A sign of just how shakey this "recovery" is ...

[Zebo]

No, we have you telling us that gas is $5, milk is $7, and that you get carded when buying vinegar. Frankly, the Republicans look like MENSA members compared to your stupid ass.

What the hell is that Avatar bro? Looks like Hendrix with Lady Gaga as his designer.

 

[Jhhnn]

Our chief export is liquidity, investment capital. That's cashflow and capital that would otherwise remain in this country. We borrow some of it back, do the same thing over again. America's investor class is basically dis-investing in american assets, buying foreign assets, profiting handsomely from the increased profits, as are their foreign partners. It's enabled by the dollar's reserve currency status. Part and parcel of the Triffin dilemma.

The cumulative effect on employment and income distribution in this country is profound. The whole thing has been papered over with debt based on false high asset valuations- for a very long time.

Debt at every level is what created the "recovery" of the Bush years, and what's fueling the same thing today. Problem is, unfortunately, that each cycle requires more debt to have the same stimulative effect, to the point where the economy doesn't really grow at all from it- debt serves more as an easing down the slope rather than a sharp decline... which is what I suspect we're finally beginning to experience.

That's evident in the fact that a lot of skilled, educated and experienced americans remain un- and under- employed and will likely remain in that state indefinitely. Employment status has become largely a matter of luck because individual workers' fortunes are decided at a level far above their individual efforts, like it or not.

 

[QuantumPion]

No one's denying that protectionism works for us,

I am.

When you enact tarriffs on for example sugar to protect the jobs of sugar cane producers in the US, sure you save their jobs. But at the cost of ten times as many jobs in the food and candy industries that move their production out of country due to higher costs.

Protectionism also stifles technological development. What if the government in the early 1900's put a tariff on automobiles in order to save the jobs of horse & buggy makers? Or if in the 1970's the government restricted the use of computers by telcos in order to save the jobs of telephone switchboard operators?

Protectionism helps those who have political clout to benefit themselves, at the much greater expense to everyone else and at a net loss to society.

 

[IHateMyJob2004]

http://money.cnn.com/2010/05/20/news/economy/consumer_retail_walmart.fortune/?hpt=P1&iref=NS1



"And then there is Wal-Mart, whose happy yellow face switched to a grimace when it released first quarter sales on Tuesday. Although international growth helped push revenues up 6%, sales at U.S. stores fell 1.4% from the same period last year. And the company had no one to blame but its shoppers. "More than ever, our customers are living paycheck to paycheck," said Tom Schoewe, the chief financial officer.

So who are you supposed to believe? In this case, Bentonville. When Wal-Mart (WMT, Fortune 500), an economic bellwether, notes that customers can't afford the gas to get to the stores and that they're increasingly using food stamps when they get there, things are bad."

Actually, the recent Wal Mart reports implies that the economy is actually recovering. More discretionary spending, etc.

 

[Blackjack200]

Actually, the recent Wal Mart reports implies that the economy is actually recovering. More discretionary spending, etc.

Yeah, I thought Wal-Mart was sort of a contrarian indicator, like as less people could afford quality goods, more would shop at Wal-Mart.

 

[daishi5]

Name something that can be done in the United States and exported for sale to China or India that the Chinese and Indians cannot do less expensively for themselves.

Wines from Napa Valley.
Caterpillar mining equipment.

Sure--we can produce goods and services the Chinese and Indians will buy--just as soon as we are willing to work for a competitive 50 cents-an-hour without labor and environmental regulations.

Or, they could be buying from us already, except their government is forcefully manipulating their currency to make our goods twice as expensive for them to purchase.

They have universities in India and China, too. Also, many people from India and China have trained in the U.S. See:

http://www.computerworld.com/s/arti...fshore_Dominance?from=story_kc&taxonomyId=010

Why are they getting degrees if those degrees don't allow them to make more money? If you miss what I am getting at, Chinese and Indian degrees prove that the pure number of laborers in those countries are not direct competitors to our labor. Their educated laborers might be a more direct competition, but those people are being paid more than the tiny 50 cents an hour.

Note that that article was published in 2004.

There isn't much here that is not present in those other nations or that could not be developed and implemented with the will to do so. Manufacturing know-how and capital can be exported overseas. America's "capital invested in American workers, their education, reliable power infrastructure, and other forms of capital" doesn't seem to have kept our manufacturing facilities here nor has it kept many of the knowledge-based jobs that have been shipped off to India.

They could implement everything we have over here, but they have to pay for it, and do the work, which is why it is cheaper for us to make it. We currently do export a lot of capital intensive items. We also import a lot of those educated foreigners, so they can work in our country that already has a strong capital infrastructure.

I think the problem is, again, currency manipulation. Chinese laborers are cheap because the exchange rate has not floated, but even the exchange rate has not allowed the most capital intensive manufacturing to leave the country, such as large scale mining equipment.

Some people also have adopted a racist notion that only Americans and Westerners are capable of "innovation".

Anyone who says that is an idiot,

The only thing that's really immobile is the land itself--that means agriculture, lumber, freshwater, and the mining of raw materials.

That may be so for now, but it's hard to compete against fifty-cents an hour without labor and environmental regulations. Does American labor's advantages give it sufficient advantage to compete with that? Apparently manufacturers don't seem to think so nor do companies that have sent knowledge-based jobs to India.

Yes, we can continue to work with them. I don't see any reason that a person from China making an Ipod means that an American can't make the headphones that I use with it. If both laborers work, we get a lot more stuff, and everyone can be more wealthy. There is no reason we can't all work.

It's certainly an issue, but the fifty-cents-an-hour without labor or environmental regulations would still be a large problem.

You keep complaining about the low price of foreign labor, but you are missing the point of my focus on the currency. I think the chinese currency is something around 1/2 of its predicted value. If it floated to its true value, that cheap labor would explode in price. Ending that manipulation indirectly attacks your chief complaint, the cost of their labor.

Regulations will come about on their own, as their workers make more money, they will demand cleaner air. Right now, they are too concerned with feeding their children.

According to Paul Craig Roberts, David Ricardo, the guy who originated the idea of comparative advantage, said it himself. If there is comparative advantage, it sure doesn't seem to be asserting itself with regards to our trade deficit.

I am familiar with Ricardo. I will have to go back and do some reading, because I don't remember that part of his theory.

You have to remember, comparative advantage does not mean that a country will become poor if it cannot produce more cheaply than other countries. What it does mean is that we can become richer by trade if we can produce something for trade cheaper than we can produce what we purchase through trade. The worst possible case, if comparative advantage were eliminated through capital mobility, is we would have to make everything for ourselves, and everyone in America would buy American made goods.

