Article

2011-10-20 Economy

A Long, Steep Drop for Americans' Standard of Living

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Posted by Fred 2011-10-20 03:41|| || Front Page|| [11129 views ] Top

#1 "What has led to the most dramatic drop in the US standard of living since at least 1960?"

The rebuilding of the rest of the world's industrial/engineering base, and the education and training of workers there who could make and design things and don't have ridiculous lifestyle expectations in exchange for their labor.

Can I get my cookie now and leave, please?

Posted by no mo uro 2011-10-20 05:40|| 2011-10-20 05:40|| Front Page Top

#2 That's BS. The rebuilding of the rest of the world's industrial/engineering base would not affect the advancement of America's industrial/engineering base. If the US had kept it's industrial base, the amount of goods produced would have increased with the advancement of technology and the standard of living increased at about 2%/year.

Instead the systematic dismantling of the American industrial base and the flood of imports has resulted in a standard of living stagnation for over 40 years as wealth has been drained from the economy. While the cheap imports acted at first like a snort of cocaine, the nation's stored wealth has been exhausted. We are reduced to printing ever more dollars to pay for imports we should be making ourselves. In the end, we only consume the value we produce.

Posted by Eohippus Phater7165 2011-10-20 06:26|| 2011-10-20 06:26|| Front Page Top

#3 "systematic dismantling"

*sigh*

Conspiracy theories are so '60's.

You sound like one of those OWS people.

At any rate, this discussion had been had here on this forum several times. Once, I had my family threatened with violence for my opinion on this subject by people with opinions identical to your own.

A later discussion proved to be less paranoid, more mature and productive, and is in the "best of" archives, I would refer you to that, since I'm off to work and don't have the time.

Posted by no mo uro 2011-10-20 06:43|| 2011-10-20 06:43|| Front Page Top

#4 Systematic dismantling by enacting trade lopsided unfavorable trade laws. See Bill Clinton, China WTA entry and illegal campaign contributions funneled through Chinese Buddhist temples. The Republicans are just as much to blame with their ill-considered push free trade like NAFTA (deficits w/ Mexico). They just pushed through FTAs w/ 3 more lower cost countries last week.

Like the illegal alien invasion, the flood of imports has benefited a small clique of importers, investment banks and politicians. The costs have been borne by the millions who have seen their jobs shipped overseas and citizens who have borne the increased costs of unemployment, welfare, increased crime, wasted lives and the coarsening of everyday relations.

Posted by Eohippus Phater7165 2011-10-20 07:13|| 2011-10-20 07:13|| Front Page Top

#5 The graph proves nothing. Trade deficit went up -- wages went up. Trade deficit went up some more -- wages went down. You'd conclude that the two weren't connected.

Posted by Steve White 2011-10-20 07:30|| 2011-10-20 07:30|| Front Page Top

#6 The graph shows wages stagnated or decreased since 1968 when the trade balance went negative. The late 90's in that wage graph show the effect of the dotcom bubble when speculation created many instant millionaires and lots of reckless spending by people and businesses. We all know the economic (and wage) beating the US has taken since the dotcom bubble burst in 2000 and all those instant riches evaporated.

In the mean time, the trade deficit peaked at -5% of GDP before the Financial Crash of 2008 and is near -4% and growing again.

2008: The China trade toll: Widespread wage suppression, 2 million jobs lost in the U.S.
Between 2001 and 2007 2.3 million jobs were lost or displaced, including 366,000 in 2007 alone. New demographic research shows that, even when re-employed in non-traded industries, the 2.3 million workers displaced by the increase in China trade deficits in this period have lost an average $8,146 per worker/year. In 2007, these losses totalled $19.4 billion.1

The impacts of the China trade deficit are not limited to its direct effects on the jobs and wages of those displaced. It is also critical to recognize that the indirect impact of trade on other workers is significant as well. Trade with less-developed countries has reduced the bargaining power of all workers in the U.S. economy who resemble the import-displaced in terms of education, credentials, and skills. Annual earnings for all workers without a four-year college degree are roughly $1,400 lower today because of this competition, and this group constitutes a large majority of the entire U.S. workforce (roughly 100 million workers or about 70% of all workers, Bivens (2008a)).

