When do you think the economy will recover? [Archive]

Zelder

03-12-2010, 03:55 PM

All money comes from banks and exists as a debt. That might be the no 1 problem with the economy. In a debt based money system you need growth in order to have prospertiy. We needs lots more people to take on more debt so you can have more money floating around. The Bernanke method of pumping money into the system is only going to make the fat boys fatter, inflate the money and make the weak people starve.

We need a revolution, a total overhaul before we get back to real prosperity.

Or we need a flood of new technology something like super cheap clean energy. That would reduce the cost of living and make people much more independant. Only proplem is it would also bring down the fat boys and Bernanke would no longer have the same control over the economy. There again....we need a revolution.

Causa Mortis

03-12-2010, 03:59 PM

What's your expected year of full economic recovery (if it will ever come) whereby unemployment finally falls to more acceptable levels?

Its well under way. Treasury-libor spreads have dropped considerably, and outside of the states that had the storm in January there was considerable job growth - even California is growing.

From day 1 this has been a nominal crisis about nothing to do with real economic variables. Now that the crisis in the repo market is over the economy will do fine. The pace of the recovery will be determined by how quickly people stop freaking out.

---------- Post added 03-12-2010 at 03:02 PM ----------

I think the economy has started its recovery in the last quarter of 2009. I doubt things are going to get really moving for a few years though. Look for unemployment to remain high (>7%) until 2012.

Well even if we get fairly robust growth UE won't drop below 7% until 2012. It won't be overnight. The real economy has been growing at a rapid clip throughout this crisis. Employment will come back when demand moves faster than the pace of the real economy.

---------- Post added 03-12-2010 at 03:04 PM ----------

It's all about the consumer. Once consumer confidence comes back, then things will start improving all-around. Maybe after-tax time; people get some money back there will be a bump?

Nah there's no one-shot. It'll be a combination of consumers and investors and government and exports...it has to be. I don't see any of them "roaring" in the near future - but all could see steady growth - and that's a great thing! That's called 'balanced, sustainable growth' not this notion that the only time that there's "growth" is when there's a huge bubble.

---------- Post added 03-12-2010 at 03:10 PM ----------

All money comes from banks and exists as a debt. That might be the no 1 problem with the economy. In a debt based money system you need growth in order to have prospertiy. We needs lots more people to take on more debt so you can have more money floating around. The Bernanke method of pumping money into the system is only going to make the fat boys fatter, inflate the money and make the weak people starve.

...

The alternative to debt money is 100% reserve banking - which is what caused this crisis - or a barter economy.

Blse

03-12-2010, 04:42 PM

The recovery has already started and GDP is growing. Unemployment has started to drop but, as has occurred in the past, the decrease unemployment lags behind GDP growth - although its going down as well.

Zelder

03-12-2010, 05:09 PM

The alternative to debt money is 100% reserve banking - which is what caused this crisis - or a barter economy.

No the two primary alternatives to debt money are as follows:

The first would be to follow the United States Constitution and use gold or silver. Metals have their problems but at least there is no interest to pay to the bankers for the gold you dug out of the ground. It is an independant and free system.

The other is to do the thing that got the colonists and Abraham Lincoln in trouble with the european bankers...issue fiat money debt free from a national bank!! Plenty of money to go around and no interest to pay to nobody.

tooboku

03-12-2010, 05:26 PM

It's already starting to recover although we didn't really feel the so called resession much up here in Canada. Stephen Harper is probably an INTJ. Totally heartless but the man is a genius. :P

Not to question Obama's leadership or anything (and I find myself nodding along to a lot of what he says), but simply having someone who isn't Bush will spark something positive. Even more so since this president has dark skin. That isn't to insult Bush either because he had a pretty tough run. Just the symbolic significance of it all is enough to enspire people to go out and spend, start businesses, and make the money circulate.

Also, taking the money back from the banks and reallocating it helps too.

