joel
Contributor
Posts: 83
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Post by joel on Feb 7, 2007 13:15:49 GMT -6
Delusion Destroys Democracy Joel S. Hirschhorn Will Americans learn to trust their fellow citizens or stay stuck on stupidly backing serial political betrayers? I have been watching films from the 1940s and 1950s about World War II. It was well known that Adolph Hitler was truly delusional. His delusions prevented him from accepting wisdom and facts from experienced military officers and others, and caused millions to suffer and die. Surely George W. Bush resembles Hitler psychologically. His obsessive delusions about his Iraq war are also causing incredible suffering and death, as well as squandering our nation’s wealth. Our constitutional democracy makes it nearly impossible to free the nation from the grip of a seemingly sane but deeply delusional president. The present constitutional provision for impeachment is clearly inadequate. As with Hitler and other delusional tyrants, Bush has surrounded himself with sycophants that share his delusions, and perhaps nurtured them, and refuse to tell the emperor that he has no clothes. Congress, even under Democratic control, commits negligent cowardice. And our mainstream press has not rallied the nation to free itself from misused presidential power. Also clear to some of us is that the delusional Bush has survived because delusion runs rampant across the nation, blocking populist actions in the national interest. Here are the main states of American delusion: Millions of Americans persist in believing, contrary to all historical evidence, that changing control of Congress and the Executive Branch between Democrats and Republicans produces sorely needed reforms. But mainstream politicians are serial betrayers. Thus, people suffer from delusional political faith. Millions of non-wealthy Americans believe that the economy works for them. This persists despite reams of facts that show how working- and middle-class people are not receiving their fair share of national income and wealth. They keep running on a debt treadmill that will not take them to the proverbial American dream. What they get is economic insecurity, inequality and injustice. Consumer confidence is an oxymoron. This is delusional prosperity. Viral delusional thinking is that America sets the gold standard for democracies. The rest of the world, however, to its credit sees an arrogant nation with a government that uses its military strength foolishly and sees its policies rewarding the rich at the expense of all others. People from Finland to New Zealand question why Americans do not receive universal health care, why its workers are sacrificed for global trade and corporate powers, why millions of its citizens go hungry and homeless, why so few people bother to vote, why so many politicians are convicted of crimes, and why there are more people in prisons than in all other countries combined. Yet Americans by and large keep thinking that their constitutional republic gives them first class democracy. This is delusional patriotism. So, what are we to do? Keep expressing dissent by marching and protesting in the streets? Keep signing petitions on the Internet? Keep demanding impeachment of Bush? Keep reading and writing angry diatribes on progressive websites? Keep voting for mainstream politicians from the two major parties, hoping for a political messiah? Keep obeying Bush by borrowing, spending, shopping and consuming to keep our debt-ridden nation afloat? Such activities release anger, but are largely placebo self-medications, unlikely to provide the permanent solutions our nation needs. Protests serve more as entertainment for the nation than a force to tear down the rotten system. Scale is a problem. Maybe if one million angry Americans sat down peacefully in the streets all around the White House, defying police action for many days, just maybe the system would crack. Protests must have a revolutionary character. They must induce fear into the hearts of smug and delusional power elites – like Dick Cheney. The real needs are structural reforms that combat the major societal delusions that are driving America downhill. We must attack the root causes of problems rather than provide temporary relief or cover-up of symptoms. Delusional political faith and delusional prosperity require profound reforms in our political system. A new competitive political party is needed. One that is guided by a set of principles that both mainstream Democrats and Republicans can not opportunistically accept, because the principles clearly conflict with their rotten behavior. A recent New America Foundation survey of Californians found that “seven in 10 voters say they often feel they must choose the lesser of two evils; more than half the voters say California needs another major political party.” Delusional patriotism is tougher to remedy. To revitalize American democracy we must have a national dialogue. Heed the words of the great John Marshall: “The people made the constitution, and the people can unmake it. It is the creature of their will, and lives only by their will.” And James Madison: “the people have an indubitable, unalienable, and indefeasible right to reform or change their Government, whenever it be found adverse or inadequate to the purposes of its institution.” Thomas Jefferson believed that the constitution-drafting process should be repeated by each generation of Americans. That’s what real freedom is all about. A great democracy must be much more than stable – it must be self-correcting. When a political system no longer deserves trust, citizens must trust themselves. Considering how doggedly our unrepresentative democracy stays under the grip of moneyed special interests and fails large fractions of Americans, more direct democracy aimed squarely at major reforms is desperately needed. That requires a lot more than protesting and ranting. Some urge citizens’ assemblies (see www.cusdi.org/ and www.healthydemocracy.org/), or national initiative elections (see votep2.us/). I and others believe that we have a constitutional right to Article V Conventions (see . However, elitist status quo forces have made the population afraid of such activities – a sick delusional, status quo bias belief. If it persists, Americans will not set themselves free of the oppressive forces that have hijacked their nation. They will keep venting their anger as dissenters or stay distractive consumers rather than work to return power to the people. LET’S NOT DELUDE OURSELVES THAT ALL WILL BE WELL AFTER BUSH IS GONE. AS AWFUL AS BUSH IS, HE IS A SYMPTOM OF WHAT AILS OUR NATION. Our nation will remain in need of deep reforms. Millions of dissidents must wake up to what is really needed and rally around a revolutionary strategy. [Check out the author’s solutions for fixing the nation at for information on the Article V Convention concept contact him at articlevATgmailDOTcom.]
