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2010-08-02 Economy

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Posted by Fred 2010-08-02 00:00|| || Front Page|| [6 views ] Top

#1 24% of American workers say that they have postponed their planned retirement age in the past year.

That would include me. But from fear over what the government WILL do to me rather than what it has done or even the economy.

Posted by Glenmore 2010-08-01 15:52|| 2010-08-01 15:52|| Front Page Top

#2 Thank you for posting this information. I have found the Law Professor who gave the lecture on the middle class wipe out.

http://www.youtube.com/watch?v=akVL7QY0S8A&feature=related

The problem is so many now on some sort of help they will vote for whoever will keep sending the money. Medicare for example every time they have a guest speaker they promise to save or expand benefits but never cuts (senior centers for example).

Posted by Dale 2010-08-01 16:12|| 2010-08-01 16:12|| Front Page Top

#3 I fear that the only chance my kids will have of home-ownership/middle class lifestyles will be if I die so they can inherit. It's gonna happen someday anyway (I'm told), but I can see Oblahblah trying to take away 401K, et al, money "being underutilized" by us plebes so our betters can administer it "for us". That will be the armed insurrection

Posted by Frank G 2010-08-01 16:26|| 2010-08-01 16:26|| Front Page Top

#4 I also fear for a country with so few with "skin in the game" as far as paying taxes. When nearly 50% of the households pay no federal taxes it pays to be a class-warfare populist Donk pol that can motivate the poorer classes to vote themselves larger and larger shares of other's money.

Posted by Frank G 2010-08-01 16:30|| 2010-08-01 16:30|| Front Page Top

#5 We've reached a point where such a large percentage of the population is unproductive, uneducated, and only interested in voting for more spending and social/welfare programs instead of fiscal responsibility.

Posted by Mike Hunt 2010-08-01 17:18|| 2010-08-01 17:18|| Front Page Top

#6 The 50% figure is misquoted. The original article stated 50% of US households pay no federal income tax. It did not mention whether or not they pay FICA or Medicare taxes.
Anyone have a source on what percent of voters in the last presidential election paid federal income tax? What percent were unemployed at the time? What percent of unemployed who voted for Obama in 2008 are still unemployed?

Posted by Anguper Hupomosing9418 2010-08-01 17:25|| 2010-08-01 17:25|| Front Page Top

#7 With the inflation we're looking at, I haven't delayed retirement, I've written it off.

Posted by Nimble Spemble 2010-08-01 17:26|| 2010-08-01 17:26|| Front Page Top

#8 AH - ask 100 people what they pay in FICA/Medicare taxes. I doubt 90% could tell you. They DO know what their tax refund was last year though. It's all perception and zombie-like voting

Posted by Frank G 2010-08-01 18:14|| 2010-08-01 18:14|| Front Page Top

#9 Mike Hunt, the best fiscal responsibility is for Americans to buy Made in USA. In stead of trying to change the elected representatives in USA government, the Tea party folks need to start changing the mind set of Americans to pay a few bucks more and buy USA made goods and to demand that made in USA means 100% made in USA, not only the card box. If only 50% of we take an oath to resist buying goods made in foreign country, and let the merchants know about it, we will be able secure our jobs and the future of our children and grand children. The basic difference between our government and rest of the worlds is that ours is from bottom to top, not from top to bottom. So please, look at what we did for the misery we brought (actually we bought) to ourtselves, correct it and do not blame others just kike the Islamic terrorist do. Please be Americans for we Americans dont blame others.

Posted by Annon 2010-08-01 19:07|| 2010-08-01 19:07|| Front Page Top

#10 the best fiscal responsibility is for Americans to buy Made in USA

Have you tried FINDING items made in America? Believe me I look. Usually it's a choice of several items ALL made in China. If the bean counters running most American companies insists on outsourcing everything, buying American is not a viable option.

Posted by DMFD 2010-08-01 19:34|| 2010-08-01 19:34|| Front Page Top

#11 #10, so what are the viable options? Well, let me jolt you a bit more. I am expecting many harsh responses because what I said, although truth, but not much different than the story goes in rains birds sitting comfortably in their nests told the monkeys to build nests instead of becoming wet and cold out side and the monkeys snatched and threw the birds nests after the rains. There is always some monkey business in all of the human kind. But only the worst critic can tell me where I went wrong. So help me by throwing the worst you can on me. # 10 your comment imply that the solution to our problems are to service what we do not produce. Well, it was tried, did not work. All the creative economy without manufacturing did not work caused disaster for Aericans, is the fact, not theory.

Posted by Annon 2010-08-01 20:14|| 2010-08-01 20:14|| Front Page Top

#12 Annon, why will I be better off spending a few thousand more for a Government Motors car so some fat, dumb and happy UAW member can retire at my expense while I work till death? They can compete with every one else just as I do. Buy American is a suckers game.

Posted by Nimble Spemble 2010-08-01 20:19|| 2010-08-01 20:19|| Front Page Top

#13 Buy American, the job you save may be your own. Quick info on some sweatshop free USA clothing:

LL bean- Freeport Maine. Look online specifically at their canvas custom boat bags can be custom made to your specs in your choice of colors. I own a sm, med, large, and the large works as a weekend bag

Quoddy-shoes made in Maine, USA.

Americanapparel.net. Sweatshop free made in US.

http://shop.moxsie.com/ Features independant designers, many American, at affordable prices.

For household items, furniture, etc, they are out there, but additional costs equal better peace of mind.

Posted by Omase Hatfield6568 2010-08-01 20:31|| 2010-08-01 20:31|| Front Page Top

#14 Buy American is a suckers game.

Wow. I wouldn't quite put it that way. IIRC, there here are some excellent cars made in the USA.

Posted by Omase Hatfield6568 2010-08-01 20:35|| 2010-08-01 20:35|| Front Page Top

#15 # 10 your comment imply that the solution to our problems are to service what we do not produce

Amen. Americans are good at producing things, we've gotten out of practice, which is a shame.

Posted by Omase Hatfield6568 2010-08-01 20:47|| 2010-08-01 20:47|| Front Page Top

#16 I believe they make Toyotas in Kentucky... and that Honda has a factory somewhere in the American Southeast.

Posted by trailing wife 2010-08-01 20:57|| 2010-08-01 20:57|| Front Page Top

#17 Great N.S., You are a bit angry and the truth is coming out of your mouth. You do not have any solution to prevent loss of jobs in USA. Instead, you are driven by the jealousy and anger -- same story when a person worshiped the God to bestow up on him the blessing that his neighbor will loose both legs when he breaks one of his. Very typical of the wishes of a Tea Party person without brain, isnt it? But let me ask you a simple question. How long you think you will hold on to your highly competitive job in America when your business management could replce you any day by paying only one tenth of your salary to some one in under/non developed country. Have your pride so long it lasts. I will suggest you to get your head out of the sand

Posted by Annon 2010-08-01 21:09|| 2010-08-01 21:09|| Front Page Top

#18 Tea Psrty person without a brain

Careful there, Annon dear. A number of Rantburgers are founding members of Tea Party organizations... and not one of them is anything like brainless.

