America's century is over

[euroazn]

As I've said before... those poor that are "only" subsisting on food stamps, medicaid, etc. are often getting QUITE a lot.

 

[MSFHQ]

C'mon, don't back out now. I'm just beginning to have some fun. Quantnet is usually quiet and devoid of animated discussions. And Dominic has joined the fray.

This is not the United States I remember when I first came here in '79. It has changed almost beyond recognition, as has the world it inhabits. And back in '79 we never expected the Soviet Union to implode -- and look at the alacrity with which it occurred when it did occur. Now people are watching the United States for the same symptoms of senescence and decline. Dimitry Orlov draws some interesting parallels here.

Let me establish my argument so we can move forward appropriately. I am not saying that I think the USA is happily chugging along without any issues. I am simply optimistically critical of the USA.

I think the deficit is going to be a huge problem. We live in a country that continually wants more and more government support yet the majority of people are not paying taxes as it is. We cannot continue to tax only one half of the population. Either reduce deductions thereby causing people who otherwise did not pay taxes to have to pay or just increase rates for everyone.

I think the military operations have obviously been very expensive and once they are scaled back you will see an immediate savings.

The economy is a mixed picture. Blue collar workers are the ones being hit the hardest. Educated workers have a much easier time. The age of unskilled manufacturing is done with in the USA. This is perfectly fine, a natural progression. Unskilled manufacturing is best suited for countries without the resources to educate the masses. We do not (in theory) fall into this category. In fact there is a demand for skilled manufacturing, something that is not as easily transferred overseas.

The educational system in this country is in trouble. We fact a unique problem because of the diversity inherent here.

With that said I still think we have the power to either improve or decline. The decision and fate is on our hands. China has and will continue to grow much faster than the world as a whole. They have over 1 billion Chinese who aspire for American middle class. You are seeing now the increase in wages demanded, the demand for white goods, the aging of their country.

The USA is still extremely free, open and vibrant. Our unemployment has been around 10% for 3 years now (or so). How long has Europe been in double digits. Is the United States not allowed a recessions from time to time? We could adopt European style labor laws, but flexibility to hire and fire allow companies the flexibility they need. Hiring is glacial in the UK and Europe because of the impossibility of getting rid of these employees.

The housing market is a mess. Well that is what happens when people look at a home like a stock and not a store of value. Imagine if the government or banks started to cool of the housing bubble. I can just imagine the outrage individuals would of had for the "evil" banks destroying the American Dream. Market went up and popped. Now we have people claiming bankruptcy, paying off debt and renting instead of buying. That has deeply hurt our economy, but I think it is an entirely sensible response.

As far as the two part society, could you please explain to me how people are being held back from moving up? Maybe going from poor to Warren Buffet is unobtainable, but are you telling me a couple who do not have children cannot work and take college classes and eventually get a middle class job? People have children too early, get needlessly in debt, buy a home and immobilize themselves. We have no caste systems, we have generous tax breaks for children, homes, marriage. We have plenty of low cost universities where someone can get a degree that will provide them with more than a minimum wage job. I fail to see the unfairness. It is as it always has been. Hard work and effort can improve your life.

Also, I don't hear too many immigrants complaining. The people that complain are the ones who have always lived here. I don't think you can really appreciate the opportunities provided here unless you come from another country.


Wolf, my big issue is you are just SUPER negative. I am a LITTLE negative. At the very least can we agree that a lot of other countries are in a mess right now. China doesn't have a walk in the park, nor does India.

 

[TraderJoe]

As I've said before... those poor that are "only" subsisting on food stamps, medicaid, etc. are often getting QUITE a lot.

For example, a single low-income mom with two kids gets the following subsidies:

Apartment: $50 per month. Normally $800 per month.
Healthcare: FREE. Normally $1100 per month.
Food Stamps: $700 per month.
Day care: $52 per month per child. Normally $1200 per month per child.

This comes to more than $5000 per month in government subsidies.

People over 65 also get a great deal. Per person $17,000 per year in Medicare, $5,000 in prescription medicines, $14,000 per year in Social Security.

Of course all this money comes from the 50% taxes they take out of our paychecks.

 

[MSFHQ]

The people who get screwed are the poor and single. Kind of sad.

 

[bigbadwolf]

Let me establish my argument so we can move forward appropriately. I am not saying that I think the USA is happily chugging along without any issues. I am simply optimistically critical of the USA.

I think the deficit is going to be a huge problem. We live in a country that continually wants more and more government support yet the majority of people are not paying taxes as it is. We cannot continue to tax only one half of the population. Either reduce deductions thereby causing people who otherwise did not pay taxes to have to pay or just increase rates for everyone.

