Why economic recovery is lagging--Posner

[Soggy in NOLA]

Ohh yeah? Go to any of the large retail chains and look at what they are selling and where it is made.
The wages our industries pay is dropping becuase of global wage competition.

Hate to say it, but I know very few people who shop for the most expensive items they can find. You want cheap, ok, cheap comes because some schmuck in Indonesia is willing to work for dirt. You want $300 12" TV's? Make them here in a union shop.

You are on the right track now just think on it a bit further and the impact that has on the USA.

Oh, I have. We still manufacture quite a bit here. But alas, the future isn't in making tennis shoes and clothes for Old Navy. It's technology. And yes, believe me, I am a Microsoft Partner, and outside their Dynamics line, I get "Ben" from Bangalore when I need tech support. It's very frustrating.

 

[uscitizen]

Hate to say it, but I know very few people who shop for the most expensive items they can find. You want cheap, ok, cheap comes because some schmuck in Indonesia is willing to work for dirt. You want $300 12" TV's? Make them here in a union shop.

You are on the right track now just think on it a bit further and the impact that has on the USA.

Lower consumer prices? Better quality goods?
Tell us.

I will never be able to tell you anything, you already know it all.
So sad.

 

[The Rabbi]

You are on the right track now just think on it a bit further and the impact that has on the USA.

Lower consumer prices? Better quality goods?
Tell us.

I will never be able to tell you anything, you already know it all.
So sad.

Actually I wanted your fantasy. The reality I already know.

 

[uscitizen]

Hate to say it, but I know very few people who shop for the most expensive items they can find. You want cheap, ok, cheap comes because some schmuck in Indonesia is willing to work for dirt. You want $300 12" TV's? Make them here in a union shop.

You are on the right track now just think on it a bit further and the impact that has on the USA.

Oh, I have. We still manufacture quite a bit here. But alas, the future isn't in making tennis shoes and clothes for Old Navy. It's technology. And yes, believe me, I am a Microsoft Partner, and outside their Dynamics line, I get "Ben" from Bangalore when I need tech support. It's very frustrating.

Where do you think the vast majority of our tech products are manufactured?
Including Apple...

 

[hellofromwarsaw]

Pub dupes!! Eat shytte, strong and wrong moron tools of the greedy rich. tyvm The problem is no jobs and training bills, and no confidence . You're working for banana Republicans who don't mind screwing the country to get power to rob back.......
I'm serious AND right, and very tired of throwing pearls before numbskull Ugly 'Merican fools

 

[Soggy in NOLA]

You are on the right track now just think on it a bit further and the impact that has on the USA.

Oh, I have. We still manufacture quite a bit here. But alas, the future isn't in making tennis shoes and clothes for Old Navy. It's technology. And yes, believe me, I am a Microsoft Partner, and outside their Dynamics line, I get "Ben" from Bangalore when I need tech support. It's very frustrating.

Where do you think the vast majority of our tech products are manufactured?
Including Apple...

Overseas of course. I know. And that is why an iPad is $499. Like I said, we want cheap shit... this is the price we pay. It's quite the dance, isn't it?

 

[hellofromwarsaw]

Under Booosh and Voodoo, public college costs doubled and we went from#1 to #12 in grads- gee, wonder why the techies are in India, dumbazz. Under Reaganomics we screwed both physical AND mental infrastructure...

 

[8537]

You are on the right track now just think on it a bit further and the impact that has on the USA.

Oh, I have. We still manufacture quite a bit here. But alas, the future isn't in making tennis shoes and clothes for Old Navy. It's technology. And yes, believe me, I am a Microsoft Partner, and outside their Dynamics line, I get "Ben" from Bangalore when I need tech support. It's very frustrating.

Where do you think the vast majority of our tech products are manufactured?
Including Apple...

While it's true they are made in China - they are developed in the US. The margins on production are tiny and the wages for such production are well below US wages. But the thousands of Apple employees in the US developing the next product to be made in China? They are making a killing.

One consequence of high wages is a shift towards labor with high returns. It sucks for the people who used to "build things", but in the end we're never going to be a manufacturing economy again - and that's a sign of our success, not our failure. In my humble opinion.