Also, I think Nimble Spemble is a business owner, so he'd have to outsource himself, sort of an Ourobouros eating its tail thingy.

Posted by trailing wife 2010-08-01 21:19|| 2010-08-01 21:19|| Front Page Top

#19 Annon - I'd warn about walking unarmed into a battle of wits, but you are determined, it seems. Onward! You have only your head to be handed you! Along with your dignity, credibility, etc.

Posted by Frank G 2010-08-01 21:58|| 2010-08-01 21:58|| Front Page Top

#20 Dear T.W. and Tea Party Rntbergers, I am sorry, I stepped out of my self restrained expression.
I like Rantburg, I have been visiting this site at least for the last 4 years, have contributed once financially, and I know T.W. has a very moderating voice here. But I always thought, Rantburg could have a constructive and problem solving discussion chapter also. Unfortunately, this is not going to happen. Thank you TW for the warning and good by to all of you folks.

Posted by Annon 2010-08-01 22:12|| 2010-08-01 22:12|| Front Page Top

#21 yay seems like we found us another hit and run troll.

Posted by Valentine 2010-08-01 22:21|| 2010-08-01 22:21|| Front Page Top

#22 I always thought, Rantburg could have a constructive and problem solving discussion chapter also.

I wouldn't call it 'constructive' when angering and insulting your opponent.

Thank you TW for the warning and good by to all of you folks.

Ta!

Posted by Pappy 2010-08-01 23:25|| 2010-08-01 23:25|| Front Page Top

#23 Gotta get rid of the minimum wage and unions if you want American made. Minimum wage means US workers CANNOT compete with Asians.

Look at what the article says 22. What American workers compete with: In China a garment worker makes approximately 86 cents an hour, and in Cambodia it's 22 cents an hour.

I'm thinking inflation is the problem. My folks paid $30,000 for a house in 1960. Today you couldn't buy that place for less than $300,000. What percentage increase is that? Sorry, I'm slow with math but I know it's a helluva lot. Who is to blame? I nominate Bawney Fwank and Chris Dodd. Complicit, of course, was George W. Bush. It's a bi-partisan mistake/crime.

Bottom line: we're screwed.

Posted by Abu Uluque 2010-08-01 23:28|| 2010-08-01 23:28|| Front Page Top

#24 It is unfortunate when we get all worked up over such small things.

If my employer could hire someone else for 1/10th the salary, then she should. But she can't. Why, because I work harder and have skills that those others don't have.

When I started my career, I had a secretary. She had a PhD in Archeology, and was a great secretary. Now I have a computer. It is a poor secretary. Nevertheless, her job was outsourced/automated. Now, she is a museum curator. And far better off.

The future is not the past. In change is opportunity. Seize it, or don't.

Posted by rammer 2010-08-01 23:36|| 2010-08-01 23:36|| Front Page Top

#25 Annon has (had) a good point, and it's one that's almost never made by our professional pundits or politicos: today's US economy has been built on a mirage aka cheap credit. Our version of bread-and-circuses has, or had, at its center a free lunch for the politicos, who didn't have to be fiscally prudent, or come up with an answer to the destruction of our manufacturing base, or improve or schools and elevate US workers' skills, or even make a pass at creating real and sustainable economic growth.

Instead, our craven political class took the easy way out. They reached for the credit spigot, and told some 50m US workers that $hit wages and utterly no employment security was no problem, saying in effect, Ignore the hole in your future, and live large today: load up on super-cheap Asian-made crap with your tiny paychecks, and take out crap mortgages and fill your cheap house with stuff you don't need bought with money you don't have!

That works OK, I suppose, when credit's artificially cheap, and crap mortgages enable ordinary folk to pretend they're playing the wannabe-WallStreeter's leveraged roulette game.

But there won't be any more cheap credit, and people have suddenly realized that they can forgo most of the shiny junk they stuffed into their shopping carts each weekend without missing a beat. Poof! There goes a hefty chunk of the 70% of our GDP that was the Big Fat American Consumer Economy!

My solution? Start by rediscovering the YANKEE virtues that made this nation the envy and aspiration of working people around the world, namely

INGENUITY - make it here. Make it better and make it more intelligently.

THRIFT - get our f###ing house in order. No more excuses.

SUPERIOR SKILLS - restore vocational ed. Reform primary and secondary education root and branch.

HIGH WAGES - to be achieved once again by not via legislative fiat but through a cultural change in which consumers agree to pay a bit more for companies that not only make good products but also pay good wages-- living wages, wages that you can support a family with and build communities around.

Bottom line (and end of my rant): either America will rediscover the virtues that made for the world's largest and wealthiest middle class, or it will cease to be America. In that case, we should just change our name to s.t. like Latin America North.

/rant

Posted by lex 2010-08-02 02:04|| 2010-08-02 02:04|| Front Page Top

#26 One could make the Unappreciated Cultural benefit argument and how cost accounts and tax laws don't factor that in....
But none of it matters when you can hire a 2yr tech school grad in Chungking for less than $1 a day.

There is Free-Trade and Fair Trade

Free-trade is killing us.

Posted by 3dc 2010-08-02 02:30|| 2010-08-02 02:30|| Front Page Top

#27 The only effective response to globalized competition is to migrate our skills and our product quality / sophistication upward, ever upward. The Germans have heavy state intervention in business. They also have outstanding product quality, unmatched technical skills, and world-class manufacturing exporters. Either we learn how to make things again, and pay our people good wages to make and design and service those things, or we will go the way of that neighboring state that has cynically dumped its dumbest, least-educated and most desperate campesinos on us.

Posted by lex 2010-08-02 02:46|| 2010-08-02 02:46|| Front Page Top

#28 Economic justice can best be won by free men through free enterprise.

Posted by Bobby 2010-08-02 06:09|| 2010-08-02 06:09|| Front Page Top

#29 I'm thinking inflation is the problem. My folks paid $30,000 for a house in 1960. Today you couldn't buy that place for less than $300,000.

Back when we were in the landlording business (yes, I was once a bloody-handed plutocrat, before getting busy with other things), I was told that historical inflation meant that the price of things generally doubled every ten years. That means that a house costing $30,000 in 1960 should be worth about... carry the seventeen and add 43 (I've always been fond of prime numbers)...$960,000 in 2010. At $300,000 you're paying theoretical 1995 prices -- not too bad.

Not to mention, Abu Uluque, as I recall you live in California, yes? What did that house sell for three years ago?

Annon has indeed been a Rantburger for years. That's why I was surprised at the sudden and unnecessary personal attack. Problem solving rarely occurs when one party begins by attacking the character and intelligence of the other party. Nose-punching is the more usual outcome.

