Re: OT Prepackaged Bankruptcy for Big 3 ? - Big Problem


"Frank Howell" <fphowell@xxxxxxxxx> wrote
Bruce S wrote:
"Frank Howell" <fphowell@xxxxxxxxx> wrote
Bruce S wrote:

This premise is false. We keep producing more manufactured product
every year - that is, in fact, creation of wealth. We have now, and
will have for the forseeable future, plenty of wealth to spread
around to the population.
Bruce

The problem is that the decrease in production jobs due to the
increased production via better machinery, etc is going to take it's
toll in overall reduced wages.

Your problem is that your reasoning is limited by your education
(true for everyone). When we talk about creating wealth, most people
think about manufacturing things (cars, toasters, TVs, etc.), and
fail to consider all the other things we make in this country that
contribute to the creation of wealth, but are not manufacturing. Consider
computer software, books, movies, TV shows, CDs, and all
sorts of other things in that vein. Further consider things like
patents and licensing agreements where the money comes back here,
regardless of where the work is done. There are lots of ways to
create wealth.

Agreed, that it is not as simple as I put it. The scale of our GDP is huge
and certainly encompasses more then manufacturing jobs. As far as CDs,
movies, software and TV shows I just don't see that they have ever been
vital to small and medium towns in America justs as I don't see patents
and licensing agreements as germane to most small and medium towns
economies.

When you put water in the trough, it doesn't matter if you put it in the
near end, the middle, or the far end, eventually the entire trough is
filled. Same with money in our economy - doesn't matter if you put it in in
New York, Hollywood, Nashville, or Denver, eventually, that money spreads
out thru the country. Just exactly the same as it would if it was put in in
Detroit, or Pittsburg (back in the steel making days).

There are thousands of products that used to be made domestically,
that are now made offshore. Toasters, furniture, appliances, shoes,
clothing, etc that at one time were made domestically, and
historically provided higher paying jobs then the service sector
jobs that have replaced them. All those jobs provided not only
higher wages, but also stayed in local and regional geographic
locations adding to those local economies and tax base.

It is a myth that manufacturing pays better than service. Sewing
machine operators in sweat shops are manufacturing jobs, lawyers are
service jobs - which would you rather have your kids doing? And as I
said above not all jobs that create wealth are actual manfacturing.
Actors make good money, but are not manufacturing anything.

No, not all jobs are manufacturing, but we can't all be lawyers, dentists,
doctors, etc.
With a large highschool dropout rate in most major cities approaching 25%
it would appear that a significant segment of our society is opting out of
white collar jobs.

People who drop out are opting out of a lot more than white collar jobs -
and I don't give a rats ass what happens to them. People make choices, and
they can then live with the consequences of those choices. All I was saying
was that not all service jobs are flipping hamburgers for minimum wage; some
are nurses making a professional salary.

Your view that we are producing more wealth to spread around doesn't
smell right to me. I see the wealth leaving local and regional
economies and going into Gigantic corporations tills. I see vast
sums leaving the US and supporting other countries economies, which
is not all bad, as other countries want to raise their standard of
living and live the good life. But at what hidden costs to the US
local economies is the crux of the problem.

That is all part of the myth of "balance of trade." We do not need a
balance of trade in order to keep the wealth right here. When you get
caught up in that type of thought, ask yourself if you have a balance
of trade with the supermarket. Do you get as much money from them as
you give them? If not, how can you survive - you don't have a
balance of trade, and are constantly losing money. Why aren't you
broke yet?

Are you telling me that during recent energy crisis, in which the US
imports 60% of it's oil, and paid billions to both OPEC and non opec
countries, that we didn't come out poorer for that fact?

Yes, that is exactly what I am saying. We spend several hundred million
dollars per year on imported oil. For that money, we receive oil. It is a
fair trade, just like when you go to the supermarket, you spend $100 and
come home with $100 worth of food. If our trade in oil made us poorer, then
your transaction with the grocer made you poorer.

The problem with buying foreign oil is not a balance of trade issue, it is
that so much of the money goes to people who wish us harm - and that we are
buying what we can produce right here at home. Your trip to the grocer
would remain just as beneficial to you even if you could have grown the
tomatoes at home - but it means that you can't spend the money on other
things.

Another aspect of this Gigantism in America is Banks. We have all
seen the hidden consequences of Giant Banks and their role in the
economy. They are too big to let fail, or so they say, and for that
reason I abhor these Monster Banks for the following reasons. With
local and regional banks, money deposited and loaned stays in those
areas. The profits and salaries generated by these banks stay in
those comminutes and expand the tax base, which is how most towns
pay for services that are vital to the community, fire, police,
schools, libraries, etc. The money that is lent would likely receive
greater scrutiny as to the credit worthiness of the borrower and in
the case of Real Estate, the worth of the property. The bank has a
direct stake in the community via the outcome of it's decisions with
regards to these loans and the profits from the repayment stays
in the local or regional areas generating more funds for future
loans. With Gigantic National banks, profits leave these areas and
the prudence of the loan comes in secondary to the profit the it
generates. The essence of all that I wrote above is: Gigantism in
America, be it
Corporations, the Federal or State governments is a form of putting
all your eggs in one basket and when they fail, the effects are
Gigantic. As an aside, I even see that America and Gigantism extends
even to
sports. This obsession takes form in many ways. Our sports heroes
are elected by weight and height and in baseball we have seen the
recent steroid episode, in that many of the players became HUGE! And
HUGE numbers of home runs followed, only to plummet with the recent
indictments and subsequent decline of steroid use .

Huge stadiums, with huge people, huge TV audiences,with huge
salaries and huge egos for me, are a reflections of obessions gone
wild.

Your commentary is paranoia run amock.

Bruce

Well maybe amok, but never amock.

I'd like to blame spell-check, but I think I forgot to check that sentence.
<g>

Bruce



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