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Massive concentrations of wealth, or even modest wealth, are what built this country and provided employees the ability to consume. It's only when the velocity of money slows to a snail's pace, because of disincentive to invest/spend, that the economy constricts for everyone. No need to speculate, the next four years will tell the story.Originally Posted by YardleyLabs
Last edited by greg ye; 01-14-2009 at 04:27 PM.
GY
The word "Politics," is derived from "Poly," meaning Many and from "Ticks," meaning Blood Sucking Parasites-Kinky Freidman.
He should have passed out the letter with copies of this one, I can bet it's flying off the shelves:
"For everyone to whom much is given, of him shall much be required." -- Luke 12:48
Raven - Moneybird's Black Magic Marker***
(Esprit's Power Play x Trumarc's Lean Cuisine)
Mick - Moneybird's Jumpin' Jack Flash***
(Clubmead's Road Warrior x Oakdale Whitewater Devil Dog)
Peerless - Moneybird's Sole Survivor
(Two River's Lucky Willie x Moneybird's Black Magic Marker)
That comment is equivalent to my suggesting that your notions come stright out of "Mein Kampf". Have you read "Das Kapital"?
The last period in which "capitalists" were permitted to operate with essentially no controls whatsoever was during the period following the Civil War and continuing unchecked until the end of the 19th century. It conrinued as a force until the 1930's when brought under increasing control. It was the era of what were called the "Robber Barons" and linked to an astronomical growth in the abuse of child labor, on-going problems with food supply captured in Upton Sinclair's book The Jungle, massive concentration of power and money in the railroads resulting in criminal violation of individua rights and virtual enslavement of immigrants recruited for construction, virtual monopolization of the oil industry, etc. In America, "radical" writers, called "Muckrakers" played a key role in documenting the abuses that went along with the growing concentration of economic power in a small number of families. Republican President Teddy Roosevelt was one of the first to take action to impose limits on the unbridled power with the Sherman Anti-trust Act and the breakup of the oil companies. In the business world, as Marivn noted, Henry Ford developed a different model for employment that allowed workers to benefit from the growth of the business and, in the process, created a whole new set of consumers able to help Ford grow. Issues continued, but this country escaped the worst of the social disintegration that accompanied the robber barons. In others, a similar concentration was directly linked with the Russian Revolution, the growth of militarism in Germany and the post war collapse of the Weimar republic which lay the groundwork for Hitler and the growth of Fascism, etc.
In this country, revolution was probably prevented by the New Deal reforms. During WWII, governemnt engagement in the economy -- not as the planner or director, but as a regulator -- gained acceptance and was a positive factor helping the US to recover faster and stronger during the 1950's and 60's than any other country in the world. The risks of a return to the earlier period of unbridled corporatism were pointed out by the famus Communist Dwight D. Eisenhower as he was leaving office in his warning about the dangers of the "military industrial complex". That growth continued almost unabated with astronomical marginal tax rates until the energy "crisis" (I would say energy war) of the 70's. During that period of growth, incomes grew at all levels and the reduced concentration of wealth seen in American was generally credited as being a major reason why we were more successful than other countries with a greater concentration of wealth.
I believe that much of the economic problems we face today are directly the result of the return to more of a pure economy of greed and the encouragement of short sighted greed by the government. Economists have long recognized the difference between a "competitive market economy" which is very good at meeting most, but not all, needs for healthy growth, and an uncontrolled "free market" economy that descends into monopolism. Economic monopolies benefit no one except their owners and ultimately destroy the economy by using their power to undermine innovation that might threaten entrenched positions.
Personally, I believe that the appropriate measure of economic health in an economy is real median income. If that number is going up than most people are benefiting from growth. If that number is going down but average income is increasing (the situation we have faced in recent years), than we are facing economic and political disintegration. If both median and average income are declining, as is the case today, we are in the midst of econmic failure. Generally, the best way out of that failure will involve increasing relative incomes in the lower 70% of the population first to rebuild the consumers needed to drive long term growth.
The question I would pose is what are the facts that lead you to say that massive concentrations of wealth are the foundation for growth. You actually say "Massive concentrations of wealth, or even modest wealth, are what built this country and provided employees the ability to consume."