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Post by LibSlayer on Feb 7, 2007 13:42:02 GMT -6
. Surely George W. Bush resembles Hitler psychologically. His obsessive delusions about his Iraq war are also causing incredible suffering and death, as well as squandering our nation’s wealth. No, it is the anti-war nuts who are delusional, who refuse to deal with reality and not learn from the failures of the past, all following the path of their patron saint, Neville Chamberlain, whose pure mindless stupidity got 50 MILLION people killed with his peace at any price mentality. The anti-war kooks just never learn the principle of an ounce of pervention is worth a pound of cure. Had the West stood up to Hitler in 1935 when he started breaking the Treaty of Versaille, a few 10's of thousands, at most, would have lost their lives. Instead the mindless chose to pay the pound of cure and 50 million paid with their lives because of the delusions.
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Post by LibSlayer on Feb 7, 2007 14:00:01 GMT -6
Delusion Destroys Democracy Millions of non-wealthy Americans believe that the economy works for them. This persists despite reams of facts that show how working- and middle-class people are not receiving their fair share of national income and wealth. The clear facts are that they do get their fair share, they get exactly what they agree to get. People from Finland to New Zealand question why Americans do not receive universal health care, why its workers are sacrificed for global trade and corporate powers, Because many of us still believe in freedom, still believe in the Constitution. why millions of its citizens go hungry and homeless,. That is easy to answer, through their own lack of effort. “And James Madison: “the people have an indubitable, unalienable, and indefeasible right to reform or change their Government, whenever it be found adverse or inadequate to the purposes of its institution.” Thomas Jefferson believed that the constitution-drafting process should be repeated by each generation of Americans. “ You want to quote Madison and Jefferson, how is this: The man who WROTE the Constitution With respect to the words general welfare, I have always regarded them as qualified by the detail of powers connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators. - James Madison www.oaknorton.com/foundingfatherquotes.cfm"Congress has not unlimited powers to provide for the general welfare, but only those specifically enumerated." --Thomas Jefferson www.gmu.edu/departments/economics/wew/quotes/govt.htmlThere is your answer to a national health care system, it is UNCONSTITUTIONAL, just as all of the social welfare programs, SS, Medicare, Medicaid, Welfare… Thomas Jefferson To take from one because it is thought that his own industry and that of his father's has acquired too much, in order to spare to others, who, or whose fathers have not exercised equal industry and skill, is to violate arbitrarily the first principle of association--the guarantee to every one of a free exercise of his industry and the fruits acquired by it." etext.virginia.edu/jefferson/quotations/jeff1550.htmAnd there is your answer to the Progressive ideology of taking from the rich and giving to the poor, it goes against the founding principles of this country, it violates the first principle of association.
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Post by unlawflcombatnt on Feb 7, 2007 22:03:29 GMT -6
Joel, Great post. I'm going to have to use your term "delusional prosperity" elsewhere. I agree with you that we need a new competitive political party. As you've suggested, both parties are largely under the thumb of big-money special interests. You're also right about how the mainstream press has failed us, by pushing and publishing the agenda of their Corporate advertisers and owners, such as Ruppert Murdoch. There is a new organization starting called "Unity2008" which has potential. They have a forum as well, and I think your writings would be well received there.
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Post by unlawflcombatnt on Feb 7, 2007 22:47:52 GMT -6
Delusion Destroys Democracy Millions of non-wealthy Americans believe that the economy works for them. This persists despite reams of facts that show how working- and middle-class people are not receiving their fair share of national income and wealth. The clear facts are that they do get their fair share, they get exactly what they agree to get. No. In fact the evidence is abundant that they are not getting their fair share. That's what the concept of the "wage-productivity gap" is all about. As American workers' productivity has increased markedly, real wages have increased very little. American workers' wages simply are not keeping up with their increase in productivity. The statistics are conclusive on this point. This is very simple to demonstrate measuring the difference between real wage increases and productivity increases. Productivity has increased 17.6% since the end of 2000, while real wages have only increased only 3.3% over the same period of time. Here is a graphic representation showing the widening gap between productivity increases and real wage increases. American workers are definitely getting less than what they deserve. And greedy CEOs and Republican propagandists are definitely getting much more than they deserve.
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Post by LibSlayer on Feb 8, 2007 8:06:57 GMT -6
"American workers are definitely getting less than what they deserve. And greedy CEOs and Republican propagandists are definitely getting much more than they deserve. "
American workers are getting exactly what they deserve, exactly what they agree to get when they take a job. If they want more the must do more.
