Announcement

Collapse
No announcement yet.

Greece's debt has been downgraded to junk status

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • #91
    I'm just a touch pressed for time, but Metryll just highlighted a logical fallacy that the advocates of the "welfare state" have never forthrightly addressed:

    Originally posted by Metryll View Post
    BTW public servant too are tax payer.
    According the the University of New Mexico, per capital annual income in the US is $39,138, yet according to US Bureau of Labor Statistics, the average Federal employee makes $67,691. Assuming the average US worker pays roughly two-fifths of his income in various taxes, that means four-and-a-thris workers employed in the private sector will be needed to support one Federal worker -- and that's not counting state and local civil servants! Surely one need not a slide rule to figure that that condition is utterly unsustainable.

    And if private sector wages are increased to the level you suggest, then through political means will public sector workers demand commmeasurate increases in real income. Then an arms race in wages starts: that's called wage inflation, and we got his with it real hard in the 1970's. It eroded all confidence even worse than our recent troubles, 'cause the value of the dollar itself wasn't to be trusted.

    By the mid-1970's, one in four New Yorkers was employed by the City of New York. If state and Federal employees were included, then that figure would rise to one-in-three. This City became hell: in order to escape oppressive taxes, businesses fled, people fled, and their taxes left with them. The only people left were the public employees, and the receipients of public services. That was it. That's where Greece is at today: their business climate os so unfavorable -- due to political designs -- that there is no tax base in Greece.

    By the way, active military personnel are considered neither public sector workers, nor members of the workforce: on the one hand, the overwhelming majority of military personnel are not lifers, not hanging on for twenty and a pension; on the other, during their term of service (usually four years) they're under contract to the military, and are therefore unavailable for employment elsewhere.

    As for the rest, all that I've seen here indicates that the surest way to waste money is to give it to a government: they've got more ways to **** away money than all the corporations throughout history put together.

    Like I said, we've seen this play before. Why on earth any would recommend running it again I can't possibly fathom. The fiasco of Wollman Rink, a closed facility that the City sunk millions of dollars into, only to have Donald Trump fix it up like new in a matter of weeks at only a fraction of the cost projected by the City, is perfeectly representative of all government projects around here: money given to a government is as good as burnt.
    I was married for two ******* years! Hell would be like Club Med! - Sam Kinison

    Comment


    • #92
      Originally posted by slick_miester View Post
      I'm just a touch pressed for time, but Metryll just highlighted a logical fallacy that the advocates of the "welfare state" have never forthrightly addressed:

      According the the University of New Mexico, per capital annual income in the US is $39,138, yet according to US Bureau of Labor Statistics, the average Federal employee makes $67,691. Assuming the average US worker pays roughly two-fifths of his income in various taxes, that means four-and-a-thris workers employed in the private sector will be needed to support one Federal worker -- and that's not counting state and local civil servants! Surely one need not a slide rule to figure that that condition is utterly unsustainable.
      Depends a bit. Are you arguing that the US can't run efficient govt. administration, or that no one can?

      The first I'm not sure you will find many to argue againt.

      Comment


      • #93
        Given the events of today, I suspect we will be soon seeing UK government given junk bond status....
        "To be free is better than to be unfree - always."

        Comment


        • #94
          Originally posted by Johan Banér View Post
          Depends a bit. Are you arguing that the US can't run efficient govt. administration, or that no one can?

          The first I'm not sure you will find many to argue againt.
          To highlight the first point, I'll introduce New York's Second Avenue Subway. First proposed back in 1919, the line has been considered essential as there has existed on Manhattan's East Side only one subway line since 1942, and it carries more passangers per day than the combined rail system total for Boston, Chicago and San Fransisco combined. Two small segments were bored out in the early 1970's, but work was halted as the City fell into insolvency in 1975, and spent the next three decades essentially in a state of receivership. Well, with City and state revenues up sharply due to the booming real estate and securities markets, the City and the state got back to work recently on the long-abandoned Second Avenue Subway. Current estimates have the northern half of the line finished and ready for passengers by 2020 at a cost of at least $17 billion. Off the top of my head I can't recall the earlier cost estimates, but promised finished dates went from 2012, to 2015, to 2017 over the last three years. I can only imagine that cost estimates rose proportionally.

