Will our economy ever recover?

[HeroOfPellinor]

First of all, I'm not an economist or sociologist. But, as I was reading an article about the Fed's concern over deflation I began to wonder about something. Is this the beginning of the unwraveling of American economic prosperity? Then I wondered something else. Is this the end of the unwraveling?

The jobless rate is high and there's really no reason for any company to hire any American when they can get the same work done by a Philipino or Indian who works for 1/20th the wage? House prices in California are beyond the means of even a dual income family. Twenty or thirty years ago these houses were within the means of single income families. So what changed?

Well, for one, many more women are now in the workforce. That's an effect of social enlightenment, but I wonder if those women would have left their aprons behind so quickly if they would have known that they'd never be able to pick them up again? Probably so, and probably rightly so, but it's decreased demand for workers and therefore decreased cost for workers.

The Internet and WANs have made locality irrelevent. It makes it that much easier to outsource even fundamental operations overseas to increase profits. New Computer Science graduates are finding no opportunities for work in part because there are just as qualified people in Manila or Bangladesh or Guadalajara who will do the same job for a fraction of what an American graduate would require.

Seems to me that this is the other side of the sword of globalization. It will be quite a splendid thing when we finally get there, but, in the meantime, it's Americans and much of Europe who will unwittingly and unwillingly fund this endeavor while our corporate execs try to increase profits by outsourcing labor which causes them to need to increase profits which causes them to outsource more labor. Is that fair? Is that the least we can do to make the world a better and more equal place? For centuries, American men and women have sewn sacrifice, dedication, hardwork and ingenuity under the most just government ever formed, yet it will be Philipinos and Chinese and Indians who reap the harvest? Seems to me there should be a better way to level things out without such a parasitic overtone.

I don't know. Will somebody who knows more about this stuff comment?

 

[StageLeft]

Yes it will.

The jobless rate is high and there's really no reason for any company to hire any American when they can get the same work done by a Philipino or Indian who works for 1/20th the wage?

Sending labor overseas is normally not worth it to a company. An educated indian may charge 1/5 the wage, but then you have to fly to meet them to get things done.

I think America's dominance economically definitely could suffer but that may be more from other places catching up as much as America falling behind.

And america's job rate is actually really quite good now. Nationally it's what 6% or so?

 

[Quixfire]

Yep, I just got released (fired) and another company called me for an interview before I even send out a resume. The offer stands at 13K over what I am making right know.

 

[Spac3d]

What goes down must come up.

 

[LongCoolMother]

when?

cisco stock is still down the toilet at 16.75

 

[toant103]

YES. I need a job

 

[LeeTJ]

this is obviously the post of someone who is young or forgetful.

the '70's gave us double digit interest rates, 18 to 20% was not uncommon.

we had double digit unemployment.

compared to recessions and depressions of the past this one is EXCEEDINGLY mild. the only thing that makes it SEEM worse than it is, is because a depression or recession was never preceeded by such a long stretch of growth before.

will we recover? YES?

Soon? No one knows.

Is this the worst? it seems to be. there will be a general world economic recovery over the next 10 years in my opinion.

 

[Schadenfroh]

Originally posted by: Spac3d
What goes down must come up.

more like what goes up must come down

btw any 1 else feal that this should be in the politics forum?

 

[Ranger X]

Anyone an economics major here? There should be a trend and an estimate as to when the economy will recover. Someone told me 2005 but I could be wrong.

 

[LongCoolMother]

Originally posted by: Ranger X
Anyone an economics major here? There should be a trend and an estimate as to when the economy will recover. Someone told me 2005 but I could be wrong.

yea, and people said it would recover in 2003 also back in '01, and that was one of numerous false hopes. imo, it does seem to be getting better, although extremely slowly, and its bumpy with many people getting fired still. the worst is over almost.

 

[TommyVercetti]

It will become better but will never become what is was in the late 90's. No more $60K jobs right after college, unless you are very qualified.

 

[Yax]

Ofcourse, when things go bad, just blame the foriegners. Its always someone else's fault when ever we have a problem. Its never ours. Me, I blame George W. Bush. The best he can do for the economy is propose tax cuts. Such Bull. Tax cut means more money in the people's pockets, therefore they'll spend it? What makes him so sure they'll spend it? I surely wouldn't spend mine and I'm not even a conservative Republican. Imagine what they'd do with it. Note the term Conservative!

Now, stop blaming foreignors. We as citizens of America have the right to vote so just vote for the president that has the best plan to improve the economy. Tax cuts aren't going to do it in my book. We need to stimulate growth, not savings.

Outsourcing is not a major factor in this economy's recession. Neither are the Taxes.

 

[LeeTJ]

Originally posted by: TommyVercetti
It will become better but will never become what is was in the late 90's. No more $60K jobs right after college, unless you are very qualified.

think of it this way, IT did happen BEFORE, remember the "roaring" 20's??

the 1920's had UNPRECEDENTED economic growth. It was the emergence of the auto/petroleum industry. Everyone thought they could get rich. Average people were making FORTUNES on the stock market, Speculation was RAMPANT.

but what was the result?? well the auto/petroleum industry did fine but thousands of people lost literally the shirts off their backs as we hit the great depression.

The fact that this recession has been as mild as it's been is a testament to how much we've learned from that era.

btw, the reason for the Unexpected growth in the 90's was due to the emergence of the "internet".

it's a shift in paradigm. only shifts in paradigms can give you such growth, now we're going to hit a slow spot than we will see the same kind of slow growth untill the industry matures.

then another industry will Emerge . . .

all in all considered we're doing pretty well.

