Thread: Is the US on the decline?

Originally Posted by Zinja

I see what you mean, and you are right in your assumption about what i mean by liberated. I think you and I are talking the same language but im not sure about gunnut namely because of his following remarks; "So the yuan is liberated and floats freely on the market, yet its value doesn't rise against the dollar when the dollar plunges? ". He seems to say that the yuan does not rise when the dollar plunges, but that can only be true if the yuan was pegged to the dollar(im asuming he understands the economics of pegging). And also in his comment on post # 114 he seems to imply that the yuan is pegged. I really am failing to understand his grasp of the two concepts.

Zinja,
Read his sentence that follows, whose point is that if that is what you believe, then he wants to do business with you because he'd make lots of money off of you.

Originally Posted by marklv

This is total BS. In many cases the corporate has a virtual monopoly, and you have effectively no choice but to buy his product or use his service. Look at Paypal for example. If you don't accept Paypal you are not likely to get many customers on eBay, are you? So it's virtually impossible to avoid using it.

Ask yourself why this is? You want to equate monopoly (which PayPal isn't) with being bad, but that is quite often not the case. The reason that people require PayPal is that it reduces the risk of bounced checks, fees associated with that, and it speeds up the transaction process, i.e., you know within minutes if you've got payment or not, versus waiting for checks to arrive.

Originally Posted by marklv

Your accusations against 'bureaucrats' are mere non-sequiturs, you make no sense. The bureaucrat is not 'bilking' anything, he is acting to ensure that there is a level playing field, that the consumer is offered a good product at a fair price, and that the corporates do not abuse their position.

Please explain why manicurists have to get "professionally" licensed in the US to open a business. What public interest is being served. Who benefits from this government protection? Who is harmed?

Originally Posted by marklb

You are deluding yourself if you think that ordinary people have power over corporates - they don't. Let me give you another example: in the UK, 20 years ago, nearly all employers offered 'final salary' pension schemes, which means that after working for a number of years you would receive a pension based on a percentage of your final salary - up to 67% for a 40 year stretch. These schemes have been systematically closed in the last 10-15 years, to the point that now only barely 20% of employers offer them. They have been replaced with crap schemes based on a tiny cash contribution from the employer of between 5% and 10% of salary, which is then gambled on the stockmarket. A very few employers offer 15% contributions. The old schemes offered guarantees, the new ones offer only insecurity. So where do we go from here? What 'choice' do you have as an employee?

Why has GM and Ford been in such dire straits in recent years? It's because a huge portion of their operating expenses have gone towards maintaining pension funds. This (along with some other reasons) have helped to make them less competitive and resulted in having to cut jobs. On the flip side, the US stock market has returned historically 10-12%, depending on which index you look at. Far from being a gamble, it's actually a very good deal. So, employees get a choice on what to do with their money, and they can either choose more consumption now (less money saved towards retirement) or more consumption later.

Originally Posted by marklv

In order to make good profits, companies need to stop paying ridiculous sums to their senior executives, and invest the money back into the business. This has been the unacceptable face of capitalism.

I'm not anti-capitalist, but capitalism should work in the interest of the nation, not of a few individuals who control industries etc. I agree that Communism was hugely corrupt, but that was because it was an ideology based purely on materialism. Human beings need ideals, aspirations. Communism abolished religion because it saw this as competition, but it failed to see that religion feeds the human soul - peope need to believe in 'something' regardless of whether it's true or not or whether it exists or not. I remember those stupid Communist slogans in Russia, praising stakhanovite workers and demanding higher production etc. This was just crap. How can you motivate people if you only offer them poverty? So, yes, capitalism is a good thing, but it needs to be controlled. That's all - it's a very simple concept really.

Capitalism in a society that allows socioeconomic mobility is the spice of life. It allows people to dream of being entrepreneurs and striking it rich (4 of 5 millionaires in the US are self made). It's exactly this opportunity of becoming rich and suceeding that motivates folks.

EVERYONE ELSE IN THE THREAD, PLEASE HELP(except Shek & gunnut)!!!

