The U.S. Middle Class Is Being Wiped Out

[WhipperSnapper]

To some extent, yes, though not for the same reasons as you do. You view executives as profiting off the backs of their employees in a vindictive nature. I don't.

It's not vindictive. They're just doing it because they can and because shareholders have difficulty keeping corporate management from ripping them off when thousands of other MBAs would happily do the same jobs just as well for far less compensation.

 

[WhipperSnapper]

I'm not sure what you're reading in to my posts, but it isn't what I'm saying.

We are running a trade deficit because we are importing more than we are exporting.

I agree.

The reason for that is because we are not competitive in the global manufacturing market.

I agree.

Protectionist tarriffs won't make that so, and we'll still run a trade deficit.

How would we run a trade deficit if our nation's economic policy was to either have a zero-dollar trade deficit or a surplus?

We do not get something for nothing by importing goods. I agree that imports are harmful to our economy. But, the fact is, if we close our system entirely by making imported goods ungodly expensive, we will shrivel up and die.

Why would our economy shrivel up and die? If anything we would benefit by ending our trade deficit. What is it that we cannot manufacture and produce independently here in the U.S.? We could still enjoy an excellent division of labor with a population 310 million people.

I would argue that our country, as a whole, has NOT survived globalization. We are still stuck in the mindset that we're better and more deserving than everyone else. That may be true, but when China can build a widget just as well as we can for 1/10th the cost, our superiority means nothing in the global market. We have a finite amount of wealth in the US. By running a trade deficit, we are moving that wealth to other countries. The only way to bring wealth in is by running a trade surplus, which we cannot do until we are competitive in manufacturing.

Why do we need to have a trade surplus? What if we had neither a trade surplus nor a trade deficit and produced our own goods and services domestically?

There are international standards that many countries require products to meet before they can be sold in those countries. If a product meets these standards, who cares where that product was produced and by whom?

It's not a problem as long as we're producing and exporting as much as we're importing.

 

[IndyColtsFan]

I agree with the part in bold 100% because I know the poster includes upper management like golden parachute executives among the overpaid Americans.

At least I hope he is including them, as they are the most ridiculously overpaid of the bunch and as a shareholder, I'd like to see a few of them outsourced as well.

 

[Jhhnn]

How many people are capable of being Wal-mart greeters in the US? 200 million, or so?

With that kind of suppy for a position, the wage for that position should be lower. Remember, as supply goes up and demand remains constant, wages go down.

If you're not comfortable making $7.50/hr or whatever going rate for a Wal-mart greeter is, learn a skill and get a better job. Equality of opportunity, remember?

Gawd that's lame. It's the smug self righteousness of the lucky expressed as moral superiority.

Millions of skilled people are currently unemployed, largely due to forces beyond their control entirely. People whose qualifications likely rival your own are among them. There are probably a whole lot of guys in India who'll do whatever you do for a lot less, given the chance. It's not like you're some unique snowflake, or that learning will make anybody more employable. Do you think the people who got the axe at Bear Stearns were any less qualified than the guys at GS?

What would you suggest that people learn to be more employable, anyway? Identify the segment of the economy that's just desperate to find workers, please, and how it'll absorb 20+M unemployed. While you're at it, explain how accepting lower wages will make the mortgage payments on the vastness of suburbia, and how it'll support the people who've invested in the bonds that finance it.

Yeh, sure, qualifications improve a person's chances of success within a system, but today's problem is a breakdown of the system itself, the system that recirculates money within the economy. That breakdown is the direct result of offshoring and the concentration of income it creates at the tippy-top, not to mention the glut of dollars flowing offshore as balance of payments deficits. The FRB can't print enough money to cover that, can't put it into the economy at a rate that'll do any good, because it'll just join the river rushing to the top and offshore...

 

[jackace]

If we look back in history before outsourcing into low wage countries was possible how did our country reach an equilibrium on prices and pay?

If it worked then, why can't we institute regulations to return to that equilibrium?

 

[Zebo]

I wish I were a politician. I'd ask question like "why is my iPhone made in Chinese death camps instead of Watts or Tulsa?"..... "why are we paying our people not to work and Chinese to work?" ...."why does a couple thousand men and one woman get in Wall Street Banks get 1% of GDP take home?" and so on. Our pols are bought and sold. Democrat, Republican makes no diff, they are all top 1%ers anyway and depend on top .01% for their election bids.

 

[Patranus]

If we look back in history before outsourcing into low wage countries was possible how did our country reach an equilibrium on prices and pay?

If it worked then, why can't we institute regulations to return to that equilibrium?

Regulations are what cause it to tip out of equilibrium.