The solution to the jobs problem is to strengthen the small business side of the economy, which is where job growth happens in America, or so I'm told. Unfortunately, the current administration loathes small business with a passion (they loathe large business, too, but those are so much easier to manage), so whatever happens in the next few years will be against the headwind of increasing regulatory and tax burdens.

Nonetheless, I expect small businesses will continue to be formed, and those that survive the current situation will be ready to grow as soon as the business climate improves. In the meantime, many college business, engineering, and other programs are looking to place interns and co-op students, who as a group are reasonably intelligent and energetic... and cheap and short-term. There are also temp. agencies which, while not necessarily cheap, have the advantage of being easily let go during a financial downturn... and most of the paperwork is handled by the agency.

Posted by trailing wife 2010-08-02 07:16|| 2010-08-02 07:16|| Front Page Top

#30 The uber-rich Rent-Seeker "class" create a uber-poor rent-seeker "class" to distract you.

Both need tackling.

Posted by Bright Pebbles 2010-08-02 07:33|| 2010-08-02 07:33|| Front Page Top

#31 Holy mackerel, Moonbeam almost wrecked my train of thought.

What an active weekend at the burg. Annon is a story teller as I am myself. We all have to be thick skinned to survive these days.

Rush told this Russian story. Two friends were walking along and one had a dog. The one who didn't have a dog was jealous. The one without a dog killed the friends dog. So now they were equal.

That's how the riots went in DC. If your neighbor had anything they were to share it and if you didn't they took it.

Posted by Dale 2010-08-02 07:53|| 2010-08-02 07:53|| Front Page Top

#32 "A number of Rantburgers are founding members of Tea Party organizations... and not one of them is anything like brainless."

Hmmm maybe I should start one in Germany? (Although I guess "beer party" would appeal to more people...

Posted by European Conservative 2010-08-02 08:27|| 2010-08-02 08:27|| Front Page Top

#33 Because made in North Korea for North Koreans has worked so well for them, we should follow the model of self sufficiency. Because Smoot-Hawley helped recover the battered economy before. /sarc off

There is no perfect. It's all trade offs. The problem is that politicians decide the trade offs for short term personal/party gain rather than allow a true 'national' free market system to do it in the interest of the majority. It's all about control and fear of riding the unpredictable beast that a true free market can be. Humans are more comfortable with predictability and routine than vagaries and uncertainty.

Posted by Procopius2k 2010-08-02 08:59|| 2010-08-02 08:59|| Front Page Top

#34 Very typical of the wishes of a Tea Party person without brain, isn't it?

The guy is just a troll. Don't engage him.

Posted by Martini 2010-08-02 09:22|| 2010-08-02 09:22|| Front Page Top

#35 So is this is an argument to raise the marginal income tax rates on incomes over 250k, etc.

Although I think most Rantburgers are in favor of low taxation, the comments here seem to support the Obama tax plan.

Posted by lord garth 2010-08-02 10:17|| 2010-08-02 10:17|| Front Page Top

#36 If your country is destroyed economically because of the outsourcing and exporting of jobs, what is the real price of goods and services?

Posted by JohnQC 2010-08-02 10:28|| 2010-08-02 10:28|| Front Page Top

#37 #32 European conservative Hi!,

Beer garden would work. You can start planning for October fest. I think tea party types are more out going than most others. I would advise you to serve the beer after the work is done but tea during activities.

Posted by Dale 2010-08-02 10:34|| 2010-08-02 10:34|| Front Page Top

#38 The world is changing. A lot. Rapidly. Mainly because of Point 22 above. Someday Clinton will be viewed as a terrible President for two decisions; not stopping the Nork nuclear program and admitting China to the WTO. Some day we find out why he made these decisions, also. But in the meantime, we need to live with the consequences.

One of them is an oversupply of relatively fungible low skilled labor in the world. An oversupply will lead to a price drop, no matter how hard we try to resist it with income transfers like Buy American or protectionist measures. The major question is whether we adopt such measures to spread the pain, thus subsidizing the unskilled, or whether the pain is borne mainly by the unskilled.

This is a major and real problem. (And remember that you get more of what you subsidize.) We would do well to remember how we dealt with the problem last time. The New Deal programs were not terribly effective in solving our economic problems. But the destruction of the rest of the world's productive capacity while we provided the arsenal for democracy proved incredibly effective. Under the post war security umbrella we provided the free world we were able to establish economic rules that allowed the middle class to flourish.

But with the decision to extend entry to our markets to those who didn't play by our rules exposed their weakness. The humpty-dumpty of the post war settlement can't be put back together. A new settlement will be reached, but not until after events more terrible than the last "good" war. And I have no idea what it will look like, anymore than someone in the 30's knew what the 50's would look like. But I know that those without skills will be remunerated at a wage established in a world market.

Posted by Nimble Spemble 2010-08-02 11:39|| 2010-08-02 11:39|| Front Page Top

#39 Instead, you are driven by the jealousy and anger

Annon,
Its extremely rare when a person is motivated simply by spite. To paraphrase Napoleon: The two primary levers of mankinds motivation are self-interest and fear. And when one automatically assumes anothers motivation is of the irrational and discounts the legitimate, its usually a sign that he is consumed with an agenda. The Buy American to save US manufacturing is the most fatigued Union canard. For example, what would motivate someone to buy a foreign electric hybrid vehicle over a US built Chevy Volt? First, it would be in their self-interest to purchase a superior product at a lower price. Second, would be the fear that their neighbors and friends would think theyre a fool if they did otherwise.

Posted by DepotGuy 2010-08-02 12:33|| 2010-08-02 12:33|| Front Page Top

#40 Lex - Good point about the mirage of cheap credit and the US economy's dependence thereon. There's another critically important take away from that idea which is rarely touched upon but equally true: while cheap credit fed an artificial, extraordinary, and unsustainable expansion of the US economy it also, in turn, fed an artificial, extraordinary, and unsustainable expansion of the public sector. Cheap credit inflated a government bubble as surely as it inflated a real estate bubble.

Unfortunately there exists no simple market mechanism to deflate this most damaging of economic distortions. Elections will bring few tangible improvements as enough members of both major parties (nearly all Democrats and many Republicans) like being or desire to be members of the ruling class that theres strong incentive across the political spectrum to maintain the present order. Though the left and right would utilize the mechanisms of the present overlarge system to different ends, theres little impetus for any elected official to voluntarily give up power and influence. But, until and unless we deflate the government bubble and remove most of its restrictive regulation and at least some of its unbearable cost, all the restoration of fundamental American ideals in the world will have little impact on our economy.

Posted by AzCat 2010-08-02 12:40|| 2010-08-02 12:40|| Front Page Top

#41 But I know that those without skills will be remunerated at a wage established in a world market.

Right.

