American living, then and now (1975 vs 2005)

[VJW]

Re: American living, then and now (1975 vs 2005)

I'm not sure how that fits into his argument (or rather, flies in the face thereof).

His basic premise was with trade theory. If a country can produce a good for cheaper (has a competitive advantage) then it should specialize and trade for its other goods.

The theory goes that when countries specialize and trade, there is more production in TOTAL.

How could a country have “more production in TOTAL” if the vast overwhelming majority of it’s workers have their Standard of Living going backwards ?

A very valid, as well as relative question.

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[cicy33]

Re: American living, then and now (1975 vs 2005)

Originally Posted by jmjj215
I'm not sure how that fits into his argument (or rather, flies in the face thereof).

His basic premise was with trade theory. If a country can produce a good for cheaper (has a competitive advantage) then it should specialize and trade for its other goods.

The theory goes that when countries specialize and trade, there is more production in TOTAL.


Unfortunately when leaders of countries act like 3 year olds then no peace can be resolved nor any fair trading. It is a nice theory but I don't see it coming true. at least not in my life time.

[jmjj215]

Re: American living, then and now (1975 vs 2005)

How could a country have “more production in TOTAL” if the vast overwhelming majority of it’s workers have their Standard of Living going backwards ?

He's not claiming that US Economic policy is doing what he says free trade could do. He actually is quite harsh on Bush about his Econ policy (he praised Clinton for his trade policy), despite being a pretty staunch Republican. (I believe he's the type of Rep. that thinks for himself, my favorite kinds of Dems are the same way )

Unfortunately when leaders of countries act like 3 year olds then no peace can be resolved nor any fair trading. It is a nice theory but I don't see it coming true. at least not in my life time.

We don't have to talk about whether it will become true However, I asked him about the war aspect, "What if your sole supplier of milk is cut off? How do you maintain peace?" (Gave him your example Cercis).

He said that (1) you wouldn't have just one supplier, so the likelihood of that happening is very slim, (2) you would suffer a setback if you had to begin to produce (inefficiently) yourself. However, he mentioned something I found particularly interesting (by the way, he specializes in planned economies - why they don't work):

During the Vietnam war, guess where theh US was getting its vast majority of minerals? From the Soviet Union.

He also mentioned that Americans are very different from Europeans in that Europeans will separate business from politics (we still want to make money...). Americans are not good at doing this. And I think he's right. We would take the hardline approach, "Oh you crossed us here and here, now we're going to place a tarriff on your goods."

Yesterday he taught us how tarriffs/quotas are bad for everybody, and they simply prolong the inevitable (an industry hanging on by a thread). It's an enjoyable class.

[jmjj215]

Re: American living, then and now (1975 vs 2005)

I failed to mention that it's hard to separate what probably is good economic principles with social conscience. Sometimes I wonder if Americans wouldn't pay a bit more for goods just to know it's keeping jobs here? He says that would be stupid because it wouldn't maxize consumer surplus. I say there are other suprluses out there: like how you feel about your country and I think cercis hit on that a bit - loyalty.

[VJW]

Re: American living, then and now (1975 vs 2005)

He's not claiming that US Economic policy is doing what he says free trade could do.

Neither was I.

The massive level of outsourcing over the past five years has driven down the wages of the vast majority of American workers. Corporate America seems to miss the connection that workers are also consumers. Who will buy all their product if the wages of workers keep going backwards ?

People used to pooh pooh outsourcing when it only affected low-wage Americans, but now it’s affecting engineers, accountants, physicians, and other high-income professionals.

He actually is quite harsh on Bush about his Econ policy (he praised Clinton for his trade policy)

Well, NAFTA was with our immediate neighbors, and was a smashing success for us and Canada, but did not work so well for Mexico, mostly because they were undercut by massive outsourcing to countries with much lower wages.

Yesterday he taught us how tarriffs/quotas are bad for everybody

Ask him why then did they work so well for the U.S. when we were a young country ?

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[CRFSaver]

Re: American living, then and now (1975 vs 2005)

I have always had mixed feelings about outsourcing. I think some things make sense to outsource and some things dont. My feeling (unscientific as it is) is its ok to outsource manufacturing operations but there are two things you never outsource, your customers and your intellectual capital.

