Bill Gross, CEO of bond giant PIMCO, has published a sobering assessment of U. S. economic, educational, and trade policy:
It is becoming obvious that the 2012 election will be fought on a battlefield of job creation. A 9.1% official unemployment rate, and a number nearly double that when discouraged and part-time workers are included in the rolls, portend an angry and disillusioned electorate, which will include millions of jobless college graduates ill-trained to compete in the global marketplace. Over the past 10 years under both Democratic and Republican administrations, only 1.8 million jobs have been created while the available labor force has grown by over 15 million. It is clear, however, that neither party has an awareness of the why or the wherefores of how to put America back to work again. Few economic advisors from either party ever mention structural long-term disconnects in employment – a recognition that cyclical influences will no longer dominate the U.S. labor market. Manufacturing and goods exports have ceded enormous ground to China and other developing labor markets, as America’s reliance on services and high tech innovation has exposed gaping holes in an historically successful model. Almost any industry dominated or significantly connected to finance and financial leverage has hit the canvas and stayed down in the aftermath of Lehman 2008. Housing construction, real estate brokerage, banking and consumer retail employment will likely never come back to levels dominated by our prior decade’s excessive leverage and its abuse leading to overconsumption. Because of that focus, a “shovel-ready,†vigorous manufacturing sector is not there to pick up the slack.
I have some quibbles with this assessment. So, for example, I think that some of his admiration of German industrial policy is misplaced and he doesn’t credit German labor policy enough, e.g. Germany doesn’t have nearly the degree of at will hiring and firing that we have here in the States. The “factory in a box” capability that German companies have developed has served them well while China was tooling up to be the consumer goods supplier to the world. The Chinese authorities won’t tolerate importing that kind of capability forever, will develop their own capabilities in that area, and, inevitably, Germany’s greater source of exports to China will dry up. It’s already happening. It will be interesting to see what happens to the German economy as their trade surplus with China vanishes.
I think that trade and immigration policies must conform to actual needs and realities rather than some ideological view. The reality is that we have millions of unemployed unskilled or semi-skilled people here in the U. S. already and wages for unskilled and semi-skilled workers have been stagnant or falling for decades, a sure sign of flagging demand. Our immigration policy wih respect to Mexico should reflect that reality; sadly, it does not.
I continue to believe that China poses a unique challenge for American economic policy. I trace many of our economic woes to three events, all involving China: China’s 1979 abandoning of its official policy of autarky, China’s pegging of the yuan to the dollar in 1993, and the admission of China to the WTO in 2001. I think that these actions eroded manufacturing jobs in the U. S., increased our imports from China to the detriment of American-made goods, and drove money into housing construction with the results that we see around us today. Our trade policy with respect to China should reflect the unique challenges that China presents; it does not.
I’m skeptical of short-term stimulus spending for reasons I’ve repeated endlessly around here. That doesn’t translate into my believing that the federal government should have no role. As I have said before I don’t think the real question at hand is the dichotomy between doing more and doing less but the greater challenge of doing differently, something for which incumbents of either party are distinctively unqualified not to mention unwilling.
I’ve also mentioned that I favor federal involvement in mass engineering programs. I continue to believe that the track record on those has been pretty good. Much better than its track record on basic science or job creation but, unfortunately, such programs don’t curry favor with any major voting bloc and are a very hard sell, particularly with the bipartisan support that such programs require.
Here’s Mr. Gross’s peroration:
Those who advocate that job creation rests on corporate tax reform (lower taxes) or a return to deregulation of the private economy always fail to address dominant structural headwinds which cannot be dismissed: 1) Labor is much more attractively priced over there than here, and 2) U.S. employment based on asset price appreciation/finance as opposed to manufacturing can no longer be sustained. The “golden†days are over, and it’s time our school and jobs “daze†comes to an end to be replaced by programs that do more than mimic failed establishment policies favoring Wall as opposed to Main Street.
