How Did America Get In This Economic Situation And How Do We Get Out

[Bottomfeeder]

SS....most Americans no nothing of the subject, at all.

But if you would like an opinion on American Idol or the Michael Jackson death, well then that is a different story altogether....

I remember during the election, interviews were taking place at the voting booths and first time voters were asked questions regarding the current political figures and who they were...Condolesa Rice....nope Bernanke, uh no, Paulson...who?...on and on....

It was really one of the most embarrassing things I have ever witnessed....

Pretty hard to keep the politicians honest when the public is so, well, stupid, for lack of a better word...pretty hopeless, we are in a position of having to hope that our representatives do the right thing....which is again pretty hopeless.

Hey is there any way to short American intelligence?

[MetalMeister]

LOL???

That is exactly what I just said.  We have this debt thanks to a credit card given to us by the world and the world's bankers.

Right.  It won't last.

LOL the reason you observed an improved standart of living "back home" is simple.  They are all in debt up to their ears.     

It won't last.   

[MetalMeister]

I did like your "bear" in a bull market, though.

China only puts up a coal fired plant weekly not daily.  Don't give them too much credit - LOL.

If we sit around with our thumbs up our arses then China will have more nuclear reactors than us...  So will India...

Yeah, I know.  Let's just keep tort over here so we can have a real discussion instead of what we are having now...

Agreed on the wind and solar, it is all fraud.  By the time there is ROI on it it will be time to replace them...  All fraud to make Al Gore rich and will make the U.S. energy bankrupt.  I hope the wind does not blow...

Ethanol is ROI fraud as well...

Had to change the avitar, that bear was starting to get on my nerves.     

Tort covers much more than the Medical.  It DOES have impact on decision to outsource. 

The environmental issue and this cap and trade..  geeeeezzz guess you will have to start yet another thread.   LOL 

One of the things we never hear when they start talking about windmills and solar.   It makes no difference what you build.   When you look at the carbon foot print of just one wind generator in the construction phase .. how much steel will it take.  The foundation of these things take lots of rebar.  Rebar made in a dirty steel mill.  Can you make steel with out emissions?  no.   How bout the concrete plant and getting the stuff to the point it can be mixed and put in to the foundation of the wind mill?  And that's all before you start putting the windmill up.  Then there's that ethenol thing.   Point is Energy is not now and never will be free.  There are a brigade of lawyers working this on over also, costing industry massive amounts while China put a coal fired plant into operation almost daily.   We are fools. 

[MetalMeister]

ALL of Asia???  Are you including the Philippines in that assessment as well?

I almost bought a company, 5 years ago, in Shenzen.  Furniture related.  My Chinese girlfriend, at that time, knew a lot of manufacturers there and we were going to set up one but the relationship ended so I never got it off the ground.  She is in the steel industry you spoke of and fronts pig iron from NE China to Thailand, Japan and other Asian countries.  She's filthy rich over there in U.S. dollars...  I miss her, she was a hottie with a very good heart.

The Japanese should be real happy to take some of the carbons from the Chinese manufacturing Walmarts "stuff". 

Flying in and out of there for over 20 years you can actually see this coming down the coast at FL390. 

Although singling out China, all of Asia is a mess.  But tell you what, I cant blame corporations if I were to want to manufacture something I would hop a flight to Shenzen and find some factory capicity.  I know where most of it is.  I have NEVER landed in Shanghai on a clear sunny day.

[MetalMeister]

Okay wise guys, ya'll going to make a real attempt on this thread to solve the world's problems or just shoot the smoke up my ass?

[sunseeker]

Hi BF
A bit late in replying.
The power in our area was disrupted today due to some workmen further down our road. So I have a lot of catching up to do today.
Re: Ron Paul. Thank you for your valued opinion:
It’s the same here in the UK. General knowledge is now all about celebrity culture. You’re a genius if you know who’s going out with who, or the names of a celebrity’s children.
They will get only interested in the things that really matter when everything goes completely wrong, and they are looking for someone to blame for the situation that they find themselves in. I don’t know about in the US/Canada but here in the UK, I am of the opinion that people think that if the worst comes to the worst the state will help us, so why worry.
Only today one economist was predicting that it will be 2115 before the UK economy recovers to where it was before the recession kicked in. It’s going to take some real unpleasant medicine to bring people to their senses. Even then they won’t blame themselves for not doing anything to help their own cause. The “Nanny State” has all but killed off a sense of self reliance.

The USA. I came across these figures:
“According to IRS data, the bottom 50% of wage earners paid a total of 2.99% of all taxes (almost none). The top 50% paid 97%.”
(I suspect that you would find similar statistics in other western countries).

