So, How's Globalization Working Out?

[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:C...ney_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 ins utions. 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, compe ive, 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 en led 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- 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 compe ion. 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, ing 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 ing 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 ers 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 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 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, ing 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 ing 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 ers 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 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 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 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/Wage...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:C...ney_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 ins utions. 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, compe ive, 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/boardd...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/boardd...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/200707...alization.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
Ron Paul is not