I like reading Bill Gross. He spins off a lot of interesting ideas. But he’s more wind-vane than sage. We didn’t get Butler Creek.
That said, it’s hard to disagree with his observation that politicians are not engaging with economic reality.
Well heck, in other news today:
The GOP Myth of ‘Job-Killing’ Spending
This is like one-upping the “stimulus didn’t ‘work'” arguments. It’s completely contrary to logic, that spending in an environment of cratered aggregate demand would be a negative … but hey … it’s all about how it feels.
Truthiness has given way to something nastier.
More “beyond truthiness:”
Are Taxes High or Low? A Further Look
If it feels good, believe it?
The loss of manufacturing is in many ways a self inflicted wound. It need not be so.
Imagine you are a manufacturing company board member or CEO and are looking out over the landscape. With the improved (more reliable and cost effective) logistics in the US, and in combination with heightened geopolitical tensions, you’d really like to have your output and supply chains closer to home; the total cost differential has declined. There is plentiful skilled and unskilled labor in the US. The cost of capital on a relative basis is low. Sounds pretty good.
And yet, you have an administration completely in the pocket of organized labor. Perhaps nothing is more troublesome to a manager than dealing with union work rules. Manufacturing is energy intensive, and you have an administration hostile to domestic energy exploration and production – beholden to a crazed political wing and a crazy theory. But if just for 10-15 years, out of current economic concerns, you could put it aside. Health care costs are a real problem, but you have an administration who just doubled down on the cause. Its likely to get worse. You have a corporate tax environment that is worse than your foreign competitors. You have a regulatory environment that is advertised as necessary for the greater public interest, but in fact is run mostly by anti-business zealots. Now, about building that new factory in Ohio……
It need not be this way.
So Drew, shouldn’t you show that non-union jobs have not fled to China?
Actually, I can cast that question in dollars and cents:
And yet, tweed-wearing capitalist that you are, you would have me believe that some intangible fear of liberalism is a bigger factor than the $3 vs $22 gulf?
You obviously don’t own and run companies, jp. This is a waste of time.
Great example of ideological bias. 7% of private sector jobs are unionized. 11% in manufacturing. Yet, it must be the unions causing our problems.
“And yet, you have an administration completely in the pocket of organized labor. Perhaps nothing is more troublesome to a manager than dealing with union work rules.”
Domestic energy production is up, yet the administration is hostile. Health care costs? Small businesses, 50 employees or less, currently pay 10%-15% more for equivalent coverage than large corporations. Those with 50-100 workers pay a smaller premium. In the last 4 years we have faced premium increases of 42% one year and 26% another year. That is good for business?
I think that Dave, and Gross, are on a better track. It is not just China, but also India, Brazil, Turkey and much of the third world. Manufacturing has been fighting an uphill battle for a long time. I dont see that changing much for a while. For some industries, supply chain issues will be a problem and we can fill that niche. Our unskilled and semi-skilled workers will need to work at wages that will more closely approximate those of the rest of the world if we want to maintain manufacturing jobs. Assuming, not a safe assumption, that our skilled workers and highly educated workers retain their income premium, we then face the problem of a diminished middle class. We need to decide what our response should be to a two tiered society.
Long term, our conversion to a service economy has always worried me. I cannot think of any country that ever existed based upon a service economy. This is uncharted territory. These are all long term problems that we have been ignoring. This is not new, not related to any recent changes in policy. It was covered over by our fiasco in the financial sector, Gross gets that right, but that avenue is, I hope, gone. We are now faced with real estate inventory issues and over capacity in key sectors that will dog us as we try to find a non-bubble solution to our jobs problem. Old answers like cutting taxes or increasing government jobs have not worked well in the past, and seem unlikely to work now.
Steve
So the root problem appears to be the combination of global productivity increases, population growth, and globalization of the economy. There’s simply not enough work to do for all the people on this planet.