Angel1

03-12-2010, 06:21 PM

Not to question Obama's leadership or anything (and I find myself nodding along to a lot of what he says), but simply having someone who isn't Bush will spark something positive. Even more so since this president has dark skin. That isn't to insult Bush either because he had a pretty tough run. Just the symbolic significance of it all is enough to enspire people to go out and spend, start businesses, and make the money circulate.
Unfortunately, Obama's leadership has not made many industries very confident. Several companies have probably decided, "We don't want to take a risk because we don't know what President Obama is going to do. For those things we know he wants, we don't know if he'll be able to pass them." New/altered/rescinded/renewed financial regulations will probably help the economy some, but the devil is in the details as to whether or not the financial regulatory reform will break the last grips of this recession. The stimulus bill had a great opportunity to revitalize the economy and prevent a future recession, but it almost entirely spent wrong.

Frankly, just being Obama is a greater negative in the economic world than Bush would be. Industry does not need congress and the president to rock the boat right now. What they need is for congress and the president to break off the anchors that are sinking the boat right now. Yes, the economy is recovering, but I believe that we would have a full recovery a lot sooner with a different president and different congress.

Yhor

03-12-2010, 07:03 PM

When will we hit a full recovery?

When we stop...

Paying interest to the Fed.
Starting big brother campaigns that rob Americans of taxes paid for misdirected 'services'.
Relying on outside resources for our every day functions. (gas/oil, manufacturing, phone services, technology, political influence, etc..).

When we start...

Electing representatives of our citizens, instead of representatives of lobbyists.

Just a few necessities. Implementation is another story; I'm not sure a full recovery is possible (given inflation, false information (as in Enron), etc..)

Causa Mortis

03-12-2010, 07:32 PM

No the two primary alternatives to debt money are as follows:

The first would be to follow the United States Constitution and use gold or silver. Metals have their problems but at least there is no interest to pay to the bankers for the gold you dug out of the ground. It is an independant and free system.

Its neither independent nor free. If its fractional reserve banking, then its a debt-based money system, regardless of whether its backed by gold, silver, oil, cotton candy, or people's trust.

Bank takes deposit of 1,000 dollars. In fractional reserve system, bank then loans out 10,000 dollars. Bank has created 9,000 in loans. Unless you want to go 100% reserve banking by government fiat, you get an interest-based money system. Whether or not it holds reserves in gold is irrelevent - its still an interested-based system.

The other is to do the thing that got the colonists and Abraham Lincoln in trouble with the european bankers...issue fiat money debt free from a national bank!! Plenty of money to go around and no interest to pay to nobody.

Actually most of the proponents of free banking think Lincoln was a form of mild fascist.

Zelder

03-12-2010, 08:56 PM

Its neither independent nor free. If its fractional reserve banking, then its a debt-based money system, regardless of whether its backed by gold, silver, oil, cotton candy, or people's trust.

Bank takes deposit of 1,000 dollars. In fractional reserve system, bank then loans out 10,000 dollars. Bank has created 9,000 in loans. Unless you want to go 100% reserve banking by government fiat, you get an interest-based money system. Whether or not it holds reserves in gold is irrelevent - its still an interested-based system.

Actually most of the proponents of free banking think Lincoln was a form of mild fascist.

Well it looks like we are in agreement on what fractional reserve banking is. I'm of the opinion that it should be illegal like it used to be. It causes the boom and bust cycles.

phej

03-12-2010, 09:01 PM

Well it looks like we are in agreement on what fractional reserve banking is. I'm of the opinion that it should be illegal like it used to be. It causes the boom and bust cycles.

Ok, so does a 100% reserve ratio prevent the boom and bust cycle? How does backing money with a commodity make things better? And how would the 100% reserve ratio be enforced?

Angel1

03-12-2010, 09:20 PM

Well it looks like we are in agreement on what fractional reserve banking is. I'm of the opinion that it should be illegal like it used to be. It causes the boom and bust cycles.
Unfortunately, we had banking problems before the Federal Reserve came into being. Thus, in order for me to support going backwards, you need to convince me that your plan would not just lead to same problems that lead us to the Federal Reserve in the first place. I would have to look up those problems myself, but I know that they caused several banking crises. Those problems were solved by going to the Federal Reserve System.

Those things that we no longer do, we no longer do for a reason. Be sure to know why we no longer do those things before you propose that we go back to doing them. Sometimes the previous way can be adopted again without issue (because the circumstances changed), but sometimes you'll have to go back and make different changes to the previous system to fix it for the current circumstances.

On the topic: The economy will be fully recovered only after threats to private industry stop stepping in front of the TV Cameras.

