Source? I'm not familiar with any economists who would argue it's that simple.
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Inequality: The Reason for the Weak Recovery
- Thread starter Sunstone
- Start date
Source? I'm not familiar with any economists who would argue it's that simple.
Avi1001
reform Jew humanist liberal feminist entrepreneur
I actually have to back up my opinion with facts
.Ok, lets start by taking a tour of your house, Sunny:
Who made your washer / dryer ?
TV ?
Dishwasher ?
Refrigerator ?
Microwave ?
Range / Oven ?
Minor electrics (hair dryer, razor, etc.) ?
Where was your PC manufactured ?
How about your car ?
You just provided your own source
.And it's not that simple, that's just the tip of the iceberg.
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Monk Of Reason
༼ つ ◕_◕ ༽つ
I actually have to back up my opinion with facts
Ok, lets start by taking a tour of your house, Sunny:
Who made your washer / dryer ?
TV ?
Dishwasher ?
Refrigerator ?
Microwave ?
Range / Oven ?
Minor electrics (hair dryer, razor, etc.) ?
Where was your PC manufactured ?
How about your car ?
You just provided your own source
And it's not that simple, that's just the tip of the iceberg.
The basis of your opinion seems to be rooted from the same old-style thinking that led to mercantilism. Mercantilism has been debunked. We do not need to export more than we import to provide wealth for our nation. Pakistan manufactures like crazy and their economy is terrible. England doesn't manufacture anything (cept maybe tea) and its doing rather well compared to most countries. Canada doesn't manufacture but they have an even healthier economy than America with a higher average annual income.
Avi1001
reform Jew humanist liberal feminist entrepreneur
Very good. I am not an economist, so I hope I am missing some key economic factors here. Please let me know what they are ?
My thinking might be "old-style". I learned that to earn $1, I need to provide $1 in product or service to a customer. Did that economic rule change ? If all our products are made overseas and because our R&D has slipped, our services are not needed, how will our economy recover ?
My view is that we have lost our competitive advantage since WWII, except for a few, specialized, areas. We need to regain it for our economy to improve. Before we can solve the problems of our economy, we need to figure out what they are. We haven't done that as a nation yet. The best example is the auto industry. Most Americans would much prefer to own Japanese or European cars. They are higher quality and have better style. Except the British cars...
.....So, on what basis is England doing well ?
I count them as 13 in per capita GDP:
http://en.wikipedia.org/wiki/Economy_of_Europe
The Brits economy has been in decline since the Middle Ages !!
Do you believe we will be a wealthy nation by exporting our brilliant ideas overseas ? Good luck with that. The best idea we've had since the Great Recession has been the iPhone, now manufactured in Asia. And Apple has had its ups and downs. One great product, that's it ! And without Steve Jobs, the iPhone 5 is an embaressment.
So, by all means, please fill me in on our "new" economic model ?
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Monk Of Reason
༼ つ ◕_◕ ༽つ
I'll split it up to answer each portion individually. There are several economic factors that you seem to be missing but they are too numerous to count. Its not that you are drastically misinformed but just that there are so many different factors that it would be asinine to try and name them all and expect to make progress.
But some major ones I suppose would be that we use capitalism as our economic system rather than mercantilism which is based more in the individual and their ability to obtain and develop "capital". In the old style of mercantilism it was believed that we must produce more and sell more to our neighbors than we imported in order to amass wealth. This is a flawed way of thinking as trade can be far more beneficial to us even in an even or uneven in the negative.
A good example of this is oil. We import a large quantity and we do not export very much of it. However we benefit greatly from importing oil (at least on the surface but I won't get into foreign oil dependency or clean energy debates right now since we should focus mainly on economics). Another good example is gaining capital in our businesses by having cheaper labor in another country. It means that businessmen in our own country still obtain massive amounts of wealth even though they did not pay our workers here. Overall our country gained wealth in this transaction rather than losses.
The nature of personal investments and entrepreneurship have little to do on the global scale initially but are fundamentally important to our overall wealth as a nation. Does this make sense?
We still have jobs here in the US and I have never stated that manufacturing and buying American was negative for the economy. It is positive in that it helps generate large amounts of jobs but not overall wealth for the nation in any innate way. It is only through the secondary effects of creating jobs that then in turn fuel the economy rather than generating profit from overseas to be shipped home.
But no I don't have to move 1 of my own dollars to make 1 dollar. If that were the situation then profit wouldn't exist. The name of the game is to find a way for me to spend 10 dollars and make >10 dollars in profit. For example if I started a lawn mowing business it matters not where I bought the equipment so long as I have customers that pay me. My wealth grows as a result. If my wealth grows as a result and no one looses wealth in the process then I have created a net gain in wealth for the nation without having produce or manufactured anything to be sent overseas. Its not a lack of raw materials as was the case prior to the industrial revolution.
.....So, on what basis is England doing well ?
I count them as 13 in per capita GDP:
Economy of Europe - Wikipedia, the free encyclopedia
The Brits economy has been in decline since the Middle Ages !![/quote]
England has the 6th largest national economy in the world. 3rd largest in Europe when measured by GDP. They are the 10th largest exporter but the 6th largest importer.