Jim Rogers:
“Asia, that’s where all the creditor nations are located. Throughout history, creditor nations have fared better than debtor nations.”
So it would make sense for a large number of those “Top 50% tax payers” to do what Jim Rogers has already done. Relocate in Asia. How could the US cope with a tax shortfall of that magnitude?

Hey is there any way to short American intelligence?

I think you’re on to something there BF (and I am not just talking the US).
In the same way we understand the term Peak Oil, we could have witnessed Peak Intelligence too.

ATB 

[MetalMeister]

I still believe the flat tax is the best workable solution for any government, no subsidies, no bailouts, etc, etc, etc, do away with the IRS almost completely.

Then you will be able to easily balance a budget and live within the means one's resources allows not the means of fiat currency.

Come on Sidewinder, placate me a little on this manufacturing thing.

It seems to me if we move our manufacturing base back here then we lose on the global economy because of Asia's cheap labor.

Right or wrong?

[sidewinder]

Come on Sidewinder, placate me a little on this manufacturing thing.

It seems to me if we move our manufacturing base back here then we lose on the global economy because of Asia's cheap labor.

Right or wrong?

That is an extremely complicated issue.  I have tried to make some sense of that one thing for a long time.  I will get back in a bit with some thoughts and try to explain my view on this complicated subject.  This one issue could lead to a lot of debate and "what ifs".  It is one major and valid question that is far outside my pay grade but I do have some thoughts about it. 

By the way I dumped windows internet explorer in favor of Google Chrome and no longer have problems with this text box.  So far so Good and Chrome has some advantages over Explorer.

[sunseeker]

Hi YC

Okay wise guys, ya'll going to make a real attempt on this thread to solve the world's problems or just shoot the smoke up my ass?

I read your post, and after sleeping on it I am up for the challenge. Here goes:
200 years ago we all had agricultural based economies.
The industrial revolution came, and people moved out of the country and into the towns. Now people at the time thought that would lead to food shortages, but it didn’t because farming became less reliant on manual labour. Which is happening again in Asia today.Think back when ever times were good it was down to innovation.
The railways. Radio/TV. Those booms have come and gone but the industries are still there.
We had the tech boom, and the economy flourished. Innovation again. The twist in the tail is that it wasn’t the dominant player (IBM) that led the way, it was the Microsoft’s, CISCO’s, Yahoos etc. When small innovative companies flourish so does the economy. The process of small companies growing into bigger companies has more of a positive effect on us than big companies growing a bit bigger. People can aspire to greater things and start to believe that they could possibly emulate these entrepreneurs. If the big banks had been allowed to fail then that would have allowed the small innovative banks who lets face it ran their businesses in a responsible fashion to excel. It also sends out the right message to all businesses.
-----------
Matthew 7
24"Therefore everyone who hears these words of mine and puts them into practice is like a wise man who built his house on the rock. 25The rain came down, the streams rose, and the winds blew and beat against that house; yet it did not fall, because it had its foundation on the rock. 26But everyone who hears these words of mine and does not put them into practice is like a foolish man who built his house on sand. 27The rain came down, the streams rose, and the winds blew and beat against that house, and it fell with a great crash."
-----------
When an elephant dies the smaller animals right down to the insects all benefit and the herd moves on.

I have worked for and with nationalised industries, and government and I can tell you that it’s like watching paint dry. It’s as if the government had come out and said it doesn’t matter whether you do anything or nothing. It doesn’t even matter whether you turn in for work or not. Your pay check will still go into the bank.
A classic case being British Leyland. The government pumped cash into it for decades. BAe Systems bought it for a song, and turned it around in next to no time. Then sold it on to BMW for a big profit. It would never have been turned around as a nationalised industry. 
So the surest way to get any country back on track in my opinion is to encourage entrepreneurs, and small businesses. We set such great store on our education systems but the graduates don’t usually turn out to become the real innovators, and entrepreneurs. However that’s not to say that there is no need for good education. It’s just that sometimes we give our young folk unrealistic aspirations and hopes based upon it and they come to think that it's an automatic ticket to success.

ATB 

[MetalMeister]

It is very complicated, I agree.  That is why I think it is a good time to seek solutions as that is what the rest of the world will be doing.  If we come up with some models on what it might take to get out of the economic collapse then we might find companies that are fundamentally sound to invest in that will take advantage of those scenarios.

Just thinking ahead, or trying to...

I use the latest version of Mozilla Firefox and never have any problems with it unless I have 50-75 tabs open at one time and blow out the memory and page files on my laptop.

Looking forward the your thoughts!