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Post by unlawflcombatnt on Feb 8, 2007 17:02:14 GMT -6
"American workers are definitely getting less than what they deserve. And greedy CEOs and Republican propagandists are definitely getting much more than they deserve. " American workers are getting exactly what they deserve, exactly what they agree to get when they take a job. If they want more the must do more. Wrong again. Americans are more productive than any other workers on the planet. If they want more, they need to elect candidates who will oppose outsourcing and unrestricted free trade, so that they don't have to compete with the less productive, but even lower cost semi-slave labor of 3rd world countries. Though American workers are the most productive on Earth, they're also more expensive than their less-productive 3rd-world counterparts. As long as Corporate America continues its near-dictatorial control over American government, highly-skilled, highly-productive American workers will continue to replaced by less-skilled, even lower-paid foreign workers, who can survive on $2/day or less.
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Post by LibSlayer on Feb 8, 2007 19:00:05 GMT -6
"Wrong again. Americans are more productive than any other workers on the planet. "
Wrong again, the French are as productive, but that is irrelevant, they are more productive because the owners invest in technology that makes the more productive.
The workers haven't done anything to increase their productivity, the owners have and the owners should be the ones who benefit.
"If they want more, they need to elect candidates who will oppose outsourcing and unrestricted free trade, so that they don't have to compete with the less productive, but even lower cost semi-slave labor of 3rd world countries. "
Yes, you have proven that you are for less freedom, I am for more freedom.
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Post by ig on Feb 9, 2007 7:06:10 GMT -6
"Wrong again. Americans are more productive than any other workers on the planet. " Wrong again, the French are as productive, but that is irrelevant, they are more productive because the owners invest in technology that makes the more productive. The workers haven't done anything to increase their productivity, the owners have and the owners should be the ones who benefit. "If they want more, they need to elect candidates who will oppose outsourcing and unrestricted free trade, so that they don't have to compete with the less productive, but even lower cost semi-slave labor of 3rd world countries. " Yes, you have proven that you are for less freedom, I am for more freedom. and there is the rub. and that boils down to the basic argument of economics. modern supply-side is nothing more than a version of classical economics and the neo keynesians, at the core offer the same arguments as their predecessors. productivity above wage gains creates deflationary pressures. when those pressures appear is a function of monetary policy. High powered labor creates inflationary pressures and capx, at the micro level falls. With those pieces in place a supply shock like that of the 70's embargo can wreak havoc. and that is where the basic argument comes in. What, if any, is the role of govt in it.
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Post by LibSlayer on Feb 9, 2007 11:23:30 GMT -6
"What, if any, is the role of govt in it."
That is an easy one, exactly what the Constitution allows.
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Post by unlawflcombatnt on Feb 9, 2007 15:06:05 GMT -6
"Wrong again. Americans are more productive than any other workers on the planet. " Wrong again, the French are as productive, but that is irrelevant, they are more productive because the owners invest in technology that makes the more productive. The workers haven't done anything to increase their productivity, the owners have and the owners should be the ones who benefit. There are some problems with this statement. The main problem, and most important consideration, has nothing to do with "fairness" or who "deserves" what or how much. The biggest problem is that the widening gap between productivity and wages makes workers less able to purchase their own production. Increases in consumer spending and production demand are normally limited by increases in worker/consumer wages. Without consumer "deficit" spending, worker-consumer wages place the absolute upper limit on consumer spending, as well as the production demand it creates. It puts the absolute limit on the dollar-value of production that can be sold. As a result, purchase of production would increase no more than wages increased. Consumer spending and consumer production demand would thus be limited to workers' wages. And since the purchase of increased production would also be limited by wage increases, production would be curtailed as a result. The increase in real wages since December 2000 has been only 3.3%. If consumer spending increases were limited to wage increases (without the addition of deficit-financed spending), the per capita increase in consumer spending would have been only 3.3% over the last 6 years. Total U.S. Employment has increased 6% since December 2000. Thus the spending power increase financed by wages alone totals 9.5% since that time (1.033 x 1.060 = 1.095). Thus personal consumption expenditures would be expected to increase about the same amount. Since consumer spending is 70% of all economic activity, and should increase at roughly the same rate as GDP growth, real GDP growth of 9.5% over that same period of time would be expected. How does this compare with the actual statistics? Real GDP has increased 16.3% since December 2000, from $9.817 trillion in 2000 to $11.422 trillion in 2006 (in inflation-adjusted, chained 2000 dollars). Since December 2000, Personal Consumption Expenditures have increased 20%, from $6.739 trillion (in chained 2000 dollars) to $8.092 trillion in 2006. Personal Consumption Expenditures have increased over twice as much as aggregate worker wages have increased. Real GDP has increased 60% more than aggregate worker wages. How did consumer spending and demand increase so much more than aggregate worker/consumer wages? By a massive increase in consumer borrowing and credit. This is a completely unsustainable way to maintain economic growth. Debt-financed consumer spending can not continue to fuel economic growth. Debt-financed consumer spending cannot continue to compensate for slow real wage growth. Again, this is not a sustainable situation. Eventually the borrowing-credit-debt bubble will burst, and consumer spending (and demand) will be forced to return to the level supported by wages alone. Had the growth of personal consumption expenditures been limited to the growth in aggregate real wages (9.5%), it would have reduced 2006 personal consumption expenditures from $8.092 trillion to $7.390 trillion. The direct subtraction of this difference alone (-$707 trillion), would have made total real GDP for 2006 only $10.720 trillion. This would represent a total GDP increase of only $903 billion since 2000, or a 9.2% real GDP increase (as opposed to the currently stated 6-year increase of 16.3%) Thus, if consumer spending increased at the same rate that aggregate wages increased, the average