn't mean that person owns the home. The majority of homes in America are owned by credit lenders.


That's a legal question yet most homeowners are able to enjoy the appreciation of the property as the value of their homes is greater than the outstanding balance on the mortgage plus their initial equity investment.




I don't think energy inflation has anything to do with globalization, as far as trade, open borders, etc. goes

Then revise the inflation rate based on the CPI downwards.




Don't give all of the gains in product quality and choice to trade; almost all of those gains belong to technological progress. People like to say that trade gave us better TVs, or whatever product. We could have banned every Japanese TV since WW2 and we'd still be watching Spurs games on HD flatscreens. The only reason that those TVs are now made in Japan is because the Japanese have benefited greatly from trade.


...and not because the US consumer has benefited as well? Anyways, consumers benefit from greater choice and competition brought about by trade. Driving down any street or highway today will show you that Americans are rather glad they aren't limited to the Big 3 when it comes to their vehicle purchases.



Notice I didn't say free trade. The Japanese put large tariffs on American products, like TVs, and we let in Japanese products tariff free or close to it. Throw in much lower Japanese wage rates over the decades and its pretty easy to see why we don't make TVs anymore. So the Japanese not only made higher profits, but they used their lower wage advantage to contribute much more to R&D. That's why they eventually destroyed certain sectors of the American electronics industry.


Yet the American consumer still benefited.



There are great gains from trade; the Japanese got plenty of them. The owners of American manufacturing plants who get to move their manufacturing bases south of the Rio Grande and to Asia and pay the workers there considerably less than American workers also benefit greatly.


And the American consumer benefits.




CFR=globalization. They only differ on the best way to move the process along.

So what if they do?

[BradLohaus]

....and housing. This is one of the major flaws in the CPI and why most economists are moving away from it as a tool. It doesn't reflect reality. It's an industrial age tool for industrial age thinking.
I'm not trying to defend the CPI. It's far from perfect and easily manipulated. But, a house is an investment that has a great deal of consumption qualites to it, and that makes it hard to translate mortgages into cost of living statistics. I guess you could assign the rent value of the house to the CPI. But rents are almost always increasing. And cost of living has nothing to do with asset appreciation anyway, which I think was your point to begin with. If you have alot of assets with gains that will be realized, then it's a good point. If you don't, then it isn't. That's all I was trying to say.


So the cost of living is lower as the outstanding balance is amortized at a lower rate over those years. Also, the PV of those payments in 2035 or so are inconsequential to the consumer today. The consumer benefits today. In the long run, we're all dead, to summon a dead economist.
I wouldn't say inconsequential; if they were, then we'd all be trying to get 50 year mortgages. And I'm not a big fan of Keynes. I'm in the group that holds his deficit spending, demand-side ideas at least partly responsible for the ever increasing size of the government and national debt. Also, at Bretton Woods, he advocated that the UN issue a single world wide currency. The US had so much power after WW2 that we were able to get the dollar to be the reserve currency of the world. He was right to see the problems with that, but insane for wanting a one world currency. Little known Keyens fact: he slept around with men before he got married. I don't intend that as an ad hominem attack against his ideas - I'm just throwing it out there. They don't tell you that in econ class.


Consumers do not bear the total impact of medical inflation on those products and services they consume.
I don't know what you're trying to say. All costs are passed on to the consumer. If the consumer isn't paying these costs, who is? Just because someone else is footing much of the bill at the time doesn't mean that those costs aren't eventually paid by the general consumer.


Well, there you go.
Gains in TV product quality come from gains in technology, not trade. If we had been making TVs all that time, then we'd be making alot of the slick new TVs the Japanese are making. But they were able to make them cheaper because of differences in tariffs and wages.


That's a legal question yet most homeowners are able to enjoy the appreciation of the property as the value of their homes is greater than the outstanding balance on the mortgage plus their initial equity investment.
It's a pretty important legal question if a person suddenly can't make their house payment. And it all depends on that appreciation continuing to exist until it's time to sell.


Then revise the inflation rate based on the CPI downwards.
Saying that globalization doesn't have much to do with energy inflation doesn't mean that the inflation rate is lower than it is.


