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Re: One Measure of US Economic Failure
Old 08-27-2006, 07:37 PM   #41
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Re: One Measure of US Economic Failure

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Originally Posted by al_bundy
no sector goes up strongly forever. there are economic cycles and different sectors go up at different rates in different cycles.
Right.* *We don't need to start worrying until overall GDP slows or declines.* *I'm just curious about what our current economic growth engines are now that we've lost a few and others are in decline.* *It seems pretty clear that we're becoming a service-based economy.* *I wonder if we'll continue to gain share in services, or if other countries with large well-educated populations can take that away from us as well.

I don't see doom and gloom in the current trends.* *I figure the worst case is that we basically become like Europe* -- more vacation time for everyone!
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Re: One Measure of US Economic Failure
Old 08-27-2006, 08:17 PM   #42
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Re: One Measure of US Economic Failure

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Originally Posted by wab
I looked for good data on GDP growth by sector, and I haven't been able to find something that gives a good picture.* *The BEA has a lot of data available, but it's hard to connect all the dots.* * The one thing that is clear is that IT had annualized growth of around 22% from 1995-2000, and now that growth has slowed to about 11%.

So, we have some healthy sectors, but even the healthy ones don't seem to be as strong as they once were.
Another interesting factoid from the BEA data is that corporate profits from manufacturing have increased 867% (6% CAGR) over the past 35 years. Hardly the decline most here would assume. Just another case of people not seeing the forest for the trees.
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Re: One Measure of US Economic Failure
Old 08-27-2006, 08:44 PM   #43
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Re: One Measure of US Economic Failure

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Originally Posted by wab
Right.* *We don't need to start worrying until overall GDP slows or declines.* *I'm just curious about what our current economic growth engines are now that we've lost a few and others are in decline.* *It seems pretty clear that we're becoming a service-based economy.* *I wonder if we'll continue to gain share in services, or if other countries with large well-educated populations can take that away from us as well.

I don't see doom and gloom in the current trends.* *I figure the worst case is that we basically become like Europe* -- more vacation time for everyone!
we are doing a huge business in manufacturing and services for building infrastructure for developing nations and we would not have this business if it wasn't for free trade

health care is pretty big too
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Re: One Measure of US Economic Failure
Old 08-27-2006, 09:32 PM   #44
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Re: One Measure of US Economic Failure

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Originally Posted by al_bundy
health care is pretty big too
So if we were all doctors, we could get fat and happy treating one another's hemorrhoids?

Repeat after me- traded goods, traded goods…
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Re: One Measure of US Economic Failure
Old 08-27-2006, 10:12 PM   #45
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Re: One Measure of US Economic Failure

plenty of medical devices and drugs being developed and made in the USA along with jet engines, heavy machinery and all kinds of other high tech products
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Re: One Measure of US Economic Failure
Old 08-28-2006, 04:11 AM   #46
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Re: One Measure of US Economic Failure

for the most part the trade deficit is alot of bull.... we buy alot of foreign goods because to us* it represents the best value ..i buy items from japan not because the emperor is coming to my place of business and buying something from me but because i feel they make a product that may be better than any other competitors product...what the trade deficit dosnt mention is all the billions or even trillions that come back to our financial markets for reinvestment as they are not part of the deficit numbers..you cant spend a dollar in tokyo,it has to be traded to someone who has someone who ultimately has a need for a dollar..ultimatley all dollars have to recirculate here eventually... the japaneese dump billions into our treasuries* * *..an american auto worker out of work makes great political news,,,the fact we excell in farm equipment,,,medical and bio-tech equipment and everything else we export dosnt make good political news .......lets face it back when the rest of the world had nothing to sell us except those little umbrellas with the secret messages we were the king exporters but times changed and each area of the world excells at something else making it better and cheaper than anyone else......man i hate to think if it wasnt for the japaneese we would still be driving those crap quality cars detroit was handing us
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Re: One Measure of US Economic Failure
Old 08-28-2006, 06:03 AM   #47
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Re: One Measure of US Economic Failure

US still makes good cars, they are just made by Toyota and Honda and now hyundai
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Re: One Measure of US Economic Failure
Old 08-28-2006, 08:17 AM   #48
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Re: One Measure of US Economic Failure

I used to Buy American. When we got a Plymouth Voyager van and I read the manuals, I discovered that it was assembled in Canada and had a Japanese engine and other foreign-made components. I guess the American part was the sales & marketing and executives . That was our last "American" car.

