Why the economy is the way it is

[MadRussian79]

The reason manufacturing in the US is dying is that foreign goods are better for the short term minded, except cars but that's a union issue more than anything else. You can buy a mower from China for half the price of a quality American made one, the one from china lasts 2 years the US made lasts six. The other issue is that as plants get smarter they need less people, basically the same thing that happened with farming, combines removed the need for unskilled labor. There are however plenty of skilled labor jobs waiting for people wit skills, carpenters, electricians, plumbers etc. I have trouble feeling pity for people that don't want to adapt, being a steel worker is not a civil right, nor is having a job.

 

[oddballer]

I used to believe Greenspan was a genius... now I know him as just a mortal man... in short I do believe the economy works in cycles... adjusts and readjusts providing we keep the capitalist format this country is built on... with the current "bailouts" i believe we are just prolonging the "adjustment" cycles...

 

[oddballer]

The reason manufacturing in the US is dying is that foreign goods are better for the short term minded, except cars but that's a union issue more than anything else. You can buy a mower from China for half the price of a quality American made one, the one from china lasts 2 years the US made lasts six. The other issue is that as plants get smarter they need less people, basically the same thing that happened with farming, combines removed the need for unskilled labor. There are however plenty of skilled labor jobs waiting for people wit skills, carpenters, electricians, plumbers etc. I have trouble feeling pity for people that don't want to adapt, being a steel worker is not a civil right, nor is having a job.

what we have here is the plague of any devoloped country... the work force develops a sense of entitlement therefore wages go up and production goes down... how can this be stopped? perhaps a depression?

 

[abortedsoul]

what we have here is the plague of any devoloped country... the work force develops a sense of entitlement therefore wages go up and production goes down... how can this be stopped? perhaps a depression?

That's a very interesting point, but as long as we produce something (such as technology or research) that draws the salary we demand, that sense of entitlement is warranted. It isn't a plague, but a blessing. The labor is still left to smaller countries, who now have something valuable to offer in exchange for vast sums of money. When they get that money, they now can buy the expensive and fancy commodities and services that the large countries enjoy and produce, elevating the quality of life for all. It also frees up the skilled labor in other countries, both offering money to the less developed country to become skilled and allowing the skilled labor to be used more efficiently in the more developed country.

True, free-market co-operation brings a strong level opportunity for all to flourish.

It would be great if America didn't waste its time doing things we cannot compete at (making cars, steel, etc) and focused more on some of our strong points (engineering, bio, med, tech, invention, programming, etc). If we would just give up that we aren't going to get a fair dime for labors of our bodies (compared to the cost of living here) and just focus on the labor of the mind, we would go far.

 

[MadRussian79]

The problem isn't manufacturing in the US it's the sense that I should be paid to do X in the US. Right now we don't need steel workers but we are short (even now) on skilled SMT solder techs. If the old steel workers are willing to retrain there are plenty of jobs to go around. No one appears to want to be cross discipline or acquire skills. They want to do the same thing their grand pappy did but safer, easier and for more money.

There are still plenty of MFG jobs available but they all require skill and flexibility, plenty of C&C machinists positions in the north east as a minimum. When a product is prototyped it need to be done in such a way as to easy to get and easy to modify. 10 Shipments for intentional Air from China will drive the cost up real fast.

 

[abortedsoul]

This is my opinion
#1, the housing bubble started it off. people thought there house value was going to climb & climb. People bought house as investment to live in. Once the buble began to bust, people just walked away. Bank were stuck with houses that couldnt get the money owed. The people that stuck it out wee afraid and shut donw any lose spending

I agree; that bubble was a result of bad credit that was created by artificially low interest rates. The fed wanted more growth, so they got it- it just happened to be growth built on bad credit. In addition, Fannie Mae and Freddie Mac also made housing more available than the market could support. The one true and fast law of finances is that as long as people are trading the market will always correct itself. It isn't always pretty, unfortunately, and the longer we dig ourselves this hole, the more violent the correction will become.

#2 big jump in energy prices..remember $4.50gallon gas?

I don't understand this part.

#3 if people dont spend,store cut inventory, & jobs. Its a cycle

Agreed. It is the backlash as a result of having too much artificially available credit.

#4 Most peoples investment took a big hit. 401k, stocks, bonds
I know eveyone want to blame Bush, but he didnt force anyone to buy a house they couldnt afford.

