The fact is we will continue to decline until Obama says....

"We are going to start manufacturing things again" and you actually see it happen.

We can no longer continue to consume, import our goods, and buy them on credit while we produce nothing. We can no longer substitute low wages with debt.

And those college kids that are coming out of school right now expecting to get a nice desk job with high pay? Reality is going to smack them in the face when it doesn't exist anymore. A WEALTHY nation has those jobs, not one completely in debt at all levels. (and I say that as someone with college who just got a highly physical by no means easy job)

tech stocks
bank stocks
......

Heck, it's not even paper anymore, it's little magnetic bits on some "storage drive" somewhere.

Fuck the numbers. We need to make things that have value, and sell more than we consume.

100%.

Turn them into steel, turn the steel into products, seel products to consumers. Value added at each step.
Instead we sell our natural resources at a discount to china.

We certainly have to start making things here again and not send it overseas. Another thing we must also do is raise the tariffs on imported goods. I heard the other day that we only charge China 2% for their goods that are imported to the USA and they charge us a 20% tariff on anything we ship to China. I'm not sure who was talking about this (Talk Left on Serius Radio.) The host and the caller were saying that if we raised our tariff, the manufacturers would have to bring the jobs back to this country. Is that too simplistic of a solution?

or some of his sillier economic arguments, he does have an analogy which I think neatly sums up our current dilemma:

et us suppose six castaways are stranded on a desert island, five Asians and one American. Their problem is hunger. So they sit down and divide labor as follows: One Asian will do the hunting, another will fish, the third will scrounge for vegetation, the fourth will cook dinner, and the fifth will gather firewood and tend the fire. The sixth, the American, is given the job of eating.

So five Asians work all day to feed one American, who spends his day sunning himself on the beach. The American is employed in the equivalent of the service sector, operating a tanning salon that has one customer: himself. At the end of the day, the five Asians present a painstakingly prepared feast to the American, who sits at the head of a special table built by the Asians specifically for this purpose.

Now the American is practical enough to know that if the Asians are going to continue providing banquets they must also be fed, so he allows them just enough scraps from his table to sustain them for the following day's labor.

Modern-day economists would have you look at the situation just described and believe that the American is the lone engine of growth driving the island's economy; that without the American and his ravenous appetite, the Asians on the island would all be unemployed.

The reality, of course, is that the American is not the engine of growth, but the caboose, and the best thing the Asians could do would be to vote the American off the island--decoupling the caboose from the gravy train. Without the American to consume most of their food, they'd have a lot more to eat themselves. Then the Asians could spend less time working on food-related tasks and devote more time to leisure or to satisfying other needs that now go unfulfilled because so many of their scarce resource are devoted to feeding the American.

and promoting distrust of each other among the Asians.

in the mean time the standard of living for most Americans is going to go down FAR more than most people realize....

but on which products?

...is that for it to work, wages need to go up. Wages, in real terms, have declined by double digits in the last thirty years. In order to support a manufacturing base, you ideally need workers who can also afford to be consumers (there's a limit to how much crap China will buy). When wages are raised to a reasonable level, workers will buy the products they're producing. That means two things: Firstly, the corporations make a profit (which is fine as long as they're not exploiting people to do so) and secondly, the quality of product improves.

I'm not sure I'm explaining this very well so let me give you an example. Bob here works in a plant, fitting auto interiors. Bob's wages are crap. He knows he'll never be able to afford one of the cars he produces, not a new one anyway. So why should he bother going beyond the minimum requirement of his job? But if you raise Bob's wages to a reasonable level, he's happy and content and he can afford (maybe with a loan) to buy one of the cars he works on. That gives him an incentive to do the very best job he can. Because Bob and his collegues are doing the very best they can, DU Motors becomes known for having a first-class interior and sells more cars. Thus, the company makes more money and hopefully passes some of that on to Bob and the state makes more money in taxes.

But, in order to get that done, you need to reform campaign finance. Why? Because corporations don't like paying higher wages, so they won't do it unless they're forced to and because of the system of legal bribery known as "campaign contributions", politicians are brought and paid for. So if you want to start manufacturing again, you need to raise wages and in order to do that, you need to reform campaign finance and, preferably, ban lobbyists outright (for much the same reasons).