Speaking of which, does anyone else remember the song that advocated buying American goods made by union labor (it was written for the ILGWU--International Ladies Garment Workers Union--my Mom taught me to look for their union label when I was growing up in the 50s & 60s--man, those days are long gone!):

Look for, the union label,
When you are buying a coat, dress or blouse.
Remember somewhere,
They're people sewing,
Their money going,
To feed the kids
And run the house.

We work hard,
But who's complaining?
For in the ILG we're earning our way.
So, always look for
The union label.
It means we're able to make it in the USA!

I actually get goose bumps hearing it in my mind.
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Re: One Measure of US Economic Failure
Old 08-28-2006, 10:46 AM   #49
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Re: One Measure of US Economic Failure

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Originally Posted by al_bundy
US still makes good cars, they are just made by Toyota and Honda and now hyundai
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Re: One Measure of US Economic Failure
Old 08-28-2006, 11:06 AM   #50
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Re: One Measure of US Economic Failure

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Originally Posted by wab
We've obviously lost many sectors of our economy to foreign competition: consumer electronics, semiconductors, automobiles, textiles, manufacturing, etc.
So, the argument for US economic growth is that for every sector we lose, we grow or gain another.
So, where are we kicking butt?
I think you answered your own question.

We're kicking butt in the industry of dreaming up (or discovering) new concepts and finding ways to pay other country's workforces to execute them for us while we retain the lion's share of the margins. It's the ultimate outsourcing.

Example #1: Warren Buffett. Heck, he even outsourced his charitable giving to Melinda Gates!
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Re: One Measure of US Economic Failure
Old 08-28-2006, 11:33 AM   #51
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Re: One Measure of US Economic Failure

Quote:
We've obviously lost many sectors of our economy to foreign competition: consumer electronics, semiconductors, automobiles, textiles, manufacturing, etc.
So, the argument for US economic growth is that for every sector we lose, we grow or gain another.
So, where are we kicking butt?
We are really good at coming up with new and inovative ways at doing home equity loans. That and Jerry Springer documentaries.




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Re: One Measure of US Economic Failure
Old 08-28-2006, 01:18 PM   #52
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Re: One Measure of US Economic Failure

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Originally Posted by MasterBlaster
We are really good at coming up with new and inovative ways at doing home equity loans. That and Jerry Springer documentaries.
We must get to work on exporting Jerry Springer immediately...
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Re: One Measure of US Economic Failure
Old 08-28-2006, 06:19 PM   #53
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Re: One Measure of US Economic Failure

I'm sure HaHa's ancestors worried about the "hallowing out of the agricultural base" too.* Thankfully we allowed capitalism to work its magic so now I can work in an air-conditioned office earning many multiples of what would be possible in an agricultural economy.* The same is happening to manufacturing.

There is a reason why the US is moving away from heavy manufacturing . . . because it is a lousy business.* Here is a sample list of company profits / worker:

Goldman Sachs* * * * * * * * * * * * $250,123
Microsoft* * ** * * * * * * * * * * * ** ** *177,451
Bank of America * * ** * *** ** * * * * *93,111
Citigroup * * ** * * ** * * ** ** * * * * 76,448
Merck * * ** * ** * ** ** ** * * * * ** * 75,309
Oracle * * ** ** * ** * * ** * ** * ** * * 60,232
Dell * * ** ** * * * ** * ** ** * ** * * * * 54,785
GE * * ** ** * * * ** * ** ** * * ** * * * *51,750
Caterpillar * * * ** * * * * * ** * ** * * * *33,531
Toyota * * * * * * * * *** * * * * ** * * * * * * *29,155
General Dynamics * * ** * ** * ** * * * *20,292
Boeing * ** * * * ** * ** * *** ** * * * *16,745

If you think about the areas where the US is strong (finance, pharmaceuticals, software) you'll see those areas also rank at the top of the list in terms of profitability / employee.* In other words, the US is allocating its scarce human capital to areas where it generates the highest return (just like capitalism is supposed to).* If you implement policies to protect or increase the manufacturing base, the economy will have to pull workers and resources from other areas.* Considering that workers in finance, pharma, etc. produce more than 3x the profits of Toyota's workers, its easy to see why those type of "managed economy" policies will make us all poorer.*

