What kind of economy are we creating?

[matmar]

What kind of an economy will produce jobs that pay a living wage/middle class lifestyle for the vast majority of the population?

The period after WW II up until the late Carter years and the onset of Reaganomics and the subsequent NAFTA/SHAFTA signngs was a period when life in America was what everyone thinks of as the golden age of middle class prosperity.

What did the country do to "promote the general welfare" in those days that allowed for such "happiness"?

What factors contributed to the largest and longest expansion of the growth of a middle class in history?

We have the historical record to rely on as to how to get the US economy moving in a direction that brings back those days of yore.

[Turbineguy]

1. We are creating an economy

based on harming others. You harm me, I harm you. It's a win-win situation!

[NNN0LHI]

7. That economy you just described is exactly the one I lived through during the 1980's

I came to the exact same conclusion over 30 years ago.

The end result of that type of economy was the rich got richer.

Don

[Egalitarian Thug]

2. One based entirely on stealing other's work and leveraging the proceeds

through a wide variety of financial scams until you have "created" enough wealth to buy a facade of respectability. In short, it's organized crime.

[invictus]

3. We have a bubble economy: stock market bubble, real estate bubble, one ponzi scheme after another ..

... with the top 2% taking all the profits and the 98% holding the bag when the ponzi scheme collapses.

[hack89]

4. A two tiered economy

good jobs for people with post high school education (this includes more than college degrees but things like certification and/or apprentice programs) and shitty service jobs for those without.

What many don't realize is that even the "trades" like electrician or boat builder require some post high school education. Most good health care jobs require post high school education like xray or lab techs. The same applies to IT - certifications are very important.

Kids need to understand that a HS diploma is no longer good enough. Times will be hard for high school graduates - it will continue to me unbearably grime for HS dropouts.

[Bake]

16. My son is nearing the end of college.

And I am terrified at what his job prospects will be.

All the good jobs are GONE. 50% of college graduates are unemployed/underemployed.

Bake

[hack89]

21. Depends on his major

employment opportunities for some fields are excellent.

[Bake]

22. Environmental science. There ought to be opportunities there.

I hope so.

Bake

[Lionessa]

5. "WE"?? There's no "we" anymore, just tPtB, they're happy, they could care less that we aren't.

All the glow and wondiferousness of yesteryear for the middle class apparently didn't pay off well enough for the 1%, that's why they are pushing it back so that all countries are third world countries with cheap labor, no corporate responsibility, and massive military/police/penal systems to keep anyone disrupting their plans in check.

Unless and until there is a real rebellion, much bigger and wide spread than Occupy, that somehow outlasts the police and military attacks which will undoubtedly escalate as participation escalates, we don't matter.

[hunter]

9. Yes. "WE" have no control over the plutocracy and the corporate dystopias they are building.

"We" are modern serfs. Some of us are slaves. More and more of us are displaced crofters looking for work and housing on the meaner streets of the cities.

“The illusion of freedom will continue as long as it's profitable to continue the illusion. At the point where the illusion becomes too expensive to maintain, they will just take down the scenery, they will pull back the curtains, they will move the tables and chairs out of the way and you will see the brick wall at the back of the theater.” ― Frank Zappa

[raccoon]

6. Several, but one that obviously doesn't exist any more: at the end of WWII,

some other countries, especially Germany and Japan, were in ruins. Over the decades they rebuilt and
produced products that rivalled those made in the USA.

[pampango]

8. As you say: the historical record is a beginning.

We had high and progressive taxes after WWII. We had strong unions. We had an effective safety net. We had effective corporate regulation and oversight of the financial sector. All of these we had thanks to Democrats.

Our income equality was among the best in the world and the productivity gains made for the first 25-30 years after the war were translated directly into increased pay for the working class.

What went wrong in the US was the we cut taxes and made them more regressive; emasculated unions; shredded the safety net and deregulated everything under the sun particularly the financial industry.

And then we looked around and wondered how things got so bad and how income inequality got back to pre-Depression levels (when taxes were low and regressive, unions were weak, there was no safety net and little corporate regulation).

[saras]

10. We are failing. The old economy depended on colonialism and expanding RATES of resource extraction

The old manufacturing economy will never exist again, anywhere in the world (or at least not for 5K years or so).

We have made no significant gains towards sustainability since we redefined sustainability to mean short-term profit instead of 10K year stability.

We still seem to be suffering from the delusion that all of America can pretend to be middle-class and successfully cling to the coattails of the rich.

One thing we need to do if we want a future is adopt a pure, simple, across-the-board, "No polluting. Ever. Of anything." prohibition backed up by taboo as well as law and intellect. Every business, every product, every service can get created from within the model of simply not having any right to harm others, in any way, in order to produce an economic good.