(that is, short of sweeping governmental and industrial change that would make Lenin blush)

The US is on track to becoming a third world country. It's already far behind the first world - something like where the USSR was during much of the cold war - and going downhill fast.

because that is what we will have to do to be competitive in this market, the global market. Oh, and keep wages down significantly and/or inflate like crazy, hurting savers and those on fixed incomes.

And please, no one give that tired line of "we have to bring China and India into our standards". That is a pipe dream. They live down in the dirt on exponential multiples less than us in money and resources, and have thoroughly kicked our ass via our own insane trade policies. NAFTA, CAFTA, etc.

No, to get manufacturing back will require one of three things, either a massive World War, total economic collapse/destruction of trade, or precipitous decline in what progressives have spent the last 80 years fighting for.

We all know this, that is why we are so mad.

That and China kicked our ass in WW3 for the tidy sum of $800 Billion(what we owe them), about 1/5 of what a war effort would have cost, and in less than 15 years. Worst part, not a single shot fired and we placed the gun in our own mouth.

Go ahead people and tell me I am wrong, I dare ya. I know, I know, we're gonna Grow, Grow, Grow!!! The politician du jour will save us!!! Woo-hoo. I shiver in anticipation.

http://www.ted.com/talks/ray_anderson_on_the_business_logic_of_sustainability.html

In fact, when BP decided to go "beyond Kyoto" when building one of their newer corporate headquarters, they discovered that they saved over 1 million dollars a year in operating costs. Going green saves money, sustainability is possible, but infinite growth driven by population is impossible. Nobody is willing to talk about population, the giant elephant in the room. We can all have sustained jobs and income if we think ahead and plan well, but doing so with a population much larger than what we have now? Impossible. If we plan on living comfortable lives without self destructing then we need to choose to curb our procreation.

At the very least, China will not be cost competitive soon.


1. Raw materials make up a large expense in manufacturing and due to global shortages of almost everything, they are going to grow in costs as a % of the expense of manufacturing goods. As a result the cost savings from labor will not be as large, since labor will make up a smaller % of the price.

2. Chinese wages go up about 10-15% a year, wages in the US go up 2-3%. So in China wages double about every 5-6 years. So they may make $2/hr now but it'll be $6-8/hr within a decade. I have seen factory jobs in the US that pay those wages.

3. China is improving their labor standards, environmental standards and quality control standards, all of which will increase the cost of manufacturing.

4. When oil prices go back up, it'll cost more to ship goods from China than to make them domestically. Back when oil was $150/barrel it started becoming cheaper to manufacture things like steel at home than to ship it from China.

5. The US dollar is going down in value, the Yuan is going up.

I'm sure there are more reasons, but my point is that I don't think China will be a haven of outsourcing manufacturing jobs for much longer.

However, we might just start outsourcing to Mexico again. That will save on shipping, but Mexico isn't big enough to function on the same level China can with 1.3 billion people. But I think manufacturing might start coming back to the US soon because China won't be cost competitive anymore. And I've heard (no idea how true it is) that no other developed nation offers the low wages, tons of workers, political/social stability and compliant government China offered. Other nations are too small, or too corrupt, or unstable, etc.

rinse, repeat.

you end up owning the world.

that once was a living world.

of $2.6 trillion worth of goods. How much more shit could we possible produce Einstein?

The record was $1.6 Trillion in 2007. It's declined since then.

I wish I had time to elaborate on the problems with this data. For now, I'll simply point out that we produce more only in terms of value, not volume. Take out the missiles and fighter jets and these figures decline rather sharply.

We used to make 85% of the goods we consumed. I'd be surprised if the real numbers were above 50% these days.

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_sector_composition

The only way to accurately account for the produce from this industry is in dollars. "volume" as you put it is to variant to measure. You might as well measure it in decamadgirl units.

Most people who like to complain about the disparity of production to consumption tend to warp the facts involved. It is true that we consumer more than we produce. If you add the agri numbers to the industrial numbers you will get the total production. The service industry is the one that does the consumption so that is easily measured. You also must consider the fact that we provide many services that are consumed by other countries.

Fact remains that we are an industrial power house.

You just don't see or think about them.

http://www.oriron.com/streetcar.htm

:sarcasm:

That's the b.s. we're being fed: that the economy is turning around & Obama is a miracle worker.

The jobless and homeless and sick can go f-off.