US economy may be stuck in slow lane for long run

[Engineer]

Tell me more about how building factories and embarking on a journey to isolationism will lead us to higher quality of life.

It's not like I'm happy that things aren't getting better, that wages aren't on a steady increase - but I don't pretend that building up american manufacturing and stopping imports from China will suddenly fix our problems.

Sorry, I already conceded to you and your long life of knowledge and experience. We're doing just fine. We should just 'stay the course'.

 

[videogames101]

The attitude in your post confirms your age.

Intellectual property is not the same as building a dam or a highway. While IP may generator money, the money is centralized to a select few.

A highway allows goods to be transported to and from market.

A power grid allows a store or small business to open.

Mentioning my age confirms your bias.

You're living in the past, newly developed IP allowed a new website to start. There is no money to be made opening a store.

 

[videogames101]

Sorry, I already conceded to you and your long life of knowledge and experience. We're doing just fine. We should just 'stay the course'.

Great dismissive argument. Nowhere did I say we should just "stay the course". All I'm saying is your idea of recreating an industrial base in the US isn't a viable way to generate wealth for this country.

 

[First]

I'd also throw in there the following, though I think by far these following factors do more damage around the edges, and aren't the main drivers of the downfall of middle class American quality of life.

1. Trade agreements that don't properly balance comparative trade advantages, particularly with China, India, Vietnam, etc.

2. Poor federal implementation and enforcement of immigration laws and borders, which create untaxable, unrealizable shadow markets for immigrant labor, which has the effect of stifling job creation and reducing educational avenues these immigrants would have otherwise embarked upon had there been an easier way for them to become legal, documented citizens.

 

[Texashiker]

Mentioning my age confirms your bias.

You're living in the past, newly developed IP allowed a new website to start.

Lets see you start a website with no power or food.

 

[videogames101]

Lets see you start a website with no power or food.

I'm not actually sure where you're going with that. Power and food are markets that are totally cornered by existing corporations, or controlled by the state. There is no money to be made.

 

[videogames101]

How hard is this to understand? You cannot compete with China's industrial base on cost, which means you can't compete with them at all. The future of jobs and the creation of wealth in the United States is not in manufacturing.

 

[senseamp]

Unless people consume more in aggregate, the economy is not going to grow. So if you think the average American is already consuming as much as they should be, again, you are entitled to your opinion, but you have to accept that it means that the economy is as big as it should be as well. Don't expect the economy to grow without people consuming more things.

 

[videogames101]

One more note just to be clear: Jobs exist in the fields where money is being made. NOT THE INDUSTRIAL SECTOR.

The problem is much of our population is not educated or qualified to undertake these positions.

My proposed solution is a long and arduous process of overhauling both our education system and the culture of our youth.

 

[Texashiker]

How hard is this to understand? You cannot compete with China's industrial base on cost, which means you can't compete with them at all. The future of jobs and the creation of wealth in the United States is not in manufacturing.

Real wealth is created through manufacturing.

There is money to be made in IP, but not like building a refinery or dam or chemical plant.

 

[videogames101]

Real wealth is created through manufacturing.

There is money to be made in IP, but not like building a refinery or dam or chemical plant.

In my eyes you are living in the past.

I mean, maybe you're right, but I don't agree. ^_^

 

[videogames101]

That is how real wealth was created. Past tense.

 

[videogames101]

Tell me who makes more money:

Apple, who designs the iPhone.

Or Foxconn, who builds it.

Therein lies the answer.

 

[Engineer]

Tell me who makes more money:

Apple, who designs the iPhone.

Or Foxconn, who builds it.

Therein lies the answer.

Damn right. Everyone should take this kid's advise and get a job as a design engineer at Apple. I like it!

 

[werepossum]

You know, I haven't worked in a factory!

Why are you trying attack me personally. Let's see where your assumptions get you.

I'm currently 21 years of age, I've had nearly all manual labor jobs up to this point and I'm currently working while paying for college.

