[jthomas1600]

Nate I gota run, but I'll check for you answer later if you feel like posting on the subject. O K I'll buy providing jobs (that just seems like a nice way to say out source) in impoverished countries will help address poverty world wide. It would seem preferable if we could do it with out driving more Americans into what we consider to be poverty. What are you're thoughts on the distribution of welth in America? Part of the reason I bring this up is that while some of our workers (like our friend above who lost his job) are negativly effected by outsourcing a small % or Americans (big business owners and high wealth investors) are getting rich.

[Nate]

Originally Posted by jthomas1600

Nate I gota run, but I'll check for you answer later if you feel like posting on the subject. O K I'll buy providing jobs (that just seems like a nice way to say out source) in impoverished countries will help address poverty world wide.

I didn't say anything about providing jobs or outsourcing as such. I don't care at all for the kind of economic stimulation or "job creation" that our government does, whether it's done domestically or internationally. I'm not suggesting we should intentionally go out and try to "create jobs" in foreign countries to end world-wide poverty. I'm not even suggesting, for the purposes of this thread at least, that we should try to end poverty.

All I'm suggesting is that we shouldn't stop businesspeople from doing what they're supposed to do and that we shouldn't deny more productive laborers from doing what they're supposed to do. This isn't because it will end poverty or because it will help foreign countries, but because it will help everybody involved. Obviously, there are transactional costs related to the process, but these are temporary if long-lived.

It would seem preferable if we could do it with out driving more Americans into what we consider to be poverty.

I would consider very few Americans to be really "poor."

Regardless, my thesis would be that "do[ing] it without driving more Americans into what we consider to be poverty" is an untenable prospect. It can't be done. It's like trying to avoid recession. All it does is push you into a deeper recession later. Once you've set it up, it's going to rear its ugly head sooner or later. The sooner you allow it to, the easier you can deal with it. The same thing happens with the international job market.

Trying to have [at least partially] free international trade without free international labor markets is a contradiction in terms, and the inevitable outcome of free international labor markets is that labor will shift the focus of production to the most profitable outcomes for the given market. In simple terms, that Indians and Chinese will manufacture and engineer and that Americans will sell things and provide customer service.

This is why I said the only real solution to this kind of unemployment that results from free international trade is to do as the original poster suggested and shut off international trade altogether. (Simply "creating more jobs" here isn't a real solution because it only pushes the problem further out into the future.) The sooner we accept that international trade leads to outsourcing, the sooner we can shift domestic production to more profitable industries.

What are you're thoughts on the distribution of welth in America? Part of the reason I bring this up is that while some of our workers (like our friend above who lost his job) are negativly effected by outsourcing a small % or Americans (big business owners and high wealth investors) are getting rich.

He cited NAFTA's figures of 4M Americans that have had "their jobs effected" (I am assuming this means "fired," "laid off," or something similar) by outsourcing. That's a small percentage, probably in the range of 2-4% depending on how you count the population (is the relevant sample to take the percentage of all Americans, or just all working Americans?). At least as many people, I am almost unafraid to venture, have benefited from outsourcing.

I think the involuntary redistribution of wealth in the form of taxes to fund welfare (not taxes to fund truly public goods) approaches criminal. Apart from that moral judgment, a more important argument I'd offer is that redistribution distorts the economic incentives that lead entrepreneurs and businesspeople to engage in the most profitable activities, which in turn leads them to make worse decisions that lower all living standards.

I think the redistribution of wealth (welfare, basically, is what you're talking about) in an economy should be handled almost entirely through private charity. Many of the businesspeople out there "getting rich" whose wealth you lament are among the most powerful philanthropic forces in the world, not only in absolute but in relative (% of income) terms. There comes a point where the rich just choose to give money away, in large sums.

[TunerSteve]

The fact that our businesses are moving in droves to outsource as much as possible to take advantage of better labor overseas shows that our economic system is starting to work exactly as it was designed to. In the long run, this will maximize the benefit to all countries involved.

Of course there are many reasons why businesses move manufacturing. Cheap labor is one, but lax (or the total lack) of environmental and saftey regulations is also very much the reason. Each job our factory eliminated, also eliminated nearly $15k/yr in benefits that don't show up in paychecks. Medical insurance, FICA, pension contributions, unemployment insurance and an untold number related to safety in the workplace (guards, hard hats, etc) that are not required, and therefore not supplied. While I am dealing with a new start, what I am troubled with the most is how my former company is exploiting the new workers without regard for their safety, in exchange for higher profits.

[JerryLove]

Here's a graph of median incomes, adjusted for inflation so as not to include the effects of natural growth.

Median is a bad choice, as it discusses who is in the middle of the population. Mean would be better/more useful

In the past 5 yeaars, housing costs (even with the downward turn) have gone up in my area 60%, medical costs are up more than 50%, gas and food has about doubled.

Has the average wage gone up 75%? Income is under-reported, and I'm not sure that "household" isn't excluding more and more of the poor.

