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The days of economic prosperity may well be behind us, warns Northwestern University's Robert...

The days of economic prosperity may well be behind us, warns Northwestern University's Robert Gordon. The robust economic growth over the past 250 years may be a unique success tale for the history books, but it's not sustainable for the future. Productivity and innovation, Gordon says will eventually succumb to the headwinds of declining demographic trends, gaps in the education system, rising income inequality, globalization, declining energy/environment resources, and of course, debt.
Comments (88)
  • sheeple2012
    , contributor
    Comments (203) | Send Message
     
    bullish!
    1 Sep 2012, 10:48 AM Reply Like
  • dsr70
    , contributor
    Comments (1407) | Send Message
     
    No mention of the real reason prosperity is permanently over: rules, regulation, taxes, lawsuits, etc. From the EPA to OSHA to the ADA, there are millions of lines of federal and state code that strangle entrepreneurs and business.
    1 Sep 2012, 10:58 AM Reply Like
  • Terry330
    , contributor
    Comments (866) | Send Message
     
    Federal taxes are at a 58 year low for wealthy. Thats the real problem, not paying the federal minimum wage $7.25, or dumping toxic wasts in drinking water.
    1 Sep 2012, 11:27 AM Reply Like
  • Tom Armistead
    , contributor
    Comments (5219) | Send Message
     
    dsr70,

     

    Go explain your views to those who were poisoned by industrial waste at Love Canal. Or to the widows and orphans of those who were killed in a refinery blast by Tesoro, after management carefully explained how they were increasing profits by deferring maintenance, not meeting industry best practices. I could cite numerous other instances.

     

    One thing regulation hasn't touched, and that's financial innovation and manipulation of stocks, bonds, CDS, CDO's, commodities and futures. It was this same innovation and freedom from regulation that gave us the financial crisis and resulting deep and lingering recession.
    1 Sep 2012, 12:05 PM Reply Like
  • tom_t
    , contributor
    Comments (260) | Send Message
     
    Without regulation, corporate America will happily poison people for profit. And that's not hyperbole, it's history.
    1 Sep 2012, 12:19 PM Reply Like
  • detto
    , contributor
    Comments (76) | Send Message
     
    No healthcare, no vacation, treating workers like rag dogs. All at the altar of profits. Who cares if children get cancer by hazard waste....it was all for the profits!!!
    1 Sep 2012, 12:30 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    How can anyone with brains agree with Terry330 that the "real problem" is simply that the Federal Government is not gouging more out of the economy and in particular from the wealthy?

     

    The wealthy can pay more for all I care but to identify that as the "real problem" is a vendetta not analysis.
    1 Sep 2012, 03:01 PM Reply Like
  • wyostocks
    , contributor
    Comments (7628) | Send Message
     
    Tomas
    Terry just spouts her DNC talking points and is not to be taken seriously.
    The next thoughtful post will be the first.
    1 Sep 2012, 03:18 PM Reply Like
  • joro_ianev
    , contributor
    Comments (378) | Send Message
     
    Terry330, you are wrong, again. Historically we are at the highest tax period the humanity has known. The 'wealthy' have not escaped any of it.
    1 Sep 2012, 11:41 PM Reply Like
  • Topcat
    , contributor
    Comments (413) | Send Message
     
    And they are usually there for a good reason...
    3 Sep 2012, 01:58 AM Reply Like
  • Venerability
    , contributor
    Comments (3048) | Send Message
     
    You're right.

     

    Way too many Club of Rome Nihilists in the Intelligentsia-Which-I...
    1 Sep 2012, 10:58 AM Reply Like
  • Archman Investor
    , contributor
    Comments (2353) | Send Message
     
    Barron's say buy buy buy!!!

     

    LOL.

     

    http://bit.ly/TJ3O2z

     

    Where do i send the check??
    1 Sep 2012, 10:59 AM Reply Like
  • Tack
    , contributor
    Comments (12761) | Send Message
     
    Utterly hilarious nonsense.

     

    Somebody do some genealogy checking to see if this guy is related to Thomas Malthus.
    1 Sep 2012, 11:02 AM Reply Like
  • Archman Investor
    , contributor
    Comments (2353) | Send Message
     
    Of course this paper was written by someone who has never worked a real day in their life and who's parents were also "economists" living off someones else's hard work.

     

    Mr. Gordon has spent his entire life living under the skirt of academia.
    I am sure thanks to the never ending tuition increases and other massive perks, pension, etc. he will be receiving from other people's wallets, he will manage to get through all that he worries about just fine in the future.
    1 Sep 2012, 11:07 AM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    AI

     

    Put another way people who live off other people always see the world as a zero sum game. They have to rob someone else and nobody knows it better than they do.
    1 Sep 2012, 03:03 PM Reply Like
  • Squaxe
    , contributor
    Comments (39) | Send Message
     
    Ad hominems don't add much to the discussion. Is his argument logically valid?
    1 Sep 2012, 06:21 PM Reply Like
  • Squaxe
    , contributor
    Comments (39) | Send Message
     
    That's not his argument. If you don't like a conclusion, it is lazy to attack the messenger.
    1 Sep 2012, 06:35 PM Reply Like
  • CautiousInvestor
    , contributor
    Comments (3017) | Send Message
     
    Labor unions and forces of globalization brought an end to prosperity defined by a growing middle class.

     

    Technological innovation helped create jobs in the upper decile domestically while farming out manufacturing internationally; financial innovation further concentrated wealth in the upper 5% while destabilizing global financial markets.