I think im the one who is thick here but please help me understand this debate: There are 4 pple in this debate, lets call them peaker A, B, C & D. The debate goes something like this:

A:
As for economics, I am not qualified to give an expert answer on the subject, but one thing is certain: sooner or later the US will have to face up to China, and it won't be pretty when it happens. China is holding HUGE amounts of dollars and if it decides to sell them - well, the consequences are pretty obvious, aren't they?

B:
Here are some pretty obvious consequences:

1. China decides to sell "HUGE" amounts of dollars. Lots of supply, price of a dollar goes down. Result: China loses lots of money.

2. Price of dollar goes down, so American exports look attractive to the rest of the world, Chinese imports look expensive to Americans. Result: China loses a prime market for Chinese goods, so China loses lots of money, and the US economy shifts sees a change in trading patterns, with fewer imports but more exports.

C:
Sir I have a question about China selling US dollars, if it happens...

If it happens, dollar value obviously plunges. Yuan will rise in value as it was pegged in part to the dollar and in part to the euro which will rise in value against the dollar. American purchasing power drops against the international market due to cheap dollar. China's biggest export customer is probably the US, selling stuff we can easily cut back on (toys, clothes, electronics). Will China experience stagflation? Rising yuan and dropping exports are not trivial deal.

D:
C, Not really. The yuan is by and large liberated now. It uses a family of busket currencies and hence as such is not affected by any one particular currency. It would suffer the same ripple effect suffered by all world currencies, generally

C:
D, So the yuan is liberated and floats freely on the market, yet its value doesn't rise against the dollar when the dollar plunges? I see you do not understand economics. I would like to do business with you. I can make a killing.

D:
C, My goodness! What are you talking about? Looking for a Way to Trade the USD/CNY (U.S. Dollar vs. Chinese Yuan)?

B:
D, The remimbi is appreciating against the dollar, i.e., getting stronger, or its value is rising. This means Chinese goods look more expensive to the US.

With currency charts, a rising value means that it appears to be falling (i.e., the trend moves downward).

C:
D, HA! PWNT!!!

D, I'm not the one who doesn't understand econ 101.

D:
B, Im not sure if we are disagreeing here. I understand what the chart means. I know that the relationship of currencies is inversely proportional ie when one currency appreciates, the other depreciates hence the downward trend in the chart as the remimbi appreciates against the dollar.

What i was rebutting there was gunnut's assertion that the Chinese currency 'is not rising against the dollar when the dollar plunges', implying that the currency is still not liberated from the dollar. That couldn't be further from the truth. The chart clearly shows its relationship to the dollar before it was liberated (ie prior 2005) and its relationship after its liberation (ie post 2005). The graph clearly shows that the Chinese currency has been appreciating consinstantly against the depreciating dollar contrary to gunnut's claims that it is not, thus it has been liberated.

C, What does PWNT mean? Are you saying that im wrong in saying the Chinese currency has been appreciating since 2005? If this is what you are saying please may you kindly qualify your claims. (Ireally would want to know this because if you think im the one who does not understand such simple economics as this, then im in the wrong profession.)

B:
D,

You misunderstood C's statement, and I think he misunderstood what you're getting at as well. By liberated, I think you mean that it is no longer pegged against the dollar exclusively. Gunnut was referring to the fact that it is not liberated in the sense that it reacts to movements in the dollar instead of being pegged through reserve transactions that stabilize the exchange rate.

C:
D, PWNT is 1337 sp34k for "owned."

You posted a chart showing me that dollar is on the decline. What does decline mean? If there is only a single currency in the world, does it decline? Dollar declines means it's worth less against other currencies. What does "worth less" against other currency mean? It means other currencies are worth more. If China dumbs American debt on the international market to "teach" American a lesson, it effectively raises all other currencies not pegged to the American dollar. The very fact that yuan is not pegged to the dollar will raise its value even more. This will hurt the US, but it will destroy Chinese economy which is export based. High currency value is not good for export.

D:
B, I see what you mean, and you are right in your assumption about what i mean by liberated. I think you and I are talking the same language but im not sure about gunnut namely because of his following remarks; "So the yuan is liberated and floats freely on the market, yet its value doesn't rise against the dollar when the dollar plunges? ". He seems to say that the yuan does not rise when the dollar plunges, but that can only be true if the yuan was pegged to the dollar(im asuming he understands the economics of pegging). And also in his comment on post # 114 he seems to imply that the yuan is pegged. I really am failing to understand his grasp of the two concepts.