Here's a few more interesting graphs, showing the ridiculously low percentage of workers that actually make minimum wage.

$0.05 above minimum wage would put them above minimum wage.

Here's a few more interesting graphs, showing the ridiculously low percentage of workers that actually make minimum wage.

Those numbers appear to be "percentage of workers", so they actually say nothing (fire all the factory workers and don't hire a single extra teacher, and it will go up).

That said, the average American factory worker earns far more than the average teacher or average car-wash-guy (business service), so I certainly can complain.

Here's another graph showing that manufacturing job loss isn't only due to increased Chinese competition. We simply don't need as many workers to do the same work.

Actually, that graph says nothing of the kind. It says that there are less workers performing more work, but it doesn't say that the *reason* that there are less workers is *because* they are performing more work.

How is our trade deficit on manufactured goods compared to1970? That would be more telling.


Personal debt

[Nate]

Originally Posted by JerryLove

Median is a bad choice, as it discusses who is in the middle of the population. Mean would be better/more useful

I'm not fond of the mean at all when there are such huge outlying values at one end (the "really really rich" end, in this case). If the rich really are getting richer, then the mean is rising more quickly than the median. More useful would really be something like 25th percentile, but those statistics aren't readily available.

Has the average wage gone up 75%? Income is under-reported, and I'm not sure that "household" isn't excluding more and more of the poor.

$0.05 above minimum wage would put them above minimum wage.

Those numbers appear to be "percentage of workers", so they actually say nothing (fire all the factory workers and don't hire a single extra teacher, and it will go up).

That said, the average American factory worker earns far more than the average teacher or average car-wash-guy (business service), so I certainly can complain.

Certainly all of this is true. I was just trying to offer a second picture that was at least a plausible picture of the economy. I just pulled graphs off a Google image search. I didn't even look at them in detail to see whether they supported any of my arguments. I just wanted to show that it wasn't as cut-and-dry as "good jobs leaving America, forcing American workers into lower-paying jobs" seems.

Actually, that graph says nothing of the kind. It says that there are less workers performing more work, but it doesn't say that the *reason* that there are less workers is *because* they are performing more work.

Sure. I'd never try to attribute causality just on the basis of a graph. Nevertheless, I found it interesting that productivity has continued to rise (although I'd assume "production" here is measured in GDP or something similar for the manufacturing industry, which has its own set of problems, of course) despite the loss of jobs. It's at least a plausible explanation, and that's all I was looking for because extreme views like "China is stealing our economy" are dangerous.

How is our trade deficit on manufactured goods compared to1970? That would be more telling.


Personal debt

I have nothing to say about these. I think they're every bit as disturbing and important as you do. This relates to what I was talking about when I spoke of Americans living beyond their means for decades.

[Mattlock]

Ever seen Detroit?

Never tell me outsourcing is good. Because it's not; there is no benefit to outsourcing compared to what it's done to my city.

I didn't read this thread, but outsourcing has killed Detroit's economy. Don't tell me otherwise.

[Chrysostom]

Originally Posted by JerryLove

In the past 5 yeaars, housing costs (even with the downward turn) have gone up in my area 60%, medical costs are up more than 50%, gas and food has about doubled.

Has the average wage gone up 75%? Income is under-reported, and I'm not sure that "household" isn't excluding more and more of the poor.

(This may be the topic of another thread, but) I read statistics like this often but never see it balanced with supply-and-demand numbers. We both know that prices can't go up like this unless either
(a) the people charging these prices are stupid and will sell a few items but go belly-up in the long run - I find this very unlikely because we're talking about the industry on the whole, not just particular sellers
(b) it costs this much more to produce what's being sold - I find this true to some extent, but because so many poorer countries are able to survive I know this isn't the root cause, so:
(c) people are buying luxuries they can't afford

Maybe a "luxury" is a nicer house or a nicer neighborhood. Maybe it's a car, an iPod, or cable TV. I'm not at all saying that those who are more affluent are fiscally responsible (it's clear that they're generally not), but even the poor dress their children in expensive clothing, after all. So we get what we deserve.

[BillSPrestonEsq]

Originally Posted by Chrysostom

(This may be the topic of another thread, but) I read statistics like this often but never see it balanced with supply-and-demand numbers. We both know that prices can't go up like this unless either
(a) the people charging these prices are stupid and will sell a few items but go belly-up in the long run - I find this very unlikely because we're talking about the industry on the whole, not just particular sellers
(b) it costs this much more to produce what's being sold - I find this true to some extent, but because so many poorer countries are able to survive I know this isn't the root cause, so:
(c) people are buying luxuries they can't afford

Maybe a "luxury" is a nicer house or a nicer neighborhood. Maybe it's a car, an iPod, or cable TV. I'm not at all saying that those who are more affluent are fiscally responsible (it's clear that they're generally not), but even the poor dress their children in expensive clothing, after all. So we get what we deserve.

I know here for example the 5 year trend in houses is something like decreased 50%. As I understand it Jerry lives in one of the areas where housing has held value better than most in the downturn, while FL already had pretty wicked grocery prices.