 

[Jhhnn]

The worst possible case, if comparative advantage were eliminated through capital mobility, is we would have to make everything for ourselves, and everyone in America would buy American made goods.

How do we create the means to do that without capital? And what sort of transition can we expect?

Maybe you need to re-think that...

 

[HendrixFan]

What the hell is that Avatar bro? Looks like Hendrix with Lady Gaga as his designer.

Looks like Bootsy Collins to me.

 

[HendrixFan]

But the problem is that there are only so many people who need to purchase corn and wheat and no value to having an excess of corn and wheat. Joe's gigantic farm has a population of 2.6 billion people who are willing to provide all of that corn and wheat for a price far below what Ted can provide.

I'll try and snip all these quotes and just respond to your post as a whole. Its getting messy...

The fact that we as a country deficit spend like crazy and borrow from other countries while also running a trade deficit has little to do with globalization. It seems to me that many of the ills we have are being pointed at free trade instead of the real culprits. In a micro or macro sense, if you aren't producing anything and just mooching off your neighbors you will have problems. The US needs to be more productive and stop being lazy, and if it is globalization that gets us off our ass and gets it done that is great.

I put this cartoon up in my office at work for all my underlings, and I think it applies to this discussion:

We have the raw materials and the labor, let's do some work! Everyone wants to "work smarter, not harder" which is the fancy way of saying "let someone else do the work while I sit in my corner office". At the end of the day someone has to do the work, and from what I've seen the majority of the "smarter" workers aren't really necessary. I keep mentioning it in threads, but I really feel that 40% of GDP being government spending has alot to do with it. Most people I know that work in government jobs (local, state or federal) have it much easier than in private industry. Most of them sought government work for that specific reason! While there are certainly those who do the work in government jobs, that cartoon still applies. Put them to work creating real wealth, not engaged in bureaucracy.

If we can't provide anything of value in a marketplace, there is something really wrong with us. Works on a micro or macro scale.

As far as wealth "drain" by adding in the global labor pool, there is this to chew on:

In 1950, the developing world has 72% of the globe's population and 28.8% of the income. By 2000 the developing world's share of population had risen to 81.3% while it's share of income had risen at a faster rate, to 42.4%. The industrial world's share of global income declined in the same period from 62.5% in 1950 to 52.4% in 2000.

Combine this with the numbers I produced earlier in the thread showing huge standard of living increases in the US after inflation over a similar stretch and you start to see how it works. Adding the resources (raw materials and labor) of different countries to our market to form a global marketplace and you get improved efficiency and everyone benefits. The developing world was/is so far behind the US (still over a billion people worldwide living on less than $1 a day) that they can improve at a rapid rate while we still improve at a great steady rate, and they are still nowhere in our vicinity in standards of living. If I go from $50k a year to $55k, that's good for me. If I go from $50k a year to $54,500 and at the same time 5 people worldwide see a huge jump from $400 a year to $500 a year, is that really so bad? Stop and consider that the global marketplace creates more wealth overall. This means that I may not have even been able to make that $50k to $55k jump in a closed economy.

It isn't a matter of the US having less wealth (decline in standard of living), as the number simply don't jive with that. It is simply that the US will grow at a less rapid rate than the developing world. Again, in all likelihood the US will grow better and faster in the global marketplace than in a closed one, so it isn't an either/or proposition as far as where the wealth goes.

Glad you agree on the population thing. Instead of offering the EIC to encourage people to spit out kids (I know it isn't a cost effective strategy but plenty of poor people think it is), the US should offer incentives for those who are "more careful" about having kids. It would be nicer than the brute force method China has, but achieve the same positive result.

We should work to even out our trade deficit, but we do have things to offer in a global market. We pay farmers not to produce food when people are starving in other countries. We can't work out anything with them? The trade deficit was never over 10% of GDP up until a decade ago when it soared to 20% of GDP. Why the sudden change? If we are "losing" out to the other countries, how are our businesses so incredibly profitable?

When I talk about global efficiency, it wouldn't cause technological advance. It just works the same way in that it eliminates some jobs short term but creates new jobs and (more importantly) allows more to be produced. Having more resources, more labor, and the means to connect them all would make anything more efficient. Having farmer Ted make one crop and farmer Joe make another has always shown to allow for more overall. Why wouldn't it be more efficient to have cheaper and less skilled labor do cheaper and less skilled labor? Now if the money "saved" by companies was put into more research and development and other long term goals it would certainly be a great benefit to us all. Pushing short term profits and sacrificing long term stability of companies while expanding into the cheaper labor pool isn't a good idea. Hopefully this trend will stop soon, but I don't see anyone as having the balls to stand up to these companies until they all collapse under their own weight. Lets just hope they don't take us all with them (bailouts).

Technological advances are not the only way to be more efficient. Anything that allows for you to increase productivity at a greater rate than increasing costs is efficiency. At my job over the last four years since taking over my position I have seen our profit increase 95% over previous year, followed by 84% over previous year and so far up 66% over previous year this year. Revenue certainly hasn't grown anywhere near that rate (not even close), so the gains were made on the back end. There were no technological advances that pushed our increased profitability, just cleaning things (and personnel) up to make things run better. One of the things I did to make more profit was get rid of the dead weight that was hanging around sucking up large pay but not doing the work. I brought in younger, more motivated staff who were willing to do more work for less. I gave them chances most others in my position around the company wouldn't because I felt I could develop them to do as good of a job as those more experienced (as less driven). They now make about what those at the start did, but they do alot more work for it. If you can find someone to do the same job for less, alot less in some cases, then you have increased efficiency. Productivity gains are indeed increases in efficiency.

Corporations are running huge profits yet the US citizens are struggling for employment, money for health care and mortgage payments. The problem isn't globalization "stealing" jobs, there is American money on the table. It just isn't being shared (not in the Obama sense) with everyone. Again, the sheer size and power that the corporations wield makes it impossible for workers to be fairly compensated. Wages aren't properly set by supply and demand for labor in the US because the individual has no ability to be on an equal level as a mega corporation. Small companies can't compete in the same space as a mega corporation either. Without equal footing, standard economic models for supply and demand are meaningless.

