Third Party & Independents: Archives

… How are we underpaying them? Failure to compete on a global level is the result of overpaying your employees and hence outsourcing jobs becomes more efficient… As for wealth being concentrated in the hands of the few… WHY DON’T YOU TRY AND STOP ME?!?!?! HUAHAHAHHAHAHA!

But in all seriousness, this is an inevitable course of events (and thus, a depression is inevitable :P). There is really no practical way to stop this concentration of wealth, and those that try to will be condemned by the ignorant masses. Of course, if I’m wrong about this, I’ll lose my bet with David :D

Teachers are not exportable jobs, Zeek. Nurses aren’t either by and large. In fact, a huge number of service sector jobs, not to mention government service jobs are not exportable.

True, but then they don’t apply to the global market do they? If they aren’t competing in a global market, then Alan Greenspan would probably say the Friedman model of economics applies to them wouldn’t he?

Zeek, teachers don’t apply to the global market? Teachers are directly responsible for the future labor force that will have to compete. Yes, related, quite directly as Greenspan pointed out.

This is the kind unilateral competitive rhetoric that is getting us deep, deep in trouble.

Americans want to see Indian data entry clerks making the same as ours, or ours the same as theirs in order to consider parity reached. That is a fallacious concept. One has to look at ‘relative’ compensation in terms of their cost of living and quality of access to comparable items like education, health care etc. Measuring parity between different economies is not easy at this level, but, we must insist that our Representatives start doing the tough work that requires.

One of the reasons many other countries are able to compete is due to their social service programs which provide things like health care and education which employers don’t have to pay for, allowing their employers a competitive edge.

We have to make all other nations give up their socialized programs or we need to tax wealth here to support our own socialized programs if our labor is going to compete with subsidized workers overseas. That is only part of the solution, but, it is a major one.

Wait, correct me if I’m wrong, but the point of this article is the rich getting richer, no? Assissting the average worker to compete in the global market solves little in the way of preventing wealth being concentrated in the hands of a few. Also, I still disagree that our teachers, nurses, etc. are being underpayed. They are being payed exactly what they are willing to work for.

Excellent post David. Thought provoking, accurate, and… succinct. :)

Zeek: “Wait, correct me if I’m wrong, but the point of this article is the rich getting richer, no? Assissting the average worker to compete in the global market solves little in the way of preventing wealth being concentrated in the hands of a few.”

True, kind of. Our social programs are going bankrupt because of the deficits, national debt and reductions in taxes upon the wealthy, and middle class. Hence the need to increase wealth taxes to help maintain our social programs which aid workers to compete as employers divest themselves increasingly of health care compensation, retirement benefits and pensions.

“I still disagree that our teachers, nurses, etc. are being underpayed. They are being payed exactly what they are willing to work for.”

They are underpayed if you look to increase their quality and output. In order for teachers here to be competitive with teachers in India or Japan, we need higher quality teachers with more education and talent than what exists in general today. Other nations are creating a competitive advantage in education - this is not news. We have been importing graduates of educational systems in other nations like India and Japan for some time now.

If we attracted better quality teachers, we would not have to import graduates from other nations in the numbers we currently have to.

David,

Wouldn’t raising standards for teachers do they same thing?
Anything in short supply causes the price for that to go up, be it material or labor.

Many that study to work in education fields finish school and wait yrs to get a job in that field.
If standards are too low and we have a surplus of teachers their wages will naturally fall.
If we demand better widgeits we raise the standards for them, the supply of them drops and the price goes up.
Raising standards for teachers would assure that the good ones were paid fairly and the poor ones would re-educate or change fields.

Except that we face a shortage of teachers right now, and the good ones go to better paying jobs.

Beagle, I’m all for high standards for teachers, but if you can’t afford to pay the good ones what they’re worth, you can’t hire them. The market works both ways.

David,

If we attracted better quality teachers, we would not have to import graduates from other nations in the numbers we currently have to.

Perhaps, then, we can import teachers from India, since, according to you, they are better and cheaper :)

But in all honesty, the best teachers naturally work in better school districts (i.e. wealthy neighborhoods). This is mainly because parents in wealthy neighborhoods generally have more time to enforce the work ethic of their children (thus making them better students). Perhaps paying them will make a difference, but I somehow doubt just throwing more money at this will solve anything…

AP,

If the poor ones were paid what THEY were worth, we could afford to pay the good ones more.

Thats the problem if unions set the standards, they set it a minimum and demand equal wage for everyone that attains that standard.
It works great, you wind up with minimum.

There is a shortage of good math/science teachers, but you get the same problem.
A first grade teacher with a phd and 20 yrs. exp. can’t be worth as much as a HS science teacher with a phd and 20 yrs. exp.
The world just dont work that way.

Good article.

AP:
“I’m all for high standards for teachers, but if you can’t afford to pay the good ones what they’re worth, you can’t hire them. The market works both ways.”

Well said. And many teachers are leaving the field not just because of the low wages (being the intelligent people they are, the majority were aware that teaching wasn’t a get-rich-quick scheme), many are currently leaving because of No Child Left Behind — being pressured to teach to a standardized test so that their schools are ensured of necessary funding was not the reason they became teachers in the first place. It’s dead boring and non-creative.

I think everyone is forgetting how making the rich even more hyper-rich keeps a lid on inflation! No one can argue that an increase in total wealth is bad, right? So, since only a few have it (the new money), then there are no pressures to increase prices as the masses, who consume most goods, don’t have more money to spend. Except, that is, for the few crumbs that trickle down their way…

It may be a problem that the rich are getting richer, but the solution is elusive. As the chart that AP provided indicated, the rich got relatively less rich (not by much, but some) AFTER the tax cuts.

