http://www.vdare.com/roberts/labor_arbitrage.htm
For example, Matthew J. Slaughter, a professor at Dartmouth, recently concluded that during 1991-2001 “for every one job that US multinationals created abroad in their foreign affiliates they created nearly two US jobs in their parent operations.”[Globalization and Employment by U.S. Multinationals: A Framework and Facts,” Daily Report for Executives, Bureau of National Affairs, [Subscription] March 26, 2004]
For example, Matthew J. Slaughter, a professor at Dartmouth, recently concluded that during 1991-2001 “for every one job that US multinationals created abroad in their foreign affiliates they created nearly two US jobs in their parent operations.”[Globalization and Employment by U.S. Multinationals: A Framework and Facts,” Daily Report for Executives, Bureau of National Affairs, [Subscription] March 26, 2004]
J
johnblake
Guest
Hello Mr. Otako,
It appears that you misunderstood me. I don't think that jobs leaving the country mean that better jobs will be available here. Just as I don't think that workers replaced by machines mean that there will be better jobs. I did not put forth that theory.
Companies outsource jobs because it's more efficient for them to do so. Companies will also introduce robots, telephone switches, computer programs, and other technology that replaces workers and makes the company more efficient. Doing so increases profitability, thereby making more capital available. It also frees up labor. When these resources (capital and labor) are put to good use it _may_ make better higher paying jobs available -- that's our nation's challenge.
Think of China and India as 'machines'. We'd be crazy not to use them. If our companies don't, other nations' companies will and the result will be even more dismal. Our challenge is to make use of the global economy in the best way possible.
What else can we do? Isolate ourselves from the global economy? If we do, the results are likely to be much worse than the outsourcing problems we face now. Mainly because of our dependency on oil (and cheap Chinese stuff).
When I was in engineering school the economic climate looked similarly dismal. Everyone was saying 'buy American'. Japan was fiercely competitive in the automotive and electronics industries. There were very few jobs available for me that weren't in the defense industry. A lot has changed since then. The US has a culture and economy that are very good at creating innovative technologies, businesses, and growing the economy. The challenge facing us is to adapt to the global realities and compete through innovation. It's hard to envision what we might do.
My point is that this challenge really isn't new. The US usually manages successfully. We did so when the economy changed from agrarian to industrial, and again with automation, and global competition. I don't claim to have a deep understanding of these issues.
What do you suggest? Implement protectionist policies?
--JB
J
johnblake
Guest
A fed, working, and educated global populace is a good thing. I don't think our prosperity is a result of poverty and the lack of education elsewhere. If it turns out that this is the case, then a 'correction' is due.
I expect that our energy binge cannot continue. But I don't think that driving a smaller car, and using less energy means a lower quality lifestyle. A good dose of competition is probably healthy in this regard.
OP
OP
Cut-Throat
Guest
JB,
I don't Otako and myself are advocating any 'solution' to this problem. We are just pointing out what could happen.
If it does happen and enough voters are affected, there will be a politician with a 'solution' and will most likely get elected. After all the voting public today believes that you can cut taxes and increase spending. Sounds absurb right?
There is this belief and you seem to have it also, that the U.S. will always be coming out on top. Not necessarily. Just keep your eyes and mind open.
J
John Galt
Guest
Re. the "voting public", Hitler believed if you repeated a
big lie loudly enough and long enough people would
believe it. Not only that, he proved it.
John Galt
big lie loudly enough and long enough people would
believe it. Not only that, he proved it.
John Galt
J
johnblake
Guest
Actually, don't believe that the US will always come out on top. The inbalance in resource consumption will change. At this time we have a culture, and institutions that are very innovative. If we work hard (ha, ha
educate our kids, and play smart, there's a good chance that having China and India come on line can be a good thing -- like a 'manufacturing machine'.If we continue with the 'walmartization' of the middle class, we're in for some problems. If this happens, I predict that we will resort to wealth re-distribution to fund basic needs -- mainly health care and housing.
I agree that this represents a very big challenge (just like every other change in the global economy.) We need to face the challenge and do the best we can.