I think the crux of the argument I'm making is that never in history has it shown to be a benefit to locking yourself up and ignoring the outside world. To think that we are the sole holders of ideas and innovations and have nothing to take/learn/borrow from the rest of the world is silly. Protectionism advocates have more in common with dictatorships in the economic sense. Protectionism seeks to stop the world from moving forward, or at least ignore the world as it goes on without us. It always fails as you can't keep pace in confined spaces.

There is an odd trend in humanity that people try to work their way into exclusive places then pull the ladder up to keep others out when they get there. Someone works hard to escape poverty and ends up buying a nice house in a gated community. The gates are there to keep people out. People immigrate to the land of opportunity then flip the sign at the door and say "stay out". There is a want to refuse people access to the opportunity to be successful, much less be successful. America didn't become prosperous by closing doors and limiting opportunity.

 

[BoberFett]

What the hell is that Avatar bro? Looks like Hendrix with Lady Gaga as his designer.

Come on man, Bootsy Collins!

 

[Zebo]

<embarrassed> Never heard of em...runs off to lala

 

[daishi5]

How do we create the means to do that without capital? And what sort of transition can we expect?

Maybe you need to re-think that...

I'm sorry, but I just explained that a lot of capital can't leave the country. So, that capital that can't leave, that would be the means.


What sort of transition would you expect in such a worst case scenario: First, remember that the worst case scenario, is that comparative advantage breaks down, and China can make everything we can make cheaper than we can make it, so that China has no reason to trade with us. China won't decide to stop trading with us tomorrow. It would happen slowly over time, as items became unprofitable for them to export to us, the price of that item would rise in America. Local manufacturers would start to make the product that we could no longer import (assuming regulations allow them to), because they can make more profit selling it.

 

[WhipperSnapper]

What the hell is that Avatar bro? Looks like Hendrix with Lady Gaga as his designer.

I was wondering the same thing.

Thank you for the kind words, Zebo.

 

[WhipperSnapper]

Protectionism also stifles technological development. What if the government in the early 1900's put a tariff on automobiles in order to save the jobs of horse & buggy makers? Or if in the 1970's the government restricted the use of computers by telcos in order to save the jobs of telephone switchboard operators?

That is the one thing it is impossible to "protect" against--innovation elsewhere. Obviously we would have to allow foreign innovations to be made use of in the United States. Whether or not it would be in our nation's interest to protect foreign intellectual property as opposed to copying it (ala China) is another story.

The funny thing is opponents of protectionism say that innovation is what will save the U.S.--we need to become innovators. Then another free trade advocate will come along and admit that innovation can be done in other countries, implying that we don't have a real advantage when it comes to innovation.

Protectionism helps those who have political clout to benefit themselves, at the much greater expense to everyone else and at a net loss to society.

If you are talking about one or two industries, then yes. But when you are talking about 50% of the industries in the nation's economy it's a different matter. In that case protectionism will benefit the vast majority of the people.

Yes--it costs more money to purchase goods and services on the front-end--but the huge invisible back-end costs of unemployment are reduced.

Trade protectionism is bad when other nations are purchasing an equal amount of value as what they are selling you. Trade protectionism between the United States and a duplicate copy of the United States would be bad. However, when you are running a multi-hundred billion dollar per year trade deficit with nations like India and China and, as a result, have tens of millions of people in your own country who are unemployed or underemployed, then it's time to question the free market dogma.

The reason why India and China are able to provide us with goods and services for less money is NOT because of technological advance or increased efficiency. It's simply because those nations are full of poor people and lack labor and environmental regulations. By trading with them we are not availing ourselves to technological advance and increased efficiency but rather a form of labor, environmental, and regulatory arbitrage.

 

[WhipperSnapper]

Wines from Napa Valley.
Caterpillar mining equipment.
Or, they could be buying from us already, except their government is forcefully manipulating their currency to make our goods twice as expensive for them to purchase.

Perhaps they are purchasing a couple items from us while they figure out how to do it themselves. Regardless, we still have huge trade deficits with them. The trade is benefiting them more than us long-term.

Why are they getting degrees if those degrees don't allow them to make more money? If you miss what I am getting at, Chinese and Indian degrees prove that the pure number of laborers in those countries are not direct competitors to our labor. Their educated laborers might be a more direct competition, but those people are being paid more than the tiny 50 cents an hour.

The factory workers are probably at 50 cents an hour. Presumably the engineers are receiving more than that, but still far less than what American engineers receive. My point is that Americans are not the only people who can perform engineering tasks and who can learn to be innovative.

They could implement everything we have over here, but they have to pay for it, and do the work, which is why it is cheaper for us to make it. We currently do export a lot of capital intensive items. We also import a lot of those educated foreigners, so they can work in our country that already has a strong capital infrastructure.

This is a huge problem--the H-1B and L-1 visas. Our nation's policy should be to force businesses to hire Americans for those jobs. If we have a shortage then we should train more Americans to work in those fields. I don't buy the shortage propaganda. There have been news reports about how Americans have been made to train their replacements. The H-1B and L-1 visas are mostly about putting downward pressure on wages for Americans by hiring cheap foreign labor.

(Got tens of millions of unemployed and underemployed Americans--solution--import people from other countries to work jobs in America. It's ludicrous.)

I think the problem is, again, currency manipulation. Chinese laborers are cheap because the exchange rate has not floated, but even the exchange rate has not allowed the most capital intensive manufacturing to leave the country, such as large scale mining equipment.

Assuming that what you say is true, I would qualify it with "for now".

Some people also have adopted a racist notion that only Americans and Westerners are capable of "innovation".

Anyone who says that is an idiot.

I agree. However, there are many free market advocates who imply just that--that innovation is what is going to save the U.S. economy and that we need to become a nation of innovators. "We don't need those filthy manual labor factory jobs--that's just for those people in other countries. We are Americans and we will do the world's innovation work and white collar work." That's what they are saying.

Yes, we can continue to work with them. I don't see any reason that a person from China making an Ipod means that an American can't make the headphones that I use with it. If both laborers work, we get a lot more stuff, and everyone can be more wealthy. There is no reason we can't all work.

I think you may have missed the point. The problem is that these nations have such a huge supply of labor relative to wealth and capital that they can make both the Ipods and the headphones for far less than what it would cost to produce in the United States.

Americans can make Ipods and headphones--as soon as they are willing to work for the pay (and lack of labor and environmental regulations) that people receive in India and China. That's the point--that merging our labor market with third world labor markets will necessarily bring down the standard of living as a result of the mechanism of arbitrage as dictated by supply-and-demand.

(I don't think I've seen American-made headphones for decades; that's a bad example.)

