This crisis has many aspects, trade, immigration, manufacturing and currencies.
Suppose we consider the value of the dollar over the last 8 years. Let's peg the dollar vs gold.The dollar vs gold has lost 60 percent of it's value. This loss has come with the monumental expansion of the twin deficits: trade and federal budget.
If we measure the value of the dollar vs the yen or Euro, there is a similar loss of about one third. This is consistent with purchasing power erosion of the Euro over 8 years.The last times in U.S Economic history similar currency crises have occurred were 1970-1973, 1933-1934, and 1872-1874. Each of these periods involved a loss in the value and purchasing power of the U.S. dollar. Anyone familiar with U.S. history can quickly paint a picture of those times.
When the housing crisis is piled on to the currency crisis, each of the two magnifies the other. There is no way to understate the human or social tragedy of 405,00 families forcibly evicted from their homes. Just do the math: almost 5 million evictions per year. Over several years, we have the dimensions of a large domestic refugee population. The closest historical similarity to the housing crisis is the dust bowl and the housing losses
of the Civil War.EPer: brleed (not verified)
Greed and self interest have always existed. Free market competition is the best overall way to sort things out. I would argue that the current labor arbitrage is NOT free market competition. When there is such an imbalance in labor costs, regulatory environment, etc. we don't have a level playing field. Our first objective to fix things should be to greatly restrict immigration (legal and illegal) and a close second is to alter our poor trade agreements. We are forced to take some actions to defend ourselves just as any other nation or group of people does. We have the voting numbers to achieve such objectives if we can obtain some unity.EPer: Anonymous (not verified)
This country is so messed up. They reward executives for incompetence, give outrageous bonuses if they are fired for incompetence and then they are just rehired somewhere else.
It's the only job I can think of where if you're an idiot, you're guaranteed to become super rich.
Then, we have a tax code that gives economic incentive to offshore outsource jobs and capital.
Here's the UAW, being obviously attacked to bust them, and where is the outrage of the American people on any of this.
Nice background research.
Nardelli - Chryslers new CEO was formerly with Home Depot where he had issues. He left with a 210 million dollar severance package. Nardelli originally came from GE which is well known for it's "Indian Initiatives" and offshoring work. Not to mention their plans to close US plants in order to offshore that work to China.
Why should this move suprise anyone - its typical and destructive to the US economy. Whos' going to buy their cars if these global corporations keep dumbing down US salaries with their foreign guest workers.
Its time - in this election year to elect ONLY candidates who will address the hemorrage of US jobs going away and who will have the courage to stand up to these businesses which use cheap foreign labor.
Check out the website mentioned above for more information.EPer: Madia (not verified)
I've seen those things happening for so long now, it's sad. When was the last time anyone even bothered to talk about our trade deficit? Even sadder, looking ahead at the election, it not being addressed, with the exception perhaps, of Ron Paul.
The leading candidate should be marching ahead boldly with the Mantra "It's the economy stupid!". But it's just the inverse with people actaully touting "It's NOT the economy stupid!".
The stimulus package is a disaster, with everyone wanting to know when we get our "$600's", no one's thought to ask, "How did we get to this point? What caused it?".
I'm not an economist so I'd like your opinion.
What to do? From my angle, politically, it's a waste of time. Politians are either clueless, or simply bought off.
From what I see, the only option we have, as middle America, is to demand change by using the most powerful tool we have,,,, our spending.
I say we stop our spending now. Let the corrupt, termite infested house of cards fall. Only at that point can we rebuild something that works.EPer: Anonymous (not verified)
I hope the UAW can win some ground with the NLRB
Companies have been succeeding in eliminating unions from the workplace.EPer: rahcn
Hillary Clinton agreed with economist Paul A. Samuelson's argument that traditional notions of comparative advantage may no longer apply. "The question of whether spreading globalization and information technology are strengthening or hollowing out our middle class may be the most paramount economic issue of our time," her chief economic adviser, Gene Sperling, recently wrote
Wow, although I believe this is to get votes. It sure would be wonderful is she started presenting policy to incorporate these facts! (none to date that I am aware of! and the corporate lobbyists would revolt I am sure!)