I think David is on the way to diagnosing the cause, but I think we have to refine it a little. Globalism is not the cause, but the same factors that cause globalism tend to create more inequality. I think the problem is the relative advantage of being the best.

The easiest place to see this principle at work is in the entrainment industry. Listen to narration of car ads. Famous actors often do them. The car companies have figured out Martin Sheen’s or Sean Connery’s voice is worth more than someone who just sounds good. Modern technology allows Martin and Sean to be in millions of places at one time. In the old days, thousands of actors were employed in hundreds of locations around the country. Hundred or thousands of people saw each. Now one group can make the movie seen by millions. They in effect aggregate and replace the work of thousands of people and their cut of that is big. If you are selling something to a hundred people, it might not make economic sense to hire the most popular and expensive spokesman, but if you can amortize this over millions, the extra hundreds of thousands you spend to get Martin Sheen is worth it.

It is less obvious, but still the case in any big market. If the best engineer is 1% better than the next best, it makes no sense to worry too much about it if you have a small market. But if you are dealing with big numbers, the 1% added value might be worth millions and you might be willing be pay much more for that small amount of advantage.

I don’t know what to do about it. Inequality increased under Clinton. It is not a Republican thing. Inequality increased as the economy grows faster. As you increase efficiencies, the winners win bigger.

A good analogy is two cars, a fast Porsche and a broken down old beetle. Maybe the Porsche can go twice as fast as the beetle, but if they are both stuck in traffic, their results are almost identical. Remove the barriers and the Porsche shoots ahead. As we remove barriers to success, we are doing the same for people and groups of people. So what do we do?

The world market is here if we like it or not, we have to adjust to deal with it.

Depending on nonexportable jobs won’t save the day, we must produce, invent, and improve things to stay in the game.
Service jobs are great, but at some point we would all be selling pizzas to eachother.
If we took everyones money and divided it equally, within 10 yrs. the same people would have it back.
I don’t know what the anwser is, but I’m sure it isn’t paying more for pizzas.

Or maybe, Beagle, the poor and middle-class citizens of America are about to get shafted— again.

David, I think Greenspan’s last quote in the article you linked to sums up his position pretty well:

“So you can look at the system and say it’s got a lot of problems to it, and sure it does. It always has,” Greenspan told the JEC last week. “But you can’t get around the fact that this is the most extraordinarily successful economy in history.”

Our economy is not perfect. But the rich getting richer isn’t the problem. Remember the 1990’s? Nobody complained about growing income inequality then, though it was growing quite rapidly. Why not? Because everybody was getting richer.

I agree that it would be better for the economy if all wages were growing. However:
(1) A wage decrease for the upper class does not equal a wage increase for the middle/lower class.
(2) There is not a great deal the government can do to affect macroeconomic trends, such as wage distribution.

Lastly, as the CS Monitor also points out, most people don’t feel poor. Homeownership is at an all-time high, middle-class people are buying DVD players, new cars, cruises, and all kinds of amenities that make their standard of living far beyond even the wealthiest Americans of seventy or eighty years ago. Most people - even in urban areas - have air conditioning in the south. Most people own autos. Most people recognize that while their incomes may not be going up, the cost of luxuries (esp. high-tech ones) is plummeting. A computer for $300? The corollary to this is that most people who feel financially stressed don’t blame the economy - they blame their own spending, because they can clearly see that they are far outstripping their parents’ standard of living.

The myth that half of the American population is going to fall into a socioeconomic abyss is one that Democrats have been repeating for decades, and each new challenge (oil crises in the 70’s, Japanese growth in the 80’s, digital divide in the 90’s) has been met with a new generation of doomsday prophets. Each time, innovation and adaptation have moved us forward. The government, meanwhile, has precious little to do with this.

Chops,

The myth that half of the American population is going to fall into a socioeconomic abyss is one that Democrats have been repeating for decades, and each new challenge (oil crises in the 70’s, Japanese growth in the 80’s, digital divide in the 90’s) has been met with a new generation of doomsday prophets.

Socioeconomic abyss will occur once all the doomsayers have finally given up and bought into the system… The very fact that they were still being heard in the 80s and 90s was assurance that while bumpy times might be ahead, we would overcome. However, when the rich people start drawing their capital out of the system, they do so quietly and do not advertise it, and by then all the whistle-blowers/doomsayers have been discredited or have disappeared.

Each time, innovation and adaptation have moved us forward. The government, meanwhile, has precious little to do with this.

I whole-heartedly agree that the government has little to do with our forward progress. However, I do not believe innovation and adaptation will be able to save most Americans this time… If you would like, I can extend my bet with David to you. My bet with David was that by 2012 we will be sent into a head-long, downward, economic spiral from which no one will be able to save us. If I am wrong, I would gladly change my name to “Served by David & Chops.” However, if I am right, I get to laught at BOTH of you and say “SERVED!”

There have been upper classes and lower classes in societies since the beginning of time.

Dawn,

There have been upper classes and lower classes in societies since the beginning of time.

What’s your point?

Zeek

That really is funny. 2012. An excellent choice. Close enough to seem threatening, far enough that nobody will check on it.

Chops makes a good point. Doomsayers have been predicting collapse ever since I can remember and from what I read ever since the beginning of human history. Consider the hard times we are supposedly living under now. Unemployment is low; productivity has been increaseing; incomes are high; home ownership is at an all time high. Most families own more than one car. One of the bigget problems of the very poor is obesity. If these are bad times, I hope we remained cursed and that we never recover.

Zeek,

You are young, smart, and informed, if you set your goals now you have a very good chance of meeting them.
Whatever those goals are, your biggest threat to getting there will be setting them too low.