B:
Read his sentence that follows, whose point is that if that is what you believe, then he wants to do business with you because he'd make lots of money off of you.

There you have it members of the jury! Can someone please arbitrate this debate for me based on real world facts. May the arbitrator briefly explain to speaker 'D'(me) what he/she is failing to understand from speakers 'B' & 'C'. Because its either we are debating at cross purposes here or my economics is seriously warped. My lecturer should have been sacked a long time ago! (Or is it my English teacher?)

Originally Posted by Zinja

EVERYONE ELSE IN THE THREAD, PLEASE HELP(except Shek & gunnut)!!!

I think im the one who is thick here but please help me understand this debate: There are 4 pple in this debate, lets call them peaker A, B, C & D. The debate goes something like this:



There you have it members of the jury! Can someone please arbitrate this debate for me based on real world facts. May the arbitrator briefly explain to speaker 'D'(me) what he/she is failing to understand from speakers 'B' & 'C'. Because its either we are debating at cross purposes here or my economics is seriously warped. My lecturer should have been sacked a long time ago! (Or is it my English teacher?)

Haha! I stopped reading your guy's debate for exactly that reason... it was getting just too complicated and I was having a hard time following what you were each trying to say and to whom.

Watching marklv get stomped is much more fun than picking through this argument.

Originally Posted by lwarmonger

Haha! I stopped reading your guy's debate for exactly that reason... it was getting just too complicated and I was having a hard time following what you were each trying to say and to whom.

Watching marklv get stomped is much more fun than picking through this argument.

Ha, ha, ha! I feel for Marklv. Or maybe you can arbitrate the Malarklv, brokensickle, kensas, kansa & shek debate. Oh, we can also try and find another arbitrator for you and Fenor.

You know what? I think i have an idea for WAB mods and contributors. Why dont we have a judiciary panel system here where we can refer problematic threads which seem to have reached a deadlock. The panel will give the vedict and thats final. Just a thought )

Originally Posted by Shek

Ask yourself why this is? You want to equate monopoly (which PayPal isn't) with being bad, but that is quite often not the case. The reason that people require PayPal is that it reduces the risk of bounced checks, fees associated with that, and it speeds up the transaction process, i.e., you know within minutes if you've got payment or not, versus waiting for checks to arrive.

I'm not anti-Paypal, but I don't know of any other company that offers a service like Paypal's. In my book this makes Paypal a monopoly. And one that imposes high charges on transactions, nearly 4%. Visa and Mastercard charge a lot less, so why is Paypal for what is essentially a similar type of transaction processing?

Originally Posted by Shek

Please explain why manicurists have to get "professionally" licensed in the US to open a business. What public interest is being served. Who benefits from this government protection? Who is harmed?

This is to ensure that those who say they are manicurists, are really manicurists! It's as simple as that. Who benefits? Those who use manicurists, of course. Otherwise any jerk could open a shop and offer a manicure service, when in reality they haven't got a clue about what to do.

Originally Posted by Shek

Why has GM and Ford been in such dire straits in recent years? It's because a huge portion of their operating expenses have gone towards maintaining pension funds. This (along with some other reasons) have helped to make them less competitive and resulted in having to cut jobs. On the flip side, the US stock market has returned historically 10-12%, depending on which index you look at. Far from being a gamble, it's actually a very good deal. So, employees get a choice on what to do with their money, and they can either choose more consumption now (less money saved towards retirement) or more consumption later.

Wrong. GM and Ford have done badly because they are not producing cars that the public wants, at the right price range. All big companies have to maintain pension funds, even the successful Japanese car makers. Really successful companies don't have to hide behind the excuse of high overheads. Yes, the stockmarkets has gone up in the long term, historically, but there are also troughs as well as peaks, and these troughs can last years. The stockmarkets have still not recovered from the collapse of 2000. This makes this type of investment very unpredictable.