 

[yobarman]

Yes it will (if someone doesn't screw up royally). The economy runs in cycles, expansion, peak, recession, througt (sp? basically the opposite of peak) This is more of a Macroeconics subject which i havent studied in over a year and I'm kind of dusty on it. The stock market crash that happened a couple years ago happened because people invested into thin air. I mean seriously, who thought these stupid companies would ever make it? (obviously someone did). Don't listen to the talking heads on MSNBC because the only people who make money (become millionares/billionares) are the ones who control the market. There is no get rich quick strategy in the stock market to making millions, it's just luck.

On account of American companies finding labor in other countries, this may be true for manual labor such as sewing soccer balls or something. Jobs that require education (engineers, architects, etc) will always have a place in America for the time being. We are just so far ahead of everyone technology-wise.

Regarding all of the people who just came out of college who can't find a job... well the market is too saturated with qualified labor. When the econmy was booming a lot of people went into the feild through college, and when it crash happened, the demand for this type of labor went down. Companies aren't investing money in capital and labor because of the poor economy, which in turn prevents jobs from being made. People feel that government should fix this, but the more they borrow to pail companies out, the less money supply there is for investment. Bad managment also plays a part. How can an airline only lose 10% of its profits after 9/11 and NEED a government bailout?

 

[YaKuZa]

Greenspan has more control over the US economy than Bush.

 

[TommyVercetti]

Originally posted by: yobarman
The stock market crash that happened a couple years ago happened because people invested into thin air. I mean seriously, who thought these stupid companies would ever make it? (obviously someone did).

What I want to know is HOW could those Venture Capitalist firms invest in some really stupid dotcoms? How could they be so blind?

 

[Mill]

Originally posted by: TommyVercetti

Originally posted by: yobarman
The stock market crash that happened a couple years ago happened because people invested into thin air. I mean seriously, who thought these stupid companies would ever make it? (obviously someone did).

What I want to know is HOW could those Venture Capitalist firms invest in some really stupid dotcoms? How could they be so blind?

They took a risk. They lost. It happens.

 

[yobarman]

Originally posted by: TommyVercetti

Originally posted by: yobarman
The stock market crash that happened a couple years ago happened because people invested into thin air. I mean seriously, who thought these stupid companies would ever make it? (obviously someone did).

What I want to know is HOW could those Venture Capitalist firms invest in some really stupid dotcoms? How could they be so blind?

in hindsight it's easy to see why it was such a dumb idea. But back in the day everyone got caught up in the hype.

this is a great site to keep track of big business f*ck ups. (he had the idea even before the market screw up... we all should've listened to him haha)

 

[theNEOone]

a mistake a lot of people make is that they think that the economy actually needs to recover to that state is was in the 90s. they don't realize that the period was actually an economic boom. it was such a long boom, people thought that the 2-3% economic increase of year's past was gone, and in it's place was the new 5-10% increase. we're not going into recession. we're just going back to the normal 2-3% increase.

 

[Harvey]

The economy will get better once we get rid of a dunce who thinks he can spend us into a $350 billion deficit while cutting taxes to the benefit of the wealthy. It won't hurt to do something about jailing all the Wall Street swindlers who blew off so many 401K and other retirement arrangements and their cronies in the administration.

 

[Quixfire]

Originally posted by: Harvey
The economy will get better once we get rid of a dunce who thinks he can spend us into a $350 billion deficit while cutting taxes to the benefit of the wealthy. It won't hurt to do something about jailing all the Wall Street swindlers who blew off so many 401K and other retirement arrangements and their cronies in the administration.

We did in 2000, don't you remember?

 

[conjur]

Originally posted by: cheapbidder01
Ofcourse, when things go bad, just blame the foriegners. Its always someone else's fault when ever we have a problem. Its never ours. Me, I blame George W. Bush. The best he can do for the economy is propose tax cuts. Such Bull. Tax cut means more money in the people's pockets, therefore they'll spend it? What makes him so sure they'll spend it? I surely wouldn't spend mine and I'm not even a conservative Republican. Imagine what they'd do with it. Note the term Conservative!

Now, stop blaming foreignors. We as citizens of America have the right to vote so just vote for the president that has the best plan to improve the economy. Tax cuts aren't going to do it in my book. We need to stimulate growth, not savings.

Outsourcing is not a major factor in this economy's recession. Neither are the Taxes.

While I agree the tax cut is a joke (esp. in a time of rising budget deficits), Bush had nothing to do with the current state of the economy.

It's been a domino effect of the dot-com bust. Many venture capitalists and other investors sank hundreds of millions into these internet 'wonders' and lost their collective arses. Hell, when eBay had a P/E of, yes, 11,000 :Q I knew something was wrong. The result was many out of work, highly-skilled professionals and investors/venture capitalists either burned or out of money so new investment suffered. Those out of work spent less on non-essential items, bought less computer equipment, rented fewer videos, went out to eat less, bought fewer new cars, etc. That affected other areas of the economy and then snowballed a bit. Then the Sept. 11 disaster hit and people were scared away from the market more and slowed spending down even more.

What tech jobs are out there now are at salaries I haven't seen in 6-7 years. I'm personally now at a salary I was at in about 1996.

 

The American empire is drawing to a close.

 

[Mill]

Originally posted by: SammySon
The American empire is drawing to a close.

Like it was in the 70's eh?

 

[Tom]

The only fundamental problem is taxes are too low until we reduce the debt. Everything else, women in the workforce, people in other countries getting jobs, is good for our economy in the long run.

Things are actually great compared to stuff in the 1970's and my folks remember mucho worse times in the 1930s.

One thing is that white collar workers and such may have to go through the revolution that us blue collar workers have had to go through.. basically they may have to actually work and do something productive say 50% of the time.