     

    The hollowing out of the middle class was disguised and papered over by unsustainable fiscal and monetary policies which have reached their limits both in terms of effect and continuation.
    1 Sep 2012, 11:13 AM Reply Like
  • joro_ianev
    , contributor
    Comments (378) | Send Message
     
    You have a valid point on labor unions. But you are barking under the wrong tree on globalization. Trade has always, always lead to increase in prosperity. Check your history books.
    1 Sep 2012, 11:17 AM Reply Like
  • CautiousInvestor
    , contributor
    Comments (3017) | Send Message
     
    Joro, Ricardo's classical law of comparative advantage (which showed that laborers in various countries will specialize in those industries in which they are relatively superior) will produce shared gains among all trading nations. In the new global economy we confront the law of absolute advantage: capital will move to those countries with the lowest costs of production, meaning some nations gain and others lose. Classical labor arbitrage.
    1 Sep 2012, 11:36 AM Reply Like
  • Tom Armistead
    , contributor
    Comments (5219) | Send Message
     
    Cautious,

     

    Excellent points.
    1 Sep 2012, 11:40 AM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    CI

     

    I have another perspective on Comparative Advantage and how it relates to labor. Obviously CA is not dead or we would see pineapples grown in Alaska just to make the point. And we can see CA that other countries have in labor when we look not only at the outputs but also the inputs.

     

    India has a CA in producing tech workers because they invested in the schooling machinery to create a ready labor force when Y2K issues in the western world created a massive shortage of tech workers. Many of them now work here in the US at US wages because we don't have the desire to train these workers or our people don't want to do it. That is totally frustrating to watch and then hear people complain that something unfair is going on.

     

    China has a CA in just producing large numbers of people to do menial labor. They have invested in producing a billion people and living like paupers for decades and now they got a huge labor force that wants to work. They along with India are exporting skilled and unskilled labor hours.

     

    Looking at CA through the example of pineapples is easy but a deeper analysis on the investment in people that countries make and how they promote their services globally is also applicable. Over time an equilibrium will be reached barring any government distortions and cultural values that make other choices. The net of all this is that CA still exists and can be applied and it is worth looking at how countries invest in their people as part of that analysis.

     

    Capital flows, all things being equal, to the highest return and governments have a lot to do with that return through tax and regulations. Corporations have always been a convenient way for western governments to take more taxes from their citizens rather than go to them directly but that model is coming to a painful end.
    1 Sep 2012, 03:18 PM Reply Like
  • naya
    , contributor
    Comments (7) | Send Message
     
    The question is and always has been for who?
    Cg
    1 Sep 2012, 07:04 PM Reply Like
  • wyostocks
    , contributor
    Comments (7628) | Send Message
     
    naya
    Correct english is "for whom".
    Public school education I assume.
    1 Sep 2012, 10:27 PM Reply Like
  • Terry330
    , contributor
    Comments (866) | Send Message
     
    Wealthy have told American people for decades that millions of good paying jobs would pop-up if taxes were cut again. Tax rate went from 91% (1950's ) on income not paid to your workers to today Mitt Romney makes millions and pays 13% and some years 00, he sends millions to offshore bank accounts and most of his US employees are on food stamps and Medicaid. Take your country back from the 1% who want you to work and live like their labor in china.
    1 Sep 2012, 11:34 AM Reply Like
  • Archman Investor
    , contributor
    Comments (2353) | Send Message
     
    Don't forget about that large percent who intentionally defraud the gov't and taxpayers by refusing to work at all or claim they are disabled while raking leaves in their yard.

     

    Of course we cannot forget about my country club police force here in Suffolk County NY who are now in line to earn $200K / year. Oh and that's a patrol officer, not any sort of detective or captain. Here in Suffolk County police work involves sitting in a car, "waiting" for a call to come in while giving out the occasional moving violations ticket to meet the quota.

     

    The rich have their faults for sure however culturally this country has sunken to new lows on both ends of the money spectrum which is sowing the seeds for its final endgame. (Like it or not)
    1 Sep 2012, 12:09 PM Reply Like
  • CautiousInvestor
    , contributor
    Comments (3017) | Send Message
     
    And what will you do once you recover the country from the evil 1%.
    Are you going to improve quality of education by abolishing the Department of Education? Are you going to liberate the poor from generational poverty? Are you going to foster innovation and business development? Are you going to arrest cultural decline? Are you going to revive a work ethic and a sense of personal responsibility and accountability? Are you going to eliminate waste, fraud and abuse in federal spending? Are you going to eliminate political corruption and impose term limits? Are you going to stop babies from having babies? I could go on and on; it's more complicated than taxes. P.S. 47% of members of congress are millionaires versus 1% of the general population. Maybe that's the problem.
    1 Sep 2012, 12:46 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    CI

     

    Well said. We can get rid of the 1% and we still have massive problems.
    1 Sep 2012, 03:22 PM Reply Like
  • Tricky
    , contributor
    Comments (1583) | Send Message
     
    Mathematically, it's pretty much impossible to get rid of a top 1% :-)
    1 Sep 2012, 03:29 PM Reply Like
  • Tom Armistead
    , contributor
    Comments (5219) | Send Message
     
    Tricky,

     

    It might be worthwhile swapping in a new group, who will be instructed to run the eonomy and financial system for the benefit of we the people.

