Economy is GRRREATFollow

Ummm....


LAST?

Ok. 5 years is still "short term" in this context. Remember. We're talking about what happens to those poor workers who work the same job for 20 years and then get laid off (of the business goes belly-up, factory closes, etc...). You're still at the beginning of your career by a long shot.

I am curious about something. Are you actually telling me that after 5 years of working there, you're making the same amount of money as someone working for 6 months? Are you sure you're getting something for your 6 bucks a month? ;)

In the first 5 years at my job, I more then trippled my salary. But then, I started as an entry level tech hired through a temp agency, then gradually gained pay raises and title increases. Amazing the difference in pay between entry level tech and senior engineer.

So what are you doing to earn an increase in pay? Do you work harder? Generate more value for your employer? See. Here's the problem I'm seeing. An employer is going to pay you based on the value you generate for him. In some fields, this corresponds directly to your experience in that field. As a computer engineer, I can literally work circles around some new guy just starting out. I can solve problems in 5 minutes that might take him 5 days. Thus, my labor is worth more to my employer. But in some fields (especially service type fields), I'm not sure where the parallel lies. Does someone become so much better at folding sheets that it justifies paying them 3 times what a beginner would be worth? I assume there's different levels of work of course, but exactly how much true growth is there? I guess what I'm getting at is should certain fields really be something you make a career out of, or just be something you do for awhile while working on a real career. Certainly, you can make more money and show value to earn that money by becoming a manager, or moving from something that's easy to something that's hard. But clearly, not 100% of a given work force can do that. Not everyone working in a hotel can be the concierge, right? Most of them are going to be folding sheets, doing laundry, cleaning rooms, etc. And that percentage has to pretty much stay the same.


Take this example. You have a hotel. It's got a service staff, all doing a variety of jobs of various relative value. They get paid according to that relative value. So the managers and decision makers are getting paid more then the bartenders and waiters, who get paid more then the cleaning staff, etc...

Pretend that no one ever leaves their jobs. It's a "workers paradise", right? Guaranteed job for life. But here's the problem. Can we justify any sort of upward mobility for anyone working at that hotel? Certainly, they can expect cost of living increases in accordance with inflation rates. But if we pay *anyone* in that situation more relative money then what they were making on day one, the hotel is losing money. The only way to ever get a promotion or a real raise would be if someone dies so you can try to take their job.

That's ultimately the problem with the union concept. The larger the scale of the union, the more dramatic this effect becomes. Because with a union with the same contract with *every* hotel now has extended this problem to every hotel. Before, you could have chosen to leave your job at one hotel and apply for one at another and hope for upward mobility. Now, you can't. The same union structure holds you in your relative position eternally.


Which would be fine if we were all worker drones and didn't care about any sort of upward mobility. But most people want to make more relative money when they are 40 then when they were 20, right? So, usually unions push for higher and higher relative wages for their workers. This ultimately cannnot be supported by the industry they are working for, reducing that industry's competitiveness and/or driving some businesses bankrupt.

It's a serious problem. And I think that in your happiness with being "secure" in your union job *today*, you aren't realizing what a trap it is ultimately. The longer you stay in that sort of work environment, the worse your relative employment position becomes. It's not going to be all roses and sunshine in 20 years.




Like I said. That's not really a good thing. It's not good for you. It's not good for the hotels. It's not good for the economy as a whole. It's great for the unions though...



Yeah. But when McDonalds has to charge 15 bucks for a burger in order to pay for the wages you've demanded by your nationwide strikes, they wont be able to stay competitive with other burger joints. And even if all of them are unionized, they wont compete with people just buying food at home instead (there's only a certain amount people will pay for fast food). McDonald's will go bankrupt, and you'll be out of a job.


What the heck do you think causes those massive layoffs at those factories where we get the sob stories of the guy working 30 years at the factory only to be out of work and unable to get another one? Despite rhetoric to the contrary, businesses don't close down factories that are making money. They close them down, in many cases, because the cost to operate is too high to make it profitable. Do you not see how unions contribute to that? Yes. Part of that is the cheaper labor in other countries, but it's also the inflated labor cost that many unions stack into the equation. Doubly so in older facilities. If I'm a big corporation, and I've got multiple factories across the US. And they all have union labor at them, and I'm losing money, which factory will I close down? The one I built last year with mostly new labor (same union, but that generally means lower wages for the entire factory), or the one we've been running for 40 years, with 80% of the union guys making top union wage?