annual GDP increase since 2000 would have been only 1.53%. Thus debt-financed consumer spending added an average of 1.17%/year to annual GDP growth. It is this debt-financing of consumer spending that has allowed the wage-productivity gap to widen. Again, without the massive increase in consumer borrowing ability, this wage-productivity gap would never have occurred. And when the borrowing bubble finally does collapse, as all bubbles eventually do, it will cause a major slowdown in our economy. Not only will it be a major hit to American workers and consumers, it will be a major hit to business and Corporate America as well. Profits cannot be maintained without sale of production. And if consumers lose purchasing power, business and Corporate America lose sales. And that means profit losses as well. I won't get into a discussion on what's "fair," or who deserves what. Those are subjective statements only. They are simply "opinions," not documentable or statistically verifiable facts. My opinion about fairness might differ from yours. But neither one of us can prove our own "opinions" are right. However, the fact that consumer spending has been funded increasingly more by borrowed money, and increasingly less by real wage increases, is documentable fact. In addition, it's pretty well accepted that this is not a sustainable situation. How much longer this can be sustained is the real question. No one knows for sure. Apparently we're going to find out the hard way, unless we change the course.
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Post by LibSlayer on Feb 9, 2007 15:58:14 GMT -6
"The biggest problem is that the widening gap between productivity and wages makes workers less able to purchase their own production. " You do understand that most of that production is now far less because it has been offshored, thus making all those things cheaper for workers to buy. If wages were raised any faster/more, that is inflationary and would increase inflation, thereby reducing the buying power of those increased wages. Again, the culprit has been inflation, absent the fuel cost increase induced inflation real wages would have risen much more. "Increases in consumer spending and production demand are normally limited by increases in worker/consumer wages. Without consumer "deficit" spending, worker-consumer wages place the absolute upper limit on consumer spending, as well as the production demand it creates. It puts the absolute limit on the dollar-value of production that can be sold. As a result, purchase of production would increase no more than wages increased. Consumer spending and consumer production demand would thus be limited to workers' wages. And since the purchase of increased production would also be limited by wage increases, production would be curtailed as a result. The increase in real wages since December 2000 has been only 3.3%. If consumer spending increases were limited to wage increases (without the addition of deficit-financed spending), the per capita increase in consumer spending would have been only 3.3% over the last 6 years. Total U.S. Employment has increased 6% since December 2000. Thus the spending power increase financed by wages alone totals 9.3% since that time. Thus personal consumption expenditures would be expected to increase about the same amount. Since consumer spending is 70% of all economic activity, and should increase at roughly the same rate as GDP growth, real GDP growth of 9.3% over that same period of time would be expected. How does this compare with the actual statistics? Real GDP has increased 16.3% since December 2000, from $9.817 trillion in 2000 to $11.422 trillion in 2006 (in chained 2000 dollars). Since December 2000, Personal Consumption Expenditures have increased 20%, from $6.739 trillion (in chained 2000 dollars) to $8.092 trillion in 2006. Personal Consumption Expenditures have increased over twice as much as aggregate worker wages have increased. Real GDP has increased 60% more than aggregate worker wages. How did consumer spending and demand increase so much more than aggregate worker/consumer wages? By a massive increase in consumer borrowing and credit. This is a completely unsustainable way to maintain economic growth. Debt-financed consumer spending can not continue to fuel economic growth. Debt-financed consumer spending cannot continue to compensate for slow real wage growth. Again, this is not a sustainable situation. Eventually the borrowing-credit-debt bubble will burst, and consumer spending (and demand) will be forced to return to the level supported by wages alone. Had the growth of personal consumption expenditures been limited to the growth in aggregate real wages (9.3%), it would have reduced 2006 personal consumption expenditures from $8.092 trillion to $7.365 trillion. The direct subtraction of this difference alone (-$727 trillion), would have made total real GDP for 2006 only $10.3958 trillion. This would represent a total GDP increase of $878 billion since 2000, or a 9% real GDP increase (as opposed to the currently stated 6-year increase of 16.3%) Thus, if consumer spending increased at the same rate that aggregate wages increased, the average annual GDP increase since 2000 would have been only 1.5%. Thus debt-financed consumer spending added an average of 1.2%/year to annual GDP growth. It is this debt-financing of consumer spending that has allowed the wage-productivity gap to widen. Again, without the massive increase in consumer borrowing ability, this wage-productivity gap would never have occurred. And when the borrowing bubble finally does collapse, as all bubbles eventually do, it will cause a major slowdown in our economy. Not only will it be a major hit to American workers and consumers, it will be a major hit to business and Corporate America as well. Profits cannot be maintained without sale of production. And if consumers lose purchasing power, business and Corporate America lose sales. And that means profit losses as well. I won't get into a discussion on what's "fair," or who deserves what. Those are subjective statements only. They are simply "opinions," not documentable or statistically verifiable facts. My opinion about fairness might differ from yours. But neither one of us can prove our own "opinions" are right. However, the fact that consumer spending has been funded increasingly more by borrowed money, and increasingly less by real wage increases, is documentable fact. In addition, it's pretty well accepted that this is not a sustainable situation. How much longer this can be sustained is the real question. No one knows for sure. Apparently we're going to find out the hard way, unless we change the course. " As long as we have new people (high school grads, college grads) moving into the economy each year and as their careers mature their spending power increases and so does their spending. But from your numbers real GDP has increased $250 billion more than personal consumption. However your figures do not include TOTAL income, more and more of the wealth being created and not paid to workers directly is paid to them indirectly, through stock ownership. Additionally what is not included is the increased value of benefits mostly due to the increasing premiums of health insurance paid by companies. What happens when these figures are added to the wages?