My fear is that our people have come to believe that they are 'entitled' to a middle class lifestyle -- a big SUV and 1500 sqft per person home.
Another approach is to use our military to sustain the resources and global climate that our economy needs to flourish. I think this will lead to the decline of the middle class even faster than competing economically.
Eventually, the US will fall as the #1 global economic and military power. Hopefully we'll fall to #2, or #3.
I'm really 'on the fence' regarding the 'globalization' and 'free trade'. I find the idea of using our own resources, and living within our means, very attractive. However, it does not appear to be practical (especially given our dependence on oil). I have not heard any arguments for protectionist policies that make sense to me.
Personally, I really don't care if we fall to #2, or #10. There really isn't such a big difference who 'wins' as long as we can maintain a high quality lifestyle for the people here.
BigMoneyJim
Thinks s/he gets paid by the post
I should really stay out of political discussions, but...
Re: Gay marriage, (sorry, misattributed quote earlier!)
Re: Hitler reference and protectionism: I don't have the link, but I recently read an article about pre-WWI Europe having trouble with protectionism and self-reliance causing serious problems with international relations and economies. Pre-WWII Germany went down that same path. I had always thought it obvious that a country being capable of producing their own food and necessary manufactured goods, but after reading that article I'm not sure it's ultimately a good thing.
As far as the declining middle class and the effect of globalization on my remaining career....I worry about it sometimes, but there's not much I can do beyond living below my means, saving some and enjoying today. Besides, our culture has a history of predicting gloom and doom and then prospering anyway.
(EDITed to fix misattributed quote. One more reason I should stay out of political discussions!)
Re: Gay marriage, (sorry, misattributed quote earlier!)
I don't see a problem there. The pastor & church perform the holy matrimony part, not the Justice of the Peace. If the church doesn't approve, their pastors won't perform the ceremonies. I don't see why the legal terminology needs to be different for gay vs. traditional marriages/unions/etc.. Legally, call it all marriage, call it all civil union, call it mutual adoption, whatever. The government gives special tax and legal (e.g. inheritance, custody of children) privileges to married couples; I can't come up with a reasonable reason to disallow those privileges to gay couples. Either let the gay couples (and platonic domestic partners) have the privileges, too, or eliminate the special treatment for everyone.
Re: Hitler reference and protectionism: I don't have the link, but I recently read an article about pre-WWI Europe having trouble with protectionism and self-reliance causing serious problems with international relations and economies. Pre-WWII Germany went down that same path. I had always thought it obvious that a country being capable of producing their own food and necessary manufactured goods, but after reading that article I'm not sure it's ultimately a good thing.
As far as the declining middle class and the effect of globalization on my remaining career....I worry about it sometimes, but there's not much I can do beyond living below my means, saving some and enjoying today. Besides, our culture has a history of predicting gloom and doom and then prospering anyway.
(EDITed to fix misattributed quote. One more reason I should stay out of political discussions!)
OP
OP
Cut-Throat
Guest
BMJ,
Please don't stick that quote with me! - I never said anything as stupid as that and I'd appreciate if you would look it up and correct your post!
I could care a less who marries who. When I say that I believe in Freedom, I mean I really believe in Freedom!
Even for people that I don't agree with!
Please don't stick that quote with me! - I never said anything as stupid as that and I'd appreciate if you would look it up and correct your post!
I could care a less who marries who. When I say that I believe in Freedom, I mean I really believe in Freedom!
Even for people that I don't agree with!
BigMoneyJim
Thinks s/he gets paid by the post
ACK! 
Sorry Cut-Throat. Major boo-boo there on my part, and corrected in post. (See why I shouldn't post in political discussions?) Actually, I have this problem with my computer, when I try to spell C-h-u-c-k---L-y-n it comes out as "Cut Throat" .
Glad I had a thought on the drive home, or that misquote would be sitting there for a while....