What is my point.
Can changes really be made to create societies where all are equal financially? Should these changes really be made?
If a waitress makes the same money and has the same benefits as say… Bill Gates … what would happen to the incentive to achieve success?
Why should the ‘lazy slob’ be afforded the same wealth as the one who worked hard to make it to the top?

Jack,

That really is funny. 2012. An excellent choice. Close enough to seem threatening, far enough that nobody will check on it.

Lol, I’m insulted! Fine, how about 2010? By the end of 2010 I’m sure America will be well on its way to financial disaster. Really though, my intention was not to dodge accountability… It’s just that I believe it will happen around 2010. But hey, what about all those people who predict doom & gloom 20+ years out? You never complain about them :P

Consider the hard times we are supposedly living under now.

Actually, by my prediction (by which I mean the prediction of smarter people who have lots of compelling data), the next four years will be the best most people will see in their lifetime. Of course, the sharp downturn which shall follow will bring about the worst decade people are likely to experience in their lifetime. Feel free to lump me in with the other doomsayers, but the main difference I have with most of them is that I realize the upside we have is considerable, even if the time we have left before GDII is short.

Beagle,

You are young, smart, and informed, if you set your goals now you have a very good chance of meeting them. Whatever those goals are, your biggest threat to getting there will be setting them too low.

Dammit! I knew I should have planned on being a trillionaire! Now I’m going to have to settle for billionaire!

Dawn,

Can changes really be made to create societies where all are equal financially? Should these changes really be made?

Dawn, I think you misunderstood the article. We’re not trying to make everyone financially equal, that would be impossible as well as stupid. The point is that the financial gap is going to sway to an extreme and leave the wealthy even wealthier and the poor even poorer. Historically speaking, a nation’s economy will remain perfectly fine despite gaps between the rich and the poor, but when that gap goes to the extreme, you have a depression. I don’t think this can be stopped, which is why I was willing to bet with David that it will happen at the risk of shaming myself.

Zeek

You ought to write in blank verse. Milton used blank verse for Paradise Lost. It goes better with such things. And you should stick to your original 2012 date, since that gives us seven fat years before the lean ones overtake us, more in line with the traditions of these things.

If you predict the end long enough, you will be right. But people can do a lot of growing, building, living and dying before the arrival of the apocalypse.

“But in all honesty, the best teachers naturally work in better school districts (i.e. wealthy neighborhoods). This is mainly because parents in wealthy neighborhoods generally have more time to enforce the work ethic of their children (thus making them better students). Perhaps paying them will make a difference, but I somehow doubt just throwing more money at this will solve anything…”

I am not certain how a definitive conclusion could be made that the best teachers work in the better school districts (ie wealthy neighborhoods) etc. If it were true that parents in wealthy neighborhoods are somehow able to instill a better work ethic in their children, an average teacher could get the desired result. It would not take the “best” teacher.

Also, I suggest that very few teachers, given a choice opt to work in ghetto like school districts irrespective of what they are paid.

Even in the worst school districts (academically and neighborhood condition) there is always a “brilliant” kid who is going to flourish regardless of conditions. For the most part however, students in these schools are better referred to as attendees by law (not intended as a characterization of 100% of the students) not students with a real desire to learn.

Jack, you need to get your clock fixed if you think 2012 is that far off, or even 2020, in economic terms.

Look, Soc. Sec. is not going to get resolved under this President. He has all but said he would veto any measure that did not include privatization and the majority of the public is opposed and polls are telling Congressional incumbents, “Don’t you do it”.

Medicare/Medicaid has just been expanded to cost more, not less, increase benefits, not reduce them, under Republican control. Both of these programs will continue to drive deficits for the next 5 years minimum. That puts us up to 2009 with no end in sight in growing the national debt.

Add to this the pension crisis coming down the pike that is going to either bankrupt retirees or add significantly to the national debt, depending on whether workers lose without government reimbursement, or the gov’t. bails pensioners out. This will be an ongoing hit to our economy for decades - the sums involved are huge.

Add to these economic pressures the outflow of more than 40% of 720 billion dollars a year in tax revenue to foreign investors and a steepening trade deficit over the last decade and a half which says that money is not coming back to the US.

These and other economic pressures say one thing about the future. They say, that our national debt of 10 to 12 trillion dollars coincident with another economic recession means a seriously diminished capacity for Government to respond to recessionary pressures.

That is what Greenspan alludes to when he discusses future economic liability. We may not be able to stem the next recession from becoming worse and spiralling, depending upon foreign investor’s risk assessment of US debt instruments at that time, and depending upon the ability and willingness of consumers to continue spending under such circumstances and their willingness to be taxed severely to offset such huge debt loads.

This is not a fantasy scenario, nor one with a miniscule probability of occurence. We are likely to face another recessionary cycle in the next 15 years. And our ability to mediate it/manage it, will be greatly reduced from the options available to us in the 2000 to 2004 period.

Jack,

You ought to write in blank verse. Milton used blank verse for Paradise Lost.

Lol. What makes you say that?

Zeek,

My post to you may have been a riddle of sorts, but wasn’t a joke.

A smart young person like yourself can set personal goals and likely meet or exceed them.
No one else is even in the race, you only compete with yourself.
A dimwitted person doesn’t have that option, goals or not, their future is likely set.
A really smart person without goals, or those set too low, will likely find bottom long before the hardworking dimwit.

Very few stupid people will ever have a nervous breakdown.

Zeek

Becaue Milton did write in PL in blank verse and it seems fitting for the kind of doomsday scenario you mention. We have our paradise now, but will soon lose it because of our pride. Very much like Milton. Of course, it is better to rule in hell than serve in heaven, right.