You keep complaining about the low price of foreign labor, but you are missing the point of my focus on the currency. I think the chinese currency is something around 1/2 of its predicted value. If it floated to its true value, that cheap labor would explode in price. Ending that manipulation indirectly attacks your chief complaint, the cost of their labor.

Even if the Chinese currency manipulation were ended, Chinese labor would still be much cheaper than American labor and China still wouldn't have costly labor and environmental regulations. I fully agree that the currency manipulation is a problem. I disagree that it is the driving force behind our trade deficit.

Regulations will come about on their own, as their workers make more money, they will demand cleaner air. Right now, they are too concerned with feeding their children.

Right--they are poor. How long will it take until the Chinese people have attained the standard of living that Americans had 12 years ago? 100 years? How will that benefit Americans--the vast bulk of whom will spend their lives living in the next 50 years?

I am familiar with Ricardo. I will have to go back and do some reading, because I don't remember that part of his theory.

That's what Paul Craig Roberts claims--that Ricardo qualified what he said but that that qualification is overlooked and has been forgotten.

The true test is reality itself, not what Ricardo wrote, but it does make someone who assumes that comparative advantage is an absolute take a step back and have to wonder about it.

You have to remember, comparative advantage does not mean that a country will become poor if it cannot produce more cheaply than other countries. What it does mean is that we can become richer by trade if we can produce something for trade cheaper than we can produce what we purchase through trade. The worst possible case, if comparative advantage were eliminated through capital mobility, is we would have to make everything for ourselves, and everyone in America would buy American made goods.

The Americans would only have to buy American-made goods if the government forced them to do so. Without comparative advantage there is nothing to trade other than capital assets such as business ownership and real estate.

What would happen is that American standards of living--the compensation and purchasing power Americans receive from their labor--would have to equalize with that of India, China, and Mexico. Americans can have their jobs back--all of them--just as soon as they are willing to be cost-competitive with labor in India, China, and Mexico and to live with the (lack of) labor and environmental regulations in those countries.

 

[WhipperSnapper]

The fact that we as a country deficit spend like crazy and borrow from other countries while also running a trade deficit has little to do with globalization. It seems to me that many of the ills we have are being pointed at free trade instead of the real culprits. In a micro or macro sense, if you aren't producing anything and just mooching off your neighbors you will have problems. The US needs to be more productive and stop being lazy, and if it is globalization that gets us off our ass and gets it done that is great.

Is it some sort of an illusion that almost all manufactured items seem to be made outside of the United States? How do you explain our nation's huge trade deficits? Are you suggesting that the reason we have the trade deficits is because Americans are refusing to work factory jobs and that thus we have no choice but to purchase goods from overseas?

Are these reports of knowledge-based jobs such as computer programming and IT functions being sent to India also an illusion?

Are the H-1B and L-1 visas non-existent?

Is our nation also not engaging in global labor arbitrage through mass immigration--importing impoverished people to displace Americans from low-wage and lower-middle class wage (such as construction) jobs?

I put this cartoon up in my office at work for all my underlings, and I think it applies to this discussion:

I like the cartoon, but I'm unsure exactly how it relates to the issue at hand.

We have the raw materials and the labor, let's do some work! Everyone wants to "work smarter, not harder" which is the fancy way of saying "let someone else do the work while I sit in my corner office". At the end of the day someone has to do the work, and from what I've seen the majority of the "smarter" workers aren't really necessary.

In that case, shouldn't American free market forces sort that out by resulting in higher wages for factory jobs? If no one wants to work factory jobs in a free market economy then the wages have to increase along with the prices of manufactured items.

However, I don't think that's the case. I highly doubt that the problem is that college-educated Americans are refusing to work in factories for traditional lower-middle and middle class standards of living. I say that because our nation has tens of millions of unemployed and underemployed people who would love to work factory jobs for lower-middle class and middle class standards of living--including a great many people who do not have college educations.

I don't buy this claim you are making. By being a member of the upper class (your mention of "underlings"), are you sure that you aren't disconnected from the economic realities faced by the lower classes? It almost seems as though you are implying that the unemployment numbers are bogus and greatly overestimate unemployment. (I think they are bogus too, but I think they underestimate unemployment.)

I keep mentioning it in threads, but I really feel that 40&#37; of GDP being government spending has alot to do with it. Most people I know that work in government jobs (local, state or federal) have it much easier than in private industry.

I know a guy who was laid off by a large law firm and took a government job. He's a good friend of mine and it seems to me that he is now working just as hard or harder in terms of how many hours he puts in than he did at the big law firm (which is really saying something). I have to admit, my friend's experiences has really changed my perception of federal government employees.

Most of them sought government work for that specific reason! While there are certainly those who do the work in government jobs, that cartoon still applies. Put them to work creating real wealth, not engaged in bureaucracy.

I'm not sure I believe this popularly-held stereotype any longer. It's something that, as government critics and skeptics, we want to believe. Perhaps it's true at the high levels of the SEC, but I'm not convinced it applies to the lowly rank-and-file government employees such as postal workers and passport clerks.

If we can't provide anything of value in a marketplace, there is something really wrong with us. Works on a micro or macro scale.

Have you read my posts? The problem is that it's hard to compete against labor that earns fifty-cents an hour. The problem is not that Americans have suddenly become incompetent or lazy or unproductive in just one or two generations. The problem is that we don't have much to sell to the rest of the world when they can purchase goods and services from India and China for much less.

As far as wealth "drain" by adding in the global labor pool, there is this to chew on:

Combine this with the numbers I produced earlier in the thread showing huge standard of living increases in the US after inflation over a similar stretch and you start to see how it works.

I pointed out that your numbers made a comparison to the 1960s. But global labor arbitrage was not as huge of a problem in the 60's, 70's, and 80's. The computer boom helped push the U.S. economy in the 90's until it was realized that the Internet would allow much knowledge-based work to be done overseas.

So, is that alleged huge standard of living increase the result of the 60's, 70's, and '80s or is it the result of the past two decades?

Do you call millions of foreclosures and tens of millions of Americans who cannot purchase health insurance a standard of living increase? In the Sixties it was possible to raise a family with one person working a middle class factory job. Today most families need two working partners. Is this really progress?

You can point to the large houses, but we are now finding that people's ability to actually legitimately purchase those houses was illusory and now, consequently, Americans' inability to purchase them is driving down the prices. Much of the standard of living increase that occurred in the past two decades was probably the result of the Dot.com and housing bubbles.

