Why did so many things start going wrong economically in the US starting around 1980

Great Debates
61

And yet the unemployment rate is not 100%.

Of course I don’t refuse to acknowledge this. It’s true. It’s been true since the dawn of time.

Well, of course. So has pretty much everyone in the entire history of the world who’s ever started a business. You don’t create wealth by employing people you don’t need to, or else Communist countries would have been as rich as all get out.

Iwould point out that the current uptick in unemployment is rather obviously the result of something that had absolutely nothing to do with manufacturing efficiency. This recession is due entirely to a banking crisis.

62

The US military isn’t bloated. The US prison system is, largely because of draconian drug laws.

As for the wealthy “stealing”, well…meet the new boss, same as the old boss.

I think your premise is full of shit.

63

I s Kissinger really wrong? Is Haiti (population >9 million) a better place today, than it was in 1950 (population <3 million)?
Poor countries have a finite amount of resources, and speading them out due to unsustainable population growth seems like a good way to increase poverty.

64

The Netherlands isn’t much bigger and has a much larger population and a higher population density. In fact, most European countries have high population densities. I think Haiti has problems that go well beyond population density.

Japan, with a very high population density, is (in percentage terms) one of the most heavily forested countries in the world. Haiti is one of the most deforested places you could imagine. The problem with Haiti ain’t the employees, it’s the management.

65

Yes, that is the commonly understood definition of “productivity”.

Then you need to look at jobs that can’t easily be automated. That’s why unless you have some particular talent, education is your best option. If you can’t work in a high level service job like lawyer or doctor or financial advisor, you will get stuck in a low level service job like bartender or waiter.

Personally, I think the world is heading towards Idocracy not because of dysgenic pressures, but because increased automation and decision support systems will eliminate the need for most people to use their brains. People will be free to spend their entire lives acting like drunken, childish, morons, taken care of by automated systems they no longer understand the workings of. We will become a nation or reality tv stars trying to amuse each other.

It’s not just about resources. Haiti and the Dominican Republic are on the same island, but have very different economies.

The problem with poor communities (country or neighborhood size) is, IMHO, that they are full of poor people. People who are uneducated, unskilled, unmotivated. These communities are often violent or corrupt and will pray on any source of potential wealth or revenue. Anyone with the wherewithal to aspire to something more typically leaves the community instead of staying to improve it. They become trapped in a vicious circle.

That’s why warehousing poor people in projects is a terrible idea and it might actually be good for Haiti for the population to spread out from overcrowded cities.

66

If there were any truth to that we’d have seen it happen by now, but in fact there seems to be no evidence at all that it’s true. People in highly industrialized countries, where most facets of survival are taken care of them by automation and industrialization, are not getting more stupid than people in non-industrialized countries.

It’s time people retired Mike Judge as some sort of visionary.

Without getting into a huge amount of discussion, the problem in really poor countries is not the people, but the government. Governments in places like Haiti or Cameroon are essentially criminal enterprises; the governments we deal with, while we like to complain about them, are largely benevolent. The PEOPLE of places like Haiti and Cameroon are perfectly decent human beings who would love to make an honest living, but there’s no way you can get very far when the authorities are basically dedicated to stealing everything you have.

67

I’m going to take a somewhat wild-ass guess here…

My suspicion is that somewhere around 1980 and thereafter, the computing power available to diagnostic instruments increased dramatically, allowing devices such as CAT scans, PET scans, MRIs to be developed. In addition to that, other medical avenues such as record keeping and scheduling were seeing that computing benefit as well. I’d also bet that pharmaceutical companies took full advantage of available and cheaper computing power to better produce drugs.

With the existence, effectiveness and availability of the tools, procedures and drugs gained through the huge expansion of computing power in that time frame, there was both a growth of types of previously unheard of procedures, as well as a growth in price as well. Hell, it’s possible that the growth in computing power let insurance companies track things better as well, causing them to charge a lot closer to what the market would bear.

Someone’s surely going to come along and point at legislation or judicial decisions, but this is the theory that popped into my head.

68

Idiocracy? Fuck that! Its Morlocks and Eloi time! Nom nom nom!

69

I don’t distinguish between “government” and “the people”. They all come from the same pool. The people effectively get the government they deserve either through their actions or inactions.

70

This is a big part of it - the major part. Health care is more expensive now because it does a lot more now. Thirty years ago, someone with inoperable cancer would basically be told to go home and die. Today, they can go through innumerable rounds of chemo, radiation, drug therapies, repeated CT scans, etc. Thirty years ago, someone with high cholesterol would be told to watch his or her diet and sent home. If that person had a heart attack, he or she was much more likely to die.

Today, if you have high cholesterol, you can be put on Lipitor or other similar drugs. Angiograms can determine if you have plaque buildup in your arteries, and prophylactic treatments like angioplasties can be done - the U.S. leads the world in angioplasties by a wide margin.

If you do have a heart attack, you’re more likely to survive it - and then you may be prescribed with beta blockers and other post-attack preventative drugs, and perhaps go in for bypass surgery.