     

    It's hard to get around the 1%, there are people who are significantly more capable than average. Or significantly better placed in terms of contacts and connections. Or both.
    1 Sep 2012, 03:36 PM Reply Like
  • joro_ianev
    , contributor
    Comments (378) | Send Message
     
    CI:

     

    To solve what ails us we must remove the source - get the government down to basic services, get rid of the rest. There is a reason you see high corruption typically in countries with the largest (per capital) government sector. Roll back the Leviathan!
    1 Sep 2012, 11:51 PM Reply Like
  • joro_ianev
    , contributor
    Comments (378) | Send Message
     
    Tom,

     

    History is choke full of dreamy eyed communists. The cold truth always is that (1) government is always inefficient (companies it runs will ultimately always fail), (2) 'capable' people working for the greater good always end up as tyrants who massacre millions or rob them of the fruits of their labor.

     

    There truly isn't anything scarier than the phrase: I am from the government and I am here to help!
    1 Sep 2012, 11:57 PM Reply Like
  • GaltMachine
    , contributor
    Comments (1135) | Send Message
     
    Was the author an Obama voter?
    1 Sep 2012, 11:35 AM Reply Like
  • Neil459
    , contributor
    Comments (2644) | Send Message
     
    Economic prosperity and growth are two different concepts. We may not have the growth we once had, but that does not in any way mean that we cannot be prosperous. Of course, that would mean getting government's hand out of everyone pocket.

     

    One thing is true, we are no longer so rich that we can provide 'free' to the lazy saps that think they are owed everything.
    1 Sep 2012, 11:45 AM Reply Like
  • Tom Armistead
    , contributor
    Comments (5219) | Send Message
     
    I'm more worried about the greedy manipulators that figure they should own everything. They do more harm.
    1 Sep 2012, 12:09 PM Reply Like
  • Neil459
    , contributor
    Comments (2644) | Send Message
     
    "I'm more worried about the greedy manipulators that figure they should own everything. They do more harm."

     

    Me too, but the only reason they (the greedy manipulators) get away with it is because you and others support political parties who continuously promise but never deliver to anyone other than 'the greedy manipulators'.

     

    And if your not a 'the greedy manipulators' funding the pocket of some politician, your not going to be able to keep much of what you earn.

     

    The problem is not 'the greedy manipulators' but the politician's that enable them.
    1 Sep 2012, 01:21 PM Reply Like
  • diadochi
    , contributor
    Comments (199) | Send Message
     
    Amen on the top 1%. Tax the hell out of them. We had a roaring prosperity when the top rate was 91% in the 1950's. It's obvious that the 30 years of neoclassical economics were nothing more than self-serving balderdash. Sounded good, though. :)

     

    I'd say let's have a tax system that looks at not just income but assets. Say, relatively low taxes on income with a basis of assets up to say, $2m, then kick in hard at $5m or somesuch. Go learn to play and enjoy your life at that point and let some other budding entrepreneur have a shot at things. No enabling those troubled creatures, billionaires, that like some sort of dragon from Tokien that need to slumber on top a vast pile of wealth, to feel fulfilled. Money is best spread around like manure so it can do some good. Like we used to do in this country...and it worked wonders.
    1 Sep 2012, 11:56 AM Reply Like
  • Tom Armistead
    , contributor
    Comments (5219) | Send Message
     
    Great points.

     

    About $5 million is rich, at that point some sort of tax on assets starts to make sense. Sometimes a small business can be worth a lot, in the eyes of the tax man, you might have to deal with that.
    1 Sep 2012, 12:01 PM Reply Like
  • Tack
    , contributor
    Comments (12761) | Send Message
     
    We had prosperity, back then, not because the top tax rate was 91%, but because virtually everybody paid some taxes on their incomes, contributed in some way, and, therefore, had a vested interest in the costs of Government, not just the benefits. Now, 50% of the population have become perpetual parasites, benefiting from the other 50% -- and most heavily, the wealthy -- who pay all the taxes.
    1 Sep 2012, 12:02 PM Reply Like
  • Tricky
    , contributor
    Comments (1583) | Send Message
     
    No one wants to hear this, but the reason we had so much prosperity back then in the U.S. was because all our competition was destroyed during WW2 and/or shooting themselves in the foot with productivity-destroying economic systems.

     

    Those days are over, competition is a LOT tougher now.
    1 Sep 2012, 12:10 PM Reply Like
  • wyostocks
    , contributor
    Comments (7628) | Send Message
     
    diadochi
    Do you really believe that a tax of say 100% on all income above a certain level will solve the nation's deficit problem?

     

    And if so, what happens when the John Galts of the world decide that they just won't earn any money at all anymore and just live off what they have? Guess what, they'll be nothing to tax.

     

    I suppose then you'll advocate simply confiscating all that "ill gotten" wealth.

     

    And, after that will the deficits problem be solved?

     

    Wake up man, we have a "spending" problem not a "tax income" problem.
    1 Sep 2012, 12:13 PM Reply Like
  • Tom Armistead
    , contributor
    Comments (5219) | Send Message
     
    Tack,

     

    Until the 70's, it was possible for one average wage earner to support a family.

     

    Not any more.
    1 Sep 2012, 12:25 PM Reply Like
  • alf2011
    , contributor
    Comments (435) | Send Message
     
    It is heartwarming, the nostalgia of liberals for the 50s and the top income rate of 91%. The good old days, when the top marginal rate was 91%, but there were so many loopholes that the federal income tax collected, as a percentage of GDP, was less that today.

     

    Makes the heart of a corrupt politician go a flutter.
    1 Sep 2012, 12:27 PM Reply Like
  • Tack
    , contributor
    Comments (12761) | Send Message
     
    TA:

     

    We've had a population that's become ever more ignorant, poorly educated, less skilled, less trained, lazier, more "entitled" and happy to become dependents, feeding at the Government trough. Why should the results be any surprise?
    1 Sep 2012, 12:31 PM Reply Like
  • wyostocks
    , contributor
    Comments (7628) | Send Message
     
    Tom

     

    Why is that?