Adding the resources (raw materials and labor) of different countries to our market to form a global marketplace and you get improved efficiency and everyone benefits.

But the problem is that this is not about technological advance or increased efficiency. This is very simply about labor arbitrage and a lack of environmental and labor regulations.

If what you claim is the case, then why do we have a huge trade deficit? Shouldn't these nations that are enjoying the increased efficiency also benefit from American efficiency and technological advance and purchase goods and services from Americans? Why aren't they engaging in a real trade of goods and services for goods and services with us?

According to the Wikipedia entry for "Trade Deficit" the U.S. trade deficit for 2006 was $817 billion. If you assume that every $100,000 of that trade deficit is money that, if internalized, would generate 1 job at $50,000/year, then that represents a loss of 8,170,000 middle class jobs.

The developing world was/is so far behind the US (still over a billion people worldwide living on less than $1 a day) that they can improve at a rapid rate while we still improve at a great steady rate, and they are still nowhere in our vicinity in standards of living.

It's going to take decades for them to come up to anything close to an American standard of living, assuming it is even possible. You could argue that eventually they will attain an American standard of living and that thus they will no longer put downward pressure on American wages and Americans' standard of living. But since that could take 100 years if ever, how is it in the rational economic selfish interests of Americans who will live the bulk of their lives in the next 50 years? (It's not.)

If I go from $50k a year to $55k, that's good for me. If I go from $50k a year to $54,500 and at the same time 5 people worldwide see a huge jump from $400 a year to $500 a year, is that really so bad?

If that were the problem we wouldn't be having this conversation.

The problem is that the wealthy are able to use this labor arbitrage to keep a larger percentage of the profits for themselves. They can keep a larger fraction of a worker's contribution to the act of wealth production--they can keep a larger fraction of the wealth value a laborer produces--for themselves as profit.

If American wages decreased by 40% with a corresponding decrease in the prices of all goods and services by 40% it wouldn't be a problem. But that's not what's happening. Instead we are seeing American wages (when you account for unemployment and underemployment) essentially decreasing by a much larger percentage than any cost savings. The wealthy seem to be getting wealthier and seem to have a larger percentage of the nation's wealth. We are moving backwards, not forwards.

Stop and consider that the global marketplace creates more wealth overall. This means that I may not have even been able to make that $50k to $55k jump in a closed economy.

It isn't necessarily creating more wealth overall. Americans are being laid off and the goods and services they used to produce for domestic consumption in the United States are being produced in India and China.

The total amount of wealth produced isn't really increasing--it's just being produced by cheaper labor with the owners of the capital keeping a larger amount of that wealth.

According to what you are saying, Americans should be hard at work in factories and offices producing goods and services, but based on our unemployment statistics and our trade deficit that is not the case.

It isn't a matter of the US having less wealth (decline in standard of living), as the number simply don't jive with that. It is simply that the US will grow at a less rapid rate than the developing world. Again, in all likelihood the US will grow better and faster in the global marketplace than in a closed one, so it isn't an either/or proposition as far as where the wealth goes.

Assuming that there is any growth at all, is that growth outpacing population growth? Keep in mind that our nation's population is growing at an explosive growth rate of 30+ million/year based on the Census data from 1990-2000.

Where exactly is this economic growth, anyway? Is it the 22% unemployment rate? See http://www.shadowstats.com/

Glad you agree on the population thing. Instead of offering the EIC to encourage people to spit out kids (I know it isn't a cost effective strategy but plenty of poor people think it is), the US should offer incentives for those who are "more careful" about having kids. It would be nicer than the brute force method China has, but achieve the same positive result.

I agree with this; it would make sense to try to encourage poor women not to have children they cannot afford in some sort of a humane and individual rights-based way. To do this we need to change our entire Christian pro-children culture in this society where people celebrate families that have 19 children and watch them on television while condemning abortion. (I don't see it happening anytime soon.)

It would also make sense to almost completely end immigration which is a major driver of our nation's population explosion. Supposedly we had achieved replacement level fertility in the 1970s but immigration caused a population explosion. (Note that even with replacement level fertility there would still be population growth for a few decades as a result of "population momentum".)

We should work to even out our trade deficit, but we do have things to offer in a global market. We pay farmers not to produce food when people are starving in other countries. We can't work out anything with them?

Are you saying that other nations are engaging in trade protectionism? Can we really count on them to stop?

The trade deficit was never over 10% of GDP up until a decade ago when it soared to 20% of GDP. Why the sudden change? If we are "losing" out to the other countries, how are our businesses so incredibly profitable?

Business profitability and the well-being of Americans are not necessarily one and the same. Since businesses can earn a higher profit when wages are low, it's possible that wages could decrease or stagnate while prices slightly increase with the wealthy (who have the money) purchasing the goods and services with increased profit margins cycling back to them.

I watch the nightly news's stock market reports and I often wonder that--does a higher stock value mean that the workers are receiving less compensation?

When I talk about global efficiency, it wouldn't cause technological advance. It just works the same way in that it eliminates some jobs short term but creates new jobs and (more importantly) allows more to be produced.

Where are those jobs? Are they here in the United States somewhere? Will they make up for the job loss implied by our trade deficit? (Those 8,170,000 $50,000/year jobs lost assuming that $100,000 of trade deficit translates into one lost $50,000/year job.)

Having more resources, more labor, and the means to connect them all would make anything more efficient. Having farmer Ted make one crop and farmer Joe make another has always shown to allow for more overall.

Assuming that Ted needs Joe for anything. What's actually happening is that the benefits of Ted's efficiency isn't going to Joe, it's going to wealthy guy who owns both Ted and Joe.

Why wouldn't it be more efficient to have cheaper and less skilled labor do cheaper and less skilled labor?

Because that labor isn't doing anything special or more efficiently or productively than what Americans can do with the same exact manufacturing facility and equipment. They are only doing it less-expensively and without labor and environmental regulations. Lower wages and fewer labor and environmental regulations is not the same thing as efficiency.

Now if the money "saved" by companies was put into more research and development and other long term goals it would certainly be a great benefit to us all.

The problem is that it comes at the expense of Americans. What we really have here is, in essence, a wealth transfer from the American middle and lower classes to the wealthy. Umemployed Americans spend their savings to purchase goods and services that pretty much cost about the same as they did before except that the business owners receive a larger profit margin.

What you are saying is almost the same as saying, "If we increased taxes on the middle class, we could use that increased tax revenue to fund scientific research."