I’m not a believer in so-called “peak oil” but I’m beginning to hope it’s true. High energy prices would make off-shore and distributed production much more expensive and would inevitably lead to more domestic manufacturing. For example, back when energy prices peaked in 2008, the US steel industry was producing like crazy because foreign steel suddenly became much more expensive.
Which is where there wasn’t a problem until the day of Obama’s inauguration.
JP:
Yeah, since you don’t share Drew’s entirely self-interested and ideological view of things which, summarized is, “More for me! More for me!” there’s no point even talking.
I don’t think you need to run companies to understand that the difference between $3 and $22 is not so small that it is all about policy choices, at the margin.
We ain’t near the margin.
I remember that one of the feedback loops, as the Japanese gained consumer electronics share, was to make things smaller. This because it was all about how many widgets you could fit in one shipping container. So, innovation was in part to make the total envelope for a 1.6 cu. ft. microwave as small as possible. That was of course a double-gain in the marketplace.
Flat screen TVs are cool, but you also put a lot more in a shipping container than old rear-projection models.
Anyway, that stage of the revolution is long gone, and now we can put however many gazillion iPhones or iPads in one container. It would take really expensive oil …
(Caterpillar has maybe held on in part because you can’t stuff a front-loader in a shipping container.)
Here’s a good near-future conspiracy story for someone to write: shadowy forces work to bring back piracy on the high seas. This raises shipping costs, thus making import/export more expensive, and only the nations with serious naval power are able to ship.
Or you could write it as a historical novel set in, say, the 17th or 18th century.
A Ragnar Danneskjöld for the new age, michael.
This is like one-upping the “stimulus didn’t ‘work’†arguments. It’s completely contrary to logic, that spending in an environment of cratered aggregate demand would be a negative … but hey … it’s all about how it feels.
The problem is that the stimulus was financed with more debt that cannot and will not be repaid. That has just pulled future demand into the present with no regard for said future. Do you really think the future economy is going to be so large that it can spare the extra $700,000,000,ooo (plus interest!) from Obama’s stimulus, not to mention the money from the the Bush stimuli(sp?), the Bush tax cuts (now NEW and IMPROVED as the Obama/Boehner tax cut extension – with extra LESS money for SS & MC), the money for TARP, the money for TALP, the money from the 1.5 trillion in annual deficits we’re now running, etc. Or do you think that debt doesn’t matter? (And don’t give me any crap about Keynsian counter-cyclical surpluses being used to pay off debt. The voters have spoken, after being prodded by our lords and masters, and that shit ain’t happening.) If debt doesn’t matter, why not cut all taxes to zero and finance everything with borrowing? Hell, do that with everything. We can all get rich selling each other hats on credit.
Additionally, Obama’s stimulus w.r.t. jobs mainly kept government employees at work in positions that various states couldn’t otherwise afford. Unless that stimulus keeps coming those jobs are going to need to be cut some time soon anyway. Like, well, now. Apocalypse: NOW!
The whole stimulus thing (from both parties, and from both preferred methods) doesn’t address an economy that has been hollowed out, and that will not go back to the way it was any time ever. Our “leaders” (elected and otherwise) trying to maintain the status quo because of a lack of understanding just shows -at best- an absolute stupidity that borders on pure evil. One might feel somewhat charitable towards them (after all, they’re only human) if they weren’t profiting at the expense of the country, but they are, so fuck ’em.
Should I really listen when someone makes a guarantee, about far futures?
This chart, figure 1, at FT Alphaville is typical of the long-view.
We’ve had high debts before, including relative highs in the early 90’s, and reduce them.
Now, we are at a scary point, one where we get to decide if we are going to retest highs last seen in WWII, or if we can reverse.
If you ask me the sunk costs of past stimulus are not the deciding factor. It’s all about what growth is possible. That, if we are honest, is an unknown.
Shorter: If we were actually beyond WWII debt, you’d have a stronger case that paying it down is impossible.
Here’s a good near-future conspiracy story for someone to write: shadowy forces work to bring back piracy on the high seas. This raises shipping costs, thus making import/export more expensive, and only the nations with serious naval power are able to ship.
