The accepted economic paradigm is wrong: Americans need less debt, not more credit.

[w4rma]

There is not a lending problem. The problem is that there aren't enough debt-free Americans to lend to.

• Liberalize the bankruptcy laws and let Americans get rid of our debt more easily.
• Allow Americans to more easily unionize, this will increase salaries and wages which will, in turn, allow Americans to pay back our debts.
• Quit forcing Americans to compete against foreign and illegal workers who have a lower standard of living than Americans do. This will force businesses to pay Americans competitive wages for our knowledge and work.

[ColbertWatcher]

1. Americans aren't competing against foreign workers.

Corporations are changing the laws. If that little loophole is closed, we'll have no problem getting jobs.

[Deja Q]

3. In theory, how long would it take to change those laws?

[ColbertWatcher]

6. First the GOP-controlled media begins a smear campaign ...

... then the dittoheads run with it on the internets and hate radio for a few months.

Wait until it gets really hot outside and voila! Another "isolated incident!"

[grahamhgreen]

2. Well this is it exactly. We need MORE PAY, not more debt.

[Deja Q]

4. The last 30~40 years have shown, adjusted for inflation, devaluation of workers' pay.

Even though productivity has gone up.

[leftstreet]

5. "MORE PAY, not more DEBT" would make great protest banners

:thumbsup:

[annabanana]

7. yup yup. . . .. . .. . . . n/t

[grahamhgreen]

17. I think they may actually be in a phase where they are fleecing us even more deeply

Deeper and deeper until America can never again be a thereat to the power elite

[sandnsea]

8. That's just not true

We are in too serious of a situation to just pull financial theories out of your ass.

The banks are insolvent. That is a lending problem.

The fact that there are many other financial problems that are colliding at once, does not change the fact that the banks are not lending because they only have enough money to service debt.

[leftstreet]

9. Anyone who currently qualifies for a loan can get one

no?

[kentuck]

21. And why do the banks not have enough money to service their debt?

Because they loaned it to every Tom, Dick, and Harry and their dogs. On credit cards and home purchases. You simply prove the point. They loaned so much that they can't cover it. Who did they loan it to? Everybody and anybody. The OP is absolutely correct.

[Warpy]

10. Mostly, tax the hell out of corporations that move jobs offshore

providing a hefty disincentive to paying workers in cheaper currencies while expecting Americans to pony up the same number of dollars for their products, jobs or no jobs.

[Fire1]

11. Exactly.

[stklurker]

14. offshore

Look, I am not against this.. but what keeps the corporations from not just moving offshore themselves... so far the American public has shown they WILL buy from the cheapest source... not necessarily American.. dont like it, but that's where we are.. especially if wages stay down... how do we get out of the catch 22 here?

[Warpy]

16. Prices didn't go down on a lot of stuff that was offshored

like Nike shoes. That's something I think even the dimmest Americans understand, that the corporate bosses are taking the labor savings and pocketing it in bonuses.

My guess is that had wages kept pace with true inflation, there would be far less demand for the sleazy crap from China that is poor quality, breaks easily, or falls apart in the wash. We know what false economy looks like now.

The only thing that stops this kind of race to the bottom we're all in is government intervention in the form of taxes at the top to provide a disincentive to greed and supported wages at the bottom to support both spending and saving.

This is at its heart a jobs and wages crisis. People pay their debts when they earn enough to do so and people avoid running up crippling debts when they're paid adequately. Only by rebuilding our infrastructure and applying government pressure to keep jobs here once they are created can we get out of this mess long term.

[Lydia Leftcoast]

18. There is only one legitimate reason for moving production offshore:

If you are making something for the Chinese market, then shipping costs and other considerations make it logical to produce it in China.

I have no argument with Coca Cola having bottling plants all over the world, or car manufacturers making right-hand drive vehicles overseas for sale in the UK and other countries where they drive on the left.

But when U.S. companies send manufacturing overseas and then re-import the products (shoes, TVs, clothing) for sale in the U.S., the "advantage" of lower prices is offset by the loss of the jobs that used to manufacture those shoes, TVs, and clothes. Working class people, whose parents and grandparents lived on one income and still owned houses and cars, are making less in real dollars than their parents and grandparents did, so they have no choice but to buy stuff made in the Third World.

In the 1950s, when we made almost everything we consumed, wages and prices were in rough balance, so that yes, stereos were pretty expensive, but people still bought them and kept other Americans employed.

If I were in charge of purchasing for the federal government, I would give absolute preference to items manufactured in the U.S. by legal workers. It wouldn't matter if someone with offshore plants was cheaper. If no U.S.-owned manufacturers made the product with U.S. workers, I would then turn to foreign-owned companies that had U.S. manufacturing plants. (What makes a company "American" if it has no U.S.-based rank and file employees and perhaps has its legal headquarters in the Cayman Islands, even if the owners live in Manhattan and winter in Hawaii?)

I would also lay confiscatory tariffs on products manufactured by American companies overseas for the U.S. market.

I recall hearing many years ago that about 1/3 of America's trade deficit is made up of such re-imports.

[Warpy]

20. You're correct, which is why I pointed out that Heinz

followed the model of production close to consumption when Kerry was running and his wife was being trashed as an evil corporatist.

I was hoping that shipping costs would rise sufficiently when the hedge funds were jacking up the price of oil that manufacturing close to consumption would be considered as a preferable model. Unfortunately, the crash caused a run on the hedge funds and we know what happened to oil futures.

Even now they're talking about retrofitting freighters with sails to cut the cost of fuel. Of course, that will drive up labor costs and the effect on shipping costs will be nil.

Eventually, piracy and increasing fuel prices will force a return to a sane manufacturing model. Nationalization by countries that have had enough of foreign devils and multinational corporations will also be a factor.

In the meantime, upper management will offshore labor and pocket the difference.

[havocmom]

12. Wage growth not stagnation and more $$ to top tier of society

Credit became the rage instead of paying living wage. There's an interesting DU thread on that. Will go hunt it up and provide link. Makes a lot of sense. Credit to allow underpaid working class to keep spending to hold up the ownership class.

edited to add link to that thread: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x5396536

It is a good think to consider

[The Gunslinger]

13. This makes way too much sense.

The corporations that are in charge would never go for it though.

[scarletwoman]

15. The problem is that there's not enough Americans with decent-paying jobs.

[Crewleader]

19. you said it my friend

:hi:

[kentuck]

22. Hi Crew!

Long time...no see. How is everything? People are wising up, I think?

[leftofthedial]

23. you need to figure out some way for the Wall Street elite to scam that system

for more than they are scamming this system for, or it will never happen.