...and not because the US consumer has benefited as well? Anyways, consumers benefit from greater choice and competition brought about by trade. Driving down any street or highway today will show you that Americans are rather glad they aren't limited to the Big 3 when it comes to their vehicle purchases.
Trade does bring about benefits from choice and competition. I'm not against trade at all. I'm against trade that is largely ideological and unfair as a whole to the US worker, who doubles as the US consumer. It's not right to look at the benefits and ignore the costs - stagnant (at best) real wage rates, a disappearing manufacturing base, a widening gap between rich and poor, and a shrinking middle class as a percentage of the population. Globalization has alot to do with those things.

And the vast majority of American just want the best car for their money; it's the fault of the architects of US trade policy over the last half century that many people find Japanese cars to be best for them. I bet much of Michigan would like to have a word with the people responsible for those trade policies. Saving some money at Wal-Mart, Best Buy and on a Japanese car certainly doesn't mean that a person or a region as gained from globalization. You have to look at the costs as well.


Yet the American consumer still benefited.

And the American consumer benefits.
Huge gains from increased technology. Some, but much less, from trade, including higher costs from trade.




So what if they do?
Because it is bad for the US.

[Nbadan]

As U.S. income stagnates, Democrats reject free trade
By Kevin G. Hall | McClatchy Newspapers


WASHINGTON — The Democratic-led Congress won’t give President Bush the special authority he needs to negotiate future free-trade deals. The Senate is moving on retaliatory trade legislation against China. The House of Representatives won’t approve deals with three small neighboring Latin American countries. Global trade talks are near collapse.

Washington's mood on free trade hasn’t been this negative in at least two decades, and a pullback is evident. Whether this becomes a full-blown return to protectionism remains to be seen. But for now Americans, and the politicians they elect to represent them, are in no mood to expand international trade.

“For decades we took for granted that everyone agreed with us economists that free trade is good, protectionism is bad. Somewhere along the way, that stopped being the conventional wisdom,” acknowledged U.S. Trade Representative Susan Schwab, in an interview with McClatchy Newspapers. “And whereas the default vote on a trade bill in Congress used to be a ‘yes’ vote, the default vote on a trade bill now in Congress is a ‘no’ vote.” Why? Because lots of people are no longer convinced that a rising tide of trade lifts all boats — and there's evidence to back them up.

For three decades, the richest 10 percent of Americans have been growing even richer much faster than everyone else. Over the past five years, real wages for all the rest of American workers have been almost flat. Many blame globalization........

McClatchy Newspapers (http://www.mcclatchydc.com/226/story/18562.html)

[Nbadan]

The Unraveling
By David Glenn Cox



The unraveling has begun, watching the talking heads the only thing they seem to agree on is the money being pumped in by central banks around the world isn’t getting to where it needs to go. That’s an easy one, everyone wants to help the leper’s but no one wants to go do it personally.

But for George Herbert Hoover Bush this is his moment in the sun, his hour of redemption. During hurricane Katrina Bush was accused of ignoring the suffering of the residents of Louisiana because they were poor and black. Now he’s proving to the world that it was not so, this time he’s ignoring bankers who are rich and white. Trapped on the rooftops of failing banks as the economic levees collapse and the castles made of sand wash away all while George tunes up his air guitar.

Not that they wouldn’t help if they could but no one has the answer. The philosophy of when in doubt do nothing reigns supreme. The Fed working in relatively small increments pours money in then sits back and watches. The European central banks alone have poured in more than double the amount of the US Federal Reserve and the problem is in America not Europe. Proof positive the smart money boys are lost like a ball in high weeds.

During the Three Mile Island accident the plant operators went through the manual and yet everything they tried just made the problem worse. The problem was that they didn’t understand the problem in the first place. This was a new problem that wasn’t in the manual. Our economic wizards will tell you the problem is liquidity in the sub prime mortgage market.

But missed in the economic floodwaters among the flotsam was the waterlogged performance of Wal-Mart. The home of low prices and lower wages is in a crisis mode as store sales are flat. They have tried to attract newer more upscale customers but they prefer to stay segregated from the great unwashed. Wal-Marts customers are generally the lower strata of the economic ladder, those of us who are all ready under the floodwaters.

There is a section of the population myself included that won’t shop at Wal-Mart because of their policies and practices and that demographic is growing. Wal-Mart stock suffered from reduced profit expectations do to shrinkage. Theft, Wal-Mart estimates 47% of shrinkage is caused by employees, funny isn’t it. No one hates Wal-Mart more than your friendly Wal-Mart associate does. A 44% annual turn over of employee’s leads to employee’s who don’t know or don’t care or don’t want to know and won’t ever care.