Dodeca

03-12-2010, 10:44 PM

"Remember the two benefits of failure. First, if you do fail, you learn what doesn't work; and second, the failure gives you the opportunity to try a new approach." -Roger Von Oech

Too big to Fail = Too big to feed

When we as society decide we do not need government steeling our money then giving it to the elite our economy will recover.

Causa Mortis

03-13-2010, 12:19 AM

Ok, so does a 100% reserve ratio prevent the boom and bust cycle?

Nope. Still have people panicking, still have liquidity traps, still have people hoarding currency, still have a half a dozen other problems.

Fractional reserve commodity banking advocates think it would solve the problem by leading banks to automatically adjust the Ms (I'm skeptical), but not 100% reserve banking because the banks have no freedom to adjust their reserves in the face of shocks.

How does backing money with a commodity make things better?

It prevents inflation in many ways. But you can do the same thing with disciplined fiat. And the reserve costs would be between .25 and 2.5% of GDP.

And how would the 100% reserve ratio be enforced?

That would be easy. Same as they are today

---------- Post added 03-13-2010 at 12:11 AM ----------

Well it looks like we are in agreement on what fractional reserve banking is. I'm of the opinion that it should be illegal like it used to be. It causes the boom and bust cycles.

We agree that its a debt-based system. However I think a debt based system is fine.

Debt has all these negative connotations, but debt is fine, particularly since its often taken out for very rationalizable things like houses, businesses, and education. Credit card type debt is obviously something one should personally take care to avoid, but do you really think debt is a negative when, say, someone is borrowing 60k to finance a college degree that will approximately double lifetime earnings? or to build a bridge that will reasonably benefit people more than the 3-4-5% interest rates? or to buy a reasonably priced home instead of renting one?

Debt is fine when used for investment, stop panicking and focus on what you can do to improve your personal situation. :)

---------- Post added 03-13-2010 at 12:18 AM ----------

Unfortunately, we had banking problems before the Federal Reserve came into being. Thus, in order for me to support going backwards, you need to convince me that your plan would not just lead to same problems that lead us to the Federal Reserve in the first place. I would have to look up those problems myself, but I know that they caused several banking crises. Those problems were solved by going to the Federal Reserve System.

The only function of the Federal Reserve that has clearly generated been a net benefit to society at large is the lender of last resort function and the provision of a generally stable price level. The Federal Reserve is also probably the most important single branch of the DoD, as it engaged in huge seignorage (under the guise of maintaining interest rates) during both world wars.

Minus Greenspan's and perhaps Volker's tenures, the Fed's interventions to stabilize employment and income in the private sector have generally done more harm than good. See their intervention in the early 1930s to prevent inflation (!) or their interventions in the 1970s, or Bernake's highly questionable approach to the crisis.

On the topic: The economy will be fully recovered only after threats to private industry stop stepping in front of the TV Cameras.

Oh I agree. They need to make up their mind about whether they want derivatives traded in New York or Hong Kong. If they don't want them traded here, fine, but get on with it.

tooboku

03-13-2010, 06:37 AM

Unfortunately, Obama's leadership has not made many industries very confident. Several companies have probably decided, "We don't want to take a risk because we don't know what President Obama is going to do. For those things we know he wants, we don't know if he'll be able to pass them." New/altered/rescinded/renewed financial regulations will probably help the economy some, but the devil is in the details as to whether or not the financial regulatory reform will break the last grips of this recession. The stimulus bill had a great opportunity to revitalize the economy and prevent a future recession, but it almost entirely spent wrong.

I get that but at the same time you can't blame everything on the president. His power is limitted and it should stay that way. I blame a lot of it on the Republicans who just seem to be turning things down just for the sake of it. It's a shame really. I also blame it on the businesses that continue to outsource projects overseas. The clean energy stimulus money for example; the money that was supposed to American manufactures went to China (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.) instead.

I agree, that was a blunder and the qualifications should have seriously been scrutinized before finalizing it. That said, those retards that bought those Chinese wind generators conciously knew the intent for the money they've been granted. They knew better but got greedy. What would have worked better are tax credits for hiring people that meet certain requirements. For example, businesses here get a $3,000 tax credit for hiring a student in a college run CO-OP program. The CO-OP term runs for four months. That's a third of the money you get back from hiring the student.