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Post by unlawflcombatnt on Feb 9, 2007 17:04:42 GMT -6
"The biggest problem is that the widening gap between productivity and wages makes workers less able to purchase their own production. " You do understand that most of that production is now far less because it has been offshored, thus making all those things cheaper for workers to buy. If wages were raised any faster/more, that is inflationary and would increase inflation, thereby reducing the buying power of those increased wages. Yes, much production has been offshored. The "productivity" increase measured by the BLS is supposed to apply to American worker productivity. (Whether that's what they're actually measuring is debatable. But the claim is that this is American worker productivity, not global productivity.) Furthermore, all of this "production" now occurring in foreign countries is the major reason workers wages have not kept up. Higher paid American workers have been replaced by starvation-waged 3rd world workers. Though this reduces the cost of production, and would allow (but not guarantee) price reductions, it also reduces aggregate American wages. It reduces aggregate worker income directly by loss of employment. It reduces average wages indirectly by reducing American labor demand (and replacing it with foreign workers), and thus reduces average wages as well. Increasing wages alone would increase inflation. But wage increases have contributed little to inflation under Bush. The major contributor has been the increase in consumer spending financed by massive increases in consumer credit and borrowing. It is the total spending power that increases demand-pull inflation. American wages have contributed little to this over the last 6 years. Increased borrowing and credit creation have been the major contributors to inflation under Bush. When this borrowing power ultimately collapses, spending and GDP growth will decline to that which can be supported by wages alone. Again, growth supported by wages alone would have been only 1.7% per year under Bush. As long as we have new people (high school grads, college grads) moving into the economy each year and as their careers mature their spending power increases and so does their spending. Yes, and that spending power increase has been increasing at 1.7% per year under Bush, 1.2% less than the average 2.7% annual GDP growth. And this spending power increase cannot sustain a 2.7% GDP growth indefinitely. However your figures do not include TOTAL income, more and more of the wealth being created and not paid to workers directly is paid to them indirectly, through stock ownership. Stock ownership and dividends are concentrated among the most affluent members of society, who devote the lowest fraction of income to consumer spending. Since dividends and capital gains go largely to the top earners, they have contributed little to the increase in consumer spending. Additionally what is not included is the increased value of benefits mostly due to the increasing premiums of health insurance paid by companies. Workers can't "spend" benefits. The increased value of benefits contributes little to consumer spending power. It is wages (and borrowing) that finance consumer spending, not benefits. People can't buy goods with their increased "benefits."
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Post by LibSlayer on Feb 9, 2007 21:16:46 GMT -6
"Furthermore, all of this "production" now occurring in foreign countries is the major reason workers wages have not kept up. "
No, just the opposite, it has allowed American workers wages to continue increasing.
"Higher paid American workers have been replaced by starvation-waged 3rd world workers."
What the foreign workers are paid is a very good wage in their countries allowing millions of them to rise out of poverty.
"Though this reduces the cost of production, and would allow (but not guarantee) price reductions, it also reduces aggregate American wages."
How many times do I have to tell you, American wages have been going UP.
" It reduces aggregate worker income directly by loss of employment. It reduces average wages indirectly by reducing American labor demand (and replacing it with foreign workers), and thus reduces average wages as well. "
No, it increases American workers income and increases demand for American workers.
Increasing wages alone would increase inflation. But wage increases have contributed little to inflation under Bush. The major contributor has been the increase in consumer spending financed by massive increases in consumer credit and borrowing. It is the total spending power that increases demand-pull inflation. American wages have contributed little to this over the last 6 years. Increased borrowing and credit creation have been the major contributors to inflation under Bush.
When this borrowing power ultimately collapses, spending and GDP growth will decline to that which can be supported by wages alone. Again, growth supported by wages alone would have been only 1.7% per year under Bush.
"Stock ownership and dividends are concentrated among the most affluent members of society, who devote the lowest fraction of income to consumer spending. Since dividends and capital gains go largely to the top earners, they have contributed little to the increase in consumer spending. "
95 million American are now invested in the market, every at my company is. When the millionaire's stock goes up so does ours.