          The Metropolitan Transportation Authority, (the agency that will own and operate the subway -- the Wikipedia article got that one wrong) and the City of New York settled on boring the tunnels underground, and only employing "cut-and-cover" for the stations. They posited that those methods would limit disruptions to normal life and business to the greatest extent possible. That's bullsht! "Cut-and-covering" the whole thing in 400 meter chunks would have been far superior, not only in terms of cost, but also in terms of disruption to the communities, as well. The tunnel boring has to go through hard Manhattan schist: bedrock. Blasting is an almost daily event: several buildings along 2nd Ave have already had their foundations damaged, and the City and the MTA have already cut settlement checks to some of their owners. Being as this is Manhattan -- arguably the most densely-populated real estate on the face of the earth -- debris from the underground blasting and boring cannot be stoed for any length of time, so dozens of dump trucks rumble over the East Side at all hours of the day and night. Four-fifths of 2nd Ave's width have been closed to both vehicular and pedestrian traffic, so businesses all up and down 2nd Ave, from 125th St all the way down to 63rd (a distance of 3.1 mi, or 5 km) are deprived deliveries, foot traffic, and ultimately, customers: they're folding left and right. I posit that "cut-and-covering" the whole thing in 400m chunks would have reduced the cost by one-third, and the time by half. But no, the City and the MTA chose tunnel-boring, instead: they've wasted more money, more time, and caused more disruption that was absolutely needed for this project. By the time they're done, the City and the MTA will be drawing no tax revenue from along 2nd Ave 'cause all of this construction will render 2nd Ave a desert.

          That's what happens when government spends your money.

          The same, however, applies to your government, as well. Sweden seems to be doing better, but that probably has more to do with her status as a net exporter: money traditionally comes into to Sweden, rather than leaves it, and is thus available to finance public works projects and public welfare programs. If Sweden were a net importer, however, then her finances would look more like Greece's or the UK's or the US'.

          Don't get too haughty about it, though: Sweden's exports are completely dependent on her customers' ability to raise financing. If Sweden's customers can't raise the capital, they won't buy so many SAAB's and Volvo's. Unemployment will rise, and the Swedish state's collections will fall. Then like so many other nations, Sweden would have to make some very tough choices regarding her public finances, too. That's why countries like Germany are rescuing Greece: without the export market, Germany's industries will idle for want of customers, and her workers will be laid off. Angela Merkel and Germany's political leadership believe that bailing out Greece is in Germany's best interests. In the immediate term, they're right. In the long-term, however -- looking ten or twenty or forty years down the road -- Germany has just sown the seeds for her own destruction, and perpetual deadbeat Greece will be the agent of that destruction.
          I was married for two ******* years! Hell would be like Club Med! - Sam Kinison

          Comment


          • #95
            Originally posted by slick_miester View Post
            Don't get too haughty about it, though: Sweden's exports are completely dependent on her customers' ability to raise financing. If Sweden's customers can't raise the capital, they won't buy so many SAAB's and Volvo's. Unemployment will rise, and the Swedish state's collections will fall. Then like so many other nations, Sweden would have to make some very tough choices regarding her public finances, too.
            Yes, that's why Sweden is in on the current bail-out. And the problem of upgrading to stay competitive is universal. The welfare system is not a problem in this regard. If anything it allows Sweden more flexibility and faster responses, which is part of the point of it.

            Comment


            • #96
              Originally posted by slick_miester View Post
              I'm just a touch pressed for time, but Metryll just highlighted a logical fallacy that the advocates of the "welfare state" have never forthrightly addressed:
              Are you implying that public servant dont pay tax ? Now if you assume that I support the fallacious idea that state wage self support economy you're incorrect.

              ...Surely one need not a slide rule to figure that that condition is utterly unsustainable.
              Tax depends of global wage, reduce the later you decrease the former. The reverse being true.

              And if private sector wages are increased to the level you suggest, then through political means will public sector workers demand commmeasurate increases in real income. Then an arms race in wages starts: that's called wage inflation, and we got his with it real hard in the 1970's. It eroded all confidence even worse than our recent troubles, 'cause the value of the dollar itself wasn't to be trusted.
              Inflation by wage exist but what mater is the level of inflation. If it raise too high the current politic of keeping wage under inflation can be used for a limited period of time, until inflation level has reached an acceptable level. For now inflation is kept low due to an absurd ideological dogma and it strangle western economies by prohibiting any stable growth.

              By the mid-1970's, one in four New Yorkers was employed by the City of New York. If state and Federal employees were included, then that figure would rise to one-in-three. This City became hell: in order to escape oppressive taxes, businesses fled, people fled, and their taxes left with them. The only people left were the public employees, and the receipients of public services. That was it. That's where Greece is at today: their business climate os so unfavorable -- due to political designs -- that there is no tax base in Greece.
              We're basically saying the same thing here. The main difference is that you dont include any negative effect of global wage reduction on consumption. Instead of a deficit based on artificial consumption you'll get a recession based on lack of consumption generating a compensation deficit.

