Do you think that the pattern of the US will continue like it has? Meaning, we have a long growth period followed by short recession followed by a long growth period and then another recession, etc.
Or do you think that with emerging economies around the world, a healthcare issue, a decline in manufacturing, a continued deficit and national debt, and so forth, the US won't be able to sustain any significant growth in the long run? With little reason to manufacture anything in the US with such high labor costs (with a few exceptions like food or semiconductors and such), combined with increasing education levels in the developing world, what will the US have to offer the rest of the world in the upcoming decades?
I'm kind of pessimistic about it, but I'm not an economist. Any other views?
-Lyn
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i see no reason for optimism for the usa or the western world, russia too, or the world for that matter.
the dictaters in china purged the country of its moral teachers and leaders. thats is to say they murdered 10s if not 100s of millions of good people.
the reason for the wests wealth is basic honesty. that honesty is fast disapearing. the reasason for the emerging economies emergence is they are riding on the wests coatails. when the west falls, they will fall too. the forces of dis-honesty are bound to triumph soon. their reward will be untold misery world wide. i think the chinese dictaters will purge the world of honest people once and for all, with civilization never to rise again.
I think the question we need to answer is, growth of what?
The fact is, much of the housing and credit problem that got us into this mess come from this belief of ours that "Growth" is somehow the be-all and end-all of an economy. Ditto the increasing number of what the former Avis executive Robert Townsend called "conglobulations and joint failiures." We've forgotten that the economy is supposed to serve us, not we it; and would do well to remember that the only thing that always grows is cancer - until it kills its host.
Frankly, I look for the credit mongers, mortgage brokers and their ilk to be back in business at the old stand in very short order; and for prices - especially housing prices - to climb back where they were and more, far beyond any true value. I'd like to think we've learned some lessons; but experience (and I don't exempt my own) tells me the smart money's on greed.
I think the question we need to answer is, growth of what?
The fact is, much of the housing and credit problem that got us into this mess come from this belief of ours that "Growth" is somehow the be-all and end-all of an economy. Ditto the increasing number of what the former Avis executive Robert Townsend called "conglobulations and joint failiures." We've forgotten that the economy is supposed to serve us, not we it; and would do well to remember that the only thing that always grows is cancer - until it kills its host.
Frankly, I look for the credit mongers, mortgage brokers and their ilk to be back in business at the old stand in very short order; and for prices - especially housing prices - to climb back where they were and more, far beyond any true value. I'd like to think we've learned some lessons; but experience (and I don't exempt my own) tells me the smart money's on greed.
By growth I mean growth of business, growth of new companies and industries, growth of job market, growth of standard of living, and so forth.
If the economic level stays flat, but population growth continues, then per-capita growth is negative. A completely flat economy would mean only enough new jobs to replace retirees, which would meaning growing unemployment and shrinking per-capita GDP if the population continues to rise.
If people in the US want to continue to have gainful employment, and want to have growing nest eggs, then growth is necessary. But whether it can continue is the question I'm asking.
-Lyn
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Two questions, then, are: How do we define "standard of living;" and, How do we determine that a "standard of living" has grown?
I do not for a moment advocate return to the days when "Woman's place was in the home," (and would note in passing that for many women those days never existed), but I lived through the Sixties and Seventies when so many fields opened up to women; and it wasn't long before the increased opportunity to work became the increased necessity, simply to maintain the lifestyle that a single breadwinner could provide for in the Fifties and early-to-mid Sixties. To my mind, where two incomes are required to provide what one could formerly, the standard of living is worse.
To my mind, it is. In the Fifties, in this small town where my wife and I moved a few years ago, there were three Main Street restaurants. There is now one, and it is open only because a local millionaire has more-or-less adopted it as a retirement hobby (and, in the bargain, now sometimes inflicts his own cooking on the customers). There were three service stations, each able to perform some degree of mechanical work and each providing fill'er up, check under the hood, wash the windshield service to all comers. Now the only pumps are at the local stop 'n rob, they are entirely self service, and sell a typical range of foods and drink. Enough to put the town's second grocery store out of business and leave the survivor struggling. The drug store has closed, apparently never to be reopened.