"Workers can't "spend" benefits. "
They are still paid that amount, regardless.
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Post by unlawflcombatnt on Feb 10, 2007 17:16:26 GMT -6
"Furthermore, all of this "production" now occurring in foreign countries is the major reason workers wages have not kept up. " No, just the opposite, it has allowed American workers wages to continue increasing. That's just completely illogical. How does decreasing demand for American labor increase wages? Decreased demand for everything else decreases prices. So how does decreased demand for labor not decrease the "price" of labor? Is this just another version of Right-Wing alternate reality economics, where "the old rules don't apply"? Is this just another part of Right-Wing economic mythology where the laws of supply-and-demand only apply when it's convenient? "Higher paid American workers have been replaced by starvation-waged 3rd world workers." What the foreign workers are paid is a very good wage in their countries allowing millions of them to rise out of poverty. More alternate reality. The wages of foreign workers are enough for them sleep in the street, and urinate & defecate in the street. Wages in Mexico are even lower than they were before U.S. Investors were allowed to take over Mexican farms and production facilities. More importantly to the United States, wages of 3rd world workers are not high enough to buy any American imports. But they are low enough to keep those workers from having any political or economic power whatsoever, and they're low enough to maintain their enslavement by American Corporate multinationals and investors. And they are low enough to maintain exorbitant profits for the Benedict Arnold American multinationals who are their masters. "Though this reduces the cost of production, and would allow (but not guarantee) price reductions, it also reduces aggregate American wages." How many times do I have to tell you, American wages have been going UP. How many times do I have to tell you, that real wages have risen only 1.3% since December of 2001? Which is an annualized rate of increase of only 0.2%. How many times do I have to tell you that consumer spending financed by borrowing cannot continue to compensate for the minuscule increase in wages? How many times do I have to tell you that our economy cannot continue to (allegedly) expand when the necessary increase in consumer spending is financed almost exclusively by increased borrowing, not wages? " It reduces aggregate worker income directly by loss of employment. It reduces average wages indirectly by reducing American labor demand (and replacing it with foreign workers), and thus reduces average wages as well. " No, it increases American workers income and increases demand for American workers. Not only are your posts "fact-free," they're "logic-free" as well. Replacing high-paid, high-skilled American workers with lower skilled, even lower-paid foreign workers does not "increase" American workers income. If workers lose jobs, their income does not increase. If there are less jobs available it doesn't "increase" labor demand. It decreases it. "Stock ownership and dividends are concentrated among the most affluent members of society, who devote the lowest fraction of income to consumer spending. Since dividends and capital gains go largely to the top earners, they have contributed little to the increase in consumer spending. " 95 million American are now invested in the market, every at my company is. When the millionaire's stock goes up so does ours. 95 million out of 230 million working age Americans is less than 50% of the population. And 90% of stock is owned by the richest 10% of Americans. Stock price increases help the top 10% almost exclusively. The lower 90% receive little benefit. And if their wages decline to increase the company's profit margin, they are worse off as a result. "Workers can't "spend" benefits. " They are still paid that amount, regardless. And they still can't spend that amount, regardless. And if they can't spend it, the dollar-value of those benefits contribute absolutely nothing to consumer spending or aggregate consumer production demand. And most of those "benefits" are underfunded, meaning they're worth much less than the wages they replace.
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Post by LibSlayer on Feb 10, 2007 18:02:46 GMT -6
The increased profits spur more R&D which creates more demand for American labor. Lawrence Klein, a Nobel Laureate and Professor Emeritus at the University of Pennsylvania's Wharton School of Business. He told FactCheck.org: Klein: In the initial phases of IT offshoring there is a loss of jobs, but the overall impact on the economy will be favorable. Because companies are paying lower costs, they have more money for investment which leads to an increased demand for labor. www.factcheck.org/article225.html "More alternate reality. The wages of foreign workers are enough for them sleep in the street, " I have lived in many of those countries, they are already living in the streets, the salaries they are getting are good salaries for those countries.
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Post by LibSlayer on Feb 10, 2007 18:16:02 GMT -6
But their companies buy services from the US, the US is currently running a surplus in services.
And how many times do I have to tell you when we are talking about what jobs pay workers we use NOMINAL wages. This is simple math, I fail to understand why you don’t get it.
Simple example
The whole economy is 5 workers, each worker is paid by the company$40,000 a year:
$40,000 $40,000 $40,000 $40,000 $40,000
The average nominal wage is $40,000.
If what YOU said was true, American lose high paying jobs and take low paying jobs then:
$40,000 $40,000 $40,000 $40,000 $20,000
The average nominal wage goes DOWN to $36,000
The nominal wage ISN’T going down, it is going UP, so this PROVES you are wrong about Americans losing high paying jobs for low paying jobs. If they were then nominal wages would be going down.
And 50 years ago, that number was less than 1%, and 30 years ago less than 5% and 20 years ago less than 10%, but that number is INCREASING
Tell that to the 88 million middle class Americans whose 401k’s and mutual funds goes up when stocks go up. You won’t find them saying they aren’t getting any benefit, they are getting a HUGE benefit.
