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Old 01-17-2011, 03:11 PM   #81
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Maybe you mean that we'll just have high unemployment rates and high unemployment benefits (say our unemployment benefits will exceed Indian wages)?

Or, do you see some way that we can maintain higher market wages than other countries?
I really can't say. Germany, Singapore, Netherlands, Switzerland and Sweden seem to be mostly doing #2 (especially Singapore) with a good dose of # 1 thrown in especially in Northern Europe. A third possibility is protectionism, relatively slow economic growth and a pullback from military and economic engagement around the world.

I believe these things tend to be path dependent, what happens is not really foreseeable. But one thing I cannot envision is US citizens getting up and going to work for Indonesian workers' wages. Whatever goverment that tried to let that come about might as well give up immediately- why wait until the next elections?

We could go the route of Latin America, with some very wealthy people living behind razorwire, and only clueless tourists venturing into poorer sections- but that model seems to be very much under stress even down there. (Venezuela, Bolivia come immediately to mind.)

Minority respecting Democracy is hard to maintain with extreme poverty among large goups of voters. Eventually voters say, I have 2 possible ways to make ends meet- work, and voting for confiscation. When work no longer suffices, confiscation is not far off, no matter what we may say about the rule of law and property rights. One man, one vote rules-save of course the plutocrats who finance our politicians.

Our system is becoming more and more simlilar to SE Asia, especially Indonesia and Phillipines. Some very wealthy industrialists/ businessmen who are mostly ethnic Chinese own most everything, except what they pass to whatever general or puppet is governing. In our case the plutocrats are ethnically more diverse, but the system is the same.

I have no idea what will happen, but it is very hard for me to envision either muddling along for decades more, or a return to what was US style democratic capitalism up until the 1980s.

It may turn out that the infatuation with market forces may turn out to have been a oddity of the last 25-30 years, and will be repudiated. In their passions, not many people are moved by considerations of efficiency.

Ha
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Old 01-17-2011, 05:26 PM   #82
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I did not mean to shoot the messenger, and I apologize if that is how it came across. Statistics is one of the subjects I took several years of in both undergraduate and graduate studies, and I guess that is one of the reasons I question statistics. I believe the unemployment rate given in the US is a sham, and adjusted for political reasons. I don't blame the power in charge, no matter which party they ascribe to, and, after going to the site, I really did not expect an answer. I guess I ask the question just to point out all we see might not be all the story.

So again, if I offended, it was not my intention.
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Old 01-17-2011, 05:35 PM   #83
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I did not mean to shoot the messenger, and I apologize if that is how it came across. Statistics is one of the subjects I took several years of in both undergraduate and graduate studies, and I guess that is one of the reasons I question statistics. I believe the unemployment rate given in the US is a sham, and adjusted for political reasons. I don't blame the power in charge, no matter which party they ascribe to, and, after going to the site, I really did not expect an answer. I guess I ask the question just to point out all we see might not be all the story.

So again, if I offended, it was not my intention.
No offense taken... just sayin'.

Anyway, I completely agree with your opinion of this issue. And I'm guessing no one better bring up the CPI in your presence.
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Old 01-17-2011, 05:49 PM   #84
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I did not mean to shoot the messenger, and I apologize if that is how it came across. Statistics is one of the subjects I took several years of in both undergraduate and graduate studies, and I guess that is one of the reasons I question statistics. I believe the unemployment rate given in the US is a sham, and adjusted for political reasons. I don't blame the power in charge, no matter which party they ascribe to, and, after going to the site, I really did not expect an answer. I guess I ask the question just to point out all we see might not be all the story.

So again, if I offended, it was not my intention.

Unemployment - Wikipedia, the free encyclopedia

The primary measure of unemployment, U3, allows for comparisons between countries. Unemployment differs from country to country and across different time periods. For example, during the 1990s and 2000s, the United States had lower unemployment levels than many countries in the European Union,[62] which had significant internal variation, with countries like the UK and Denmark outperforming Italy and France. However, large economic events such as the Great Depression can lead to similar unemployment rates across the globe.