 

[jackace]

Regulations are what cause it to tip out of equilibrium.

We have always had regulations, and will always have regulations.

Edit - Everyone seems to forget that we have never lived in a truly unregulated free market.

 

[Darwin333]

The other part of the equation is to place a tax on the wealthy. Either they pay it or they leave the money in their companies to hire Americans, thus reducing the social services roles and Government expenses. If they decide to "leave", we just tax their imports.

They don't have the kind of money we require for simple day to day operations of our current government. You can raise their taxes as high as you want and we will still be short (forgetting the small fact that the rich generally write the tax code).

Historically the government can only extract roughly 20% of GDP from the economy regardless of "tax rates", that includes periods that we had so called 70%+ tax rates on the rich. Recent history has been a little over 17% but lets pretend that we get it back up to 20%, we are still short a ton of money. Unless you are advocating that the budget be restricted to tax revenues with no exceptions (if you buy that I got some ocean front property for sale in Arizona, real cheap) then it simply won't work. The "foretasted" revenue from the tax hike on the rich next year puts us real damn close to that 20% mark but nowhere near a balanced budget. Even worse is the fact that our cost to service existing debt is going to shoot the moon eventually (unless you want to argue rates will stay at virtually zero forever) AND we have to "roll" that debt over because its all very short term. What happens if China doesn't allow us to roll that debt over due to our tariffs?

Granted, I think we are going to default eventually anyways but doing as you suggest has us defaulting sooner rather than later. I figure if we are going to default anyway and they are dumb enough to keep loaning it to us, lets spend the shit out of it and then default.

 

[dmcowen674]

How many people are capable of being Wal-mart greeters in the US? 200 million, or so?

With that kind of suppy for a position, the wage for that position should be lower. Remember, as supply goes up and demand remains constant, wages go down.

If you're not comfortable making $7.50/hr or whatever going rate for a Wal-mart greeter is, learn a skill and get a better job. Equality of opportunity, remember?

That's the point genius, the skilled jobs were sent overseas by your Corporate buds. The only jobs here is greeter. You''ll find out soon enough.

 

[drebo]

How would we run a trade deficit if our nation's economic policy was to either have a zero-dollar trade deficit or a surplus?

Because this is more of a utopian ideal than an Ayn Rand novel. It's not possible. It will never be possible.

There is no possible way we will ever be 100% self sufficient. Hell, even back in the time of subsistence farming and tallow candles we were not self sufficient as a country.

Nor should we want to be.

 

[drebo]

That's the point genius, the skilled jobs were sent overseas by your Corporate buds. The only jobs here is greeter. You''ll find out soon enough.

Right...because someone from India is capable of sitting down at one of my customers' sites to figure out that a switch port isn't working because some moron bridged two network ports together with his own unauthorized equipment.

My job is plenty skilled and will never go away. The same is true of many jobs.

Which is completely beside the point in relation to the argument. If labor costs were brought down to true market rates, outsourcing would not be anywhere near as viable in most industries.

 

[drebo]

Gawd that's lame. It's the smug self righteousness of the lucky expressed as moral superiority.

Millions of skilled people are currently unemployed, largely due to forces beyond their control entirely. People whose qualifications likely rival your own are among them. There are probably a whole lot of guys in India who'll do whatever you do for a lot less, given the chance. It's not like you're some unique snowflake, or that learning will make anybody more employable. Do you think the people who got the axe at Bear Stearns were any less qualified than the guys at GS?

What would you suggest that people learn to be more employable, anyway? Identify the segment of the economy that's just desperate to find workers, please, and how it'll absorb 20+M unemployed. While you're at it, explain how accepting lower wages will make the mortgage payments on the vastness of suburbia, and how it'll support the people who've invested in the bonds that finance it.

Yeh, sure, qualifications improve a person's chances of success within a system, but today's problem is a breakdown of the system itself, the system that recirculates money within the economy. That breakdown is the direct result of offshoring and the concentration of income it creates at the tippy-top, not to mention the glut of dollars flowing offshore as balance of payments deficits. The FRB can't print enough money to cover that, can't put it into the economy at a rate that'll do any good, because it'll just join the river rushing to the top and offshore...

Lucky? I worked incredibly hard to get where I am. I started at the bottom of my company and worked for years studying independently and going to school to better my self. Nothing I did required me to be from a well-to-do family, I went to a state-sponsored college, and public high schools. Now I am the lead engineer on a very lucrative project.

If I can do it, so can anyone else.

I was not lucky in any way, shape, or form. I worked for everything I have.

