Avi's Economics Thread

[metis]

Which Morris book does he predict it, Metis ?

Actually I caught him on an interview back around 1970 on t.v., and he was asked what he felt about the future of the U.S. since he was here at the time. He sort of hemmed and hawed a bit, but then said that we'd likely be OK in the short haul but not the long haul, unless we were willing to significantly alter our system.

He said that Americans don't seem to be able to stop competing against each other, and that no nation can likely go on over a substantial length of time with that much internal dissent. He said what would likely happen is that, as resources became proportionally less abundant and thus more expensive, the competition would tend to drift in the favor of the wealthy, thus leaving the poor, including the working poor, with less and less.

Why didn't this happen sooner? He said because America was blessed with abundant resources and a relatively small population proportional to that resource level. Even if I got a lot more than you, there was still enough for you to relatively easily get by on.

With both a higher population and less resources that we are now seeing, this huge and increasing disparity is beginning to tear us apart.

 

[Avi1001]

Actually I caught him on an interview back around 1970 on t.v., and he was asked what he felt about the future of the U.S. since he was here at the time. He sort of hemmed and hawed a bit, but then said that we'd likely be OK in the short haul but not the long haul, unless we were willing to significantly alter our system.

You have a remarkable memory!

He said that Americans don't seem to be able to stop competing against each other, and that no nation can likely go on over a substantial length of time with that much internal dissent. He said what would likely happen is that, as resources became proportionally less abundant and thus more expensive, the competition would tend to drift in the favor of the wealthy, thus leaving the poor, including the working poor, with less and less.

This is a pretty good summary of what I agree is our current problem. In addition, I would say, our innovation has decreased the last 20 years.

Why didn't this happen sooner? He said because America was blessed with abundant resources and a relatively small population proportional to that resource level. Even if I got a lot more than you, there was still enough for you to relatively easily get by on.

This makes sense.

With both a higher population and less resources that we are now seeing, this huge and increasing disparity is beginning to tear us apart.

True. But I am actually more optimistic than this. If we can get back on the road toward innovation, much good can happen. Apple, Tesla, 3D printing are shining stars. We have to keep education, technology, science, energy, the environment, the economy, entreprenuership, ethics and morals in our central focus.

 

[metis]

You have a remarkable memory!

Pretty good long-term memory-- terrible short-term. Wait, what did you just write?

True. But I am actually more optimistic than this. If we can get back on the road toward innovation, much good can happen. Apple, Tesla, 3D printing are shining stars. We have to keep education, technology, science, energy, the environment, the economy, entreprenuership, ethics and morals in our central focus.

I really wish I could be more optimistic as I believe that our failure to be willing to provide better economic access to good colleges and universities is really going to hurt both American families and the country as a whole. Any suggestion by any politician that we need maybe to run slightly higher taxes to help provide better educational opportunities is a death wish for them. We want everything, but we are unwilling to pay for it.

 

[Revoltingest]

But I am actually more optimistic than this. If we can get back on the road toward innovation, much good can happen. Apple, Tesla, 3D printing are shining stars. We have to keep education, technology, science, energy, the environment, the economy, entreprenuership, ethics and morals in our central focus.

I'm less optimistic about the employment picture. Much of the innovation is happening in automation,
thereby allowing fewer (the smarter & better trained) workers able to do the jobs of more & more
increasingly obsolete workers. And even low skill workers are becoming more expensive to hire.

Interesting times loom over us.

 

[Brickjectivity]

Just putting out a feeler: Does anyone here use economic formulas to predict the direction of things to come? Does anyone here put income and other data into a spreadsheet or try to use statistics to crunch out some predictions for their economy?

 

[Avi1001]

I agree with you again. Affordable education is the key to solving our problems. A four year education in a Tier I University is now $240k. How many can afford that ?

I really wish I could be more optimistic as I believe that our failure to be willing to provide better economic access to good colleges and universities is really going to hurt both American families and the country as a whole. Any suggestion by any politician that we need maybe to run slightly higher taxes to help provide better educational opportunities is a death wish for them. We want everything, but we are unwilling to pay for it.

 

[Avi1001]

Automation requires skilled workers to supervise and oversee the operations. It leads to increased productivity. We should not be afraid of automation. We need to do a better job training and educating people for the modern workforce. It is the only way we will be able to compete globally. And we need to create new products. iPhones and high end electric cars are not enough to move us out of this recession.