But those with skills too. As a computer programmer I am keenly aware that there are programmers in India who are just as skilled as I am. If I was to sit here and claim that I am smarter, better educated, harder working and more productive than they are it would be as foolish as it is arrogant. That's why we have fewer students in this country who will major in computer science. That's how we lose our edge in that critical field just like we've lost our edge in steel, textiles and automobiles. What's left? Cotton? Wheat? Corn? Lettuce that is harvested by illegal aliens? Big Macs?

What I'm saying is that maybe those wages that are established in a world market wouldn't be so bad if it wasn't for inflation. If there had been no inflation since 1960 then maybe our workers could compete. We're getting squeezed by an exorbitant cost of living here in the USA and a vast pool of cheap labor that is not entirely unskilled overseas. We really are screwed, all of us, except the uber rich who can live on their investments and the union members who manage to keep their jobs and their pensions.

And why do we have inflation? I'm no expert here but it seems to me that runaway government spending and easy credit have had a lot to do with it. That's why I mentioned Bawney Fwank. I guess what I meant was Fannie Mae and Freddie Mac because, when people can get a mortgage for a house that they really can't afford it encourages even more housing inflation resulting in the real estate bubble that has just about ruined us. When people can buy stuff on credit, when they are living beyond their means, it encourages retailers and producers to increase their prices. Unions that demand ever increasing wages and benefits can blame it on inflation but they can also share the blame for inflation and they have themselves to blame when their jobs are sent overseas and they are left unemployed.

And yes, TW, I live in California where it is much more expensive to live than in the so-called flyover country. I'd leave it if I could but I've been here so long that it has spoiled me rotten. Besides, some of my fellow Rantburgers would be upset if I Californicated Colorado. Hmmmm. I wonder what a four-bedroom, three-bath, three-car garage, 2500 sq. ft., two-story house is going for these days in the Denver-Colorado Springs area? But I don't wonder too much because I don't like snow. I wonder how much it would be in Bangalore?

Posted by Ebbang Uluque6305 2010-08-02 13:18|| 2010-08-02 13:18|| Front Page Top

#42 There are a lot of great ideas above, and even better correctives. In particular P2K #33, N.S. #38 have very good posts. The various posters railing against robotic "buy American" and other sloganeering are dead on, too, as are those like rammer #24.

But is it all for naught?

I mentioned it recently (http://rantburg.com/poparticle.php?D=2010-07-06&ID=300351&HC=) in an excellent discussion here, and I'll say it again.

Until and unless Americans stop overrating the monetary and material value of their work in terms of lifestyle expectations, and until they stop worshipping at the altar of the false god of bulletproof income stream security, none of the suggestions above will work. Period.

The middle class isn't being "destroyed", except by some very arbitrary standards. It is, however, being reset to a more historical norm, a norm more in line with an economy not blown out of proportion by a hallucinogenic credit scenario.

I've been saying it for years here at the 'burg and on other sites. 1954 is dead. 1986 is dead. Do NOT listen to any politician (of either party) or professor or union boss or co-worker or blogger or drunk in a bar who tells you that he can get us back to either time. We can only go forward. And we must end the insanity of the fifty-year revolution of forever-rising expectations.

And we MUST get over the fact that some people will be richer than we are, and have more stuff.

The globalization of world labor markets is like toothpaste out of the tube. It can't be put back to its original state. None of you would want me to get my legislators to put in tariffs and taxes on you to pay (in a de facto way) ten times more for what I do just so I can live the lifestyle I've convinced myself I deserve, without regard to any historical context. That's thuggery, no matter who is doing it to whom (grammar?).

I agree, other countries where labor ends up are less free, have less safe workplaces, are less environmentally safe, etc. That's a moot argument. I don't like that stuff, either. But even if those things were equalized, the sense of expectation and entitlement of Amercans would be the real paralysis.

We can either nitpick and howl about it, and waste time with fifty different theories about how we can go back to some other hallowed era, or we can do something genuine and effective that recognizes that reality that moves us forward.

Lex, "high wages", "good wages"? This isn't the tune you were singing recently in our discussion!

Who is paying for those, but us? That truly becomes ourobouros. How about "wages which are in line with any real-world historical context"? Before the 1950's, even in good times, folks had very realistic expectations about what an hour of work entitled them to in terms of material standards. In good times, and in bad (like a good marriage!). Now, everybody thinks their work entitles them to live like a king, literally, in historical terms. Unless we can get back to deriving more of our joy in life from things not inolving purchases and stuff, we are in big trouble.

Posted by no mo uro 2010-08-02 13:50|| 2010-08-02 13:50|| Front Page Top

#43 The 25 statistics below prove that the middle class is being systematically wiped out of existence in America. The rich are getting richer and the poor are getting poorer at a staggering rate.
This article is extremely deceptive.

1. According to a 2009 poll, 61% of Americans "always or usually" live paycheck to paycheck, which was up from 49% in 2008 and 43% in 2007.
Polls aren't facts, but there's some truth in this. Part of the reason is that people are gullible, and there's a group of people out there that push living paycheck to paycheck. Heck, I live paycheck to paycheck. I do have savings, but I don't use it for routine purchases. I wait until I get a paycheck, then buy what I need. The problem isn't "living paycheck to paycheck", but living BEYOND your paycheck, routinely. The problem is debt - debt beyond your ability to pay it off in a reasonable time period. More and more Americans understand this, and are gradually weaning themselves from credit cards and easy debt.

2. 36% of Americans say that they don't contribute anything to retirement savings.
That's 36% that have been sold the canard that social security IS a retirement account - and even that 36% probably contribute to it. Social security by itself will keep you from starving, but that's about it. Part of that 36% are probably the chronic unemployed, or those trying to game the system by living on Social Security Disability Insurance or other government largess. My son gets SSDI. He's basically unemployable. He lives in a group home where his SSDI covers room and board. I spend about $300 a month meeting some of his other essentials and paying his Medicaid co-pays, because there's nothing left after he covers room and board.

3. A staggering 43% of Americans have less than $10,000 saved up for retirement.
How many of those are union employees who have a contractual retirement? How many have the kind of retirement account I had at a local company, where the company put "X" amount into a retirement account for me every month, plus ten shares of common stock for each year I worked for them? I didn't directly contribute, but the cash was deposited into my account each month. When I left, I got that cash, plus the stock (I also paid taxes on both - a real bite!).

4. 24% of American workers say that they have postponed their planned retirement age in the past year.
How many of those were planning an early retirement? How many had planned to retire at the minimum Social Security retirement age? How many were offered an incentive to stay? My father worked four years beyond age 65 at his company's request. Unless you can answer those questions, this statistic is meaningless.