Ray9

03-13-2010, 07:49 AM

This economy is worse than anything we have seen since the great depression. These optimistic responses demonstrate just how unaware most are of the seriousness of this issue. You can expect things to really start to fall apart after this coming summer when unemployment will begin to approach thirteen percent. Layoffs will continue to rise as industries cut back due to flat orders. Funding for unemployment compensation will begin to run out in 2011 and things will take a critical turn by fall of that year. The democrats will ram the healthcare bill through in spite of the fact that the majority of the population does not want it. Riots will begin by early 2012 and the depression will become worldwide by the end of that year. Obama will be gone and there will never be another black president in the history of the United states. When the dust clears by about 2014 there will be a sea change in American government as it will shrink considerably.

Angel1

03-13-2010, 08:05 AM

I get that but at the same time you can't blame everything on the president. His power is limitted and it should stay that way. I blame a lot of it on the Republicans who just seem to be turning things down just for the sake of it. It's a shame really. I also blame it on the businesses that continue to outsource projects overseas. The clean energy stimulus money for example; the money that was supposed to American manufactures went to China (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.) instead.
The Republicans start crying foul when huge new projects are proposed, especially when most of the money is not going to places that they can at least recover part of the bill in additional tax revenue. The stimulus for instance would have been a lot easier to swallow if most of the money had been spent to fix a growing list of infrastructure problems that could themselves cause a recession in the future, and the best part of that kind of a stimulus is that it would have required AMERICAN workers.

Yes, Bush ran the debt up; yes, the Republicans did nothing real to stop him; yes, it could seem a bit of a double standard for them to be crying fould now. However, President Obama successfully did what it took Bush 8 years to do in just 1 year. He doubled Bush's debt in just 1 year. No, I don't buy that Obama's altered use of the TARP funds constitutes debt that Bush added; repay the TARP money and get it out of the equation.

We can't afford to be the nanny state, especially right now. Thus, every time that Obama tries to push more nanny state spending and legislation through congress the Republicans will fight back and do whatever they can to stop it. Give the economy time to recover before you start playing with fire.

President Obama (as leader of the Democratic Party in the US) is delaying a full economic recovery.

Causa Mortis

03-13-2010, 11:22 AM

I get that but at the same time you can't blame everything on the president. His power is limitted and it should stay that way. I blame a lot of it on the Republicans who just seem to be turning things down just for the sake of it. It's a shame really. I also blame it on the businesses that continue to outsource projects overseas. The clean energy stimulus money for example; the money that was supposed to American manufactures went to China (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.) instead.

Wow this might be one of the worst post I've read on economics in a while. The President is significantly at fault for reappointing Ben Bernake.

Ben has been extremely generous with big banks, and basically has centrally planned to ensure very large banking sector profits. He's succeeded in this. Meanwhile, he's been extremely tight with open market and currency growth. Why? Because he's concerned about general inflation...yet he's gone to great lengths to pump up reserves and then pay the banks interest on those reserves.

Additionally, the president is driving legislative risk into two key industries by talking about gargantuan reforms while...doing absolutely nothing except for talking.

Additionally, free trade benefits everyone, and this notion that manufacturing is somehow the only "true" part of the economy is frankly something that's asinine and that I'm tired of hearing.

---------- Post added 03-13-2010 at 10:24 AM ----------

This economy is worse than anything we have seen since the great depression. These optimistic responses demonstrate just how unaware most are of the seriousness of this issue. You can expect things to really start to fall apart after this coming summer when unemployment will begin to approach thirteen percent. Layoffs will continue to rise as industries cut back due to flat orders. Funding for unemployment compensation will begin to run out in 2011 and things will take a critical turn by fall of that year. The democrats will ram the healthcare bill through in spite of the fact that the majority of the population does not want it. Riots will begin by early 2012 and the depression will become worldwide by the end of that year. Obama will be gone and there will never be another black president in the history of the United states. When the dust clears by about 2014 there will be a sea change in American government as it will shrink considerably.

To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.

I love the part about "epistemystic".

What do you base this absolutely sure, histrionic macro prediction on?

tooboku

03-13-2010, 12:38 PM

Wow this might be one of the worst post I've read on economics in a while. The President is significantly at fault for reappointing Ben Bernake.

