Re: Interesting

On Aug 19, 11:15 am, "John Galt" <whoisjohng...@xxxxxxxxxxxxxx> wrote:
"mg" <mgkel...@xxxxxxxxx> wrote in message

news:1187542081.907628.29380@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

On Aug 19, 7:45 am, Alan Lichtenstein <a...@xxxxxxxxxx> wrote:
mg wrote:
On Aug 18, 8:02 am, "Jerry Okamura" <okamuraj...@xxxxxxxxxxxxx> wrote:

I posted a mesaage with a very simple question concerning outsourcing.
I
asked, what kinds of jobs can be outsourced. I received zero replies.
Now
it just seems to me those who think that the boogie man is outsourcing,
should know or want to know the answer to that question....

My economic philosophy about wealthy nations is that wealth is like
water or gravity, for instance. Given enough time wealth will equalize
to every single nook and cranny of the earth. Or, put another way,
what goes up must come down and eventually the wealth of the other
nations in the world will go up and the U.S. wealth will come down.

I enjoyed all your comments, Alan. It's good to see someone else
taking a comprehensive view.

Actually, we are not becoming poorer if aggregate growth and economies
are taken into consideration. Actually what you mean to say is the
average AMERICAN( usually one who works for a living instead of
investing for a living) is becoming poorer. A very different thing.

True. In taking a second look at this issue, I can see some
complicated issues. How do you define the wealth of a nation? I don't
think you can simply use GDP or GDP per capita. It's more complicated
than that. Does a rising tide raise all boats? Historically, I think
it has, but intuitively I believe we will reach a point where it's a
zero sum game. Does the distribution of the wealth on this planet
matter? If one person owned 99% of the wealth and the remaining 6.6
billion people owned 1%, obviously it would matter to the 6.6 billion.
What is the ultimate source of wealth? My guess is that it's natural
resources and they are all finite.

A couple of thoughts:

The "gravity" analogy is apropos. I think of it in terms of "osmosis." The
US is the bucket where money is concentrated in the highest osmotic
pressure, and over time, it inevitably passes through those semipermeable
membranes (borders) to areas of lower concentration. This is inevitable,
IMO.

From an intuitive viewpoint at least, the conclusion seems inevitable.
Wealth cannot remain forever in the hands of one nation. To believe it
can is to believe that there is something entirely and permanently
unique about that nation which is probably as unlikely as finding a
tree that doesn't work on the principle of osmosis.

The question is not *if* the US standard of living will come down in
relative terms -- it will -- but if it actually does decline, or simply
remains stable in the face of rising standards of living elsewhere.
Personally (and somewhat contradictorily) I believe that globalization
increase the chances that it remains stable as opposed to shrinking.

A couple of lifetimes ago, I had a supervisor who was giving my
overtime to a beautiful, young curvascious co-worker of the opposite
sex. From that experience, I developed MG's theory of world-wide
wealth. Briefly it states that resources are limited and one country's
gain is another's loss. I'm open to ideas to the contrary, though :>

Measurement of standard of living is generally in terms of "basket of
goods". What does every person in America purchase every day, week, month,
and how much does it cost relative to the *median* income. Statistics like
this are hard to calculate, and thus are hard to find. Obviously, the
"basket" contains food, clothing, taxes, medical care, shelter, utilities,
transportation, and the like -- doesn't matter if you're working minimum
wage or you're Warren Buffet, you pay these things. By my way of thinking,
the lower the % of your income that you spend on your basket of necessities,
the higher is your disposable, and thus the standard of living.

The basket of goods measurement makes perfect sense to me. I think
you've solved my short-lived mystery of how to approach the
measurement of standard of living and comparisons between nations.

It's a foregone conclusion that the world cannot support 6.6B consuming like
Americans consume. Stay tuned for contention for resources.....

Alright, but you have to promise not to calculate areas under the
curve . . . :>

The only issue that it makes sense to argue about is how we handle the
transition the U.S. is going to go through on its painful journey to
becoming a poorer nation. Opinions on how we handle the transition
will vary depending on one's ideology and one's sense of fairness and
morality, etc., and ones ability to face the facts and reality.

We are not handling it. The so-called 'free market' is supporting our
standard of living, which has moved from productivity to credit, simply
because we still have the markets to support THEIR growth. Once their
markets are sufficiently large and prosperous enough, the United States
will no longer be necessary, and that will have serious effects on our
standard of living. Based on current circumstances, I estimate we have
between 15-30 years left.

It's true. We are not handling it. By the time we do decide to handle
it, middle-class prosperity will be just a memory that our children
read about in the history books. I suspect that addressing the problem
long term would involve population reduction and husbanding our
natural resources.