There’s just one problem – like the Jason Bourne novels it assumes a level of governmental competence not otherwise found in reality. Hell, the most powerful Navy in the world is having trouble stopping a bunch of idiots in speedboats in effing SOMALIA from terrorizing one small part of the Ocean Sea. How are they going to defend the whole bounding main?
OTOH, you did say it would be fiction. But it would be a bit less believable than, say, a group of youngsters being able to transform into any animal they touch by alot. From a believability perspective it would be like living in a Universe in which George Lucas could write decent dialogue.
PS Part of you idea has been used in science fiction. Gregory Benford’s Across the Sea of Suns incorporates the following:On Earth, international commerce is brought to a standstill when mysterious spaceships drop sea creatures dubbed “Swarmers” and “Skimmers” (for their behaviour; Swarmers swarms ships and head-butt them until they sink, and Skimmers simply jump and skim around like dolphins). They begin multiplying and the Swarmers begin attacking humans and all their works on the seas, high or otherwise.Destruction of sea commerce: Yes. The rest of your idea: No.
Shorter: If we were actually beyond WWII debt, you’d have a stronger case that paying it down is impossible.
Yes, because we are definitely going to have conditions like directly after WWII again just any day now.
So, when do you advocate we start bombing all the other industrial nations in the world into rubble, while convincing half of them to adopt an economic model doomed to fail? (Just to mention two items from many.)
As for the 1990s – that one is slightly more possible. We could get some real economic savings by drawing down the size of the military, now as then. But where are we going to get another tech bubble big enough to propel the whole tax base into the stratosphere? I don’t think the Groupon/LinkedIn/Facebook/etc thing is going to be that long-lived. Besides, we haven’t really lived down the 1990s tech bubble – we just papered it over with more crap from a much bigger real estate bubble.
Shorter: If we didn’t already have several multiples of the US GDP size in UNFUNDED LIABILITIES COMING DUE that we didn’t have back when, then you might actually have a point.
Shorter still: Demographics and prior mistakes matter.
Icepick, your complains just seem so 2008.
The stimulus is winding down. There won’t be another. Washington is more fascinated with the deficit than anything else at this point. Democrats won’t say “stimulus” even if you ask them to. The Republicans even think spending reductions should go toward deficit rather than tax reductions these days.
Isn’t it an odd time to say the sky is falling?
And those unfunded liabilities you are talking about “coming due” … you really mean in like 2035, right?
And those unfunded liabilities you are talking about “coming due†… you really mean in like 2035, right?
And here I thought SS and MC were already no longer running surpluses. I must have slipped into another reality again.
…
No, that’s not it. (Thank god. The beds never feel right in other universes. Not right away, anyhow.) We’re now having to pay for those programs with funds that we otherwise don’t have. That’s pretty much the definition of an unfunded liability coming due, yes? When you have to pay for something with money you don’t have?
The stimulus is winding down. There won’t be another.
That huge deficit counts as stimulus – partly on the tax side, partly on the spending side. By your own logic it is creating aggregate demand that is otherwise lacking. Thus, stimulus.
As for Washington following through – they will probably do something, some of it will even make sense. It looks like we will start drawing down our military commitments somewhat. But other things will likely be done as stupidly as possible. (Look for cuts to the FDA long before cuts to foreign “aid”, for example.) But given the reception the Ryan Medicare Reform idea (bad as it was) don’t look for any real cuts there until several years down the line. And of course the idea in Washington now (and several months ago) is to reduce payroll taxes just when those programs cannot afford the revenue loss.
So I don’t see all that much more reality in Washington now than I did in 2008. And there are a lot fewer jobs now than in 2008, which accounts for the $350,000,000,000 in lower federal revenue projected for 2011 than in 2008. (Not to mention the extra $500,000,000,000 in federal outlays.) Things are actually much worse now than then. I can’t understand why you think otherwise.