5. The number of Americans with incomes below the official poverty line rose by about 15% between 2000 and 2006, and by 2008 over 30 million US workers were earning less than $10 per hour.
This piece of drivel needs to be dissected and discarded. What percentage of the US population was actually living below the poverty line? How many of those people were getting benefits from the State or Federal government, and how much? In some counties in the US, what's considered "the poverty line" is about the median income. How many of those "below the poverty line" were in prison, living on Native American reservations, in the military (lower enlisted ranks, up to about E-3, earn below the poverty level), or like my son, on SSDI? How many of those living on "less than $10/hour" were under 21, single, and living at home?

6. According to Harvard Magazine, 66% of the income growth between 2001 and 2007 went to the top 1% of all Americans.
Sigh. Yes, it probably did. When you're earning $2-$3 million a year (or you're a business making $2-$5 million a year) ANY increase is probably going to be staggering. How much of that, however, was in non-dollar income, such as stock options? For small businesses (treated like persons), a better year means income growth, and falls in that 66%.

7. In New York, the top fifth of earners collect more than 53% of the income; the bottom fifth takes home less than 3%.
And the top fifth pay 75% of ALL taxes, while the bottom HALF pay no income taxes, and less than a third of all other taxes. This statement is only relevant if your purpose is to induce envy and justify "wealth redistribution". Nothing is keeping anyone from increasing their earning power, if they're willing to work at it. Three things are needed to guarantee income: education, experience, and a willingness to work. The more of each you have, the more likely your income will be greater. I went from earning $8 an hour in 1994 to earning $18 an hour in 2000 because I had the right mix of education, experience and willingness to work. If you dropped out of high school in the tenth grade, have little or no work experience, and would rather goof off than work, your income is going to reflect that.

8. Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32% increase over 2008.
Another lying statistic. There are supposedly 134 million working Americans. That means that a little less than 1% of Americans filed for personal bankruptcy in 2009, in the midst of a roaring recession and near-10% unemployment. If that number were 10% or greater, I'd be worried.

9. Only the top 5% of households have earned enough additional income to match the rise in housing costs since 1975.
I have my doubts about this. I'd have to see some raw data. Too many people bought houses since 1975. Were the figures adjusted for inflation? Did they reflect the change in mortgage rates? Was the unbelievable 17% inflation of the 1977-1980 period factored in?

10. For the first time in US history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.
I need data. This statement, at face value, looks pretty iffy. And how much of what the banks own is the result of being FORCED to loan to people who had no ability to repay the loans? How much of that is in "derivatives", and how much in actual deed ownership? How much is the result of foreclosures caused by people losing their jobs as the economy retrenched - caused by the housing loan bubble?

11. In 1950, the ratio of the average executive's paycheck to the average worker's paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.
Again, so what? Nothing but a statistic to cause envy and encourage "wealth redistribution". The better question is how much income did each earn compared to what they contributed to the company's overall income and growth. Productivity of the individual worker in the US is among the highest in the world. While I don't believe that many "executives" are worth what they're paid, there are those whose contributions to a company deserve their seven-figure salary plus perks.

12. As of 2007, the bottom 80% of American households held about 7% of the liquid financial assets.
Well, duh! The income of the bottom 80% is less likely to result in huge surpluses (especially when most of those 80% are living beyond their incomes), while those top 20% have incomes significantly larger to provide a greater portion that can be saved. Also, how much of that 93% of liquid financial assets is in stocks and bonds provided as part of the upper 20%'s average annual salary?

13. The bottom 40% of income earners now collectively own less than 1% of the nation's wealth.
See above. Just another useless statistic.

14. Average Wall Street bonuses for 2009 were up 17% when compared with 2008.
And in 2010, how much BELOW 2009 are they? Again, just another 'envy' statistic.

15. The average income of the top fifth of New York families is 8.7 times greater than that of the bottom fifth. This is the biggest difference of all states.
New York, at the center of the financial infrastructure of the nation, would naturally include more people in the upper brackets than say, Gary, Indiana. Picking which data you're going to use can allow you to "prove" just about anything.

16. The average income of families in the top 5% in New York was five times greater than the average income of families in the middle 20% of earners. Again this is the biggest difference of all states.
Again, see above.

17. The average federal worker now earns about twice as much as the average worker in the private sector.
And has greater benefits. Factor out the military, and the span is even greater. Most of this is the direct result of Congress buying the civil service votes with greater pay and benefits. It needs to change, but it'll take a revolution - the shooting/killing kind - to make those changes. Eliminating the "unionization" of government employees would go a long way toward redressing this problem. Reducing the federal bureaucracy by 15%-20% would also help immensely.

18. An analysis of income tax data by the Congressional Budget Office found that the top 1% of US households own nearly twice as much of America's corporate wealth as they did just 15 years ago.
How many households owned ANY corporate wealth 15 years ago? There are too many variables one needs to see the data on to even comment on this.

19. The average time needed to find a job has risen to a record 35.2 weeks.
How much is this due to a continued recession, how much to a lack of jobs, and how much to extended unemployment compensation?

20. More than 40% of Americans who are employed now work in often low-paying service jobs.
As compared to what? Low-paying farm jobs during the first half of the last century? Low-paying manufacturing jobs that have since been shipped overseas due to payroll increases? How many are the result of the loss of union jobs, as compared to non-union income? That blanket statement means nothing without some supporting information.

21. For the first time in US history, more than 40 million Americans are on food stamps, and the US Department of Agriculture projects that number will go up to 43 million Americans in 2011.
Again, how much of this is because of the crappy economy? How much is because of a population increase, especially illegal immigration? How much of it is just out-and-out fraud?

22. What American workers compete with: In China a garment worker makes approximately 86 cents an hour, and in Cambodia it's 22 cents an hour.
Sigh. How does that compare to the cost of living in China, or Cambodia? When I was in Vietnam in 1970-71, the barracks housemaid got 1000 piasters from each of the 36 people in our barracks. That's 36,000 piasters. At an exchange rate of 500P=$1, that was a whopping $72/month. That put her in the upper 50% of the population in income. Garment workers - highly unionized - get $15-$25 an hour, but the number of jobs keeps decreasing because manufacturers cannot pay that and compete with companies in the Third World.

23. Despite the financial crisis, the number of millionaires in the US rose a whopping 16% to 7.8 million in 2009.
More forced envy. So what? So someone was able to hang on to more of their money, make more money, or operate a business more profitably than others. My income also rose 11% last year. So fricking what?

24. About 21% of all children are living below the poverty line in 2010 -- the highest rate in 20 years.
Again, how many of those are living below the poverty line because they're children of illegals, how many are children of people who have lost their jobs, and how many of those "children" are 15 or older and on their own? How many are children of unwed mothers, which has increased for the first time in a decade?

25. According to Professor Emmanuel Saez of the University of California at Berkeley, the top 10% percent of Americans now take in approximately 50% of the income.
And how is this different than what it was in the 1870's, or the 1890's, or even the 1920's?