We have our paradise now, but will soon lose it because of our pride.

jack, jack… It isn’t all doom! The rich will be very, very, very well off! I assure you, I fully intend to be one of those people who benefits from the turbulent changes the future holds, you have the freedom to choose the same.

As for ruling in hell… well… I’m not quite sure I catch your meaning, but I rather prefer the fresh air of heaven myself :P

And Beagle, you flatter me.

Zeek

Don’t they make people read Paradise Lost in HS anymore (or at least the Cliff’s notes)? The heaven and hell reference is the most famous part of the story where Satan indicates why he can never get out of hell and how his one arrogance keeps him there.

Jack, no I’m afraid they don’t, but you have piqued my interest. I shall borrow it from my county library this week and finish it by the end of the month…

Assuming what you said is true, though, does that mean you think I’m arrogant?

Damn, your pretty sharp, Jack ;P

As the chart that AP provided indicated, the rich got relatively less rich (not by much, but some) AFTER the tax cuts.

Jack, you’re talking about how the rich lost their shirts in the stock market crash. My chart shows that the rich got a Bush tax cut that was twice as big (as a percentage of income) as everyone elses.

And as the dividend, inheretance, and capital gains tax cuts phase in over the next five years, the gap will get wider still.

I agree that it would be better for the economy if all wages were growing. However:

However nothing, Chops. It’s this administration’s economic policies that are keeping everybody from getting richer like they were in the Golden Age of Clinton.

Can changes really be made to create societies where all are equal financially? Should these changes really be made?

Dawn, nobody is calling for financially equal societies. That would be dumb.

But we are concerned with the speed and the rate at which the gap between the rich and the middle class - and even the rich and the hyper-rich - are growing.

AP,

It’s this administration’s economic policies that are keeping everybody from getting richer like they were in the Golden Age of Clinton.

Total horse-shit. First off, I resent the idea that people need to be handed their wealth by the government instead of finding opportunity themselves. Second, the idea that presidents can affect the stock market is ridiculous. Before Clinton was even in office, forecasts of an up and coming stock market bubble were present. One might say that it was a mere coincidence or lucky guess, but if you knew the accuracy with which they called the internet bubble you would perish such a thought.

By the by, if these people are right again, Democrats are going to be eating their own words and Bush is going to have his own “Golden Age” to gloat over.

This could get messy…

AP

I just followed the link to the NYT article and clicked onto the chart that showed relative shares of income. The tax cuts seem to have no effect on this. The richest share went way up under Clinton and dropped under Bush. The rest is only commentary.

Jack, and yet, the Republicans don’t seem to ever talk about how Clinton did a huge cut on the capital gains tax and how a lot of people benefited from that (AVERAGE CITIZENS). What’s even funnier is that Democrats don’t seem to ever talk about it either.

Haha!

The Reds and Blues are both embarrassed about Clinton cutting capital gains taxes but for completely opposite reasons! That’s priceless!

The tax cuts seem to have no effect on this.

You’re the one who implied that it did. The only thing that chart shows is how 99% of Americans got a 3-8% tax cut, and the wealthiest 1% got a 12% tax cut.

Total horse-shit.

Right back atcha.

First off, I resent the idea that people need to be handed their wealth by the government instead of finding opportunity themselves.

And rightly so. That’s why no one ever said that. But a president’s fiscal and economic policies damned well do affect the environment in which businesses are founded and run.

Nobody ever made that claim either. Clinton and Rubin were working on the bond market. The stock market boom was just a bonus.

Another excellent post Mr. Remer, but few will listen I am afraid. We are too fractured a society to come together in the cause of self-preservation. There are many, many vexing issues facing this nation as we plow into the 21st century with China nipping at our economic and military heals, but we lack the leadership to address them. We, in the end, will go the way of so many other great societies: we will fail, and then fail again, and eventually we as a society, will fall.

Returing to the teacher issue for a moment.

There was a piece on the news last night about 6 or 7 states (mostly deep South states)have banished a number of “children’s books” from the libraries and classrooms.

These were books with stories and relatively graphic pictures about gay relationships and marriage with men embracing and kissing each other, women in like scenes and stories sanctioning this.

You would expect this in Louisiana, Mississippi, Alabama, etc. Oklahoma was one of the states as well. I wonder if this is a precurser of things to come in the Northeast, and other areas of large possibly less conservative populations and, if so, what impact it will have on the entire teacher issue we were discussing before we digressed once again into a broader topic concerning more general inbalances in income.

Steve Smith~
Are you posing that as a bad thing? I personally don’t want my child reading anything thats over all theme is marriage or sex between any sexuality. “The Cat In The Hat” will suffice thank-you!

Traci, Traci, Traci,

If you read back through my posts on almost any issue you will notice that my political position is just to the right of Attila the Hun.

My post is a wish that that crap be banished from the earth. It will inspire however a ton of bleeding heart liberal responses that we both can have fun with.

Let the games begin!:)

[Crickets chirping]

AP,

Clinton and Rubin were working on the bond market.

Er, yeah, the bond market, that’s clearly what made everyone wealthy.

Wait, no it wasn’t.

When it comes to SS and personal savings accounts, the only way it will be set up is if the accounts are separate from what is already taken out for SS.

If anything good will come from Bush and all his talking about these personal savings accounts, it will be people taking it upon themselves to save their own money.
Put the 20 under the mattress instead of buying that new CD or DVD.

Dawn, I basically agree with what you’re saying, but “20 under the mattress?” I hope that’s a metaphor for investing…

Yes Zeek, but even 20 under the mattress is better than giving it to walmart for something that one could live without.