Come on Sidewinder, placate me a little on this manufacturing thing.

It seems to me if we move our manufacturing base back here then we lose on the global economy because of Asia's cheap labor.

Right or wrong?

That is an extremely complicated issue.  I have tried to make some sense of that one thing for a long time.  I will get back in a bit with some thoughts and try to explain my view on this complicated subject.  This one issue could lead to a lot of debate and "what ifs".  It is one major and valid question that is far outside my pay grade but I do have some thoughts about it. 

By the way I dumped windows internet explorer in favor of Google Chrome and no longer have problems with this text box.  So far so Good and Chrome has some advantages over Explorer.

[sidewinder]

First let me address something SS said.

<<We set such great store on our education systems but the graduates don’t usually turn out to become the real innovators, and entrepreneurs. However that’s not to say that there is no need for good education. It’s just that sometimes we give our young folk unrealistic aspirations and hopes based upon it and they come to think that it's an automatic ticket to success.
>>

What real good is a 4 year BA degree.  Thousands upon thousands of kids graduate every year and go into the work place.  Outside of degrees in engineering and the sciences the rest do not reflect the real world into which the new graduate enters.  Now IF they get hired someplace in something other than a temporary position some employer is now going to have to train them in their new job.  Why have they wasted 4 years on the campus when they could have learned the skills they will Now have to learn through an apprentice process or meaningful vocational training.  The BA has turned into the B.S. and s isn't for science. 

When you consider the cost to obtain a BA degree In the US, It truly is a waste in most cases.  The Degrees  have lost their meaning IMHO.  While some of these subjects are nice to refine and round off a person they are really not practical.  And if Jay Leno's 'Jay Walking' segment is any indication of knowledge of new teachers and college students they should close out half of the college programs in effect today. 

I would much rather hire a 23 year old with 5 years experience in hands on exposure to the job I am hiring them for than have to spend 18 months to 2 years getting some recent graduate with a degree in an unrelated field such as liberal arts.  And I would be more likely to pay him a better entry salary before someone else scarfs him up..   Just one of my many pet peeves.   

[MetalMeister]

Very good post, thanks!

Makes my head spin with lots of thoughts.  First, thanks for the scripture as that is completely sound economic advice.

Would you advocate getting rid of all big business subsidies, oil, big agricultural farm, every other industry as well?

Seems to me that all those subsidies serves only to kill the free market and hurt small business.  For example, if agricultural products like milk or other things did not have price controls or subsidies then the smaller famers (small businesses) would be able to compete both financially and in the public innovation of ideas and entrepreneurship am I right?

I am not for tariffs of any kind except with regards to countries that put tariffs on our trade with them.  Not sure I know much about this idea but it seems doable.

When you mention agriculture, much of American agriculture feeds many nations around the world.  If the controlled agriculture prices were allowed to freely rise and fall with the markets then would that be more fair or do you think it would necessarily hurt countries that depend on our food (we could force all the other big countries to purchase our food at higher prices and make them help the poorer countries (all on a level playing feel of charity to those countries).

You're dead on about the "subsidized" banks and investment backs (and auto companies).  These bailouts and free loans do nothing except hurt the competition of the smaller, sound banks and car companies that were not bailed out.  Imagine if you own an insurance company and AIG is still a leg up on you after all the money that we have given them that will never be paid back!!

Ideas?  Rebuttals?

Hi YC

Okay wise guys, ya'll going to make a real attempt on this thread to solve the world's problems or just shoot the smoke up my ass?

I read your post, and after sleeping on it I am up for the challenge. Here goes:
200 years ago we all had agricultural based economies.
The industrial revolution came, and people moved out of the country and into the towns. Now people at the time thought that would lead to food shortages, but it didn’t because farming became less reliant on manual labour. Which is happening again in Asia today.Think back when ever times were good it was down to innovation.
The railways. Radio/TV. Those booms have come and gone but the industries are still there.
We had the tech boom, and the economy flourished. Innovation again. The twist in the tail is that it wasn’t the dominant player (IBM) that led the way, it was the Microsoft’s, CISCO’s, Yahoos etc. When small innovative companies flourish so does the economy. The process of small companies growing into bigger companies has more of a positive effect on us than big companies growing a bit bigger. People can aspire to greater things and start to believe that they could possibly emulate these entrepreneurs. If the big banks had been allowed to fail then that would have allowed the small innovative banks who lets face it ran their businesses in a responsible fashion to excel. It also sends out the right message to all businesses.
-----------
Matthew 7
24"Therefore everyone who hears these words of mine and puts them into practice is like a wise man who built his house on the rock. 25The rain came down, the streams rose, and the winds blew and beat against that house; yet it did not fall, because it had its foundation on the rock. 26But everyone who hears these words of mine and does not put them into practice is like a foolish man who built his house on sand. 27The rain came down, the streams rose, and the winds blew and beat against that house, and it fell with a great crash."
-----------
When an elephant dies the smaller animals right down to the insects all benefit and the herd moves on.

