Has the recession created a "lost generation" of permanently unemployed?

Great Debates
81

This is sad, yes.

Bernard Lewis is a researcher who has written about Islamic terrorism. He claims a good deal of the impotent rage that westerners find so confusing is because Islamic nations used to be a world leader on the political stage. Now they are consistently near the bottom on various comparisons (human rights, economics, political influence) and as a result people grasp at desperate philosophies to regain that lost sense of power and prestige. Before Islamic fundamentalism became popular in the 70s & 80s, Pan Arabism was the desperate, failed philosophy of renewal and rejuvination. Saddam Hussen was one of the last Pan Arabists and that was partly why he invaded Kuwait and wanted to invade Saudi Arabia.

Anyway, point being, the US is going through the same process. We used to claim we were the ‘best’ country on earth. Now we are closer to the least good OECD country. Now third world countries are lapping us. Brazil was a military dictatorship 20 years ago, and they have universal health care. The US, with our 200 year history of democracy does not. Human rights in third world countries are starting to lap our own. Third world nations are starting to shame us with their civil rights, safety nets, levels of democratic participation, effective political leadership, job growth, etc.

And angry, frustrated people who feel their national and personal prestige, autonomy and power are falling apart make easy picking for radical philosophy which seeks to blame ‘those impure people’ for the fact that prestige, power and influence are rapidly slipping away. That is the breeding ground of fascism (Islamic terrorism is arguably a form of fascism since it is a militant, RWA philosophy based on a desire for renewal, rejuvination, purification and a return to the ‘good old days’ of power and prestige, at least for the right people and the purified nation as a whole).

There is a strong ground for fascism to become more and more popular in the US as we keep slipping down the global socioeconomic and political totem pole. And I think the tea party is just the beginning. A few years ago a mainstream senate candidate calling for more Tim McVeigh style attacks (which Sharron Angle did with her 2nd amendment statement) would be unthinkable. Now it barely registers. But I don’t think we will ever go into full on fascism. But that is just my opinion.

82

Allow me.

Country A makes X very efficiently and Y merely good enough. Country B makes X badly and Y a little better, but still not as good as country A makes Y. Economic theory dictates that Country A should stop making Y and concentrate on X, trading with Country B for Y even though it could make Y better. Country A will be better off than before because it can devote more resources to making X very well. Country B will be better off than before because it now has a market for its’ Y.

Sound about right?

It’s a staple of economic theory. Annnnnnnnd it’s wrong.

The problem with this theory: what if the market for X collapses or changes such that Country A is no longer competitive? What if, during the period of no Y production, Country B becomes much more efficient to a degree that Country A could no longer dominate the market in B if it resumed production? Remember, when Country A stops making Y, they are also over time losing the knowledge to make Y (and they stop thinking about how to make Y more efficiently) and losing trained Y producers. Country A’s manufacturers would have closed down, died out, retired, or merely become acclimated to perhaps a drastically different business when working to make X…which now they can no longer compete in, either. Country A is outcompeted in making X and no longer accustomed to making Y.

Kids, can you say, “don’t put all of your eggs in one basket?”

Books on investing don’t always agree, but they usually agree on one thing: don’t invest just in one thing. You have to diversify.

Sage nods all around, right? Yet this is precisely what economists are arguing against when they quote the so-called principal of comparative advantage.

By Country A making both X and at least some Y, it can at least keep it’s hand in for a share of the Y market. If conditions shift and they take a competitive hit in the X market (or the market just collapses permanently, as in, say, the buggy whip business), Country A can leap into the Y business with both feet.

Consider the phrase “Banana Republic”. It’s not just a metaphor; there are indeed some countries that do almost nothing but grow and export bananas (or some other product) because they have the right natural resources. But what if some other country suddenly starts growing bananas more cheaply and undercuts their price? What if some banana-killing disease decimates their crops? Then what?

Business-wise, today’s Golden Goose can swiftly turn into tomorrow’s White Elephant. The moral of this story: diversification isn’t just for investors, it’s for countries, too.

83

To do what exactly? Force misguided regulation that will ultimately harm them?

84

I believe in free trade but its not a religious faith…

While a tarriff on buggy whips is not likely to save any buggy whip jobs, a tarriff on cars is likely to save a few auto jobs in this country. Regardless of whether or not Honda makes cars in the US, they import a lot of cars as well. If you applied a tarrif, its hard to imagine that Honda wouldn’t move more of their manufacturing to the US.

The flattening of the world is structurally changing the value of labor in the US.

Yes and that entire time, wages in the US drop.

Its definitely bad for growth but is it worse than what we have now?

I would generally be OK with the absence of tariff if other countries were playing on a level playing field but they routinely play game (and we play them too but we are just not as enthusiastic about it).