Thirty years ago, if your baby was born several months premature, it would almost certainly die. Today, it may survive - at a cost of hundreds of thousands of dollars in medical care.

Three other main reasons why medical costs are increasing: The aging of the population, the wealth of the population, and the 3rd party payment system in the U.S. which removes cost-containment incentives.

Most people’s health care expenses come with old age. As the population ages, health care costs increase. This is going to be a big problem in the U.S. as the baby boom retires.

Wealthy populations spend a greater proportion of GDP on health care because they can afford it. The U.S. spends the highest percentage of its GDP on health care. But then, it also spends the highest proportion of GDP on pets, manicures, toys, cable TV, and other luxuries.

And a system in which insurance is expected to cover 100% of your costs is a system in which the only thing that controls those costs is paperwork and insurance company regulation of services. Consumers and doctors have no incentive to control costs, leaving that control to the one agency least-equipped to do so.

71

Starting in the early 80s, as the Reagan administration decided to quit enforcing antitrust laws, big companies began merging in earnest, and by the start of this century it was common for three or four firms to control upwards of half or more of entire sectors. It happened in retail, it happened in banking, it happened in pet food, it happened nearly everywhere.

It’s small business that is the engine of job growth, particularly after recessions and particularly in an era when big corporations are outsourcing or exporting jobs as fast as possible, downsizing workforces massively etc. The job growth of the 80s and 90s was largely powered by companies that were founded in the 70s – companies like Apple, Microsoft, Oracle, and Genentech. By the time the 2000s rolled around, consolidation was largely complete and the pipeline of small, innovative companies was drier than it had been in decades.

So too much power gained by corporations since 1976 when the Supreme Court declared that corporate money is free speech would be my number one reason why things started getting worse. Add on globalisation, the huge redistribution of wealth from low/middle incomes to the wealthy that started in 1981 which with increased corporate power created our unstable financial system, the stagnation of low/middle incomes leading to massive indebtedness that started around the same time, and a bunch of other things. But those are the main ones, till I remember something obvious I forgot.

EDIT: apologies for the appalling use of commas in this post.

72

Henry Ford payed his workers well enough that they could afford to buy the cars they were building. He had some really screwed up notions in other areas, but that thing he got right.

WalMart pays it’s employees shit, and squeezes it’s suppliers for every penny. When the employees of the stores that failed when WalMart came to town stop buying because their unemployment ran out, WalMart’s solution is to squeeze even harder so they can get thier prices down to welfare level.

If it were only WalMart doing it, it wouldn’t be such a big thing. But when every industry is outsourcing right and left, the Americans that are put out of work can’t buy the stuff no matter how cheap the outsourced labor made it. It’s not so bad while you still have a job, stuff getting cheaper all the time. Of course you have to tolerate the drop in quality, and the premium for what quality goods still exist becomes higher, because the loss of market kills the economies of scale they once had.

Eventually, though, you or yours will end up unemployed, and it all won’t seem such a great thing. You’ll be one of the many pushing wages down for those who still have a job.

Capitalism works out well for everyone in good times, but when you start shitting on the workers during hard times, it becomes a race to the bottom, where even the winners are losers.

73

There needs to be a big redistribution of wealth from the wealthy to low/middle income earners to make up for the big redistribution of wealth from low/middle income earners to the wealthy that has taken place since 1980. Until it happens we won’t see any sustainable economic recovery. We could do with a substantial diminution of corporate power too. Unfortunately things are all moving in the wrong direction still, possibly even picking up pace.

74

I hate to produce those pesky facts again, but a Ford Model T cost about 4 month’s pay for an assembly line worker.

Today, four months’ pay for an assembly line worker at Ford will buy him a 2010 Ford Focus like this.

The Model T was an open-air vehicle with no amenities, 20 hp, got 13-21 mpg, had a top speed of 45 mph, and all the crashworthiness that a pile of riveted steel with no padding and no seatbelts can provide.

The Focus has heated, leather trimmed seats, an in-car hard drive based audio system that syncs to your iPod, air conditioning, air bags all around you, seven times the horsepower of the Model T, and you don’t have to crank it to start it.

The improvements are brought to you courtesy of the capitalist system you guys like to bag on all the time.

And a Wal-Mart employee can do the same thing, provided he or she is willing to take a car that’s 2 or 3 years old, which is still stupendously better than the old Model T.

75

And you can get it in more than one color! :stuck_out_tongue:

-XT

76

“What do you mean we have a flat tire? It doesn’t count until all four tires are flat! Keep driving!”

77

Really? Because I seem to remember a million little start ups here and there during the 90s.

78

Where are all the jobs then? We just went through a decade creating zero jobs. We created tens of millions of jobs every decade previously.

79

IOW, reality doesn’t conform to your world view, you don’t understand why, so instead of trying to grasp what he’s telling you, instead decided to post the above as if it says something. Right?

-XT

80

Seriously? What was the unemployment rate through the 90’s? What was the unemployment rate until 2008? Or are only menial labor or factory worker/manufacturing jobs real to you?

-XT