Can JK beat GB?

[jmfryar]

<small>[ 11-28-2005, 02:26 PM: Message edited by: jmfryar ]</small>

[BenODen]

Debt is the killer in all this, I think. We could perhaps scale back the whole pricing and wage scale of activity in our country, if it weren't for the loans out there that demand to be payed. I would be willing to be payed 20% less if everything made in the US cost 20% less as well. I myself have no debt, so I could do that in theory, but there is enough debt out there that 20% pay cuts wouldn't even come close to bringing about a 20% cut in the cost of living.

Globalism is here to stay, I'm afraid. It did start out as a good idea. New markets for goods made in the US sounds like a really good idea. But no, our goods intrinsically cost more, so we have to have niches that we fit in, and the uniqueness of these niches is now shrinking... Hey wait, thinking out loud here... Who sets these exchange rates, that say that 1 dollar US is worth x Yen? If Chinese Goods cost more here in the US and US Goods were, 'Cheaper' over in China, wouldn't that bring production of products back to the US where it belongs? What are the other ramifications of such a shift in exchange rates? It would have to happen over a long period of time, since there is so much Foreign involvment, but why should we have to be stuck on the short end of the Import vs Export balance?

The whole US would have to be OK with buying less stuff with their money though. That'd be the rub. But, I don't see how we can continue on the path we're on. When steel making moved off shore, we said, "That's OK, we'll make the parts and the cars." Manufacturing has been shrinking, moving off shore, but we said, "That's OK, we'll build our economy off High Tech." Now we're losing that High Tech, sending Engineering and Computer jobs off shore. So, what's left? You have health care, but if we go to a single payer system, that will cease to be a cash cow. Law seems like it would be a good field to be in, but I must be mistaken, since Mike there can't find a job either. What's left as high paying jobs you can train for?

I've seen some reference to the theory that part of the job stingyness of our economy is because all the venture capitalists are sitting on the sidelines, hands still stinging from the internet bubble that blew up in their faces, but I'm not so sure. I've also heard very small numbers like 400,000 jobs going off shore across all service sectors by 2015, but it sure seems like a worse impact within the Computer Science community. Again... I've more questions than answers, but it sure seems pretty bleak from my perspective.

-Benito

[Rudy2toot]

You can see where our minds are lately -we're crossing threads.
Take a look at Radio-Active, Todays Active Topics.
Two totally separate topics ended up in the exact same place.

<small>[ 03-11-2004, 02:29 PM: Message edited by: Rudy2toot ]</small>

[Rudy2toot]

Exchange rates:
I don't get what you mean when you ask "who sets the exchange rates"?
It is primarily a supply and demand thing.
Or did I miss something?

[jmfryar]

<small>[ 11-28-2005, 02:27 PM: Message edited by: jmfryar ]</small>

[haggis]

Marye,
The age-old question, what's more American (or Canadian) A Chevy made in Canada (or the U.S.) and a Nissan made in Mississippi (or, in your case, a Honda made in Canada)? I really don’t know.

The Global marketplace exists and it’s not going away. You can’t “un-ring a bell” as lawyers are fond of saying.

Benito and Jmfryar both mention the trade surplus imbalance between the U.S. and China and even that’s not a “black and white” good thing, bad thing issue.

It lets the Chinese know that they need our market places a lot more than we need theirs, and that becomes a powerful negotiation tool when we begin to discuss allegations that China’s keeping the currency exchange rate artificially high in its favor (true, I think)

[jmfryar]

<small>[ 11-28-2005, 02:28 PM: Message edited by: jmfryar ]</small>

[BenODen]

Sure, a global economy has existed since for ages, but historically, there have been products that one country hasn't been able to produce as cheaply as another all things factored in. I suspect that the fact that we can now communicate and ship things around the world as if it were right next door and the fact that more countries in the world are catching up with our education and technology all conspire to make relative cost of labor trump all.

When does China officially join the WTO? Are exchange rate manipulations within the scope of WTO regulations? Does our huge national budget deficit (not trade deficit) influence the strength of our dollar? These are questions that make economists go Hmmm, I think.

A google search turns up a paper about prices, imports and exports that includes this phrase "However, as Obstfeld and Rogoff (2000) remark, the exchange rate often seems to have a life of it's own..." But the paper does address the exchange rate of the dollar as a factor in the balance of trade. (Less strong a correlation to imports than we might hope..)