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Post by LibSlayer on Feb 10, 2007 18:28:54 GMT -6
Relatively Minor Problem There are no official figures on the total number of jobs that have gone overseas, but in May 2004 the Labor Department made its first-ever report on the portion of "mass layoffs" attributable to "overseas relocation." Their survey showed that only 2.5 percent of major layoffs in the first three months of 2004 were a result of outsourcing abroad . That survey only covers companies that have laid off 50 or more workers at one time for 30 days or longer, and so may not be representative of all companies and all job loss. But it gives scant support for Kerry's theme. Trying to assess whether offshoring might actually be a larger problem than the Labor Department figures indicate, veteran Democratic economist Charles Schultze tried another approach. He reasoned that if America's production needs were increasingly met by foreign outsourcing (and cheap imports) this would be shown as a rise in the value of U.S. imports relative to the overall economy, as measured by Gross Domestic Product, or GDP. But what he found was that the ratio wasn't rising at all - it had leveled off since 2000. He concluded that "there is nothing in the data to suggest that large increases in. . . offshoring could have played a major role in explaining America's job performance in recent years. " He told FactCheck.org: Schultze: It is clear that offshoring has had a relatively modest impact on unemployment when compared to all the other economic factors that create and destroy jobs week by week in the U.S. economy. He also said that offshoring only holds down US job growth in the short run. Over time, he said it is beneficial: Schultze: In the short run, an increase in offshoring reduces U.S. job growth. But in the long run it improves the standard of living, increases real wages, and increases the country's economic growth. Schultze is now Senior Fellow Emeritus at the Brookings Institution, with impeccable Democratic credentials. He was President Lyndon Johnson's budget director in the 1960's, and was chairman of President Carter's Council of Economic Advisers back in the late 1970's. Even backers of Kerry's proposed solution concede that the problem is relatively minor. One of those backers is Christian Weller, senior economist at the Democratic-leaning Center for American Progress. Weller acknowledges that the problem of outsourcing is not large when compared to overall levels of unemployment. He said in an article on the subject: Weller: While offshoring has taken the spotlight in the national debate, estimates of the jobs lost due to this practice amount to between 300,000 and 995,000 over the last three years. Only a fraction of the jobs America has lost, but hardly insignificant. Yet, even though offshoring accounts for a relatively small portion of U.S. unemployment, it deserves our immediate attention. For one, the pain and suffering of those who lost their jobs are real. Moreover, for those who still have jobs, offshoring has contributed to the stagnant wages and declining benefits. Another assessment comes from Ben Bernanke, Chairman of the economics department at Princeton University and also a governor of the Federal Reserve. In a speech at the end of March he estimated that the total number of jobs lost to "offshoring" at roughly one percent of all jobs lost. Bernanke estimated that over the past decade the US economy lost an overall total of about 15 million jobs each year for all reasons, while creating an average of about 17 million new jobs each year - a huge rate of "churn" as countless businesses fail or downsize while others grow or are created. Of that 15 million annual gross job loss, he said the portion due to outsourcing is quite small. Bernanke cited a 2003 study by the Wall Street firm of Goldman, Sachs & Co. that estimated outsourcing abroad had averaged between 100,000 and 167,000 jobs per year since 2000. And he said offshoring would remain a minor factor even if the figure grew larger: Bernanke: Two hundred thousand jobs per year amount to a bit more than 1 percent of the 15 million gross jobs lost each year. . . for all reasons. Quantitatively, outsourcing abroad simply cannot account for much of the recent weakness in the U.S. labor market and does not appear likely to be an important restraint to further recovery in employment. The Upside to Outsourcing Recent studies show that when companies move some jobs abroad the savings stimulate job creation at home. Matthew Slaughter, a Dartmouth economist, looked at foreign and domestic job growth in multinational corporations from 1991 to 2001. He found foreign affiliates of American companies added 2.9 million workers to their payrolls overseas, but at the same time those companies added 5.5 million US employees to their payrolls. And a study released by the private economic consulting firm Global Insight in March looked at outsourcing in the information technology (IT) sector. It found that outsourcing generated a net gain of 90,000 jobs during 2003, in both IT and non-IT sectors. Furthermore, the study found that the cost savings of IT outsourcing lowered inflation throughout the US economy, increased consumer spending, and "contributed significantly" to the overall growth of US GDP. It said that by 2008, "real GDP is expected to be $124 billion higher than it would be in an environment in which offshore IT. . .outsourcing does not occur. " Global Insight's research was supervised by Lawrence Klein, a Nobel Laureate and Professor Emeritus at the University of Pennsylvania's Wharton School of Business. He told FactCheck.org: Klein: In the initial phases of IT offshoring there is a loss of jobs, but the overall impact on the economy will be favorable. Because companies are paying lower costs, they have more money for investment which leads to an increased demand for labor. This does not indicate a 1-to-1 ratio of jobs gained to those lost, however the overall economy will benefit from offshoring. Bernanke, the Princeton economics chairman, also said in his speech that the US gains more from "insourcing" of jobs than it loses from outsourcing. He said that in 2002, the most recent year on record, the US exported $29 billion in "business services" while importing less than $11 billion. And he said the jobs that are being gained are generally higher-paying jobs than those that are being lost. Bernanke: An important reason for the U.S. trade surplus in business services is that this country provides many high-value services to users abroad, including financial, legal, engineering, architectural, and software development services , while many of the services imported by U.S. companies are less sophisticated and hence of lower cost. www.factcheck.org/article225.html