Here in the past 5 years fuel has gone up close to if not more than 300% housing has cut in half over the last 5, (mostly in the last 6 months. Literally I am eyeing a house thats been on the market for close to 2 years that has gone down over 50%)

I know in southern California, if you are under 40 (didn't buy in the previous recession or before) and not earning mid to high 6 figures, you could not afford a freestanding home. Now, the market for homes here is dropping out, but its a correction. Still only the upper middle class can afford a 1200 square foot home, but that was impossible till recently anyway.

The other possibility I see is that the home market was like stock in the '20s. It was overvalued and the bottom fell out.

[t3dwb]

Originally Posted by BillSPrestonEsq

I know here for example the 5 year trend in houses is something like decreased 50%. As I understand it Jerry lives in one of the areas where housing has held value better than most in the downturn, while FL already had pretty wicked grocery prices.

Here in the past 5 years fuel has gone up close to if not more than 300% housing has cut in half over the last 5, (mostly in the last 6 months. Literally I am eyeing a house thats been on the market for close to 2 years that has gone down over 50%)

I know in southern California, if you are under 40 (didn't buy in the previous recession or before) and not earning mid to high 6 figures, you could not afford a freestanding home. Now, the market for homes here is dropping out, but its a correction. Still only the upper middle class can afford a 1200 square foot home, but that was impossible till recently anyway.

The other possibility I see is that the home market was like stock in the '20s. It was overvalued and the bottom fell out.

The most significant part of this is the cost of fuel skyrocketing, because you can not go anywhere and purchase anything that was not delivered buy truck. Have you noticed that deisel is higher than the gas?

[BillSPrestonEsq]

Originally Posted by t3dwb

The most significant part of this is the cost of fuel skyrocketing, because you can not go anywhere and purchase anything that was not delivered buy truck. Have you noticed that deisel is higher than the gas?

personally, I think the 300k reduction in housing costs is more significant to me.

Where I go to school, in that town, (La Mirada) some homes have gone from 550k to 240k or so in the 2 years I have been here, and the 550 was already down from previous years...

[t3dwb]

Originally Posted by BillSPrestonEsq

personally, I think the 300k reduction in housing costs is more significant to me.

Where I go to school, in that town, (La Mirada) some homes have gone from 550k to 240k or so in the 2 years I have been here, and the 550 was already down from previous years...

I know a little about the rising cost of fuel because I used to drive a truck and pull a 8,800 gallon fuel tanker for the largest fuel hauling company in America for 31/2 years. and I know how much the rising costs can effect the entire economy across the board.
Its hard for me to imagine paying 300K plus for a home. Real estate around here is priced very low. where I live that would be a huge mansion price. I bought my current home three years ago. I have a four bedroom house on 69 acres and payed 92,000 for it.
where is Orange County by the way? I am originally from Glenn County.

[BillSPrestonEsq]

Originally Posted by t3dwb

I know a little about the rising cost of fuel because I used to drive a truck and pull a 8,800 gallon fuel tanker for the largest fuel hauling company in America for 31/2 years. and I know how much the rising costs can effect the entire economy across the board.
Its hard for me to imagine paying 300K plus for a home. Real estate around here is priced very low. where I live that would be a huge mansion price. I bought my current home three years ago. I have a four bedroom house on 69 acres and payed 92,000 for it.
where is Orange County by the way? I am originally from Glenn County.

Southern California. 300k might buy you a detached 1200 square foot, 2 bedroom home if you are lucky and it is in rough shape here. More likely, you get around 900square feet if you are getting a detached home. Neither of which would come with a yard of significant enough size to have a dog.

Thus, I can handle spending an extra 400 dollars a year on fuel if housing prices drop to affordability. I put about 5000 miles on our cars last year, which we got about 30 mpg on. Thus the fuel rate increase in the past 5 years, in fuel alone works out to about a $400 difference. (416 was the estimate based on rough numbers)

So while the fuel cost is not fun... and increases everythings price a little, I will take the crashing house market and be overall better off for the current situation. I think it is largely a market correction.

[JerryLove]

(a) the people charging these prices are stupid and will sell a few items but go belly-up in the long run - I find this very unlikely because we're talking about the industry on the whole, not just particular sellers

In 1998, I baught my townhome for $68k. In 2001 I sold it for $105k. That year I baught my house for $175k, in 2005 identical houses on my block sold as high as $300k.

Meanwhile, thanks to the forclosure market, my friend is eyeing a hous like mine, on more land but farther from the city, for $40k.

The fluxuations are real.

[Chrysostom]

Meaning that we're talking about irresponsible buyers?

[Jfool]

Nate, Milton Friedman would be proud.

The more we let free markets fluxuate in favor of openess, the less pain Detroit will feel in the long run.

I bought my first house in an old run down town built on steel and textile. There was a "revitalization" during the 90's. The property values are rising to this very day , and the streets are clogged with people going to work every morning. Why? Because the old factories are now offices, small industry, parks, high tech, etc. etc.