     

    Answer: Government taxation at all levels to fund excessive payrolls and benefits and welfare programs of all sorts. In other words, the liberals implemented their plans and the middle class family got screwed to pay for it.

     

    Very simple.
    1 Sep 2012, 12:43 PM Reply Like
  • Tom Armistead
    , contributor
    Comments (5219) | Send Message
     
    Tack,

     

    Go preach that to the millions of unemployed created by financial manipulationl, deregulation, and labor arbitrage to places where poverty is the norm.

     

    Appears you must be one of the elite: the masses of the ignorant, poorly educated, less trained, lazier and more entitled just seem to be beneath your contempt.

     

    You might try redefining your goals in life in ways that are compatible with the common good. Simply treating the rest of humanity with contempt doesn't qualify.
    1 Sep 2012, 12:54 PM Reply Like
  • alf2011
    , contributor
    Comments (435) | Send Message
     
    Tom,
    How does one reconcile being for "the common good" and against creating jobs in places "where poverty is the norm?"
    1 Sep 2012, 01:08 PM Reply Like
  • Tack
    , contributor
    Comments (12761) | Send Message
     
    TA:

     

    You know what, I grew up in a family, where I was the first to attend college, and my dad (bless his soul) came back from WWII, worked various jobs, then, unexpectedly got fired one day in 1958, and my mom told me, years later, that on that day, their entire net liquid wealth was 20 cents. And, my dad, having almost no choice, decided to start his own business installing elevated computer-room flooring (back in the days when computers were monstrous). And, subsequently, he built that business, started from desperation, into a very successful sales and installation business that supported our family and allowed his four children to achieve a better life by attending college and having better opportunities.

     

    And, speaking of my mom, she's Italian and spent her childhood ducking bombs and strafing from both the Americans and the Germans and was lucky to survive. She met my father in 1944, and they embarked on an uncertain life together, but one where they worked endlessly for success and financial security.

     

    As the oldest, I spent my childhood in a relatively poor family, but with lots of love. I had responsibilities from an early age. I worked in summers during high school and throughout college. My mother's parents were dead before I was born, but my mom's still alive, and I have never received a single dime in inheritance, trust funds or other money that has paved my road in life.

     

    I have respect for individuals who strive to improve themselves and think they should be lauded and afforded opportunities. I have no respect for "victims," who think life's unfair and that they should be entitled to the work product and wealth of others. And, those that have more, who wish to pander to such are held by me in even lower esteem.

     

    So, don't give me a bunch of condescending claptrap on matters about which you know absolutely nothing. Zero.
    1 Sep 2012, 01:12 PM Reply Like
  • Tom Armistead
    , contributor
    Comments (5219) | Send Message
     
    So give up on the arrogance.
    1 Sep 2012, 01:15 PM Reply Like
  • Tom Armistead
    , contributor
    Comments (5219) | Send Message
     
    Easy,

     

    Increase wages until poverty is not the norm - anywhere. They're starting down that road in China, now that the suicides of workers doomed to a lifetime of underpaid toil in company run dormitories has mobilized sentiment.

     

    Henry Ford figured that out a long time ago, doubled the wages of the workers in his factory, created the beginnings of the American middle class.
    1 Sep 2012, 01:18 PM Reply Like
  • Tack
    , contributor
    Comments (12761) | Send Message
     
    TA

     

    I was offering an opinion on the subject matter. You're offering an opinion on me.

     

    Who's presumptuous and arrogant?
    1 Sep 2012, 01:45 PM Reply Like
  • Tom Armistead
    , contributor
    Comments (5219) | Send Message
     
    Tack,

     

    You were offering an opinion on half of humanity, most of whom you can't possibly observe.

     

    My opinion on you is based on your posts on this comment stream.

     

    Prove me wrong.
    1 Sep 2012, 02:15 PM Reply Like
  • Tack
    , contributor
    Comments (12761) | Send Message
     
    TA

     

    Everything in this forum is an opinion unless it's documented data. We're both entitled to have one.

     

    I stand by my appraisal of today's coddled society. People who look at themselves as losers and "victims".mostly deserve to be so.
    1 Sep 2012, 02:28 PM Reply Like
  • Archman Investor
    , contributor
    Comments (2353) | Send Message
     
    Tack:
    I agree with everything you have said in this thread.
    As someone like you, who came from nothing, who received no economic help from parents, and who through their own hard work, their own determination, their own at risk capital and time, now enjoys the fruits of that labor....i will be damned if anyone is going to take that away from me or tell me "I did not build it".

     

    There are people in this country, who truly deserve our help, or understanding, our friendship and our donations to help them survive. These are truly people who are caught in a cycle with no means of getting out. They were born into it and remain in it.

     

    Then there are the others. The takers. They are not makers like us. They are lazy. They commit fraud by lying about their economic condition, enjoy living off the fruits of others, commit disability fraud, look to the legal system to enrich themselves, receive their transfer payments only to spend them at the Apple store, or Atlantic City, Vegas or where ever. This is not made up stuff. It is real. It is even shown on TV and the government does NOTHING about it.
    Why?
    Control. These fraudulent dummies are so clueless that they do not understand that they are now owned by the government.
    What will this country look like by 2016 if the current admin. is still in power?
    The nanny state that exists today will easily expand to unheard of proportions.
    1 Sep 2012, 02:40 PM Reply Like
  • Robin Heiderscheit
    , contributor
    Comments (1785) | Send Message
     
    Tom, rather than taxing say 10% of the assets of the top 1%, wouldn't it make more sense to take the top one tenth of 1% and just shoot them and take their assets. Fewer people to complain that way.

