The True State of the US Economy: What the Mainstream Media Won't Tell You.

[SillyWilly]

Is there something the main stream media in the US isn't telling us about the economic recovery? I'm talking about CNN, Fox News, CNBC, Bloomberg, local broadcasters, etc. How bad are things really in the job market? How far has the job market really deteriorated?

Check out the latest data at this link: http://johngaltfla.com/wordpress/2012/0 ... ed-to-see/

Some of these charts are just plain scary. Non-durable goods employment down to pre-1938 level! That's right...75-year lows! Manufacturing jobs are down to 65-year lows. Construction employment is down to early 1990s level.

Most new jobs are in the service industry, where people - young and old - make minimum wage flipping burgers and cleaning floors. How do you create wealth for yourself and for a nation flipping freakin' burgers?

My guess is if the Fed doesn't act soon to help this ultra-anemic economy in the US, the world will enter a massive Great Depression-like deflationary period that will destroy millions of ordinary middle-class hardworking people all over the world, but especially in the US. More jobs need to be created in manufacturing - where real shit is produced and exported.

An if you think you're safe in Taiwan, think again. Those millions of unemployed Americans who can't find jobs in their own country, sooner or later, start looking abroad for employment. If even a few thousand extra American ESL teachers find their way to Taiwan, wages will decline and the standard of living for current ESL teachers in Taiwan WILL decline further.

The Fed needs to act ASAP to stimulate the economy in such a way as to create jobs that create wealth. How they might do this remains a mystery. They're supposed to be the smart ones and the experts on The Great Depression.

[NonTocareLeTete]

But what is the fed supposed to do? It's an honest question, and by your own admission you can't answer it. What are they supposed to do that won't fuck tax payers? They can create a house of cards that LOOKS good momentarily but the truth is that they are already in massive amounts of debt.
And why would anybody manufacture anything in America, when it can be done for a fraction of the cost abroad? Are you going to go to the store and look at two nearly identical products, one which costs $5 and one that costs $3, and buy the five dollar one? Who's going to do that?
Really, these are honest questions, I don't know the answers. When I think about this stuff my first inclination is to run away screaming.

[cfimages]

More jobs need to be created in manufacturing - where real shit is produced and exported.

There are only 2 ways that could happen.

1. American companies have to be willing to forego substantial profits to be able to sell American-manufactured goods at the same price as they can sell Chinese-manufactured goods.

or

2. American consumers have to be willing to pay substantially more for the goods.

I can't see any other way it'd be possible.

[NonTocareLeTete]

There are only 2 ways that could happen.

1. American companies have to be willing to forego substantial profits to be able to sell American-manufactured goods at the same price as they can sell Chinese-manufactured goods.

or

2. American consumers have to be willing to pay substantially more for the goods.

I can't see any other way it'd be possible.

Yeah, 2 is just against human nature (I know many many staunch environmentalists who live in much the same manner as people who don't care about the environment, and I know a great many so-called socialists and communists who happily live to a higher standard than much of the world- people don't live by what they believe, they live in whichever way benefits them the most) and as far as 1, I don't think it's just about foregoing profit- It's that the workers, energy, rent, supplies, and everything else are way more expensive in America. Just abiding by regulations makes doing business anywhere else preferable.

As usual, many people clamor for a solution, and blame the people in charge, but have no solution themselves. Not that I'm criticizing Mr. Silly- opening a discussion is important - I'm just sick of people saying "SOMEBODY'S GOT TO DO SOMETHING!!!" Okay. Who? What? If you don't know, how do you expect someone else to know?

[cfimages]

There are only 2 ways that could happen.

1. American companies have to be willing to forego substantial profits to be able to sell American-manufactured goods at the same price as they can sell Chinese-manufactured goods.

or

2. American consumers have to be willing to pay substantially more for the goods.

I can't see any other way it'd be possible.

Yeah, 2 is just against human nature (I know many many staunch environmentalists who live in much the same manner as people who don't care about the environment, and I know a great many so-called socialists and communists who happily live to a higher standard than much of the world- people don't live by what they believe, they live in whichever way benefits them the most) and as far as 1, I don't think it's just about foregoing profit- It's that the workers, energy, rent, supplies, and everything else are way more expensive in America. Just abiding by regulations makes doing business anywhere else preferable.

As usual, many people clamor for a solution, and blame the people in charge, but have no solution themselves. Not that I'm criticizing Mr. Silly- opening a discussion is important - I'm just sick of people saying "SOMEBODY'S GOT TO DO SOMETHING!!!" Okay. Who? What? If you don't know, how do you expect someone else to know?

By foregoing profits I meant that to sell goods for the same price, the extra expense of doing business (all the things you mentioned) would have to come out of their profit if it weren't being passed on to the consumer.

[SillyWilly]

Really, these are honest questions, I don't know the answers. When I think about this stuff my first inclination is to run away screaming.