That's still productivity. We can't maintain our infrastructure and
businesses with less people than we have. If we reduce population (and most
Western nations and China are) we reduce businesses ability to provide the
standard of living, so SOL (heh) and population decline in tandem, UNLESS
productivity increases.

Make no mistake about it, however. There are still tremendous productivity
gains to be had from streamlining business operations. More to come.

Perhaps eventually we could have robots do the work for us. I just
bought 40-feet of 10/2 wire (for $1.03/ft!) to do some wiring in my
shed. If robots had mined the copper and manufactured the cable, I'm
sure it would have cost less. But what do we do when the copper
becomes harder and harder to find?

The simple fact is that we have a world economy as far as capital is
concerned, but we still lack a world economy as far as labor is
concerned. The way in which we need to handle it, is to level the
playing field for labor, NOW while we still can use our markets as
leverage. That can be done by removing restrictions on labor to
organize, as well as any governmental regulations which restrict labor
in one place as compared to another. Unfortunately, that might mean we
may have to allow wetbacks to immigrate here, but to remove
right-to-work laws, which are blatantly anti-labor.

I agree with all that as temporary measures to ease the transition,
but I don't think those measure alone will solve the problem in the
long term.

I personally believe that a legitimate function of our government is
to ease the transition for it's citizens and to do so in a fair and
equitable manner. On the other hand, I don't believe a legitimate
function of our government is to maintain a policy of denial in order
to pander to its citizens by running up massive deficits and
continuing to maintain the illusion of well being and, therefore,
making the situation worse for our children.

Exactly how do you propose to do that?

I would support the measures you mentioned previously along with a tax
system that recognized that labor is the injured party with
globalization. In addition, some of my recommendations listed below
address this issue.

I believe that during the inevitable transition, citizens need to be
wise and they need to be vigilant in recognizing propaganda to insure
that dishonest politicians don't take advantage of the situation by
either morphing America into a socialistic system or a fascist system.

But that's what's going to happen. It is irrational for citizens to
accept the fact that their standard of living is actually declining.
Who in his/her right mind would take that lying down?

As the pain increases the motivation to find a scapegoat will also
increase. The left will blame the right and right will blame the left
and we will attack other countries for their natural resources. Wealth
will become even more concentrated and ultimately some sort of radical
government will emerge.

That's gloomy. I believe a new phase of productivity and technological
improvements will be the solution (remember, this isn't the first time since
the Industrial Revolution that people were predicting the decline of
standards of living. The pain of decline stimulates another generation to
search for solutions, which they inevitably find.

It seems like most everything can be described with a curve. The earth
curves, space curves. You got your Laffer curve and your peak-oil
curve and your supply and demand curve. Then you also got one of the
biggest saddists in the world who came along and invented a way to
calculate the area under a curve and called it calculus.

I suspect that maximum possible wealth can be described with a
population vs natural resources curve.

Malthus has been proven wrong time after time, but eventually he will
probably have the last laugh because of the damned curves.

I believe we should insist on some common sense fairness during the
transition. Here are just a few examples that come to mind:

1. People working in free-enterprise, private-industry jobs should
make more money than those with government jobs to reflect the extra
degree of job-security risk private industry workers face.
That would put what few manufacturing industries we have right out of
business, unless they can level the playing field for labor across
national boundaries. Do you believe that is likely to happen?

I was thinking of a decrease in government wages relative to private
industry wages rather than vice-versa. I believe we should attempt to
level the playing field to assist workers with the transition, but
it's only a temporary solution.

I'd agree. To do that, you'd have to bust the goverment workers unions. How?

Tax payers are going to have to get smarter and put their foot down.
Or, new workers in the labor market are going to have to get smarter
and say I'm not going to hire on to a job that will likely be
outsourced.

2. Displaced workers should be given generous assistance in retraining
and not just for jobs that require a quickie, associate degree, but
for jobs that require university degrees also.

In what industries? If we had jobs for these workers, our economy would
be expanding, not shrinking, as the circumstances you suggest would
indicate.

I remember when I worked at a steel plant that was closing a couple of
lifetimes ago, displaced workers were attending the local trade
school. The standard joke was about a pipefitter and a welder who ran
into each other between classes. Each one was extolling the great
benefits of their new, future occupation, while, in fact, they were
merely switching occupations with the welder becoming a pipefitter and
the pipefitter becoming a welder :>

As a temporary measure, workers need to continue to chase the jobs
that haven't been affected by globalization yet.

Agree again. Educational support always pays back in new taxes paid by
better-paid workers.

3. U.S. workers should not pay more for drugs than the rest of the
world.

Patents which are infringed on need to be addressed internationally, as
this is indeed a problem. However, I agree with you that American
citizens should not bear the total

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