Here comes the other economic shoe dropping...

[Warren Dew]

Networked services workers are going to buy what? More networked services?

What are people working in manufacturing going to buy? More manufactured goods?

Oh wait ... they do. Same with networked services and the rest of the new economy. Absolutely people in IT work do tend to have high speed internet access and use it a lot - and even spend a lot of money over it.

Given the choice, I'd rather have the $80/hour internet related jobs in the U.S. and the $2/hour manual assembly jobs in China, rather than vice versa. But hey, people who prefer the $2/hour jobs can always move to China and take them!

[Robert_S]

Networked services workers are going to buy what? More networked services?

What are people working in manufacturing going to buy? More manufactured goods?

Oh wait ... they do. Same with networked services and the rest of the new economy. Absolutely people in IT work do tend to have high speed internet access and use it a lot - and even spend a lot of money over it.

Given the choice, I'd rather have the $80/hour internet related jobs in the U.S. and the $2/hour manual assembly jobs in China, rather than vice versa. But hey, people who prefer the $2/hour jobs can always move to China and take them!

Why not have both, except give our manufacturing workers a wage that they can afford to buy some of those networked services you speak of?

For every $2.00 an hour in job in China, that's a person who won't be buying much in the way of networked services. This explain a little bit of why we have a huge trade imbalance with China. Besides, how long do you think those jobs are going to pull in $80.00 an hour? When everyone in the US makes $80.00 an hour, how far do you think it's going to go? Thinking we can all be in IT is as shortsighted as thinking we can all be real estate agents.

[Coito ergo sum]

Obama and Congress can make the decision to increase my taxes and then I'll be more than happy to comply - that's why I voted for him.

It seems what you really want is for everyone else's taxes to be increased, not just yours.

Bingo! Just about everybody else's, anyway. Probably yours too.

Of course, but you didn't say that, initially. You said "raise MY taxes, please!"

[Coito ergo sum]

Is it so hard for those that have a comfortable lifestyle to have a few less holidays or maybe run a car for 4 years not 2 before replacing it ?

If those "comfortable" enough to buy cars buy them every 4 years when they had been buying them every 2, that's half the auto workers thrown out of work.

Nope. Poduction would only be halved if everyone halved their purchases, not just those who buy very frequently and if the money not spent on said car does not end up enabling someone who could not afford one to buy one.

I still say the US needs it's manufacturing back if we're to have a stable future.

Agree 100%. We need heavy industry. We're losing the manufacturing base. Another generation or so, and we may be teetering on having to buy most of our military hardware from foreign manufacturers. When that happens...."Farewell and adieu, my fair Spanish ladies....farewell and adieu, my ladies of Spain...."

[Coito ergo sum]

Networked services workers are going to buy what? More networked services?

What are people working in manufacturing going to buy? More manufactured goods?

Oh wait ... they do. Same with networked services and the rest of the new economy. Absolutely people in IT work do tend to have high speed internet access and use it a lot - and even spend a lot of money over it.

Given the choice, I'd rather have the $80/hour internet related jobs in the U.S. and the $2/hour manual assembly jobs in China, rather than vice versa. But hey, people who prefer the $2/hour jobs can always move to China and take them!

Why not have both, except give our manufacturing workers a wage that they can afford to buy some of those networked services you speak of?

Manufacturing workers in the US tend to make higher than average incomes.

[Robert_S]

Is it so hard for those that have a comfortable lifestyle to have a few less holidays or maybe run a car for 4 years not 2 before replacing it ?

If those "comfortable" enough to buy cars buy them every 4 years when they had been buying them every 2, that's half the auto workers thrown out of work.

Nope. Poduction would only be halved if everyone halved their purchases, not just those who buy very frequently and if the money not spent on said car does not end up enabling someone who could not afford one to buy one.

I still say the US needs it's manufacturing back if we're to have a stable future.

Agree 100%. We need heavy industry. We're losing the manufacturing base. Another generation or so, and we may be teetering on having to buy most of our military hardware from foreign manufacturers. When that happens...."Farewell and adieu, my fair Spanish ladies....farewell and adieu, my ladies of Spain...."

We could get the pentagon to ramp up our networked service defense...

[Coito ergo sum]

We need to produce our own energy, steel and other metals, and other raw materials, and we need to build our own stuff out of it.

A great industry, one that might actually be worth giving "stimulus" money to, would be the space industry. Ramp up the project that was short-sightedly canceled (Moon project) and add too it a real Mars project - manned missions - and require that 90% of all materials, research, development, manufacturing and assembly occur in the US, and you've got yourself a top-to-bottom industry....

[Feck]

well i'm sure BMW will cope ! Or do the rich mostly by Merkin cars ? oops FAIL !

You think all the people who work in BMW plants are rich, just because they work on BMWs? Do you think the people who change the oil in BMWs are rich, too, just because they work on BMWs?

no I didn't say that I even didn't imply that
Cutting taxes for the rich allows them to spend a percentage of their money abroad , this is money that if were removed from them by taxation could be spent by the US government on things that are good for the US .

[Warren Dew]

We need heavy industry. We're losing the manufacturing base.

Actually, the U.S. manufacturing base is fine. It just doesn't happen to be highly visible in terms of things people see every day.

For example, in 2009, we exported $28 billion worth of vehicles, but imported $52 billion worth - a net deficit of $24 billion. However, we exported $40 billion worth of aircraft, and imported only $11 billion worth - a net surplus of $29 billion. Americans just happen to notice all the Toyotas driving around on the streets, and not all the Boeings that are being flown by foreign flag carriers all over Europe and Asia.

