Random News Observations

[Balloon guy 158]

The UN, failboats even when they are trying to do the right thingCliffs:UN sends Nepalese soldiers to Haiti to help after earthquake.They bring a super strain of Cholera that kills 7,000 in Haiti so far.Haiti had no instances of Cholera before the arrival of UN peacekeepers from Nepal.Haiti is close to America

[strategy 4]

the bit about oil is pretty much missing the point.http://en.wikipedia.org/wiki/Fungibility

[AmScray 355]

Good article. And toward the first point, even if a product is are technically made in China, it doesn't mean that the profits go to China. The mac I'm typing on was made in China, but Apple's profits stay in the US.

It's a fallacy. You're smart enough to understand capital formation/flow. Even if the corporate profits stay healthy at Apple HQ in the United States, the ENORMOUS lower and middle class economic equalizer that were manufacturing jobs is now gone. Historians will look back on this era we now live in and when asked the question "So, just how did the wealth get so stratified?", will conclude that outsourcing manufacturing to the 3rd world is the answer. Indeed, lowering labor costs has a tremendous positive impact on corporate profits, but it has a massively negative impact on certain macro issues relating to a nations employment base and in turn, a whole host of things associated with robust lower and middle class employment. You're a Mac using physicist so it's likely that you're pretty far disconnected from the blue collar world and really don't understand that Apple Corporate Headquarters may a fine job creator for guys like you, but for every guy like you, there are 500 guys who aren't cut out for that kind of work who need to make a living. Manufacturing filled that need. Our net standard of living is determined at this level, not by how many billionaires, physicists and Jew merchants we have. hblask would come along and say "Well they could just retrain!" but that's as delusoinally simplistic/idealistic as every other libertard answer to questions like this. Now? They're just fucked while the twelve cylinder economic engine that used to employ them has shifted to Asia in the name of 'lower corporate profits'. One needn't look any further than the Asian fine art market, the activities at the Macau Casino or the Beijing skyline to see what impact being the default manufacturing base has on an economy. So yeah, guys like you will be fine because you'll always be one of the ones in office jobs enjoying the 'corporate profits'. Guys like me will be fine because we're talented at boosting the loot from guys like you. The problem is the other 98 guys in line behind us who need ****ing jobs. The brutal part is that this is terminal cancer. There is no happy ending, there is no brighter tomorrow, there is no 'fixing' this. It's over.Capitalism, like gun rights, was always an Anglo-centric system that worked fine with certain peoples but was a disaster in other places. It was created in a time when the outsourcing of manufacturing did not exist. Capitalism does not work in a global, information-age economy.

[ShakeZuma 585]

just because we're losing doesn't mean it's not working

[AmScray 355]

just because we're losing doesn't mean it's not working

It means its not working for us.Also, worth pointing out that Capitalism was the best system forever, until China came along with their Capitalism/Communism hybrid, which is clearly superior.

[vbnautilus 48]

It means its not working for us.Also, worth pointing out that Capitalism was the best system forever, until China came along with their Capitalism/Communism hybrid, which is clearly superior.

Depends whether you are trying maximize economic growth or human well being.

[ShakeZuma 585]

Capitalism/Communism hybrid, which is clearly superior.

but only in the short run. you can already see the beginnings of a workers revolution in china just like we had here in the early 1900's. they're demanding higher wages, better working conditions, etc., and can see the effects of this both in some manufacturing moving back to the US and in manufacturing moving to the more third world asian countries like vietnam. my point, really, is that you can only oppress people for so long before they fight back for rights (and I know you think there's racial differences here, and I don't completely disagree, but I don't think it's possible for any group to be continually comfortable with being controlled completely), and when they do that is when we'll come back to the equilibrium.but in the mean time, I think I'm going to get the rosetta stone for mandarin (or is it cantonese?) so I can be more prepared to communicate with our overlords.

[BaseJester 1]

It means its not working for us.Also, worth pointing out that Capitalism was the best system forever, until China came along with their Capitalism/Communism hybrid, which is clearly superior.

Are you sure you're using the same measure of success throughout this thread? Income disparity in China is increasing.

[AmScray 355]

Depends whether you are trying maximize economic growth or human well being.