Originally Posted by Shek

Capitalism in a society that allows socioeconomic mobility is the spice of life. It allows people to dream of being entrepreneurs and striking it rich (4 of 5 millionaires in the US are self made). It's exactly this opportunity of becoming rich and suceeding that motivates folks.

I don't have anything against anyone becoming rich, but in reality very, very few, as a proportion of the population will ever achieve this. Not everyone has the willingness to gamble everything, and not everyone has the entrepreneurial skills and aptitude. Most 'John Does' just want a steady, decently paid 9 to 5 job, with good vacation time and a secure retirement fund.

Originally Posted by marklv

I'm not anti-Paypal, but I don't know of any other company that offers a service like Paypal's. In my book this makes Paypal a monopoly. And one that imposes high charges on transactions, nearly 4%. Visa and Mastercard charge a lot less, so why is Paypal for what is essentially a similar type of transaction processing?

What does "high" mean? High compared to what? If you don't like their services, don't use it. If you think they are ripping you off, start your own and charge people less. If you can offer a service like Paypal at a lower cost, you can make it in this world.

Originally Posted by marklv

This is to ensure that those who say they are manicurists, are really manicurists! It's as simple as that. Who benefits? Those who use manicurists, of course. Otherwise any jerk could open a shop and offer a manicure service, when in reality they haven't got a clue about what to do.

And how much does the government charge the manicurists for this license? And what if some jerk who doesn't have any training registered to be a manicurist, receives a license, and practices? So what? What can you do if something goes wrong?

Paypal charges 4% is like a license to sell. Otherwise any jerk can just offer a nice picture and a detailed description of vapor ware, take your money, and leave. There's no way to track him down. You're up the creek without a paddle if that happens. But luckily Paypal is here to ensure that doesn't. It doesn't have power to arrest the jerk, but through collective insurance of 4% surcharge, it promises both the buyer and seller don't get cheated. Should something happen, Paypal eats the cost while making sure its customers are happy.

Originally Posted by marklv

Wrong. GM and Ford have done badly because they are not producing cars that the public wants, at the right price range. All big companies have to maintain pension funds, even the successful Japanese car makers. Really successful companies don't have to hide behind the excuse of high overheads. Yes, the stockmarkets has gone up in the long term, historically, but there are also troughs as well as peaks, and these troughs can last years. The stockmarkets have still not recovered from the collapse of 2000. This makes this type of investment very unpredictable.

Have you analysed GM's cost structure? Have you seen the generous pension their retirees get? Here's a comparison of a union pension to shed some light. Public employees in my county negotiated a very generous package a few years back when revenue was high. After 30 years of service, the retiree gets a pension that's 80% or 90% of the average of his last year's pay. So these people schedule A LOT of overtime for themselves on the final year to boost that number. Some retire with a pension that's actually higher than his salary, every year, for life. Unions have a habit of doing this. A janitor gets $60k a year. That's the cost we're talking about for GM/Ford/Chrysler workers.

Originally Posted by marklv

I don't have anything against anyone becoming rich, but in reality very, very few, as a proportion of the population will ever achieve this. Not everyone has the willingness to gamble everything, and not everyone has the entrepreneurial skills and aptitude. Most 'John Does' just want a steady, decently paid 9 to 5 job, with good vacation time and a secure retirement fund.

Fine. That's like me. But I don't want other people to pick up my slack. And I don't want to pick up other people's slack. I want to invest my own retirement money. I don't want the government involved. Look at how well the government handled Katrina. You want more of that?

Originally Posted by Zinja

You know what? I think i have an idea for WAB mods and contributors. Why dont we have a judiciary panel system here where we can refer problematic threads which seem to have reached a deadlock. The panel will give the vedict and thats final. Just a thought )

You think you can find a consistently neutral party on this board? :P

Good luck.

Just because people don't enter into an argument doesn't mean they lack an opinion. )

Originally Posted by marklv

It's certainly true that over regulation hampers effective production, but you need some regulation to ensure that the consumer is not sold crap at an expensive price. Or would you prefer to be scammed?

