The US Economy

Yes, McGentrix. I do want a federal law prohibiting jobs being sent to India.

I also want a law passed which will force industry to cut the absurd Productivity Gains down to a reasonable number, like 1 or 1 and a half percent.

Any higher number merely means that management is forcing the workers to work too hard.

I also want the ridiculous flow of items from China to stop.

Isn't our balance of trade too skewed as it is?

Nafta must be repealed. No more jobs to Mexico and South America.

China is not to be considered a "favorite nation"

Our steel companies are in very bad shape. Let's put American steel in our cars---not Japanese steel.

American goods produced by American workers.

If we review history, we find that during Clinton's term, only 4% of Americans were out of work.

Now, we have 6% out of work.

That means Millions of people are in bad financial shape.

I am waiting for Kerry to announce his plans for the economy to solve the problems of Productivity, So called Free Trade, China, NAFTA, jobs sent to India and steel production. Everyone knows that Bush has given our economy to his oil interests.

We need a new administration.

bocdaver, I disagree with 90 percent of your 'demands.' I do not believe in isolation of our economy.

I don't agree with much of bocdaver's post either, ci.

It's a world economy that depends on our participation as much as we depend on it beyond our shores.



Let's also review the part where many of the 96% that had jobs were employees of the tech bubble built on artificial prosperity that bust at the end of his term. Anything that phenomenal has to have an equally phenomenal correction sooner or later. Most of our recent history shows that an unemployment rate between 5-6% is quite the norm.



These jobs commonly referred to as outsourced and exported don't belong to us the workers or the government, they belong to the companies who are trying to stay competitive and in business for the most part. If not for that, they are at least trying to make the most profit they can which is what I would do if I owned my own. In America we demand cheap products and we are the big consumers, you can't have it both ways. If it weren't for goods being made in China and elsewhere the items that US consumers enjoy buying at Wal Mart etc. would be $20.00 instead of $2.50.

Start a busuness in the you and see how much you pay in taxes, corporations don't pay taxes, people do but a hell of pile of taxes are charged to businesses. So the environment for business owners is such that they weigh their time, effort , risk and investment against high wages, benefits and taxes and somehow it has to end up being worth their while or the business closes and even more jobs are lost.

Most businesses that set up operations in India enjoy paying lower wages and most of India is accustomed to a six day work week so productivity verses wages and number of employess is higher.

I agree that it is not ideal and we all need jobs, but the market must stay free flowing.



The US steel industry is down because it has screwed itself for many years by letting unions dictate essentially how it would function. The unions held the companies feet to the fire on so many issues such as keeping training for new processes pushed aside bcause the old workers didn't want to learn anything new therefor the US companies became dinosaurs. There are processes in the US steel industry that are either illegal due to environmental restrictions, or new processes were brought online too late or not at all.

Everything is not as black and white as you portray it.

Disclaimer: I'm not an economist nor do I play one on TV. :wink:

I might add that many of the unemployed are largely unemployable and/or have made poor career choices, just ask all the workers now unemployed by Dean and Clark.

Laws like these are not new. They have been proposed throughout the world, and sometimes implemented, ever since the 19th century. And they have never worked in the long run (say 3 years or longer). Of course, this hasn't kept nationalists in either political camp from advocating for them.

UPDATE: Today's Economist has an interesting and fairly in-depth article on the issue. It's called "Jobs in America"; this excerpt sums it up nicely.

Here's another nice one from the Economist, called "The new jobs migration"

I also believe in "free trade," but I do not expect this cycle to resemble anything we've had in the past. Here's why: We've been losing textile and apparel jobs at the rate of 100,000 jobs a year. We've been losing 77,000 jobs per month in the US since GWBush took over as president. We bought $958 billion worth of foreign manufactured goods last year, and our trade deficit was more than $400 billion - or more than $1 billion per day. Not that long ago, Detroit was the auto capital of the world, but no longer. We were the first to produce tv's and vcr's, but they are now US imports. The US is the number one producer of airplanes and airplane parts, but Airbus is catching up very quickly. Our trade surplus comes from agricultural products, not manufacturing. The world has changed in too many ways for the US economy to retain the number one spot. Protectionism is not the answer.

I agree the business cycle is behaving strangely. But the reasons why it's behaving strangely are fairly well known. The Fed has no more room to cut interest rates, and the Bush administration has pushed through the wrong tax cuts (too focused on savers rather than spenders, most of them kicking in too late.) It troubles me that both Democrats and Republicans have made protectionism a bipartisan agenda, instead of fixing up their very own, homemade mess.

Cicerone,

I do believe the recent firewstorm about the loss of manufacturing jobs is much exaggerated. Our biggest import in dollar terms is pertoleum and refined petroleum products. We import and export large quantities of industrial goods and manufactured products, including automobiles. Agricultural exports are large, but not as large as manufactured goods.