Another paper starts from the assumption that the interest rate and the exchange rate are tightly linked, such that a low interest rate favors exports... But my eyes are glazing over with the seeming contradictions, so I can't be sure!

A third paper about exchange rates may be the most relevant... Primer on Exchange Rates It seems to say that the IMF has it's fingers in the pie, encouraging countries to have very strong exchanges with respect to the dollar. (What a way to guarantee exports, huh?)

Man! If I thought there were a job for me in the field, I think I'd go back to school to get a PHD in economics. It's so complicated that nobody's got a lock on "the truth" yet, yet it's vital to know who's right...

Now, tieing it in to the topic at hand, JK vs GB. I have this feeling that neither of them have a good beat on how to keep our jobs from leaving the country, but at least Kerry thinks it's an issue worth working on, while Bush says, "Hey, don't worry, it's free market, it'll all work fine, trust me! Besides, there's nothing we can do, so just sitback enjoy the ride." Oh great, thanks.

Ah well!

-Benito

<small>[ 03-12-2004, 12:32 AM: Message edited by: Benito Of Denver ]</small>

[jmfryar]

Two comedians have summed up elections pretty well for me recently...

"How many people driving around with American Flags aon their cars actually vote? It should be a requirement that you present your voter registration before you can attach one to your vehicle."

"California wants to give the vote to 14 year olds. Lord knows the average 14 year old is probably smarter than the average voter. How about instead of expanding it to those under 18, we restrict it to intelligent adults?"

It's getting discouraging knowing that there's a vast majority out there who don't even bother, but are directly affected...talk about along for the ride...

I understand that I'm unusual - I'm a Republican "super-voter" - but still - is it thar freaking hard for people to do a little reading and show up to flip a few levers..

Then again, I'm the first one to say - if you're not sure of the issues, or the candidates, don't just show up and flip them at random like it's the SAT's - that can be even more dangerous as people who have suffered under weird boards of edw will attest...

[haggis]

Benito,
People for years have blamed or alternatively praised U.S. Presidents for job creation or job losses when in reality there is almost nothing presidents can do to create or kill jobs.

The jobless numbers for the last 36 years are available at the BLS web site (you have to play with the table to get the info, I couldn’t link my search results).

2002 is the first year the jobless rate exceeds 5 % (5.8%) since 1994. Actually from 1970 until 1994 there were only 7 years when the jobless rate was less than 5.8%.

Only six of those years was a Democrat President and the only job gains under a Democrat was during President Clinton’s watch. So if Presidents get credit for building or losing jobs, then the record is mixed.

I believe the phenomena we are experiencing here is not the rate of unemployment, the jobless rate - approximately 5.6% - currently being condemned now was praised in May 1996 when it was also 5.6%.

What IS new, however, is WHO is unemployed. Corporate America is quickly learning that a cubicle can be replicated overseas as easily as a shop floor can.

”Of the nine million Americans out of a job, 17.4% are managers or specialty workers, according to a study of Labor Department data by Hofstra University economist Irwin Kellner. During the 1990-91 recession only 10% of that group was unemployed. Even after the much deeper recession of the early 1980s, just under 8% of unemployed workers were white collar. Sure, there are more white-collar workers today, but joblessness among them has risen faster than their share of the overall job market.

"White-collar workers and college graduates are in a state of shock," says Kellner. "It appears these job losses are permanent. They're not necessarily coming back when the economy does."

Fortune magazine, June 2003, subscription required.

Ouch

I’m not making light of unemployment or the miseries associated with it. I was one of those white-collar jobs that went away in 2001. I was unemployed 16 months and know very well the unavoidable feelings of uselessness and despair that attends losing a job. I had been employed since 1967 and never had lost a job before! I’d never even LOOKED for a job; they found me. I finally took a job that I had to relocate for AND took a $12K annual pay cut.

But the point is that its not just blue collar manufacturing jobs that are being lost this time. It’s the lawyers and radiologists and accountants that previously thought they were always going to be in demand. They were wrong. And they are vocal about it as no group of unemployed people has ever been before.

What's ironic is that the people who always were in favor of helping people in poorer countries - at the expense of better off people in richer countries - seem most upset by this job-export stuff.

Could it be because the phenomenon is just now hitting the kinds of jobs those mostly liberal opinion leaders, or at least NPR donors, tend to hold?

At any rate, I think the politics of this stuff are likely to play out in interesting and unpredictable ways, but I can’t see that President Kerry or President Bush or President Hillary Clinton is going to affect the outcome very much.