Has anyone considered the point that teachers elsewhere, in nations where they make money that is not only smaller in number but also smaller relatively, seem to be doing a better job educating that our home grown ones?

I doubt the issue is teacher pay. It has more to do with the fact that teachers have no control over students, the perverse insentive system in schools, and what is, frankly, a laziness in our society.

My nephews spend about 3 hours a day doing sports, and then they cram in the wee hours of the night ot get their homework done. Priorities matter more than we might want to believe.

Damon, the trick is in hiring teachers that care and that can connect with students. And you are right to say that pay is not the biggest issue, a higher paid teacher doesn’t become a more empathetic one, and it certainly doesn’t attract people who are interested in the students, only those that are interested in the money.

The teacher is such an important aspect of the system yet interviews and reviews of teachers’ perfomance are never done, and for good reason seeing as it would be difficult and time consuming. So really, there is little way of insuring high-quality teachers.

David:

Teachers are not exportable jobs, Zeek. Nurses aren’t either by and large. In fact, a huge number of service sector jobs, not to mention government service jobs are not exportable.

You are way off here. At least on the service sector jobs.

Tax returns are now being done in India. Medical tests are being evaluated from here worldwide. Everything from Xrays read to your blood workup.

When you call a toll free number to make reservations, you may be calling overseas. Eventually when you move up to a drive up window and order your big mack, you may be speaking to someone in India.

Any service that can be digitalized can be done overseas. You want your teeth cleaned? The person who calls to schedule you may be calling from who knows where.

This is one of the reasons why we wont have much inflation in the future. As you and I have battled before. The Internet just opened up a great big huge labor market that is unbelievably vast. Labor in India is 20% the cost of labor in the USA.

So what does this mean?? I am reading a book that is excellent called “The world is flat” that is awesome as it is scarey. It is written by a reporter from the NY Times. I would encourage anyone to read it as he researches this issue.

Bottom line? The Rich don’t need nearly as many American workers as they did even 10 years ago. Even traditionally white collar jobs like accounting and engineering and programing are moving off shore and will continue to.

Greenspan is right in that education needs to change and reform. I disagree with his emphsis. If I were king and liberal, my money would be on community college and higher education. I would pound the pulpit for money to retain displaced workers to retool them for the new economy. In this market you can’t lick ‘em so you have to join ‘em.

We could move to an ownership society. (ducking),, where we all act like the rich and use our creative minds to create wealth and let the Indians and company fill in the details for us. For instance, why do I schedule my own appointments for clients if I can pay someone $2.00/hour on the other side of the world to do it for me?? Would my time be better spend with sitdown face to face strategy??

I am not so sure Greenspan is on top of this one.

This is exactly why long term rates have come down while short term rates have gone up. Investors in Europe and Japan can easily access US Treasuries via the Internet unlike 10 years ago. So when their interest rates are 2% and ours are 4% the money flows to America. The reason is exactly the same reason jobs are outsoursing so fast. Just as Labor is flowing to other countries, Investments are flowing here.

We are watching a fundamental restructuring of the world economy.

Europe is going to be a big looser as they cannot adapt quick enough. Big winners India and China. It remains to be seen what will happen to the USA. Either we adapt to this new economy or we go the way of the “whalers” of New England.

Craig

No Craig, you are flat wrong when you say I am. I said a huge number of service jobs are not exportable. I did not say all service jobs are not exportable. A large number are and have been. But, supporting 294 million consumers in America means a huge number of service jobs that have to be done here.

Try paying a plumber in India to fix your toilet. Or an electrician in China to wire your home entertainment system. The number of such service jobs are huge.

I wrote about “The World Is Flat” by Freidman a few weeks ago. I am very familiar with the concepts. He has a compelling argument about nations not wanting to war with economies so interdependent upon each other.

But, he does not take into account the costs of internationaly bullying that comes with trade with the US. China could easily recognize that future economic independence from the US is the way to their greatness and protection of their form of government.

“If I were king and liberal, my money would be on community college and higher education. I would pound the pulpit for money to retain displaced workers to retool them for the new economy. In this market you can’t lick ‘em so you have to join ‘em.”

We are in general agreement here. I say general because between your words is implied retooling them to accept a lower standard of income and living. There, we would disagree.

As for interest rates, one must never forget the inverse relationship - earnings vs. risk. Yes, the money will flow to higher earnings in the US until that day arrives when investors hit their ceiling on risk, at that point no amount of earnings will change risk reduction investing which could flow funds away from the U.S. as an economic perfect storm looms large on the horizon.

We are witnessing a fundamental restructuring of economics in the world, which makes this time more unpredictable and risky. We are also talking about changes without intelligent design. By that I mean what Adam Smith referred to as the invisible hand. Greed, desire, and want is the designer of these fundamental changes, and rational political decisions will not alter the changes taking place, they have a life of their own, now.

“Europe is going to be a big looser as they cannot adapt quick enough. Big winners India and China.”

That may turn out to be true. On the other hand, if the invisible hand is moving toward calmity, those slow to change may actually be advantaged if the calamity arrives and they are not aboard.

Er, yeah, the bond market, that’s clearly what made everyone wealthy.

Wait, no it wasn’t.

Zeek, you’re a pretty bright guy, so I’m sure you realize that you never stop learning. There’s a book by Clinton’s Treasury Secretary that details exactly what they did and why.

David,

Another thing that could happen after we lose all our mfg. jobs and plants, We could never again fight a war like ww2 without just nuking everyone.
For years everything made for the military was required to be made in USA. We should go back to that rule, if we continue importing everything whoever is making it might not be on our side!

Almost zero clothing is made in America ( of any kind), that would make a catchy title if you were to write a book about this problem …
“naked on the battlefield”.

