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Old 11-18-2014, 08:06 PM   #21
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Japan has been in some sort of recession since the 1990s (or earlier) but every time I go there it never looks like it is in recession. Always new cars, new consumer goods, new construction and infrastructure.

Some cities in the US look like they are in recession - but Japan doesn't look that way, however, the figures say it is.

Japan's problem is its aging population and declining birthrate coupled with a refusal to permit large scale immigration - the economy has to contract as the population contracts.
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Old 11-18-2014, 09:52 PM   #22
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I may be bungling my data, but I believe I read not too long ago, that for the average person their purchasing power is actually less now than it was back in 2000...

We may not be in a recession, like Japan, but it appears that for many of us our standard of living has declined.
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Old 11-19-2014, 11:01 AM   #23
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The problem is that increased productivity can also reduce demand for labor if the demand for goods isn't all that elastic, or the production of a good is limited by another factor of production.

Imagine that the entire fast food industry managed to increase productivity by 100%, so that they could run their restaurants with half as many workers. That isn't going to push the wages of fast food workers up, because there is still plenty of supply for those workers, and the demand for fast food isn't going to double even with lower prices. There are only so many McDonald's double cheeseburgers I can eat, no matter how cheap they are. That increased productivity would actually tend to reduce jobs and wages.

Our imagine that you can farm the US farmland with half as many people (so like three total ). You may have increased demand at lower prices, but at some point you can't make more farmland.

Increased productivity only means higher wages when the economy is at full employment, with plenty of work available for those freed up workers to do. The level of productivity provides an upper bound to wages if you will. Higher productivity is a requirement for higher wages, but not sufficient in and of itself.

Yes, higher productivity can encourage employers to choose the US over another country, but ultimately the number of jobs that could actually amount to is not huge compared to the overall economy. We imported $2.33 trillion of goods in 2013. That's about 14% of our $17 trillion economy. That is still the tail and not the dog, no matter what all the books about globalization say.

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So, if supply can't be effectively reduced, then the best route to increased wages for US workers is to improve the demand for that labor. High US worker productivity and a business climate which encourages employers to choose to locate in the US are the two ways to do that. If that demand is reduced (e.g. because US workers aren't seen as being very productive for each hour they work compared to other workers) then we can all guess what will happen to US worker pay.
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Old 11-19-2014, 11:56 AM   #24
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Imagine what would happen if all of the minimum wage workers showed up at the polls, and voted for a communist for president? Imagine if they voted a slate of people who confiscated companies, like in Venezuela? Or a $20 minimum wage.

There are plenty of people who would vote like that, and would win, but they do not show up to vote.

The world is run by those who show up.

If we continue to export our dollars, and effectively print enough money to equalize wages, the debt will be solved as well as declining wages. Foreign goods would just be too expensive to import.
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Old 11-19-2014, 12:22 PM   #25
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Let's imagine this instead
.
.

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Old 11-19-2014, 12:25 PM   #26
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The problem is that increased productivity ..........Snip

Yes, higher productivity can encourage employers to choose the US over another country, but ultimately the number of jobs that could actually amount to is not huge compared to the overall economy. We imported $2.33 trillion of goods in 2013. That's about 14% of our $17 trillion economy. That is still the tail and not the dog, no matter what all the books about globalization say...........
Not trying to be a smart-ass , but how much of the 17 trillion of the US economy is real goods and services, and how much is entitlements, like S.S. , Medicare, local government services ( fire, police, etc) and similar ? I seem to recall that in our bizarre world of economic theory's , things like entitlements are lumped in with goods and services. I hope I,m off base on this one.
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Old 11-19-2014, 01:21 PM   #27
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Well, goods and services provided by or paid for by the government would be included in GDP. SS is just a transfer payment, so that wouldn't get measured by GDP, although if you use your SS to buy something at the store, what you buy is going to get included.