I would argue tht the bolded part of your sentence is actually the most important and that the weakness we see today is because employees have not been allowed to benefit from growth and have now run out of money as a result.
Jeff you mentioned something earlier about "shift in the return on labor". How about the effect of 12 to 20 million illegal laborers added to the supply of labor? The laws of supply and demand at work. If there is unchecked capitalism it is on the side of the labor supply. We failed to check it. The same reasons for allowing the illegals was the same for slavery.
I don't think illegal (or legal) immigration is a significant factor. However, you are correct that "laws" of supply and demand are at the center of much of what has happened. Globalization, which I believe is desirable and inevitable, has been the primary force enabling the shift in returns between capital and labor. As long as the world is at least basically stable, the movement of capital is more flexible now than ever before in history. While labor (meaning most of us) is less flexible, it has also become much easier to move production activities to areas with lower labor costs meaning that labor has to compete on a global scale for the first time.
While some of this was possible even in the 50's and 60's, comparatively higher education levels and better social infrastructure made the American worker more productive and therefore "worth" a higher salary. That advantage has eroded.
We have invested less in education and infrastructure than other nations and the productivity gap has narrowed. As a consequence, American wages and the American standard of living have fallen relative to those in Europe and much of Asia. That, too, is inevitable. It can't be "fixed" by buildings walls around our country. However, it underscores the fact that issues of economic justice and competition must be addressed in a global manner. It also means that if we want to maintain our own position of economic leadership we must invest in education and economic infrastructure (communication lines, energy production, transportation, etc.) with the same fervor we have traditionally reserved for building weapons.
Jeff, your posts are great. What I meant by "concentration of wealth" was the availability of capital or credit by business and was a poor play on how you initially used the phrase. Let's face it: With out strong employers, our consumer economy is doomed. To exclude business from fiscal policy considerations at this time is pure folly. No references here to back up my thoughts, pure Garage Logic.
GY
The word "Politics," is derived from "Poly," meaning Many and from "Ticks," meaning Blood Sucking Parasites-Kinky Freidman.
There are 154 million in the US labor force. 12 to 20 million illegals which is 7 to 12 percent of the civilian workforce is not a "significant factor"! If unemployment gets to 12% will that be insignificant?
PS Expenditures on education have little to do with learning. Take the DC school system. Proper parenting is more influential, which requires a strong family unit that liberals attack.
"U.S. tops the world in school spending but not test scores
WASHINGTON (AP) — The United States spends more public and private money on education than other major countries, but its performance doesn't measure up in areas ranging from high-school graduation rates to test scores in math, reading and science, a new report shows.
"There are countries which don't get the bang for the bucks, and the U.S. is one of them," said Barry McGaw, education director for the Paris-based Organization for Economic Cooperation and Development, which produced the annual review of industrialized nations.
The United States spent $10,240 per student from elementary school through college in 2000, according to the report. The average was $6,361 among more than 25 nations.
The range stretched from less than $3,000 per student in Turkey, Mexico, the Slovak Republic and Poland to more than $8,000 per student in Denmark, Norway, Austria and Switzerland.
The report cited Australia, Finland, Ireland, Korea and the United Kingdom as examples of OECD nations that have moderate spending on primary and lower secondary education but high levels of performance by 15-year-olds in key subject areas.
As for the United States, it finished in the middle of the pack in its 15-year-olds' performance on math, reading and science in 2000, and its high-school graduation rate was below the international average in 2001 — figures highlighted by Education Secretary Rod Paige.
The country fared better in reading literacy among fourth-graders, where it finished among the top scorers in 2001. But the declining performance as students grow older served as a warning to the nation, Paige said.
"These results highlight an extremely important truth about our educational system: I think we have become complacent, self-satisfied and often lacking the will to do better," Paige said.
Appropriate spending has emerged as a key political issue this year as the nation's schools deal with federal reforms. The No Child Left Behind law demands better performance from students and teachers, particularly in low-income districts, but critics say Republican leaders in Congress have spent too little on the effort.
The report, released Tuesday, sets international benchmarks and identifies areas for improvement.
Based on educational level, the report says the United States spends the most on higher education for every student and is a leading spender on primary and secondary education.