Ben has been extremely generous with big banks, and basically has centrally planned to ensure very large banking sector profits. He's succeeded in this. Meanwhile, he's been extremely tight with open market and currency growth. Why? Because he's concerned about general inflation...yet he's gone to great lengths to pump up reserves and then pay the banks interest on those reserves.

Additionally, the president is driving legislative risk into two key industries by talking about gargantuan reforms while...doing absolutely nothing except for talking.

Additionally, free trade benefits everyone, and this notion that manufacturing is somehow the only "true" part of the economy is frankly something that's asinine and that I'm tired of hearing.

Heheh... Thank you. I was actually hoping to get information from a more passionate poster since I didn't feel like sifting through a bunch of search hits. I still concede to being an idiot nonetheless. :P

Free trade does benefit everyone in the long term. However, when there is a shortage of managerial jobs, outsourcing jobs hurts the domestic economy in the mean time. I distinctly remember reading about it in "Why Mexicans Don't Drink Molson". In the early 1900s Canada had to discourage foreign trade in order to strengthen it's own economy. It did work but it was a policy that was meant for the short term. Unfortunately, those policies stayed for the long term and eventually our economy didn't catch up with globalization. So yes, you're right that free trade benefits everybody but in the interm, Americans who need jobs now will benefit more from domestic jobs that exist now. Manufacturing means jobs that most Americans will qualify for without the need for much additional training. The long term goal however is still to create more high-end jobs domestically but in the mean time, in a situation with no job vurses a manufacturing job, I for one would pick manufacturing.

TheLastMohican

03-13-2010, 12:48 PM

RBM

03-13-2010, 02:54 PM

I don't see a 'recovery' in several decades. I suspect there is a transition in play.

Causa Mortis

03-13-2010, 03:17 PM

Free trade does benefit everyone in the long term. However, when there is a shortage of managerial jobs, outsourcing jobs hurts the domestic economy in the mean time

So you're going to generate a long-run inefficiency in order to avoid frictional unemployment? I'm not.

I distinctly remember reading about it in "Why Mexicans Don't Drink Molson". In the early 1900s Canada had to discourage foreign trade in order to strengthen it's own economy. It did work but it was a policy that was meant for the short term. Unfortunately, those policies stayed for the long term and eventually our economy didn't catch up with globalization.

Canada's economy is near the forefront of the global economy and has shown remarkable resiliency during both the great depression and the current crisis. Its also shown remarkable financial stability because of sound banking.

So yes, you're right that free trade benefits everybody but in the interm, Americans who need jobs now will benefit more from domestic jobs that exist now. Manufacturing means jobs that most Americans will qualify for without the need for much additional training. The long term goal however is still to create more high-end jobs domestically but in the mean time, in a situation with no job vurses a manufacturing job, I for one would pick manufacturing.

At the expense of long run economic efficiency? Not in a million years. Leave them on unemployment for another year

tooboku

03-13-2010, 07:23 PM

So you're going to generate a long-run inefficiency in order to avoid frictional unemployment? I'm not.

I'm sorry if it's not an ideal solution in the long run but in the long run we're all dead anyway. This will alleviate some of the poverty while we wait for the economy to strengthen. It would only be for the in term. I don't believe in a nanny state but it's socially irresponsible to let your neighbors live in poverty.

Canada's economy is near the forefront of the global economy and has shown remarkable resiliency during both the great depression and the current crisis. Its also shown remarkable financial stability because of sound banking.

#1 - The Canadian economy relies on natural resources. We have so much that we can afford to coast off of them for decades without making any major changes in our trade policies. It's only recently that some businesses are starting to become more aggressive internationally again but on average we don't go global very well. Companies like RIM may have received some international recognition but it's not enough to say that our economy has truly gone multinational.

#2 - Our government stopped our 5 big banks from merging. All those banks are actually tiny compared to Citi or Wells Fargo. We would have felt it a little more if they have but still not as hard as the US. Harper may be a cold heartless bastard sometimes but he's a genius. (Incidentally, he's probably also an xNTJ.)

#3 - The only reason Canada was in the G8 in the first place was because Ford decided to be nice to us and invite Trudeau to the summit. Today we're only about the same size as Spain and Brazil depending on your source and that's being generous.