Pushing short term profits and sacrificing long term stability of companies while expanding into the cheaper labor pool isn't a good idea. Hopefully this trend will stop soon, but I don't see anyone as having the balls to stand up to these companies until they all collapse under their own weight. Lets just hope they don't take us all with them (bailouts).

You just said you thought it was a good thing? That it was about increased efficiency? Do you support manufacturing goods and services abroad for export back to and consumption in the U.S. or not?

Technological advances are not the only way to be more efficient. Anything that allows for you to increase productivity at a greater rate than increasing costs is efficiency.

How do you define "technological advance"?

I define a "technological advance" in this context as being a scientific advance, an engineering advance, or some sort of improved way of doing something that increases the amount of wealth produced per unit of human effort.

For example, terrified employees working harder might produce more product per dollar expended in wages--but it isn't really a technological advance--it's just people working harder--it's just people essentially receiving a less pay per unit effort. Likewise, terrified employees who work extra hours for free is not a technological advance--it's just people working longer hours for less pay per unit effort.

You can call it whatever you want, but I don't regard terrified people working harder and longer as being a real technological or efficiency advance.

At my job over the last four years since taking over my position I have seen our profit increase 95% over previous year, followed by 84% over previous year and so far up 66% over previous year this year. Revenue certainly hasn't grown anywhere near that rate (not even close), so the gains were made on the back end. There were no technological advances that pushed our increased profitability, just cleaning things (and personnel) up to make things run better. One of the things I did to make more profit was get rid of the dead weight that was hanging around sucking up large pay but not doing the work. I brought in younger, more motivated staff who were willing to do more work for less. I gave them chances most others in my position around the company wouldn't because I felt I could develop them to do as good of a job as those more experienced (as less driven). They now make about what those at the start did, but they do alot more work for it. If you can find someone to do the same job for less, alot less in some cases, then you have increased efficiency. Productivity gains are indeed increases in efficiency.

That isn't really a technological advance nor an efficiency advance in the context of the global labor arbitrage discussion. It's just an example of people working for less compensation per unit of human effort expended.

What you did might not have been a bad thing and might have been a smart business move, but it isn't really an example of a technologically-driven efficiency gain.

Certainly goods and services can be produced cheaper overseas by workers willing to receive less compensation per unit of human effort expended--that's the entire point of this discussion--they are willing to do the work for a lower standard of living. I think it is wrong to call it "efficiency" because people associate "efficiency" with "technological advance" or "a better way of doing things".

Instead of calling it "efficiency", we should say that, "Those people are willing to work cheaper."

Corporations are running huge profits yet the US citizens are struggling for employment, money for health care and mortgage payments. The problem isn't globalization "stealing" jobs, there is American money on the table. It just isn't being shared (not in the Obama sense) with everyone.

According to free market theory, the free market should determine that it gets shared everyone, at least in a closed American free market. I actually think that free market forces are working--and those forces are telling us that corporations can keep a larger percentage of a workers' contribution to the wealth production process as profit. It's just simple supply-and-demand at work relative to the amount of labor and capital in the market.

Again, the sheer size and power that the corporations wield makes it impossible for workers to be fairly compensated. Wages aren't properly set by supply and demand for labor in the US because the individual has no ability to be on an equal level as a mega corporation. Small companies can't compete in the same space as a mega corporation either. Without equal footing, standard economic models for supply and demand are meaningless.

Fair enough. But is it also possible that the supply of labor increased exponentially almost overnight relative to the demand for labor? Wouldn't that (a shift out of the supply curve) also push the wages price point (where supply and demand meet) down?

What exactly is your position on how our nation and society should help the lower and middle classes anyway? Are you implying advocacy of some sort of wealth redistribution from the corporations to the lower classes in order to make up for this power and bargaining disparity?

I think the crux of the argument I'm making is that never in history has it shown to be a benefit to locking yourself up and ignoring the outside world.

You haven't made that argument very convincingly in the context of whether or not it makes sense to protect the U.S. labor market.

To think that we are the sole holders of ideas and innovations and have nothing to take/learn/borrow from the rest of the world is silly.

I disagree that there is a dichotomy between protecting the U.S. labor market and being able to avail ourselves to real technological advances (innovations) discovered abroad. If someone invents a new way of making widgets, there's no reason why that technology could not be implemented here in the U.S. even if we required that goods and services to be consumed in the United States be produced by American labor.

Protectionism advocates have more in common with dictatorships in the economic sense.

I guess that depends on what you regard as dictatorship. This might be a case of having to contemplate the difference between "de jure" (under law) and "de facto" (in reality) freedom. Our nation might have more de jure freedom by engaging in free international trade while having less de facto freedom for Americans if the Americans end up having a third world standard of living. (Less freedom in terms of being able to afford goods and services.) In contrast we might have less de jure freedom by only being able to purchase American-made goods and services (or goods and services produced abroad that were required to be traded for American-made goods and services) but we might have more de facto freedom for lower and middle class Americans if they can have a higher standard of living and greater purchasing power.

So, it's all relative.

Under real laissez-faire capitalism we might have more de jure freedom at the expense of de facto freedom. For example, businesses would have the freedom to tell employees what religion they must believe in and employees would have the "freedom" not to take jobs they don't like. However if all of the businesses are doing the same thing then the employees really don't have much freedom of religion unless they want to starve.

It's easy to talk about (de jure) freedom and dictatorship in the abstract but the story could be very different when you consider the actual (de facto) application.

Protectionism seeks to stop the world from moving forward, or at least ignore the world as it goes on without us. It always fails as you can't keep pace in confined spaces.

I don't see any reason why the U.S. couldn't "keep pace" as long as it was able to benefit from any technological advance and innovation discovered abroad. It might also be possible to exchange American innovation for foreign innovation and even American goods and services for equivalent goods and services produced abroad (a zero-dollar trade deficit policy or an "import credits" type of policy).

There is an odd trend in humanity that people try to work their way into exclusive places then pull the ladder up to keep others out when they get there. Someone works hard to escape poverty and ends up buying a nice house in a gated community. The gates are there to keep people out. People immigrate to the land of opportunity then flip the sign at the door and say "stay out". There is a want to refuse people access to the opportunity to be successful, much less be successful. America didn't become prosperous by closing doors and limiting opportunity.

It might make sense to do just as you suggested--to bar the gates. The issue is--what is the purpose of the United States government? Is the purpose of the U.S. government to promote economic opportunity and economic well being for non-Americans in other countries? Or should the purpose of the United States government be to promote the rational selfish economic interests of the American people.

I think it should be the later.

