Americans may have to get used to a slow-growth economy, WHY

Discussion in 'Business & Economics' started by Buddha12, Jul 7, 2012.

  1. Michael 歌舞伎 Valued Senior Member

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    He meant the death of Corporatism is nearing, leaving us with, hopefully, Capitalism

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    To get there we'll have to endure more Fascism with a healthy dose of War.

    Real War.
     
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  3. Michael 歌舞伎 Valued Senior Member

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    Why do you need to make a Law? Workers are not forced to work in the company. They freely choose to work in a company. Not to mention most companies are traded and thus any worker can purchase stock at a free market price. And a lot are given options.

    You keep making it seem as if workers are being forced to work when exactly the opposite is true. Workers are generally happy when hired for a job they apply for. They sit through an interview, dress well, some even put in years of preparation hoping to be hired. They choose to work - they're not forced to work.

    That said, ever have a crappy employee? It's much MUCH worse than having a horrid boss. A boss you can (and I have) told to get f*cked and went to his senior and threatened to quit - to which I was rewarded by being promoted to the same level as my boss, given a raise and better medical coverage. I quit 6 months later anyway. That's when I was just fresh out of University. Since then I've had people who I've hired and I can tell you, I suck at picking the right people. I've had people just call in sick over and over and it's impossible to do anything. I once had to pay someone out for 8 months - EIGHT MONTHS plus vacation and every other free day they could scam out of the company. I ended up working late nights making up what they didn't do because they couldn't be bothered actually doing anything. They'd come in late or even not come in. And there was no way to get rid of them until they finally, upon nice encouragement, went to do bigger and better things to some other poor shmuck. How about the person signs a contract and then 2 hours before they're to do their job calls with a "can't make it" and while you're not obliged to pay, you are required to get someone or do it yourself - which means doing it yourself.

    It's very very hard to get good workers. And even when you do get a good worker, some of those ones have some sort of irrational resentment and can have a bit of passive aggression as if it's your fault they're stuck at work instead of out at the beach enjoying their life. Or stuck working late Friday or picking up work on the weekend. Well, tough, that's the job - do it or find another job. No one is making you work. You choose to work.

    The problems I see with the current system are notion of patent law that create rent seekers or stifel competition (like Apple's resent lawsuit that Samsung copied their square with rounded corner design - give me a break). I say get rid of patents period. Or regulations the restrict entry into a market. Or all the millions of other evil regulations. I was tossing some mail the other day and it said they had sale on floor tiles but you were limited in the number you could buy. Why? It listed some douche regulation that, upon inspection, only allowed builders to buy more than enough to do a small kitchen or bathroom. That's government in a nutshell. Protect corporations and screw the consumer.

    I'm of the mind that in a free market capitalistic world we'd probably be living healthily until 120 years old and disease and hunger would be gone. Not to mention the wonderful technology. Just imagine the TRILLIONS of our capital wasted on military and government.

    SInce 1950 we've had around 400% increase in productivity yet less then 30% of that has gone to us. The other 370% of our labor and productivity has been sucked into a vortex of immoral insanity called "The Nation" where armies of ninnies pass paper to one another all in the name of "The Good of Society". Meanwhile we can barely afford to raise a family and if we do, it usually means waiting till 40 to start one - if at all.

    Anyway, I need another beer, so, there you go

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  5. Buddha12 Valued Senior Member

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    But those stocks are "common stocks" which aren't worth anything if the company should go bankrupt.

    The employees aren't allowed to unionize as well with anyone trying to bring in a union usually gets fired or dismissed for some strange reasons.
     
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  7. Michael 歌舞伎 Valued Senior Member

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    Firstly, I appreciate that it's difficult times economically and our knee jerk reaction is to seek safety in a union or socialism. But, what we need to ask ourselves is WHY is it that times are tough? Why don't we, in our small community, have access to 'money'? Why are job prospects so limited it almost feels like we're forced to take anything to get by? Why aren't most of us taught HOW to start a business? 12 years of school and most Americans have no idea what a bond is, how to buy stock, how to open a business and the regulation to OPEN a business is so steep most couldn't get though it anyway (not to mention rent seeking on the part of the State with liquor licenses and vending licenses medical licenses, law licenses and god only knows how many other licenses - I'm waiting for the child license that's coming soon [for the 'good' of the people mind you]).

    I took jobs without contract when I was in High School or part time jobs while attending University. But, as an adult, I would not accept a job without a written agreement. In this way there is no legal way to 'dismiss' me without me suing you.

    Secondly, the community either does or doesn't support unionism. I think you'll find a lot of people really don't care about the 'worker' and this is evident when you work directly with the public (say as a waiter or bartender or grocery store clerk). You find out quite quickly that it's the consumer that drives business interaction. And many consumers are asswipes.