     

    Just admit it. You want the stuff in their garages. You are too lazy or scared to steal it yourself so you want to hire the government for a small percentage of the "take" to steal it for you. I and many others will fight you and if necessary imprison you to keep that from happening. Get ready. Your day is coming.
    1 Sep 2012, 11:45 PM Reply Like
  • Robin Heiderscheit
    , contributor
    Comments (1785) | Send Message
     
    Wow, great logic. Until the 1970s, it was possible to keep black people from voting. Guess you want to go back to that, too.
    1 Sep 2012, 11:47 PM Reply Like
  • Apathy
    , contributor
    Comments (4) | Send Message
     
    I would argue we had prosperity then due to the fact we bombed the hell out of every other country, who could not complete with us manufacturing.

     

    Once the nations were reduced to rubble, they had no choice but to outsource the manufacturing to *us*.
    2 Sep 2012, 10:11 AM Reply Like
  • Apathy
    , contributor
    Comments (4) | Send Message
     
    This is exactly correct.
    2 Sep 2012, 10:11 AM Reply Like
  • JohntheOld
    , contributor
    Comments (162) | Send Message
     
    Exactly. Europe decimated by WWII. USA had factory capability fueled by war effort and was virtually untouched by the war. Even the manpower was not seriously impacted by war losses. On the other hand, once Europe and Asia started rebuilding, they had newer production facilities and techniques, while America had been enjoying the fruits of the non competition.
    2 Sep 2012, 12:50 PM Reply Like
  • anonymous#12
    , contributor
    Comments (552) | Send Message
     
    Don't bet against innovation.

     

    1798 in “An Essay on the Principle of Population. 
    Estimated Population: 9 million.

     

    2012: ~7B

     

    Still waiting for the crisis....

     

    On the rich, If the 1% doesn't wants to pay higher salaries to their workers, let's tax them 50% on their income and capital gains. Ah, those poor old blokes with 30 cars and three private jets....cry me a river, pay up!
    1 Sep 2012, 12:08 PM Reply Like
  • Tack
    , contributor
    Comments (12761) | Send Message
     
    Be careful!

     

    Taxaholics and wealth haters better start planning their own version of the Berlin Wall, complete with shoot-to-kill guards, because that's what it will take to keep the wealthy from leaving, along with their capital, if confiscatory policies are adopted. The Soviet Union has only been gone a short while, but it and all its misery have been forgotten already, apparently.
    1 Sep 2012, 12:27 PM Reply Like
  • Tom Armistead
    , contributor
    Comments (5219) | Send Message
     
    Wow Tack, you got more pejoratives than Carter has pills!
    1 Sep 2012, 12:56 PM Reply Like
  • steven russo
    , contributor
    Comments (162) | Send Message
     
    yea maybe not everyone will be prosperous but the motivated and knowledgable will still get it. Way to be a negative nancy though. No one wants to hear this bull.
    1 Sep 2012, 12:15 PM Reply Like
  • Guardian3981
    , contributor
    Comments (1927) | Send Message
     
    The economic system works best when its a balance between greed and fear, just like the market.

     

    Problem is our economy now has too much greed and too much fear. Wealthy people are more greedy then ever and don't want to pay workers squat, and lazy people are more afraid then ever go to try to work and better themselves.

     

    One must ask is it a chicken and egg debate, which came first?

     

    I personally feel greed is more to blame. In my company if a person gets promoted they usually do not even get the pay increase for half a year and are told "hr drags their feet." In reality all that is happening is they are trying to pad their budget numbers and save a few bucks on salary for those months paying someone less to do a better job. I will underline that some of these people work hard and get promoted. So you people going to tell me that's about laziness too?

     

    The issue is when greed becomes to out of control is strangles opportunity in that people get too discouraged.

     

    There are billionaires to have 5 mega yachts and compete with eachother for who has the largest yacht.

     

    I am all for someone working hard to get rich and people to want to work toward driving a Cadillac like he does. But when it gets to a point where you have assets you rarely use something is wrong.

     

    I am not sure where the line is drawn. But when it goes from improving your standard of living to just collecting for bragging rights something is wrong.

     

    One of the worlds biggest billionaires is the founder of blockbuster, anyone check out blockbuster has been doing these days? Maybe if the guy had put some of the money into innovation and employees blockbuster wouldn't be a bust. But why should he care, he made his money while all the workers were out of a job!

     

    I personally think if companys started treating their employees better alot of the "lazy" people would come out and want to start working. I will always work and fight the good fight. But I can understand how alot of people out there end up on government assistance when even if you work hard in school and apply everywhere and work hard when you get a job your still struggling to make ends meat.

     

    Demand side economics works, Keynes ideas were meant to boost this from the government until the private sector was on its feet. The issue you have now a days is businesses to not treat their employees good enough for the private side to ever get back on its feet.

     

    If you treat workers better they spend more and create jobs, people out of work will see their neighbors being treated well and want to join the workforce.

     

    But there is little that we can do, the government trying to reign in on greed does not work, people need to do it out of their own nature.
    1 Sep 2012, 02:25 PM Reply Like
  • Venerability
    , contributor
    Comments (3048) | Send Message
     
    Here is what is not yet "in the discussion" and needs to be:

     

    Most people don't resent "the rich," if they amassed their wealth by productive acitvities which were good for the nation and the world.