I don't think you've done anything to convincingly argue against the simple supply-and-demand math of global labor arbitrage. The math just dictates that the American standard of living must decrease. When the supply of labor increases dramatically almost infinitely and overnight relative to capital or the demand for labor--the price point--wages (standard of living, purchasing power, or the amount of a worker's contribution to the act of wealth production that the worker can keep) must decrease.

We can discuss what constitutes dictatorship, de jure freedom, de facto freedom, innovation and efficiency but in the end there's just no way around that simple economic math.

So far no politician, no economist, no businessman, and no pundit has found a convincing explanation to explain why global labor arbitrage is good for lower and middle class Americans. They cannot come up with an easy-to-understand, intuitive explanation. (If they did, you can bet that they would be broadcasting it day and night and shouting it out from loudspeakers erected on rooftops.) In contrast, a worker who didn't graduate from high school can easily and intuitively understand that he is better off if he is the only applicant for a job instead of his being one of ten applicants trying to underbid one another for the same job.

I want someone to provide an easy-to-understand and intuitive explanation of why a worker is better off having 10 people underbid him or compete with him for a job than if he were the sole bidder or the only applicant.

 

[dmcowen674]

Quote:
Originally Posted by HendrixFan
The fact that we as a country deficit spend like crazy and borrow from other countries while also running a trade deficit has little to do with globalization. It seems to me that many of the ills we have are being pointed at free trade instead of the real culprits. In a micro or macro sense, if you aren't producing anything and just mooching off your neighbors you will have problems. The US needs to be more productive and stop being lazy, and if it is globalization that gets us off our ass and gets it done that is great.

Is it some sort of an illusion that almost all manufactured items seem to be made outside of the United States?

How do you explain our nation's huge trade deficits?

Are you suggesting that the reason we have the trade deficits is because Americans are refusing to work factory jobs and that thus we have no choice but to purchase goods from overseas?

[/QUOTE]

Do you honestly expect rich Republicans that benefit from sending jobs overseas to answer you?

 

[IndyColtsFan]

Do you honestly expect rich Republicans that benefit from sending jobs overseas to answer you?

I think most Americans, me included (and you've called me a rich Republican), despise companies that outsource jobs. Economically, most understand why companies do it, but there has to be better ways to solve the problem. When a company outsources jobs but pays their CEO and top executives bonuses that would've paid for those lost jobs for several years, that is a huge problem in my opinion. I just don't know the solution, as I don't think government should be regulating executive pay either (unless, of course, they received bailout funds).

 

[Zebo]

Our chief export is liquidity, investment capital. That's cashflow and capital that would otherwise remain in this country. We borrow some of it back, do the same thing over again. America's investor class is basically dis-investing in american assets, buying foreign assets, profiting handsomely from the increased profits, as are their foreign partners. It's enabled by the dollar's reserve currency status. Part and parcel of the Triffin dilemma.

The cumulative effect on employment and income distribution in this country is profound. The whole thing has been papered over with debt based on false high asset valuations- for a very long time.

Debt at every level is what created the "recovery" of the Bush years, and what's fueling the same thing today. Problem is, unfortunately, that each cycle requires more debt to have the same stimulative effect, to the point where the economy doesn't really grow at all from it- debt serves more as an easing down the slope rather than a sharp decline... which is what I suspect we're finally beginning to experience.

That's evident in the fact that a lot of skilled, educated and experienced americans remain un- and under- employed and will likely remain in that state indefinitely. Employment status has become largely a matter of luck because individual workers' fortunes are decided at a level far above their individual efforts, like it or not.

You totally get it J. The United States is well on it's way to becoming a third world country. In many ways already the economy and the distribution of wealth already resemble that of a medieval monarchy or a more recent third world scenario like what Brazil or Venezuela used to look like. The rich get richer and the poor get poorer while the middle class eventually starts to slip more and more towards being poor.

Look at the economic collapse and all of the jobs lost in the US over the last couple of years. How many people in the middle class lost there homes and fell from middle class to poor? There were a lot. Most will never fully recover. People claim that the economy is bad and there is no money, but in reality more money was made then ever during the recent economic downturn. The only difference is it wasn&#8217;t made by the middle class it was made by the ultra-rich. There are men making 2-3 Billion a year and investment banks record profits and profit taking.

The rich essentially control the economy. They control the money, who gets the money, and the jobs and they basically just trade money back and forth between them using an intermediary, which means you and me. The only control the common man has in the situation is the right to vote. We can exercise that right to control those who control the wealth.

Essentially, there are really only two options. You either let the ultra-rich control things or you let the government control things.

The Rank and File Right in this country are essentially fools. By opposing any sort of publicly run system we are in essence submitting our only means of control over to someone else the ultra rich, instead of ourselves. If they don't like for some from public control, why bother calling ourselves a democracy? The votes don't mean anything anyway. The Left has been co-opted as well and are essentially right with a smile on their face. People Need to wake up.

This is faces of the children as they learn their parents were nothing more than sheep...and that they are joint and severally liable <google it> for all debt, paid to the richest Americans and collected by our IRS and sheriff departments across this land.

No more singing Mary had a little lamb.....it will be Mary was a sheep.

 

[Zebo]

Regarding outsourcing, illegal immigration, tariff free world - all that's for is to break the middle class once and for all by the uber-rich. They hired their shill "economists" to tell you how great these things would be under such "freedom" for 30 years, slapping in face all previous notions and Americans are so fkn stupid they bought it hook line and sinker. They thought it was cool to send their jobs overseas, import cheap labor, get into debt to the foreign companies that have your jobs now and to the bankers who wholesaled them. Thought it was cool to consume more than you produce rack up debt to eyeballs both privately and governmental. Well that's over baby and the private economy has no wherewithal to borrow anymore, credit card is maxed out and the only thing left is the .Gov card - when that ends it won't be the end of the world, but it will be the end of the world as you know it. Prepare.

I suggest going over to YouTube and watching a few hours of LA Riots and multiply this x1000. Instead of thinking all Americans will know is rage when they are in debt, homeless and starving.

I've shown before with mathematical certainty about 2/3 our population today is directly/indirectly dependent on a government check to eat, when this gets disturbed, and it enviably will without DRASTIC ALMOST REVOLUTIONARY IMMEDIATE changes which require thinking Americans, you're in for a world of hurt.