              By the way, active military personnel are considered neither public sector workers, nor members of the workforce: on the one hand, the overwhelming majority of military personnel are not lifers, not hanging on for twenty and a pension; on the other, during their term of service (usually four years) they're under contract to the military, and are therefore unavailable for employment elsewhere.
              How you consider military personnel from a political/legal point of view is a thing. What they are from a macro-economic point of view is another : their wage are state paid and are part of global wage.

              As for the rest, all that I've seen here indicates that the surest way to waste money is to give it to a government: they've got more ways to **** away money than all the corporations throughout history put together.
              One can argue following his own political perception that the spending is sound or not but, safe for corruption, money used by goverment is re-introduced in economy.

              Like I said, we've seen this play before. Why on earth any would recommend running it again I can't possibly fathom. ...
              Probably because you continue to incorrectly identify Keynes with Marx, a quite common error.

              Comment


              • #97
                This line of conversation can be quite annoying, because it displays a decided unwillingness to apply basic mathematics to the topic in question. For example:

                Originally posted by Metryll View Post
                Are you implying that public servant dont pay tax ? Now if you assume that I support the fallacious idea that state wage self support economy you're incorrect.
                Let's do some math: according to the UNM link I provided earlier, the average American worker grosses $39,138.00/yr. According to the US Gov't, the average Federal employee grosses $67,691.00. Yes, public sector employees pay taxes, but they're not paying any higher rates than their private sector counterparts, so your observation that civil servants pay taxes is immaterial: they're not paying enough taxes to support themselves. They're not paying 100%.

                Now, if we assume that the average American worker, private and public sector alike, pays roughly 40% of his income in various taxes (that figure varies widely, according to income bracket, personal deductions, and state/locality, but for the Greater New York area, it might be a touch low) that means that 4.33 private sector workers are needed to support one public employee. If the tax rate is increased, then the real income of the private sector worker declines: he'll have less money to spend, and in turn the receipients of his spending will have lower absolute and real earnings, and the businesses that they patronize will suffer reduced absolute and real earnings, and so on, and so on, and so on. When such a chain of events is initiated, the ratio of private sector workers needed to support one public employee rises: from 4.33-to-1, it may go to five, or 5.5-1. Yet, as the private sector is taxed more and more, in responds by contracting: workers have less incentive to enter the private sector because their real earnings will decline precipitously, and entrepreneurs will be disincentivized to launch new ventures for the same reason. Therefore, while the ratio needed mathematically may rise to 5 or 5.5-1, the general economy can only provide 3.5, or 3-1. It should be obvious that such a pattern is not economically sustainable.

                In the 1960's and '70's, that's exactly what happened in Great Britain and the City of New York. The private sector was taxed into oblivion, and the public sector grew without restraint, until the whole rotten ediface collapsed into insolvency, political malaise, and general public disorder. I've lived through this pattern: I have no intention of living through it again.

                Originally posted by Metryll View Post
                Inflation by wage exist but what mater is the level of inflation. If it raise too high the current politic of keeping wage under inflation can be used for a limited period of time, until inflation level has reached an acceptable level. For now inflation is kept low due to an absurd ideological dogma and it strangle western economies by prohibiting any stable growth.
                In the US context, you're right: apart from times of war, inflation in the US has only been a problem in the 1970's. In Europe, however, inflation has always been a concern, at least since the 16th century. From the point of view of their economic and political context as it stood in time, Western Europe has always been over-saturated with both workers and capital. In the 16th and 17th centuries, inflationary pressures were often relieved through emigration. In the 19th and 20th centuries, Europe relieved infaltionary pressures through industrial and capital exports. When either measure failed, for whatever reason, European leaders could always fall back on war to relieve inflationary pressures. Since WW2 took war off the table, however, Europe has took to reducing her fertility rates as a means of relieving inflationary pressures. Europe's whole monetary regime for the last four centuries has been geared towards addressing, avoiding, and reducing inflation. Were Greece still on the drachma instead of the euro, Greece would be hit with a blast of inflation. The honchos at the ECB want to avoid inflation, because if the euro should be devalued, then imports -- especially petroleum and petroleum-based products -- would become drastrically more expensive to European consumers. Economic activity would be strangled, and unemployment would shoot up. That's what the ECB and the EU want to avoid. The ECB would likely have to respond by raising interst rates, which would strangle the economy even more. They're not crazy, and they're not stupid necessarily: they're politically trapped, so they're putting off tomorrow the pain they're afraid of incurring today.