    Of course, when they have a job they want treated well, but, when they're a consumer they treat people like crap. This is probably a problem of childhood. IMO


    It is true that common stock isn't as good as when you invest in the actual startup of a company - but, that's when there's the most risk, and so if it goes bust they lose out. That said, you'll find in the USA coincidentally, the closer your family lives to the Federal Reserve Bank of New York, the more money you happen to have for investing/gambling on start-up companies where all the risk and benefit happens to fall into your lap.

    That is a marcoeconomic reality that we have to live with for now - unfortunately.

    It isn't moral to use the State to legally prevent unionization of private workers and in the USA unionization is legal. I don't agree with public unions, that's perverse, but private unionization is fine. I have no problems with private sector unions. Sure UAW completely destroyed the auto-industry in the MI. But hey, the Greatest Generation (grandparents) and Babyboomers generation (parents) probably lived the highest standard of living for the menial laborer in the world. Most Babyboomers in my family that worked for General Motors were on close to $100,000 a year WAY BACK IN THE 1980s! Yeah, put lugs on a wheel, barely speak English, get high all day and you were paid a minimum of $60,000 a year. Unfortunately not my mother she just missed the boat and so she and I we had the wonderful pleasure of living in a trailer on $25 a week plus stamps. Ah, the 'Great Society' of the 1960s and 70s. Wonderful.

    Back then there were over 200,000 GM employees in Flint alone (when I was a kid). I think there are around 25,000 legacy employees now.

    The Union is wonderful for one or two generations and that's about it. You have to be able to fire people who suck and reward people who don't suck. Unionization greatly prevents this. AND may the Gods help you if you work for the Government AND are in a Union. The boxes you will be forced to tick, the bureaucracy between you and your boss, just forget it. It's why you can walk into McDonalds and get a meal in under 5 minutes for under $5. Go into the DMV and grab a number and wait for an hour to renew your driver license by someone who treats you like crap.


    In summary:
    (1) In a free society no one is forcing the worker to work at a company where the owners won't hire unionized labor. Now one is forcing anyone to buy at that store. Compare this with the DMV where you're forced INTO the union and Citizens are forced to buy there (hence the shit service). Great example of why force doesn't work and why government run anything, even a little of it, creates crap over priced unhappy service and an unhappy unproductive society.

    (2) Workers can and should sign work agreements. Why this is not our culture is unfortunate and we should reflect upon it as a society.

    (3) Workers in a union could form there own store (say a Union-mart). My guess is soon they will go bust and be out competed BY Walmart because at the end of the day the Greedy Consumer prefers to shop at friendly non-Union Walmart and not unfriendly dirty unionized Super KMart where service is crap right along with the products.




    In a freemarket educated Capitalistic moral society people will feel intimately connected with their local currencies, be prosperous and the worker can BE the owner if he or she has the ambition and it would be more common to sign work contracts (for employment as individual workers) particularly where there is competition FOR good workers.




    Recall the field workers in the south. I remember reading about a Farmer who paid by the bushel. A Mexican he had working for him made $150 a day. Some inner city kids were bused out there and didn't make enough to cover their fare for the bus ride home. In a Union the Mexican's productivity would be taken from him and given to support the crappy workers from the city - thus society stops progressing and starts regressing because soon the Mexican is not going to be happy to work that hard. This is the point we are at in society now and why people generally don't support unions any longer. Which IMO is why the Democrats are shifting from Unions to Bankers as they go from being Liberal to Progressive - you know, so as to get money to bribe the voters. Expect the to big to fail banks to own everything and have to be killed off sometime before 2030. I suspect we'll see a 30% reduction in our standard of living over the next 10 years. Then, we'll see.
     
  8. Buddha12 Valued Senior Member

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    But few companies that I've ever worked for have ever given me anything like that. Most companies wouldn't hire me when I asked for a contract with them so I learned that the "worker" doesn't have much say in their employment process.

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  9. Michael 歌舞伎 Valued Senior Member

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    Yes, I understand.

    Well, it depends on what skills you have. If you don't have a highly sought after skill then you will need to accept a job without contract or develop a skill that is highly sought after. I imagine if you were to move to Tibet and teach computer programming, you may be valued and in demand? Then you probably could negotiate.

    Sadly, we don't live in a free-market Capitalistic society - if we did you'd probably be sitting pretty. Insread we live in an Banking Corpocracy where down is up and left is right. They control the money - they control us. That said, there are opportunities out there. I think, if I were young, I'd do a degree in bioengeneering and start working in the summers for a farm - then I'd buy a farm. Farming is going to be the next Wall Street

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    Or so I think.
     