My thought on standards of living: One thing I keep forgetting to factor in is that our idea of a minimal standard of living has greatly increased in the past few decades. Back in the 50's didn't families have one car, one TV and one radio if they were lucky? These days there's frequently at least one car per person over 16, more than 1 TV per person plus a slew of relatively short-lived electronic gadgets like radio/CD/cassetes (including boomboxes & personal sets), VCRs, DVD players, cable/satellite TV, cell phones, game system (PS2, Xbox) and increasingly the ever-obsoleting PC. Not to mention the vendors of each of these items has refined the nickel-and-dime upgrades like Caller ID, Call Waiting, picture-in-picture, undercoating, rustproofing, extended warranty, oh-don't-you-want-to-pay-a-little-more-for-so-much-more-features and consumables/media for consumer devices. The expected home size per person has grown, too, as an earlier poster noted.
Will all the modern consumable expenses I intuit that they severely affect our expenditures while not making us feel like our quality of life is better when reflecting upon our parents' lives.
I don't guess I have a specific point here, just an observation that I think this is a significant factor that is often overlooked.
Sorry Cut-Throat. Major boo-boo there on my part, and corrected in post. (See why I shouldn't post in political discussions?) Actually, I have this problem with my computer, when I try to spell C-h-u-c-k---L-y-n it comes out as "Cut Throat" .Glad I had a thought on the drive home, or that misquote would be sitting there for a while....
My thought on standards of living: One thing I keep forgetting to factor in is that our idea of a minimal standard of living has greatly increased in the past few decades. Back in the 50's didn't families have one car, one TV and one radio if they were lucky? These days there's frequently at least one car per person over 16, more than 1 TV per person plus a slew of relatively short-lived electronic gadgets like radio/CD/cassetes (including boomboxes & personal sets), VCRs, DVD players, cable/satellite TV, cell phones, game system (PS2, Xbox) and increasingly the ever-obsoleting PC. Not to mention the vendors of each of these items has refined the nickel-and-dime upgrades like Caller ID, Call Waiting, picture-in-picture, undercoating, rustproofing, extended warranty, oh-don't-you-want-to-pay-a-little-more-for-so-much-more-features and consumables/media for consumer devices. The expected home size per person has grown, too, as an earlier poster noted.
Will all the modern consumable expenses I intuit that they severely affect our expenditures while not making us feel like our quality of life is better when reflecting upon our parents' lives.
I don't guess I have a specific point here, just an observation that I think this is a significant factor that is often overlooked.
The cost of high-tech goods has come down a LOT since then. To put it into perspective, a TV set in the 1950s cost between $200 and $1000, but the average annual income was about $3000.... which means that a TV cost between 15-33% of the gross household income. No wonder homes only had one TV set. I was curious, and adjusted for inflation, that $3000 income (1955) is worth about $20000 now. From the numbers I could gather (regional), the current average pay ranges between $20k and $40k depending on where in the country you live.... so it doesn't look like people are THAT much better off..... personally, I think people make LESS now (in terms of buying power) than they did back in the 1950s, and that the dual-income family masks this underlying fact.
cute fuzzy bunny
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Which is somewhat offset by people owning WAY more electronics crap than they used to. Most families in the 60's/70's owned perhaps one tv, a radio, and maybe a record player. They owned one car, and often it was an old clunker.
Todays families have usually more than one computer, tvs, vcr's, tivo's, satellite receivers, cable modems, a couple of stereos, clock radios, cell phones, fax machines, etc, etc. Its also almost expected that you have at least two newer cars, and of course cars for the teenagers when they get their license. So the stuff is cheaper, but we have more of it and multiples.
Hence the decline. Expectations have gone way up and exceeded the middle classes ability to pay for it without going into debt.
As far as the rest of this stuff, its said there are two kinds of people: those that just want to live their own life and are happy with that as long as someone elses behavior doesnt infringe on their freedom, and those that either want to tell other people what to do and/or how to do it, or who feel that everyone elses behavior should meet their standards.
With all due respect to people I like that fall into the latter category, my wan opinion is that the world would be a better place if some of that energy were directed a little more positively.
Perhaps all this energy spent keeping people who want to get married but dont meet some peoples "appropriate criteria" would be better spent working to drop the divorce rate below 50% or improving the quality of marriage so more younger people look at it as something they might want to do.
