pigdog67

Want to Solve the Housing Crisis? Look to the North

One difference is that in Canada they require 20% down on the purchase of the house. Or at least they used to... So that makes it hard for underfinanced speculators.

A Modest Proposal: How to fix the American Economy

Finally I am seeing someone talk sense. Many of the Big American companies now are about 80% outside the USA, like Ford, IBM etc. Why should they pretend to be American when it suits them.
How about also adding
8. Let the US President threaten to BOMB China unless they move to RENMINBI to parity with the dollar. Why bother with IRAQ and Afghanistan when it is China that is destroying the US economy by pegging their exchange rate at about 1 tenth of what it should be relative to the dollar. The CIA says that in Purchasing Power Parity, PPP, China's economy is now half the size of the US economy. Right now the US can still defeat China. In 10 years likely not. Right now China will have to cave. Oh but then the above multinationals will have to stop moving all the jobs to China.


>>>
5. Any company that manufactures its products overseas and hires mostly foreigners but considers itself an "American" company must pay an extra fee of at least 25% yearly gross revenues to remain headquartered in the United States. This fee money will go to the states with a note encouraging its use for "job training programs". ;)
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Kool-Aid and GDP: The Delusion of Economic Activity

I actually worked for a software company where most of the developers and QA was in China. It is an American company. The product is software licenses so to speak. Frankly when it is sold to someone there is no indication that the product was imported. It appears to be an American product. However Chinese workers get paid by the US accounting department somehow. I guess I should take some accounting courses but to me this sounds like 100% US GDP and 90% Chinese income in terms of wages. And this company was by no means a large company. Suppose for arguments sake that Microsoft had its entire software development team in India. And it sells a copy of Windows. Is that not then completely US GDP. There are no imported components. A lot of money was exported to India to pay for labor... Our GDP calculation needs to treat labor costs and parts costs not just parts costs.


On Jul 04 09:32 PM Steven Hansen wrote:

> pigdog,
>
> just to keep things real, when an item is imported - regardless of
> whether it is an american company or not - it is subtracted from
> gdp.
>
> i have no issue with items being imported - as long as the net effect
> is jobs equilibrium and trade balance. but this is the problem as
> the government is not managing the effects of importation, and we
> are a net exporter of jobs.
>
> this great recession may have put us over the tipping point. many
> of the existing jobs lost may be lost permanently. we are not thinking
> clearly here as:
> - on one hand we believe in the mechanics of free trade; and
> - on the other hand we ignore that this means we most be competitive
> with goods and services produced in other countries.
>
> we increase minimum wage (making wages even more uncompetitive).
> we increase taxes (other countries rebate taxes for exported items).
> we are thinking about forcing health care costs on business (do you
> think the vietnamese do this?).
>
> we cannot have it both ways unless you want to dig your own grave.

U.S. Share of World GDP Remains Remarkably Constant

There was a recent article in the New York Times mentioning how multinationals count their offshore subsidiary production as 'US GDP' via components that go in larger assemblies. So work done by an Intel worker in China is US GDP. This partly explains why our standard of living keeps falling, and yet our supposed US GDP keeps going up. And Chinas goes up too. Isnt that amazing. We live in a world of finite resources (watch the commodities) so everyones GDP cannot keep going up in real terms.

There's No Jobless Recovery

Jobs are being created. Its just that they are in India, China and Vietnam. AMERICAN companies like Ford, GM and IBM have 75 -85% of the employees outside the USA. Until these companies are told that "you are either for America or against it" this crap will go on. Its really not very complicated. Strip these companies of their US status and protection by the US military. Watch them scream then. They should be required to have 51% of their jobs in America to keep their American corporate status. Our politicians have no balls. No politician even mentions offshoring. Lou Dobbs is the only one who ever mentions it. As it is going by 2020 China will declare war on America and not a shot will be fired. Because China will hold the purse strings and will say to Uncle Sam you fire a shot and we will close you down both financially and in terms of your imports. America is the new ARGENTINA.

The Aftershock: Where Does the Next Investment Opportunity Lie?