(Ed. “Better put the “flame proof” suit on now.”

Sigh, yeah, I already have

[Shapley]

Nicole Marie Wrote: Worker productivity is way up but that's because one person now does the job of two. And a company is not going to hire more people if their current work force is meeting the demand.

Nicole,

Couldn't it also be said that two people had been doing the work of one?

[Rudy2toot]

Haggis;
I agree.
We are capitalists and we do try to promote that philosophy so we shouldn't be too surprised at the outcome.
There is much evidence that the economy sticks fairly closely to a cycle regardless of who sits in the White House.
I expect that when we have grown beyond the fear of terrorism, we should see a return to the predicted path. I don't quite remember where we were on that path though
The overall trend is probably going to leave a much greater variety of the workforce scrambling.

<small>[ 03-12-2004, 01:21 PM: Message edited by: Rudy2toot ]</small>

[eaphil]

Originally posted by jmfryar:
Then again, I'm the first one to say - if you're not sure of the issues, or the candidates, don't just show up and flip them at random like it's the SAT's - that can be even more dangerous as people who have suffered under weird boards of edw will attest...

Democracy is a wonderful thing... but usually it gives you what you deserve... and that's not always a good thing.

[jmfryar]

If only we were a democracy and not a republic, then we might have a shot...

then again, THAT would be interesting...true democracy in this country...I'd pay to watch some of those meetings...

[Nicole Marie]

Originally posted by Shapley:
Nicole Marie Wrote: [b]Worker productivity is way up but that's because one person now does the job of two. And a company is not going to hire more people if their current work force is meeting the demand.

Nicole,

Couldn't it also be said that two people had been doing the work of one? [/b]

No Shapely, this same poll that uncovered this info also polled workers who were doing the job of two. They were busting ass, not complaining and doing the job out of fear of lossing their own job. Market Place did this research. They also found these people were working over time, just to get the tasks done. This was infringing on family time and personal time. They also found workers coming in weekends, and staying late to get the jobs finished with out pay.

[jmfryar]

Keeping in mind that better technology, robotics, automated assembly lines, etc. has also aided the average worker to be as productive as 3 or 4 people 50 or 60 years ago...

[Nicole Marie]

Folks, don't miss the point and try to justify the loss of jobs.

[haggis]

Nicole,
I certainly don't mean to justify the loss of jobs, I was trying to explain what I think are the reasons jobs are leaving the U.S.

And I don't believe they are "coming back." And I don't believe there is any legal way to stop them leaving.

So, now we need to find ways to create more jobs. Traditionally, job creation has always been the role of industry and not the government.

The government can help marginally by increasing incentives for industry growth (tax cuts, more favorable business laws, etc.)

But in the end, it will be private enterprise and the entrepreneurs that create new jobs.

I believe we are witnessing a major paradigm shift vis-à-vis jobs and jobs creation and I can’t even begin to figure out where it will go.

[Nicole Marie]

That wasn't really meant for you Haggis, more JM and Shap.

Haggis I agree with you in part on the creation of jobs. I do take a step back when it comes to the government trying to create jobs. Some of these ideas have ended up loosing jobs instead. I feel the only way they should step in is to prevent a US company from leaving US soil. but that brings up a whole new ball of wax.

[Shapley]

Nicole,

They may be working longer hours, or working weekends, but unless they are putting in 80 hours a week, they aren't doing the job of two. Let us say, for the sake of argument, that they are doing the work of 1 1/2. They question then becomes one of the feasability of hiring or maintaining a worker to do the work of 1/2 worker, or should the 1/2 workers work be divided among the remaining workers, who are doing the work of 7/8 of a worker. Most Employers would choose the latter.

Many companies have, in the past, hired more employees than were required to do the job. This was done in part because it allowed the work to allow uninterrupted in the absence of one or more workers. The cost of labor, while high, was still sufficiently low to allow for this luxury. With the cost of labor skyrocketing (not wages, but insurance, workers compensation, etc.), that is luxury many companies can ill afford, so they trim the fat, and rely on the remaining workers to pick up the slack.

They also outsource, where the cost of having the work done is lower than the cost of hiring a worker to do the job, and they don't have the headaches of workers comp, insurance, etc., which can all be handled by the outscource employer.

There is also the question of whether the workers are working weekends to do the work of the other worker, or to make up for the time spent goofing around on the b.combb.