Where is the US economy headed?

It's necessary hawk to separate economic activity from psychological considerations. Veblen's dictum that waste equals status and use equals odium is operative beyond a fairly low point in a nation's affairs.

The US is in a very similar situation to that of the Ptolemy dynasties in Egypt when the Macedonian empire split into three after Alexander the Great died. An underdeveloped rich fortress to which Greek expertise was applied and then corrupted by luxury and waste.

There is one important difference though which Mr Badian pointed out in an essay The Hellenistic World. The natives in Egypt were used to working hard and taking orders. In a droll parenthesis he says--" To that extent, the Ptolemaic planners had a much easier task than their successors in some modern countries."

But what else is there once economic necessities are provided by a small proportion of the population except to invent psychological necessities and label them economic ones.

As Veblen said--America is a psychiatric ward. So is the UK. We have to be because we can't be trusted to be unemployed which we can obviously afford to be.

Hence wardrobe expansion as just one example. One has to waste in order to be highly thought of.

Edward Gibbon wrote in Chapter 2 of his monumental masterpiece--



I wonder what he would say about us.

It's a tough choice.

hawk, Did you keep up with the news when GM replaced Toyota as the biggest car company? Have you heard of Apple Computer? Also, many foreign cars are produced in this country. That's smart business.

Comparative advantage is a economics theory. You're talking about legal issues that's supposed to be somewhat controlled by the World Trade Organization.

That you can't see how "everybody gains," it's an issue that can't be learned if you fail to understand it.

Being a builder doesn't say much; there are many who fail at it. Building is an industry based on a country's economic health. Were you "building" after 2008? It's not only about supply; it's also about demand.

Comparative advantage includes all economies and workers.

When you talk about "trade accounts," you're talking about macro-economics. I'll admit that this area of economics is a very complex one, but the US has been having trade deficits for many decades, and we're still the strongest economy in the world. Most foreign investors still believe in the US economy, and invest their wealth into our stock market and equities.

China's purchase of raw materials from Australia creates a false economy in Australia. That's what the Tour Director and bus driver in Sydney told me on my last visit to Australia last August. That's because not everyone benefits.

That Australia still producing clothing products only explains the level of your economy. Advanced economies such as the US, Germany, and many parts of Asia now produce high tech products and services. That's where the economic future is.

Some US companies might produce some clothing products, but it's a small share of our total economy. As I've said, advanced economies let cheaper labor countries produce them, so that we can still purchase clothing at reasonable cost.

It's not the fault of the Chinese that what your buying don't last long. It's called quality control. I guess you never heard of that either. Do you build without quality controls?

Yes, I studied economics as requirements for my Business Administration degree.

You know not of what you speak; Florsheim Shoe was the high-end shoes in this country, and we produced our shoes in Chicago. You also fail to understand about why the cost of labor on shoes in the US vs Asia resulted in the bankruptcy.

I don't have to disprove anything to you; do your own homework. The facts are readily available on the internet.

There you are Builder. What a thick plonker you are eh?

Not to worry though. According to ci. I don't understand anything.

Here's a chart of the countries that manufacture clothing. If you can "see it," most advanced countries no longer produce clothing like they used to in the past.

http://www.fashionproducts.com/fashion-apparel-overview.html

Here's another issues about treasuries that continues to sell even when the purchaser loses money, because they're not keeping up with inflation.



The buyers are losing over 1%/year by purchasing these bonds. I don't get it!

Safe haven. You've money to invest, so you pick a fund with good earnings over time. Next thing you know, you're reading stories about Bernie Madoff.

Many got burned with Madoff, but the majority of Americans who have investments with huge funds like Fidelity and Vanguard have always done very well.

There were many tell-tale signs with the Madoff investments, because when the market was in a bear, he still reported increases in his funds.

Even during the worst of times, Berkshire Hathaway reflected losses.

Most advanced brainboxes like you don't mine coal, plough fields or take the garbage out like they did in the past.

What does "in the past mean"? I can think of a few things that they did in the Darwinian recent past that you don't do. And even in the recent past they didn't have fuckwits like you styling themselves financial manager thanks to a degree (that'll be forty five thousand dollars Sir, plus bed and board, agreement fees and a few trivialities which it is not thought fit to refer to in the hallowed portals of such an august institution of learning it is your privilege to be entering) from the University of Cork and beating us all over the head with it every chance you get.

That stuff goes to people's heads and before you know it they start fancying themselves as the nation's financial manager and they don't even know that its largely a psychological problem and only peripherally economic. Which is not something the real financial managers can afford to indulge their Simple Simon side with.

This thread title should read "Where is the US Balance Sheet headed?

It's accepted in internet forums such as this one, that stooping to patronising ad hominen attacks is an admission of surrender. So, it would appear that CO tossed in the towel on this page, Spendius.