I also think it is fair to apply a tax to counter the externalities they impose through pollution.

[quote=“Susanann, post:66, topic:549657”]

And how do our imports look? We have a annual trade deficit of about a trillion dollars. Most times when I see people talking about comparative advantage, they don’t talk about trade deficits a whole lot.

Most consumer products (other than food and things like that) are imported. There is really no point arguing that. But do we really need to manufacture can openers to be a viable economy?

The trade deficit is about 50% oil imports.

If we focused on domestic technologies that would reduce or eliminate this single import, I think it could work out pretty well for us.

85

There was such a movement on the West Coast circa 1932, but it was promptly taken over by Stalinists. That was probably just fine and dandy with the local authorities, who then had a ready-made excuse to crack down on it.

msmith introduces the disturbing implication that the un- and underemployed cannot be trusted to know what is in their own best interests.

86

Sure the US could probably do better during a trade war than almost any other country in the world. Its still probably something I don’t want to have to live through.

On the other hand, this is really not like the buggywhip makers going out of business. This is a paradigm shift as the cost of labor is flattening around the world and we will have an ever increasing diminishing need for unskilled labor.

Places like Korea on the other hand have the opposite problem (80% of high school students go on to a 4 year college and there simply can’t be enough jobs for all of them when they graduate). A large educated labor pool with more unskilled labor jobs than people willing to take them.

87

What’s the definition of “American manufacturing” being used in these figures? Is it items manufactured on American soil, or items manufactured by US companies wherever production might be located? I suspect the latter.

88

I’m to tired to look up a cite right now, but, yes, American still has a very healthy manufacturing sector, just counting the goods produced on US soil.

One of the reasons that things look bad on the ground is that most American manufacturing produces high-end goods like nuclear reactor parts, instead of widgets and T-shirts. Plus, since much of our manufacturing utilizes high-tech robotics and “clean room” type factory floors, the job structure and training is much higher level.

This means that there just aren’t a lot of “Blue Collar Joe” type jobs available in America. It’s a problem, since a portion of the population isn’t smart enough to move into other occupations. I don’t know the solution, but going backwards isn’t it.

89

I think there is a good chance of turning the trend of chronic unemployment, our vanishing manufacturing base, stagnant wages, wealth gap, and other factors contributing to the decline of the US economy around.

More and more people are realizing that “free trade” is anything but free, and that yes, the master plan IS to drive down wages, benefits, workplace and environmental standards to a global common denominator, as low as possible.

When we see record corporate profits and CEO salaries and bonuses, record gaps between the top richest 1% and the rest of us, it is obvious that there is PLENTY of money/wealth to go around. It just ain’t GOING around…it is staying put and/or gushing UP instead of trickling down.

Dammit, the US should be upholding HIGHER standards of living/wages, not kissing the ass of the multinational corporations and their stockholders who are trying to herd us all into the pen of a global minimum wage somewhere between China and Europe.

FUCK “competing” with slave wages around the world. The “economy” is not some magical, inevitable thing, it is a system we have created and have the power to modify to suit our needs.

I’ve no doubt if we don’t take action to prevent it, absolutely, we are headed for much higher and permanent unemployment for BILLIONS. Read an excellent book a while back called “The End of Work” on the subject. (which, btw, had some good suggestions for things which can be done to prevent or mitigate this crisis).

On a personal note, as a 44 yr old returning college student who finally decided to return and get that higher degree I’d always sort of fantasied about but never gotten around to, but finally did after 9 mths or so of unemployment…

I hope to find work after I graduate. Going to be another yr and a half or so going FT, so I hope things open up a bit by then. It’s still pretty tight where I am (placed myself on call with my temp agency for the summer and to date, have not worked). Yes, I have an excellent resume and they kept me busy constantly before the economy tanked, several months before Bush left office as I recall.

If all else fails, I may have to start my own business (I’ve run a couple before and know the ropes). But I sure hope things don’t turn out that dire (not that I didn’t ENJOY being a small business owner, but if I can’t find a JOB, that’s an overall bad sign, imo) :eek:

90

Here is one: http://www.fivethirtyeight.com/2010/02/us-manufacturing-is-not-dead.html

91

Of course, now that there homes have been foreclosed on, their kids have moved back home because they can’t find a job, they had to sell the matching furniture to get the security deposit on a rental after they were foreclosed, and they’re raping their retirement account just to get by life does kind of suck…

It seems you’re buying into the myth that by being “responsible” you can’t suffer economic misfortune. I hope you never personally experience that fate, but you really can do everything right and wind up losing everything.

92

My God, how those sentences make my blood run cold.