But if you want to bring the Fifties back, you need a new South America, a new Asia, and a new Middle East to exploit. The old ones are used up or otherwise occupied.

[hifiguy]

11. A feudal economy

where there is a tiny minority with most of the wealth, a "courtier" class of professionals such as attorneys and financial types who are needed by the tiny minority to manage certain affairs, and a vast class of serfs and peons in which the overwhelming majority of the population will dwell.

[dkf]

13. People can certainly turn themselves into serfs by borrowing money.

Then they work for the person who they borrowed from.

[dkf]

12. That was an aberration thanks to the world wars.

If we had lost those wars and experienced more destruction, I doubt the economy would have been so nice.

[pampango]

17. Our economy would have been worse if we lost those wars and experienced more destruction,

but mostly due to whom we would have lost to. Germany and Japan lost and had their economies devastated in the process, but have stronger economies and middle classes today than we do.

[taught_me_patience]

14. Oligarchy ala Mexico

A few super rich insiders and peasants.

[Cronkite]

15. Destroying the majority of Europe's manufacturing base helped.

I think we enjoyed a great middle class economy post WWII due to the fact that much of Europe was laid to waste in the war. Being the one country that did not suffer destruction gave us a bit of an edge.

I suggest that we bomb China back into the stone age in order to regain our previous status...... Yes, I am just kidding but if China lost its manufacturing base it couldn't hurt us, could it?

[A HERETIC I AM]

18. Exactly correct.

The reason we did so well in the late 40's through the 60's and into the 1970's was there was no competition. We were pretty much the only ones left with an intact infrastructure and a bunch of new factories. Only Australia came through WWII as unscathed as we did, but they weren't the manufacturing powerhouse we were.

With regard to your comment about China, I am afraid to say, it might just come to that. A better scenario would be for the Indians to do it for us.

[Zalatix]

29. I know you have no answer for this but what the hell.

The reason why we're in this economic mess is not because the rest of the world "caught up" with us. The reason is because the rest of the world offers cheaper labor than we do. America is far more productive per capita than China or India but their labor costs are what attracts corporations to move American jobs there.

The only way you can beat China is not to bomb them - it's to have lower wages than they have, or to devalue your currency against theirs. And we're doing both. THAT is why manufacturing jobs are coming back to America.

http://blogs.cisco.com/manufacturing/made-in-the-usa-again/

-- Wage and benefit increases of 15-20% per year at the average Chinese factory will slash China’s labor-cost advantage, reducing the savings gained from outsourcing will drop to single digits for many products.

-- Transportation, duties, supply chain risks, industrial real estate and other expenses will minimize cost savings of manufacturing in China compared to the US.

-- Automation and other productivity improvements in China will further undercut the primary attraction of outsourcing to China: access to low-cost labor.

-- Rising income levels in China will create greater demand for goods in the domestic Chinese market, driving production work for the North American market back to the US.

-- Because of rising Chinese labor costs, manufacturing of some goods will shift to other low-labor cost countries. However, compared to the US, those countries do not have the infrastructure, IP protection or political stability that is necessary to mitigate risk, which will encourage manufacturers to return to the US.

Manufacturing jobs coming back to America:
http://www.washingtonpost.com/politics/us-manufacturing-expands-at-fastest-pace-in-10-months-as-orders-hiring-and-production-rise/2012/05/01/gIQAs4R2tT_story.html

The Institute for Supply Management, a trade group of purchasing managers, said Tuesday that its index of manufacturing activity reached 54.8 in April. That’s the highest level since June and up from 53.4 the previous month. Readings above 50 indicate expansion.

The report, which exceeded analysts’ expectations, led investors to shift money out of bonds and into stocks. The flurry of stock buying put the Dow Jones industrial average on track for its highest close in more than four years.

.............

A measure of employment in the ISM’s survey rose to a 10-month high. This showed that factories are still hiring at a solid pace.

[A HERETIC I AM]

31. Not sure you asked a question of me, but what the heck.

To a degree, I think the above is correct. One other thing that will drive manufacturing back to the US is rising fuel prices. Whil still fairly cheap to ship goods across that rather large lake between China and the US, it will get to the point that it will be cheaper to make things here (whatever those "things" are) than ship them across the Pacific.

I also think that there is a HUGE danger from an environmental point of view of 1 billion + Chinese and their Indian counterparts all get cars, air conditioning, refrigerators and the rest of the modern conveniences we take for granted. Unles they do it smartly, and I mean REALLY smartly, we are all fucked.