     

    Building enterprises, of whatever sort, which contribute to the common good is admired.

     

    But in the most recent period, many - if not most - of the greatest fortunes have been made by destroying, rather than building.

     

    They've been made by short selling.

     

    They've been made by HFT.

     

    They've been made by outsourcing.

     

    They've been made by financial engineering of all sorts.

     

    And a great deal of the "wealth" that's been amassed by these means has been shut away in dark pools or underground vaults or untouchable Caymans bank accounts - or who knows where it's been stashed. The point is that it HAS been stashed and is not being used for productive purposes.

     

    In fact, as those of us active in financial sites well know, some of it's been used for decidedly UNproductive purposes, funding Botnets that dominate the Internet for the cause of pushing more and more and more of the world's assets into fewer and fewer and fewer hands.

     

    So many people now are literally living in fear. They're afraid of the market. They're afraid of politics. They're afraid of participating in anything, because if you inadvertently get on the wrong side of someone with a Dark Pool - or for all we know, a Dark Star - behind them, you may be targeted in one way or another.

     

    That is the antithesis of the American Way - the antithesis of everything that made America great.

     

    As some of us have said, it's a Through the Looking Glass world - certainly a Through the Looking Glass market - where the Red Queen can say "off with its head" at any moment, wiping out, if not you, a big chunk of your profits.
    1 Sep 2012, 04:36 PM Reply Like
  • Tom Armistead
    , contributor
    Comments (5219) | Send Message
     
    I agree, there is a great deal of wealth that is hidden away, and is being deployed so as to create losses for the economy and financial system as a whole, in order to profit from bets placed for that purpose.

     

    Magnetar, a hedge funded named after black hole type stars, is an example. With the aid of Mizuho, they created numerous CDO's along the same lines that got Goldman Sachs in trouble, the Abacus transaction done for John Paulson. These were CDO's of synthetic ABS, stuffed with CDS referencing adverse selected mezzanine tranches of subprime RMBS.

     

    Transactions of this type doubled the losses from the financial crisis.

     

    This is exactly the type of thing we don't need in this country. There have been fines to pay, but no jail time, and no legislation that will actually prevent a recurrence.
    1 Sep 2012, 04:58 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    Ven

     

    You are offering up fear versus analysis. Might as well throw black helicopters and the grassy knoll on your list.

     

    There is always somebody someplace doing something wrong. That should never stop the rest of us from doing something positive and having a life. Problem is our government is looking to handcuff us in every way.

     

    So what is worse the few that might be doing something wrong or our government who neither applies the law against those people nor wants us to have the freedoms we deserve to work hard and be successful?
    2 Sep 2012, 09:34 AM Reply Like
  • Papaswamp
    , contributor
    Comments (2178) | Send Message
     
    Here is an interesting study on employment shift from mid level skill and pay to lower level.
    http://nyti.ms/PM5vQm
    We do have a demographics problem...as companies become leaner and more efficient they need fewer workers to generate the same or higher output. The only jobs left are the low skill low pay.
    Fingers can be pointed in numerous directions, but this trend has been coming for over a decade.
    http://bit.ly/PXg8M3
    The question come down to, how does the country generate living wage jobs for ~40 million people (unemployed+p/t that want f/t+ able bodied NILF)? Not sure there is a pleasant solution.
    1 Sep 2012, 02:38 PM Reply Like
  • Jin teee
    , contributor
    Comments (113) | Send Message
     
    My my goodness, this is quite appalling.

     

    Mr. Tom Armistead rational central planner will enforce his
    opinions of what is 'right' on all others!
    hmmm equality at all cost.
    Its okay to STEAL, KILL, OPPRESS.
    as long as we are all equal!
    as long as Tom gets to play out his utopian fantasies!

     

    Who will watch the watchers Tom?

     

    This is what history teaches:
    -There will always be wealth inequality (rich, middle, poor)
    -The key is mobility and opportunity; a meritocracy.
    -The government is the most corruptible enemy of the people.
    -"Centralized Welfare" is just another guise of elites to further consolidate the world further. It is a scam.
    -In any system there will be many poor (got math?)

     

    It is truly frightening to see fallacious posts getting thumbed up.
    This is a sign to me. I smell the sentiments. I smell MISDIRECTED rage, jealousy, and bitterness.

     

    Tack is right in his position.

     

    I don't talk alot, but I couldn't help it.
    1 Sep 2012, 05:19 PM Reply Like
  • Tom Armistead
    , contributor
    Comments (5219) | Send Message
     
    Jin teee,

     

    You seem to have more opinions on my thinking than you can support from your comments. Basically you're setting me up as a straw man and then countering with a bunch of right wing ideology.

     

    Setting ideology aside, it may be useful to look at questions of inequality from a more pragmatic view.

     

    There is a minority of human beings who for one reason or another will not accumulate savings regardless of how easy it may be. There are many who work diligently to save and get ahead, but various life accidents overtake them - sickness, disability, joblessness etc.

     

    On the other end we have a minority who will do well under most conditions, unless they are in a society that enslaves the majority of its memebers. Of course, that was the norm until recently. In any event, given a democracy these people will uniformly prosper.

     

    Pragmatically, amounts given to persons who by their nature will never accumulate anything make no difference whatsoever to their more industrious and thrifty counterparts. The wealth detours but goes right back to the same people.

     

    The difference is, for those in the middle, the occasional helping hand gets them back on their feet, they accumulate and invest, and contribute to increasing wealth.