It seems to me that something so 'treasured' should be desirable to be in and to stay in. Then later on you can worry about 'miscreants' who want to 'pollute' the 'sanctity' of the thing a lot of people dont want to do or keep doing long term.
Todays families have usually more than one computer, tvs, vcr's, tivo's, satellite receivers, cable modems, a couple of stereos, clock radios, cell phones, fax machines, etc, etc. Its also almost expected that you have at least two newer cars, and of course cars for the teenagers when they get their license. So the stuff is cheaper, but we have more of it and multiples.
Hence the decline. Expectations have gone way up and exceeded the middle classes ability to pay for it without going into debt.
As far as the rest of this stuff, its said there are two kinds of people: those that just want to live their own life and are happy with that as long as someone elses behavior doesnt infringe on their freedom, and those that either want to tell other people what to do and/or how to do it, or who feel that everyone elses behavior should meet their standards.
With all due respect to people I like that fall into the latter category, my wan opinion is that the world would be a better place if some of that energy were directed a little more positively.
Perhaps all this energy spent keeping people who want to get married but dont meet some peoples "appropriate criteria" would be better spent working to drop the divorce rate below 50% or improving the quality of marriage so more younger people look at it as something they might want to do.
It seems to me that something so 'treasured' should be desirable to be in and to stay in. Then later on you can worry about 'miscreants' who want to 'pollute' the 'sanctity' of the thing a lot of people dont want to do or keep doing long term.
J
John Galt
Guest
I don't much care what other people do, or how they do it, as long as they stay out of my way and do not
negatively impact my life.
John Galt
negatively impact my life.
John Galt
Morning in Which America?
http://www.amconmag.com/2004_08_30/buchanan.html
“With the perception growing that the economy has turned a corner and is headed due north again, Democrats seem to be losing that issue as well. But there is a worm in the apple of prosperity, and the New York Times has spotted it.
“Hourly Pay in U.S. Not Keeping Pace with Price Rises,” ran the headline over July 18’s lead story: “Drop in Spending Power May Gain Prominence as a Campaign Issue.” (The subhead to that might have read, “At Least We Hope So.”)
The story, however, frames the decisive issue of 2004. Will news of rising profits and new jobs eclipse the dark side of this recovery? For scores of millions of U.S. workers, things are getting worse.
“The amount of money workers receive in their paychecks is failing to keep up with inflation,” said the Times.
“On Friday, the Bureau of Labor Statistics reported that hourly earnings of production workers—non-management workers ranging from nurses to teachers to hamburger flippers to assembly line workers—fell 1.1 percent in June, after accounting for inflation. The June drop, the steepest since the depths of recession in 1991, came after a 0.8 percent fall in real hourly earnings in May.”
What appears to have returned is a phenomenon Americans first came to experience between 1972 and 1994. In those two decades, despite the seven fat years of the Reagan era where U.S. workers were making impressive strides, real wages fell 19 percent.
Now the cancer has recurred. “In June, production workers took home $525.84 a week, on average. After accounting for inflation, this is about $8 less than they were pocketing last January and is the lowest level of weekly pay since October 1991.”
Continued:
http://www.amconmag.com/2004_08_30/buchanan.html
http://www.amconmag.com/2004_08_30/buchanan.html
“With the perception growing that the economy has turned a corner and is headed due north again, Democrats seem to be losing that issue as well. But there is a worm in the apple of prosperity, and the New York Times has spotted it.
“Hourly Pay in U.S. Not Keeping Pace with Price Rises,” ran the headline over July 18’s lead story: “Drop in Spending Power May Gain Prominence as a Campaign Issue.” (The subhead to that might have read, “At Least We Hope So.”)
The story, however, frames the decisive issue of 2004. Will news of rising profits and new jobs eclipse the dark side of this recovery? For scores of millions of U.S. workers, things are getting worse.
“The amount of money workers receive in their paychecks is failing to keep up with inflation,” said the Times.
“On Friday, the Bureau of Labor Statistics reported that hourly earnings of production workers—non-management workers ranging from nurses to teachers to hamburger flippers to assembly line workers—fell 1.1 percent in June, after accounting for inflation. The June drop, the steepest since the depths of recession in 1991, came after a 0.8 percent fall in real hourly earnings in May.”