The real issue is the offshoring of production and the offshoring of services to India and China. This is destroying the ability of most Americans to increase or maintain incomes. Education will not solve this. Neither will entrepreneurship. As soon as something new is developed the multinationals will buy it or copy it and offshore development outside of the USA. Is it better to be educated and unemployed or just unemployed. This is the dirty undercurrent that the media and the politicians will not address. Basically the ability to generate wealth in the USA is being transferred to other countries. However the elite in America is doing fine by taking there cut from this. Eventually the offshore elite will cut the American elite out of the deal.

The Greatest Depression Is Coming

The analysis given basically follows that of Ravi Bhatra. It is very good. It cannot predict when but what. Unfortunately the worst has not come yet. No one has taken a hard look at the affect of offshoring. 10s of millions of jobs will go overseas in the next few years, to India and China. The middle class in the USA is going to experience a 50% drop in the standard of living very quickly. This is presaged by the 45% drop in housing prices in some locations. Most people will struggle to survive, feed themselves, pay there rent, healthcare and heat. The rich will start to get hit to as the 'globs' of money to be made from 'managing' offshoring will itself move offshore and the foreign multinationals will come into existence. Why have Cisco when you can have Huawei much cheaper. Why cheaper? Because their management gets paid a small fraction of Cisco's management. US multinationals will continue to struggle and then die wondering 'Why Me?' as the steamroller they started runs them over. Think about it. Many multinationals now have 70-85% of their workers overseas. Don't those people have the skills to eliminate the multinational and start their own foreign based companies. Especially when they see the ludicicrous salaries that bloated mostly incompetent US executives get. They will say 'I would be happy for one twentieth of that salary and I could do a better job'. Hmmm, the light bulb goes on....
Maybe then we will see some outcry about offshoring????

The Great Shift: China Rising, U.S. Falling

The rise of a new empire is very complex. That the USA is dying is obvious. I immigrated here fifteen years ago, and have watched the decline accelerate. Even mid sized US companies are now getting into offshoring in a big way. China if they do not make any big mistakes will be the new empire. The American political process is incredibly flawed. Pericles was a great man but the city state of Athens died with him. America is dying every day but Congress just makes things worse because they always sell out to those same multinationals that are hugely into offshoring. Big Pharma, Big Auto, Big financial etc. Obama is a gifted individual but has totally failed in Washington. He is continuing the wars in Afghanistan and Iraq, and will fail on healthcare. And he bailed out Wall Street. Wall Street is big into financing the destruction of America. Basically no change over Bush.

You Can Spend Your Way Out of a Recession

One thing that has not been addressed is the enormous structural problems in our economy. Bankrupt state governments which continue to spend, riduculous healthcare costs, enormous federal debt, the worlds largest military (bigger than everyone elses COMBINED). Even with this recession no one really gets it yet.
Take healthcare. Apparently it costs 7500 per person per year in the USA. So for a family of 4 that is 30,000 per year. And the average household income is 50,000. So after paying the families healthcare cost you have left 20,000 to live on. Yet this government cannot even address the healthcare issue. I am sorry but America is done, finished, kaput. And no one is addressing it.

Looks Like the Trade War Is on, Maybe

I bought dinner plates and bowls made in China. Of course they are relatively cheap but looked fine. They all chipped within a month. I was wondering where I could find decent plates. I had to go to Macy's of all places and buy some that are made in Germany. They cost $25 a plate but have lasted 6 months so far without any chipping. Chinese manufactures are JUNK.


On Sep 13 11:18 AM myscreenname wrote:

> Buying cheap chinese crap made by slave labor gives us short term
> economic benefit of cheap goods but eventually without jobs we wont
> even be able to afford the cheap slave made crap. The chinese have
> been cheating for years by holding their currency low and by refusing
> to implement any sort of environmental or labor policy. Economists
> have been feeding us this free trade creates jobs for years so where
> are the jobs? At some point you have to pay attention to the measurable
> evidence instead of the bullshit.