Our economy has been particularly effective in preserving our terchnological lead in a broad array od industries. Moreover, unemployment is a good deal lower here than in the countries that enjoy trade surpluses with us.

Airbus has been aided in its competition for the commercial aircraft market by both substantial government sdubsidies, and also by some very wise early investments in improved design and lighter weicht consrtruction materials.

I will agree that we do have a problem in our educational system. We are gravitating towards a two tier economy in which those with good educations and strong marketable skills are doing particularly well while a growing body of less skilled workers are lagging farther behind. The remedy for that is not government directed income transfers, but rather some serious competition and improvement in our primary and secondary educational systems.

Thomas, Not only do we not have any more room to cut interest rates, but I'm also afraid of the over-valuation of assets in the form of real property. This is what happened in Japan before their balloon bust.
george, The loss of manufacturing jobs is not exaggerated; by industry, the heaviest losses are in computers at 28 percent of all manufacturing jobs, semiconductors have lost 37 percent, and communications have lost 39 percent in the past three years. These are the areas where growth is anticipated for the foreseeable future. That is worrisome for me. The 2.8 million job loss is not about to be replaced any time soon. I agree with you that our educational system needs to be improved, but "leave no child behind" has been an unfunded mandate that have been responsible for closure of more of our schools.

Thomas - this comment piqued my interest, and I want to explore it; not because I think I can prove it wrong, but because I want to better understand what you mean by it, and see if perhaps some of my assumptions are wrong.

One of my assumptions is that it doesn't matter whether the beneficiary of the tax cut is a "spender" or a "saver". "Savers" don't put their money in a mattress; they invest it in the stock market or put it in a bank. In both cases that money becomes available as capital for growing business, which in turn spurs the economy towards greater growth. Right?

Am I taking too rosy a view on this? Can you make a case for money saved by "savers" having no positive impact on the economy? Thanks.

Scrat, We now enjoy "over capacity" so we really don't need to have more savers than spenders. Two-thirds of our economy is consumer spending. We now have an over-valued stock market and real estate. Our public debt is increasing every day. This cannot go on indefinitely. Our money will become Monopoly money with very little value at this rate.

Do you have any evidence that anyone intends or even thinks it likely that things will "go on this way indefinitely"?

Scrat, Nobody has a crystal ball that we can rely on what the future holds. Economics is an art - not science. Everybody guesses, and most financial pundits have been wrong in their prognostications for the past couple of years. I've been the "lonesome" voice on A2K about the progress and future of our economy. I've yet not seen anything that changes my ideas about where our economy is headed - even at a time when most experts say our economy is "improving." I still see it as half empty.

That depends on the time frame you're talking about. Higher saving means you can spend less now but more in the future. In a recession, you want to encourage people to spend more money now and less money in the future, which is the opposite of what the Bush tax cuts were accomplishing.

In the long run, you are right and the pattern of tax cuts doesn't make much of a difference. In the context of your question, I don't blame Bush's tax cuts for being bad long run policy (as long as they're matched by spending cuts, which so far haven't happened). I blame them for being bad short run policy.


You're welcome. I don't say it has no positive impact at all, and I don't remember having ever made such a strong case. But if your objective is to create jobs in the short run, as the Bush administration keeps saying it is, standard textbook economics predict that tax cuts directed at spenders give you much more bang for the buck. I am not an economist, so the best I can do is to read textbooks and bet they are right.

Rubbish. You're the one arguing that "things can't go on this way indefinitely". That is a claim, made by YOU, pretending to have knowledge of what will happen in the future. My point was that it is drivel. No reasonable person with any knowledge of business, economics, or history would pretend that "things will go on this way indefinitely". You might as well complain that we can't wall-to-wall carpet the Earth. Of course we can't, but then nobody claimed we could.

Scrat, I repeat again, "These are only my PERSONAL OPINIONS." Got that? I hope so. I tire of repeating this over and over.

This sentence involves a minor misunderstanding that may nevertheless cause trouble later in the discussion. I might as well clear it up now. The savers do put money in a mattress. Either that, or they spend their money on stocks and bonds, and then put these in their mattress. It is the people who sell those stocks and bonds who invest money by spending it on machines, houses, education and other forms of capital.

On top of clarifying the misunderstanding, this offers the opportunity to look at this from a slightly different angle. If fiscal policy encourages saving and discourages investment by way of discouraging spending, factories will be reluctant to sell assets because there's little investment to be financed, and savers will be eager to buy assets. The law of supply and demand predicts that this will drive up asset prices without much increase in the stock of machinery (and education, and ...). That's another way of seeing why the structure of Bush's tax cuts doesn't give you much bang for the buck, compared to tax cuts that encourage spending in the present. (Or compared with spending increases, which are spending in the present.)

Ah, so we should ignore your opinions, or are we entitled to comment on them, given that you are sharing them in a public forum the purpose of which is to interact with other persons?