                Originally posted by Metryll View Post
                We're basically saying the same thing here. The main difference is that you dont include any negative effect of global wage reduction on consumption. Instead of a deficit based on artificial consumption you'll get a recession based on lack of consumption generating a compensation deficit.
                In only the last ten years, farmers in India -- who, on average, live on an unbelievable four-and-a-half acres per household -- have had their lives and work revolutionized by mobile telephones. They're alerting their friends and neighbors about weather patterns, irrigation conditions, market variations, transportation routes, etc, etc. Are India's farmers still among the poorest people in the world? Yes. The word "poorest," however, is a comparitive: "poor" is relative. A more prescient question would be, have India's farmers' quality of life improved in recent years? The answer is a resounding yes. That improvement in quality of life has been predicated on a foundation of global competitive commerce. More and better and cheaper products and services have become more easily availble to a greater share of the world's population than ever before.

                http://www.washingtonpost.com/wp-dyn...101400342.html
                http://www.pcworld.com/businesscente...rrigation.html
                http://springwise.com/telecom_mobile/nanoganesh/

                What makes that possible is capital fluidity. If money can't move, then it can't do anything. Think of money like manure: only if it's spread onto a field can it make things grow. The more fields that are fertilized, then the more fields that can provide needed produce to people. Money works the same way.

                Originally posted by Metryll View Post
                How you consider military personnel from a political/legal point of view is a thing. What they are from a macro-economic point of view is another : their wage are state paid and are part of global wage.
                In as much as they receive and spend money, that is correct. Unlike most workers, however, military personnel enjoy much less flexibility in their working conditions. They can't respond to pay or working conditions issues as quickly and as assertively as their civilian counterparts, private and public sector alike. Perhaps that's why they're not counted as part of the workforce.

                Another reason might have to do with the nature of the military as an institution. By and large, most military personnel don't "work," in that they don't actively fight wars most of the time. They spend most of their time training and preparing for war, but not actually fighting wars. Indeed, an active military may show some failing on the part of the political leadership. The military is an insurance policy: society can be insured against violence if the political leadership somehow drops the ball. In that light the military's mission is a lot different than most any other sector of the society's: we pay for their upkeep in the hope than we'll never need their services.

                Originally posted by Metryll View Post
                One can argue following his own political perception that the spending is sound or not but, safe for corruption, money used by goverment is re-introduced in economy.

                Probably because you continue to incorrectly identify Keynes with Marx, a quite common error.
                Please read Caro, at least: he's a self-described prgressive from way back. No Keynes was no communist. His theories hold a lot of validity, even today: they're just not applicable when the society's aggregate debt is many times higher than its equity. Keynes himself knew as much. That's why Keynesian theories wouldn't work for Greece today.

                Originally posted by Johan Banér View Post
                Yes, that's why Sweden is in on the current bail-out. And the problem of upgrading to stay competitive is universal. The welfare system is not a problem in this regard. If anything it allows Sweden more flexibility and faster responses, which is part of the point of it.
                That all depends on how long welfare receipients remain on the welfare rolls. If it's a month here, a month there, something to fill the gap between paying gigs, then the system is probably working fine. If welfare becomes a way of life, however, if three generations in the same family come of age having never known work, if whole neighborhoods have more people collecting benefits than earning wages, then something's very wrong. Don't laugh: whole swaths of New York were in such straights for many years. Even liberal progressive Democrats were griping about it.
                Last edited by slick_miester; 11 May 10, 10:42.
                I was married for two ******* years! Hell would be like Club Med! - Sam Kinison

                Comment


                • #98
                  Originally posted by slick_miester View Post
                  This line of conversation can be quite annoying, because it displays a decided unwillingness to apply basic mathematics to the topic in question. For example:
                  Stop hurt yourself then and for a moment integrate the following :

                  For the nth time what apply in micro-economy DONT apply into macro-economy.

                  It's not that your math are inherently false, they simply dont apply as weak nuclear force dont apply between Earth and Moon.

                  Let's do some math: according to the UNM link I provided earlier, the average American worker grosses $39,138.00/yr....
                  What do you want to prove, that state wages turn to wage redistribution instead of global wage increase ? If so nothing new there, French socialists did the very same error in early 80's when 300.000 public servants were hired. It was assumed that consumption would raise leading to an increase of offer. It failed since tax are mostly based on wage, the result was then a redistribution in global wage, not an increase.