I think the military operations have obviously been very expensive and once they are scaled back you will see an immediate savings.

The economy is a mixed picture. Blue collar workers are the ones being hit the hardest. Educated workers have a much easier time. The age of unskilled manufacturing is done with in the USA. This is perfectly fine, a natural progression. Unskilled manufacturing is best suited for countries without the resources to educate the masses. We do not (in theory) fall into this category. In fact there is a demand for skilled manufacturing, something that is not as easily transferred overseas.

The educational system in this country is in trouble. We fact a unique problem because of the diversity inherent here.

With that said I still think we have the power to either improve or decline. The decision and fate is on our hands. China has and will continue to grow much faster than the world as a whole. They have over 1 billion Chinese who aspire for American middle class. You are seeing now the increase in wages demanded, the demand for white goods, the aging of their country.

The USA is still extremely free, open and vibrant. Our unemployment has been around 10% for 3 years now (or so). How long has Europe been in double digits. Is the United States not allowed a recessions from time to time? We could adopt European style labor laws, but flexibility to hire and fire allow companies the flexibility they need. Hiring is glacial in the UK and Europe because of the impossibility of getting rid of these employees.

I will give online links where I can. Where I can't, I'll have to refer to the literature. The single most important point is to refer to a nation as an organic whole, and one which has its own trajectory of being born, rising to its supreme point, and then declining. The ancient empires -- Assyria, Egypt, Rome -- all went through this cycle. People like Toynbee and Spengler have adopted this perspective of looking at societies and civilisations as organic entities. Not saying it's necessarily right but it has a ring of plausibility and I subscribe to this mode of thought. Thus, for example, post-WW2 Britain was a very different Britain from the exuberant and dynamic Britain of a century earlier. In decline a number of superficially unrelated symptoms of malaise -- reliance on military power, increasing polarisation of income and wealth, decline of industry, decadence in fashion, manners, and education, decaying infrastructure -- start feeding on one another to create an irresistible cycle of downward decay. My central thesis is that the USA -- like earlier powers -- is now in that cycle. How fast it goes on that downward slope, to what extent it can arrest or retard that decline, and where that slope ultimately leads to are open questions to which I don't have the answers.

With regard to the unemployment rate, most commentators are careful to point that 9.5% is the "official" number -- i.e., a lie. As Paul Craig Roberts points out, if the 1980 criteria were to be used, the figure would be 22%:

I will end this column on unemployment. “Our government” tells us that the unemployment rate is just under 10 percent, a figure that would have wrecked any post-Great Depression administration. But, again, “our government” is lying.

Compare this fact with the number you read from the financial press. Right now, if measured according to the methodology of 1980, the US unemployment rate is about 22%. Thus, the reported rate of unemployment hides more than half of the unemployed.

The only one upbeat about the employment picture is this pathetic figurehead of a president:

If you’ve listened to recent speeches the President has given about the economy and the Iraq war, you’d think that two of the biggest social issues facing working Americans are improving. But facts are stubborn things.

Take for example the numbers of jobs lost in the last two months: 221,000 in June, 131,000 in July.

Instead of taking the drastic measures needed to stop the continued hemorrhaging, the President had this to say on August 5th:

“Even though it's going to take years to repair all the damage caused by this recession, I am absolutely convinced that this nation is finally headed in the right direction. Our economy is growing again. We are adding jobs again [!]. America is moving forward again…”

Since Obama has access to the above job numbers, we must assume that he is either delusional or lying. We also cannot attribute this comment to a one-time slip of the tongue, because Obama has essentially made the same speech several times while promoting Democratic candidates nationwide.

Contrary to his recent statements, Obama has not improved the economy. He has overseen a catastrophic destruction of jobs on a state-by-state basis, in part due to state budget crises and the pathetic lack of response on the national level: Obama’s first stimulus was under-funded and misdirected (too much emphasis on tax cuts for businesses, etc.), while Obama’s recent “stimulus”— only $26 billion — is simply farce.

(Source)

It's not only blue-collar workers being affected. It is across the board. Skilled workers have not escaped unscathed as manufacturing has left American shores. The emphasis on education and training -- a false panacea -- comes from mendacious Judas politicians who for their thirty pieces of silver have sold out the population to entrenched financial interests who don't look further than the ratios on financial statements.

Conditions in the United States are now so dire that Indian call centres are now stepping up shop on American shores:

An article published in Wednesday’s Financial Times under the headline “US Matches Indian Call Centre Costs” gives some indication of the impact on American workers of a coordinated and escalating wage-cutting drive by big business, backed by the Obama administration.