There is another possible solution that is rarely if ever discussed. Tell American companies that want to make things overseas - no problem, help yourselves. Except that the factories over there must comply with US EPA and OSHA regulations. IF they don't, your goods are charged the appropriate tariff on arrival in the US.

Seems to me that low wages aren't the only thing attracting companies to do business elsewhere. Much less stringent environmental and worker safety rules are a savings as well.

[pampango]

19. I know you're joking about bombing China back to the stone age, but what if Mao

had pulled off an hereditary succession like the Kim's have done in North Korea. What if his descendants had retained control and maintained his domestic policies, as the Kims have done? China had no manufacturing base to speak of in Mao's day and was not a part of the global economy, just like North Korea. What if that were still true today? It's all hypothetical, but interesting to think about.

[hifiguy]

24. There couldn't really be a Mao dynasty

because (1) because his surviving children were daughters; and (2) he never designated any successor.

Like Stalin, he was a paranoid and engaged in periodic purges, the best known of which was the Cultural Revolution of the 1960s, which saw Deng Xiaoping exiled to a collective farm. How Chou En-lai survived as an unpurged relative pragmatist was something of a miracle. Many purged former higher-ups, like Deng, managed to survive the Cultural Revolution, bided their time and moved when Mao died. Virtually everyone had been alienated by Mao's last wife, Jiang Xing and her protege Lin Biao, his successor Hua Guofeng was a cipher, and the pragmatists, led by Deng, removed the remaining Mao clique from power in due course. The rest, as they say, is history, and Deng-inspired technocrats have controlled the country since his death.

The current leaders of China are a nasty bit of work, but look relatively lamb-like compared to the brutality of Mao, what with his mass starvations and purges that resulted in the deaths of millions of Chinese.

The Kims have gotten by because there have been sons to carry on the dynasty - a strangely Confucian tradition in a communist country. The Kims combine the worst of Mao and Stalin into something that is wholly their own and, thankfully, not exportable.

[Zalatix]

28. Your "what should we do, bomb them?" argument is downright childish. And old, too.

The way to beat free trade is not to bomb anyone back to the stone age.

The way to beat free trade is to use tariffs to stop the outflow of American jobs overseas, and to block the excessive amount of cheap labor imports.

Or better yet we could just beat China on wages, or let China beat itself on wages. This is in fact happening now. Neither you nor your free trade crowd have an answer to this:

http://blogs.cisco.com/manufacturing/made-in-the-usa-again/

This is proof that your beloved free trade is downright unsustainable.

[madokie]

20. Greedy fucks have really screwed things up

until something is done about that we'll continue to go down hill. If our Press did their job they would be berating the rich man for wanting it all when we have people living in the streets for instance. Right now we have no one on our side. Our congress critters are all bought and paid for so theres no help there. The Press is against us so no help there. About the only entity I see that is on our side is the President and his cabinet. Everybody else wants to keep on fucking us more and more.

[jwirr]

23. I lived those years and losing our jobs overseas is the key change. Also lowering the tax rate for

the rich. We were pretty much self sufficient back then. Made almost everything we needed ourselves. Oh, and I forgot banks were regulated - especially with the glass-steagel law. Edited to add - too much easy credit. It was one thing to borrow to buy or build a house but to pay for the little things was not done then.

[lunatica]

25. One word. Unions.

If you want to know what made the middle class prosperous, there's your answer. Unions did.

[KurtNYC]

26. Germany is now the number 2 exporting country in the world

Not per capita, just straight up #2.

At the end of WWII, much of europe was devastated and unproductive. Factories and farms in the US were expanding to fill the gap. And the population of the US was 1/3 of what it is today (132m vs 311m). How do we get back to that? We would have to bomb Europe into the stone age, nuke Japan twice, kill or deport 2/3s of the US population, etc....

We can't go back. Global warming may create drought, famine, and the spread of tropical diseases to more heavily populated areas of the US. The challenges of the future are very different from the challenges of the 20th Century but the low hanging fruit for improve quality of life includes:
- defeat Mitt Romney
- switch to the metric system to improve exports and engineering of US goods
- universal health care to put us on par with Canada (where US manufacturing jobs go to reduce costs) and other industrialized countries
- stop mindlessly pushing EVERY student into college and start promoting more tech schools which are aligned with emerging jobs, and
- declare "war" on global warming or unemployment or something (besides people) that will unite us against a common foe

[Zalatix]

27. Your ideas will not increase US exports. Nothing can increase US exports except MUCH LOWER wages.

Period. Dot. Stop.

[KurtNYC]

30. but Germany does not have low wages

exclamation mark