                  In the US context, you're right: apart from times of war, inflation in the US has only been a problem in the 1970's. In Europe, however, inflation has always been a concern, at least since the 16th century...
                  Basically West European and US economies are quite identical as for theirs basic concepts. European inflation in late 70's had same source than US one : inflation by wages and inflation by demand due to petroleum crisis after 1973.

                  Today we've mainly an inflation by demand with inflation by wage kept almost inexistant with unenployment as side effect. Logical when one integrate BOTH global profit and global wage. A concept that apparently you dont want to heard of despite its successfull use trough Keynes theory between 1945 and 1973.

                  .. More and better and cheaper products and services have become more easily availble to a greater share of the world's population than ever before.
                  More cheaper products are useless if no one can afford them. You basically follow Freidman neo-classical economy that Keynes proved inefficiant. Freidman attempted to prove Keynes and he never could. Lest's kill that once for all :

                  Friedman never, not, did not, has not, NEVER demonstrated Keynes wrong.

                  He spent his lifetime doing so and failed. He only demonstrated that in some case money could have an effect where Keynes believed that it had no effect at all. Friedman theory was called Monetarism, later he turned it as Free Market theory that itself turned to an ideology along with Hayek.

                  And there is nothing new there, it's exactly the kind of economy that was prone to regular crisis with 1929 as the summum of its failure.

                  This explain why you cant explain that US deficit actually decreased after 1973 crisis to pre-crisis level in early 80's for example.

                  How many times it will take for some westerners to realize they support a failed utopy is simply a matter of time...and ink. After all it took 70 years before some realized that communist did not work and we're dying slowly form 'economism' for only 30. Only 40 to go

                  What makes that possible is capital fluidity. If money can't move, then it can't do anything. Think of money like manure: only if it's spread onto a field can it make things grow. The more fields that are fertilized, then the more fields that can provide needed produce to people. Money works the same way.
                  It is not fluidity of capital that make an economy growth but increase of capital trough investment. You're advocating the exact symetric redistribution of global wage/State wage above for capital. And both fails.

                  If you were correct, US industry would never had been able to develop between 1850 and WWI.

                  In as much as they receive and spend money, that is correct. Unlike most workers, however, military personnel enjoy much less flexibility in their working conditions. They can't respond to pay or working conditions issues as quickly and as assertively as their civilian counterparts, private and public sector alike. Perhaps that's why they're not counted as part of the workforce....
                  Macro-economy dont need to make difference of wages or individual situations as such have NO impact. Let's be clearer : NO, ZERO, NADA, ZIP, QUE DALLE.

                  The only thing that count is the amount of global wage that is defined following global profit. Too low, economy crash trough crisis leading to recession/depression, too high economy crash trough inflation.

                  Please read Caro, at least: he's a self-described prgressive from way back. No Keynes was no communist. His theories hold a lot of validity, even today: they're just not applicable when the society's aggregate debt is many times higher than its equity. Keynes himself knew as much. That's why Keynesian theories wouldn't work for Greece today.
                  It's not a matter of debt versus equity but ability to use deficit. Theory apply but effective economic act cannot. When a stone is on the ground, the fact that it dont fall dont mean that Newton theory is wrong, hopefully

                  That all depends on how long welfare receipients remain on the welfare rolls. ...
                  It's has been already pointed out to you with facts supporting the point : reduction of global wage lead at best to recession, at worst to depression.

                  It had been the case for US in 1929, ASEAN in 1997, Argentine in 1998 and will be the case for Greece.

                  Hence the question is not if liberal progressive Democrats will grip about but if the result will lead to recession or depression. It's only that, nothing less, nothing more.
                  Last edited by Metryll; 11 May 10, 14:19.

                  Comment


                  • #99
                    Originally posted by Metryll View Post
                    Stop hurt yourself then and for a moment integrate the following :
                    Such as:

                    Originally posted by Metryll View Post
                    It's has been already pointed out to you with facts supporting the point : reduction of global wage lead at best to recession, at worst to depression.

                    It had been the case for US in 1929, ASEAN in 1997, Argentine in 1998 and will be the case for Greece.
                    These are all examples of rapid inflation due to a meteoric rise in aggregate debt. In the 1920's, no one NEEDED a washing machine, but everybody wanted one: manufacturers and retailers offered store credit. Well, that came crashing down pretty quick. Likewise, governments and institutions alike in this decade have taken to lending to sub-prime risks. In both examples, easy credit stimulated demand, thus inflating asset prices. As asset prices rose, both employment and absolute wages rose, as well. All of that prosperity was built on a mountain of debt -- at least some of it not worth the paper it was sprinted on. Now everybody's looking around to see if any of that debt will be relieved. That's what's causing today's credit crisis.