It's not really a hard choice. In fact, it's brutally obvious. That's why I say you *really* need to look a bit harder and longer at your joy at being in such a great union job. In 20 years, if you haven't moved on to something else, it *really* wont be that great.




Eh... That's really hard to say. You can't look at the internet-boom, dot-com craze days and use that as a measuring point. Everyone involved back then *knew* that was all false bubble. A bubble is a market inflation that is artificial and destined to burst (as it did). When you look at real economic growth during that period, we're matching, and in many ways exceeding that today.

To give you an idea, here's the GDP growth for the last 10 years:

95: 3%
96: 4.1%
97: 2.4%
98: 3.8%
99: 3.9%
00: 4.1%
01: 5%
02: .3%
03: 2.45%
04: 3.1%
05: 4.4%


Note that you can see the "bubble" in the 00, and 01 figures. Each growth rate is the result of the previous year, so there's a delay between economic action and effect in terms of these numbers. You can see the dual effect of the bursting of that bubble (and the 9/11 attacks) in the miserable 02 value. Then you see immediate and sustained growth from that point on. Now, we're at a value that exceeds any for the last 10 years *except* that last frenzied tech-bubble year.

Um. And there aren't any bubbles right now. This is *real* growth. We really are producing more right now. Our economy realy is strong right now. This is not an illusion. It's reality. It's not incorrect at all to say that the economy is doing great, because it *is* doing great.

As goes America, so goes the rest of the world. The dollar will not be allowed to collapse. The rest of the world would go in to an economic tailspin if our economy tanked. Sucks to have 1 country in the world be so important, and it not be your own, dudnit?

Hahaha. Ahhh hahahahaha. snicker.

You're a cute kid, you know that?

The people who hold the debt, and wish to be repayed those 8 odd trillion dollars.

China(others as well) ... we suport the damn contry. Without our money paying for their products China doesn't have an industry. This goes for many other nations.

The flaw in your McDonald's example is that it is a Franchise, McDonald's does not own it, they just have their name plastered on the front and charge the owner out the *** for all of the products, and they tell them what to charge for the food.

The employees sign a contract with the owner and the owner decides salaries, when or if a union enters the picture it is not McDonald's that steps in and says NO! and shuts down the franchise, the owner of the franchise shuts it down, keeps paying the franchise fee and moves or sells out.

McDonald's influence ends with products and pricing, if they deem the store to be doing something that does not fit the contract they signed with the owner then yes they could step in, but as far as labor goes, that is strictly based upon state law and the owner of the establishment.

Sigh. What exactly does that mean? Nothing.

I don't think you understand how national debt works. We don't go to some other country, hat in hand, and beg them to give us a loan. It just doesn't work that way. What we do is that the treasury authorizes the printing of additional treasury bonds (t-bills). Those are offered to anyone who wants to buy them, with an assumed return on investment based on the rate of economic growth of the US economy.

You *can* look at them as a loan and money borrowed by the US government from other people. But a more accurate way of looking at it is that it's money invested by others into our economy. And people invest that money because they believe that the US economy is strong and will continue to grow, thus generating a profit for them. Having many other nations hold significant amounts of t-bills is *not* an indication of a weak economy. It's exactly the opposite. It means those other nations believe in the strenght of our economy to such a degree that they're willing to invest hundreds of billions of dollars in it for the return on the interest of that investment alone. They have faith that their investment will be worth more then they spent in 5, 10, or 20 years.


How you can interpret that as weakness, I don't know. Certainly, those who've invested that money have *zero* interest in making their investment fail. Your whole argument is based on spooky assumptions and half truths and relies on an audience with minimal understanding of the topic.




Two problems here.

First. You clearly know *nothing* about Keynesian economic models. The whole premise is that money in a treasury is meaningless since inflation determines how much that money is worth. Wealth is measured in terms of economic production (GDP). How much cash you have stashed away in a vault somewhere was somewhat meaningless back when "cash" meant bars of gold or something, and is completely meaningless when it's just printed paper based on the relative value of goods produced in your country. You don't *want* a treasury vault loaded with cash. That's meaningless. You could just as easily burn that money and lose nothing. Remember. Dollars have no value. They are placeholders for goods and services. Money held out of the hands of either consumers or producers of goods is completely worthless.