… AP, I’ve already been assigned Paradise Lost. I’m not about to read another book from this blog -_-

Jack said something about me ruling in hell rather than serving in heaven so I thought I’d check it out.

I read Paradise Lost in college. You’re not missing anything. Snore. Rubin’s book is far more interesting and relevent.

Zeek,

When you finish those two books, try “Death in the silent places” by Peter Chapstick.

It has nothing to do with politics but it’s hard to put down.

David:

I think you are right on some things and wrong on others. You are consistently wrong on inflation for instance. Basically it is nearly impossible to have low inflation in an atmosphere of surplus labor. The left cannot argue for a jobless recovery and inflation at the same time because labor costs are the number one cause of inflation.

I think you are right that conflicts worldwide will increase. A smaller world will mean that there will be wars as cultures become assimilated into the Internet world and for for the first time for many have the noise of new ideas overwelm them.

I think the debt will (should) self correct. It looks to me like arbitrage. Not only did we in America find cheap labor overseas but also cheap credit. I agree with you that this will end at some point. (Actually that it will slow down at some point). Importing $2 billion a day sounds like a great deal. When the slack (surplus) overseas is taken up, the price will obviously go up. (The same of course will be true of cheap foreign labor).

We have an excess (relative to the world) of wealth, they have an excess of money to lend, and a surplus of “cheap” labor, and so we are leveraging our capital to purchase cheap goods.

I disagree with your negative outlook. Well I partially disagree. Some will benefit and others will not. There will be some who end up like the American Indian and that is pretty sad and bleak. That is why the emphasis on education. I think displaced workers need help to compete and feed their families. From the American Indian perspective (which may be the perpective you are writing from) the future of the world will be bleak because the Buffalo will never roam free again like before. (This might be the view of the American labor Union). For others who adjust to the new economy, they may invest some money next to a railroad stop, and service the train or it’s passengers, and have a great life!!

The future is one of perspective. I don’t want as you say to educate displaced people to take lower paying jobs. I want to retrain them so they understand that the world has fundamentally changed. The Buffalo are no longer going to roam free, and to survive they have to become competant in something that has to do with the new economy that is growing around the railroad. (Internet).

It is not a matter of choice, it is a matter of reality.

In my analogy are you expressing the view of the Indian? Your threads are usually pretty bleak!!

Craig

Beagle, I couldn’t agree more on your point regarding our infrastructure growing more and more dependent upon foreign imports for maintenance and refurbishment. At the very least, we need to prototype our military’s hardware, (which I believe we do for the most part) which insures that if our supplier became an enemy, we would have the plans available to give to American firms to reproduce.

Craig,

“The left cannot argue for a jobless recovery and inflation at the same time because labor costs are the number one cause of inflation.”

That paradigm is changing, Craig. For example, labor costs are not driving the most rapidly inflating industry in America, health care costs. You need to rethink your models, they are not reflecting reality anymore in some crucial ways.

“From the American Indian perspective (which may be the perpective you are writing from) the future of the world will be bleak because the Buffalo will never roam free again like before.”

Craig, this is a brilliant analogy, and as much as I would love to debate it, I find doing so rationally illogical. Well said, Craig. And I thank you for pointing me to understanding one of my basic assumptions which I was not consciously aware of. At this point, I have to agree with you that the buffalo will never return for the perspective of civilization.

Personally, I have been moving toward generalization as a survival methodology. I have learned to grow my own food, I distill my own drinking water. We built a house that requires very little energy to heat and have five acres of trees for fuel. I have learned all manner of construction from welding to concrete, to housebuilding, electrical and plumbing. In the event of an economic decline, I have essentially self-insured against recession.

I think this is a rational approach to the changes taking place in which the entire world may experience one day in my own lifetime (the next 25 years or so), an interdependent deep global recession until, as you say, the self-adjustment mechanisms kick into place.

Money used to have value when gold backed it up for the exchange of goods and services. Money today, has no intrinsic value whatsoever except as starter fuel in a wood burning stove. This is becoming true the world over as wealth is ever more predicated on goods and services that are not essential for sustaining physical life. The world’s wealth is an illusion presented in the form of promissory notes. As we become ever more interdependent upon each other’s notes, we move closer to the day that someone fails to honor their notes, and the house of cards falls.

If that scenario is an American Indian model, then, I would have to answer yes, my model is one predicated upon the American Indian. And just as the American Indian, though decimated, did survive to the day when some of them could prosper again, I believe that analogy will hold true for the world’s future as well.

David,

Prototypeing and having plans wont mean poop if the factorys and skilled labor is gone.
I agree that we should( and do) proto everything.
Any MFG plant anywhere would be shut down in 3 days if all the skilled tradesmen( tool+die, machine repair, ect.) didn’t show up for work.
If plants keep closing the current supply of skilled tradesmen will run out and more arn’t being trained.
It takes 4 yrs of equal work/schooling for an aprentice to be allowed to work independantly and another 10 yrs before little will stump them.
A clever “shadetree mechanic” can work into machine repair faster but tool+die is a lil different, its not something anyone ever did at home or on the farm( for the most part).
Big die’s and molds today often cost 250k-500k or more, most plants only build one.
They have small problems everyday and someone that don’t know what they’re doing can trash one in 10 min.’s by trying “thisNthat”.

There is no way to shit em out when you need one, once they’re all gone.

Good tool+die makers today are already making wayyy over 6 figures in non-union plants.

Beagle, something I think you are forgetting, as others have here, is that our society requires a tremendous amount of service and labor that can’t be exported. As long as Americans maintain the Golden Gate Bridge, The Washington monuments, and continue to construct buildings, and do custom work on vehicles and motorcycles, we will have tool and die makers and the expertise to retrain more if the need arises.