The article begins: “Call centre workers are becoming as cheap to hire in the US as they are in India, according to the head of the country’s largest business process outsourcing company. High unemployment levels have driven down wages for some low-skilled outsourcing services in some parts of the US, particularly among the Hispanic population.”

According to the article, a number of Indian outsourcing firms are shifting operations to the US to take advantage of low labor costs, a reversal from the 1990s when many call centers and software firms shuttered American operations to exploit educated but low-paid workers in India.

“We need to be very aware as people [in the US] are open to working at home and working at lower salaries than they were used to,” commented Pramod Bhasin, CEO of Indian firm Genpact. The company, which already outsources work to Chicago, Pennsylvania, Tennessee and New York, intends to triple the size of its US workforce over the next year.

The Financial Times article is a stark indication that the corporate-government campaign to narrow the wage differential between American workers and super-exploited workers in Asia and other “emerging economies” is meeting with considerable success. The breakdown of American and world capitalism is being utilized by the ruling class to carry through a drastic and permanent reduction in American workers’ wages and living standards and raise the level of exploitation.

(Source)

The US is a militarised state. Important to keep in mind that the twin engines of postwar growth were suburbanisation and military build-up. The Truman administration was apprehensive that the Depression would rear its ugly head again after the was was over, and so began a process of military Keynesianism that has just grown worse over the decades. Again, it's part and parcel of a process of unsustainable and wasteful expenditure, tied in to a broader pattern of incipient decline.

The housing market is a mess. Well that is what happens when people look at a home like a stock and not a store of value. Imagine if the government or banks started to cool of the housing bubble. I can just imagine the outrage individuals would of had for the "evil" banks destroying the American Dream. Market went up and popped. Now we have people claiming bankruptcy, paying off debt and renting instead of buying. That has deeply hurt our economy, but I think it is an entirely sensible response.

Paucity of time on my part precludes an elaborate reply. Speculative bubbles have become an inherent part of the eviscerated US economy. Again, an inherent part of broader decline.

As far as the two part society, could you please explain to me how people are being held back from moving up? Maybe going from poor to Warren Buffet is unobtainable, but are you telling me a couple who do not have children cannot work and take college classes and eventually get a middle class job?

It's not what it used to be like a generation or two ago. There was a time when you could work your way through college, when CUNY and the various state universities throughout the land were either free or had risibly low fees. That era has gone. Furthermore, a mere degree is now no guarantee of middle-class income and status. The ante has gone up. The jobs -- such as they are -- have become more precarious. Wages have stagnated in real terms while big-ticket items like housing, medical, and education have gone up.

Is this situation unique to the US? Nope. Many of the same symptoms can be seen in Japan and Europe. Indeed, the term "precariat" (precarious + proletariat) has been coined to describe the 30-40% of the workforces in Japan, Germany, Holland and Italy that are in low-paid, semi-skilled, part-time. and seasonal work. Where are the differences? There's more of a welfare setup in Europe. If you're unemployed you get some money from the state. The state pays for retraining. Medical is usually taken care of. The common citizenry has more influence on the state. Wealth and income disparities are not so pronounced. There's a pervasive sense of insecurity in the USA; when Warren Buffett says he can't afford to retire, there's a grain of truth in his asseertion.

 

[euroazn]

For example, a single low-income mom with two kids gets the following subsidies:

Apartment: $50 per month. Normally $800 per month.
Healthcare: FREE. Normally $1100 per month.
Food Stamps: $700 per month.
Day care: $52 per month per child. Normally $1200 per month per child.

This comes to more than $5000 per month in government subsidies.

People over 65 also get a great deal. Per person $17,000 per year in Medicare, $5,000 in prescription medicines, $14,000 per year in Social Security.

Of course all this money comes from the 50% taxes they take out of our paychecks.

This is 60k a year untaxed, or probably around 90k a year before taxes. Add the 15k they are already making... WOAH THAT'S OVER 100k!
And for seniors, even more.

 

[MSFHQ]

Where are you getting your "normally" figures from? lol

I've never paid $1100 per month for healthcare, even for a whole family with amazing coverage... I could believe about 700 a month or so for a family of 4 for great coverage but I doubt that that is what is being provided to the woman in question...

however... the $1200 a month per child in daycare takes the cake. It just sounds outrageous. If that's even remotely accurate I'll never make enough money to afford a kid! ... let alone two...

Thanks man.

