Rolling US Economy Into The Shitbin Thread

Hey do you expect oil companies to provide their own security?

let atlas shrug away the enemies of the oil companies

been looking for an answer to this question: what is the engine that will drive the u.s. economy for the forseeable future? in the (now distant) past, the us had thriving steel-mills, a manufacturing base, etc., all of which made things the world needed, and provided solid, long-term jobs for many u.s. male high-school graduates. i imagine that part of the idea behind globalization was that lower-skill jobs in these and other industries would move to cheap-labor markets, while higher-skill jobs in these and other industries would flourish in the u.s. but many forces, including the u.s.'s failure to make the kind of massive investment in public education needed to create that type of high-skill workforce, has kept the idea from becoming a reality. so what's the next industry that will, or even can, make the u.s. economy roar again? i'm sure there are a dozen assumptions or inferential links that are debatable, and i'm happy to be disabused of any mistaken-beliefs.

i watched a depressing episode of up, where this question was put to a policy-advisor to mitt romney. his answer was something inconsequential and "local services," which sounded like a terrible answer when he delivered it.

local services to mitt romney, I think I meant

*he* meant, I mean, of course, no breach of anonyMITTy here, no sir

haha. it was such a bad answer. it basically sounded like, "there will be a financial-service sector, populated by the elite class," and everyone else will be paid to give each other haircuts and cut each other's lawns.

we still cultivate distracting content farms like nobody's business

Now you might think that business—having benefited from years of tax cuts that got us in this fix in the first place—might have agreed to shoulder most of the cost of the fix. But business said, "No, that would hurt the economy." Business has all the high-priced lobbyists and bankrolls most of the legislators’ campaigns.

The unemployed have virtually no voice in the legislature. So they get stuck with the tab.

http://www.dukechronicle.com/articles/2014/02/07/unemployed-stuck-tab

america, fuck yeah

Since my brain defaults to "blame Reagan" part of me feels like giving all those cuts to taxes etc has meant that we really can't put that cat back in the bag.

i'm the same way but more of me says fuck the rich, let's restore taxes to eisenhower rates

daniel i've been meaning to read this for some time:
http://www.amazon.co.uk/Fantasy-Island-Larry-Elliott/dp/1845296052

which talks about that question as it relates to britain, which has its own post-industrial legacy to deal with

Tech and financial services

fantasy island looks good. the author's clearly been writing, for some time, about the type of question i mention above:

Going South: Why Britain will have a Third World Economy by 2014 by Larry Elliott Paperback £10.34
The Gods That Failed: How the Financial Elite Have Gambled Away Our Futures by Larry Elliott Paperback £8.99

i'm going to start with fantasy island, but those other books look intriguing, too.

Tech and financial services

― 龜, Sunday, February 9, 2014

tech as a driver-for-the-economy requires a skilled labor-force that i don't think the u.s. has. or i should say, we have plenty of skilled laborers, but we also still have a large glut of semi-skilled or under-skilled laborers. also, it's a challenge to bring the tech manufacturing jobs to the u.s. there was a silicon valley ceo who wrote an article a few years ago, noting that there's an immense amount of tech-innovation in the u.s., but once the idea is born, the manufacturing is done overseas.

financial services . . . well, i assume you're kidding here.

The GDP doesn't care how many american workers are employed by the tech corps as long as the tech corps bring in revenue that fill the balance sheets

yeah, but i'm talking about a broader measure of economic-health than robust balance-sheets for companies. i mean industries that will create widespread job growth, with good pay and benefits, and relative security for the workforce. that, in turn, gives workers enough money to spend, creating demand that fuels the overall economy. can't see tech being that engine, unless (like i said above) we make massive investments in public education.

in 2012, for instance, the u.s. employment in the tech sector grew, but modestly -- the industry added 67,400 net jobs in 2012, for bringing the total number of tech workers to 5.95 million (1.1% growth). that's okay, but hardly enough to make the u.s. economy roar (and roar in a long-term, sustainable way).