My father is a construction worker and I worked with him on his various construction sites from 14 until 17. When I was 18 I worked as a dishwasher at a local diner. My first job in college was serving and doing prep/cleaning for a catering service. My first summer back I worked for a professional cleaning company. In my second year I got a job at a call center at my college, which I'm still working now in my third year. My second summer back I worked as a luggage salesmen while doing secretarial work for my uncle's real estate company.

Do I need to explain which jobs involve getting sweaty or having "dirty hands"? I took exactly the jobs I was able to find.

I'm looking forward to my first real internship this summer where for the first time I'll be making more than minimum wage.

Good for you. We need more kids willing to do whatever they can get.

A couple quick points:

1. The argument that we "used to" have good middle class jobs (manufacturing, etc.) I think clearly ignores that the middle class wages/wealth boom between the early 1940's and early 1970's is unlikely to be repeated. From my perspective that's because we depended on the rest of the world being either bombed to smithereens and/or recovering from WWII to get much of the prosperity we enjoyed, in addition to significant government outlays during the 40's. A WWII type event that puts the US on extraordinary economic footing certainly isn't an event we should strive to repeat, and from where I'm sitting best explains a good deal of the manufacturing and middle class boom of this 30 year period.

2. Women entering the workforce toward the latter part of this 30 year boom created by necessity an environment where a married couple couldn't just depend on one male breadwinner to maintain the same quality of living. I think if there were negative economic consequences to having women enter the workforce (increasing the pool of workers and perhaps putting tremendous downward pressure on wages) it was still clearly worth it given that it started the revitalization of women's rights and has resulted near 40 years later in women being hired more than men for managerial positions and generally being employed more than men. You also have to take into account that women entered the labor market at unjustifiably lower wages than comparable jobs men were performing, which helped further put downward pressure on average wages. Once women's wages are at parity with men, perhaps we'll see a protracted wage boom in combination with the aforementioned and yet to be mentioned factors.

3. I think it's clear the middle class hasn't yet adjusted to the new wealth-building realities of the 21st century. It's no longer sensible to ignore the gains you can make investing in markets that weren't nearly as common during the 40's-70's period. Forgoing even common investments like 401k's is simply throwing money away; there's a real cost to ignoring opportunities.

Very well said.

Tell me who makes more money:

Apple, who designs the iPhone.

Or Foxconn, who builds it.

Therein lies the answer.

Apple. But Apple is always an outlier. Look at how many American companies used Foxconn to make even more money. Most on these ended up making less than Foxconn and eventually were either replaced by Foxconn or else snapped up cheap by Taiwanese and later Chinese companies for their IP.

 

[Matt1970]

Regardless how you feel, he's right on the rest of the post that you pulled that from. Give 1,000 people like you and me and extra $1,000 each and there's a huge chance we'll put the full $1,000,000 back into the economy (which the recipients of our $1,000,000 spending would put that into the economy and right on down the line). Give the extra $1,000,000 to Bill Gates and he would still spend what he's spending now. There sure won't be a 'wow, I've got to go buy something with my extra $1,000,000 dollars'.

I'm not saying that we should or shouldn't be taking more from anyone at the top, I'm saying that the US worker is being sold out and that a better paying job (with benefits, skills learning and the making of a product (since I offend some with 'wealth building')) would not only benefit the middle and lower classes, it would bring life to the economy and those at the top would reap the benefits of a growing economy instead of the scowls of the bottom wanting to tax and spend from them.

The proposed solution to that is to have the government seize assets and redistribute so people can turn around and spend the money at Wal-Mart who buys a huge portion of their inventory from China same with Apple or wherever and the money goes right back to the same people that have it now.

 

[Engineer]

The proposed solution to that is to have the government seize assets and redistribute so people can turn around and spend the money at Wal-Mart who buys a huge portion of their inventory from China same with Apple or wherever and the money goes right back to the same people that have it now.