I think some of these figures might be off, but the insurance is correct when you include what your employer is paying. I paid around 100 bucks a month for my insurance, but that didn't include the companies end. If you figure that the government is paying for the person and the company then the $1200 sounds reasonable. Maybe a little high, but I don't think it is way off.


People on welfare are not living a great life, but there is a lot of assistance for those who know the system. Food stamps, subsidized apartments, welfare, heating subsidies, free healthcare, etc.

 

[helpteye]

List of countries by GDP (PPP) per capita - Wikipedia, the free encyclopedia

That is all.

Edit, well for good measure: China Might Rank Second by GDP, But Ranks 99 for Per-Capita GDP -- Seeking Alpha

And for anyone who might rebut: well what about the poor? I discussed that in my post in the other thread... With governmental benefits, some are getting tired of caviar. Specifically, senior "daycares" (which are covered by medicaid) have ridiculous benefits including 50$ theater tickets, free access to amenities, and daily cuisine.

GDP per capita is not necessarily a good estimate when you consider that in the US the top 1% control 90% of the economy. The GDP per capita may be high, but tell that to the man cleaning other peoples toilets.

---------- Post added at 11:13 PM ---------- Previous post was at 11:05 PM ----------

Actually, USA is the second-greatest country to live in (after Canada). But China's economy WILL overtake the economy of USA in 10 years time and China's economy WILL overtake the combined economies of USA and European Union in 20 years time. There's really nothing that can stop this from occuring.

Yeah, but it depends on how you look at it. The point is Chinese people will be very very poor for a long time. You need to remember, that the population there is at least 1.2 billion. So even if their GDP is say $1 trillion, that is simply $1000 per person. So their economy may become larger, but it will take at least 100 yrs to grow to be competitive with even Japan.

---------- Post added at 11:17 PM ---------- Previous post was at 11:13 PM ----------

As I've said before... those poor that are "only" subsisting on food stamps, medicaid, etc. are often getting QUITE a lot.

Please stop saying poor people are getting a lot. It is too ridiculous a statement. Its actually an oxymoron.

Are you suggesting somehow that its cool to be poor?

 

[alain]

I've never paid $1100 per month for healthcare, even for a whole family with amazing coverage... I could believe about 700 a month or so for a family of 4 for great coverage but I doubt that that is what is being provided to the woman in question...

You are probably not in the US or you have never paid health insurance from your own pocket. $1100 per month might be the lower end of a health insurance plan for individual persons. If you have more people, you will pay less per person but higher total figure as a family. This is if you go to BCBS or Aetna and try to get insurance. This is not subsidize insurance through your job. The figure will be really high if you want a high quality medical plan.

however... the $1200 a month per child in daycare takes the cake. It just sounds outrageous. If that's even remotely accurate I'll never make enough money to afford a kid! ... let alone two...

The number might sound outrageous to you but might sound low to parents. The figure sounds reasonable and it can be even higher. Also, if you live in NYC, forget it. Not only it is expensive but it is impossible to get in pre-schools too. Somebody made a documentary about this. I will try to find the link but you can see it on Showtime.

 

[DominiConnor]

I think the deficit is going to be a huge problem.


Agreed, but a problem for who ?
The classical way out of this problem is inflation, indeed the default path for many western economies is headed that way because of recent measures and the very strong inflation pulse coming this winter from food prices.
Inflation can be modelled as a tax, and look at who the holders of US debt are to see how much fun that is going to be.



yet the majority of people are not paying taxes as it is.
Of itself that is neither good nor bad. The modern tax / borrow model is a British invention, devised less than 200 metres from where I'm currently sitting. At that time, only a few % of the population paid income based taxes, and it ushered in the greatest expansion of wealth in the history of the human race. But it was monotonically easy to expand the tax base, so that people whose income was so low that they received state benefits were still taxed on them, something now seen in most developed economies. So the Conservative led government in the UK is reducing the % of the population that pay income tax big time. It is felt by both left and right that taxing low paid reduces incentives to work, and doesn't being in much cash. Hint to any evangelicals here: poor people can't pay much tax.


We cannot continue to tax only one half of the population.
Yes you can, it might even be optimal.
In any case, you aren't, I doubt if there is any serious country where that is true.
There are sales taxes, 'charges' etc. That's wildly suboptimal, but all countries do it.

I think the military operations have obviously been very expensive and once they are scaled back you will see an immediate savings.
America's wars are expensive, but cheaper than the alternative.

Blue collar workers are the ones being hit the hardest.
Been true for many years, but here we hit the core of the problem.
What is good for the 'state' is often bad for the people in it.