 

[Zebo]

The gates are there to keep people out. People immigrate to the land of opportunity then flip the sign at the door and say "stay out". There is a want to refuse people access to the opportunity to be successful,

Since I picked on Conservatives it's time to show the problem with liberals - Their virtues such as trying to transcend xenophobia carried to an irrational extreme and becoming harmful self destructive vices. Have you looked at U6 unemployment? Do you realize why the chamber of commerce and TPTB want as many as possible here? Read my above post.

 

[soccerballtux]

Off shore production and then get all bummed when your newly unemployed customers can't afford to buy your cheaper stuff. It's like Henry Ford started spinning counter clockwise in his grave. Protectionism works.

nothing wrong with offshoring the production...TECHNICALLY...if all the trade is balanced.

The problem we are having is caused by unbalanced trade. If they were buying IP that we produce all would be good, because we would be benefiting from them and they would be benefiting from our production. As it stands, they are not consuming anything we produce.

"Manufacturing" is a false-messiah, people keep claiming if we bring it back all will be well. In actuality, what we need is to produce things other people want to buy.
The problem with Intellectual Property is you cannot enforce restricted consumption. So they have no incentive to buy our product.

There is no way out of this. 10 engineers can design something that 10,000,000 people can consume once it's produced. Factor in machines and you only need to employ a few hundred people to satisfy the demands of those 10,000,000. We can't all be engineers. This is what Kurt Vonnegut forecasted in his book "Player Piano".
The only solution is socialism, which really isn't a solution so don't consider it one. The problem is there are only so many things that can be invented under the sun. And we have invented them. We are on the 32nm node for processors. 5nm is the physical limit before electrons start quantum-teleporting across the dielectric. What happens then? 5nm is only 10 years away.

We'd have to move to bioengineering, but oh wait we just shot that market dead before it even got time to get rolling, thanks to our healthcare bill.

 

[wwswimming]

So who are you supposed to believe? In this case, Bentonville. When Wal-Mart (WMT, Fortune 500), an economic bellwether, notes that customers can't afford the gas to get to the stores and that they're increasingly using food stamps when they get there, things are bad."

it's sort of like the Great Depression, though with iPods and iPads and $Trillions in US government spending.

the gov't spending gooses the GNP enough so that the US gov't can pretend there's a "recovery".

but if you took out the increased gov't spending - you'd lose 10&#37; of GNP and people would realize, "oh this is like the Great Depression."

are iPods that great ? you can't listen to a ballgame live on an iPod - but you can on a cheap transistor radio.

but they didn't have surfing webcasts in the Great Depression - so i guess we are better off now.

 

[blackangst1]

I am.

When you enact tarriffs on for example sugar to protect the jobs of sugar cane producers in the US, sure you save their jobs. But at the cost of ten times as many jobs in the food and candy industries that move their production out of country due to higher costs.

Protectionism also stifles technological development. What if the government in the early 1900's put a tariff on automobiles in order to save the jobs of horse & buggy makers? Or if in the 1970's the government restricted the use of computers by telcos in order to save the jobs of telephone switchboard operators?

Protectionism helps those who have political clout to benefit themselves, at the much greater expense to everyone else and at a net loss to society.

Youre right. A modern failure of extreme protectionism is the USSR. Up until the mid 80's, the soviets forbid ANY money leaving the country. That meant investment, trading, or anything. The ruble therefore was an internal currency only, and not traded on forex. And of course the entire banking system was managed by Gosbank, the state bank. Also, the USSR priced consumer goods not by supply and demand, but typically below market value artificially, which created massive shortages as a result. Another problem the soviets had was too many jobs and not enough workers. It was the government that set growth goals, and just kept building factories to make...stuff. This created a phenomenon called shirking...where workers would show up late, take 4 hour lunches and drink, and maybe come back for another few hours. It was allowed to continue because a half assed worker is better than no worker, and if an employer fired him/her, he may not get a replacement due to labor shortages.

Protectionism isnt really a successful model.

 

[Jhhnn]

nothing wrong with offshoring the production...TECHNICALLY...if all the trade is balanced.

The problem we are having is caused by unbalanced trade. If they were buying IP that we produce all would be good, because we would be benefiting from them and they would be benefiting from our production. As it stands, they are not consuming anything we produce.

"Manufacturing" is a false-messiah, people keep claiming if we bring it back all will be well. In actuality, what we need is to produce things other people want to buy.
The problem with Intellectual Property is you cannot enforce restricted consumption. So they have no incentive to buy our product.

There is no way out of this. 10 engineers can design something that 10,000,000 people can consume once it's produced. Factor in machines and you only need to employ a few hundred people to satisfy the demands of those 10,000,000. We can't all be engineers. This is what Kurt Vonnegut forecasted in his book "Player Piano".
The only solution is socialism, which really isn't a solution so don't consider it one. The problem is there are only so many things that can be invented under the sun. And we have invented them. We are on the 32nm node for processors. 5nm is the physical limit before electrons start quantum-teleporting across the dielectric. What happens then? 5nm is only 10 years away.

We'd have to move to bioengineering, but oh wait we just shot that market dead before it even got time to get rolling, thanks to our healthcare bill.

Heh. offshoring unbalances both trade and income distribution in this country, quite intentionally. Whatever benefits the financial elite is what's been done.

Within our mixed economy model, regular Americans need regular jobs, jobs that pay well enough to support the price of real estate, consumer goods, food, healthcare, you name it. Manufacturing furnished those jobs, and furnished trade goods to balance things on a monetary, fiscal, and international level. Manufacturing jobs also furnished American workers with a sense of self discipline and self respect, too. They made things that mattered.

When private industry fails to provide jobs with decent pay rates, pay rates that will support the general economy, the tendency for govt to try to cover the gap is obviously quite strong, and is what's been done. The problem with that is that instead of taxing the financial elite sufficiently to pay for it, we've borrowed from them instead, creating huge debt maintenance issues, as well, public and private.

I realize that'll set the usual rightwingers to foaming at the mouth, which is what they do best, anyway. I'm sure we'll get the usual lament about how people at the top are getting taxed to death, yada, yada, yada, when that's demonstrably not true at all.

Prior to Reaganomics, the policies of the New Deal maintained a certain balance. Having lost that, it seems only reasonable that if we want to regain that balance, then we'll need to employ those methods to do it, and probably some remedial ones for a time. Which, of course, is exactly what we're not doing.

What we are doing is waltzing into a fiscal and financial trap that benefits only the very few at the top and their offshore partners, a trap that may ultimately force us into a low yield form of socialism- low yield for the vast majority, that is...

We're staring down the wrong end of the gunbarrel at trickledown economics, and few have the sense to even realize it...