But the big Chinese surplus came from government policies discouraging internal consumption and encouraging savings - and trade barriers also. I’m getting over my head here, but wouldn’t cheap borrowing encourage the deficits we’ve seen, which was definitely stimulative. They also reduced interest rates which helped drive up housing prices, which encourage borrowing on the paper appreciation of housing, which definitely drove consumption.
Say Greenspan had let interest rates rise in 2003/2004, after the recession was over. (OK, 2003 - he’d never do that in an election year.) Housing prices would moderate, consumption would fall, and the bubble would deflate - gently, we hope. That would reduce consumption and improve the balance of payments a bit, and we might have gotten to a stable situation with a much reduced level of pain.
Sorry, you’re right. I don’t think they could really do this in a practical sense, even under Bush.
But the point is, and I think you’d agree, that bad things can happen through natural market forces, which drive the same behavior as collusion would. The Invisible Hand often winds up in our pockets.
You didn’t answer my question of how Chinese surpluses, or any country’s money, can directly reduce our interest rates or open up more funds for borrowing. I must be missing something, because lots of people repeat it as fact, but my analysis made plenty of sense to me.
More money to be lent drives down interest rates at auctions. Lower interest rates increase demand for loans. The extra money for mortgages came from mortgage backed securities, which helped increase the market for home loans and drive up demand. This encouraged lenders to lend to more people, and the desire for higher returns encouraged subprime mortgages to be written. It is clear the mortgage brokers, at least in some places, got incentivized to write these.
I’d guess that there was some additional flow of money to China coming from offshoring, which would reduce wages that would stay here. This also increased profits, which went to the top few percent and which might have also encouraged the expansion of high return mortgage backed securities. I’ve never seen an analysis of is part of it, so that is just a guess.
You expect that, given your job, you should have a higher standard of living than you do. I would like to know where that expectation comes from. I mean what is “general office grunt work”? Did you go to college for that? What kind of career path does an office grunt have?
My point is that we have an expectation of what our American standard of living should be and that it should continue to keep going up. Fair or not, it will not continue to go up and may even decrease if America does not stay competetive.
No, I fucking don’t. I am angry because sanctimonious twits expect me to accept an even lower standard of living than I already have, which isn’t very high by American standards.
Screw that. I’m not going to write a goddam autobiography for you. To have worked so damned hard for such a modest standard of living, and then have some twit talk to me as though I were a spoiled teenager sulking because his parents bought him a new Ford instead of BMW–that really is just too much.
And my point is that millions of people like me never participated in that standard of living to begin with. If you tell someone who’s lost his $12/hour factory job with benefits to outsourcing and now makes $7.50/hour stocking shelves without benefits, that his resentment is due to some irrational “sense of entitlement” – well, you’re liable to get a punch in the mouth. And you’d deserve it.
You ARE acting like a spoiled sulking teenager. You think that someone should pay you $X dollars whether or not there is a need for your labor. And when someone tells you otherwise you resort to insults, :rolleyes: faces, and impotent threats of violence.
I don’t want you to think that my attitude is “screw the poor”. What I am saying is that we need to figure out how to make it more attractive to bring working and middle class jobs to the US.
Yes your current living situation is “modest” but that’s irrelevant in comparison with the rest of the world.
You say you drive a 13-year-old used car? Several millions in Asia, Africa, Latin America are driving used bicycles. Or walking several miles to fetch their daily water needs. Are you “entitled” to a new car or even a used one? Not really. You need to compete for that car (and also compete for the petroleum resources to fuel that car) against the millions of poor people in the global economy that want to raise their standard-of-living and trade up from bicycles to cars.
Your sense of not being able to “accept” a lower standard-of-living is of no concern to the citizens of developing countries. No need to punch msmith537 in the mouth… you need to redirect your hate out on the millions of Chinese, Aficans, Latinos. What’s your proposal? Wanna nuke em?
You are defining “competitive” as a race to the bottom. Competing to offer the lowest pay and worst conditions just makes life hellish for everyone but the rich, and eventually will create the conditions for major unrest. While I’d like the Left to become more powerful in America, I’d rather it not be the sort of revenge driven Left that dumps capitalists in mass graves, which is the likely long term result of your ideas.
Forget the punch in the mouth. The owner of that factory is going to wonder why he isn’t selling his product anymore. The people he now employs in China can’t afford it, and the people he used to pay can’t either, now that they’ve maxed out their credit cards and they’re behind on their mortgages.
And what is it you think the Left is going to do for you? Force companies not to outsource? Provide massive benefits to working class poor out of the pockets of the wealthy? Create unskilled jobs out of thin air for the undereducated to work at? Errect trade barriers to isolate the United States from the world?
Force the rich to pay their fair share. Put in ( or rather, put in AGAIN ) the kinds of regulations that can prevent this kind of meltdown. Create a national health care system, which will make for a healthier America for less money. Crack down on monopolies and corruption and corporate crime instead of looking the other way. Impose better environmental and safety regulations. Fight such dangers as terrorism effectively. And a wide variety of other things. The Right is incompetent, corrupt, amoral, greedy, and often outright malignant or irrational. Among other bad qualities.
Various ways; gambling ( stocks and such ), various forms of money shuffling where money is all they contribute, fraud, as parasites on the people who do the actual work, or they inherit it, or steal it via some legal loophole, or the government, or more likely a combination. Luck, obsession, and ruthlessness.
Mainly, by people building and inventing and creating and working while the wealthy feed off of them. It’s seldom the people who actually contribute who get the monetary reward.
50 years ago the strength of America was that we manufactured and built things. Along with that was innovation and invention. They are part of the package. You train engineers, computer pros and management to feed and develop the creation of industrial and consumer goods. The international corporations moved everything off shore. Our strength became someone else’s strength. China and India need manufacturing engineers and computer pros. They need people to work in their factories. We so not. It was our strength.
The financial pros stepped up to the rescue. We dropped fed rates low and lending became easy. China needed us to buy their products. We were the biggest consumer of goods on the planet. So China was nice to us. We bought and bought. But when the financial sector collapsed, we had nothing. Our purchasing power in on the wane. We do not built nearly as much. To drop our wages to compete ,diminished our buying power. Layoffs and bankruptcies roared. What do we have to offer the world? There will be a point where the world does not need us. It is coming soon.
The international business men acted in an un-American way. They removed the jobs and diminished our importance to the world. They knew what they were doing. But, damn they got rich. That part is American.
Um yeah. INTERNATIONAL business. Businesses with facilities and infrastructure and employees from all over the world. They are under no obligation to take your Americentric view of the world.
So if us Americans want to have nothing but used bicycles, and multimile walks for drinking water we should follow your theory?
What exactly is your point? Yes the world is shitty, but American workers have fought hard to get livable pay at safe factories with nonabusive work schedules. You just want us to give those up? We’re “entitled” for wanting to keep the high standard of living our country has worked hard for most of it’s existence to get and maintain?
Fuck that, and the subhuman trash who advocate it.
I know they are not, but they did not come up with a new anything. Our companies moved everything,lock,stock and intellectual property to countries that had cheap labor, no pollution laws and the employees had no rights. The companies made huge short term profits. That is what they do. The bosses get huge profits by cutting American labor and moving factories. The old idea of competition has gone away. It is about keeping a lid on workers and escaping laws to make a bunch of money short term. Long term, America becomes a second class country with no means of production and huge unemployment. The upper class owners get even richer and more powerful. The rest just suffer.