Not being pat, but wasn't/isn't there a saying that no country with a free press and a democratically elected government has ever suffered starvation? Obviously the details can be debated, but I suppose the argument can be made that as long as developing countries like Russia or China (or Iran or Saudi Arabia) are gaming the system to their own precarious advantage, "western" countries like the US or UK will by default stay on top. I suppose a hypothesis could be promoted that the countries best able to marshall the future potential of Africa and South America, as Russia, China, India and those other countries rise in stature, will be best situated to take advantage/exploit the next few decades. But then, think about all the stuff that's wobbly, related to the aforementioned free press/democracy condition: as unlikely as it may seem, I wouldn't be shocked to see some degree of economic/social collapse in countries like Russia, India, China or further change in the general middle east in the near future, which of course will send ripples all over the place, linked obviously to oil but also to the general status quo stability to provide to their respective regions, let alone the world at large.

Which leaves the world up for grabs.

internationally, sure that would be very complex. but nationally again i don't see what the big deal is? i mean there are arguments that re-distribution would "shrink the cake" so depending to what degree you believe those theories (i don't for the most part) you may think it less worthwhile to have a more equal distribution. but given that median income has been decreasing for 30 years and all nearly wealth gains have been absorbed by the top of the distribution there's not really any purely economic argument against it.

Even on a national basis it is very challenging to redistribute wealth/prosperity because of the complex relationships it has to culture. For example, progressive taxation can address some aspects of income redistribution, and some forms of affirmative action can address societal wealth, but our society seems reluctant to consistently unbundle merit (or perceived merit) from reward. I assume (and hope) there is a lot of support to eliminate or greatly lessen poverty via redistribution, but beyond that it would seem challenging to create prosperity equalization because of the self-interest of the stakeholders.

Not being pat, but wasn't/isn't there a saying that no country with a free press and a democratically elected government has ever suffered starvation?

*forgets about the Great Depression*

but beyond that it would seem challenging to create prosperity equalization because of the self-interest of the stakeholders.

also hard b/c of intense white racism

america was all about new deal until benefits could go to people of color
euro welfare states will be dismantled in response to growing immigration
etc

in short, white ppl dont view "the poor" (which to most whites codes as people of color) and deserving of assistance since meritocratic ethos says poverty is a personal moral failing. if it's a personal moral failing, redistribution is not justice, it's theft of white people by people of color.

our politics needs to address the systemic racism inherent to meritocracy

there was a silicon valley ceo who wrote an article a few years ago, noting that there's an immense amount of tech-innovation in the u.s., but once the idea is born, the manufacturing is done overseas.

― Daniel, Esq 2, Sunday, February 9, 2014 7:31 AM (2 hours ago) Bookmark Flag Post Permalink

we both know why this is so and it has nothing to do with a shortage of qualified domestic STEM workers

our politics also needs to address the systemic classism inherent to "meritocracy"

pretty sure america was only able to be all about the new deal because benefits were excluded from people of color

precisely my point! :)

instead of the "should" game i want to play the "will" game in terms of the question -- like what will the econ be based on in the coming period. and ok now one can say "maybe this has to do with what the economy _is_ based on" and then there are like numbers we can look at and stuff so

https://www.census.gov/compendia/statab/2012/tables/12s0670.pdf

and this is just recent years but at least in recent years the only major shift in the (very service oriented) GDP in terms of composition has really been an increase in healthcare.

but whatever its not like there are too few jobs in the u.s. because there's insufficient demand for goods and services per se. and someone needs to invent a geegaw the world wants to buy and then build them all in michigan. that's not really how a systemic economic crisis works.

provide every american adult a basic income ($20,000 / year?) and watch consumption boom

If there's one thing Americans excel at, it's consumption.

we both know why this is so and it has nothing to do with a shortage of qualified domestic STEM workers

― rhyme heals all goons (m bison), Sunday, February 9, 2014

yeah, but that still doesn't suggest that the u.s. economy can thrive, on a sustainable basis, on the tech sector.