At the expense of long run economic efficiency? Not in a million years. Leave them on unemployment for another year

In the mean time, they have families to feed and children to put through college. Some of those children would have had the potential to fill in those high-end jobs we want to create in the future. Those children who don't end up getting that higher education would end up working the same jobs as their parents. The levels of disparity would be even more staggered than they are now. If America truly is a land of equal opportunity, this cannot be allowed to happen.

Causa Mortis

03-13-2010, 08:37 PM

I'm sorry if it's not an ideal solution in the long run but in the long run we're all dead anyway. This will alleviate some of the poverty while we wait for the economy to strengthen. It would only be for the in term. I don't believe in a nanny state but it's socially irresponsible to let your neighbors live in poverty.

So you're going to use protectionism now that won't do anything besides appreciate the real exchange rate, get countervailing tariffs slapped on goods that you do have a genuine competetivie disadvantage for, and interject a keynesian protectionist argument as a way out of depressions? I wonder what will happen when everyone does this?

#1 - The Canadian economy relies on natural resources. We have so much that we can afford to coast off of them for decades without making any major changes in our trade policies. It's only recently that some businesses are starting to become more aggressive internationally again but on average we don't go global very well. Companies like RIM may have received some international recognition but it's not enough to say that our economy has truly gone multinational.

By every measure - HDI, per capita income, balance of trade, inflation - Canada is a very healthy economy. That they don't compete in high-prestige industries is irrelevant - their people are well off, there's no intolerable social inequality, and the Canadian system has been remarkably stable.

#2 - Our government stopped our 5 big banks from merging. All those banks are actually tiny compared to Citi or Wells Fargo. We would have felt it a little more if they have but still not as hard as the US. Harper may be a cold heartless bastard sometimes but he's a genius. (Incidentally, he's probably also an xNTJ.)

Cool story bro. I believe that's what my claim is - that they've been more stable for a variety of reasons than the US has.

#3 - The only reason Canada was in the G8 in the first place was because Ford decided to be nice to us and invite Trudeau to the summit. Today we're only about the same size as Spain and Brazil depending on your source and that's being generous.

Another cool story bro. I just don't see what this has to do with anything.

In the mean time, they have families to feed and children to put through college. Some of those children would have had the potential to fill in those high-end jobs we want to create in the future. Those children who don't end up getting that higher education would end up working the same jobs as their parents. The levels of disparity would be even more staggered than they are now. If America truly is a land of equal opportunity, this cannot be allowed to happen.

You can't allow anyone to lose a job because they can't handle competition from mostly illiterate, uneducated, poorly capitalized, and unhealthy Chinese a half a world away? Please. If they're losing out to the Chinese, there's a reason why.

The only element of this that's not an emotional argument is that job loss => less college => fewer skilled workers. OK, well you have a lot of people going back to school because the job market is so shitty, and you probably have a few who are dropping out and entering the job market because their parents can't afford to pay (or get loans like the rest of us?). Fine, just subsidize education more.

tooboku

03-14-2010, 12:40 AM

You can't allow anyone to lose a job because they can't handle competition from mostly illiterate, uneducated, poorly capitalized, and unhealthy Chinese a half a world away? Please. If they're losing out to the Chinese, there's a reason why.

Honestly, the reason the jobs are being lost to the Chinese and so on is because North Americans have that perception of the so called second and third world countries. Chinese manufacturing is pretty damn efficient and the quality of some of the stuff they put out may surprize you. A lot of the quality control for iTunes, especially for classical music is done in China. They actually have people there who listen through tracks to make sure there are no blips from the ingestion process and that classical music tracks are named properly. There are very few people here with a sufficient musical education that would want to do that. Especially for what they're paying the Chinese. Same goes for India and programming or the Philippines and call centers. The current generation can't handle them.

Top to bottom, North Americans demand more pay for less productivity. Yes, I am stating the obvious. However, even if this generation is lost, the success of the next one is still pegged to this one's survival. As already stated, you can't expect much from the current work force which is why temporary protectionism might work for them. It'll give them a head start but it will only last if they are able to recognize the faults in their processes and correct them.

Fine, just subsidize education more.