Are you telling me a guy running for President of the United States is just "misinformed"? I don't think so and if he is, that's even more reason he shouldn't run.
I mean you're talking about policy that will affect hundred of millions of American workers and oopsy, he's just misinformed as he pushes for policy that will wipe out the middle class?
McCain is surrounded by corporate lobbyists also, so is he just misinformed?
Obama is more than informed, his letters back to constituents on labor arbitrage through guest worker Visas claims that they, the constituent is just "blaming the immigrant" and he has millions of dollars from Silicon valley corporate lobbyists, big business, US chamber of Commerce, the same as Hillary.
He just got the Kennedy endorsement who is probably the worst Senator pushing the global labor arbitrage agenda through insourcing. They know full well they twist the US diversity values to hide this real agenda. They have had congressional testimony, many, many constituents writing them, phone calls and even their own GAO has released multiple reports stating this is going on.
Obama would be an unmitigated disaster for working professionals from his nebulous policy positions and more importantly his voting record on trade, immigration, global labor arbitrage issues.
This site is about real analysis, not identity politics or even political cheer leading. If a candidate has good positions for true trade, economic, labor reforms, great post it.
But, please do not promote a candidate who simply had bad policy period. We have plenty of that coming from every other website.
Hillary is well-informed on this issue and knows well the effects of the Guest Worker visa. But she likes the money the Indian consulting groups provide her.
Barack Obama, as with many in congress on this issue, is poorly informed and is surrounded by the wrong people- at least on this issue.
It is also very difficult for a high-profile Democrat running for office to be on the same side as Lou Dobbs.
I really believe we are ahead of the game with Obama- if only just.
the reason I posted this is for the first time we have Hillary Clinton acknowledging two elements in the global migration issue:
1. wage repression, exploitation, displacement
2. a primary cause of illegal immigration is economic destitution in the home country
Note that Obama denies these highly verifiable labor economic statistics but both deny the law of supply and demand when it comes to the labor force and wages.
The labor market fundamentally operates on the laws of supply and demand. If the labor supply suddenly increases, the wages will go down in those occupational categories.
Of course they are still pushing for "comprehensive" immigration reform which would have decimated working America through guest worker Visas and massive increases in the labor supply, legal or not.
Honestly I don't know but it sounds like something you might be able to research out and if you posted your results, I certainly would be grateful. This "fact sheet" I left all of the references on and it's from the Democratic party. Now that you raise that up, I want to know too.
Another discussion item that bothers me that I don't have any answers to is we are constantly hearing how "entitlements" cannot be funded and are 70%, 80% of the total budget but I question that because last I saw the DoD is the biggest part of the overall budget.
Am I correct in assuming that this does not count around $600 billion taken from the Social Security surplus? I would like to hear more about how that money is counted or not.
"$734 Billion Deficit over the
Previous Three Budget Years"
Seven years of surplus used to pay for misguided tax cuts and war without end. Doesn't that add yp to about 1.5 trillion more dollars that we paid in to the retirement system. Money that made this system solvent until 2040. Now bush the liar and thief is saying it is broke in 2017. If he was in the private sector jail time would be appropriate I think.
Please if you could give some figures on the "borrowed" surplus it would be appreciated.EPer: Salunga
While I commend Durbin, he isn't exactly making this his main agenda item! He could get cosponsors if he wanted to and he's not. Grassley is seemingly way more active and Bernie Sanders has been professional workers advocate and trying for years.
Obama, he is for more guest worker Visas, pretty much all open border, no controls and even worse, he's not cosponsoring S.1035. He voted for trade deals that have come up in the Senate. He is currently pushing for those global labor arbitrating "comprehensive immigration reform" bills which had unlimited H-1Bs, F-4, H-2C guest worker Visas.
McCain is for sure the worst of the bunch. He is letting corporate lobbyists run his entire "economic" agenda, he is a front man for private equity corporate raiders. Why in God's name aren't those facts getting out there?
I mean if Romney is the best of the bunch in terms of economic, trade, policy that's really saying something is very wrong. Most of what he recommends is going to make things worse but on the other hand he does understand how to attract corporations through tax breaks, investment incentives, which is more than I can say for the rest of 'em!
Hillary is the chair of the India caucus and seems hell bent on offshore outsourcing our jobs.