I'm less optimistic about the employment picture. Much of the innovation is happening in automation,
thereby allowing fewer (the smarter & better trained) workers able to do the jobs of more & more increasingly obsolete workers. And even low skill workers are becoming more expensive to hire.

Interesting times loom over us.

 

[Avi1001]

Of course not

Who would want to keep track of our rising national debt?

National debt of the United States - Wikipedia, the free encyclopedia

Just putting out a feeler: Does anyone here use economic formulas to predict the direction of things to come? Does anyone here put income and other data into a spreadsheet or try to use statistics to crunch out some predictions for their economy?

 

[metis]

Of course not

Who would want to keep track of our rising national debt?

National debt of the United States - Wikipedia, the free encyclopedia

Fortunately it's coming down-- all the more reason to keep the Republicans out of office.

 

[Avi1001]

Fortunately it's coming down-- all the more reason to keep the Republicans out of office.

You read the Wiki article to say that the national debt is decreasing ? Can I borrow your rose colored glasses ?

 

[metis]

You read the Wiki article to say that the national debt is decreasing ? Can I borrow your rose colored glasses ?

Sure, and here they are, courtesy of Nobel Prize winning economist Paul Krugman as found in the NYT: http://krugman.blogs.nytimes.com/20...about-the-deficit/?_php=true&_type=blogs&_r=0

 

[Avi1001]

Unfortunately, it is only temporary:

Deficit Forecasts Shaved, But Likely Won't Shrink For Much Longer : The Two-Way : NPR

Sure, and here they are, courtesy of Nobel Prize winning economist Paul Krugman as found in the NYT: http://krugman.blogs.nytimes.com/20...about-the-deficit/?_php=true&_type=blogs&_r=0

 

[MysticSang'ha]

I'm less optimistic about the employment picture. Much of the innovation is happening in automation,
thereby allowing fewer (the smarter & better trained) workers able to do the jobs of more & more
increasingly obsolete workers. And even low skill workers are becoming more expensive to hire.

Interesting times loom over us.

That gives me an idea. What if I were to design an automated dance instructor/choreographer? Kids and teens could get a master class for so little money most could afford it. Dance studios would then become "McStudios", I could probably reap millions (or at least hundreds of thousands) and then retreat to the boonies with a pseudo-name to live out the rest of my life.

It's a pipe dream. Not the coolest thing to do for my fellow artists, but it allows me to revel in my own dark fantasy of selfishness.

 

[metis]

Unfortunately, it is only temporary:

Deficit Forecasts Shaved, But Likely Won't Shrink For Much Longer : The Two-Way : NPR

There's no doubt that we are going to have rather serious challenges because of our changing demographics, and I agree with your tone that we may not be up to the challenge. Right now, it seems that all too many Americans are operating in the "denial" range.

In previous generations, we were economically powerful enough to make mistakes but then kick ourselves out of holes we fell into. However, that's rapidly becoming the luxury of the past. Our changing demographics along with the effects of globalization is not going to bode well for us in the future, although the slippage will likely be gradual.

We will have to change, but are we going to wait until too much damage is done? I certainly hope not for our kid's and grandkid's sake.

 

[Avi1001]

I believe that we have not yet solved our economic problems. Look in your house, and in the houses of most of your friends. You will see most products are from Asia. Refrigerators, washers, dryers, dishwashers, TV's, phones (including the IPhone, which is manufactured in China).

Until we start making the products that we want, it will be hard to come out of recession. We are not going to succeed just based on our good looks and witty sense of humor .

There's no doubt that we are going to have rather serious challenges because of our changing demographics, and I agree with your tone that we may not be up to the challenge. Right now, it seems that all too many Americans are operating in the "denial" range.

In previous generations, we were economically powerful enough to make mistakes but then kick ourselves out of holes we fell into. However, that's rapidly becoming the luxury of the past. Our changing demographics along with the effects of globalization is not going to bode well for us in the future, although the slippage will likely be gradual.

We will have to change, but are we going to wait until too much damage is done? I certainly hope not for our kid's and grandkid's sake.

 

[Avi1001]

, indeed robotics are probably our best hope.

That gives me an idea. What if I were to design an automated dance instructor/choreographer? Kids and teens could get a master class for so little money most could afford it. Dance studios would then become "McStudios", I could probably reap millions (or at least hundreds of thousands) and then retreat to the boonies with a pseudo-name to live out the rest of my life.