I prefer not to buy scammers products. If people wanted they could put a
corporation out of business by refusing to work there and not buying their funky, over-priced, products. They have to change with the pressure to bear from the customer and the employee. I guarantee. It takes fortitude of the consumer.

For instance, America overwhelmingly didn't buy Yugo's. Today Yugo's are not sold in America. If Yugo made a decent product the steering wheel would not fall off in your hand while you are driving. The failure of Yugo was that they made an inferior product and regardless of the great price the public considered them junk.

This is total BS. In many cases the corporate has a virtual monopoly, and you have effectively no choice but to buy his product or use his service. Look at Pay pal for example. If you don't accept Pay pal you are not likely to get many customers on eBay, are you? So it's virtually impossible to avoid using it. And in other cases, many corporates offering the same product or service form a cartel to artificially keep prices up, giving the illusion of competition when it really doesn't exist. This is currently an issue in the UK domestic energy market.

I don't use pay pal, but if you don't like it vote em' out by not using em'. Every vote counts. Neither do I use E-bay. My advice, don't use them.

Isn't UK utilities a Government Institution? An if it is wrought with government controls and over regulation, it makes my point as to why the government makes it so inefficient, not to mention the greeny-wienie's contributions to inefficiencies.

Your accusations against 'bureaucrats' are mere non-sequiturs, you make no sense.

It makes sense to me, but I'm not you. You seem content to take what you are given. Freedom does not come with out vigilance. YOU get what YOU pay for. I get what I want. I really do.

The bureaucrat is not 'bilking' anything, he is acting to ensure that there is a level playing field, that the consumer is offered a good product at a fair price, and that the corporates do not abuse their position. You are deluding yourself if you think that ordinary people have power over corporates - they don't. Let me give you another example: in the UK, 20 years ago, nearly all employers offered 'final salary' pension schemes, which means that after working for a number of years you would receive a pension based on a percentage of your final salary - up to 67% for a 40 year stretch. These schemes have been systematically closed in the last 10-15 years, to the point that now only barely 20% of employers offer them. They have been replaced with crap schemes based on a tiny cash contribution from the employer of between 5% and 10% of salary, which is then gambled on the stockmarket. A very few employers offer 15% contributions. The old schemes offered guarantees, the new ones offer only insecurity. So where do we go from here? What 'choice' do you have as an employee?

Take care of yourself! Don't wait for someone to do it for you. Invest, and let God do the rest. I'm not rich, but one day sure enough I will die, the rich man can do no better than me some day he will also die. We both have the same ability to control our destinies to a point.

I don't want to give that responsibility to government. It just cost to much and I've come to realize that no one loves my children more than God and me. Government is just as much human as any other human why would they love or desire better for me or my family than me or my family. The answer is they won't. No matter how you slice it governments responsibilities should be far limited for freedom to work. The more government is given, the more it takes. This is because of Greed. But I'm just a simple man and desire to keep it simple.

In order to make good profits, companies need to stop paying ridiculous sums to their senior executives, and invest the money back into the business. This has been the unacceptable face of capitalism.

Don't buy what their peddling.

I'm not anti-capitalist, but capitalism should work in the interest of the nation, not of a few individuals who control industries etc. I agree that Communism was hugely corrupt, but that was because it was an ideology based purely on materialism. Human beings need ideals, aspirations. Communism abolished religion because it saw this as competition, but it failed to see that religion feeds the human soul - peope need to believe in 'something' regardless of whether it's true or not or whether it exists or not. I remember those stupid Communist slogans in Russia, praising stakhanovite workers and demanding higher production etc. This was just crap. How can you motivate people if you only offer them poverty? So, yes, capitalism is a good thing, but it needs to be controlled. That's all - it's a very simple concept really.

Nobody likes to get scammed, bilked, cheated, or bamboozled, I know I don't.




Regards,
Ivan

I had left this thread to pursue the dollar vs yeun discussion. Whilst i await the jury on that verdict i will attempt to respond to this post you made:

Originally Posted by Shek

Firstly, gunnut's arguement is not what you are talking about here. My arguement was his notion that somehow economies chiefly revolve around people's salaries.