All of this, of course, is for "sound business reasons." The local restaurants and drugstore do not have the "economy of scale" that the chains do. Neither does the grocery which, given its size and cash flow, is tied to one supplier. It costs money to pay mechanics, and high school kids to pump gas. "More efficient" to go to self-service, whatever strain that puts on the disabled and some of our older residents.
Going back to my earliest days, I can count some eight major American auto manufacturers. There are now three; one bankrupt, a second "owned" by thew President of the United States, the third struggling. Things are even worse with the airlines. They grow fewer and fewer, and all lose money. As for local service, suffice that in the 1960s I could fly from Kansas City MO to Topeka KS on a 28 passenger DC 3 and be served coffee by a cabin attendant who might even have time to sit and chat. The last time I was over that route there was no attendant, no coffee -- and no lavatory! (Even the mid-late 1920s Ford Trimotor had a seat over a hole in the cabin floor!)
What this boils down to, I guess, is that economists and I differ in how we define "standard of living." If it's crunched numbers, I'm sure it's grown exponentially; but if it has something to do with the quality of life - with convenience, choice and true service without servility - I'd say the current recession simply puts the frosting on an already baked cake. We've lost ground.
Sorry to inflict a rant; but, though the pros would differ with me, the problem is that a real recovery is going to take a lot more than a change in the numbers,
to have economic growth you need population growth. when the birthrate declined the shorterm wealth increased. women were making money instead of spending it on kids. who do you think looks after the parents when they get old? the kids. oops.
pensions were based on a high birthrate. without kids who will pay to keep the old people alive? oops. america was the worlds factory after ww2 because europe was a crater. maufacturing is gone and doesnt look like it wants to come back.
Two questions, then, are: How do we define "standard of living;" and, How do we determine that a "standard of living" has grown?
Well, I can't compare it directly with decades ago because I wasn't alive. I can only listen to testimonies, look at the math, and read in history books. I mean, my father had to drop out of grade school to support his family, and things like that are very uncommon now (and usually illegal, as school is mandatory). Lifespans have increased, literacy has increased, and so forth. During summer internships I can make enough money off of an intern's salary to support a small apartment, a car, and food (no kids though).
Houses and land have gotten more expensive partly because population has increased while land surface has stayed relatively stable.
One way to measure standard of living is through the Human Development Index. Human Development Index - Wikipedia, the free encyclopedia
It's a rank that countries receive based on life expectancy, education, literacy, and per capita gross domestic product. It's not perfect but it's a reasonably objective way to measure it. When compared to rankings of per-capita income, it's closely correlated but not a perfect fit. For example, some smaller middle eastern countries have high GDP per capita but lower HDI because women are not as literate or well-educated and because the income is dispersed very unevenly.
I do not for a moment advocate return to the days when "Woman's place was in the home," (and would note in passing that for many women those days never existed), but I lived through the Sixties and Seventies when so many fields opened up to women; and it wasn't long before the increased opportunity to work became the increased necessity, simply to maintain the lifestyle that a single breadwinner could provide for in the Fifties and early-to-mid Sixties. To my mind, where two incomes are required to provide what one could formerly, the standard of living is worse.
To my mind, it is. In the Fifties, in this small town where my wife and I moved a few years ago, there were three Main Street restaurants. There is now one, and it is open only because a local millionaire has more-or-less adopted it as a retirement hobby (and, in the bargain, now sometimes inflicts his own cooking on the customers). There were three service stations, each able to perform some degree of mechanical work and each providing fill'er up, check under the hood, wash the windshield service to all comers. Now the only pumps are at the local stop 'n rob, they are entirely self service, and sell a typical range of foods and drink. Enough to put the town's second grocery store out of business and leave the survivor struggling. The drug store has closed, apparently never to be reopened.