Note that the measurement of GDP is not an exact science, and that you can come up with a lot of goofy things that increase GDP with no real increase in our standard of living. My favorite example involves a stay-at-home mother getting a job at Subway and paying childcare while she is at work. Before she went to work, she wasn't producing anything GDP-wise. Now, she's producing subways, and someone is providing the service of childcare, so GDP jumps twice, although we might question the actual value of that GDP.

I think its a little funny that people don't think of the services provided by government as "real". The hip replacement paid for by Medicare is an extremely "real" service. The education of my children is a very real service. Providing police and fire protection, water on tap, and roads to drive on are very real services.

There is the potential for more waste in government spending to be sure, but having spent my life in corporate America I can assure you that it isn't unique to government.

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Not trying to be a smart-ass , but how much of the 17 trillion of the US economy is real goods and services, and how much is entitlements, like S.S. , Medicare, local government services ( fire, police, etc) and similar ? I seem to recall that in our bizarre world of economic theory's , things like entitlements are lumped in with goods and services. I hope I,m off base on this one.
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Old 11-19-2014, 01:32 PM   #28
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I don't think even most minimum wage people in this country are going to vote for a communist, or a $20 minimum wage. I think they might vote for a $10 minimum wage, though, and I'd be right there with them.

There are very few people looking for communism in this country. There are a lot of people looking at the economic policy changes we've made since the 60s and 70s and wondering if we are actually better off for them, though.

I'm a capitalist by nature, but--

I don't think having strong unions is anti-capitalist
I don't think having a minimum wage is anti-capitalist
I don't think the regulation of the finance sector is anti-capitalist.

Basically, I refuse to buy into the dogma that the market always knows best. I've seen markets get incredibly foolish results often enough to know that they don't work quite like the way they do in an Ayn Rand novel.

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Imagine what would happen if all of the minimum wage workers showed up at the polls, and voted for a communist for president? Imagine if they voted a slate of people who confiscated companies, like in Venezuela? Or a $20 minimum wage.

There are plenty of people who would vote like that, and would win, but they do not show up to vote.

The world is run by those who show up.

If we continue to export our dollars, and effectively print enough money to equalize wages, the debt will be solved as well as declining wages. Foreign goods would just be too expensive to import.
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Old 11-19-2014, 02:04 PM   #29
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Hamlet,

Thank's for the explanation of "Transfer Payments" , that is what I was questioning.
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Old 11-20-2014, 05:14 PM   #30
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Who would have thought that raising sales taxes might actually reduce purchases? Maybe I should apply for a government grant to study this.
I just got back from a business trip near Tokyo. Many shops and restaurants had signs in the window reminding customers of the new 8% sales tax (called "consumption tax" or something similar).

An 8% hit on purchases does indeed seem like a guarantee to stifle spending.

duh
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Old 11-20-2014, 05:22 PM   #31
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I just got back from a business trip near Tokyo. Many shops and restaurants had signs in the window reminding customers of the new 8% sales tax (called "consumption tax" or something similar).

An 8% hit on purchases does indeed seem like a guarantee to stifle spending.

duh
Perhaps it is to fund a new economic stimulus plan sorry , I just couldn't help myself
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Old 11-20-2014, 06:00 PM   #32
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Imagine what would happen if all of the minimum wage workers showed up at the polls, and voted for a communist for president? Imagine if they voted a slate of people who confiscated companies, like in Venezuela? Or a $20 minimum wage.

There are plenty of people who would vote like that, and would win, but they do not show up to vote.

The world is run by those who show up.

If we continue to export our dollars, and effectively print enough money to equalize wages, the debt will be solved as well as declining wages. Foreign goods would just be too expensive to import.
If all of the minimum wage workers and welfare recipients turned up to vote you would end up with.....AUSTRALIA.

Voting has been compulsory in Australia for the last 100 years - everyone has to turn up to vote or face prosecution.

The result has turned out fairly well. Nothing wrong with having a decent minimum wage for working people to live on.
A slightly more egalitarian and fairer society than the US but still definitely in the capitalist model.

Yes, the world is run by those who show up and vote so make everyone show up and vote.
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