Secondly, didn't we already go over your whole 8 trillion figure? About half of that is intergovernmental debt. Which is basically money that the federal government owes to itself. That doesn't *really* count. It's the left hand lending the right hand cash. When a government program has a surplus, it invests that money by buying t-bills. Even if the other side of that equation defaults on the loan, it doesn't actually cost you, me, or the fed anything. The more accurate measure of "real debt" is the "debt held by the public", which is closer to 4.3 Trillion dollars. And, since we use a Keynesian model of economics, that number only has value in terms of its relation to GDP, right?

And you know what's really interesting? That value "debt held by public", as a percentage of GDP is *lower* then it was for the entire time period between 1987 and 1999. See cbo budget tables for reference.

The last full budget year to date was 2004, and had a total debt as percentage of GDP of 37.2. Through most of the 90s, that debt rate was in the 40s. We're not *really* more in debt today then we were before. We're actually *less* in debt. The numbers are bigger, but our economy has grown faster then the debt. Um... Which is the entire point, and is *exactly* why nations like Japan and China invest so much money in the US economy.

Sheesh. I debunked all of this like 3 weeks ago. Does no one actually pay any attention?



Lovely rhetoric from someone who clearly has minimal understanding of economics. Nice how you threw in engineered and unconstitutional in there. Explain again to me how a war authorized by the US congress can possibly be unconstitutional? If I recall my civics classes correctly, isn't that branch of the government specifically given the constitutional power to declare war? Yeah. I think it is.

And engineered? Afghanistan? Are you now trying to imply that the US government engineered the Taliban's support for Al-qeada, and the 9/11 attacks? That's quite a claim to make in a general thread about economics. And completely out of the blue to boot!




*cough* Trade Deficit has *nothing* do to with national debt, or federal budget deficit. Are you actually just trying to use the fact that both contain the word "deficit" to make people think you have a point? Sheesh. More rhetoric.

Trade deficit simply means we are buying more from other countries then we are selling to those same countries. By itself it says *nothing* about the state of our economy.


And the rest of your post is a useless series of "when the world collapses" kinda garbage. Whatever. Look. You clearly need to take some actual classes on economics and stop just skimming some biased site showing you "alarming" figures about the US economy.


OMG! A 3 bedroom home costs 5 times as much today as it did 20 years ago! That must mean our economy is collapsing. Sheesh.

Edited, Thu Dec 1 20:07:42 2005 by gbaji

Nothing's funnier than Gbaji trying to post about economics. I mean really, nothing in the world.

I almost died laughing reading those.


And the rest of your post is a useless series of "when the world collapses" kinda garbage. Whatever. Look. You clearly need to take some actual classes on economics and stop just skimming some biased site showing you "alarming" figures about the US economy.



Oh the pain!


OMG! A 3 bedroom home costs 5 times as much today as it did 20 years ago! That must mean our economy is collapsing. Sheesh.


Without corresponding wage inflation, yes, it does.

Do you see why, or do I need to explain to you why further stratification of wealth among socio-economic classes is bad for the economy?

Sorry, that was rhetorical. Of course I would have to.

So... Assuming that's true. We are, in fact, in less debt today then we were 10 years ago. Thanks for supporting my position Smash. Have a nice day! :)

Not than 6 years ago, however. Funny how that works. We can agree, can we not, that barring some major fiscal miracle the debt/GFP ratio at the end of the Bush presidency will be considerably higher than that at the end of the Clinton presidency, and in all likelyhood higher also that the highest point in the Clinton presidency.

The far more troubling part, of course, is that while constantly touting the economic 'recovery' of late, debt continues to increase. Isn't the idea behind cutting taxes that as the economy picks up we recover the debt spent to stimulate it as opposed to spending even more?

Oh well. Not like we won't have a Democrat in office again shortly to get spending under controll I guess.

What the hell, is it reunion day or something? or have youa ll just been lurking for the last 8 months?

I hope so, anyway.

Hell, I'd vote for McCain

I don't know that I'd vote for him over a democrat necessarily, but I certainly wouldn't be too upset if he won. I always liked McCain.

Nexa