They have seen growth this last year and suffered far less than many (if not most) of their Eurozone counterparts during the 2008 global recession.
That is the basis in which I derived that they are doing "well".
I would like to think that the internet, microsoft personal computers and the extensive list of NASA patents would say otherwise.
Again I agree that it would help our economy to have more manufacturing jobs here. Though it is not as simple as "sell 10 million dollars to China and grow the economy".
The notion that it's as simple as adding manufacturing jobs strikes me as simplistic for several reasons, but the one reason that is most relevant to this thread is that consumer demand accounts for 70% of the US economy. Without that demand, the economy will always be sluggish or depressed. But what boosts consumer spending? Consumers with money to spend, obviously. And that is not going to be the case no matter how many manufacturing jobs we have if those jobs don't pay well enough for consumers to have much money to spend. So, while I agree that manufacturing jobs might help the economy, I don't think that manufacturing jobs alone are all that's needed. Among other things, you need some way of translating those jobs into decent wages for the workers. But if the top 1% are reaping most of the wealth created by manufacturing, where is the money for the workers going to come from?
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Dirty Penguin
Master Of Ceremony
esmith
Veteran Member
better tell your friends at the National Education Association and the American Federation of Teachers then.
That's the easy and repeatable narrative, but it's not quite that simple.
For example, if you break down an iPhone into where the money goes by country like a pie chart, the money doesn't go to low-skill manufacturing. It's assembled in China where many of the contractors are, but only a tiny fraction of the money (3.6%) ends up in China, because that's such a low-value part of the process. The country that gets the most money from an iPhone is actually Japan (34%), because of the engineering and design (which varies by part and may or may not include manufacturing- that can often be outsourced) of electronic components. The country that gets the second most is actually Germany (17%), for a similar reason of high precision parts manufactured by a very well-educated workforce. China might get a few extra percentage points because some of Germany and Japan's components gets made elsewhere, but that's a low-value part of their product too, so China's share is in the low or mid single-digits.
Manufacturing of most low-cost goods is a very small part of the value pie, and is very much automated now anyway. It's either very cheap labor, or automation, depending on what makes sense for the product. Software, engineering, medicine, and the smaller subset of high-value precision manufacturing, add a lot of value and get a lot of the revenue pie.
dust1n
Zindīq
The solution was finally unveiled at SXSW a few days ago.
Google Eric Schmidt: He has some ideas about how to solve income inequality.
Google Eric Schmidt: He has some ideas about how to solve income inequality.
Dirty Penguin
Master Of Ceremony
What are you going on about...now....??
esmith
Veteran Member
originally posted by revoltingest
warning:
- this is not a solution. It is a single step to improve things.
- yes, it means increasing spending in some areas. In the long run, it looks cost effective.
In the short run, we could take it out of our foreign adventurism & foreign aid budget.
We need better education & vocational training for kids & people.
The part of revoltingest post
and saying that those at the National Education Association and the American Federation of Teachers are one of the problems with education in our K-12 schools
Dirty Penguin
Master Of Ceremony
I don't think they're a problem but I do agree we need education for kids k-12 as well as adults. And I support the bullet points he laid out in the post....
" increasing spending in some areas. In the long run, it looks cost effective.
In the short run, we could take it out of our foreign adventurism & foreign aid budget."
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I don't see anything complicated about this. Wealthy aristocrats running society for their own benefit is the default human situation. The US was different for a while, but is headed back.
The recovery is excellent for people who can afford to buy the government. Have you seen the DOW the last few years?
Obama's big contribution to "hope and change" was to require us to pay enough to guarantee corporate profits remain huge even if the government has to take over your life to justify tax payer subsidies of these corporate profits.
Nothing important will change. The rich will keep getting richer, and the government will keep claiming that the rich are "job creators" despite clear evidence that they create jobs mainly overseas.
Tom
The recovery is excellent for people who can afford to buy the government. Have you seen the DOW the last few years?
Obama's big contribution to "hope and change" was to require us to pay enough to guarantee corporate profits remain huge even if the government has to take over your life to justify tax payer subsidies of these corporate profits.
Nothing important will change. The rich will keep getting richer, and the government will keep claiming that the rich are "job creators" despite clear evidence that they create jobs mainly overseas.
Tom
Dirty Penguin
Master Of Ceremony
I happened to to be scanning through NetFlix and came across Robert Reich's documentary Inequality For All. It was well done and touches on a lot of the points we (all) have been making. IMO I think it's worth watching if you haven't seen it.
https://www.youtube.com/watch?v=YCbAyk8aRxI
:yes:
https://www.youtube.com/watch?v=YCbAyk8aRxI
:yes:
esmith
Veteran Member
And I am in the process of re-reading Atlas Shrugged for the 3rd time. Each time I read it, it becomes clearer that some of the concept she espoused have merit in today's world. In my opinion it is worth reading if one hasn't done so. And even if you have read it, try again and focus on what's has been going on in the US in the past 5 years.