This entire article is not about the "decline of the middle class" but an attempt to justify more greed on the part of politicians by igniting "envy of the haves", and "justification" for either higher taxes, or the expiration of the Bush tax cuts (or both). In truth, most Americans, including those "below the poverty line", live better than even the top 10% in most Third World nations. If government would quit trying to run every aspect of every person's life, would quit trying to confiscate as much of each person's productivity as possible, we could ALL live better. The person that wrote this article is part of the problem, and should reside at the end of a rope attached to some DC lamp post.

Posted by Old Patriot 2010-08-02 14:26|| 2010-08-02 14:26|| Front Page Top

#44 Tell us we're selfish all you want, especially as the government (whose "public servants" make much more than the rest of us) strangles what's left of private industry in this country. Just remember what those people y'all decided to give one of y'all's most strategic industries to have as a saying: at the narrow passage, there is no brother, there is no friend.

Posted by Thing From Snowy Mountain 2010-08-02 14:35|| 2010-08-02 14:35|| Front Page Top

#45 It's probably more the case that our vaunted postwar middle class was much smaller in reality than the myth had it.

We never really had a large middle class, as that category is traditionally understood: well-educated, highly-skilled managers, professionals and others capable of managing some organizational entity with a degree of foresight, planning and prudence. The middle class historically has been those with the skills, character and education needed to accumulate some small amount of capital instead of living from paycheck to paycheck or delegating their economic future to overlords of the feudal, patrimonial/agrarian or capitalist company-store varieties.

When you look at many of the Americans who call themselves "middle class," what you see is a badly-educated or even completely uneducated proletariat with few marketable or competitive skills and no understanding of middle-class virtues such as thrift, planning, hard work etc.

We call ourselves a middle-class nation, but in a global information-based economy, probably more than half of our workforce is simply uncompetitive. IOW, not deserving of the fat middle-class lifestyle that post-1930s American generations came to believe was their birthright.

Posted by lex 2010-08-02 15:28|| 2010-08-02 15:28|| Front Page Top

#46 no mo uro - Lex, "high wages", "good wages"? This isn't the tune you were singing recently in our discussion!

Let em clarify: I don't believe that many, perhaps most, of our workers at present deserve such wages, but I am 100% certain that unless we focus our efforts on getting those workers' skillsets up to world-class levels-- German levels would be a worthy target for the near future-- we will never have a sustainable, stable, broad-based prosperity in this brutally competitive global economy. I'm not blaming the workers, I'm not blaming management or shareholders. I'm simply saying that we as a nation, collectively, have to have a clear understanding that the only way out of our mess is to create real value with a supremely well-educated, highly skilled workforce that is second to none.

Right now, our workers' skills in many areas suck. Even where they're pretty good, they're still uncompetitive, for many reasons. It's not enough to just leave it up to slash-and-burn artists who will never invest their workforces; neither will it do any good to shovel money at a primary/secondary educational model that's broken. We need to get very serious about vocational and tracking-based education, in a hurry, and turn out as many STEM grads and highly skilled tradesmen as we possibly can.

I don't argue for a "chicken in every pot." More like "globally-competitive tools in everyone's toolset." Whatever path to get there ASAP, I'm for, whether it means keeping the idiot kids in school, in lockdown, "don't leave til you can read" mode, or even letting corporations take over school budgets and dictate a large protion of the curriculum or any other means necessary.

Posted by lex 2010-08-02 15:59|| 2010-08-02 15:59|| Front Page Top

#47 The reason America's middle class is being destroyed is not because of globalization. The reason Americas middle class is being destroyed is because we are a people who don't share the same set of values that others in third world countries do. Therefore, here within our own borders, we still don't allow sweat shops, child labor, and people to die in the streets or children to go unfed and uneducated.

So the end result is that we are generous and willing to share a portion of our income to house, clothe, educate and assist an unending supply of people who keep entering the system.

The highest unemployement rates in the nation are in El Centro (27%), Yuma and one other border town. Why? Because there is ALWAYS a steady stream of cheap labor that just got off the boat from a third world country that does not share the same values for their people as we do, so they are always willing to come to the west because it is better than what they can find at home.

The life boat is sinking because we can't continue to just keep taking more and more on board.

We no longer demand accountability from our leaders because it became passe to talk about issues like character, honor, values and commitment and we allowed the Clintons, the Obamas and every other liberal puke to pretend that we could just keep writing checks with no accountability on any level and that was somehow smart to pretend we could wave a magic fairy wand and make it so.

Posted by Martini 2010-08-02 16:11|| 2010-08-02 16:11|| Front Page Top

#48 TFSM #44-

Your comment about the government strangling the private sector is spot on. I agree 100%.

I'm not sure why you think that trumps or even affects my comments about a populace that has historically inaccurate and ridiculously excessive lifestyle expectations.

Lex-

Agree entirely with your post #45, and thanks for the clarification in #46. However, that post begs the question - in a global labor environment which is the one we will have going forward, is this something the political ruling class will ever have the cojones to do? It will require many of them doing the fall-upon-their-sword and tell prospective voters that they can't have their owned house and flat screen and new car and Carribean cruises etc. just because they are American and above ground. What do you think the odds of that might be (asking seriously)?

OP-

Your post is classic. Enjoyed reading it. A lot.

Posted by no mo uro 2010-08-02 16:49|| 2010-08-02 16:49|| Front Page Top

#49 Excessive? I call it a Blessed life style. Take a vacation. And stay there. Raise your chickens and a cow for milk if you can afford to buy feed for them, and if you get sick, too bad, your dead. You want third world, go there. Your daddy in the white house wants third world here for you while he and his union thugs are on the golf course all day.

Posted by Kofi Ulaper5682 2010-08-02 16:56|| 2010-08-02 16:56|| Front Page Top

#50 ... in a global labor environment which is the one we will have going forward, is this something the political ruling class will ever have the cojones to do?

But the global labor environment is only one piece of a much larger puzzle. You simply CANNOT compare labor costs alone across borders, such comparisons are nearly meaningless. There exist a multitude of other relevant factors including but certainly not limited to the: availability of capital, quality of the workforce, level of expected graft, regulatory environment, tax system, level of political stability, level of legal risk, etc.

Once upon a time the US was competitive with both the developed world and the less developed world on nearly every one of those bullet points. Today we: have among the most stringent, expensive and rapidly-advancing regulatory regimes on the planet; have among the highest real effective (not just marginal alleged rates) tax rates on the planet, particularly on business who pays *all* of the bills directly or indirectly; suffer from runaway size, scope & cost of government creating an extraordinarily uncertain business climate; seem to import more unskilled labor who don't even speak the native language than skilled and/or monied folks of the sort who propped us up for the past few decades even as we export the jobs the less skilled might do; are forced to do business in a legal shooting gallery that's more expensive to business owners than any graft demanded of a business in a third world kleptocracy.