93

Ah, you know the specific group of people I’m talking about? No, obviously you don’t because none of them have had their homes foreclosed on (several of them have paid off mortgages, which really means the chance of foreclosure goes down).

I SPECIFICALLY gave the disclaimer that this was a SPECIFIC group of people - other groups and other areas of the country may differ. But in MY GROUP of friends, there is a definite correlation between those who “were responsible” when responsibility was available, and not suffering unduly at this time.

94

Let’s assume unemployment is seriously underreported and is close to 20% once you’ve counted not only those without jobs seeking work, but those who have given up looking for work and those working part time when they need full time work. Does it make any sense under those conditions to accept large numbers of immigrants, most of whom are unskilled labor who will wind up costing us more than they produce? Bear in mind that, to maintain the current quality of life, we would have to add infrastructure equivalent to twenty five cities the size of Los Angeles over the next three decades to accommodate a hundred million newcomers.

You think we’ve got the money? You think our economy can expand without limit? You think the United States is going to be wealthy and powerful forever?

It boggles my mind that anyone would seriously believe that immigrants aren’t taking work away from citizens.

95

It’s not “multinational corporations” that are the problem. At least not companies like WalMart, General Electric or Microsoft. The root of the problem, IMHO, is that the way our system currently works, it essentially makes everyone litterally serfs to the banks. In order to “get ahead”, people need to take out massive loans so they can afford to go to college and buys homes and cars. A $100,000 student loan plus a 30 year mortgage plus most people’s reckless credit card spending is pretty much an obligation to work for life. And some percentage of every dollar that you earn has to go back to the bank.

And what do the best and brightest do to earn enough money to pay off this obligation? They go to work for those banks. Except they just take out bigger loans in order to live a much higher standard of living.

Yes, we can modify the institutions and laws that govern our economy. Of course you have to ensure that the people placed in charge in creating and running those institutions aren’t manipulating them for their own benefit.

And of course, you have to figure out what everyone’s “needs” are and what they truly need vs what they are willing to give up.

96

One thing that I learned in economics (and college in general) is that just because you intuitively believe something works a certain way, does not mean that is in fact how it works.

To a certain extent, yes, immigrants do depress wages. Mostly for unskilled, low-income jobs. Professional jobs are typically not affected.

For the most part, studies seem to indicate that illegals contribute to the tax base at least as much as they take out. Remember they still pay sales tax whenever they buy something. They may take out more at the local level than they put in, but everyone does.

And for the most part, they are here DOING WORK.

I don’t know where you got 100 million people, but the Center for Immigration Studies estimates their population to be about 11 million people (a little over ONE Los Angeles). In any event, if we did need to build a few more cities worth of infrastructure to accomodate illegals, I’m pretty sure a lot of that would be built by the illegals themselves.

97

[quote=“LonesomePolecat, post:94, topic:549657”]

You think our economy can expand without limit? You think the United States is going to be wealthy and powerful forever?[/qyuote]

Economies can in fact expand without any meaningful limit, can’t they. Immigration is not the problem, it is the rate of immigration that is teh problem.

If illegal aliens disappeared (and were not replaced by some sort of bracero program), we would end up importing all our produce from South America. That’s as close to economic fact as we can get.

Talking to my landscaper, the pays about $10/hour to his illegal alien workers. He charges me $40 to mow my lawn. If he had to hire non-illegal aliens, it would cost him at least double that and he would have to charge me $60-70 to mow my lawn. I would probably just mow my own damn lawn. That is a job that wouldn’t exist without the cheap labor.

On the other hand, if I had to hire a nanny from one of the nanny services and pay their rate, my wife would simply quit her job and do it herself. I guess in that case they undocumented housekeepers and nannies allow my wife to take a job that might otherwise go to some single woman or man but that doesn’t really seem like an improvement to me.

If we enforced immigration laws in construction companies, the cost of housing would skyrocket. perhaps this would be good for our current real estate inventory but it would ceratinly maake it difficult for those whoa re just starting out.

98

Right: To ordinary consumers it may look like the U.S. doesn’t manufacture much anymore, because the stuff they see at Wal-Mart, for example is all made in China.

But that’s because the most valuable products made in the U.S. are not consumer goods. They are things like pharmaceuticals and other medical devices, chemicals, airplanes and spacecraft, non-consumer high technology, etc.

99

Sort of like how the Irish, Germans, Italians, Greeks, Jews, Chinese, Koreans, and Russians have been taking all the jobs over the last couple of centuries?

Or do you feel you have some inherent right to a job, based on the order your relatives settled here?

100

I think if more people took a step back and realized how broadly true it is, a lot of us would shudder.

Of course, after that, we’d just go back to business as usual. Awareness, by itself, changes very little.