  10. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    Billy T comment: I always thought honesty was the best policy – now Fed is admitting the printing press may run forever if unemployment does not improve. Unfortunately, the problem has not been a lack of fiat money, but lack of it circulating. Not even the FED can push on that string to make jobs or scared people borrow, etc.

    All the FED can do is give banks low cost funds the banks can use to buy Treasury Bonds with or deposit with the FED to make modest 100% risk free profits with.
    The FED, the banks and the Treasury are locked in a mutual circle jerk that has no effect on the real economy (before the hyper-inflation hits with all that fiat money chasing little increase in food or goods. Dollars will suddenly become like hot potatoes with no one wanting to hold them while their purchasing power drops every day.)

    The FED reminds me of the CEO who told the workers that his “pep-talks” would continue until moral improved.

    You can clearly see the root of the problem in graph below. Cash rich (corporations and individuals) are not investing in the stagnant US and most others are "de-leveraging" old debts so banks have few wanting to borrow to make new US jobs, but even if they had loan applications, banks are not inclined to take on risk of losses when they can get 100% safe returns from FED or US Treasury. What borrowing there is for US investments is mainly for machines that increase productivity with fewer workers. FED holding interest rates at history lows makes that job killing automation equipment more attractive to US businesses.

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    More new money given to banks is not going to help. QE3 is a failed, dead idea.
    Tax reductions for the very rich few is an even dumber idea as that reduces revenue, increasing US deficits, and builds modern production facilities in Asia, especially Indonesia and Vietnam, the new cheap labor centers. FED buying new Treasury bonds also will not help, but someone must buy to "finance" the trillion plus deficits.
     
    Last edited by a moderator: Sep 3, 2012
  11. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    Here is the European version of the "great circle jerk" graphically displayed:

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    For US version switch:
    FED for ECB,
    12 US Banks* for Sovereign debt
    US treasury for European banks.

    * I.e. the FED makes its "thin air money" by telling its 12 "participating banks" to credit its account in them. With these new deposits, these banks don´t lend to US job creators (too risky). Instead they buy** 100% safe Treasury bonds for a modest return of a few percent net. That puts the money back where the FED can get it to start another loop around the circle jerk and with each loop the banks earn a little more.

    ** If the banks just deposit the funds back at the FED (as "excess" over required deposits with small interest earned) then it is "financial ping pong" not a circle jerk but still does next to nothing for the real economy.
     
  12. Gorlitz Iron Man Registered Senior Member

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    There is a solution to both the European debt problem and also to get the American economy moving again. That solution is the creation of new money by both the Europeans and Americans. The Eurozone countries can then pay off their debts and put money in people's pockets to go out and spend and get the wheels of industry once again turning, thanks to a good oiling of cash. The same would work equally well in America a combination of national debt reduction and money for consumers to go out and spend. There would also be the knock on effect of lowering US & EU currency values against others others such as the Chinese Yuan. This would make it cheaper for consumers to buy American and European goods, and ensure a healthy increase for export sales boosting the balance of trade.

    The downside would be two fold, but accepable, as it would mean foreign import goods would cost slightly more and also it would cost the rich disproportionately more as they would have more money that will lose some of it's value against foreign currencies. Though that said in the long run even they would benefit as a flourishing economy would offer them more ways to generate money.
     
  13. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    Ok, lets call this new money "Mcash." How do you determine how much Mcash will buy a new car or pay off $1000 debt? Why would it be any more valuable than Monopoly game money? Money has value ONLY because people know it and that other people will give you goods or services for it.

    I can´t get the baker to give me a loaf of bread for either 100 in monopoly money or 100 in Mcash. How do you over come this "What is that?" reply the baker gave me when I tried to pay for my bread with Mcash?
     
  14. Gorlitz Iron Man Registered Senior Member

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    290

    Forgive me for not making myself clear there, what I mean is just increasing the existing money supply. I didn't want to say printing more money as that gives the impression it's necessary to print it. No quite simply what I mean is this the Government deciding we should have more money and sending it electronically to the banks to place in everyone's accounts and using some more to pay down debt and yet more for economic investment. Then should the Government by required to actually print this money it can be done over a period of time. The point being it can be done immediately. That way it could be co-ordinated with the Europeans to create more Euro currency for the same purpose. I should have just said huge scale QE, probably would have been less confusing.
     
  15. quadraphonics Bloodthirsty Barbarian Valued Senior Member

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    What you describe is nothing more or less than exactly the QE that has already occurred.
     
  16. quadraphonics Bloodthirsty Barbarian Valued Senior Member

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    This is not a problem. Look at how it was done with the Euro if you want to know. Basically, you introduce the currency in parallel with the existing currencies, at a specific exchange rate. Then you phase out the old currencies.
     