Americans want a shit education system, it is working as designed. American kids receive a better understanding of football than maths. Teaching unions exploit the absurdities to make it worse.
In many parts of the USA education officials are directly elected, and Americans in free and fair elections pick people who exhibit a degree of religious hysteria that in Iran would be grounds for being force fed drugs to make you calm down. In Iran, they teach evolution as well.

Combine this with the way American media force feeds the idea that education is bad, and so if America did not have very strong and vicious incentives for kids to learn, then the economy as a whole would be screwed. These incentives fail in many cases of course.

Unskilled manufacturing is best suited for countries without the resources to educate the masses.
That contradicts your position. America does not have the resources to educate it's kids. Yes it has schools and a vast number of graduates, but it lacks resources like will and competence.

In fact there is a demand for skilled manufacturing, something that is not as easily transferred overseas.
Superbly untrue.
British manufacturing was highly skilled.
It's gone now.
Often it was lost to Germany and Japan who actually had higher hourly wage costs.
Look at chip and pharmaceutical manufacturing, which clearly meet the filter of requiring high skills.
Look at them leave the US.


We fact a unique problem because of the diversity inherent here.
Not even slightly true.
The overwhelming majority of kids in US schools can speak English before they start school.
Also, the least fucked up part of the US education system is the postgrad level, and that is the most diverse.
American education is bad because of a horrid mix of anti-semitism, religious inspired undermining of science, and obsession with sport. You could bring US education levels up to the dizzy heights of (say) Greece by eliminating inter school sport, in 5 years flat.
Won't happen.



China has and will continue to grow much faster than the world as a whole.
By necessity there is an upper bound for how long they can do that.

We could adopt European style labor laws, but flexibility to hire and fire allow companies the flexibility they need.
The flexibility of the US labour market is one of the USA's biggest strengths.


Hiring is glacial in the UK and Europe because of the impossibility of getting rid of these employees.
You voted for Sarah, right ?
UK laws are not as employer friendly as the USA, but they are simply not a significant factor in employment numbers. Redundancy payments are a couple of weeks pay per year of service and capped at a small level, hardly an 'impossible' barrier. We have less penal discrimination laws than the USA.

As far as the two part society, could you please explain to me how people are being held back from moving up?
Appalling levels of education in poor areas, high cost of education, racism.

Maybe going from poor to Warren Buffet is unobtainable,
No it isn't. Just rare.

but are you telling me a couple who do not have children cannot work and take college classes and eventually get a middle class job?
By the time people are 'couples' the damage is mostly done.

People have children too early,
This is of course partly driven by religious hysteria that prevents effective sex education in many schools.


We have no caste systems,

Wholly untrue. In the USA the best predictor of a child's income is that of his father.

We have plenty of low cost universities where someone can get a degree that will provide them with more than a minimum wage job.
A degree is not a risk free investment by any stretch of the imagination, and degrees with good risk/return characteristics require that you have a good base education first.

Also, I don't hear too many immigrants complaining. The people that complain are the ones who have always lived here. I don't think you can really appreciate the opportunities provided here unless you come from another country.
But you do hear the locals, especially tea party types pushing for less immigration, especially by coloured people. They are being quite successful. That will end badly for the USA.

 

[MSFHQ]

I think the deficit is going to be a huge problem.


Agreed, but a problem for who ?
The classical way out of this problem is inflation, indeed the default path for many western economies is headed that way because of recent measures and the very strong inflation pulse coming this winter from food prices.
Inflation can be modelled as a tax, and look at who the holders of US debt are to see how much fun that is going to be.

I am sure the Chinese will appreciate this. As if they already do not have enough leverage on us.


yet the majority of people are not paying taxes as it is.
Of itself that is neither good nor bad. The modern tax / borrow model is a British invention, devised less than 200 metres from where I'm currently sitting. At that time, only a few % of the population paid income based taxes, and it ushered in the greatest expansion of wealth in the history of the human race. But it was monotonically easy to expand the tax base, so that people whose income was so low that they received state benefits were still taxed on them, something now seen in most developed economies. So the Conservative led government in the UK is reducing the % of the population that pay income tax big time. It is felt by both left and right that taxing low paid reduces incentives to work, and doesn't being in much cash. Hint to any evangelicals here: poor people can't pay much tax.


We cannot continue to tax only one half of the population.
Yes you can, it might even be optimal.
In any case, you aren't, I doubt if there is any serious country where that is true.
There are sales taxes, 'charges' etc. That's wildly suboptimal, but all countries do it.

