Nuff Said?

I've seen over the past thirty years a real change in attitudes here in the United States. I started out in the early 80s and back then people wanted to get rich. It was everyone's dream. There was no evil rich guy. People aspired to be like them. Now it's that rich CEO that's hording all the money and making people slaves. What a difference 30 years can make.
 
dmpi said:
I've seen over the past thirty years a real change in attitudes here in the United States. I started out in the early 80s and back then people wanted to get rich. It was everyone's dream. There was no evil rich guy. People aspired to be like them. Now it's that rich CEO that's hording all the money and making people slaves. What a difference 30 years can make.
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A bit of this is just how one gets to be rich. A lifetime of saving and careful investing, or running a good small business with a great local reputation is one thing. Becoming rich by providing banking services for terrorists or drug runners, or dismantling beloved companies, or engaging in the selling of financial weapons or mass destruction might not be looked upon so kindly.

The analyst who made the slide presentation and the better set of MIT videos linked from the presentation is assuming a zero sum game, in that as life gets better for the majority of the worlds population now in poverty, that life must necessarily get worse for those of us with a high standard of living. While it is true that there is likely to be a redistribution of resources (indeed, we are already seeing this; for example refineries are shipping more product overseas, and are net exporters this year), this redistribution meed not affect our overall standard of living.

Life can be a positive sum game. I suspect that almost everyone in the world is overall better off now than our typical ancestors of 5,000 years ago. The improvement we have seen is just unevenly distributed. I think that with significant gains in efficiencies and better utilization of resources, that the lot of much of the world can continue to improve, without dragging down the standard of living that we enjoy.
 
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M Paquette said:
The analyst who made the slide presentation and the better set of MIT videos linked from the presentation is assuming a zero sum game, in that as life gets better for the majority of the worlds population now in poverty, that life must necessarily get worse for those of us with a high standard of living. While it is true that there is likely to be a redistribution of resources (indeed, we are already seeing this; for example refineries are shipping more product overseas, and are net exporters this year), this redistribution meed not affect our overall standard of living.

Life can be a positive sum game. I suspect that almost everyone in the world is overall better off now than our typical ancestors of 5,000 years ago. The improvement we have seen is just unevenly distributed. I think that with significant gains in efficiencies and better utilization of resources, that the lot of much of the world can continue to improve, without dragging down the standard of living that we enjoy.
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+1

The world economy is not a zero sum game. It's also worth remembering (i) that most people in developed countries are not only better off than their parents/grandparents (education, healh care etc) and (ii) a lot of the change in relative wealth is a product of the decisions we are making ourselves (either individually or as a society). The fact that one group has improved relatively more than others does not mean that others have lost out or are worse off.

For a refresingly positive spin on the future, Matt Ridley's "The Rational Optimist" is worth a read. I don't agree with everything he says, but he provides some welcome relief from the regular offerings of doom and gloom provided elsewhere: Rational Optimist - Matt Ridley
 
Well the whole thing makes a lot of assumptions. If the facts they presented are true they were eye opening.
 
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A massive, talented, country held back for centuries lets the brakes loose and the economy pops. Some powerpoint producing analyst sees this as the end of our world. Gimme a break. The challenges facing China are immense and are barely held in check. If you think they will blast through them like a rocket leaving the west behind I guess you either think that centrally managed governments had the better idea all along or that there is a racial/cultural advantage on the Chinese side. The Japanese were eclipsing us in the 1980s, the Chinese in the 2010s, a booming sub-Sahara in the 2030s?
 
Good read and I agree with the presentation more than I probably should. Presented a lot of good points that hopefully will open the eyes of some people some day...
 
I guess I am not surprised by the general tenor of responses. I see the typical salad of red herrings, strawmen and so on.

I've no appetite for arguing, so all I can say is that I hope you "rational" optimists are correct. I think at best your chances of being right are 10%, but there is no way I can figure out to reasonably and prudently bet against you.

I personally find it easier to believe in the tooth fairy than in the chances of the dominant policies of modern western governments working in the long term.

I am going to try to post on fewer broad topics, particularly those with negative meanings which humans have shown themselves to be resistant over all of history.

For those with more stomach for being disturbed, Moynihan who prepared this presentaion gives an excellent (IMO only!) presentaion to the London School of Economics. You can find it at the end of the power point.

Ha
 
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traineeinvestor said:
The world economy is not a zero sum game.
For a refresingly positive spin on the future, Matt Ridley's "The Rational Optimist" is worth a read. I don't agree with everything he says, but he provides some welcome relief from the regular offerings of doom and gloom provided elsewhere: Rational Optimist*-*Matt Ridley
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I also enjoyed "Abundance":
Book review: “Abundance” | Military Retirement & Financial Independence

But the media's curmudgeons can find the dark cloud in every silver lining...
 
Being a perennial pessimist, I like gloomy reports. It's just my nature to be somber, even though I like to make jokes. From a practical standpoint, it is so that if things don't turn out so bad, I will be pleasantly surprised. Sad to say, in my life I have seen things worse than people would imagine.