Yes, we could get caught flat footed for a time as we have retrain, but economics dictates that we go to the lowest quality source and that means overseas. Only in a marxist or dictatorial society could one mandate building and buying American and back it up with the force of law. I am sure that is not what you would recommend.

David my friend,

My point was that if it ever came to an all-out war we couldn’t depend on imports to mfg anything to deal with it, they might be fighting against us.
Ok, I know you built your home, I admire that( I built mine too), but my best guess would be that you didn’t make all the tools you used to build it?
To make a long story short, if we import everything used to build things, if that supply if cut off we are back to the stone age as soon as what we have breaks/wears out.

Beagle, it’s simply not true in my opinion. Blacksmiths made tools for centuries, and ferriers are still in fair abundance. Any combination of metallurgist, welder, and tool & die maker can design and build almost whatever one puts in from of them by way of design for a tool.

The real worry IMO would be raw resources. How much raw iron ore do we have available domestically? That to me would be the bigger concern. Like Japan after our oil embargo prior to WWII. But, even if China cut us off directly from iron products and sources, we could always buy it with a middleman markup from the UK or EU who in turn would get it from China. This is an example of both the strength and achille’s heel of an interdependent supply on demand global economy.

Bah, David, why would the steel companies do that? It would kill their stock prices and make investors very unhappy. When investors are unhappy, board members do something about it. Sometimes the dollar is mightier than political agendas.

David,

I respect your opinion(as always) but in this case I think you may be mistaken.

A blacksmith can likely make you a hammer, an engineer can design a computer, but both together wouldn’t produce many Dell XL 2006’s or whatevers.
If they did produce something that could make one, an operator of that machine would give it a cold shot, a double trip on that part, or any number of other things that will trash tooling.

Back to square one.
If we trained no doctors and depended on importing them, if the supply is cut off, at some point we could get to be some sick puppys.

A good Vet can give you some great basic medical info., but I’m not real sure if I want one operating on me.( I once was sewed up by a vet, did a pretty damn good job)

David:

I am glad you liked the analogy. Thinking of it more, I think it has value for discussion purposes.

I have a community about 200 miles from my home that is a good example. The school district has lost 50% of it’s students because the Buffalo (Logging) has gone. Millworkers who used to make $20,000 to $30,000 a year have moved. You can find small houses for under $100,000, but then nicer houses from retirees (Californian Locusts) are up in the millions.

I have thought about starting a phone calling center there. I could pay workers $8 to $10/hr. With high unemployment I could hire a few hundred people and fill those homes with wage earning families again. That choice would be to start a business “next to the railroad” or on the Internet.

The late 1800’s forced enormous changes in migration. I wonder if migration wont be out of the cities and into the small towns because of the new cottage industries that will develop.

Also enormous debt levels occured in the second half of the 1800’s. The railroad almost went broke. The government gave away much land, just as it is doing now by not taxing “the new railroad”.

At least the analogy gives a basis for discussion.

Go West Young Man!!

Craig

Craig said: “The late 1800’s forced enormous changes in migration. I wonder if migration wont be out of the cities and into the small towns because of the new cottage industries that will develop.”

That has been occuring since the mid 1950’s for a host of reasons like upscale incomes and response to urban riots - it was termed “white flight” and “inner city decay” at the hands of suburbs, and outlying small townships. It is still going on today, though a few communities like Seattle I believe it is, figured out how halt it and regrow the city from the inside out.

I know you are talking migration in search of jobs. And I don’t disagree. Oregon for example saw a huge influx of hippies back in the 1960’s in a back to the land and nature movement which included communes. I was one of those who moved from Detroit to Takilma, Or. where a commune called the Magic Forest Farm hosted my presence for a summer. What sustained that movement after arrival was, as you pointed out, basic cottage industries.

At the end of the summer, both the elders of the commune and I agreed, I did not fit that lifestyle, but, it was nonetheless one of my most memorable years. It was a practical real life course in why communism does not work. Precisely because pure communism can’t exist when people are thrown into competition with demand exceeding supply on a permanent basis. It inevitably results in those with the most calling the shots for those without, which breeds revolution. It was a great real life educational year for me. In that sense, it was also very educational about capitalism.

I don’t know if the Magic Forest Farm commune still exists. But if it does, I know it has survived in much the same way as the US has, with a mix of capitalism and social sharing.

David:

That is too funny. What years?? I want to College in Ashland OR 73-75. There were alot of hippies in the early 70’s. I as a part of the Jesus People movement. I was in High School but use to go to a commune in Salem for Bible Study. I googled the information you gave me. There are still communes in that town.

The town I am thinking of is Enterprise which is in the North East Corner.

After thinking about my post earlier, I don’t think you are an “Indian.” Indians didn’t have the literacy to understand what was happening.

You seem like more of a nonconformist, and a minimalist. The world may be going one way, but you are going to go another way.

I grew up in a small town in the Willamette Valley. My dad was a sawmill worker. It troubles me that these small towns are drying up.

I think the immigration is going to be different than you suggest. I am thinking about moving my business to a small town. I can work off the Internet, and my clients wont even know I am 200 miles away. I can move between two homes. The city traffic even for our small city is a pain. In Enterprise there are only 2000 people, and the mountains are stunning. People rarely lock their car doors. It is the internet that could make that dream or the previous one come true. (or both).

The new immigration that you didn’t mention is from subberbs to small towns. Some of these small towns like the ones in Oregon that have lost population might see inflows. It could be interesting times.

Craig

But in all honesty, the best teachers naturally work in better school districts (i.e. wealthy neighborhoods).