I think there should be skin in the game. At the Federal level less people are paying taxes. It might be fine right now, but when you have people who pay nothing voting and deciding there will be distortions. Who cares how much XYZ program costs if it is not you who will pay for it. Kids appreciate things they have to work for and earn. People appreciate things that directly hit them in the pocket book.

I think the military operations have obviously been very expensive and once they are scaled back you will see an immediate savings.
America's wars are expensive, but cheaper than the alternative.

Blue collar workers are the ones being hit the hardest.
Been true for many years, but here we hit the core of the problem.
What is good for the 'state' is often bad for the people in it.

Americans want a shit education system, it is working as designed. American kids receive a better understanding of football than maths. Teaching unions exploit the absurdities to make it worse.
In many parts of the USA education officials are directly elected, and Americans in free and fair elections pick people who exhibit a degree of religious hysteria that in Iran would be grounds for being force fed drugs to make you calm down. In Iran, they teach evolution as well.

Combine this with the way American media force feeds the idea that education is bad, and so if America did not have very strong and vicious incentives for kids to learn, then the economy as a whole would be screwed. These incentives fail in many cases of course.

Unskilled manufacturing is best suited for countries without the resources to educate the masses.
That contradicts your position. America does not have the resources to educate it's kids. Yes it has schools and a vast number of graduates, but it lacks resources like will and competence.

We have the resources to have schools open, to offer free education up until grad 12, to provide enough social welfare programs so kids do not have to farm and drop out of school at 3rd grade like they did historically. We have child labor laws, truancy laws, etc. Things are not perfect, but we do a lot to provide a K-12 education for all.

In fact there is a demand for skilled manufacturing, something that is not as easily transferred overseas.
Superbly untrue.
British manufacturing was highly skilled.
It's gone now.
Often it was lost to Germany and Japan who actually had higher hourly wage costs.
Look at chip and pharmaceutical manufacturing, which clearly meet the filter of requiring high skills.
Look at them leave the US.

I think highly skilled manufacturing slows the process or prevents it. Japan is being hit with outsourcing, but to closer by neighbors who are now very technically proficient. US machinists, skilled manufactures, people with value added are still in demand. China's weak IP laws are giving pharmaceutical and tech companies second thoughts about manufacturing there. All I am saying is when unskilled labor is your major cost there will either be automation or outsourcing.

In Manufacturing, Skilled Workers are in High Demand Shopfloor


We fact a unique problem because of the diversity inherent here.
Not even slightly true.
The overwhelming majority of kids in US schools can speak English before they start school.
Also, the least fucked up part of the US education system is the postgrad level, and that is the most diverse.
American education is bad because of a horrid mix of anti-semitism, religious inspired undermining of science, and obsession with sport. You could bring US education levels up to the dizzy heights of (say) Greece by eliminating inter school sport, in 5 years flat.
Won't happen.

You lost me at the antisemitism part.

China has and will continue to grow much faster than the world as a whole.
By necessity there is an upper bound for how long they can do that.

Of course, but I mean the here and now.

We could adopt European style labor laws, but flexibility to hire and fire allow companies the flexibility they need.
The flexibility of the US labour market is one of the USA's biggest strengths.

Hiring is glacial in the UK and Europe because of the impossibility of getting rid of these employees.
You voted for Sarah, right ?
UK laws are not as employer friendly as the USA, but they are simply not a significant factor in employment numbers. Redundancy payments are a couple of weeks pay per year of service and capped at a small level, hardly an 'impossible' barrier. We have less penal discrimination laws than the USA.

I just read an article about the dreaded French labor courts. Maybe employment rights in the EU are not the single handed factor, they do not help. It is extremely hard to fire workers, benefits are lucrative and jobs are very protected. The normal UK/EU worker is the equivalent of a unionized worker in the USA (IMO).

As far as the two part society, could you please explain to me how people are being held back from moving up?
Appalling levels of education in poor areas, high cost of education, racism.

I am not disagreeing that educational levels in inner city areas might be not the greatest, but we bus lower income kids to different schools, have inner city teaching programs, and other attempts to try and fix it. More can be done, but there is an effort. As far as I am concerned education is pretty cheap. Not as cheap as Europe, but someone could go part time and pay reasonable costs.

Maybe going from poor to Warren Buffet is unobtainable,
No it isn't. Just rare.

but are you telling me a couple who do not have children cannot work and take college classes and eventually get a middle class job?
By the time people are 'couples' the damage is mostly done.

Condoms are pretty cheap. It sucks people make bad decisions, but I am not interested in living in a nanny state.

People have children too early,
This is of course partly driven by religious hysteria that prevents effective sex education in many schools.

I agree that there is some of this going on, but by and large sex education is taught. People having children too early is an individual decision (or mistake).