I'm still a bigger fan of government issued student loans myself. They're much better for the student than bank loans as intrest rates are lower and approval is almost guarunteed so long as the student is of accademic standing. Unlike subsidation, it has a lower correlation with higher taxes. In fact, it even generates a little income.

Causa Mortis

03-14-2010, 03:57 AM

Honestly, the reason the jobs are being lost to the Chinese and so on is because North Americans have that perception of the so called second and third world countries. Chinese manufacturing is pretty damn efficient and the quality of some of the stuff they put out may surprize you.

Cool story bro. Empirical facts:

China has less capital per worker than the US
Education by years of schooling is radically lower
Health by most standards is worse
Transportation is generally quite poor relative to US standards

...in short, if you're losing out to them, its either because you fucking suck or your wage demands are unreasonable. In either case, time to find a better fit.

A lot of the quality control for iTunes, especially for classical music is done in China. They actually have people there who listen through tracks to make sure there are no blips from the ingestion process and that classical music tracks are named properly. There are very few people here with a sufficient musical education that would want to do that. Especially for what they're paying the Chinese. Same goes for India and programming or the Philippines and call centers. The current generation can't handle them.

This isn't really going to the competitiveness of the US or Canadian economy.

Top to bottom, North Americans demand more pay for less productivity.

In manufacturing absolutely, and that's the decline.

I'm still a bigger fan of government issued student loans myself. They're much better for the student than bank loans as intrest rates are lower and approval is almost guarunteed so long as the student is of accademic standing. Unlike subsidation, it has a lower correlation with higher taxes. In fact, it even generates a little income.

Your original position was protect to interject a keynesian type stimulus to the economy in part of save jobs so kids can still go to college.

Lucid

03-14-2010, 12:19 PM

Cool story bro. Empirical facts:

China has less capital per worker than the US
Education by years of schooling is radically lower
Health by most standards is worse
Transportation is generally quite poor relative to US standards

...in short, if you're losing out to them, its either because you fucking suck or your wage demands are unreasonable. In either case, time to find a better fit.

Well... it's hard for US workers to compete with the wages they pay in China and still be able to eat and all that. At least, that's my understanding of the problem. Second and third world workers will work 12 hour days for something like $263 a month. And apparently, that number is up from $197 a month in February. Do you really want to see US workers race third world workers to the bottom?

Causa Mortis

03-14-2010, 05:47 PM

Well... it's hard for US workers to compete with the wages they pay in China and still be able to eat and all that.

A US worker should be outproducing a Chinese worker by a factor of 5 or more - they have better education, better health care, greater levels of capitalization, a better regulatory environment, and lower cost access to affluent markets.

At least, that's my understanding of the problem. Second and third world workers will work 12 hour days for something like $263 a month. And apparently, that number is up from $197 a month in February. Do you really want to see US workers race third world workers to the bottom?

Well you've highlighted how its elevating 3rd world living standards, which is the bulk of my argument.

263 per month is about right in China, and since profit-maximizing firms will pay workers at their marginal productivity (an empirical relationship (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.) that only breaks down if you omit the insane cost of health care, which is what I recommend provision of), if we're going to go easy on workers and say they can easily produce 5xs as much per person as the average Chinese worker, then we'll be paying them 1400 or so per month.

Blse

03-14-2010, 05:49 PM

Well... it's hard for US workers to compete with the wages they pay in China and still be able to eat and all that. At least, that's my understanding of the problem. Second and third world workers will work 12 hour days for something like $263 a month. And apparently, that number is up from $197 a month in February. Do you really want to see US workers race third world workers to the bottom?

That's why the U.S. needs to specialize in something different than routine labor-intensive manufacturing. America's highly educated labor force and well-built infrastructure give us a comparative advantage in certain sectors that require high skills level, creativity, and good infrastructure. Low wages give China a comparative advantage in sectors that require relatively low-skill labor (or "raw muscle"). If each country does what they have comparative advantage in (i.e. encounter less opportunity cost than the other), overall opportunity cost are minimized and everyone is better off. American consumers get cheaper goods and high paying jobs in the creative sector, while the Chinese gain a foothold on the economic ladder.

Main point is that Chinese and American workers aren't supposed to be in direct competition. Most Chinese workers aim for routine factory jobs while most Americans aim for working in the service or creative sector. So job gains in China don't necessarily come at the expense of American workers.