Ditto!

[SillyWilly]

More jobs need to be created in manufacturing - where real shit is produced and exported.

There are only 2 ways that could happen.

1. American companies have to be willing to forego substantial profits to be able to sell American-manufactured goods at the same price as they can sell Chinese-manufactured goods.

or

2. American consumers have to be willing to pay substantially more for the goods.

I can't see any other way it'd be possible.

As usual, many people clamor for a solution, and blame the people in charge, but have no solution themselves. Not that I'm criticizing Mr. Silly- opening a discussion is important - I'm just sick of people saying "SOMEBODY'S GOT TO DO SOMETHING!!!" Okay. Who? What? If you don't know, how do you expect someone else to know?

There is a third way!



I think I know a way, but Americans are going to hate it! Here it is: Make your currency dirt cheap relative to other currencies. I.e. Start a currency war that boosts exports and reinvigorates the manufacturing base. This is a decision the government will make for the people. Corporations won't have a say and American consumers won't have a say. Will manufacturing employment increase? Certainly.

Will the median household get wealthier in a dirt-cheap dollar climate? Certainly not, but the US will return to a mainly manufacturing economy and not a predominant service economy. This will be very very painful for especially middle class America. Their standard of living will drop substantially, maybe even as far as Third World living standards. I DID SAY Americans WOULD HATE IT! But it might be the only way to steadily grow the manufacturing base in the US again, even if it leads to the extinction of the current middle class.

It would be what they call in golf, a mulligan - a do-over. The US can start afresh to build a strong manufacturing base and compete with Brazil, India, China, and the rest of Asia and in the future rise again to a world economic powerhouse. They did it before, they can do it again. But it will be painful to the extreme.

That's why the government won't ask for permission to devalue the currency, they'll do it surreptitiously by way of AND HERE IT COMES....huge quantitative easing...massive trillions and trillions of dollars worth of bailouts and stimulus packages. Those dollars will flood the economy like a tsunami, the velocity of money will spike, people will rush to get the hell out of the US dollar into anything else as the value of each dollar in circulation declines in value, and when all is said and done, the USD will be worth 40-50% less than before the Great USD Devaluation.

It's not an ideal solution (not even close), but it's something I'm sure the Washington bureaucrats are considering to save the country from ultimate failure and long lasting depression. Better controlled than spontaneous market-driven devaluation.

[headhonchoII]

More jobs need to be created in manufacturing - where real shit is produced and exported.

There are only 2 ways that could happen.

1. American companies have to be willing to forego substantial profits to be able to sell American-manufactured goods at the same price as they can sell Chinese-manufactured goods.

or

2. American consumers have to be willing to pay substantially more for the goods.

I can't see any other way it'd be possible.

There are many ways to do this actually.
-Adjust trade policies to incentivise manufacturing in the US using tax penalties/carrots, push for overseas profits to be be brought back and invested in manufacturing plants in the US using tax amnesties and new penalty laws
-Slap on import tariffs
-Adjust currency vs other currencies
-Improve productivity (but at the same time this usually reduces job opportunities)
-Speed up plant approval and adjust environmental policies
-Reduce energy costs and offer stable supply

The manufacturing cost gap is getting smaller all the time. The problem now is that many industry clusters exist outside the US, e.g. electronics in China/Taiwan/Korea/Japan, heavy machinery and tools in Germany.

American consumers could pay a bit more for goods if they earned more collectively, they could earn more if they had jobs and there was a tight job market!

The service economy intersects with the manufacturing economy. It is not either/or. I work in a manufacturing company, but a huge part of our group earnings is now customised production which involves heavy service element and close contact with customers. We also need scientists, researchers, business analysts, logistics people, accountants, marketers, sales people, designers etc.

These are just the direct jobs, obviously the money earned percolates down to other service and manufacturing providers in the vicinity and contributes tax revenue to fund public sector jobs and services.

[Belgian Pie]

The only true answer ... globalization doesn't work, FTA's don't work, It only works between equal partners, as long as living standards around the world are not equal it won't work. It goes both ways wrong.
A country needs to be in charge of it's own manufacturing and have a majority of production and sales domestically, exports-imports should be a 'by-product' ... for select products and services.

Globalization only works for multinational companies with production and sales worldwide. They are basically the only that make money ... for the shareholders.

There are enough examples worldwide ... just look at NAFTA, did Mexico profit from it? Did the US profit from it? Both big NO's!
Who got bigger, the huge agricultural/commodity companies in the US, without creating to many jobs.

Have a look at what happened in Europe.

[dan2006]

People will also need to lower their standards as well.. You won't be able to get that $30/hr union job standing around doing nothing anymore.

But while the regular people will need to take a cut in living standards, so the CEO's will have to as well to lead by example.

Its a complex problem with no answers I think.