                    Greece is a sub-prime risk. Greece has a history of arrears, threatened default, and bankruptcy. Greece will never repay her old debts, and she will certainly never repay her new debts, either. Greece's balance of payments will grow even more negative in coming years. Greece will threaten default again. Then what?

                    And as for feeding the US industrial revolution, look up House of Morgan. British capital financed the US' industrialization. Free-flow of capital: that's what did it.
                    I was married for two ******* years! Hell would be like Club Med! - Sam Kinison

                    Comment


                    • Originally posted by slick_miester View Post
                      ...These are all examples of rapid inflation due to a meteoric rise in aggregate debt. ...
                      Credit crisis are not due to overhelming demand, lenders are always the option to not make a loan, but is result of over estimation by lenders of global wage increase.

                      Greece is a sub-prime risk. Greece has a history of arrears, threatened default, and bankruptcy. Greece will never repay her old debts, and she will certainly never repay her new debts, either. Greece's balance of payments will grow even more negative in coming years. Greece will threaten default again. Then what?
                      About Greece ability to pay back debt futur will tell but a thing is sure reducing global wage will definitively not help. We have now a schizophrenic situation in which lenders call for conditions that will increase the risk of no repay. Wonderfully absurd no ?

                      And as for feeding the US industrial revolution, look up House of Morgan. British capital financed the US' industrialization. Free-flow of capital: that's what did it.
                      Most of US companies raised themselves out of US internal market trough protectionnist taxes. American workers had wage way higher than their Euorpeans counter parts leading to a greater golbal wage available . British capital did not industrialize US by itself, it needed an US internal market to do so.

                      Comment


                      • Originally posted by Metryll View Post
                        Credit crisis are not due to overhelming demand, lenders are always the option to not make a loan, but is result of over estimation by lendres of global wage increase.
                        No: overwhelming demand is caused by too loose credit.

                        Originally posted by Metryll View Post
                        About Greece ability to pay back debt futur will tell but a thing is sure reducing global wage will definitively not help. We have now a schizophrenic situation in which lenders call for conditions that will increase the risk of no repay. Wonderfully absurd no ?
                        The fact is that Greece wouldn't have passed a TRW or a D&B: they never should have qualified for a dime in the first place. They should have been forced to rely on their own indigineous resources in order to capitalize their development. Until Greece did at least the first thing on its own, she was always a risky bet -- a too risky bet.

                        Originally posted by Metryll View Post
                        Most of US companies raised themselves out of US internal market trough protectionnist taxes.
                        By and large that kind of thing ended after WW2: promoting industry abroad was supposed to combat the spread of communism.

                        Originally posted by Metryll View Post
                        American workers had wage way higher than their Euorpeans counter parts leading to a greater golbal wage available.
                        American wages were higher becuase the density here was a lot lower than in Europe.

                        Originally posted by Metryll View Post
                        British capital did not industrialize US by itself, it needed an US internal market to do so.
                        The consumer base was domestic -- by and large -- but the capitlization was British. Winchester, Colt, Armour Meat, Union Pacific, Central Pacific, New York Central, were all financed by Sterling. No one individual had as much influence on the growth of industrial America as John Pierpont Morgan. The only thing bigger was the Erie Canal, and at $17 million in 1817 -- better than $225 million in 2009, who else but the City of London had that kind of scratch? The canal would have consumed 3% of the entire US' GDP at that time. At the time only London could float that kind of money.
                        I was married for two ******* years! Hell would be like Club Med! - Sam Kinison

                        Comment


                        • Sorry was a busy (and ,as a EU-phile, demoralizing) week so my late response.

                          Originally posted by Miss Saigon View Post
                          Germans settled a large area just south of here and provide us with a good sausage and beer industry. They speak a version of German that I don't think you will understand though.

                          And keep in mind, by that time you will have to fight with the Hispanics for control of the German areas. The rest of us won't have any say anymore. How is your Spanish?
                          Hmm... I understand bavarians and Friseans. American german cant be much worse. As for the spanish, we will sow the lie (?) that the spanish drink warm beer (serveca?). The furor teutonicus will be all-consuming.


                          So you are saying that the German market is more flexible? I think we are misunderstanding each other, because I believe that flexible markets are important to productivity growth. Not just labor markets.
                          No, I'm arguing that german labour markets are less flexible and that it was a good thing in the crisis that they were so. As for the ordinary market... as said, we have a single market. The german market is as flexible or inflexible as the polish or italian one. We've "exported" our way out of the bailout for the former GDR all over the world but mostly in the common market because that is our home market.
                          Well, honestly though, yes. Our markets are more mature. Also consumption will not rise unless we either introduce more credit cards (most people only have debit cards) which i think would be stupid or pay higher wages. Which I would think good, but ...