I have worked for and with nationalised industries, and government and I can tell you that it’s like watching paint dry. It’s as if the government had come out and said it doesn’t matter whether you do anything or nothing. It doesn’t even matter whether you turn in for work or not. Your pay check will still go into the bank.
A classic case being British Leyland. The government pumped cash into it for decades. BAe Systems bought it for a song, and turned it around in next to no time. Then sold it on to BMW for a big profit. It would never have been turned around as a nationalised industry. 
So the surest way to get any country back on track in my opinion is to encourage entrepreneurs, and small businesses. We set such great store on our education systems but the graduates don’t usually turn out to become the real innovators, and entrepreneurs. However that’s not to say that there is no need for good education. It’s just that sometimes we give our young folk unrealistic aspirations and hopes based upon it and they come to think that it's an automatic ticket to success.

ATB 

[pinetree]

When you consider the cost to obtain a BA degree In the US, It truly is a waste in most cases.  The Degrees  have lost their meaning IMHO.  While some of these subjects are nice to refine and round off a person they are really not practical.  And if Jay Leno's 'Jay Walking' segment is any indication of knowledge of new teachers and college students they should close out half of the college programs in effect today.

Now you've got me up on my soapbox.

I've felt for a while now that in most cases college is a rip-off.  Most degrees don't offer a person much if anything that will help them in the "real world".  There are exceptions like nursing, physical therapy, engineering, and some others but most new graduates go into a job and need to be trained from scratch.  That was my experience.  If that is the case then why bother with college?

Yes, it's a fun social experience, but you could have that for a lot less money by travelling to new places and staying in youth hostels or something similar.  Which I did and really enjoyed.

I think there's a scam here somewhere.  Kids going into debt to obtain something that in most cases will not prepare them for life, yet a degree has become such a formality (many employers require it) that it's too risky to go without it.  Unless you're blessed with an entrepeneurial vision at a young age, or are going into a blue collar trade, you have to get a BA/BS because many employers will screen you out otherwise.

I was in college during the late 90's tech craze.  I was hearing stories about high salaries in tech so for fun I took some programming classes to see if I'd like them.  I'll never forget my first programming class the prof had everyone in the lecture hall introduce themselves and say why they were interested in computer science.  There were a fair number of people who were recent college graduates that "couldn't do anything" with their current degree and so came back to school to get a degree that had better job prospects.  And this was the roaring 90's!  If it was that bad for some grads then I can't imagine what it must be like now.

[sunseeker]

Re: Qualifications.
My wife tells me that the company that she worked for before retiring now requires a person to be a graduate for a job that was traditionally done by the office junior (a 16 year old straight from school) when she started working there. Why it takes a highly qualified 25/26 year old to do the job now who knows?
 
It’s getting late here in the UK and we are off out early tomorrow for a bit of a jolly (good time).
Good night all.
ATB 

[sidewinder]

Pinetree,

  I heard some blurb yesterday that only 20% of this years graduates have found jobs.  Much less than in previous years.  

 Interesting thing I remember hearing in Japan years ago.  And this was from a Japanese colleague.  There is a Minimum Wage law in japan for anyone having a college degree.  At the time it was around $35K US.  This is why the Japanese high school students go all out in study.  Only so many are accepted into collage and the competition is really stiff.  I remember seeing news reports during testing season as results of entrance exams came out.  Kids were devastated if not making the cut.  The kids not making the cut ended up going to vocational school and learning a trade, which makes more sense to me anyway.  

What kids fail to look at is why am I going to work.  Answer to earn money.  What what interest do I have in the highest paying jobs and where can I train for it.  

Good example for boys, few know Maritime academies.  Come out qualified as an engineering officer on a ship.  Few years learning that job and you will have your own ship.  You come out understanding all the engineering skills for that profession without learning certain engineering skills in another field of engineering.  Why waste time and effort on something you will never use.  A river pilot on the Mississippi makes in excess of $380K.  Lots of little know jobs the pay a handsome salary.  Of course you could end up a hostage of some third world asswipe but hey, that's why they pay the big bucks.  

Cant tell you how many 40 somethings with Token degrees out there still living with parents but I will bet it's more than we think.   After all the got their degree without much effort so why not expect to go through life the same way.