What appears to have returned is a phenomenon Americans first came to experience between 1972 and 1994. In those two decades, despite the seven fat years of the Reagan era where U.S. workers were making impressive strides, real wages fell 19 percent.
Now the cancer has recurred. “In June, production workers took home $525.84 a week, on average. After accounting for inflation, this is about $8 less than they were pocketing last January and is the lowest level of weekly pay since October 1991.”
Continued:
http://www.amconmag.com/2004_08_30/buchanan.html
http://money.cnn.com/2004/08/26/news/economy/poverty.reut/index.htm?cnn=yes
The percentage of the U.S. population living in poverty rose to 12.5 percent from 12.1 percent in 2002, the Census Bureau said in its annual poverty report, seen by some as the most important score card on the nation's economy and Bush's first term in office. The ranks of the poor rose to 35.9 million, a boost of 1.3 million.
The percentage of the U.S. population living in poverty rose to 12.5 percent from 12.1 percent in 2002, the Census Bureau said in its annual poverty report, seen by some as the most important score card on the nation's economy and Bush's first term in office. The ranks of the poor rose to 35.9 million, a boost of 1.3 million.
The median household income, adjusted for inflation, was unchanged at $43,318, down $1,535 from its peak in 2000.
http://cbs.marketwatch.com/news/story.asp?guid={A39EFB9C-53BA-4980-884A-7A7FCA38B479}&siteid=mktw
http://cbs.marketwatch.com/news/story.asp?guid={A39EFB9C-53BA-4980-884A-7A7FCA38B479}&siteid=mktw
I have heard a lot of grumbling about use of the CPI as an inflation indicator, especially when the "core CPI" is used since many people believe that it doesn't accuratly capture the market realities (like this guy: http://www.financialsense.com/Experts/HSL/BigPicture/2004/0525.html)
I tend to believe that the government reported inflation numbers aren't correct in that they are a bit low.... low inflation numbers are good for politicians because the allow them to say things like "real wages remained the same".... they are also good for the budget since inflation indexed securities (I-Bonds), and social security COLAs won't increase as much. Do I think that they are outright lying? no, but I do think that they massaged the numbers a bit (look at the price for unleaded gas in the CPI numbers) for their own self-interest..... in light of this, it is my belief that real income actually went down a bit, especially when you factor in the increasing cost of health insurance.
I tend to believe that the government reported inflation numbers aren't correct in that they are a bit low.... low inflation numbers are good for politicians because the allow them to say things like "real wages remained the same".... they are also good for the budget since inflation indexed securities (I-Bonds), and social security COLAs won't increase as much. Do I think that they are outright lying? no, but I do think that they massaged the numbers a bit (look at the price for unleaded gas in the CPI numbers) for their own self-interest..... in light of this, it is my belief that real income actually went down a bit, especially when you factor in the increasing cost of health insurance.
cute fuzzy bunny
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I recognize data manipulation when I see it.
They're lying. Outright.
Inflation in many areas is far higher than I've seen reported by PPI or CPI. I've kept my spending level by changing service providers; cheaper supermarkets, lower cost long distance providers, etc. In some cases substituting lower cost, lower quality products.
There should be a separate group that is non-government that measures, determines and reports inflation across various geographic and demographic segments.
The danger to ER's is purchasing "inflation protected securities" in bulk and removing inflationary influences from their long term financial calculations.
wabmester
Thinks s/he gets paid by the post
- Joined
- Dec 6, 2003
- Messages
- 4,459
Danger is a relative thing. If the market believed that inflation was much higher than the CPI, that would be reflected in nominal interest rates. It's not, so there is clearly less danger in TIPS than any other security I'm aware of.
An excellent rant on the CPI is here:
http://www.zealllc.com/commentary/damnlies.htm
Among other things, this guy goes into alternative measures of inflation (such as the size of the money supply, which is the fundamental measure when you have a fiat currency as we do). I actually take some solace in the fact that the CPI tracks M1 so well....
J
johnblake
Guest
Yes, this indicator tends to rise and fall. This change is not out of the ordinary.
J
