American Capitalism’s Great Crisis

[Dondilion]

Originally Posted by finnbow

We don't need a plan. As long as creditors are willing to buy our bonds at 2%, there's no issue.

Basically since we control the major world institutions and the perception that as long as you are nice to us we will provide a safe haven for you and your wealth.

[Dondilion]

Originally Posted by BlueStreak

Admittedly, I only skimmed over this article. It's late, I just got home from work and I'm still recouping after battling the flu for the last four days. But it looks fascinating.

Perhaps my following comments aren't quite relevant to the article, but here is my input at this point;

I've been thinking that at some point, maybe in the 1970s sometime, we decided to rein in inflation by outsourcing certain manufactured goods to lower cost labor markets and those with "more favorable business conditions"; Mexico, S. America, Taiwan..... Of course this meant sacrificing manufacturing jobs, mostly in what is now called the "Rust Belt". At the time the trend may have been small but, obviously, with GATT, NAFTA and so on, the trend grew until we have what we have today.

To try and make my point as simply as possible,

I believe the thought all along is that the American worker would simply adjust to the new conditions, adapt and overcome the challenges of the changing job markets. Indeed if this had occurred according to theory, we would be in far better shape that we are today. So, what went wrong?

I recall an older brother, a degreed engineer, telling me that the job market was "going high tech". He said that "....anyone who doesn't get with it, will simply get left behind.". I remember thinking about how unrealistic this line of thinking was.

To my mind, the ideal job market should contain a mix of opportunities for workers at all skill levels. To say that "......the market is going to ________ and everyone that fails to do ______ will simply get left behind." can only mean one thing; That many people will simply get left behind. As unpleasant a fact it may be to face, we do not all possess the aptitude or the IQ to become software programmers and neuro-surgeons. Nor are we all apt to work assembly lines or drive garbage trucks. A healthy job market has decent employment to offer to everyone.

So, what does "left behind" mean? It seems to me that we have the answer to that question before us.

This is Mitt Romneys 47%. The millions disenfranchised with nowhere to go.

Guys, when we were in high school the burger flipper/ chain store shelf stocker job was strictly for teenagers learning a work ethic, trying to pick up some money to buy his first car. After that you went to college and on to that "high tech" job my brother spoke of, or you went to work in a local factory or mill and started a family............. Those were the "Good ol' Days".... (I know, I know....)

Now, take the factory and mill out of the picture.............welcome to 2016.

This is what has happened to way too many communities across America. We've cost cut ourselves into oblivion. We decided to save ourselves a buck by exporting our own job base......... And now we wonder why we have so many people out of work. It would be a joke, if it was funny.

No, I'm not implying that these people are "stupid" or "hopeless" in any way. I'm simply saying that we are not all the same. That the job market we build has to meet the realities of humanity, humanity is not going to magically change to meet the job market.

How do we achieve that? Hell if I know. If I had that answer, do you think I would still be turning a wrench at 52?

Hopefully, my half awake, mildly stoned on Nyquil Severe Flu Formula comments make some sense to you.

Good night, All!

Dave

Many Americans who went into the Hi Tech industries found themselves disadvantaged by the familiar out sourcing and the massive misuse of special visas.

[MrPots]

Originally Posted by Dondilion

Basically since we control the major world institutions and the perception that as long as you are nice to us we will provide a safe haven for you and your wealth.

"We"?, or big business?

[Dondilion]

Originally Posted by MrPots

"We"?, or big business?

Oh Lawd MrPots you know what the "We" means.

[finnbow]

Originally Posted by donquixote99

What if that willingness to buy changes?

Where are institutional investors going to go to buy secure fixed incomes securities? Europe with its negative interest rates and threatened currency? Not gonna happen.

Here's a worthwhile read:

http://www.nytimes.com/2016/05/09/op...ignoramus.html

[Dondilion]

Originally Posted by finnbow

Where are institutional investors going to go to buy secure fixed incomes securities? Europe with its negative interest rates and threatened currency? Not gonna happen.

Here's a worthwhile read:

http://www.nytimes.com/2016/05/09/op...ignoramus.html

Great link!

It is the most substantive anti Trump article I have read and it has some gems which I have to note.

Good one Mr Krugman!

[donquixote99]

Originally Posted by MrPots

But can your country be forclosed? That has yet to be determined. How much is a country worth?

Wouldn't it be a bitch if our "leaders" forfeited your country to a foreign debtor as collateral? The leaders are rich...they can live anywhere so why would they care?

Things like this have happened: to Germany with the WWI reparations, and to some countries more or less taken over by The World Bank..... Basically, there are dangers in pushing it too far.

[donquixote99]

Originally Posted by finnbow

Where are institutional investors going to go to buy secure fixed incomes securities? Europe with its negative interest rates and threatened currency? Not gonna happen.

Here's a worthwhile read:

http://www.nytimes.com/2016/05/09/op...ignoramus.html

I contemplate the willingness to buy changing only due to 1) gratuitous default based on the colossal idiocy of a Trump administration, or 2) enemy action.

And yes, Krugman connects well that time.

[Dondilion]

Originally Posted by donquixote99

Things like this have happened: to Germany with the WWI reparations, and to some countries more or less taken over by The World Bank..... Basically, there are dangers in pushing it too far.

I guess that is part of the reasons we try to dominate all geopolitical spaces.

We get to make/modify the rules largely in our favor.

[whell]

Originally Posted by finnbow

Where are institutional investors going to go to buy secure fixed incomes securities? Europe with its negative interest rates and threatened currency?

From the Time article:

Now, as many top economists and investors predict an era of much lower asset-price returns over the next 30 years, America’s ability to offer up even the appearance of growth—via financially oriented strategies like low interest rates, more and more consumer credit, tax-deferred debt financing for businesses, and asset bubbles that make people feel richer than we really are, until they burst—is at an end.

Stoking the stock market with nearly free money is a train that's about to come back to the station for good. The Fed has signaled the possibility that rates could rise as early as June 2016.

That might be good for the "institutional investors". On the other hand, a strong bond market is typically an indicator of an stock market on the skids. With one third of available money in cash - much of it outside the US - where will the capital come from to fuel domestic growth?