Maybe you saw your co worker put a camera or DVD player in the trash on his way out what do you care it’s not worth the trouble. It’s not like the company would appreciate you or something. But in reading about Wal-Marts troubles I read something that disturbed me greatly, so much that I went looking for corroboration. The theft problems at Wal-Mart weren’t camera’s or DVD players or sneakers or rap music CD’s but food!


Food from Wal-Mart grocery stores was among the leaders, the canary in the coal mine. Teenagers steal sneakers and video games the elderly steal Poly Grip or Preparation H to stretch their Social Security checks. But food crosses all lines hungry people steal food, they don’t brag about it nor are they proud of it they don’t do it to impress their friends or to be thought of as cool.

I was shocked to read it but I bet the boys at the Fed don’t know about it yet. George Herbert Hoover Bush doesn’t know it and I bet the traders in the money pits on Wall Street don’t know about it either. If the economic talking head guru’s on TV know about it mums the word. But as they pontificate about the nations largest mortgage lender becoming insolvent can they miss the significance of the nations largest retailer losing millions of dollars in stolen food! Duh! Just doesn’t seem to cover it.

Globalization has brought lower wages to the middle class and even to the upper middle class and two days of hunger can undo a lifetime of thou shall not steal. Civilization is a voluntary organization and people priced out of it and pushed out of it don’t care about it any more than Wal-Mart associates care about stock forecasts.But they do understand that working two jobs isn’t full employment but empty life.A life of struggle and hardship of doing and doing and doing without.

But those at the top really believe if you pour enough money in it will trickle down but the evidence says other wise. Globalism was sold to us that it would bring jobs and prosperity but the evidence says other wise. The exportation of manufacturing and the outsourcing of technical jobs has left a hole in our economy and it is exacerbated by 20 million illegal aliens driving down wages even more. Any good Republican can tell you it’s not about racism its about supply and demand.

But the housing bubble or any bubble is built on the expectation that it will continue to expand. But when a nation export's it’s manufacturing base and outsources technical jobs and forces down wages what else can mortgage lenders do? But lower standards after all they will pass that paper on anyway and their income is dependent on how much paper they pass. Just as the homebuilders is on how many homes they sell and they material suppliers depend on them selling as well.

But forgotten in the formula is low wages and no health insurance force people out of the home buying market. People stealing food at Wal-Mart don’t buy houses in fact they don’t buy much of anything. The illegal alien carpenter building those new homes sends his money home to Mexico or Guatemala where globalism and free trade have brought even more misery.

It’s the great global disconnect, high corporate profits does not prosperity make. The Chinaman earning five dollars a day might look great on the balance sheet but it doesn’t help Pittsburgh or Portland and since the corporation uses a mail drop in the Caribbean it doesn’t add one dollar of tax revenue to the local economy. You’ll just have to make up that tax revenue from the Wal-Mart associates or maybe add a penny of sales tax.

Duh! I wonder why bridges are falling in? I wonder why those levees failed? I wonder why our jails are full? I wonder why do those kids want to sell drugs?

Push has come to shove, the bubble burst not because of easy credit or action by the Federal reserve, or mortgage lenders but by the strangulation of the American working class. The pinprick of reality the one time wealthiest consumer in the world now steals food from Wal-Mart, where one income was once enough now it takes three or more.

There is a cynical guilty pleasure in watching the smart boys struggle to swim against the current, trying to handle the crisis. I know it’s wrong, but for so many years they had all the answers and spoke of the working class in their academic abstractions of lowered expectations and short term economic pain. Eat some of your own lowered expectations and short term economic pain fellas it’s called humble pie. Maybe the wife can get a job, I hear Wal-Mart’s hiring or maybe if you work more hours or live in a smaller house this will all go away.

But it won’t go away, last week the experts called it a correction yesterday the used the word bank failure. Last week Country Wide mortgage said they had $187 billion in reserves but the reserves are in those same depreciated dollars that force Americans to steal food from Wal-Mart. The weakness isn’t at the top it’s at the bottom, a con perpetrated on the American people to pay for wars and tax cuts when they didn’t need either.

We seem to need to relearn the lesson every few generations, that the top of the economy is supported by the bottom. That wealth comes from the bottom up that there has never been an economy where the working class has done well that has collapsed. The wreckage from economies manipulated to move wealth to the top of societies litter history books pages. Maybe now we can go back to business building products rather than stock prices and making money by making things. And by paying decent wages to the people so they can buy those products.