Paige said the nation must fill the gap between it and other countries, and bridge another between students succeeding in American public schools and those falling behind. Within that promising fourth-grade reading showing in the United States, Paige said, is a revealing number: the higher the percentage of poor students, the lower the average score.
"There's no such thing as a 'typical' fourth-grader," Paige said. "We want to go to each fourth-grader. We need to see who needs the help."
The new federal law requires states to chart adequate yearly progress — not just for a school's overall population, but for groups such as minorities and students who speak little English. Sanctions grow by the year for schools receiving low-income aid that don't improve enough. Consequences range from letting students transfer to a better school within their districts to handing control of a poor-performing school to the state.
"No other country is imposing such a rigorous requirement on its schools," McGaw said.
But from school boards to Congress, growing numbers of leaders say the federal government isn't committing enough money to the task. States must, for example, expand their standardized testing and put a highly qualified teacher in every core class by 2005-06.
Federal education spending has grown by $11 billion since President Bush took office, Paige said, but that includes spending beyond the first 12 grades. Even increased money for elementary and secondary education doesn't cover the law's sweeping expenses, said David Shreve of the National Conference of State Legislatures.
"
Last edited by tpaschal30; 01-15-2009 at 07:39 AM.
It's relatively insignificant as a depressor of wages since most of the illegals are filling minimum wage jobs. The jobs exported to other countries represent a greater portion of our employment and also represent relatively skilled positions.
I agree with many/most of the comments on education in your "PS". My own observation, from personal experience as a student in Switzerland, and parent/grandparent in America, is that we do a pretty good job in elementary school and college and a terrible job in secondary school (7-12).
For secondary students too much emphasis is placed on non-academic activities (sports, jobs, social activities) and too little on academic work. When I graduated from high school, where I was a good but not stellar student, I had 32 credits including 18 credits in lab sciences. I took advanced placement classes in six subjects. This compares with US norms of 18 credits in total with limited opportunities for advanced placement classes.
The difference was that I went to school from 8 AM - 4 PM every day with virtually no free periods, taking 8 classes. Homework took an average of 4 hours/night with an occasional (2-3 times/month) all nighter to catch up. That was a "normal" schedule for European schools at that time. While I followed an "American" track in my studies, the European norm was also to complete 13 years of grade school before attending university. A reason for this was that a higher percentage of students did not attend college and the secondary schools were designed to provide a more complete educational foundation, somewhat comparable to what we do through junior colleges. In France and Switzerland, graduation was tied to passing a national proficiency examination covering a broad range of subjects including foreign languages, science, history, primary language, literature, and philosophy. Think how much more could be done in American high schools by adding 2-3 hours to the daily class schedule and by defining proficiency to include a little more than reading, writing and arithmetic.
Let's assume they never came here. One, a machine would have tobe produced to do what they do now or two a wage paid high enough to get legals to do it, which would compete with other jobs(rising tide raises all boats), or three it would be noncompetitive and gone. In all cases it would either create jobs(building machines), raise wages, or be more efficient. That is how the market and capitalism works! Both parties are in cahoots with business to keep the supply of labor high and cheap.
We will be relegated to following other countries instead of being the leaders in innovation, so long as we, as a society, continue to view being intelligent as "uncool". It is very, very difficult to get young people interested in a career in the sciences or technology (unless it is writing gaming programs). Some of this (maybe a large part) has to do with how intelligent people are portrayed on television. Think of any of a number of popular TV shows, and the most intelligent characters are almost always portrayed as socially awkward, unintelligible, and badly dressed. In short, nothing any self-respecting teenager ever wants to be within a hundred miles of! Is it any wonder that our mathematics, science, and technology schools are increasingly attended by foreign nationals, and less and less by US citizens?We have invested less in education and infrastructure than other nations and the productivity gap has narrowed. As a consequence, American wages and the American standard of living have fallen relative to those in Europe and much of Asia. That, too, is inevitable. It can't be "fixed" by buildings walls around our country. However, it underscores the fact that issues of economic justice and competition must be addressed in a global manner. It also means that if we want to maintain our own position of economic leadership we must invest in education and economic infrastructure (communication lines, energy production, transportation, etc.) with the same fervor we have traditionally reserved for building weapons.
Lisa
"Go sell crazy someplace else. We're all stocked up here." - Jack Nicholson in As Good As It Gets
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