It's a pipe dream. Not the coolest thing to do for my fellow artists, but it allows me to revel in my own dark fantasy of selfishness.

 

[metis]

I believe that we have not yet solved our economic problems. Look in your house, and in the houses of most of your friends. You will see most products are from Asia. Refrigerators, washers, dryers, dishwashers, TV's, phones (including the IPhone, which is manufactured in China).

Until we start making the products that we want, it will be hard to come out of recession. We are not going to succeed just based on our good looks and witty sense of humor .

We aren't? Shucks!

Anyway, I agree with what you say above. Sort of reminds me of a cartoon called "Pogo" that I saw years ago, whereas Pogo and his friends are playing at war, and then one of them bravely stands up and say "I have seen the enemy, and it's us!".

As long as we go to places like Walmart, buying the cheapest stuff we can, we are not going to remain long as the world's number one economic power. If we refuse to buy American, then our kids and grandkids have a very limited future economically. Unfortunately, we as Americans have a couple of major drawbacks that are badly hurting us economically, with one being an absence of long-term thinking and another being self-centered materialism. Remember what I said about Desmond Morris.

 

[Revoltingest]

, indeed robotics are probably our best hope.

The results will be tumultuous though. Those low skill workers replaced by Benders,
Calculons, Crushinators, Helpers & Hedonismbots won't have jobs. What will they do?

 

[Brickjectivity]

I believe that we have not yet solved our economic problems. Look in your house, and in the houses of most of your friends. You will see most products are from Asia. Refrigerators, washers, dryers, dishwashers, TV's, phones (including the IPhone, which is manufactured in China).

Until we start making the products that we want, it will be hard to come out of recession. We are not going to succeed just based on our good looks and witty sense of humor .

I used to agree with that but am no longer in full agreement. Take this comment with a grain of salt, since it is not from an econ major but I took some economics courses that changed me mind somewhat.

To me it isn't only about where things are manufactured. For one thing If we buy from Asia, then Asia has our money which it can only spend here. Also while I realize USA is in a dramatic shift from manufacturing of appliances to other kinds of work and that shift has been difficult for workers to retrain for, so while I realize that I note that if we close up our economy for the sake of keeping all jobs the same then we will likely stifle our economy and prevent the number of jobs from increasing in the long run. I think what we are experiencing is a huge transition, perhaps abnormally huge since we have connected up with several other economies to create a much larger economy. It is supposed to benefit everyone in the long run though.

 

[metis]

To me it isn't only about where things are manufactured. For one thing If we buy from Asia, then Asia has our money which it can only spend here. Also while I realize USA is in a dramatic shift from manufacturing of appliances to other kinds of work and that shift has been difficult for workers to retrain for, so while I realize that I note that if we close up our economy for the sake of keeping all jobs the same then we will likely stifle our economy and prevent the number of jobs from increasing in the long run. I think what we are experiencing is a huge transition, perhaps abnormally huge since we have connected up with several other economies to create a much larger economy. It is supposed to benefit everyone in the long run though.

If I can chime in on this even though it wasn't addressed to me.

With what you say above, there definitely is some truth involved but there are also some problems as well. One problem is that most service economies tend to be less stable since it's typically easier to cut back on services than on many material items. I may delay getting a haircut, or even have my wife do it for me (with a bowl on my head), but if my refrigerator goes, I gotta get another one.

Secondly, the more diversified an economy is, the better the chance of surviving economic downturns. Therefore, a balance of service and manufacturing is more desirable than mainly having just one or the other.

Thirdly, the more we import, the greater an emphasis on a corporate mindset that can be devastating to especially third-world countries. For example, Honduras exports bananas to us in North America, has relatively good farmland, and yet a significant portion of its population suffers from malnutrition.

Fourthly, carbon emissions are higher with more international trade, and we well know what problems that creates.

Fifth, when we have larger and larger businesses and corporations, the less personal the relationship becomes between employee and employer, thus making it far more tempting for the employee to be mistreated or to have very low wages and benefits, if they have any benefits at all.

An older but excellent book that covers this and much more is "Small Is Beautiful" written by the economist E. F. Schumacher. However, it's gonna be very difficult to put the genie back into the bottle, especially because the big money is plentiful to make sure she doesn't get back in.