It's true we can't have our vacations, detached single family homes and big screen plasmas along with all of that crap. It's a choice between: have our lifestyle and not our present level of government or have our present level of government along with its forthcoming growth and lead a third world lifestyle. Easy call IMHO, I think there's enough vestigial sanity in America that it'll become an easy call for the majority soon enough.

Posted by AzCat 2010-08-02 18:02|| 2010-08-02 18:02|| Front Page Top

#51 As we continue to have Undocumented Democrats flooding into the country no wonder the lower class is expanding. DOH!

What is the percentage of Americans with Flat Screen TVs vs. those with savings?

Posted by GolfBravoUSMC 2010-08-02 18:24|| 2010-08-02 18:24|| Front Page Top

#52 How will our government respond?. The actions they take will be more of the same. Tax revenue will decrease. Programs will not be cut. Print more money will be the first action. Then tax efforts will only increase at the same time. Obama is not going to change. His enablers will continue to sing his praise. Then in November we will see Rino's and Dino's continue on this same path. Why? the tough decisions will be put off. Reality is the patient is very ill and wants only to be medicated. The old skin must be shed for new growth to occur.

Posted by Dale 2010-08-02 19:05|| 2010-08-02 19:05|| Front Page Top

#53 It's true we can't have our vacations, detached single family homes and big screen plasmas along with all of that crap. It's a choice between: have our lifestyle and not our present level of government or have our present level of government along with its forthcoming growth and lead a third world lifestyle. Easy call IMHO, I think there's enough vestigial sanity in America that it'll become an easy call for the majority soon enough.

That call's already been made, which is why the economy's tanking. Aside from addictive crap and shiny gadgets, Americans aren't spending anymore.

In effect, we need to change the entire culture of BSYDN (Buying $hit-You-Don't-Need) with money-you-don't-have that arose around that time credit became cheap and memories of the Depression faded-- date it to the 1980s and the "You can have it all!" Michelob ads.

There's a simple model, and it goes back to the north European roots of this country: the high-savings, high-education model of Protestant Northern Europe. The issue isn't really the amount of government intervention in the economy. Sweden, Holland and Germany are doing fine. The keys are

- low debt and clean government

- a tight rein on bankster mischief via high capital ratios and strong govt watchdogs

- a social ethos and cultural bias in favor of thrift and high cultural and intellectual attainment, and against BSYD

Imagine: a society in which we measure success by the strength, beauty and depth of our communities rather than by square footage of our housing and the amount of Chinese-made shiny crap in our living rooms.

Posted by lex 2010-08-02 19:46|| 2010-08-02 19:46|| Front Page Top

#54 #49-

You offer a false choice, and you damn well know it. There is very sustainable and comfortable level somewhere between. There is a third choice between having a society where workers who are unskilled or semiskilled (or are highly skilled in a field where there are lots of other people who can perform the same highly skilled task) live in third-world squalor, and one where the same group lives high off the hog, demanding and expecting a level of material luxury and services (and the shiny SYDN lex talks about) and bulletproof income stream security that bears no resemblance to what our granparents and their grandparents thought to be normal.

And yeah, you might need to relearn how to do some things for yourself instead of just calling someone every time something doesn't work and saying, "Fix it, boy". Boo fricken hoo. That will make your existence "third world"?

You might even want to catch a few fish to eat, or you and your wife might want to put up some veggies and jam for the winter. "Oh, the horror! We're no different than savages!" Please.

And you might even want to sacrifice the joy jolt from some purchase and save the money, like our "squalorous" grandparents did.

And yes, you might need to retrain yourself to derive joy in life from church, community, taking your kids to Cub Scouts, bowling, going hunting and fishing with your friends, etc. All things, I would point out, that our grandparents and their grandparents thought defined happiness in their life. Was America "third world", to use your term, when they were living that way?

BTW - is your point about the union thugs golfing anger at their corruption, or is it really envy that they might have that lifestyle and you wouldn't?

#50 Azcat-

Agree that globalization of labor is only one of a myriad of factors. I've said that repeatedly on this thread and others. But it is one of the biggest factors, and we ignore dealing with it in a mature and honest way at our peril.

Posted by no mo uro 2010-08-02 20:36|| 2010-08-02 20:36|| Front Page Top

#55 Someone should regress the American states' performance-- fiscal health, economic and job growth, income and housing market stability, etc-- against % of population that are of north European origin. I suspect that the nordic/Lutheran states like MN, WI, WA, SD, UT etc will come out on top, and the states with the highest % of non-north Euros will be on the bottom....

If so, then our problem isn't political so much as it is cultural. Not socialism vs capitalism-- again, the heavily interventionist nordic states are all doing fine-- but thrifty yankee vs oligarco/bread&circus.

Posted by lex 2010-08-02 20:37|| 2010-08-02 20:37|| Front Page Top

#56 There is a third choice between having a society where workers who are unskilled or semiskilled (or are highly skilled in a field where there are lots of other people who can perform the same highly skilled task) live in third-world squalor, and one where the same group lives high off the hog, demanding and expecting a level of material luxury and services (and the shiny SYDN lex talks about) and bulletproof income stream security that bears no resemblance to what our granparents and their grandparents thought to be normal

Go to Europe and you'll see what I and no mo are talking about. Slim women; reasonable portions of excellent, fresh food; small houses that have twice as many books as consumerist junk instead of v-v; tons of first-rate cultural offerings in city centers that preserve buildings instead of ripping them down for big-box Chino-Crappo Emporia... .

Look, we've become fat, stupid and drowing in SYDN. We used to be stronger, healthier, smarter than the denizens of the Old World. Not true any more. Time to get back to our historical roots, and get rid of all this SYDN.

Posted by lex 2010-08-02 20:47|| 2010-08-02 20:47|| Front Page Top

#57 Hold on, lex.

Not sure we want to be like Euroland, either. Demographic collapse, cultural marxism, bigotry against religion, etc., y'know.

I'd not want to end up like that.

Their way isn't all that wise, either.

Posted by no mo uro 2010-08-02 20:56|| 2010-08-02 20:56|| Front Page Top

#58 All this educated for the new economy stuff is BS!

As an engineer who tries to stay educated... the gov doesn't want you educated if your a citizen (look at foreign vs citizen grad school rates)...
If you do get educated they will bring in a ton of scabs (H1B-Visa holders) who are modern indentured servants to do your job. Why? Because if they hesitate one second... the company can pull their stay in the US. They are modern slaves, paid a good wage, but no benefits that need to actually be paid out. Just pull their damn visa and deep six their run...
But it really screws the US worker. But, who cares because the plan call for upper mgnt and majority owners to move their families to some tax haven and operate everything from some Nike factory hell hole as soon as their accountants give them a thumbs up.

Posted by 3dc 2010-08-02 22:59|| 2010-08-02 22:59|| Front Page Top

#59 Agree that globalization of labor is only one of a myriad of factors. ... But it is one of the biggest factors, and we ignore dealing with it in a mature and honest way at our peril.