 

[ShackledNation]

Over time, the US labor force has become increasingly educated and more and more skilled. There is simply a very small labor force of unskilled labor force in the US compared to the past. It is completely natural and logical to employ unskilled labor elsewhere.

On the other side of the same coin, other countries have high demand for high skilled labor in the US, which is why they hire US workers for their foreign companies. In fact, foreign companies pay higher wages to US workers than US companies pay to our workers.

People who are against free trade and an international free market economy only look at one side of the coin and refuse to flip the other side up.

Here is what we get:
1. Lower priced goods
2. High paying jobs for our increasingly skilled workers from foreign companies
3. Higher real wages due to lower priced goods
4. Increased production in other sectors financed by increased real wages that could not have been possible without it.
5. An overall increase in global economic output
6. A rise in US standard of living

Look at the bigger picture folks!

 

[Sactowndog]

For what it's worth, I think the major impediment to economic growth at present is uncertainty on the part of the key economic actors, namely businessmen and consumers. Businessmen are hesitant to hire and invest and consumers to spend, in both cases because of uncertainty about their economic prospects.

I don't know about Posner but form where I sit in a Fortune 1000 firm it is pretty obvious why the economy is struggling.

For every 2 people who leave in our division .5 are hired as replacements in the US. The rest are hired in Costa Rica, Singapore or India. Some leave on their own and some are fired but the hits continue.

 

[Sactowndog]

While it's true they are made in China - they are developed in the US. The margins on production are tiny and the wages for such production are well below US wages. But the thousands of Apple employees in the US developing the next product to be made in China? They are making a killing.

One consequence of high wages is a shift towards labor with high returns. It sucks for the people who used to "build things", but in the end we're never going to be a manufacturing economy again - and that's a sign of our success, not our failure. In my humble opinion.

No they are not. You don't know what you are talking about. I work in high tech for one of those major firms.... Countries like Singapore and China pay a subsidy for every engineeering job in their country. I have watched my company move whole divisions to Asia laying off hunderds of engineers and marketing people..

Currently the company is shift most Marketing jobs, Finance jobs, HR jobs overseas. We had a very talented web designer who was laid off and replaced in India. He is just one example.

Pull your head out...

 

[Sactowndog]

Over time, the US labor force has become increasingly educated and more and more skilled. There is simply a very small labor force of unskilled labor force in the US compared to the past. It is completely natural and logical to employ unskilled labor elsewhere.

You live in a dream world look at the data. The US is falling behind in terms of education.

On the other side of the same coin, other countries have high demand for high skilled labor in the US, which is why they hire US workers for their foreign companies. In fact, foreign companies pay higher wages to US workers than US companies pay to our workers.

In some cases yes but many countries have specific laws requiring in country manufacture and development and they have subsidies to encourage development. They understand the short term profit motive of US investors and managers and are using that mentality to their advantage.

 

[Antiderivative]

I see that conversation has steered off into a tangent about manufacturing and exports. McKinnon puts forth a good argument that deficit spending is tied directly to the deindustrialization of the America.,
https://docs.google.com/viewer?a=v&...M2XRpd&sig=AHIEtbRIMzPQdwdsvERQLeBX4StTKkebGg

He contends that when the government finances deficit spending, it speeds up the deindustrialization of the US. Americans don't save, so the government must borrow abroad. This is why the Twin Deficits typically move together. Deficit spending increasing our trade deficits.

When foreigners purchased government bonds that means that they are not purchasing American made goods. It is a simple trade-off. If you spend all your money on US bonds, then you have no money left over to buy American goods.

Guess when this deindustrialization begun? During the Reagan years when he exploded the Twin Deficits. It slowed down during the Clinton years and accelerated during the Bush years. It is a 2004 paper and he doesn't analyze the Obama administration. However, due to our extremely weak dollar, the US has currently seen an increase in exports. Opposing forces are currently in play.

 

[8537]

No they are not. You don't know what you are talking about.

That will come as quite a surprise to the tens of thousands of very well paid individuals working in Cupertino and around Silicon Valley - as well as the hundreds of thousands of very highly paid individuals in other US cities such as Boston, Austin and Seattle that have thriving hi-tech sectors.