                          I don't think it is like that here. Not exactly anyway. There is definitely an us versus them attitude among a lot of labor in the US. The people who raised me were most certainly like this. I don't think people look at the employers as benefactors at all. But there may be more of an attitude in the US among certain segments of US labor that they could be management and move up one day too if they work for it. These laborers undermine the typical labor versus management dichotomy. I think these ambitious elements of labor help undermine Unionization too, as they just see Unions as solidifying the status quo.
                          Well, if that believe that they can move up is justified in the vast majority of cases then that is a good thing. If it is not then they buy their happiness with the missery of their peers... and in the worst case they themselves dont achieve that happiness and stay labourers all their life, condemning themselfes to chasing a dream they can never achieve and forgoing benefits in the present for future benefits that never materialize. I guess though that with a credit card one can buy that "moving up" the social latter feeling on debt which likely calms the workers. If they had to live within their means they would realize how meagre those means truly are.

                          Sure, the people are the basis of everything, but as I said to you before, not all people are interchangeable. Not all are entrepreneurs who will create jobs for others. Not all are capable of management because many don't like responsibility or cannot take difficult decisions. Not every laborer is capable of doing every job.

                          I work for a company that is, like all of us, in the business of earning a living for its owners. They try to produce a product that makes their customers happy, and I see no conspiratorial behavior at all. It is as simple as we make money when our customers are happy, and we usually get better work when our workers are taken care within the limits provided by what our customers are willing to pay. Because that is the biggest limiting factor. If the customers will not pay for it, we cannot pay our workers. So in the end, regardless of what the employees think they are worth, they are only worth what they can produce for the customer. We cannot pay them more than we can charge for what they produce or we go out of business.

                          So, in this respect it is like your German attitude. The customers buying the product is supremely important. On the other hand, in my experience, most labor here doesn't make that connection. They don't see the connection with what they do and what pay and benefits we can provide. Many would take more than they give and never see their role in the demise of the company. Instead they would blame management. People rarely see their own role in problems. Look at Greece.
                          We've had constantly for the last decade or so unionized labour contracts that conceded no rise in wages because the people would rather do with less than have their peers fired. Its in the self interest of the workers to stay employed. So I think labourers can make the connection if propperly educated and well led. Of course there has to be some kind of trust also. Trust by the company that the labourers will do what they say and stand for the company and trust by the labourers that the company will not start fireing 50 year old people who sacrificed their life for the company and are now that the times got though left out with a warm handshake and a good bye because they are too old.
                          One thing I think most people can learn is that when looking cloesly at the german system that not only people can do amazing things when they are pushed to make ends meet, no. Also companies suddenly find new, amazing ways to keep their people productive when they cant just say "you're fired". Its not that the management would throw the towel instantly and walk away. Amazingly they too would then loose their job then, so they really sit down and try to find a solution to the problem with their "Betriebsrat".

                          So, when you talk about Businesses as if they Conspire to get what they can, I see the same behavior among people in general. Frankly, I don't see one bit of difference between the behavior of businesses and individuals.
                          Yeah, sure. I too would love to make millions on the financial markets and then have the loses spread throughout the whole society. But i cant, so I dont. They can so they do. Workers too would like to get bonuses even when the company fails, but they cant. Workers too would like to not having to stand with their own fortune for their families financial failure. But they must, while CEOs dont have to pay with their own fortune for their failed companies (afaik). I'm sure mid sized companies would love to have that too, but they cant because they are only medium sized and not big.
                          I think slick said somewhere that there is only a difference in degree. Well, there is only a difference in degree between homocide and genocide. Still, one is far more horrible than the other.
                          Last edited by Kimi; 12 May 10, 17:14.
                          Ha, wie so stolz und hehr
                          Wirft über Land und Meer
                          Weithin der deutsche Aar
                          Flammenden Blick.

                          Comment


                          • Originally posted by slick_miester View Post
                            Such as:



                            These are all examples of rapid inflation due to a meteoric rise in aggregate debt. In the 1920's, no one NEEDED a washing machine, but everybody wanted one: manufacturers and retailers offered store credit. Well, that came crashing down pretty quick. Likewise, governments and institutions alike in this decade have taken to lending to sub-prime risks. In both examples, easy credit stimulated demand, thus inflating asset prices. As asset prices rose, both employment and absolute wages rose, as well. All of that prosperity was built on a mountain of debt -- at least some of it not worth the paper it was sprinted on. Now everybody's looking around to see if any of that debt will be relieved. That's what's causing today's credit crisis.

