Cheap Products vs. High Wages... Americans Want BOTH!

[makloda]

Quote from Renegen:Makloda, you have no idea what you're talking about. What studies are you quoting? They can say anything.

Looks like I am replying to clowns here that have never seen a university from the inside. "They can say anything". They can, exactly once and then never again. You fool have any idea how research is conducted and what "peer review" is?

Paul Krugman, Princeton Economist:

http://www.pkarchive.org/column/12300.html
The reality is that globalization makes the world a richer place, but the wealth it creates goes disproportionately to two sorts of people. On one side are those who benefit from vastly improved access to technology and capital -- which is to say, workers in developing countries. On the other are those in advanced countries who, directly or indirectly, have technology and capital to sell -- which means the rich and the highly educated. Largely left out of the party, possibly even made worse off, are those who fall into neither category. Most conspicuously, competition from those newly productive third-world workers is one, though probably not the most important, of the reasons that real wages of many American workers have stagnated or even declined over the last 25 years.

P.S. You know what human capital means is about at all? By the sound of it ("human capital extensive" vs. "capital intensive and labor intensive") you don't. For a list of Becker's publications: http://en.wikipedia.org/wiki/Gary_Becker

 

[BoyBrutus]

Asia Bashing

In the early 1980s, Japan was blamed for the perceived decline in the US economy, much as China is in the 2000s. One scholar defined ‘Japan bashing’ as “those perspectives that routinely blame the Japanese for the breakdown in communication and refuse to consider that the American side might also be part of the problem.” Japan bashing was a political shortcut that used a scapegoat to avoid forcing America to look at its own problems. [1] Two books on the theme, Akio Morita’s The Japan That Can Say No and Michael Crichton’s novel Rising Sun became best sellers.

In politics, Japan became an easy means of wooing voters unsettled by US economy's evolution from industrial to service economy. In 1992, one observer asked, “What if America’s trade deficit with Japan is a permanent condition and cannot be eliminated through pressure to open up Japanese markets or short-term investments in domestic competitiveness?” [2]

Fast forward to the 2000s, and replace Japan with China and it appears that the “bashee” is whatever East Asian nations happens to be the location for manufacturing in the particular period under consideration. Policy heavyweights such as Robert Zoellick and Fred Bergsten have demanded that China grant the US more concessions, under threat of economic sanctions. [3] As was the case with Japan in the 1980s, the trade deficit is the key measure of how “unfairly” the major East Asian economic power plays. The question is “no longer whether to bash China over its trade and currency policies. It’s how hard to bash China.”[4]

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

 

[mgookin]

Quote from gnome:

CN-BS rarely has anything to say of merit, but earlier this week they along with guests were discussing aspects of unions.

One statement was made which explains much of our economic condition...

"Americans want to buy cheap products"... atta boy Wal Mart.

"American middle class wants higher wages"... as might be gained through union influence.

Unfortunately, these are as incompatible as oil and water.

There appears to be no solution to the conflict...

I don't ask for anything cheap. I'm always willing to pay a fair price for a good product. I'll pay more for an American muscle car any day over a rice grinder knowing my fellow countrymen have employment and they won't be killing my family to survive because of the selfish fucking idiotic treasonous mother fuckers in this country who buy that Asian shit at half price.

 

[peilthetraveler]

Eventually all these people that buy 3 dollar shirts at wal-mart will finally catch on that those shirts only last 3 washes and if they had bought a 20 dollar american made shirt that lasts 100 washes, they would be saving money.

 

[kiwi_trader]

Makloda,

I think your points are very well made:
- free trade & specialization can and research shows, currently does, increase the size of the pie
- the pie is distributed to cheap labour and wealthy/strong sources of information/management/skills.

But you need to consider that the growing pie may grow worldwide but shrink considerably for your homeland.

Consider that we all saw the shoe factories and clothing factories shut. And thought - its only the low skilled jobs.

Then the next layer went.

What's to stop the progression to the point where all that's left in the USA is a sales front end to the remaining rich? No need for Senior management, just in country marketing and sales with a bit of hands-on service (the phone service has gone to India anyway) until your ghetto labour gets so cheap that even the Indian's can't compete.

 

[TraderZones]

Quote from wutangfinancial:

I think Canada could have the highest GDP per capita in the world in some time...if they get over the Seperatist B.S. and stop their protectionism.

Why do I bring up Canada in a discussion about the states? Because Canada is better positioned as a developed country in a free trading world, despite being too socialist for many. Canada has so much more human capital PER CAPITA. Everyone has a degree in engineering, finance, accounting, chemistry, etc. and the universities are much better ON AVERAGE. The very smartest people are in the U.S., no question. But the median person in Canada is a million times smarter. I have only lived in Canada for 2 years, so this isnt Canadian pride or anything.

one of the more stupid posts on ET

 

[pneuma]

Quote from thesharpone:

not 100% true

money represents wealth, but wealth is; resources, tools and the ability to create and develop what you want with or (godlike) without those resources and tools

too many think wealth is a good income, nice car, lush house and good school (and plenty of debt).

keeping up with the jones' is what is destroying the western world.

the younger you are the more you will think that you can have the assets of your parents without the 40 years of hard work - change that and you will have a new economy.

pneuma

 

[pneuma]

Quote from peilthetraveler:

Eventually all these people that buy 3 dollar shirts at wal-mart will finally catch on that those shirts only last 3 washes and if they had bought a 20 dollar american made shirt that lasts 100 washes, they would be saving money.

what you say is true, however i doubt that they will realize

why buy a $20 when you can get a 7 $3 ones.

I have the same argument with my misses - i buy $100 demin jeans coz they will go the distance, she buys 5 $20 pairs because she can change with the fashion ...

what is destroying the western economy is a disproportionate level of wealth to population. if you earn $40k pa, then you are 1 in a million globally. count yourself lucky that you are the cheapest bloke in your local community.

pneuma

pneuma

 

[nutmeg]

the younger you are the more you will think that you can have the assets of your parents without the 40 years of hard work - change that and you will have a new economy.

pneuma

-----------------------

Good point. You have to pay your dues. Saving is for chumps when you have a credit card in your pocket is the wrong attitude.

 

[gnome]

Quote from peilthetraveler:

Eventually all these people that buy 3 dollar shirts at wal-mart will finally catch on that those shirts only last 3 washes and if they had bought a 20 dollar american made shirt that lasts 100 washes, they would be saving money.

What about the $20, name-brand shirt that was made in China. How is that different from the no-name $3, shirt?

Is it not reality that nearly ALL shirts are made in China, regardless of the cost?