Now, the diagram you produced is hardly relevent to this discussion considering its elementary academic value, it hardly reflects the real world. It is a simple diagram to explain economics in simple terms not real terms. I will give you just a few points from the top of my head

1. It asumes a totally closed economy(imports/exports), hardly fitting the scenarios we are talking bout with gunnut.

2. It takes no account of investments

3. It has no public expenditure effect (i realise that you mention this in your further explanation)

4. It has no measure of inventory change

5. It does not reflect velocity of money

I could go on and on. Strictly speaking, the salaries and capital you are talking about are remunerations of production factors, and the services/products are part of the effective demands in GDP equations. You cant talk about them at the same time as forming the total of GDP as this would be double counting. Economist use effective demand measurements of GDP as this is the generally accepted method rather than remuneration of production factors. (This is why i was arguing with gunnut that he can not use 'salaries' to determine economies - but i realise that i probably was talking over his/her head). Trying to use remuneration of production factors will be like trying to determine how you look like by examining your DNA(can't think of a better example to explain this)

In short, the diagram is just a simplified microeconomic system. It is a flow chart not a GDP function, and it certainly does not show salaries as a function of it.

Originally Posted by Shek

But where does the government get the money to spend? From households (i.e., consumers) through taxes.

... and by and large from coperates as well.

Originally Posted by Shek

To look at it from a consumer perspective is not wrong. It is simply the flip side of the coin.

Never said it was. i said "Whilst individual consumers have a part to play, to view economics in terms of employee salaries is certainly misinformed."

Originally Posted by Shek

He has a hard time finding a transplant because the US government prevents people from being compensated for organs. Government intervention costs him his life because it destroys the market for organs.

That is not the issue. The issue is government's role in social matters which the corporates would otherwise not cater for. Organ compensation might be a specific issue in the US, im talking about wider issues which are relevant in any society world wide not specifics case scenarios.

Originally Posted by Shek

......It didn't take government intervention, just market forces.

It took government intervention to discover the contaminations in the first place, thats the point im making. No Bill Gates or Paris Hilton goes about checking if products are contaminated or not. The Markets reacted to discoveries reaveled by check systems set up by the government. Without such government interventions vulnerable american children would be swallowing lead now as we speak.

Originally Posted by gunnut

PWNT is 1337 sp34k for "owned."

... and what does '1337 sp34k' stand for? Man, you are dazzling me with this typo lingo !

Originally Posted by Zinja

Ha, ha, ha! I feel for Marklv. Or maybe you can arbitrate the Malarklv, brokensickle, kansas, kansas & shek debate.

Were Major Shek and I debating?? In most areas of academics, the Major has me beat.

Originally Posted by Shek

On the flip side, the US stock market has returned historically 10-12%, depending on which index you look at. Far from being a gamble, it's actually a very good deal. So, employees get a choice on what to do with their money, and they can either choose more consumption now (less money saved towards retirement) or more consumption later.

Shek, this is the problem with american consumers; they don't save!!! American debt is ballooning because america is not saving enough. America is consuming goods they are not producing. In other words, America is spending money they do not have thats why the government is borrowing so much. 20% of treasury budget is gobbled up servicing debts, and at this rate if the government does not do something by 2020 it is forecasted at 50%!!! This is an issue of high national security which the US government needs to consider seriously.

The stimulus package unveiled is just a quick fix for short term benefits. It does not address these baseline fundamental problems with the US economy. An economy based on ramping up consumer spending is sure to face dire consequences in the long run. This is why i personally was not happy with this package as it only encouraged more spending by the consumer. However, i checked with other professionals in the circles and explained to me that other issues (the 'R' word) took precedence over long term stabilisation plans. But still, the next administration really needs to tighten up its budget to fix these issues for good.

Im not predicting doom for the US yet, it is still recoverable. But if urgent attention is not paid to these fundamental issues, America will crash out spectacularly.

NB: I love America, i have no ill feelings towards her. But if you ask any honest economist im sure they will say the same things.

Originally Posted by lwarmonger

You think you can find a consistently neutral party on this board? :P

Good luck.

Just because people don't enter into an argument doesn't mean they lack an opinion. )

Rodger that! Consider my suggestion then as one of those 'it seemed like a good idea at the time' )