  17. Gorlitz Iron Man Registered Senior Member

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    Yes but on a massive scale, to really get things moving people need money to go out spend, once this happens people will start making things again as they'll have customers to buy them. This in turn will then help to give value to the extra money created. Basically the position is like a watered down version of the Great Depression, people just haven't the money or desire to go out and spend to get things moving again, whilst Europe is in so much debt they arn't buying or making enough either. The only solution is massive scale investment and actually getting money into people's pockets.
     
    Last edited: Sep 9, 2012
  18. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    That would work, but if you fixed the exchange rate, is that not just a renaming of the old currency.

    When Brazil switched to the Real in time of great inflation (prices needed to be marked up each day) they introduced the URV - Unit of Real Value which as the name suggests did not change much at all. Then the daily remarking of prices on goods in the store ended as the prices were given in URVs which did not actually exist. When you checked out with a bill for 342 URVs, that day´s (or hour´s) conversion from the currency which was in the people´s pockets and the URV was used to see how much they had to take out of their pockets to buy the goods they had selected.

    This helped destroy the belief that prices changed every day and a new currency the "Real" that you could hold in your hand as it was real, was introduced with a fixed exchange rate to the URV (Not to the old currency as I think you are suggesting.) For some period (more than a year as I recall) you could continue to pay ever more every day with the old currency OR with the new currency (the Real) and paying now or next week it was the same amount.

    People liked that and converted their old currency into Real. Eventually when more than 90% had been converted just by the people´s own free choice, the government announced that after another 6 months or so the had to pay taxes in Real and merchants did not need to accept the old currency if they did not want to - It was no longer "legal tender." The less than 10% of the old currency still out was quickly converted into Real.

    Most economists credit this approach, invented in Brazil, as by far the best way way to kill inflation while introducing a currency with slowly changing exchange rates into other currencies. I.e don´t peg the new currency to the old one at a fixed rate. Peg it to "real value of goods and services." (the non-existing URV)
     
  19. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    Billy T comment:well at least that 6 billion gets counted in US´s GDP (but not in the "lasting GDP" where China´s is already larger.)
     
  20. quadraphonics Bloodthirsty Barbarian Valued Senior Member

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    The examples in question dealt with aggregating multiple old currencies into a unified new currency.
     
  21. quadraphonics Bloodthirsty Barbarian Valued Senior Member

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    Since you have never offered any usable definition of "lasting GDP," that claim is impossible to even evaluate, let alone substantiate.

    If you are using investment spending as a proxy for "lasting GDP" (i.e., excluding consumption and trade), then it is true that China's investment spending is higher than the USA's. It is also true that China has a lot less existing infrastructure than the USA, that their high investment levels are unsustainable, and that a large portion of China's investment spending is wasted on projects that never generate any production (ghost towns, bridges to nowhere, idled steel foundries, infrastructure that collapses in short order).
     
  22. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    You repeating your self - I defined "lasting GDP items" when I first used the term and again last time you made this comment. Both times as items that had most of their value two years later, not items like 6 billion expenditure on current elections campaign TV ads etc. mentioned in post 76 or my earlier examples of 2010´s rose bowl, NFL games, hair styles, etc. expenditures that were counted in 2010´s GDP. I.e. China´s high speed railroads, power plants (new one very 10 days), etc. are "lasting GDP" items. Are you growing senile and can´t remember we been over this ground before?
     
  23. quadraphonics Bloodthirsty Barbarian Valued Senior Member

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    What I asked for was a usable definition. Since it is impossible to meaningfully break down GDP outlays according to your definition there, it is not "usable." We have no way of calculating what this quantity might be for any given economy. Instead, we find you relying on naked supposition and cultural biases.

    Unless they turn out not to be valuable investments, you mean. Lots of that infrastructure in China has been wasteful - the ghost towns and bridges to nowhere I've already mentioned. That stuff has not retained "value."

    Likewise, consumption spending has lasting "value" for years. The memory of that Iron Maiden concert I went to last month will be putting a smile on my face for years into the future - that is value, for which I gladly exchanged my money. The food, water and medicine I consume also has long-lasting value, because it causes me to continue living years into the future. You seem to be thinking of "productive output" or something, but aren't bothering to supply any meaningful definitions of terms here.

    Since you have presented no analysis of the long-term value of investment spending in China, or even pinned down what you even mean by "value" here, nor suggested any alternative way of measuring "long term GDP," we remain lacking in any usable definition of such. All we get is some hand-waving from you that Americans are spending too much on football games. This is not impressive - it is just a recitation of your fixed (and stilted) cultural biases, dressed up as if it were some kind of economic analysis (it is no such thing).
     

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