I think that is a very good point. Bush didn't do much of anything, either way, which is admirable. He didn't add regulation and he didn't de-regulate, and with the exception of a very expensive war, his decisions didn't have much to do with what is going on now. The president isn't responsible for the economy, but most people don't want to actually spend the time to understand what is going on. They just want a figure head to cry to, so that's what they do. "Obama, save our economy. Do your magic government fix-ups and everthing will be better! Yay!"

We will slowly come out of this. People will starrt to spend, housing will recover, business' will start to hire. It takes time, will not happen over-night. Look at the markets the last 5 months
stock up 30-45%
oil up 70%
copper, aluminum both rising
These are stronge economic signs

I'm glad you are confident that we are recovering; I just hope that the market corrects itself without having to tear the rug out from under too many more of us. If the government keeps digging itself into deeper debt by wasting more money (not to mention that they are buying up industries and banks, which is socialist btw), it might only end with a complete crash. The fractional reserve banking system is failing; I just pray that they let it fail instead of bring us all down with it. It would be nice, too, if we could avoid the fate of the Soviet Union and stop the government from buying up the banking and auto industries.

 

[abortedsoul]

The problem isn't manufacturing in the US it's the sense that I should be paid to do X in the US. Right now we don't need steel workers but we are short (even now) on skilled SMT solder techs. If the old steel workers are willing to retrain there are plenty of jobs to go around. No one appears to want to be cross discipline or acquire skills. They want to do the same thing their grand pappy did but safer, easier and for more money.

Very good point.

I didn't know that little detail about solder techs. Surely there are eager young people who want those jobs? If not now they will soon; labor is becoming easier to get, and people are going to have to look harder to find a place to sell their time and skills.

 

[MadRussian79]

Surely there are eager young people who want those jobs?

Oddly enough, no. Those with the background (can read a schematic and operate basic test equipment) to do it feel it is beneeth them, those who are willing to do it lack the skill and/or refuse to learn. You see the same thing in IT, everyone want to be a administrator.

 

[AtomBat]

I agree with everyone in saying Bush wasn't the problem, he was only part of the problem. Yea bush didn't force you to buy houses, you were just lied to by the banks that you could afford it.

I am very surprised that the article didn't mention manufacturing seeing as how it most likely the biggest problem we have! WHen companies move overseas we lose jobs here and we lose out on taxes for those companies. The automobile market is crashing WHY? because now "american cars" are no longer made in america, quality of work goes down because they are paying workers in 3rd world countries pennies to do the same work we did. SO then demand for these automobiles go down but the manufacturers still is making more than the demand is.

I also think government jobs need to be slashed down on a bit, too many big fish trying to scrounge off of the little ones.

And a solution to our gas being $2.50 now and $4.50 last year...... make gas stations be cash only, too many fees charged to the gas station owners with credit cards. During recessions less cash means more people using credit which makes gas go up!

 

[Fish Room Plus]

I agree; that bubble was a result of bad credit that was created by artificially low interest rates. The fed wanted more growth, so they got it- it just happened to be growth built on bad credit. In addition, Fannie Mae and Freddie Mac also made housing more available than the market could support. The one true and fast law of finances is that as long as people are trading the market will always correct itself. It isn't always pretty, unfortunately, and the longer we dig ourselves this hole, the more violent the correction will become.



I don't understand this part.



Agreed. It is the backlash as a result of having too much artificially available credit.



I think that is a very good point. Bush didn't do much of anything, either way, which is admirable. He didn't add regulation and he didn't de-regulate, and with the exception of a very expensive war, his decisions didn't have much to do with what is going on now. The president isn't responsible for the economy, but most people don't want to actually spend the time to understand what is going on. They just want a figure head to cry to, so that's what they do. "Obama, save our economy. Do your magic government fix-ups and everthing will be better! Yay!"



I'm glad you are confident that we are recovering; I just hope that the market corrects itself without having to tear the rug out from under too many more of us. If the government keeps digging itself into deeper debt by wasting more money (not to mention that they are buying up industries and banks, which is socialist btw), it might only end with a complete crash. The fractional reserve banking system is failing; I just pray that they let it fail instead of bring us all down with it. It would be nice, too, if we could avoid the fate of the Soviet Union and stop the government from buying up the banking and auto industries.

The point I was making is that with gas(energy )soo high, it takes away from free spending. Can buy "extas" with a $75 gas bill to fill up. Now that its $35, it adds free money to spend.