Economic Donkeys

The upside of this is that Chinese bankers are more cautious and sensible. So after the next collapse, which will likely occur either next year or the year after, these bankers will completely control the new world order. This order will be a Chinese order. Then men like Paulson and Geithner will take direct orders from Chinese President Hu Jintao. So there is hope for the future. It just will not be an Anglo-American future.

China Urges Citizens to Buy Gold and Silver

Wow. This is an active thread.
Let me give another perspective. I immigrated from Canada to the US in the early 90's because there were more opportunities for technical people here. What I have seen is a continual decline in opportunities mainly because of deindustrialization and offshoring. Also Canadians were much more careful with their money than Americans. I do see that Americans embrace risk much more so than Canadians. Then so did the Athenians but they understood 'tragedy'. Americans do not seem to realize they are facing a tragedy created by the multinational corporations and the Chinese government. When I was still in Canada the Chinese government sent in the first wave, "the Chinese scholars". Their role was to prepare the way for massive numbers of "Chinese graduate students". Why was China doing this? They were hoping many of the foreign graduate school educated, and possibly employed in US firms, Chinese would return to China to help jump start China's modernization. And others would provide US dollars. And it worked. The Chinese emigre have been helping to deindustrial the US and Canada and build up China. The actions of the Chinese government in my experience are carefully planned. The US appears to have no plan. This is a war that the US does not even know that it is in... When the real WAR comes, a shot will probably not be fired as the US will simply secede to its creditor.

The Face of Employment: Permanently Changed?

This is a great article and the comments are great too. This is certainly evidence of wise people living in America. Unfortunately vast swaths of the American population do not have a clue. The bizarre healthcare debate proves that. As my brother says it is those from the 60s generation (born in the 40s), that run the show and they are a bad bunch. He is one of them but open and wise enough to admit it. He has hope in the younger generation, those currently in their 20s, to clean things up. So all we have to do is wait another 20 years for these people to gain power.
Things are going to suck in the meantime for America though. 20 years of suffering ahead with paralyzed leadership.

China: Exactly Where Japan Was in the 1980s?

There are two huge differences between Japan and China.
Population
Japan: population 127 million
China: population 1.33 BILLION, 10 times greater than Japan
Land Area
Japan: 394744 sq km (a tiny country)
China: 9.6 million sq km—the third-largest country in land size in the world, sitting right next to Siberia on the Northern western side, which they will be able to easily grab or 'buy' for resources
Japan is and was basically a Xenophobic island country. China has embraced everyone else technologically and is using its Chinese worldwide network (the Chinese Diaspora) to great advantage.
Japan being an economic power at all is a near miracle.
China is the real deal, Japan was purely based on their citizens working 18 hours a day for 8 hours salary. That corporate slave generation in Japan is retired or near retirement and their offspring have no intention of working that hard.

Supporting the Financial System by Bleeding the 'Real' Economy

Its all just a temporary fix anyway. America is done. The people at the top are grabbing what they can from the savings and pensions of the suckers in the middle. Where do you think those Goldman Sachs Billions came from. Goldman can only swindle money from others. They do not create wealth by producing real 'goods or services'. Its a zero sum game. BRIC will move on because they create real wealth and America will become totally irrelevant. I feel sad because I immigrated to this country. Even with California going bankrupt nobody seems to get what deep dodo the country is really in. The public service employees there are threatening a strike. The country is bankrupt. Our economists talk about a recovery "in this country". That will take 20 years and our real incomes are going to drop 50-75%. We are becoming Argentina. Try to buy a decent plate. Yes a dinner plate. I went through many that chipped within a week from China and Portugal. I finally threw up my hands and bought some from Germany. At 20$ a plate. They do not chip. Hopefully I can pass them on to my daughters. So to buy something of value you have to pay dearly. That shows how much our living standards have really dropped. People are fooled by the cheap 'substitute' crap that they can buy. If I buy 4 plates at $5 a plate and they all chip within 2 months then I was better of buying one plate for $20 that lasts 10 years without chipping. But my true standard of living has dropped.