The two are pretty closely linked (as far as standard of living goes), although totally on board with knowledge that wealth and 50 hour workweeks don't equate to happiness and indeed, may lead to sadness- that poorer people living simpler lives can indeed be much happier than wealthier people living much more complicated lives.

[AmScray 355]

Are you sure you're using the same measure of success throughout this thread? Income disparity in China is increasing.

Rapidly emerging 3rd world economies have some 'odd considerations' as far as that kind of stuff goes. China is re-writing the book as far as how we measure this stuff. Theirs is a nation with wide scale, massive poverty, but equally dramatic opportunity. You can't measure an emerging 3rd world economy and a decaying 1st world superpower in the same way.

[AmScray 355]

but only in the short run. you can already see the beginnings of a workers revolution in china just like we had here in the early 1900's.

Possibly. I forget where, but I once read something that illustrated India and China as two highways heading in the same direction....India was a rugged dirt highway with several side-paths. Up ahead lay a gleaming six lane, perfectly paved superhighway. Their objective is to reach that point without veering off course into constrained-market policies or going too fast down the bumpy dirt road. China is that perfectly paved, six lane superhighway, but they're in a car traveling 120 miles per hour with a huge speed-bump up ahead that is social reform. They may go over that speed bump with no problem. It may blow the axles off. No telling, but its coming.At the end of the day, China pulls it off. You have to keep in mind that Orientals are essentially like ants. As evidenced by Japan after WW2 (or the Tsunami) one of their greatest strengths is the ability to congeal into a giant Power Ranger and work as one, which is precisely why communism is such an appealing system to them. A couple decades into it, they're learning how to leverage the strengths of that system in a world that's totally invested the free market lie. Caucasians are notoriously bad about relentlessly pursuing our own self interests which works fine when capitalism is working, but is going to fail in the face of a billion people who operate as a collective for .50 cents an hour.

[strategy 4]

china has been growing at the expense of the rest of the world via its peg with the dollar. ben gave it to them pretty good with all the QE, to which they had to respond by raising reserve requirements, slowing growth. was quite funny to see perry calling it treasonous, when it was in fact a huge slap in the face for china. "I'm rick perry, and I sympathize with the chinks."there will eventually be consequences for china, one way or another.

[BaseJester 1]

the bit about oil is pretty much missing the point.http://en.wikipedia.org/wiki/Fungibility

Good point, imho.

[LongLiveYorke 38]

It's a fallacy. You're smart enough to understand capital formation/flow. Even if the corporate profits stay healthy at Apple HQ in the United States, the ENORMOUS lower and middle class economic equalizer that were manufacturing jobs is now gone.

It's funny that I'm at the opposite end of this argument when usually I'm the one saying exactly what you're saying.I agree with a lot of your post, and I agree that the current crisis, more than almost anything, is about shifting demographics and a fundamental change in the job landscape in the US and Western Europe. But there are many sides to that argument. If one's not only concerned with the US, one could argue that the manufacturing jobs that appear in China, for example, are good for those regions. I'm with Nick Kristof in thinking that working in a factory is generally better than working in a field in terms of lifestyle. (I wonder when companies will start opening factories in Africa, and how much that will help the local economies there? I guess the main obstacle is massive political instability, right?)Anyway, back to the US, manufacturing isn't dead, but it's taken a body blow. However, some of that damage can be stepped backward if better policies are put into place. There are small signs that some industries are bringing jobs back to the US, and that the once-dead auto industry is in better shape than it's been in a while. There will always be industries where it's better to produce locally (I mean, it's not exactly trivial for a small business to open and manage a factory in China). But you're overall point isn't missed. If you don't have a college education or if you don't have computer skills (which usually requires growing up with a computer, which is not an option for many who grew up poor), it's more and more difficult to find a guaranteed manufacturing job that could, in principle, support you for life and give you a pension. This was more a set of bullet points than a coherent argument, but oh well.

[BaseJester 1]

Rapidly emerging 3rd world economies have some 'odd considerations' as far as that kind of stuff goes. China is re-writing the book as far as how we measure this stuff. Theirs is a nation with wide scale, massive poverty, but equally dramatic opportunity. You can't measure an emerging 3rd world economy and a decaying 1st world superpower in the same way.