                            Greece is a sub-prime risk. Greece has a history of arrears, threatened default, and bankruptcy. Greece will never repay her old debts, and she will certainly never repay her new debts, either. Greece's balance of payments will grow even more negative in coming years. Greece will threaten default again. Then what?

                            And as for feeding the US industrial revolution, look up House of Morgan. British capital financed the US' industrialization. Free-flow of capital: that's what did it.
                            There was free was flow of capital to the US - there was also a return on that capital because the were able to and did pay the money back, and because the US government existed and (more or less) maintained order and honesty.

                            Most other countries that could be invested in did not offer this stability; for that matter there really weren't any other countries in the 19th century with the existing and projected markets of the US.
                            Last edited by lakechampainer; 12 May 10, 19:11.

                            Comment


                            • Originally posted by slick_miester View Post
                              No: overwhelming demand is caused by too loose credit.
                              Credit happen when lenders see prospect to increase global profits based on estimation of capacity to be repaid. Try to get a $1 billion credit from your bank and you'll see by yourself that demand dont create credit by itself.

                              The fact is that Greece wouldn't have passed a TRW or a D&B: they never should have qualified for a dime in the first place. They should have been forced to rely on their own indigineous resources in order to capitalize their development. Until Greece did at least the first thing on its own, she was always a risky bet -- a too risky bet.
                              See above, different micro-economic situation, identical macro-economic explanation.

                              By and large that kind of thing ended after WW2: promoting industry abroad was supposed to combat the spread of communism.
                              And ?

                              American wages were higher becuase the density here was a lot lower than in Europe.
                              May be, but in macro-economy it dont matter. What matter is that global wage was increasing enough to support an increase in global profit. US economy positively spiraled leading it to 1st place in early 1900.

                              Such a global wage was increased too trough immigration. Today we could have similar effect by reducing unemployement.

                              The consumer base was domestic -- by and large -- but the capitlization was British. Winchester, Colt, Armour Meat, Union Pacific, Central Pacific, New York Central, were all financed by Sterling. No one individual had as much influence on the growth of industrial America as John Pierpont Morgan. The only thing bigger was the Erie Canal, and at $17 million in 1817 -- better than $225 million in 2009, who else but the City of London had that kind of scratch? The canal would have consumed 3% of the entire US' GDP at that time. At the time only London could float that kind of money.
                              You underestimate US own growth and J.P Morgan was American not British.

                              http://www.puhsd.k12.ca.us/chana/sta...ialization.htm

                              http://en.wikipedia.org/wiki/J.P._Morgan

                              Comment


                              • Originally posted by slick_miester View Post
                                I'm just a touch pressed for time, but Metryll just highlighted a logical fallacy that the advocates of the "welfare state" have never forthrightly addressed:



                                According the the University of New Mexico, per capital annual income in the US is $39,138, yet according to US Bureau of Labor Statistics, the average Federal employee makes $67,691. Assuming the average US worker pays roughly two-fifths of his income in various taxes, that means four-and-a-thris workers employed in the private sector will be needed to support one Federal worker -- and that's not counting state and local civil servants! Surely one need not a slide rule to figure that that condition is utterly unsustainable.
                                I thought that you(considering the amount of time you spend discussing the economy) would understand what income per capita(l) (sic) represents. The UNM chart you quoted displays the figure representing total US income(on what ever basis they have decided to calculate it) divided by the number of people living in the US( It does not say if it includes an allowance +/- for illegals, temporary residents etc, but you get the idea). It is not the amount received per person actively participating in the workforce, which more closely equates to the amount paid to each US civil servant. The divisor used in the "per capita" calculation includes babies, school children, stay at home spouses, handicapped(unable to work) and retirees. It is not total US income divided by total US workers. You have made a completely invalid comparison.

                                OK, you maybe pressed for time, but you have just made a much more elementary mistake than someone who overslept an hour.
                                Post # 20. http://www.armchairgeneral.com/forum...13#post1348613
                                Last edited by At ease; 13 May 10, 03:22.
                                "It's like shooting rats in a barrel."
                                "You'll be in a barrel if you don't watch out for the fighters!"

                                "Talking about airplanes is a very pleasant mental disease."
                                — Sergei(son of Igor) Sikorsky, 'AOPA Pilot' magazine February 2003.

                                Comment

                                Latest Topics

                                Collapse

                                Working...
                                X