#1 money man in the world talking like Zebo

[Zebo]

Economically, We're All Living in Allentown, PA: Gross
Published: Thursday, 2 Dec 2010 | 2:52 PM ET

For a vivid display of the current economic conditions, Pimco's Bill Gross harkens back to a 1981 Billy Joel song to assert that we're all living in "Allentown" now.

William H. Gross
Source: pimco.com

Joel's paean to the struggling Lehigh Valley community laments that what used to be the heart of American steel production in the Allentown/Bethlehem region is now the home of "the Pennsylvania we never found."

Similarly, Gross told CNBC Thursday, the nation is mired in an economic slump that will be hard to fix considering a mindset that is not looking toward the future.

As a result, investors are going to continue to turn their attention to putting their money in other countries. Equity mutual fund flows have been leaving the US for most of the past six months, while emerging market funds have been growing.

Gross said Pimco is directing its clients to emerging markets in Brazil, China, India and elsewhere.

"Allentown, Bethlehem and to an extent the entire world faces a similar problem that is affecting Allentown (which is) lack of aggregate demand. That simply means our credit cards are maxed out, we can't spend," said the co-CEO of Pimco, which runs the largest bond fund in the world.

"We're simply focusing on consumption as opposed to improving education, infrastructure, the future—the 21st century as opposed to the 20th century," he said.

The auto industry serves as one example of what the US faces: While sales have trended higher lately, they are far below historical norms and likely to stay that way.

As Joel sang, "We'll we're living here in Allentown, and they're closing all the factories down." President Obama spoke in the region a year ago as part of his economic "listening tour."

Gross said the situation is similar "in terms of Bethlehem, Allentown that they've closed plants and that the workers that we're used to employing the past three, four and five years probably aren't going to come back to those levels. That's where I suggest we need a 21st century economy. That's something that President Obama and certainly the Congress failed to address in the past several years."

Detroit same thing...soon USA same thing without investment back into people you'll have collective intelligence, infrastructure, and civility of Haiti. Not a place people want to do business! Old Republicans understood this Eisenhower actually raised taxes with a republican house and senate to a whooping 92% on multimillionaires and it included capital gains!! To pay off crushing war debt and rebuild Europe and Japan and build our nation sacrifice was required. And then with Federal Highway Act of 1954 and Interstate Highway Act of 1956 built the largest road infrastructure on the planet. Forget about massive union workforce that got to send their kids to college who built it, it allowed trillions to be made in agriculture, tourism, auto industry, etc. Not anymore we bail them out and they split! Thank you very much. You cost too much. Overpaid underworked and over benefited! We got ours c-ya.

We need to get real or we die.

Gonna be hard since even congressman from Alabama needs to go to wall street to get approved and 45% of campaign contributions come from banks alone but here is what we should be doing the fix things.

1. Regulate trade on a country by country basis until trade is balanced with each country. Millions of jobs.
2. Lets build 2 Trillion dollar super project like IKE did - something to rid us of foriegn oil once and for all and put the fundis back in tents where they belong. We built it for them and can take it all away! 100 nuke plants, standard quick swap batteries, Charge stations and ecars - all built by Americans! More Millions of jobs. Those Mexican won't look so bad after all. This will spur innovation too in to untold horizons and fortunes made and near zero pollution in our cities.
3. No more nothing for free unless you're old. Destroys young people. Old people paid their dues let retire in sunset, young? Go build and iphone or quick charge station and pay your dues.
4. Old banking rules put into place. No more billionaire bailouts either. Indict the racketeers like law demands. Without rule of law we are nothing.
5. Tax those who have all the marbles. 15% tax for 2 billion $ a year hedge fund managers to accelerate your job overseas? Gimme a break! I have $14 an hour employees (for now) who pay more than 15% just in SS and medi! Look at your check I guarantee you it's over 15%.

 

[zephyrprime]

The most important things to do is actually to let economic losers (the banks, those who invested in MBS's and etc) lose. Then the second most important thing to do will be to create new liquidity (money) which can be done because letting losers lose is hugely deflationary and then give it directly to the people rather than the banks likes we currently do.

 

[ElFenix]

read this the other day

 

[alkemyst]

IMHO any monies we spent rebuilding other countries should now be taken on by them or forgiven. It's utter bullshit when a nation we saved ends up screwing us.

 

[drebo]

Sending jobs overseas is not in-and-of-itself a bad thing. Most jobs that get sent overseas are for products and things that were never intended and are never destined for the US. Utilizing local labor for manufacturing like that makes a whole lot of sense.

Additionally, using certain countries' specializations is very useful.

The problems occur (and have been occuring) when money leaves the US permanently. A job to someone in India or China does not necessarily cause that to happen. The problems also occur when we allow bad business to continue to happen.

What will kill our economy faster than welfare, consumer overspending spending, foreign aid, government waste, corruption, corporate welfare, and social security all combined is isolationism and forced domestic competition through protective tarriffs. If you drive up the price of foreign-produced goods by US corporations through taxes, one thing and one thing only will result: hyperinflation.

Why? Because the goods aren't worth what it would cost to produce them in the US.

What the US needs to do is reduce some of the regulations that bar manufacturing from being competitive. They need to offer incentives for companies to expand here, not penalties for going elsewhere. The US needs to realize that a minimum wage is useless and causes nothing but inflation.

The US also needs to raise interest rates to spur foreign investment in private US companies. China buying government bonds is all well and good to support our oversized, top-heavy government, but it doesn't do shit for our economy.

 

[yllus]

I read an article in a paper up here the other day that said that the returns on re-training via diploma programs or going back to university weren't very good - instead, we should be making money available to relocate people to where the work actually is. I think there's probably merit to the idea.

 

[Generator]

This isn't a serious country thats willing to make the tough decisions. While we "vote present" as the United States falls into bankruptcy, we should start figuring out what exactly bankruptcy for America would entail.

 

[CycloWizard]

Funding research is not the same as building infrastructure by any stretch of the imagination. Building private infrastructure using public money is the definition of highway robbery. What you're proposing will inevitably make a few guys really, really wealthy (most likely those who already are wealthy and have their foot in the door working on the projects you pick) at my expense, in addition to causing increasingly massive deficits.

 

[CanOWorms]

IMHO any monies we spent rebuilding other countries should now be taken on by them or forgiven. It's utter bullshit when a nation we saved ends up screwing us.

Are you saying that we need to be paid back for the Marshall Plan? Which countries are you referring to?

 

[Infohawk]

Are you saying that we need to be paid back for the Marshall Plan? Which countries are you referring to?

Maybe he's referring to this aid?

http://www.thehindu.com/news/international/article510910.ece

LOL

 

[CanOWorms]

Maybe he's referring to this aid?

http://www.thehindu.com/news/international/article510910.ece

LOL

That's about the UK. Unless you're saying that the US should get the UK to revoke aid to another country and reroute it to the US?