We have no caste systems,

Wholly untrue. In the USA the best predictor of a child's income is that of his father.

I am not going to disagree with that, but just because a child comes from a poor father does not mean they have to be poor themselves. The USA has no formal caste system. People are free to put as much effort into their lives as they want.

We have plenty of low cost universities where someone can get a degree that will provide them with more than a minimum wage job.
A degree is not a risk free investment by any stretch of the imagination, and degrees with good risk/return characteristics require that you have a good base education first.

If you are uneducated your job prospects are pretty bleak. A local degree from whatever university will still provide many more opportunities then just a high school education. If the parents go to school then the children will go to school. Maybe they will have it better. Have to start somewhere.

Also, I don't hear too many immigrants complaining. The people that complain are the ones who have always lived here. I don't think you can really appreciate the opportunities provided here unless you come from another country.
But you do hear the locals, especially tea party types pushing for less immigration, especially by coloured people. They are being quite successful. That will end badly for the USA.

Colored people? You mean illegal immigration. The USA is more than happy to have people from all over the world come here. The thing is you are not allowed to just walk over the boarder and become a citizen. I wonder if anywhere in the EU would allow me free citizenship and a job with all rights attached if I just hopped a fence. The Tea Party might be a little fringe, but I think it is 100% for a sovereign nation to decide the number of immigrants it lets in. EU has a nice immigrant problem of their own. You would think we could get some empathy.




We have a huge problem in the USA and that problem is we let people make stupid decisions. We are not in the business of stopping people from getting drunk and having kids too early, from parents not reading to their kids, from kids idolizing sports stars instead of doctors. Some kids fall through the crack. The thing is we offer people a clean slate and they do what they want with it.

 

[Lyosha]

The number might sound outrageous to you but might sound low to parents. The figure sounds reasonable and it can be even higher. Also, if you live in NYC, forget it. Not only it is expensive but it is impossible to get in pre-schools too. Somebody made a documentary about this. I will try to find the link but you can see it on Showtime.

Damn, well that takes all the fun out of babymaking...

 

[bigbadwolf]

A prognosis from John Williams, who runs the shadowstats site. Not saying that things will necessarily turn out this way; just sayin'.

Postscript: I hurried out to buy a small packet of peanut M&M's from a vending machine. The packet presently costs $0.90, but with the advent of hyperinflation, it could be $90 or even $9,000,000. I recall reading (in Evans' The Coming of the Third Reich) that in the hyperinflationary period of Weimar Germany, a woman ordered a cup of coffee then costing 5,000 marks but when she got up to pay the bill, the price had risen to 8,000 marks.

 

[Pasion]

The most powerful economies in the world are usually the most powerful military powers. What happens when China over takes the USA in nominal GDP? War.

Hans Rosling: Asias rise -- how and when | Video on TED.com

 

[bigbadwolf]

The most powerful economies in the world are usually the most powerful military powers. What happens when China over takes the USA in nominal GDP? War.

The US dollar and US military power prop each other up. If the dollar becomes de facto a soft currency, the US can no longer afford its military bases, aircraft carrier task forces, and imperial excursions. And if US military power goes then, as F.W. Engdahl has pointed out, the main prop of the the dollar since the USA went off the gold standard vanishes. US military power backs the dollar and enforces its de facto backing by "black gold" (i.e., oil). We're in for some interesting times ahead as these basic equations get tested and major and rising powers implement their "grand strategies" (in the case of the US, a desperate and probably failing attempt to maintain the international status quo with itself as unchallenged hegemon). Needless to say, all of this has a direct and immediate impact on the world of finance. Recall that the explosion of derivatives and other forms of speculative finance occurred as one corollary of the dollar going off the gold standard in '71 and becoming a fiat currency.

 

[DominiConnor]

In many forums, I have asked what precisely China can do to the USA though the fact it holds a lot of debt. Not once have I received any answer. China might stop buying bonds, but the only thing it can do is sell US debt, which if it does it too quickly is in effect burning money.


, but when you have people who pay nothing voting and deciding there will be distortions. Who cares how much XYZ program costs if it is not you who will pay for it. Kids appreciate things they have to work for and earn. People appreciate things that directly hit them in the pocket book.

That's true, but completely unimportant because the cost of any given program is a small % of government spending. Rich Republican wanted the "bridge to nowhere", and military bases whose only function is to defend US coasts against attacks by the Royal Navy are defended by both parties. Solve the pork barrel and you solve the deficit.