This is not always true. In many wealthier communities with active parental involvement there are pressures to get teachers who conform. They may be fine and competent teachers but they are not necessarily inspiring or creative. In poorer communities with less parental involvement, and thus less pressure on the board for oversight, many teachers who are considered radical can find a home. Such teachers are often more committed to the actual children in front of them rather than some abstract concept of what education should be. They are more prone to tolerate bad behavior in pursuit of reaching a “problem child.” And they tend to have more creative curricula. Obviously, this isn’t a ubiquitous phenomenon, but your assumption that the “best” teachers “naturally” work in “better” school districts is not a universal truth.

Those were interesting times for some of us, tumultuous for others.

I have had a large number of labels hung on me over the years, yours are somewhat more complimentary than others, so, thanks. Though I don’t see myself as contrarian. For me it is largely a matter of refusing to be directed by incompetents (you would have to have known my father). I respect intelligence, logic, reality and idealism, and submit to these when I find them, and oppose most everything else. :-)

On the migration, I read recently of a state, Kansas, perhaps, which is trying to lure taxpayers and business back by offering free or low cost land. It remains to be seen if such tactics will be successful.

Telecommuting work would be the key to the migration you are talking about - as yet, however, our government is not making it a priority, and there are some high psychological barriers in corporate America to trusting telecommuting jobs.

Employers have not been indocrinated to, nor do they trust or understand the concepts behind incremental units of work for pay which is the only way to measure whether someone working for you over the internet is actually getting anything done. Unless and until, employers get on this bandwagon, I have doubts whether the migration to which you refer will ever become significant.

Insurance claims processing is a perfect example of a job that does not require a physical centralized location for employment for the adjusters. While some companies have adopted remote claims adjusting for catastrophes like hurricanes, they are reluctant to go the next big step and decentralize the claims home office to the places of residence of adjusters, which if you think about it, could result in huge overhead savings and for awhile, real competitive advantage.

This is pure speculation at this point, but, because India is already telecommuting its contract work for other nation’s companies, I think the telecommuting revolution will occur overseas before it ever takes off here. The US is still locked into the centralized command and control hierarchical employment structure, while India and Malaysia and Taiwan are already well underway in shifting from that employment structure to a more Freidman like flat decentralized phone/PC remote employment type structure.

“You seem like more of a nonconformist, and a minimalist. The world may be going one way, but you are going to go another way”

WELCOME to my world David!
Our nonconformist paths may be different right now but sooner or later they will meet and I would like to buy you a beer when they do.
Unless of course, Zeek is right and it all ends, in which case I will make you a great beer.

kctim

Unless of course, Zeek is right and it all ends, in which case I will make you a great beer.

Hey now! I’m not saying it all ends! I’m just saying most Americans are going to be screwed in a few years.

But don’t worry, you’ll still be able to buy your beer. Assuming of course you’re not killed in a terrorist act which I also expect shall happen in a decade or so.

kctim, perhaps we can joint venture in producing and marketing a new beer called “Oblivion”. Catchy, eh? :-)

HMPH!

>8(

David:

I have had a large number of labels hung on me over the years, yours are somewhat more complimentary than others, so, thanks. Though I don’t see myself as contrarian. For me it is largely a matter of refusing to be directed by incompetents (you would have to have known my father). I respect intelligence, logic, reality and idealism, and submit to these when I find them, and oppose most everything else. :-)

Like I said, a nonconformist!!!!

Craig

Craig, I suppose. But, not for its own sake.

David,

You mention that our education troubles are directly related to teachers being underpaid and therefore attract a lesser talented work force in the teaching profession.

Are you saying that if we pay teachers more the ones we have now will be fired and better ones will take their place ? Otherwise, won’t we just be giving more money to the less qualified teachers we already have ? Will vouchers correct this ?

Someone else mentioned that teachers are not exportable. You haven’t been to a college lately have you ? Most of the math and engineering in this country is taught be Chinese and Indian professors.

you mention “teaching our young to compete” tell me where is that still taught in the US?

You cannot achieve high levels of success when lower and lower standards are acceptable.

Lastly, David, are you really 3rd party ?

James, the mechanism to work is setting high standards for teachers, and offering salaries attractive enough to attract high quality teachers to replace those lost through attrition or failing the standards. Simple enough, thus we almost immediately acquire either higher output from current teachers or from their replacements and (this is a big one) we reduce the high turnover rate of good and great teachers who leave for better pay and working conditions.

Speaking of working conditions. America needs to invest in security in her schools. A number of fine folks would choose teaching careers if schools were a safe place for teachers to work. Too many aren’t, and that needs to be fixed concurrently with elevating standards and teacher pay. We can no longer afford to put education on the cheap pile. Like all investments, education requires sacrifice today for rewards tomorrow.

James said: “Someone else mentioned that teachers are not exportable. You haven’t been to a college lately have you ? Most of the math and engineering in this country is taught be Chinese and Indian professors.”

You are confusing export with import. We have no problem importing teachers. We don’t export them. Frankly, I would prefer teachers who spoke english that our young could understand. I find listening to thick Indian or Chinese accents difficult to follow, and I am not alone on this. Plus, our imported teachers have a very high turnover rate. They use our schools as stepping stones to better pay and positions. We need career educators who reward us with their long experience in teaching and knowledge of what works with which students, instead of cookie cutter teachers who teach all students the same whether they get it or not.

“you mention “teaching our young to compete” tell me where is that still taught in the US?”

In economics courses, in sports activities, in homemaking believe it or not, where they teach about resumes, checking and savings accounts, and home based business opportunities. How about in civics where competition is the name of the game where power is concerned?

James, read my latest Nader article and tell me, am I really third party?