Also, why do you think "skilled" people are out of work? Hint: It's partly because the cost to employ domestic labor is far too high. That's not the main cause, though. The main cause is the recession caused (and exacerbated) by our government. Place blame where blame is due. Don't blame those of us who have successful careers for those who made bad decisions in life. Hell, I have an uncle who took a job that paid way more than it should have at a startup that promptly went bankrupt. My sympathy for him is about as much as the fly that I just swatted.

 

[drebo]

It's not vindictive. They're just doing it because they can and because shareholders have difficulty keeping corporate management from ripping them off when thousands of other MBAs would happily do the same jobs just as well for far less compensation.

Shareholders have the option of not investing in companies that have corporate climates they don't agree with.

Don't like it? Don't invest.

Fact of the matter is that most shareholders don't care how much the CEO makes as long as the company is run in a manner that is above-board and they get a healthy return.

The only people that seem to care are those who care not because they are personally involved, but rather because of some fanatical dislike of anyone who is more successful than anyone else.

 

[Acanthus]

Regulations are what cause it to tip out of equilibrium.

So we are supposed to drop OSHA and minimum wage laws now?

 

[Acanthus]

Lucky? I worked incredibly hard to get where I am. I started at the bottom of my company and worked for years studying independently and going to school to better my self. Nothing I did required me to be from a well-to-do family, I went to a state-sponsored college, and public high schools. Now I am the lead engineer on a very lucrative project.

If I can do it, so can anyone else.

I was not lucky in any way, shape, or form. I worked for everything I have.

Also, why do you think "skilled" people are out of work? Hint: It's partly because the cost to employ domestic labor is far too high. That's not the main cause, though. The main cause is the recession caused (and exacerbated) by our government. Place blame where blame is due. Don't blame those of us who have successful careers for those who made bad decisions in life. Hell, I have an uncle who took a job that paid way more than it should have at a startup that promptly went bankrupt. My sympathy for him is about as much as the fly that I just swatted.

"My anecdotal evidence tops your economic analysis."

Come on, if you really are a "lead engineer" you at least had to take courses that allowed you to recognize critical thinking skills?

 

[jackace]

Lucky? I worked incredibly hard to get where I am. I started at the bottom of my company and worked for years studying independently and going to school to better my self. Nothing I did required me to be from a well-to-do family, I went to a state-sponsored college, and public high schools. Now I am the lead engineer on a very lucrative project.

If I can do it, so can anyone else.

I was not lucky in any way, shape, or form. I worked for everything I have.

Also, why do you think "skilled" people are out of work? Hint: It's partly because the cost to employ domestic labor is far too high. That's not the main cause, though. The main cause is the recession caused (and exacerbated) by our government. Place blame where blame is due. Don't blame those of us who have successful careers for those who made bad decisions in life. Hell, I have an uncle who took a job that paid way more than it should have at a startup that promptly went bankrupt. My sympathy for him is about as much as the fly that I just swatted.

Not going to say you didn't work hard, but you also got some breaks along the way. I know my parents did (they acknowledge it) and I know I did. To think that you got to where you are all on your own is just not realistic in this day and age.

 

[Acanthus]

Because this is more of a utopian ideal than an Ayn Rand novel. It's not possible. It will never be possible.

There is no possible way we will ever be 100% self sufficient. Hell, even back in the time of subsistence farming and tallow candles we were not self sufficient as a country.

Nor should we want to be.

It's not hard to limit trade to countries with nefarious worker treatment.

We don't want to be a part of their economy.

This is not hard to figure out.

 

[Brigandier]

So we are supposed to drop OSHA and minimum wage laws now?

Don't drop OSHA, but please drop minimum wage. I am pissed off every day that I cannot legally compete with foreigners.

 

[gingermeggs]

Polarization not found. We have the Republicans, who used to be center-right, now pushing far right. And we have the Democrats, who used to be center, now occupying the Republicans former spot on the center right.

You hear a lot of left wing talk with relation to the Democrats, but look at the Democrats in action. They're just as happy to give corporate welfare as the Republicans, promote the free trade religion just like the Republicans, and continue Republican wars. Unfortunately, the left wing really has no party to call their own so they take the lesser of two evils.

Like most things I say here, I am speaking about the future. In this case I mean 5 to 10 years- you watch and see, it is not so hard to imagine, once the propping up of the economy breaks' things will develop momentum- It's once the penny drops in the minds of the majority that faith in a usury based system is futile, you will see American cities existing similar to northern Ireland, only more exciting with bigger more expensive explosives. Mack from Blackwater is loving the idea as he gets to use his toys and all his sade rage finally!