     

    Of more concern, is that people often accomplish what others empower them to do. Some teachers have this ability, to make their students into high achievers. Some negativists have the reverse power, to tell members of racial or ethnic minorities that they are fit for nothing but menial labor. Or, as we have seen on this site, to denigrate half of humanity.

     

    For that matter, rich people in and of themselves aren't necessarily a problem, provided they don't use their wealth and the power it gives them to oppress others. Many of them have earned their wealth in ways that create value for society as a whole, the capitalist entrepreneurial class that we all admire.

     

    However, we have a class of people in this country, who have for many years now been using their wealth to destabilize or even destroy the economy, for their own benefit. Financial instability destroys the savings and jobs of the middle class, while the wealthy simply see it as an opportunity to acquire assets at a discount. So we have hedge funds and private equtiy types who are financial predators. They need to be put out of business, so that the US will be safe for capitalism.
    1 Sep 2012, 07:09 PM Reply Like
  • anonymous#12
    , contributor
    Comments (552) | Send Message
     
    The rich should be careful if they keep meddling with social security and Medicare. You cut these programs and the US voters would destroy the plutocracy with massive tax increases on the rich being the forefront policy in the next government.

     

    Make my day republicans, cut these two programs and we would see what happens to your beloved 1%.....
    1 Sep 2012, 05:53 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    anon

     

    False choice and people making the top 1% of incomes are not necessarily the same as top 1% of wealth.

     

    Also if SSA, SSI and Medicare are not addressed then we are not addressing the budget so everyone can pack it in and go home and we can go broke and then the pain will be massive.
    2 Sep 2012, 09:38 AM Reply Like
  • slickvguy
    , contributor
    Comments (498) | Send Message
     
    And what's the bad news? Yeesh.
    1 Sep 2012, 06:50 PM Reply Like
  • Jolly_Rancher
    , contributor
    Comments (546) | Send Message
     
    So what should the US government do in light of the possibilities suggested by this article? On the one hand, assume that Gordon is 100% correct, that decline is a sure bet. Would it not be prudent for the US government to simply print money (not borrow) to counter an inevitable falling money supply and money velocity? Persistent inflation arises from dramatic increase in money velocity. Printing money in the face of falling money velocity would not be inflationary.

     

    http://bit.ly/x0cMMT
    http://bit.ly/RyAD4E

     

    Read those graphs and PANIC! The government should start printing NOW! Borrowing is a wasted effort because it does not increase the velocity of money. Increased bank lending cannot help this situation because bank reserves come from another account that subtracts from money velocity and because the credit-worthiness of borrowers falling. Cash flows from economic projects is turning negative. Only larger corporations are maintaining cash flows at the expense of those gone bankrupt during the 2008 bust. The US government needs to PRINT NOW!.
    1 Sep 2012, 06:52 PM Reply Like
  • Guardian3981
    , contributor
    Comments (1927) | Send Message
     
    You can't print because there is already inflationary pressures on commodities and you can't pretend the rest of the world is gone and this will go away. US and developed world is in a tough spot, commodities are weighing in and preventing more easing while structural deflation is eroding wages and standard of living.
    1 Sep 2012, 10:40 PM Reply Like
  • Buddy Canuspare
    , contributor
    Comments (398) | Send Message
     
    Do y'all read each others' posts?
    The Hammer:
    "Lets do not forget Healthcare another bloated fraudulent sector."
    SmashFinance:
    "So the trash man makes as much as the doctor?"
    Hammer - meet Smash.
    Smash - meet Hammer.
    I'm sure that the two of you can get together and figure out the healthcare mess.
    2 Sep 2012, 03:25 PM Reply Like
  • The_Hammer
    , contributor
    Comments (3810) | Send Message
     
    hey buddy how much y'all been soaking the system?
    Stop your sobbing already. This fraud of a system is near collapse.
    Americans have been pampered for decades and hard times are coming.
    Depressions are great attitude adjusters. Me me me becomes we we we.
    2 Sep 2012, 09:49 PM Reply Like
  • Buddy Canuspare
    , contributor
    Comments (398) | Send Message
     
    Hammer,
    Define "hard times." And "we we we" will sound way too much like socialism for the rest of our companions on SA to ever buy into it.
    BTW, have you and Smash got healthcare figured out yet?
    3 Sep 2012, 12:00 AM Reply Like
  • SmashFinance
    , contributor
    Comments (34) | Send Message
     
    TA

     

    "Increase wages until poverty is not the norm - anywhere"

     

    Most times your quite good, occasionally your very scary. Exactly how does one increase wages until poverty is not the norm. So the trash man makes as much as the doctor? I'm curious.

     

    A tax on assets? yikes...

     

    Getting scary out here folks...
    1 Sep 2012, 11:23 PM Reply Like
  • The_Hammer
    , contributor
    Comments (3810) | Send Message
     
    Median Income Family of 4:
    Approx. $50,000
    Rent or House payment: 1,350 a month = 16,200 year
    Car payments = 2x2 cars= 2X300 a month = 7,200 year
    Gas car1 12,000 miles /18 mpg = 667 X 3.70 gas = 2,468
    Gas Car2 15,000 miles/25 mpg= 600X3.70 = 2,220
    Car insurance 2 cars = 2000
    Food family 4 = $25 a day 750 a month = 9,000 a year
    Utilities (Cable/internet 100) + phone(140) + electric/gas(250) =1200+1680+3000=5,880 year
    Does not include healthcare contribution or copays or 401k contributions.
    16,200+7,200+2,468+2,2... $44,968

     

    50,000-44,968= $5,032 leftover for everything else?? Clothes car repairs house maintenance