I think those companies that outsource all their tech developement are in for a heap of trouble as they are essentially training their competition 5-10 years from now. It also takes away the institutional memory of a company that can only be built over time. Why anyone would let someone else deal with their customers is beyond me. Without a customer you have no business. Pretty simple concept to me.

[PrincessPerky]

Re: American living, then and now (1975 vs 2005)

I hear all the time how people hate calling insurance companies because of the people they talk to, (one major phone help that is outsourced) and now DH is training people to do part of his job, I don't begrudge them a job, but I do dread hearing him come home telling me of the complaints about the calls that get routed overseas. (half the calls will be, the other half will go to him and the few who will be kept with him)

I have always been in favor of free whatever, trade and all that, but now that it is effecting me, I am not so happy. And when I call a company I hate finding someone who doesn't speak english VERY well, weather it is an american who never learned the difference between "aks, and ask" or a foriegn employee who cannot pronounce my name, I hate it.

But I still believe that the government goes out of its way to make having an employee VERY expensive, so DHs salary is cut and the company is looking for ways to get his job overseas where they can pay the people the same as DH makes if they want and still come out thousands cheaper, due to less taxes and miscelaneous HR 'stuff'.

[jmjj215]

Re: American living, then and now (1975 vs 2005)

or a foriegn employee who cannot pronounce my name, I hate it

Oh, Americans murder my name all the time too

[Russell]

Re: American living, then and now (1975 vs 2005)

Did someone say overseas support call centers ?

http://www.sahaskatta.com/shared/Late_Night.wmv

[cercis]

Re: American living, then and now (1975 vs 2005)

Princess, it's pretty silly for most companies to gripe about the cost of an employee when their CEO makes 7 figures in salary and another 7 figues in benefits and yet another 7 figures in stock options. And then they pay their board of directors 6 figure salaries and give them 7 figure bonuses. This is typical for most companies who are outsourcing jobs.

I'm sorry, I don't care how good a CEO is at his job, he just isn't worth that kind of money. He just isn't (and I am not using he as a gender neutral here, look how few CEOs are women).

[PrincessPerky]

Re: American living, then and now (1975 vs 2005)

ah but said CEO is the guy in charge of the complaining .

No law will make a company pay the CEO less or make less profit, they will only effect the consumers and the workers. If a bill goes up in my house I get to chose where I find the money to pay it, I might make the decision to cut the cable net out, makes the cable company lose a bit, but I wont lose food over it. Same with companies, make a law charging more or changing how they can pay and they will not be losing meals, they pick the lowest on their charts of priority. (that would be 'little people' .)

[PrincessPerky]

Re: American living, then and now (1975 vs 2005)

They asked some of the people where DH works to volunteer for a help line for Rita, then later said never mind.

apparently cause they farmed the stuff to india.

Indian Center Handles Hurricane Rita Calls
GANDHINAGAR, India (AP) - Until last week, Madhavi Patel came to work each evening at a western India call center, put on her headset and American accent and spent the night taking calls from Americans about their credit cards. Then, Hurricane Rita happened.

The call center, run by Effective Teleservices of Lufkin, Texas, set up a hot line for victims of the hurricane, and Patel and more than 240 of her colleagues began long days and nights fielding thousands of calls from frantic, scared people affected by the storm half a world away....full story here

[CRFSaver]

Re: American living, then and now (1975 vs 2005)

I believe it was legislation on CEO salaries that contributed to the massive increase in executive pay over the years. COngress legislated (I believe) that any salary or salary and bonus over, I think a million dollars, couldnt be deducted as an expense. Instead companies started creating options and deferred compensation arrangements to make that pay available.

What I have never understood is why not do call centers in areas of Canada like Nova Scotia where they speak english and are clammering for jobs to come to those areas. I think people would be a ton more ameniable to jobs at least staying in the North American continent.

[jmjj215]

Re: American living, then and now (1975 vs 2005)

I think people would be a ton more ameniable to jobs at least staying in the North American continent.

What's the difference (besides the accent)?

[CRFSaver]

Re: American living, then and now (1975 vs 2005)

I could see myself living in Canada... Not so much India...