If your answer is that can’t be done, then start swimming Capitalism is finished.

[Winehole23]

great for the Asian middle class and the top decile of world income:

https://hbr.org/resources/images/article_assets/2016/05/W160429_MILANOVIC_WHOHAS.png (https://hbr.org/2016/05/why-the-global-1-and-the-asian-middle-class-have-gained-the-most-from-globalization)

[spurraider21]

https://amp.businessinsider.com/images/5922f54834911b297f8b4c85-750-563.jpg

[Winehole23]

great pic

[Blake]

Lol

[spurraider21]

yeah. trump, muslim leaders, and a clear message of globalization, all in one pic. fantastic

[AaronY]

great for the Asian middle class and the top decile of world income:

https://hbr.org/resources/images/article_assets/2016/05/W160429_MILANOVIC_WHOHAS.png (https://hbr.org/2016/05/why-the-global-1-and-the-asian-middle-class-have-gained-the-most-from-globalization)
lol zero sum game theory is so derpy

[boutons_deux]

what was the story behind that pic? WTF were they doing?

[Blake]

https://amp.businessinsider.com/images/5922f54834911b297f8b4c85-750-563.jpg

Trump walling off Mexico with his fingers

[Winehole23]

lol zero sum game theory is so derpyWho gets the goodies is always a relevant question:

http://www.slate.com/content/dam/slate/blogs/moneybox/2014/09/25/how_the_rich_conquered_the_economy_in_one_chart/pavlina_tcherneva.jpg.CROP.promovar-mediumlarge.jpg (http://www.slate.com/blogs/moneybox/2014/09/25/how_the_rich_conquered_the_economy_in_one_chart.ht ml)

[Winehole23]

that a rising tide floats all boats isn't a suitable answer to all political complaints, in fact it's showing signs of overuse.

Why should Americans care about making Asians richer while their own prospects are flatlining?

[Winehole23]

https://www.washingtonpost.com/news/wonk/wp/2018/06/13/a-minimum-wage-worker-cant-afford-a-2-bedroom-apartment-anywhere-in-the-u-s/

[AaronY]

Who gets the goodies is always a relevant question:

http://www.slate.com/content/dam/slate/blogs/moneybox/2014/09/25/how_the_rich_conquered_the_economy_in_one_chart/pavlina_tcherneva.jpg.CROP.promovar-mediumlarge.jpg (http://www.slate.com/blogs/moneybox/2014/09/25/how_the_rich_conquered_the_economy_in_one_chart.ht ml)

That's due to trickle down economics and not raising minimum wage or pegging it to inflation dodo.

Studies have shown that 87% of jobs in manufacturing and have been lost due to automation. You can raise tariffs to a trillion percent those 1950s manufacturing jobs aren't coming back

[Winehole23]

I agree

[Winehole23]

the way markets work and the way the social product is distributed isn't some natural law, but the result of force, laws and politics.

[boutons_deux]

Who gets the goodies is always a relevant question:

http://www.slate.com/content/dam/slate/blogs/moneybox/2014/09/25/how_the_rich_conquered_the_economy_in_one_chart/pavlina_tcherneva.jpg.CROP.promovar-mediumlarge.jpg (http://www.slate.com/blogs/moneybox/2014/09/25/how_the_rich_conquered_the_economy_in_one_chart.ht ml)


..is why only violent revolution overthrow of the American oligarchy is what history recommends

[Winehole23]

that's your recommendation. go for it!

[boutons_deux]

that's your recommendation. go for it!

It wouldn't be fun, but historically, including The American Revolution, violent revolution has been the only solution for removing a tyrannical regime.

There's no fucking way citizens' so-called "voting" :lol GMAFB, will ever produce less inequality, less enslavement to debt, less oligarchical control of the country, when both US parties are owned by the oligarchy.

The oligarchy simply will not give up its wealth and power without a violent fight.

[Winehole23]

The oligarchy simply will not give up its wealth and power without a violent fight.how do you explain a revolution within the form like the New Deal?

[boutons_deux]

how do you explain a revolution within the form like the New Deal?

New Deal wasn't a revolution, the Wealthy Class wasn't removed by revolutionaries, only some of them wiped out by their own greed, as ALWAYS happens with unregulated BigFinance.