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Post by unlawflcombatnt on Feb 11, 2007 4:39:26 GMT -6
Relatively Minor Problem There are no official figures on the total number of jobs that have gone overseas, but in May 2004 the Labor Department made its first-ever report on the portion of "mass layoffs" attributable to "overseas relocation." There are no "official" figures that support their false claim on benefits to outsourcing. That's because there aren't any figures at all, official or unofficial, that support their contention. The concocted theory that outsourcing helps the U.S. has been proven false. There's not a shred of evidence to support it. Their survey showed that only 2.5 percent of major layoffs in the first three months of 2004 were a result of outsourcing abroad. This proves nothing whatsoever. In fact, it doesn't even suggest anything. Posting a survey covering only 3 months is ridiculous. Using it to support an argument is even more ridiculous. Outsourcing reduces American employment, wages, and aggregate consumer income. This is strongly suggested by the facts, and even more strongly suggested by simple common sense. Trying to assess whether offshoring might actually be a larger problem than the Labor Department figures indicate, veteran Democratic economist Charles Schultz tried another approach. He reasoned that if America's production needs were increasingly met by foreign outsourcing (and cheap imports) this would be shown as a rise in the value of U.S. imports relative to the overall economy, as measured by Gross Domestic Product, or GDP. But what he found was that the ratio wasn't rising at all - it had leveled off since 2000. This is an outright lie. Not only is it a lie, it is a preposterous lie. It's very simple to disprove by a concept Right-Wingers hate to mention: the rising trade deficit. The trade deficit is increasing almost exclusively due to increased imports. Furthermore, just because you find a free-trading Democrat, to provide such a fraudulent statement, doesn't make it any more valid. Schultz: It is clear that offshoring has had a relatively modest impact on unemployment when compared to all the other economic factors that create and destroy jobs week by week in the U.S. economy.... That's nothing but a self-serving opinion by a free-trader, which has no factual support whatsoever. He also said that offshoring only holds down US job growth in the short run. Over time, he said it is beneficial.... Schultz: In the short run, an increase in offshoring reduces U.S. job growth. But in the long run it improves the standard of living, increases real wages, and increases the country's economic growth. Let me translate that statement. Schultz is freely admitting that offshoring holds U.S. job growth down. His false claim about that jobs increase "over time" has no factual basis whatsoever. No one knows how long the "long-term" is. As such, anything that is not moving in the direction that Schultz-like prevaricators claim, will move in the direction they claim, if we wait long enough. In other words, at the present time we are wrong, but "history" will prove us right. Eventually. As Keynes said, "in the long-run, we're all dead." For all anyone knows, the long-run may be 100 years. Or maybe a thousand years. . In the short-term, as well as the "longest" term we are aware of, offshoring reduces American employment and wages. Schultz makes no claims to the contrary. In fact, he admits that short-term job growth is reduced by offshoring. Thanks again for proving me right, Libslayer. I always appreciate your posting information that supports my own views, and refutes yours. Keep up the good work.
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Post by blueneck on Feb 11, 2007 8:39:46 GMT -6
Seems we have a great example of someone who has bought into this kind of deluisional thinking lock stock and barrel right here in our midst.
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Post by ig on Feb 11, 2007 9:00:59 GMT -6
But their companies buy services from the US, the US is currently running a surplus in services. And how many times do I have to tell you when we are talking about what jobs pay workers we use NOMINAL wages. This is simple math, I fail to understand why you don’t get it. Simple example The whole economy is 5 workers, each worker is paid by the company$40,000 a year: $40,000 $40,000 $40,000 $40,000 $40,000 The average nominal wage is $40,000. If what YOU said was true, American lose high paying jobs and take low paying jobs then: $40,000 $40,000 $40,000 $40,000 $20,000 The average nominal wage goes DOWN to $36,000 Tell that to the 88 million middle class Americans whose 401k’s and mutual funds goes up when stocks go up. You won’t find them saying they aren’t getting any benefit, they are getting a HUGE benefit. the 40K, 40k, 40K argument is pretty silly from a quintile argument. the bottom 2/3rds have lost. so your second piece should look like. $60,000 $40,000 $40,000 $40,000 $20,000 thats a bit distorted but in very general terms, that is what is going on. now as far as the 401k argument goes, sure many americans are now invested in the stock market but very few use it for income. Unless of course you want to get into the trickle down theory.
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Post by blueneck on Feb 11, 2007 11:54:20 GMT -6
Numbers get skewed real easily
Lets look at 100 workers making 50k, then their CEO makes 400 times that, to be fair lets say he makes 200 times that
100 x 50k = 5,000,000 200 x 50K 10,000,000 15,000,000 / 101 = 150,000
so it looks like the average worker is making 150k
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