All of this, of course, is for "sound business reasons." The local restaurants and drugstore do not have the "economy of scale" that the chains do. Neither does the grocery which, given its size and cash flow, is tied to one supplier. It costs money to pay mechanics, and high school kids to pump gas. "More efficient" to go to self-service, whatever strain that puts on the disabled and some of our older residents.
Going back to my earliest days, I can count some eight major American auto manufacturers. There are now three; one bankrupt, a second "owned" by thew President of the United States, the third struggling. Things are even worse with the airlines. They grow fewer and fewer, and all lose money. As for local service, suffice that in the 1960s I could fly from Kansas City MO to Topeka KS on a 28 passenger DC 3 and be served coffee by a cabin attendant who might even have time to sit and chat. The last time I was over that route there was no attendant, no coffee -- and no lavatory! (Even the mid-late 1920s Ford Trimotor had a seat over a hole in the cabin floor!)
What this boils down to, I guess, is that economists and I differ in how we define "standard of living." If it's crunched numbers, I'm sure it's grown exponentially; but if it has something to do with the quality of life - with convenience, choice and true service without servility - I'd say the current recession simply puts the frosting on an already baked cake. We've lost ground.
Sorry to inflict a rant; but, though the pros would differ with me, the problem is that a real recovery is going to take a lot more than a change in the numbers,
So where do you suppose the future is going, and what steps should be taken to ensure it's a good future, in your opinion?
-Lyn
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Would that I had easy answers! I'm afraid I'll have to be pretty general here.
First, we need to answer the question I posed above, "Growth of what?" You, to your credit, provided specific answers; but for decades we have taken it almost a mantra that "the economy must grow," that this year's GDP must be greater than last year's. Yet we've known in recent years that far too many of those jobs the politicians boast of creating do not pay a living wage. The numbers take on new meaning when you consider the number of people who must hold down two, maybe three jobs just to make ends meet.
Shareholders and stakeholders need to see to it that all employees of the companies they're involved with are paid fairly. This means, quite simply, no more multi-hundred million dollar compensation packages for incompetent top managements. (In fact, anyone who wants one of those jobs simply for the money should be looked at askance. Find the people who accept that to get big money you're supposed to get big results.
Encourage competition, including new competition. Up until last October we were insisting "Big is Beautiful." It is not. Lehmann Brothers, the automotive Big Three and the airlines are proof of that. They don't make money; but it's quite true that some have grown so large that their failiure would be catastrophic. Let's bring some competitive pressure on them that will whittle them down. (Which is, of course, exactly what Toyota and Honda have been doing for decades now.)
Labor and Management both need to get it into their heads that their relationship is symbiotic. My experience in almost every job I had was that each views the other as an adversary. Each would do well to take a long, hard look at the legitimate needs of the other, then work out agreements that best further everyone's interest.
We consumers have to start asking some hard questions of ourselves. Besides "Do I need this?", we need, "Does this really improve the quality of life I'm living and want to live?" (A triage I use - when I think to remember it - is "Need to have/good to have/nice to have." You're ahead of the game if you pass up at least half of the "goods," all of the "nice." Unless you really have money to spare.
I'll close with a story cribbed from Garrison Keillor, about the dry goods merchant in Lake Wobegon (whose name I forget). Keillor spoke of how this nobody liked the blue jeans he stocked, they really preferred Calvins, and these were available at a mall less than an hour's drive away. Yet they did but the local guy's jeans - because, when the baby stopped breathing, it wasn't going to be Calvin driving up in the VFD's ambulance. We really, really need to keep that in mind. Almost nobody likes that millionaire who's keeping our restaurant open. He's in many ways not easy to like. But if he folds, there's no more restaurant. Here in blizzard country where highways can be closed for days, we could really miss it.
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