 

[gingermeggs]

1. Get rid of the free trade religion. Jesus isn't going to come down and kill you because you don't worship at the altar of free trade.
2. Start tarriffing imported goods to make them production competitive with American goods so that foreign countries aren't simply competing on how much industrial waste they can dump into rivers and how many workers they can work to death.
3. Mandate that the Government has to buy 100% Made in USA. If the product isn't made here, then the Government needs to issue loans and startup capital so that the product can be made here.
4. Increase the tax on high compensations so there is less incentive to send jobs overseas so the CEO can get a bonus.
5. Universal health care, independent of employers. Foreign countries either have national health care or no health care. Our employer based private gouging system is harmful to American companies and workers.

That would be a good start.

All good ideas but they won't happen in time, too little too late- start sharpening your machet'e!

 

[gingermeggs]

Pretty sure I can't touch it for another 40 something years anyway.

Considering that's a lifetime away, I don't really care about it. My actual savings/asset should be far more significant than anything in a retirement account by then.

Gold is worthless when your being carved up by a hungry and angry mob!

 

[gingermeggs]

We just need to accept the fact that America no longer provides the standard of living it once did (not counting technological advances) in today's world economy.

Having a 2000sq ft house, 2 cars might seem like your typical American middle class family, but it is considered luxury in almost everywhere else in the world, including other first world countries in Europe.

You are not entitled to a livable wage, you have to earn it. It used to be that a UAW worker in the 60s could earn a livable wage for the entire family, but that is not the case anymore. The white collar workers are not immune either, software development jobs are going overseas just the same. If you don't adapt your skills quickly in the fast-changing world economy, you become obsolete. It sounds cruel, but it is the way it works. The rest of the world is catching up fast, and we can't compete in the global stage unless we adapt.

The first step is to stop whining about job losses and actually improve our labor force skills so that we are competitive in the world labor market. Companies are not going to pay an American worker $30/hr when they can pay $5/hr elsewhere. We definitely can't compete on price because our standards of living expectation is much higher, but we can try to compete on labor skills. Thus, we need to further educate ourselves first. China and India already sees this, there is a reason they turn out so many engineers and scientists for the next generation. Your economy can only depend on low-cost manufacturing for so long.

America will not be on top forever (we are already seeing signs of decline). It the coming years, the slow decline will reach equilibrium when we have declined enough and developing countries' economy have grown enough. The wage deflation we are seeing is a mere reflection of America integrating its economy into the world economy.

This is crazy talk- it is the consumption created by those $30/hr workers which is the market....Whats need is some real patriotism to the American made product, not just by the consumer but by Import tariffs!
Fuck the IMF and world bank!
Close down the multi-national corps monopolies on the market place.
If the government won't, the people themselves will have to finally get their hands dirty!
It all comes back to the fact of having nothing to lose anymore, except life itself...suicide is cowardly, drag some of the filth' that made it all happen down with ya- don't let em win, Scot free!
The only truth in the word "Economy" is con!

 

[gingermeggs]

What are you doing with your share? ...Hopefully buying gold, land or local income producing property. Nothing wrong with not believing in stock market scheme (don't you love how they even 'give' 'you' a tax deferment to invest in Wall Street but you can't save for a Subway franchise on tax defered dollars) Anyway - unfortunatly many just piss it away on vacations or liabilities like cars boats instead.

Ohh great! he will buy an ounce and a bit of gold with his 2g!
what kind of income producing land do you buy with $2000usd?
WTF?
Piss it away for all its worth today...
because in 5years it will cost ya $2000 for a loaf of bread!

 

[gingermeggs]

I have been very curious about this mindset. What causes it? What happened to us? How did Americans lose any sense of collective identity or at least concern for the well-being of other Americans?

Somehow, although the free market dogmatists grew up in the United States, they end up having no empathy for other Americans. It's the, "I don't care if other Americans end up impoverished because no one has a right to be middle class when impoverished masses in other countries are willing to work for pennies an hour," mentality.

Part of it may be racial/cultural. Our society is just so diverse today that it's hard for some people to feel any kinship with other Americans or to identify one's self as being an American. The free market dogmatists just end up being unable to identify or feel any sense of collective identity with other Americans. In their minds all of the poor people become drug users and welfare queens who are out to steal their wealth and leach off of them. In their minds the working class is composed of lazy union members. It's a one man against other Americans type of mentality.

They have been very fortunate so far that the lower classes don't share the same modus operandi. If the lower classes started to see the upper classes as being alien and as leaching off of them or more accurately as enslaving them, and if they began to organize and agitate with the furor of the Tea Partiers, all hell could break lose in this country.

Watch this space!
Remember the lawlessness that occurred during the new Orleans hurricane?
What happens when there is no cavalry- anarchy!
Monkeys fed peanuts with never any bananas' start throwing the shits!