And as employees, who do you think earns a better living?* The folks at Boeing who each generate $16,000 per year in profit or those at Goldman Sachs who generate 15-times as much??
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Re: One Measure of US Economic Failure
Old 08-28-2006, 07:17 PM   #54
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Re: One Measure of US Economic Failure

it's OK, manufacturing will make it up on volume
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Re: One Measure of US Economic Failure
Old 08-29-2006, 09:16 AM   #55
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Re: One Measure of US Economic Failure

astromeria.. you would love the "Unity Day" festivities all around Italy -- chance for the downtrodden workers to sing stirring communist songs.*

"Made in Italy" is a big issue here, with bazillions of economic commissions, etc. (read, money wasted) to protect local industries. But the only glimmer of growth is in high-tech, for which Italy is only slowing adapting itself, with some successes in bio-tech and specialized manufacturing, like helicopters. The fabulous textile mills are mostly gone, along with the leather trade, the clothing trade. Big protections for agriculture but that, too, is fading for obvious reasons mentioned by 3 Yrs to Go. The EU is doing its damndest to extirpate any possible 'home-grown' advantage (legislating the permissible length of asparagus and trying to abolish wood-fired pizza ovens Union-wide are but two of their infamous diktats). The Italian companies that are having success are those who invest overseas, no doubt about it. Fashion and eyewear (go LUX!) designed in Italy but made in China.

In the US I used to be a "liberal", but here, between the unions and the gov't. I see first hand that socialism and protectionism has not helped the Italian worker; instead, it's just another form of slavery. The salaries here are (take home) about $1200-1500/month, even for people with degrees, like computer programmers. (Of course, you can't fire most people, though).

As if that weren't enough, cartels and protectionism ensure that consumer goods cost double or more: normal Braun coffeemaker made in Germany, no auto-shutoff: here $70 (literally identical model in the US =$20); normal fridge (1/2 American size) $650.* Banks charge high monthly fees for any kind of account AND charge you to close your account. You can't find even medium-cheap-quality items of clothes or shoes for less than $40, even at 1/2-off sales (fondly remembering my last trip to Marshall's and the $11 skirt I got). P.S. Sales are only allowed on certain weeks of the year, in January and August!!! Not sure who that is supposed to protect... the shopkeeper who can't move stuff as quickly as he'd like? the consumer who's forced to pay higher prices year-round? or the worker who ends up producing less due to reduced demand..* * :

Everyone is so caught up in "protecting" their special labor class or business interest that it hurts everyone.

I like Nords' comment:
Quote:
We're kicking butt in the industry of dreaming up (or discovering) new concepts and finding ways to pay other country's workforces to execute them for us while we retain the lion's share of the margins.* It's the ultimate outsourcing.
tho' you could replace "concepts" with "must-have trinkets" and cover a lot of it. The whole world aspires to have American-style "stuff". All we have to do is make sure we keep raising the bar and cashing in on the margins.

Plus, there are things worse than "services". What does Goldman Sachs provide if not a service? Only a few types of services can be easily outsourced; for instance, I hear there's big money to be made in the handyman biz!
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Re: One Measure of US Economic Failure
Old 08-29-2006, 09:31 AM   #56
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Re: One Measure of US Economic Failure

Sounds like fun But seriously, I'm not in favor of protectionism--or socialism for that matter (well, I do favor public education and public safety services--fire, police, EPA, OSHA, SEC, FDIC...--and public catastrophic health coverage). But when American companies are making their greatest profits ever, I get steamed that productive workers don't get to share in their own success.

From yesterday's NYTimes:

The median hourly wage for American workers has declined 2 percent since 2003, after factoring in inflation. The drop has been especially notable, economists say, because productivity — the amount that an average worker produces in an hour and the basic wellspring of a nation’s living standards — has risen steadily over the same period.