Our manufacturing does focus on high tech, high margin areas like aircraft and microprocessors, rather than on the cheap consumer goods that people see in the bargain bin. That's why we have the high paying manufacturing jobs, and continental Asia has the low paying ones. That's a good thing, not a bad thing.

We can't rely on manufacturing for jobs, though. The fact is that manufacturing is becoming less and less labor intensive, just as agriculture did last century. Trying to regain the low paying manufacturing jobs would be like trying to go back to farming behind a teams of oxen. For jobs, we have to look at emerging areas of the economy, and that means services, particularly services with a high tech component.

[Warren Dew]

We need to produce our own energy, steel and other metals, and other raw materials, and we need to build our own stuff out of it.

"Producing our own energy" would just mean depleting our own oil reserves more quickly. It would certainly help our immediate balance of trade, but would make things much worse in a decade or two when our reserves ran out and we became completely dependent on imported oil, rather than only partly dependent on it as we are now. It would also be rather bad for the environment, as it would lower global oil prices and encourage more CO2 emissions.

I'd rather see measures to encourage research into energy efficiency. Big wellhead and oil import taxes would help, because really the only way to encourage people to buy more energy efficient cars, for example, is higher gasoline prices. If we became global leaders on energy efficient technologies, that would also help our balance of trade in the long run, since the rest of the world would also need those technologies as their oil ran out.

[Robert_S]

We need heavy industry. We're losing the manufacturing base.

Actually, the U.S. manufacturing base is fine. It just doesn't happen to be highly visible in terms of things people see every day.

For example, in 2009, we exported $28 billion worth of vehicles, but imported $52 billion worth - a net deficit of $24 billion. However, we exported $40 billion worth of aircraft, and imported only $11 billion worth - a net surplus of $29 billion. Americans just happen to notice all the Toyotas driving around on the streets, and not all the Boeings that are being flown by foreign flag carriers all over Europe and Asia.

Our manufacturing does focus on high tech, high margin areas like aircraft and microprocessors, rather than on the cheap consumer goods that people see in the bargain bin. That's why we have the high paying manufacturing jobs, and continental Asia has the low paying ones. That's a good thing, not a bad thing.

We can't rely on manufacturing for jobs, though. The fact is that manufacturing is becoming less and less labor intensive, just as agriculture did last century. Trying to regain the low paying manufacturing jobs would be like trying to go back to farming behind a teams of oxen. For jobs, we have to look at emerging areas of the economy, and that means services, particularly services with a high tech component.

I was thinking along the lines of textiles and electronic devises. I have a friend who works at a Kohl's department store who was embarrassed to find that she wa having a very hard time finding clothing made in the US for the visiting Chinese couple to take home with them.

We need to either spend massively and change our education paradigm to get a great deal more of our youth prepared for these high tech service jobs or we need to recover and keep our mid-range manufacturing jobs. Otherwise we'll end up with more and more chavs.

[Coito ergo sum]

We need to produce our own energy, steel and other metals, and other raw materials, and we need to build our own stuff out of it.

"Producing our own energy" would just mean depleting our own oil reserves more quickly. It would certainly help our immediate balance of trade, but would make things much worse in a decade or two when our reserves ran out and we became completely dependent on imported oil, rather than only partly dependent on it as we are now. It would also be rather bad for the environment, as it would lower global oil prices and encourage more CO2 emissions.

I'd rather see measures to encourage research into energy efficiency. Big wellhead and oil import taxes would help, because really the only way to encourage people to buy more energy efficient cars, for example, is higher gasoline prices. If we became global leaders on energy efficient technologies, that would also help our balance of trade in the long run, since the rest of the world would also need those technologies as their oil ran out.

Not if we build nuclear power plants.

And develop affordable micro-energy producers, like home solar panel systems.

[Warren Dew]

I was thinking along the lines of textiles and electronic devises.

Electronics I'm not too worried about. Sure, we buy Japanese and Korean branded televisions, but U.S. branded iPods and Macs are pretty popular over there, too. Inside, microprocessor chips tend to come from the U.S., the memory chips tend to come from Korea and Japan, and only the relatively unskilled - and poorly paid - soldering and assembly work goes to Taiwan or China. When you buy a computer, most of the money either stays in or comes back to the U.S., because the high value CPU chips are made here.

Mass market textiles depend on the cheapest of unskilled labor to do the sewing - even Chinese wages are getting too expensive for it, and it's starting to move to southeast Asia. Want to know how much clothing would cost if U.S. wage rates were paid for this work? Go to a U.S. dressmaker or bespoke tailor. You'd pay thousands of dollars for a suit, hundreds for a dress or shirt.

And even so, most of those jobs would end up being minimum wage sweatshop jobs - the kind that are going begging right now, because Americans are too proud to do them. We'd need a cultural adjustment to bring that kind of job back into the U.S., assuming we wanted to.

As for education, spending there tends to be unproductive or even counterproductive; the better schools in the U.S. tend to have the lower paid teachers. However, legislation like No Child Left Behind enforcing some minimum standards is a step in the right direction; and in one of my few areas of agreement with Obama, I think his emphasis on measuring results and pushing vouchers and charter schools are also in the right direction.

[Coito ergo sum]

Americans are only too proud to do the shit jobs if they are given options other than doing them. End their unemployment insurance, and they'll take the crap jobs.

[Warren Dew]

I'd rather see measures to encourage research into energy efficiency. Big wellhead and oil import taxes would help, because really the only way to encourage people to buy more energy efficient cars, for example, is higher gasoline prices. If we became global leaders on energy efficient technologies, that would also help our balance of trade in the long run, since the rest of the world would also need those technologies as their oil ran out.

Not if we build nuclear power plants.

And develop affordable micro-energy producers, like home solar panel systems.

Big wellhead and oil import taxes would help a lot with those, too.