Some additional types of unemployment that are occasionally mentioned are seasonal unemployment, hardcore unemployment, and hidden unemployment. The U.S. BLS measures six types of unemployment, U1-U6.


U3 and U6 Unemployment during the Great Depression | The Economic Populist

A frequent meme propounded in the economic blogosphere is that U6 unemployment, running near 17% now, is a truer measure (and there are good reasons to believe it is), so that means we have unemployment already approaching Great Depression levels of 25%. Left out of the comparison is the fact that U3 and U6 measurements didn't exist during the 1930s. So, is the 25% unemployment peak for the Great Depression a fair comparison to U6 unemployment today?

+++++

Based on that research, he was able to generate a mathematical formula to calculate U3 and U6 unemployment for the entire period since 1900. He found that at the peak of the Great Depression, U3 was 25.2%. U6 was 37.6%.
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Old 01-18-2011, 04:58 PM   #85
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I really can't say. Germany, Singapore, Netherlands, Switzerland and Sweden seem to be mostly doing #2 (especially Singapore) with a good dose of # 1 thrown in especially in Northern Europe. A third possibility is protectionism, relatively slow economic growth and a pullback from military and economic engagement around the world.

I believe these things tend to be path dependent, what happens is not really foreseeable. But one thing I cannot envision is US citizens getting up and going to work for Indonesian workers' wages. Whatever goverment that tried to let that come about might as well give up immediately- why wait until the next elections?

We could go the route of Latin America, with some very wealthy people living behind razorwire, and only clueless tourists venturing into poorer sections- but that model seems to be very much under stress even down there. (Venezuela, Bolivia come immediately to mind.)

Minority respecting Democracy is hard to maintain with extreme poverty among large goups of voters. Eventually voters say, I have 2 possible ways to make ends meet- work, and voting for confiscation. When work no longer suffices, confiscation is not far off, no matter what we may say about the rule of law and property rights. One man, one vote rules-save of course the plutocrats who finance our politicians.

Our system is becoming more and more simlilar to SE Asia, especially Indonesia and Phillipines. Some very wealthy industrialists/ businessmen who are mostly ethnic Chinese own most everything, except what they pass to whatever general or puppet is governing. In our case the plutocrats are ethnically more diverse, but the system is the same.

I have no idea what will happen, but it is very hard for me to envision either muddling along for decades more, or a return to what was US style democratic capitalism up until the 1980s.

It may turn out that the infatuation with market forces may turn out to have been a oddity of the last 25-30 years, and will be repudiated. In their passions, not many people are moved by considerations of efficiency.

Ha
Lots of good thoughts here. So far we've had stagnant wages for 4 year college grads and slightly declining for HS grads. I think we've avoided the political implications by:

- Individuals borrowing so they can consume more than they earn.
- Government borrowing so it can provide support for low income and unemployed without raising taxes on the rich.
- Individuals believing that "it's my own fault" for not staying in school and getting a degree, and believing that if they send their kids to college at least the kids will do okay.

I think none of those can continue indefinitely.

We've already started on the gated community path. I've heard that Germany maintains decent wages with excellent vocational schools and with strong unions (that even get Board seats), I don't know if that's really true, but I don't see any motion in this direction in the US. There was talk about increasing taxes on higher income and wealthy, but it didn't happen in December in spite of all the hand-wringing among the political class about the deficit. Similarly there's no support for tariffs even though it seems to be conventional wisdom that the Chinese have successfully underpriced their currency - I assume the people who see opportunities in China want to protect their interests.

I'm guessing we'll eventually get more people qualifying for Earned Income Tax Credits. It's a way to convert very low wages into livable wages without the specter of sending checks to people who are sitting on their couches. But in the long run even this will require raising taxes on somebody.
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