That said, even if the other countries catch up to the US and the standard of living here stands still and stops improving, is it really that bad? I do not have statistics, but see that most new houses now have a 3-car garage. Do we need any "Jean and Joan and who-knows-who" to have a 4-car garage?
 
Nords said:
But the media's curmudgeons can find the dark cloud in every silver lining...
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Nords, we're pretty good at that here as well.

Having lived through the 1980's Japan global dominance scare there are similar overtones to the points made in the presentation linked in the OP. The last 1/3 does discuss policies that would effect needed change, and some of them seem reasonable and feasible.

M Paquette said:
The analyst who made the slide presentation and the better set of MIT videos linked from the presentation is assuming a zero sum game, in that as life gets better for the majority of the worlds population now in poverty, that life must necessarily get worse for those of us with a high standard of living. While it is true that there is likely to be a redistribution of resources (indeed, we are already seeing this; for example refineries are shipping more product overseas, and are net exporters this year), this redistribution meed not affect our overall standard of living.

Life can be a positive sum game. I suspect that almost everyone in the world is overall better off now than our typical ancestors of 5,000 years ago. The improvement we have seen is just unevenly distributed. I think that with significant gains in efficiencies and better utilization of resources, that the lot of much of the world can continue to improve, without dragging down the standard of living that we enjoy.
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+2

There appears to be a global surplus of low-skilled labor, and debt. This is a bad combination but it will not be so forever. Western developed countries will address one or the other, and if we're really fortunate, both.
 
haha said:
Analyst Presents A Terrifying Vision: THE DECLINE OF THE WEST - Business Insider

Contrasting atitudes toward wealth in China and the West.

No matter how fair and cuddly Western attitudes may be, to me it seems that the Chinese attitude will better favor business and economic growth.

Ha
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I suspect it will. Just don't feel a need to be #1 in everything. In fact, some of the best places on this planet are content to be smaller players in the world scene. Perhaps we need to wrap our minds around this concept too.
 
donheff said:
A massive, talented, country held back for centuries lets the brakes loose and the economy pops. Some powerpoint producing analyst sees this as the end of our world. Gimme a break. The challenges facing China are immense and are barely held in check. If you think they will blast through them like a rocket leaving the west behind I guess you either think that centrally managed governments had the better idea all along or that there is a racial/cultural advantage on the Chinese side. The Japanese were eclipsing us in the 1980s, the Chinese in the 2010s, a booming sub-Sahara in the 2030s?
Click to expand...

+1. China has some serious social, political and yes even economical challenges to come. I work with several people who grew up and went to college in China and the mega corp I work for has a major site in shangai, they have told me outside the major cities the public services are by poor to not existing. Things like reliable sewer, water and electricity. Office buildings in shanghai are required by law to keep AC above 76 degree due to lack of sufficient electricity, trust me it gets real hot and smelly in summer. Also there is a significant divide btw extreme wealthy and those who dont have enough to eat - this is a real tough pill to swallow for a socialist / communist nation. Another point to consider is the lack of innovative and creativity in the population. These are things we are encouraged to develop and for in our society, its just not the same for china. Yes they are great at copying and making things, not so good with creating new! Remember the first aircraft carrier they just launch last year, it was built on some european nations old carrier. Lastly, what was a real affordable option for research and manufacturing just 10 years ago is as expensive as effort in the US. I really see China as a great big market for our goods and services, what is going to stink is the impact of the social revolution that will eventually occur, remember what Russia went through. Just my opinion based on reading and first experience.
 
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I looked through the 97-slide presentation linked by the OP. It contains some good information, and does not simply attribute China's economic rise to their new "capitalist" attitude. It is a worthwhile read, and one must go through it to see for himself. I will isolate a few points that I found interesting.

The author says violation of IP rights gives China an advantage. Its economy is not yet at the stage of innovation and invention, but on the cusp of that evolution step due to an increasing percentage of Chinese students repatriating after studying abroad.

The lower wage in China relative to developed nations is of course nothing new. In developed nations, it causes loss of the lower jobs, while increasing the salary of the top workers and creates more income disparity. The author also points out the excessive remuneration by financial sector and public workers, and CEOs. He says that policy makers in developed countries, the US included, are too quick to write off the manufacturing sector as unimportant. They are wrong as manufacturing sector jobs create more secondary jobs than the service and retail sectors.

Adding to the decline of the West is the increasing amount spent on benefits to middle class households to buy votes. A chart on poor reading skills of students in the West is alarming. I did not know that some European countries fare so badly compared to the US. Of course the West trails Japan, who is now behind China.

How to fix or slow this down? He shows how the quality of teachers correlates to the nation's economic well-being. He argues for less populist tax policies, more subsidies to the technology sector as it is the way of the future, and most controversially, an immediate cut of 10 to 15% to the living standards to rebalance Western economies.
 
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NW-Bound said:
The author says violation of IP rights gives China an advantage. Its economy is not yet at the stage of innovation and invention, but on the cusp of that evolution step due to an increasing percentage of Chinese students repatriating after studying abroad.
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Very nice summary NW. I would not have tried, once I saw the "Media Sensationalism" board refrain that I already know too well.

