Re: Interesting

On Aug 19, 4:49 pm, Alan Lichtenstein <a...@xxxxxxxxxx> wrote:
mg wrote:
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.

As I enjoy your comments. It's refreshing to have a discussion with
someone who has knowledge of issues, as well as understands abstractions
and their implications. A set of circumstances I find lacking among
some regular participants here.



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.

For wont of a better thing, GDP is the best we've got at this point.
And it really doesn't address what you mean by wealth, IMHO. Since we
have national entities, GDP is useful, as it permits us some way to
measure, albeit indirectly, wealth. And whether or not it's a zero sum
game, depends on what you define as wealth. If you define it with a
natural resource component, you may be right. If you define it as
inclusive of resources, but also produced goods, then it probably isn't.

I like John's "Basket of Goods" approach for calculating wealth. A few
quick Google searches seems to indicate that the "zero sum" game
appears to be very controversial. I didn't know that when I made my
original post, but I'm not surprised.

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.

We can no longer husband natural resources. Our economy has grown so
large that we can no longer avoid having to deal with a global economy.
Much as I would like to. We simply, as no nation does, have the
self-contained natural resources to have its own, insulated
self-contained economy.

I suppose that's true. Here's the results of a quick search on Google:

"China leads US copper exports higher
U.S. exporters sold 582,614 short tons of red metals scrap in 2001, an
8.9-percent increase over the previous year to one of the highest
annual totals in the past decade."
http://findarticles.com/p/articles/mi_m3MKT/is_41_110/ai_83486494

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.

Further down the road would be the dissolving of national boundaries.
Doing so would make permanent the measures, by eliminating all unnatural
impediments. Radical, I realize, but if one looks far enough down the
road, one realizes that such is the only logical solution.

No matter how we rearrange the boxes on the world's organizational
chart, I believe wealth will eventually equalize and resources are
finite.

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.

That does not solve the problem. The problem can only be solved by
attacking it where it presents the problem. That's where labor is
treated to far less than here.

I'm sure we could have some degree of success in insuring that foreign
workers are treated better and the playing field leveled more.
However, that's really just a temporary measure that will reduce cheap
imports. In the long run, I don't think it will help the American
worker a lot. When the day comes that he has to compete 100% on a
world-wide basis and resources become more scarce, his wages will
inevitably go down and the cost of products will go up.

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.

A possible scenario, not out of the question.

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.

If that is the case, you only exacerbate the problem, not solve it. Or
at best, merely shift the problem from one worker to another. Solutions
which are not global do not level the global advantage capital has over
labor.

True, but it appeals to my sense of fairness and if we share the pain
among more citizens, it makes it more likely that more people will
face the problem and that will be the first step in finding some fair
and intelligent solutions.

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.

Unfortunately such is not the case. Our economy is shifting rapidly
from manufacturing to financialization. 28% of our GDP, and rising
rapidly, is due to the FIRE sectors of our economy, as compared to a
mere 6% a bit under 40 years ago. That is unsustainable as far as
sharing of the fruits of our economy are concerned.

I, personally, don't think there's any doubt that we are on an
unsustainable course. I think the immediate question is how do we ease
the transition and ultimately, I suppose the question is how do we
maximize the general welfare of the people 30 or 100 or 200 years from
now when the dust has settled?

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 burden for patent infringement, in
particular, by China.

So, how do you propose to achieve this?

I think what I might try if I were king of the U.S. is to separate the
research function of the pharmaceutical companies from the
manufacturing and marketing function. Let's break them apart like we
did Ma Bell. I think that might shine some daylight on the situation
and increase competition. In addition, we could consider giving
companies involved in pure drug research generous tax breaks or even
subsidies.

Separation of ...

read more »


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