Icepick, you should listen to Mark Zandi, economist, on Planet Money
Or maybe I just say that because I listened to it since my last post, and discovered an analysis that isn’t so far from my own.
He observes that the deficit commission said they wanted to cut $4T over 10 years. The Ryan plan wants to cut $4T. Even Obama wants to cut $4T. They are in gridlock not on the need, or the amount, just on the path.
Now, if you’ve been reading my posts for the last few years you know I’m ready to go no. I signed on to the deficit commissions plan, etc.
Sadly, as Zandi reminds us, everyone is counting time until the 2012 elections. They won’t go until they get a mandate.
Knuckleheads. But still, I guess whoever wins gets to call the tune.
(Go ahead, use SS and MC flows at 10% unemployment like they would be permanent.)
Ice:
Thanks for the link to a good sci fi novel. I’ve been looking for something.
Don’t diss the kids turning into animals. It paid a lot of bills.
Oh, I’m not dissing that. That’s good clean fun, and part of an old tradition of fantastical story telling. I’m dissing the idea of a competent government in the 21 century. That and the idea of George Lucas writing decent dialogue. Some things are not to be believed.
JP, your last comment makes no sense to me. First off, Mark Zandi? The guy who is always wrong? WTF? How bad was his miss on the last unemployment report? About 150,000 jobs? Not to mention that he works for Moody’s. Exactly how well did they do analyzing all those MBSs? Hey, it’s only their JOB….
Secondly, how is cutting 4T out of 15T fix the problem? And that 15T is just the projected deficits for ten years or so, which given the quality of budget projections in recent years are understating the problem. Plus there’s the 14.5T we already owe, plus all the unfunded liabilities. All that piddling 4T does is postpone the day of reckoning, and not by much.
As for the 10% flow on unemployment – I’m not seeing things get any better any time soon. Where’s the job growth supposed to come from? Michael Reynolds tells me I should either become a successful children’s book author or write a killer app for smart phones. Drew tells me I should go back to school, spend tens of thousands of borrowed dollars to become an engineer – and then not work as an engineer but become a highly successful private equity rapist, er, capitalist benefactor of all the world’s poor. You think I need to buy a fucking Prius.
The one thing you all have in common is that you have no fucking clue what it’s like in the employment market. Locally we’re supposed to be seeing 10,000s of new jobs. But all I’m really seeing are lots of part-time minimum wage jobs related to the tourist industry. And the only people that can get those are people that just lost their full-time slightly better than minimum wage jobs (but with benefits!) in the tourist industry. It was a wet dream of Disney management several years ago to replace a big chunk of the hourly full-timers with hourly part-timers, so the company could pocket the money that otherwise would have gone to benefits. Back when the local UE rate stood around 3% (yeah, you read that right), they couldn’t possibly have done it. I know because I was there and saw how they failed. Oh you should have seen the fear on the faces on the junior VPs as they reported their failure to the senior VPs. You should have seen the quivering jaws of the senior VPs as they reported their failures to the executive VPs. And you could hear the wailing of the executive VPs as they reported the failures to the higher management. Later one could see them walking in the mazes of Team Disney Orlando in rent clothing, for they mourned their lost bonuses deeply. But I imagine they’re well on their way to their targets now, and destined to fly right past them. They’ll no doubt buy some nice clothing to replace the stuff they tore in their grief. I guess that’s stimulative, yes?
Meanwhile, the local stores still don’t have enough customers (I stood in a Target the day before Christmas, and in the middle of the store I could not see a single person in any direction for over a minute – then I got bored and moved), shops are closing down, and businesses continue to lay people off. My wife’s company just laid off 10% of their staff a little over a month ago. They believe that they will now be profitable and not have to lay anyone else off. I don’t really think anyone except the company board believes that, and they only do because they don’t want to believe otherwise. It really is a tightly-knit group, and the lay-offs were painful.