And please, stop with the "you don't know what you're talking about". You don't know a damn thing about me, nor do you have any idea what my expertise might be.

I work in high tech for one of those major firms.... Countries like Singapore and China pay a subsidy for every engineeering job in their country. I have watched my company move whole divisions to Asia laying off hunderds of engineers and marketing people..

Sure, it happens. It will continue to happen. Meanwhile, jobs that used to be done overseas will migrate here.

 

[Jarhead]

Oh, I have. We still manufacture quite a bit here. But alas, the future isn't in making tennis shoes and clothes for Old Navy. It's technology. And yes, believe me, I am a Microsoft Partner, and outside their Dynamics line, I get "Ben" from Bangalore when I need tech support. It's very frustrating.

Where do you think the vast majority of our tech products are manufactured?
Including Apple...

While it's true they are made in China - they are developed in the US. The margins on production are tiny and the wages for such production are well below US wages. But the thousands of Apple employees in the US developing the next product to be made in China? They are making a killing.

One consequence of high wages is a shift towards labor with high returns. It sucks for the people who used to "build things", but in the end we're never going to be a manufacturing economy again - and that's a sign of our success, not our failure. In my humble opinion.

I trust this theory.
It is logical and comes from someone who is not looking to win an argument.
Well...he couldnt win one if he wanted to...but thats not the point.

 

[The Rabbi]

Oh, I have. We still manufacture quite a bit here. But alas, the future isn't in making tennis shoes and clothes for Old Navy. It's technology. And yes, believe me, I am a Microsoft Partner, and outside their Dynamics line, I get "Ben" from Bangalore when I need tech support. It's very frustrating.

Where do you think the vast majority of our tech products are manufactured?
Including Apple...

While it's true they are made in China - they are developed in the US. The margins on production are tiny and the wages for such production are well below US wages. But the thousands of Apple employees in the US developing the next product to be made in China? They are making a killing.

One consequence of high wages is a shift towards labor with high returns. It sucks for the people who used to "build things", but in the end we're never going to be a manufacturing economy again - and that's a sign of our success, not our failure. In my humble opinion.

OK, maybe you're not a total idiot. Good post and right on.

 

[editec]

Oh I think Posner is totally onto one of the major problems facing this economy.

Uncertainty does not just effect businesses, it effects consumers, too.

If I KNEW the national economy (and my personal economy, which are not the same thing, but they are definitely aligned) was going to get better, I'd have purchased a $1,400 lawnmower last month.

MY UNCERTAINTY therefore reduced the GDP by $1,400 last month.

Multiply that kind of decision making by tens millions of us consumers each making dozens of such decisions, and you've got the makings of a economic downturn that can exist for DECADES.

Our economy is going to be in the shitter for a mighty long time, kids.

Probably for the rest of your lifetimes.

Your economies might improve, but this nation's economy is smoked

 

[ShackledNation]

Over time, the US labor force has become increasingly educated and more and more skilled. There is simply a very small labor force of unskilled labor force in the US compared to the past. It is completely natural and logical to employ unskilled labor elsewhere.

You live in a dream world look at the data. The US is falling behind in terms of education.

Strawman. I never said the US education system was superior to anyone else. I said that US workers today compared to their past counterparts are more educated and skilled. Which is why are economy is less centered on manufacturing. If people are more educated, they are wasting their skills working on an assembly line.

On the other side of the same coin, other countries have high demand for high skilled labor in the US, which is why they hire US workers for their foreign companies. In fact, foreign companies pay higher wages to US workers than US companies pay to our workers.

In some cases yes but many countries have specific laws requiring in country manufacture and development and they have subsidies to encourage development. They understand the short term profit motive of US investors and managers and are using that mentality to their advantage.

Not just some cases, most cases. Due to the balance of payments, the US insources twice as many jobs as it outsources. Those insourced jobs are higher paying on average than US jobs.

On average, insourced jobs pay 34.7% more and account for 4.6% of private sector employment. I am not sure how referencing subsidies is relevant to the fact that the US gains more jobs from outsourcing than it loses from it.
"Insourcing" Companies Unfairly Targeted as "Foreign" in Wake of Citizens United Supreme Court Case