But if the people who send these jobs our and control most of it (including government) won't keep good paying jobs here with benefits, what do you really expect to happen?

(again, I'm not proposing it, I'm stating the 'what other choices' question...)

 

[BoberFett]

You're so close to getting the point of how privilege destroys empathy by making it easy for us to just assume what we don't have to deal with doesn't exist.

Those people fucking exist. Just because they don't exist in your white middle class conservative bubble doesn't mean they're not there in huge numbers.

http://www.dailymail.co.uk/news/art...ble-people-shot-photojournalists-poverty.html
http://lightbox.time.com/2011/11/17/below-the-line-portraits-of-american-poverty/
http://www.worldhunger.org/us_hunger_pictures.htm
http://www.pewresearch.org/fact-tan...ears-into-the-war-on-poverty-a-data-portrait/

That first article is intentionally dishonest, talking about "the epic struggle of 50 million" in the US, then going on to show pictures of a family living in a shack. You expect me to believe that 50 million people live like that? Or did they find an outlier and take some touching black-and-white photos to tug at the heart strings?

Any time a news piece comes out about some poor impoverished family, inevitably someone does a little digging and finds that the sob story doesn't match reality.

I'll go take a couple of pictures of Americans driving exotic cars and eating caviar, then we'll be doing OK!

 

[Engineer]

That first article is intentionally dishonest, talking about "the epic struggle of 50 million" in the US, then going on to show pictures of a family living in a shack. You expect me to believe that 50 million people live like that? Or did they find an outlier and take some touching black-and-white photos to tug at the heart strings?

Any time a news piece comes out about some poor impoverished family, inevitably someone does a little digging and finds that the sob story doesn't match reality.

I'll go take a couple of pictures of Americans driving exotic cars and eating caviar, then we'll be doing OK!

It's not so much that people are in or out of poverty in the US, it's how much the government spends on welfare programs in this country on those people and it's only getting worse. I would rather see those people be able to work at a job that pays well and produces something than to work at McDonalds and supplement it on the government's (borrowed) dime.

 

[BoberFett]

I don't have a problem with rich people having lots of stuff. But the point is it's not enough to grow the economy. Size of the economy is dictated by the aggregate demand. Key word being "aggregate."
100 average working class families each earning extra $10K is going to create far more demand than a CEO who already makes $10M making an extra $1M, who is likely to simply save or invest that money in financial assets.
Again, if you care simply about the economy growing, then distribution of wealth is important. If you care about something else, that's fine, but it's off topic in this thread.

Demand for what? Again, please tell me what these people are going to demand that they don't have now. A third car? A bigger house? Another big screen TV?

 

[BoberFett]

A couple quick points:
...

Thanks First, good post.

 

[senseamp]

Demand for what? Again, please tell me what these people are going to demand that they don't have now. A third car? A bigger house? Another big screen TV?

Everyone has a house, two cars, and a big screen TV? That's the point that is completely flying over your head. If that's all that one could ever demand, then wealth being concentrated in the hands of those who already have all those things is not going to grow the economy.

 

[BoberFett]

Real wealth is created through manufacturing.

There is money to be made in IP, but not like building a refinery or dam or chemical plant.

And someday soon all manufacturing will be done by robots. I guess humanity is going to have to figure out a new way to distribute prosperity other than "making stuff."

 

[BoberFett]

Damn right. Everyone should take this kid's advise and get a job as a design engineer at Apple. I like it!

So are you saying Americans should get poverty wage jobs? I thought that's what you were complaining about?

The facts are that manufacturing is no longer a money making proposition. Making stuff can be done anywhere by the lowest bidder, and for American consumers, that's what they've decided they want.

Your answer of "Moar manufacturing!" is no more a real answer than the guy you're mocking.

 

[Engineer]

Your answer of "Moar manufacturing!" is no more a real answer than the guy you're mocking.

Well, I disagree and we can leave it at that (because neither you or I are going to change our minds on the subject).