Want to know how bad it is? I’ve been taking my mother to see lots of doctors recently. All of the doctors’ waiting rooms are largely unoccupied. Mom has been going through various health crises for four years now, and in the last few months the waiting rooms have gone from crowded to empty. Same goes for the parking lots around the doctors’ offices. They’ve just emptied out this calendar year. A couple of weeks ago I noted that Mom’s cardiologists had laid off about 40% of their office staff. And a week ago the family physician my wife and I use announced that he was cutting back his weekly hours by at least 30%. (The missus still has health insurance – we can’t afford rent, but we can still afford to get sick!) I’m pretty sure at his age and with several small children he isn’t doing it just to spend more time with the family. Even though I’m sure he’d love to spend time with his children, I doubt he’s even paid off his medical school debts yet. If the doctors in the Medicare-enriched state of Florida are losing business how bad are things getting? (And the dentists went through this two years ago.)
Another smaller example: My sister is in town. She needs to get her hair cut. She started looking for a salon to cut her hair today. The first four places she called had gone out of business since the last phone book came out in January. She then got a couple of hits from places which employed no English speakers. Then she got another run of places that had gone out of business. Six months ago those businesses put their numbers in the phone book, and now they’re gone.
I’ll skip the story about my friend whose wife’s company just went into liquidation. I’ll skip the story about the another friend whose husband has seen two jobs dry up on him from the time he got hired to the time he showed up for work one or two weeks later.
I see government reports of an improving economy locally. What I actually SEE, and what I actually HEAR, is another story entirely.
Where are the new industries to lead us out of this? What’s going to replace the FIRE jobs that have been lost? The manufacturing jobs that have been lost? The service jobs that have been outsourced to India? What’s going to replace all of those wonderful jobs that are getting eliminated over at NASA? Where are the jobs going to come from, jp? The only reason the unemployment rate is coming down at all is because people are dropping out of the workforce. (Okay, part of it is that employers are splitting up full-time jobs into part-time jobs, too. Two part-time workers count as two employed individuals according to the BLS. That’s not much of a win for us schleps looking for work.) If enough people do that, I’m sure the UE-3 rate will drop down to 5% again. I’m also certain that average wages will go lower as more people get stuck doing temp work, as will average real wages as prices go up. (Not to mention lost benefits.)
You can say I’m a Doomer, but I’m living The Dream. I’ve been unemployed for over three years now. I am never going to get hired for anything ever again. That’s a goddamned fact. My skills have completely eroded, for the careers I had and the career I retrained for. No one wants to hire someone that has been unemployed for more than a few months and I’m at the few YEARS stage. I can’t say as I blame them. There’re lots of people looking for work, why hire someone who can’t remember what it’s like to get up and go to work every day? Hell, I’m not even sure I would remember HOW to work on a job anymore. I’m certain I don’t know how to eat shit and ask for more these days – I’ve lost the habit. And I know, personally, dozens in the same boat. And despite what the stats from the BLS say, most of the folks I know have college degrees.
Hellfire and Damnation, I’m educated in mathematics, for Christ’s sake. According to the President and every other dipshit asshole leader in the country, I am what we need more of. I can’t even get a fucking call-back. That also goes for a few engineers I know at the moment. So, we need more engineers and scientists and mathematicians – except that we don’t actually want to give them any jobs.
So where ARE the jobs going to come from, jp?
The jobs aren’t going to come back, and new ones are not going to be created at anything like the rate (and especially not the quality) needed. So I, and a few million of my closest friends, get pissed on, shit on, mocked, humiliated and ground into the dirt, so assholes like Drew and Rick Scott can rape the country till there’s nothing left to fuck over; and assholes like Michael can tell me how fucking wonderful they are for supporting assholes like Obama who help their friends like Drew, Jeffrey Immelt and those wonderful examples of walking talking filth on Wall Street rape the country until there’s nothing left to fuck over; and assholes like you telling me to buy a fucking Prius. It’s a wonderful life!