I am not disagreeing that educational levels in inner city areas might be not the greatest, but we bus lower income kids to different schools, have inner city teaching programs, and other attempts to try and fix it. More can be done, but there is an effort. As far as I am concerned education is pretty cheap. Not as cheap as Europe, but someone could go part time and pay reasonable costs.

Problem is that you are by necessity dealing with ignorant people, whose ability to judge risk and return is poor. They find it hard to work out whether education pays, and don't forget you are in effect asking badly educated 16 year olds to make decisions that I as a quant headhunter have to help people with PhDs.

I agree that the USA has a better view on immigration than the European Union, that's a long way short of being good. Both need immigration, but for different reasons. Europe has severe demographic problems, and a horde of reasonably well educated people within walking distance.
The USA has less of an issue with demographics, but needs to import people to counter the failings of its education system. Having a population of old, ignorant people is not a recipe for success.

Also the EU doesn't have an immigration policy. It has around 30 of them, Americans see racism in some of their southern states trying to form locally based harassment of coloured people who 'look foreign'.
That's nothing compared to Europe. Austrian governments have associates of the SS, yes, that SS, Ireland until recently gave citizenship to people with "Irish sounding names", Britain recognises gay marriage in citizenship but most others don't, it's extraordinarily hard to become a German citizen unless you're white, and whilst several EU states have removed all border checks with each other, some still have men with guns. In some parts of the EU, you are not allowed to live in a town unless the police say it's OK, even if you are a citizen of that country, born there.
I can get a visa for NY and work in SF, or Hawaii. An American wanting to work in the EU would need around two dozen.

 

[bigbadwolf]

Also the EU doesn't have an immigration policy. It has around 30 of them, Americans see racism in some of their southern states trying to form locally based harassment of coloured people who 'look foreign'.

That's nothing compared to Europe. Austrian governments have associates of the SS, yes, that SS, Ireland until recently gave citizenship to people with "Irish sounding names", Britain recognises gay marriage in citizenship but most others don't, it's extraordinarily hard to become a German citizen unless you're white, and whilst several EU states have removed all border checks with each other, some still have men with guns. In some parts of the EU, you are not allowed to live in a town unless the police say it's OK, even if you are a citizen of that country, born there.

Off topic, but Europe can't be understood without looking at this phenomenon. Not saying it's right or wrong (no moral judgments from me), but it's part of the warp-and-woof of the European psyche. Genetic proximity is key in Europe. The Third Reich and its racial policies were not some aberration; they tapped into a deep, subterranean vein of European feeling that remains alive to this day. The fault lines between Nordic and Slavic populations, between Northern and Mediterranean Europeans remain alive. Thus, for example, the reluctance of Germans to bail ouit what they see as a bunch of lazy and corrupt Greeks. The same reluctance wouldn't be there if it were Sweden. As for those who aren't European, they almost don't exist ontologically.

The US is very different. National feeling has found it difficult to assume a concrete form because for various reasons -- mainly immigration for the last hundred and fifty years -- homo americanus never became a concrete entity. So the Tea Partiers and their ilk try to give shape to an inchoate white nationalism, which has their European counterparts howling derisively, as being "white" has little meaning in Europe (for an illustration of this, look at common English sentiment these days towards Poles in England). For a politically incorrect view of the American situation, I might recommend Wilmott Robertson's The Dispossessed Majority.

 

[Andy Nguyen]

I can get a visa for NY and work in SF, or Hawaii. An American wanting to work in the EU would need around two dozen.

So the advantages should go to Wall Street as far as jobs in finance are concerned?

 

[JDMe]

Every morning Bigbadwolf starts with a socialist newspaper (socialist.org??? something like that, he posted an article once from that website) looking for any article which is anti-American/capitalist. Then he would go on to search for the remotest of articles on some Russian newspaper decrying America and capitalism and then would post it right away on QN. Well Mr. Wolf if you are in US you are eating from it's plate and it's food, so don't talk Russian.

As someone said earlier this century is not over for America, it has re-emerged in China and India and is flourishing. So true. If your socialism was that great China and India would not have shun it after 50 years of experimentation. Being American is no longer a matter of staying within it's boundary but adopting it's message of capitalism and freedom.

 

[ThinkDifferent]

Colored people? You mean illegal immigration. The USA is more than happy to have people from all over the world come here. The thing is you are not allowed to just walk over the boarder and become a citizen. I wonder if anywhere in the EU would allow me free citizenship and a job with all rights attached if I just hopped a fence.

no, you would not get a free citizinship. but you will also not get deported like a criminal if you get caught and will not get a 10 year ban for entering the country if you overstay your visa for > 1 year.