would not suggest as much. so i would also be incredibly wary of massive public ed investments with the intent of choosing tech as winning industry. the primary beneficiary of such a plan would be tech companies who could drive down wages of domestic tech workers.

oh i agree with that.

i still think the broader point is right. if we embraced globalization as a way to send lower-skill jobs elsewhere and attract higher-skill, and better-paying, jobs to the u.s., we need to have a better educated, better trained workforce. that's true whether the "winning industry" is the technology sector or something else.

my problem is i struggle to see what sector could be the "winner," in the way i imagine we need a sector to "win."

provide every american adult a basic income ($20,000 / year?) and watch consumption boom

do you have to adjust the income level based on where that adult lives?

as a public school teacher, im obv in favor of a massive influx of money. but equitable distribution is my aim. any labor benefits of tech-oriented govt investments would accrue to the children of the privileged who have tech at home, who have the math and language background to take to tech more easily, etc. so the ppl least likely to need help finding a job or help their progeny find one) would be better positioned to get better ones later.

tech companies who could drive down wages of domestic tech workers

Not to mention the massive cash flow that is generated for tech companies when public schools nationwide invest more heavily in tech equipment.

see: apple, millions of ipads being used as little more than electronic textbooks and testing machines

do you have to adjust the income level based on where that adult lives?

This should work itself out very nicely as population redistributed and wages adjust to the new reality. Rural areas would undoubtedly see an influx of both people and cash. Transportation would see some new strains in the process, I expect, and as iatee would also be quick to deplore.

Am I wrong or is there not a significant portion of the money Apple spends to make their products going to Germany for their STEM factories to take care of the more 'sophisticated' bits?

i mean i'd like all my students to have an inexpensive laptop with wifi access at home and school. and i'd like for computer science to be an elective at all schools. and i'd like all schools to have the tech needed to make publications, produce audio and video, collect data and so on. but tech investment in schools is usually discussed (not by you, daniel, but at large) in a way like "how do we rescue white working class?"

we already have lots of tech investment in schools of the well-off. what we need is govt action to invest equitably in schools like mine that do not offer computer science but have started phasing in ipads which get used as gaming platforms and not as something that students can create with.

xp

i don't necessarily mean for this discussion to be funneled into a "tech-only" framework. it would be fine with me if someone said, "look, here's a study saying the emerging market for smart-cars can fuel sustainable job-growth for a generation, if only we had a labor-force able to do that type of work." i just assume that's not realistic at this juncture. a smart fellow i know said maybe the u.s. could become a high-end r&d hub for medical research and devices. there's something very appealing about this as an answer. health-care is, obviously, a huge sector with a massive need for innovative solutions. and i can actually see a robust medical r&d industry fueling the economy. it's just harder to imagine that as the engine for sustainable u.s. job-growth versus, say, the steel mills or manufacturing plants of the past.

Every sector of the global economy requires energy inputs to function. Fossil fuel energy inputs must be replaced asap. The energy tech industry (aka big oil) was extremely instrumental in building the US into the world's biggest economy in the 20th century. I'd vote for massive-scale conversion to alternative/renewable energy as the highest priority for the US economy moving forward. Even if we lose the competition for the most advanced energy tech sector, the payback for conversion would be enormous.

Even if we lose the competition for the most advanced energy tech sector, the payback for conversion would be enormous.

Why? How?

Ever hear of global warming? When it slows down, everyone's a winner, but especially agriculture (where the US is also a world leader).

Do we know it will slow down?

Would love to see the projected cost of massive conversion.

Less than the cost of a 5C rise in global temperatures.

That's a non answer

here's an attempt at an answer. a 2013 u.n. report suggests fighting climate-change could cost 4% of the total world economy by 2030. but the report notes that, if we wait, the cost will be far higher later (that is, of course, if you believe the crackpot, outlier scientists that believe the earth is warming, and it's humans' fault).