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07/05/2010

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Edward  Boyle

I was thinking of this stuff and have following observation:

Productivity=>Less employment+Massive cheap goods=>cheap credit to sell the goods(unemployed can't buy the increasing amount of stuff) resulting in societal bankruptcy through increasing financial bubbles to supply income to get desirable (due to heavy ad campaigns) goods into people's possession. So higher productivity is bad.

Lower prodcutivity supposedly makes people poor as they can't afford simple consumer goods. However then they save and are frugal, ocnsidering waht they really need before buying it and keeping it a long time. With less productivity things are made to last. So as GDP and growth are the holy grails of economics along withg productivity, we can throw them all out as not well thought out. GDQ (Gross Domestic Quality) should replace GDP and quality should replace productivity.

matt

How long before the high value-added work goes overseas too? There was an article last year in BusinessWeek on a fabric/garment company in India that current did most of the production for some clothes stores in the U.S. They were expanding their offerings from just manufacturing to also finding fabric suppliers and also opening a design division. Their goal was that "when Saks needs their spring collection, they just make one phone call and it's all done from design to delivery". My first thought when reading this was what you mentioned above - who's going to have the jobs to buy it?

Tony Weddle

"Americans used easy credit offered at usurious rates to buy Apple gadgets they could not really afford."

I was thinking about credit (loans) recently. Isn't it always the case that loans provide a way for people to buy stuff they can't really afford? Only so long as they can service the debt does this bare fact not become prominent. Increasingly, that assumption about being able to service the debt seems to be a poor one. Look at the public employees in California; high paid jobs one day, minimum wage the next.

Greg Pinelli

Businesses from the US move manufacturing overseas because they are, literally, paid to do it. I have two very straightforward proposals for reversing that ingrained trend...

First..all US corporations with overseas manufacturing can only deduct expenses for wages paid to US Nationals and for materials purchased in this country. In other words...they pay Taxes (largely) on Gross profits..not Net profits..

Second..All imported goods are subsidized by US taxpayers...this is in the form of every single piece of infrastructure that exists that's constructed thru tax dollars. EVERY imported good is charged an infrastructure use fee..

Will this result in "trade wars...?" I doubt it...Asian countries depend greatly on US consumers to buy their stuff..Japan, Taiwan and So. Korea have well developed internal markets..the others...pretty shaky. Maybe they'll retaliate and not buy our Bonds..Good!!!! Then we can begin the long overdue process of living beneath our means.

In connection with the above it's critical that, as a nation, we stop the obsessive status mongering of demanding every young person go to College. We need electricians, plumbers, makers and builders. We have more than enough ladder clawing middle manager types to last several lifetimes.

Matt K

Speaking of credit for things people can't afford, this article was on CNBC on how retailers were extending credit to get people to shop (Target giving credit card customers 5% discount, or Wal-Mart helping people apply for small business loans) http://www.cnbc.com/id/38093389//
Must keep spending going...

Rural Idiocy

Jobs are rubbish. I always hated mine. Back to the land y'all...

marku

an actual economist questions "free trade" I think this is the most sense I have ever seen an economist make on the subject. I am sure they will take away his guild membership.

very interesting comments.

http://economistsview.typepad.com/economistsview/2010/07/why-is-the-american-jobs-machine-broken.html

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