About China's copy-cat technique, I have seen this before. When I was a boy, the joke was how Japan could only copy. Why not copy until you have mastered the skills to innovate? As Niall Ferguson says, China is downloading all the killer apps that have made the the US dominant up until now. And as China developed so many sciences and techologies long before the West woke out of it's millenium + year period of the dark ages, I doubt that the intellectual or cultural power to once more do this has disappeared.

It should also be remembered that there has been no failure of Japanese business or industry. Their failure is government polices, and hence wrongheaded finance.

Setting aside foolish and corrupt governement, as a manufacturing power, per capita Japan could bury us.

Furthermore, the US is busy copying Japanese governemnts poor approach of socializing banking losses and accepting policies of prolonged government support of insolvent banks.

Ha
 
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haha said:
Very nice summary NW. I would not have tried, once I saw the "Media Sensationalism" board refrain that I already know too well.
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SOunds a bit too sensitive to me Ha. I doubt any of us in the refrain see China as a paper tiger. But we do see "terrifying vision," "decline of the west" as media sensation. I agree that "made in Japan" and "Made in China" were dismissed by lots as pointing to copy cat nations. But this article sounds too much like the Japan will crush us refrain we have heard before. It think M Paquette is right that the problem is assuming this is a zero sum game. There is room for a progressing China (and Africa) and a thriving USA.
 
I quoted a Bob Dylan song in another thread, then realized that a verse in that song would be appropriate here. Well, I don't want to alarm anybody or anything, you all knowing that I am pessimistic, but the lyrics just fit the theme, and I generally do not want to miss a chance to flog something that I like.

Gather 'round people
Wherever you roam
And admit that the waters
Around you have grown

And accept it that soon
You'll be drenched to the bone
If your time to you
Is worth savin'

Then you better start swimmin'
Or you'll sink like a stone
For the times they are a-changin​
Bob Dylan - Times They are a-Changin - YouTube
 
I would say that Japanese industry has certainly lost the apparent edge it had in the 1980's.

Their auto companies are no longer head and shoulders above the rest of the world.

Sony is facing a shift of most of its large markets that may very well destroy it.

In the 80's it looked like Japan would be the world's manufacturing leader.

That no longer seems likely.

haha said:
It should also be remembered that there has been no failure of Japanese business or industry. Their failure is government polices, and hence wrongheaded finance.

Setting aside foolish and corrupt governement, as a manufacturing power, per capita Japan could bury us.
Click to expand...
 
Hamlet said:
I would say that Japanese industry has certainly lost the apparent edge it had in the 1980's.

Their auto companies are no longer head and shoulders above the rest of the world.

Sony is facing a shift of most of its large markets that may very well destroy it.

In the 80's it looked like Japan would be the world's manufacturing leader.

That no longer seems likely.
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Perhaps. But how many of us prefer American cars to Japanese ones? Also, it should be remembered that Japan, an advanced country, faces the same headwind of all the other Western nations- a huge negative wage cost disparity. No Western country is going to be the world manufacturing leader, and perhaps I have just been taken in by Mr. Moynihan's sensationalism, but I believe that China will hold that position for most of the next 25 years anyway..

donheff said:
SOunds a bit too sensitive to me Ha. I doubt any of us in the refrain see China as a paper tiger. But we do see "terrifying vision," "decline of the west" as media sensation.
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Could be. Yet it seems a stretch to call a lecture delivered to graduate students at LSE "media sensation".

But as I said earlier, everyone makes his or her own bets. Bonne chance!

Ha
 
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Japan's nominal GDP is lower than it was 15 years ago. Where it once had global dominance or competitiveness it is now struggling. China has picked up some of that, but other countries, like Korea, have also gained competitiveness. There are many reasons for this. Wages are one, but not necessarily the most important.
 
MichaelB said:
Japan's nominal GDP is lower than it was 15 years ago. Where it once had global dominance or competitiveness it is now struggling. China has picked up some of that, but other countries, like Korea, have also gained competitiveness. There are many reasons for this. Wages are one, but not necessarily the most important.
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Well, whatever. Nevertheless, as I said earlier, I think much if the problem with Japan is not its maufacturers, but its banks and government.
 
haha said:
Well, whatever. Nevertheless, as I said earlier, I think much if the problem with Japan is not its maufacturers, but its banks and government.
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Ok. Thanks for the clarification.
 
One thing to keep in mind about China--

They have half our GDP with four times the people. So their GDP per capita is 1/8 of ours. Their growth has been on a pretty small base.

It remains to be seen whether they can keep growing without some massive social upheaval. It's easy to keep a nation of subsistence farmers under control. Their increased wealth may force political change. Or their government may choose control over growth.

I would be reluctant to try to predict what China will look like in 20 years. I think it is more or less unknowable at this point.

haha said:
Perhaps. But how many of us prefer American cars to Japanese ones? Also, it should be remembered that Japan, an advanced country, faces the same headwind of all the other Western nations- a huge negative wage cost disparity. No Western country is going to be the world manufacturing leader, and perhaps I have just been taken in by Mr. Moynihan's sensationalism, but I believe that China will hold that position for most of the next 25 years anyway..
Click to expand...
 
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