When you say that their system is superior, you're implicitly picking a common measurement. It's fair for your measurement to contain some non-quantifiable elements, but I can't really put my finger on what you have in mind.

[hblask 1]

It means its not working for us.Also, worth pointing out that Capitalism was the best system forever, until China came along with their Capitalism/Communism hybrid, which is clearly superior.

Please feel free to repost this in ten years.Do you know why China is growing so fast right now? Because when "getting electricity" can triple your output, it's not difficult to grow. But they've picked most of the low hanging fruit, and can expect to meet reality soon. They will not maintain these levels of growth for long; at least not far beyond bringing the poorest villages out of the stone age. That may take a while, because there are so many of them, but then they need freedom, and don't appear poised to move in that direction.

[hblask 1]

It's a fallacy. You're smart enough to understand capital formation/flow. Even if the corporate profits stay healthy at Apple HQ in the United States, the ENORMOUS lower and middle class economic equalizer that were manufacturing jobs is now gone. Historians will look back on this era we now live in and when asked the question "So, just how did the wealth get so stratified?", will conclude that outsourcing manufacturing to the 3rd world is the answer. Indeed, lowering labor costs has a tremendous positive impact on corporate profits, but it has a massively negative impact on certain macro issues relating to a nations employment base and in turn, a whole host of things associated with robust lower and middle class employment. You're a Mac using physicist so it's likely that you're pretty far disconnected from the blue collar world and really don't understand that Apple Corporate Headquarters may a fine job creator for guys like you, but for every guy like you, there are 500 guys who aren't cut out for that kind of work who need to make a living. Manufacturing filled that need. Our net standard of living is determined at this level, not by how many billionaires, physicists and Jew merchants we have. hblask would come along and say "Well they could just retrain!" but that's as delusoinally simplistic/idealistic as every other libertard answer to questions like this. Now? They're just fucked while the twelve cylinder economic engine that used to employ them has shifted to Asia in the name of 'lower corporate profits'. One needn't look any further than the Asian fine art market, the activities at the Macau Casino or the Beijing skyline to see what impact being the default manufacturing base has on an economy. So yeah, guys like you will be fine because you'll always be one of the ones in office jobs enjoying the 'corporate profits'. Guys like me will be fine because we're talented at boosting the loot from guys like you. The problem is the other 98 guys in line behind us who need ****ing jobs. The brutal part is that this is terminal cancer. There is no happy ending, there is no brighter tomorrow, there is no 'fixing' this. It's over.Capitalism, like gun rights, was always an Anglo-centric system that worked fine with certain peoples but was a disaster in other places. It was created in a time when the outsourcing of manufacturing did not exist. Capitalism does not work in a global, information-age economy.

You've brought this up before and it is very thought provoking, this notion that 1. there are too many people too stupid to ever have office jobs, and 2. capitalism will not take care of them. The first seems plausible, but I don't know about the second. I continue to think about this, but I guess the real question is, what is the alternative? The communist model? That can only work temporarily, and relies heavily on lots of people disappearing in the night never to be seen again.Anyway, I'm not dismissing it outright, but will have to ponder it more and read more.

[FCP Bob 1,312]

Please feel free to repost this in ten years.Do you know why China is growing so fast right now? Because when "getting electricity" can triple your output, it's not difficult to grow. But they've picked most of the low hanging fruit, and can expect to meet reality soon. They will not maintain these levels of growth for long; at least not far beyond bringing the poorest villages out of the stone age. That may take a while, because there are so many of them, but then they need freedom, and don't appear poised to move in that direction.

Another huge reason for the growth of the Chinese economy has been a super favourable demographic situation. China over the last 20 years has been in the sweet spot of having the highest perecentage of their population in their working productive years. Believe it or not but as a result of the one child policy China is going to run into a situation of having too few working age people in 15 or 20 years which is going to be a drag on their economy.

[brvheart 1,752]

That's when they will start outsourcing the manufacturing jobs to US!