McCain is probably worse than Romney. Hillary is not much better - at least historically. Obama may be our "best bet" of those still in the race.
On the bright side there's Dorgan, Tester, McCaskill, Sanders and yes- Dick Durbin. Forget his position on amnesty. A blue-state Democrat's gotta do what a blue-state Democrats gotta do.
And when a blue-state Democrat does something right, he should be congratulated. While not a perfect bill, s1035 (Durbin-Grassley) has a lot to commend it. So take the time to commend Durbin.
I think that's a subtle insult to Americans that they should "shop" on $300 to ~$2000 max or so. they are broke, tapped out, losing their homes, have negative savings, absurd credit card debt, home equity debt and few high paying jobs.
I agree and even worse is if they do consume it will most likely be spent on imports. But, for myself, it would go into savings, debt payment or tax payment. I think this is ridiculous and 150B is a lot I don't know the percentage of that are the actual checks but intuitively it makes more sense to invest in public infrastructure, they would spend on US materials, raw materials, generate a lot of jobs and also give businesses and people much needed roads, public works, electricity, water services that are needed.
This post is completely correct. A $300 (or $600 or even $1000) check is not going to help at all - people aren't going to go on a spending spree when they get their check. Most people will pay off bills, some will put it away in the bank and a few will spend like there's no tomorrow. Many of the people who could really use the money won't even get it (they don't make enough which, apparently, means they aren't good spenders so they shouldn't get it anyway!).
Realistically, what does $300 get you? A couple of months of cable and internet (if you can afford it)? 2 months for your heating bill (if you're lucky)? A couple of minimum payments on a credit card? A week or two worth of rent? How about a couple of tanks of gas to get to work? A car payment?
Let's face it - the best way to stimulate the economy is to get people jobs. The Government is using the 'Give a man a fish' policy, when they should be using the 'Teach a man to fish' policy. Stop the outsourcing, stop bringing people in to take jobs, encourage investment in the US by companies and individuals. One way to help this would be to use reciprocal trade policies. Many countries hinder the trade of goods, services and people into their country while the US opens their borders. By doing the same to them, our exports would increase, our imports would decrease, and the trade imbalance would be more level. This wouldn't cure everything of course, but it would be a good start. I often wonder why the world is flat only in Washington?EPer: Sapperperson
I have to agree with you in that they have stopped the bills and as we saw last night in the State of the Union, not only are both parties planning giving unlimited H-1B Visas and whatever other guest worker Visa they can find but all of the major Presidential candidates have promised corporate lobbyists pretty much the same thing.
Roy Beck from NumbersUSA is in the position to make a difference on the ground.
Many of us have gone to Washington D.C. with this result:
- talked to our representatives (or more likely, their aides)
- had them pretend to listen to us
- went back home
- watched nothing happen
Roy is a straight-shooter with the potential of leading politically.
Roy and Rosemary- if you're listening- you know how congress pushes through "dead of night" legislation and you know how to stop it!
This isn't a debt crisis, any more than the Great Depression was when the stock market, pumped by buys on margin of up to 96% of a stock's value was.
They are both crises of maldistribution of wealth. This time the tax laws were fiddled and wages depressed and finally decent jobs were offshored, the result being wealth concentrated into very few hands at the top while everyone else was encouraged to use relaxed credit rules to compensate for depressed wages. The only thing that didn't happen the last time was the offshoring.
No economy with wealth concentrated at the top while the bottom drowns in debt is a stable one and it is going to collapse, no matter how many bad checks the government sends the suckers. Eventually somebody notices the debt is simply uncollectable and the whole house of cards comes tumbling down.
Don't expect this one to be as easy to fix as the last one was. Roosevelt was able to borrow and spend his way out of that one. President Stupid has slammed that door shut.EPer: Warpster (not verified)
Welcome to the site and I hope you register and consider posting articles (blogs). We'd love to have your input and cross posting to other people's work, blogs, papers is strongly encouraged. We want more regular folks to become economically literate so they may more accurate demand our government change policy and not be sucked into rhetoric such as tax cuts solve everything.
Other readers, Dr. Powell's website he refers to is:
Exponential Improvement.com where it appears he has a lot of detailed work available.