As a result, wages and salaries now make up the lowest share of the nation’s gross domestic product since the government began recording the data in 1947, while corporate profits have climbed to their highest share since the 1960’s. UBS, the investment bank, recently described the current period as “the golden era of profitability.”

http://tinyurl.com/erxao
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Re: One Measure of US Economic Failure
Old 08-29-2006, 09:58 AM   #57
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Re: One Measure of US Economic Failure

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Originally Posted by astromeria
[i]The median hourly wage for American workers has declined 2 percent since 2003, after factoring in inflation.
Labor stats is a tricky area that can be easily manipulated to make it look better or worse depending on what the author wants to prove. Two common sources of obfuscation are (a) substituting "wages" (usually private non-farm non-supervisory wages) for total income and (b) ignoring benefits, which have been growing rapidly (see, e.g., http://stats.bls.gov/news.release/eci.t12.htm). If you want to see the whole picture, you need to read the fine print (http://stats.bls.gov/news.release/eci.tn.htm) and then do enough additional reading to understand the jargon, which can be time consuming.

Edit: Oh yes, forgot to add one of the better summary tables: http://www.bls.gov/news.release/prod2.t02.htm
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Re: One Measure of US Economic Failure
Old 08-29-2006, 10:48 AM   #58
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Re: One Measure of US Economic Failure

NY Times is a bad source since they always fudge the numbers by picking years to support their conclusion.

All I know is that in 1981 when i first came to the US all the middle class people didn't have a lot of money for discretionary spending. today we have DVD players, DVD collections, CD collections, cheap vacations to all kinds of places, cheap airfare almost everywhere, cell phones, home theaters, large screen TV's, game consoles, crazy expensive phones with all kinds of features, a whole industry based on home improvement sprang up in the last 25 years, cable and satellite TV with hundreds of channels, internet service, eating out is a regular occurrence and another industry sprang up to fill the demand, people are buying more expensive cars, new homes today offer features only the rich had 25 years ago, child fashions and anything else i forgot which is a discretionary expense.

if people are so much poorer today than 25 years ago like the NY Times says where is the money coming from for all this spending? we should be spending all our money on food, clothes and shelter and not have anything left.
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Re: One Measure of US Economic Failure
Old 08-29-2006, 10:54 AM   #59
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Re: One Measure of US Economic Failure

Quote:
Originally Posted by Scrooge
Labor stats is a tricky area that can be easily manipulated to make it look better or worse depending on what the author wants to prove. Two common sources of obfuscation are (a) substituting "wages" (usually private non-farm non-supervisory wages) for total income and (b) ignoring benefits, which have been growing rapidly (see, e.g., http://stats.bls.gov/news.release/eci.t12.htm). If you want to see the whole picture, you need to read the fine print (http://stats.bls.gov/news.release/eci.tn.htm) and then do enough additional reading to understand the jargon, which can be time consuming.

Edit: Oh yes, forgot to add one of the better summary tables: http://www.bls.gov/news.release/prod2.t02.htm
If I read correctly the article/graph mentioned earlier, the wages are decreasing but the total work benefit is constant. (Constant as a whole but much bigger for large company CEOs )
What benefits are increasing? Probably only health costs which are slowly strangulating American companies providing them. The consequences are huge for the competitiveness of companies as well as the well being of all of us (financial if you have insurance and health if you dont). Health insurance is now like having a second mortgage.
The Fed. Government needs to do something.
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Re: One Measure of US Economic Failure
Old 08-29-2006, 10:59 AM   #60
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Re: One Measure of US Economic Failure

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Originally Posted by al_bundy
NY Times is a bad source since they always fudge the numbers by picking years to support their conclusion.

All I know is that in 1981 when i first came to the US all the middle class people didn't have a lot of money for discretionary spending. today we have DVD players, DVD collections, CD collections, cheap vacations to all kinds of places, cheap airfare almost everywhere, cell phones, home theaters, large screen TV's, game consoles, crazy expensive phones with all kinds of features, a whole industry based on home improvement sprang up in the last 25 years, cable and satellite TV with hundreds of channels, internet service, eating out is a regular occurrence and another industry sprang up to fill the demand, people are buying more expensive cars, new homes today offer features only the rich had 25 years ago, child fashions and anything else i forgot which is a discretionary expense.

if people are so much poorer today than 25 years ago like the NY Times says where is the money coming from for all this spending? we should be spending all our money on food, clothes and shelter and not have anything left.
A lot of the evident money is debt that wasn't present a generation ago.* Also sending the spouse out to work (two income families v one income family a generation ago)
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