No doubt it is a significant factor but it's not the be-all end-all and is one of the biggest only in a few select unskilled labor intensive industries. The fact that US labor commands higher wages than similar labor in other nations merely argues strongly that we must become more competitive in other areas. A good start would be killing off the federal regulatory state, eliminating all business and capital gains taxes, eliminating our corrupt bureaucratic nightmare of a tax system in favor of a true flat or single-level consumption tax to give everyone equal skin in the game, busting the public sector unions, phasing out entitlements as we know them, eliminating all federal labor & discrimination laws, rules, regulations & causes of action, etc. Do those things and a few others and America dominates the globe for another century with wages and standards of living that put today's to shame. Fail to do so or fail to do something similarly bold and pro-market and, well, fail as a nation. Both the problems and possible solutions are clear, only the will to go forward is lacking.

Go to Europe and you'll see what I and no mo are talking about.

Europe ran along 20-30 years ahead of the US in their implementation of their particular leftist / statist hell. They're less consumerist because they're taxed half to death and regulated most of the rest of the way there just as we're about to be. It's not cultural superiority that prevents European peoples from buying more stuff, it's lack of money.

As far as specifics:

Norway is a bad comparison as the government there controls tremendous oil wealth from which it draws significant income to support a welfare state with a relative small population. Their solution can't be implemented in the US as the US government does not have access to a similar per capita wealth generator.

Sweden was rapidly becoming a socialist backwater hellhole until they smelled the proverbial coffee and implemented pro-market / pro-business reforms over the past decade or so. And, oddly, as they abandoned a few of their statist ideals in favor of policies that rewarded, rather than punished, productive individuals and organizations they began to prosper. We can learn from their example.

We could learn from Germany but not in the way you imply. The German government seems to view the German industrial base as an asset, not so the US government who has been seeking to destroy ours for most of the past half-century.

As no mo indicated: the "European" peoples, pretty much all of them, are in demographic collapse. It's almost certainly due to the cost of their socialist governments. Due to extraordinarily high taxes and imposed regulatory costs couples require dual incomes to support a decent lifestyle; many therefore delay or forego having children. Any hope of reversing that trend lies in slashing the imposed costs of taxation & regulation to the bone. Any hope of our avoiding a similar fate lies along those same lines. Nowhere does there exist a statist social democracy with a healthy birthrate; the correlation is clear, the causation I believe we can reasonably infer.

Posted by AzCat 2010-08-02 23:03|| 2010-08-02 23:03|| Front Page Top

#60 I've been sitting here arguing with myself about this thread.

Fair trade, as espoused by Adam Smith, is based on comparative advantage. Countries have different levels of natural resources, so it's advantageous to trade these raw materials with minimal tariffs.

But, thinking about it, conversion of raw materials to useful goods depends on people. If we 'fair trade' human labor, the work goes to countries having an advantage in cheap labor. This didn't start happening with manufactured goods until the 20th century. First the fabric mills left, then the shoe factories, then the auto plants, then the machinery business and the steel mills.

We had a vibrant high tech semiconductor industry. First we offshored the assembly, then the wafer fabs, followed by the semiconductor processing equipment. Finally, the design is leaving because the engineers in the East are good (having had scholarships at MIT instead of our children) and cheap.

We were able to mobilize for World War II and subsequent because we had extensive manufacturing capability. If we were strategically cut off from the Orient and faced with war, where would we get our semiconductors? It takes billions of dollars and a semiconductor equipment industry to set up one fab, and the leadtime is years.

This is a possibly fatal strategic error.

Going further, let's say we use robots to do assembly and don't outsource our consumer goods. The people who traditionally did this work still won't have jobs. At this point we have perhaps 20% working for the government, 15% in health care, 10% in finance (hedgies, banks, Wall Street) and global corporate management. The rest are flipping burgers for each other, watching each other's kids, (badly) educating each other, and making movies about fishies looking for their mommies, when they're not on unemployment.

Retraining the latter group to be German craftsmen is futile. First, because they don't have the education, manual skills, or inclination any more. Second, because the skills are readily available elsewhere for less.

So fair trade of human labor, i.e. globalization, clearly will result in pulling down the US standard of living. TFA is correct, we are experiencing increased disparity between the top 5% and the bottom 50%, both in wealth and capability. This is a fact, and not to be dismissed as envious whining.

We are now divided into a small class of makers and a large class of users, who have only the vaguest idea of how their computer or car or financial system actually works, and no ability to fix any of them. And believe me, the people in government are in the user class.

So, it seems there are two roads: once McDonalds develops the burger flipping robot, etc., much of the "service" industry will turn into Eloi. Socialism is appropriate for this road, because the bulk of the people in this country won't have anything useful to do. The economics of how a few truly productive people can support a mass of dead weight via free markets is mystifying. It's still working, but just barely.

The other road is to pull up the gangplanks, fire our government, promote local government, families, and free enterprise.

Example. I have a pair of hiking boots made in NH. They were custom made for me 30 years ago for $350. They are an amazing product, and nearly as good as new, though well broken in and ready for new Vibram. That's about $10 per year. How many $100 - $200 pair from Singapore would I have used by now?

Currently, these boots sell for $600 and the maker has an 18 month backlog. They frequently repair boots made in the '60s. Quality is a bargain.

Get back to doing things ourselves! We will be happier and strategically stronger. Tell me what the downside is. What will we be missing?

Posted by KBK 2010-08-02 23:09|| 2010-08-02 23:09|| Front Page Top

#61 All this educated for the new economy stuff is BS!

Depends on the sort of education you're talking about.

In the late 80s it was obvious to me that electronics & software were going to run for a while so I became an engineer specialized in those areas. Worked for a while, loved building things, was very successful but saw the writing on the wall.

In the late 90s it was obvious to me that we were headed down a road that was leading inexorable to the parasite (government and associated leeches like lawyers) killing the host (private industry). The most profitable parasitic profession seemed to be law so off I went to retool and participate. Worked for a while, was very successful, didn't particularly like it and saw the writing on the wall.

Now it seems obvious to me that the government bubble must burst but equally obvious that the ruling class and their attendant parasites will not allow it to do so until they've maneuvered the US private sector into an irretrievable death spiral. Before it's over (mid-century I think) we'll have irreversibly given up every competitive advantage we once had. Thus I'm brushing up on non-English language skills, investigating emigration options, reading the classics (amazing how relevant many are) and sharpening my standardized test-taking skills in preparation for a run at a spot in a top-shelf MBA program. I firmly intend to be among those running the Nike sweatshop from my plantation in my own little third world hellhole as that's probably where the highest standard of living will be to be found over the remainder of my working life (which is to say until the day I die).

Change is constant, evolve or die.

Posted by AzCat 2010-08-02 23:22|| 2010-08-02 23:22|| Front Page Top

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