A biz manager's degree? Hmmm, I have a BA in Adult Ed, but I prefer to work with my hands. I do like to create online learning resources, which can now be marketed for free on the TeachersPayTeachers website.

Australia's "false economy" is actually referred to as a Two-speed economy, and our opposition makes front page news when it whinges about our deficit rising above two percent of GDP. Kinda makes America's balance sheet look like the biggest failure in the world.

But what would we know, Spendius?

I'm glad they don't owe me much.

You can't even translate what I said correctly; I said I earned a Business Administration degree; that's not a business manager's degree. Not everyone who earns a BA degree becomes a manager.

Adult Ed didn't help you much!

You said that you worked in a shoe shop. What have you done with your degree?

I worked in Adult Ed for three years, but decided I preferred to work with my hands, (too cerebral, that teaching gig, if you take it seriously).

Have you kept up-to-date with the LIBOR "scandal" at all? Not sure why they call it a scandal, when it was known about five years back. Funny how this internet thingy works against the corporate control of our media, huh?
============================================================
The 21st has been a banner century for financial and accounting scandals. Enron, the dotcom bust, the subprime-mortgage crisis and the bank bailouts have all contributed to the very low esteem in which the American public holds Corporate America in general, and high finance in particular. So it is no small feat that the latest interest-rate-fixing LIBOR scandal is being heralded as the most egregious in a generation or, as Robert Scheer put it in the Nation, “the crime of the century.”

LIBOR is an acronym for the London interbank offered rate, and it is the average interest rate the world’s largest banks pay when they borrow money. And this figure (or figures, as different LIBORs are calculated for different loan maturities and currencies) is used to price hundreds of trillions of dollars worth of financial instruments, from high-yield corporate debt to student loans.

Read more: http://business.time.com/2012/07/09/libor-scandal-the-crime-of-the-century/?iid=tsmodule#ixzz208or4O3w

I worked in shoe stores as a field auditor for Florsheim Shoe Company after earning my college degree. They promoted me to Audit Manager after 3.5 years, and moved my family from California to Chicago where they had their home office and factory. After seven years with Florsheim, I worked for several other companies as Controller, Fiscal Manager, and Director of Administration.

I retired early, and have traveled the world having visited all five continents and over 170 countries.

I know a little about the LIBOR scandal because they were reported in the local and national media.

Otherwise, I'm just an average joe.

Do any of you keep up with the Keiser Report or am the only one?

He is a bit of a comedian and a banking specialist.

He was a Cost Accountant. Not exactly the cobbler you seem to visualize.

I was seeking clarification, Roger. I got that in CI's last post, thankyou.

As for Australia's "failed economy" our current federal treasurer, Wayne Swan, was named World's best treasurer:
Updated September 21, 2011 07:54:18
Treasurer Wayne Swan has been awarded the prestigious finance minister of the year award for his handling of the Australian economy.

The award is judged by leading European banking and finance magazine Euromoney. Story here.

Granted that the "judges" of this award are banksters, it may just mean that, like previous governments of this fine land of ours, Mr. Swan is more than willing to allow foriegn investors to run rough-shod all over the place.

Interestingly, the much-vaunted Trans-Pacific Trade agreement, still in the development stages, and being cooked up by the corporations who look to be as devious as they are wealthy, has been stalled again by our government.

“The leaked investment chapter of the Trans- Pacific trade agreement (TPPA) being negotiated between the US, Australia, New Zealand and six other Pacific countries contains special rights for foreign investors to sue governments if a law or policy harms their investment," Dr Patricia Ranald, Convenor of the Australian Fair Trade and Investment network said today.

“However, the leaked chapter shows that Australian Government has kept to its policy and is refusing to apply the right of investors to sue governments for damages in Australia. We support the government's policy, but believe it would be more consistent if the government simply opposed the inclusion of this provision in the agreement,” said Dr Ranald.

“The right of investors to sue was excluded from the US Australia Free Trade Agreement, and more recently was not included in the Malaysia-Australian free trade agreement. We have long campaigned against this provision, because its inclusion in other agreements has allowed corporations to sue governments over health and environment legislation. The Australian Government's policy has been reinforced by its battle against the current attempt of Philip Morris tobacco company to sue the Australian government damages over its tobacco plain packaging legislation under the provisions of an obscure 1993 Hong Kong Australia investment agreement,” explained Dr Ranald.
More here.


Oh, and Reasoning Logic, keep the videos coming. ;-)

Builder, Who ever said "Australia's failed economy?" Do you know how to read and comprehend what's written rather than making your own interpretation?

I don't see where Mr. Lacker gets that from. Certainly not from any economics-101 book. If the US economy was at full employment, printing money at the rate the Fed prints it would lead to runaway inflation; Keynesian and Monetarist models agree in predicting that. But we're simply not seeing that, so the US economy is not at full employment Lacker's statement may have a foundation in politics; it does not have a foundation in economics.