But that’s okay. It can’t go on forever. Soon enough the system is going to crash. And then the payback begins. I personally look forward to it. It’s not like I’ve got much left to lose, right? I’ve got no future. My wife has no future. My daughter has no future, assuming she doesn’t starve to death before reaching her maturity. So I’m looking forward to the End Days. I’m looking forward to the day when high financiers get slaughtered in their manses. I’m looking forward to the days when lobbyists get staked out on anthills to be disemboweled SLOOOOOWLY for ants to feast upon their living flesh. I’m looking forward to the day when politicians get strung up from the nearest trees en masse. Viva la Revolution, and fuck the world. I’ve got nothing left to lose, there’s no way I can win, and all that leaves is the need for some cheap entertainment. Because one thing keeps getting cheaper: screens. And I see no reason the entertainment shouldn’t be done up in shades of red – it shows up so well on the telly.
And Michael, you might want to avoid the Benford. That book is the second book in a very depressing series of books. Think “The Terminator” writ EXTREMELY large, and the machines always win. I don’t usually require happy-feel-good for my books, but Benford wears me out, and I never finished the series. Ellroy is down-right fun by comparison.
JP,
PCE is still over 70% of GDP has been going up quarter after quarter since Q2 of 2009.
Never mind that investment on the other hand is still well below its previous high and the trend while positive the last several quarters is weakening.
Yes it is all demand, demand, demand…..
We don’t need stimulus plans putting money in people’s hands, we need to get businesses investing again.
Decisions are made on the margin. That is the look at marginal costs vs. absolute costs. Sure there is a gaping wage differential, but China isn’t going to buy up all those manufactured goods. They have to be shipped back. That will close the differential to some degree. Also, other costs might be higher in China as well. That is labor is not the only input. Managing an overseas operation may cost a firm more than if it were closer, for example. In other words, firms also like to be close to their market. So it isn’t just a large wage gap that is at work here.
The problem with this optimistic view is that after WWII there was a much better view of the future. As the military shrunk rapidly in size, the private sector picked up those people and put them to work. Industry shifted from making munitions to making consumer goods that had been lacking for years. As such, GDP grew rapidly in the decade after WWII and the debt-to-GDP ratio dropped as a result.
Also, right after WWII government spending dropped tremendously. The percentage change of government spending in 1946 was a 65% drop from 1954.
What were you saying about austerity? Oh, I know you’ll say that was different from now, but if that is true then you can’t point to our paying down the debt in post WWII years as a comparison to today.
Regarding manufacturing jobs:
World wide manufacturing jobs are on the decline. It is due not to off shoring, that is a zero sum game. It is due to technological advancement and automation. While many wring their hands over this, it is actually a driver behind rising standards of living. It means you are using less people to make the same or even more goods than before. Now that labor can be employed elsewhere in the economy adding even more value.
Here is a great idea to restoring manufacturing jobs, get rid of all the robotics that have been developed and installed in factors for the last 30 years. Go back to having people standing there on the assembly line doing that work.
Where?
I don’t think so. I think robots are gaining on us an IQ point at a time. How long until all manufacturing jobs are automated? How long until fast food jobs and barista jobs and grocery store — oh, wait, that’s already happening.
What jobs can a person with, say, IQ 80 to 95 do that robots either can’t do, or won’t do within a few years?
And it’s not just the intellectually limited. You don’t think computers will be doing better radiology than human doctors in 5 years?
What’s your basis for assuming that jobs will simply appear for the low IQ, or for those whose specialties can be off-shored or automated? And if you say, well, it’s worked out for the last 100 years, I’ll remind you as I did on the other thread at OTB that in the last 100 years we’ve seen the Great Depression, two world wars and the ideological sequestering of a huge part of the international labor pool by communism. Those are specific events with huge impacts on American jobs and prosperity. They are (one hopes) not the norm, or a basis for far-reaching conclusions about the future.
So Steve, you think there other factors that make $3 more expensive then $22.
Name them.
(Specifically, and not in an argument from missing data.)
From the title of your post i remember my golden days where i really enjoyed my all golden days my collage days and all that so thank you to reminding me these days.