     

    Yeah and the NAR thinks houses are affordable and will just go up up up above inflation. NOT. These people are going to get squeezed very hard over the next 5-10 years along with fixed pensioners as the cost of living escalates upward..
    2 Sep 2012, 07:44 AM Reply Like
  • Sam Liu
    , contributor
    Comments (3864) | Send Message
     
    Car payments = 2x2 cars= 2X300 a month = 7,200 year
    Gas car1 12,000 miles /18 mpg = 667 X 3.70 gas = 2,468
    Gas Car2 15,000 miles/25 mpg= 600X3.70 = 2,220
    Car insurance 2 cars = 2000

     

    Wouldn't taking out the significant private automobile expenditure increase the quality of life immensely?
    total: 13,668/50,000
    27.25% of budget

     

    and improve the environment?
    2 Sep 2012, 09:47 AM Reply Like
  • The_Hammer
    , contributor
    Comments (3810) | Send Message
     
    good point but our economy since the 1940's has been constructed around abundant cheap energy. Infrastructure built based on cheap energy.
    this precious fossil fuel is being squandered.
    Local Mfg is coming back albeit slowly but a mfg renaissance is coming imo.
    to much emphasis is put on housing. we have lost trillions in subsidies and fraud fannie freddie and now the delinquent loan underwriting specialists at FHA. Lets do not forget Healthcare another bloated fraudulent sector. some free market capitalism may just help make these two sectors affordable once again.
    2 Sep 2012, 12:00 PM Reply Like
  • SmashFinance
    , contributor
    Comments (34) | Send Message
     
    Also:

     

    If your using median income, might as well use median home price to figure out mortgage. Much closer to 1k then $1300 imo.
    2 Sep 2012, 09:29 PM Reply Like
  • DaLatin
    , contributor
    Comments (1522) | Send Message
     
    All Americans have lived way beyond there means for 60 years and the ridiculous standard of living had to crumble. While the planet suffered the US gobbled up 30% of the planets bounty.

     

    The fact that political trolls above can get buckets of likes with sheer stupidity shows me that leaving the US and stopping all contributions to all us entities there was 100% correct. The US demise was written about by academia starting 50 years back and it surly has come to fruition !

     

    118 trillion in debt and unfunded liabilities is greater then the entire world's debt throughout history combined.If the US doesn't change her CEO doom will arrive soon and durning the next 4 years.Just look at the open mike blunders on 3 continents and how Russia will get her booty without Congressional output as soon as he's done with the hassel of the election.

     

    What America lost just from my leaving.Since April we've built schools and churches and 41 charities will get yearly help forever ( if all goes as planned) We've sold 95% of US stocks and acquired 8300 hectors of wet rich soiled farmland.More deals are on the way. The good news is 100s of folks now have internet and more to come..

     

    To US people ~ just read these posts and you'll know.. The bad way outnumber the good and despite the bogus stats dumped on the thread the rare honest schmoe needs to make about 90 million bucks to legally keep one,but,the ones on both sides who play the loopholes created during the 40 years of the Democrat controlled Congress turned the progressive IRS system into a giant sham.

     

    And for all the folks who think things are better now...... Your all a joke.. .. You all use the bogus US fiat dollar instead of real money. Gold is real money and when you compare 10 year charts of gold & the S&P you'll see how far down the actual market is.

     

    It used to take 4 ounces of gold for to equal one share of the S&P 10 years back and now it takes 0.8 ounce to buy one share of the S&P,so, your wealth has collapsed way more than the BLS's 30% collapse being touted. Your country is collapsing at a rapid pace and sooner than later the world will drop the Reserve Status and boom the dagger goes in deep and gets twisted. Then you'll see the number of Federal programs go from 110 million to 210 million ! Good job Americans !

     

    DALATIN
    3 Sep 2012, 04:38 AM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    Reminds me of the Tom Cruise/Jack Nicholson scene.

     

    "You want the truth? You can't handle the truth."

     

    Yup we have serious issues here in the old USA. And the scope is massive.
    3 Sep 2012, 10:59 AM Reply Like
  • Sam Liu
    , contributor
    Comments (3864) | Send Message
     
    http://bit.ly/TarVeT

     

    People living beyond their means.
    3 Sep 2012, 11:49 AM Reply Like
  • Sam Liu
    , contributor
    Comments (3864) | Send Message
     
    "What America lost just from my leaving.Since April we've built schools and churches and 41 charities will get yearly help forever ( if all goes as planned) We've sold 95% of US stocks and acquired 8300 hectors of wet rich soiled farmland.More deals are on the way."

     

    DeLatin:

     

    For the past 15 years, I've been giving out money on a small scale with significant impact. But in the near future this can be ramped up.

     

    My question is how can I give while learning something fundamental.
    Since college graduation, none of my jobs or education have led to that foundation.

     

    Thanks,

     

    Sam

     

    Because of the failure of the session with a career counselor in Oakland, my time in Sacramento has minimal gains. Taking off to Shanghai on Tuesday where minimal contribution has better returns.
    3 Sep 2012, 12:16 PM Reply Like
  • idkmybffjill
    , contributor
    Comments (1558) | Send Message
     
    "Gold is real money and when you compare 10 year charts of gold & the S&P you'll see how far down the actual market is."

     

    Why don't we look at a 50 year chart? And gold is as useless as fiat money if we ever end up in the apocalyptic world that many gold bugs are supposedly preparing for by clutching onto their gold real hard.....
    3 Sep 2012, 10:20 PM Reply Like
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