Posted by Eohippus Phater7165 2011-10-20 07:51|| 2011-10-20 07:51|| Front Page Top

#7 Growing U.S. trade deficit with China cost 2.8 million jobs between 2001 and 2010

Posted by Eohippus Phater7165 2011-10-20 07:57|| 2011-10-20 07:57|| Front Page Top

#8 This discussion thread.

Posted by no mo uro 2011-10-20 08:05|| 2011-10-20 08:05|| Front Page Top

#9 It was totally self inflicted (and going American-Juche would have made it worse).

Taxes on income (Sales, income, employment) harm comparative advantage.
In order to simulate economic growth, governments turned to (exponential) debt and inflation to pay it off.

Inflation causes unemployment and erodes the standard of living.

Posted by Bright Pebbles 2011-10-20 09:39|| 2011-10-20 09:39|| Front Page Top

#10 Whatever the causes, the US standard of living will continue to drop & will stay low for many years into the future, no matter what is done. I've been studying this for years & IMHO haven't found proposals from anyone that promise to reverse the trend, just wishful thinking and recycled talking points. I know post #9 had a typo in it, but the mistake had a grain of truth -- much reported US economic growth over the last 30 years WAS 'simulated' not 'stimulated.' Maybe a huge meteorite with a 24 kt solid gold crust and a creamy nougat center of light sweet crude will impact federal land and yet save us from this fate. We'll be lucky to avoid a catastrophic economic collapse at the rate we're going.

Posted by Anguper Hupomosing9418 2011-10-20 13:52|| 2011-10-20 13:52|| Front Page Top

#11 No. SIMULATED, was the word I wanted.

The effect of increased debt TEMPORARILY simulates the effect of comparative advantage.

Posted by Bright Pebbles 2011-10-20 13:54|| 2011-10-20 13:54|| Front Page Top

#12 #11 - then you have supported my point, that US economic growth for a very long time has been faked.

Posted by Anguper Hupomosing9418 2011-10-20 14:04|| 2011-10-20 14:04|| Front Page Top

#13 In the last few years there has been a drop, high unemployment and a recession/depression/whatever are likely to do that but anyone arguing that this is some long term trend should also explain how a modern American can have a couple of cars, a number of televisions and other conveniences that the wealthier folks in the 60s never dreamed of owning. Perhaps the problem is we buy crap with our money instead of saving it but the standard of living seems higher despite the three year drop.

Posted by rjschwarz 2011-10-20 15:08|| 2011-10-20 15:08|| Front Page Top

#14 explain how a modern American can have a couple of cars, a number of televisions and other conveniences that the wealthier folks in the 60s never dreamed of owning. I doubt most of them own much of anything, particularly not their cars or their houses, most of which will have loan liens on them.
[disclaimer] I have a couple of paid-off rusted pickups, and a house I theoretically 'own', but in reality rent from my county & state governments.

Posted by Anguper Hupomosing9418 2011-10-20 15:51|| 2011-10-20 15:51|| Front Page Top

#15 ...US economic growth for a very long time has been faked...

Uhhhhhhh, yeahhhhhhh. That was kinda the whole point of Fannie Mae and Freddie Mac, wasn't it?

Posted by Ebbang Uluque6305 2011-10-20 16:07|| 2011-10-20 16:07|| Front Page Top

#16 That was kinda the whole point of Fannie Mae and Freddie Mac The fakery extended far beyond the borders of the GSE's. This is not a left vs. right issue.

Posted by Anguper Hupomosing9418 2011-10-20 16:33|| 2011-10-20 16:33|| Front Page Top

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