[akoff 0]

It's funny that I'm at the opposite end of this argument when usually I'm the one saying exactly what you're saying.I agree with a lot of your post, and I agree that the current crisis, more than almost anything, is about shifting demographics and a fundamental change in the job landscape in the US and Western Europe. But there are many sides to that argument. If one's not only concerned with the US, one could argue that the manufacturing jobs that appear in China, for example, are good for those regions. I'm with Nick Kristof in thinking that working in a factory is generally better than working in a field in terms of lifestyle. (I wonder when companies will start opening factories in Africa, and how much that will help the local economies there? I guess the main obstacle is massive political instability, right?)Anyway, back to the US, manufacturing isn't dead, but it's taken a body blow. However, some of that damage can be stepped backward if better policies are put into place. There are small signs that some industries are bringing jobs back to the US, and that the once-dead auto industry is in better shape than it's been in a while. There will always be industries where it's better to produce locally (I mean, it's not exactly trivial for a small business to open and manage a factory in China). But you're overall point isn't missed. If you don't have a college education or if you don't have computer skills (which usually requires growing up with a computer, which is not an option for many who grew up poor), it's more and more difficult to find a guaranteed manufacturing job that could, in principle, support you for life and give you a pension. This was more a set of bullet points than a coherent argument, but oh well.

it seems to me the manufacturing that has stayed here and thrived has done so by automation and doesn't create near enough jobs to make a huge impact. I spent 15 years working in manufacturing as a contractor. Everywhere you go the goal is to improve / multiply production and cut labor to the bone. it is the only way plants can be profitable. Even then it is a coin flip many times.When i got home yesterday the Sunday paper had a big story on the last 3 philly refineries on the verge of closing the doors...we need to create some new industries because the old ones aren't going to do it.

[ahosang 0]

The two are pretty closely linked (as far as standard of living goes), although totally on board with knowledge that wealth and 50 hour workweeks don't equate to happiness and indeed, may lead to sadness- that poorer people living simpler lives can indeed be much happier than wealthier people living much more complicated lives.

Mishan wrote about economic growth and its problems in the 60's(???). The book was called The Costs of Economic Growth. Might have to dig out my copy and see how relevant/dated it is today.

[AmScray 355]

Mishan wrote about economic growth and its problems in the 60's(???). The book was called The Costs of Economic Growth. Might have to dig out my copy and see how relevant/dated it is today.

Did it talk about happiness/unhappiness relative to industrialization?I noticed weird things about poverty and happiness when I was in India. DIIIIIIIIIRT ooor, but plenty of happiness. Much happier than the people I encounter on a daily basis. Certainly a lot happier than I am.

[mk 11]

china has been growing at the expense of the rest of the world via its peg with the dollar. ben gave it to them pretty good with all the QE, to which they had to respond by raising reserve requirements, slowing growth. was quite funny to see perry calling it treasonous, when it was in fact a huge slap in the face for china. "I'm rick perry, and I sympathize with the chinks."there will eventually be consequences for china, one way or another.

jstrat ftwhere's a pretty simple explanation for china's manufacturing success, M2 money supply, artificially making the yuan worthless and thus making china a wonderland of free labor:it won't last forever.

[FCP Bob 1,312]

I think MK's and strat's analysis that it's all about an artifically low Chinese Yuan is a little simplistic.And showing that the money supply in China has been growing more than it has in other countries should be expected since nominal GNP in China has been growing far more quickly than in other economies both because China has higher inflation and because their economy has been growing so much faster than the US or Europe over the period of that graph.Edit: Another thing to remember when talking about exchange rates is that the $USD is always going to be overvalued to a certain extent as a result of the US being the World's reserve currency. It's why anytime there is bad World economic news the $USD goes up in value as the World's hot money looks for a safe haven and the US is where most of that ends up.

[mk 11]

I think MK's and strat's analysis that it's all about an artifically low Chinese Yuan is a little simplistic.

yeah, it's really not though. currency devalution is responsible for china's huge increase in fdi since the 80s and funneling outsourcing activities straight to china. they decided they wanted to crush the race to the bottom by manufacturing the lowest-quality goods at the lowest prices and indeed they have. obviously there are other factors at play e.g. plugging an enormous population into a newly open and expanding economy, but once the funny money train is forced to stop by bad loans and asset bubbles it will be really interesting to see how they weather the storm. it probably won't be 80s japan but probably more like 60s japan.