The wealthy class, esp the Repug party, fought hard against New Deal (and 1950s, 1960s progress) and are still fighting, successfully, to wipe any socio/economic progress For The People achieved since 1929.

The New Deal wasn't a revolution, and 1000s of workers demanding rights, and pay, were murdered by goons working for the wealthy class. How many wealthy were murdered by The People?

The oligarchy now is much more sophisticated, has compromised, hired The Best People into its ranks as de facto goon squads, and, repeating, simply won't give up power and wealth without a violent revolution.

[boutons_deux]

Globalization is working out fantasically for the very people who created it

World's Millionaires and Billionaires Now Control Half the World's Personal Wealth, New Analysis Shows

"The rich are getting a lot richer and doing so a lot faster."
Millionaires and billionaires own nearly half of all the world's personal wealth, which reached $201.9 trillion last year, according to a new report from Boston Consulting Group.

"The share of global wealth held by millionaires increased to almost 50 percent in 2017,

compared with just under 45 percent in 2012,

driven mainly by higher-wealth individuals investing in higher-return assets," the report (http://image-src.bcg.com/Images/BCG-Seizing-the-Analytics-Advantage-June-2018-R_tcm9-194512.pdf) (pdf) states.

In other words, as Bloomberg put it (https://www.bloomberg.com/news/articles/2018-06-14/millionaires-now-control-half-of-the-world-s-personal-wealth), "The rich are getting a lot richer and doing so a lot faster."

That's especially true in the United States,

where the Trump administration and the GOP-controlled Congress are working to keep slashing taxes (https://www.commondreams.org/news/2017/12/22/corporations-are-literally-going-wild-says-trump-he-signs-tax-bill-most-americans) on the nation's wealthiest individuals and corporations at the expense (https://www.commondreams.org/news/2018/03/27/while-workers-get-crumbs-gop-tax-scam-analysis-details-25-billion-bonanza-big-oil) of working families.

"North America remained the richest global region in 2017 in terms of personal wealth, which expanded by 8 percent to $86.1 trillion,"

the report notes. "North American wealth was highly concentrated in the over-$5-million segment, which held 42 percent of investable wealth."

Overall, researchers found that "residents of North America held over 40 percent of global personal wealth,

followed by residents of Western Europe with 22 percent.

The strongest region of growth was Asia, which posted a 19 percent increase."

https://www.commondreams.org/news/2018/06/14/worlds-millionaires-and-billionaires-now-control-half-worlds-personal-wealth-new

[Winehole23]

New Deal wasn't a revolution, the Wealthy Class wasn't removed by revolutionaries, only some of them wiped out by their own greed, as ALWAYS happens with unregulated BigFinance. Simply waving your hands at the Great Depression and pointing out that some rich people got wiped out isn't an explanation for how we got Social Security, the Fair Labor Standards Act, the NLRA, the SEC, the FDA, electrification, deposit insurance and (for a time) a federal jobs guarantee.

The New Deal vastly enlarged the executive branch and inaugurated an era of administrative/ameliorative bureaucracy, without a violent revolution.

[boutons_deux]

Social Security, the Fair Labor Standards Act, the NLRA, the SEC, the FDA, electrification, deposit insurance and (for a time) a federal jobs guarantee.

All ephemeral, as the oligarchy has been, and is attacking or denying all of them successfully since the 1930s, and they aren't finished, yet.

The 1930s progress again wasn't a revolution, and happened because that oligarchy, BigFinance, face-planted itself into powerlessness.

America of the 1930s, or even 1960s, is long gone.

Since the 1970s, the oligarchy "took their country back" and have much more power and sophistication and a militarized police/surveillance state to protect their wealth, which is their power, to rig and operate the USA for themselves.

ST has never answered my question as to how the non-wealthy can "take their country back" For The People, what practical steps can be taken to overcome the oligarchy?

[Winehole23]

The 1930s progress again wasn't a revolution, and happened because that oligarchy, BigFinance, face-planted itself into powerlessness. Bullshit, There was a labor movement it feared and respected.

[Winehole23]

also, creeping domestic fascism

[Winehole23]

and a shitload of suddenly impoverished Americans. tinder for the fire.

[boutons_deux]

Bullshit, There was a labor movement it feared and respected.

:lol evidence? no unions?

and Labor was so feared by Capital that FDR had to impose a $0.25/hour (less that $5/hour today) which STILL pisses off Capital