Hey Amicus, or anyone else who questions my knowledge here

[Le Jacquelope]

Wanna predict what's going to happen to the economy?

I've been pretty damned good at calling the disastrous fall of capitalism so far.

I say consumer spending is going to be permanently reduced due to lower paying jobs and reduced access to credit and that the era of explosive growths of high paying jobs (horse and carriage to auto manufacturing, switching operators to telecom to network infrastructure, etc.) is over. I predict that China will supplant the United States as the #1 superpower, and that the West will be forced to rethink their culture of workplace safety, environmental pollution controls, even the whole concept of democracy itself, in light of how China's inhumane version of undemocratic Capitalism is steamrolling the world. China will be calling more of the global political shots, weighing in on global conflicts and being listened to more than the United States. Developing nations will certainly opt to be more like China than the West because that will be the best way to attract jobs FROM China. The spread of Western values will hit a peak soon and stop in favor of the spread of a culture of worker and environmental exploitation.

That is, unless someone has the guts to put an end to globalism, which from looking at Hillary Clinton, that ain't gonna happen.

 

[JAMESBJOHNSON]

You presuppose that you have knowledge, but thats not exactly a slam-dunk for most of us.

The chinks have a coolie mentality. In the history of the world they have never developed any technology theyve discovered. Some folks have strong minds, some have strong backs. Theyre smart, like Mister Ed was smart, but they simply cannot apply what they discover or learn.

My prediction: Government at all levels will circle its wagons and take care of its own. There isnt enough money to take care of the peasants and the geezers, so they'll be cut loose. Government employees will be deputized to cite and fine citizens for civil infractions. The meter reader will give you a ticket if your grass needs mowing. Cops will bust seat belt violators a lot more often.

 

[dr_mabeuse]

I think you're about right. Expecting the private sector to come to the rescue during the present crisis is fallacious when you consider they're sending their jobs overseas as fast as they create them. All the gains in the private sector now go toward helping China, India, and Brazil.

No one saw that globalization actually is a zero-sum game, but it is. The third world will get richer at our expense, and we'll get poorer in the process. The only kinds of jobs that will stay in America are health care, auto repair, and sex worker. (Infrastructure too, which can't be outsourced.)

On the other hand, our strength is in the free market for financial services and invention, which China can't match with their regulated economy. That might save our asses yet.

 

[JAMESBJOHNSON]

DOC

It seems to me we went as far as we could with the empty suits running things. Theyre clueless as to how to make it work again. I think ordinary people will get things going again, with new products and services. The empty suits have enough bailout money to wait it out.

 

[Huckleman2000]

[...]
On the other hand, our strength is in the free market for financial services and invention, which China can't match with their regulated economy. That might save our asses yet.

This is what scares me most. We know that the world will shift from a petroleum-fueled auto based economy to ...something else. This means there will need to be an entirely new delivery infrastructure, on a massive scale.

Right now, there are several competing technologies, at various stages of development in research labs all over the world. A free-marketer might say, the best solution will win out, confident that so-called "energy" companies will see it in their best interests to use their immense profits to build the personal transportation industry of the future.

In practice, "energy" companies are still simply oil producers, very good at drilling, refining, and getting petroleum to the gaspump. For the most part, though, they're just making some people really rich and necessitating business with a lot of unsavory people, leading to wars, etc.

Suppose Chinese researchers get close to an "end-to-end solution". They make cheap hydrogen cars, and develop compact wind-turbines that transform filling-stations into electricity-generating/hydrogen-producing centers, or something. Once they have decided what that technology will be, they have the economy of scale to effectively dictate hydrogen (or whatever)-power to the rest of the world. They'll have a huge head-start on the manufacture and expertise in the field, and much of the profits produced by a burgeoning new market. Corporate China.

 

[sr71plt]

Suppose Chinese researchers get close to an "end-to-end solution". They make cheap hydrogen cars, and develop compact wind-turbines that transform filling-stations into electricity-generating/hydrogen-producing centers, or something. Once they have decided what that technology will be, they have the economy of scale to effectively dictate hydrogen (or whatever)-power to the rest of the world. They'll have a huge head-start on the manufacture and expertise in the field, and much of the profits produced by a burgeoning new market. Corporate China.

There's always "what if" possibilities/dangers, but as I think I saw noted someplace else, the historical experience with the Chinese is that they do sometimes stumble on scientific breakthroughs, but for the most part they steal others' technology, and don't develop much on their own, including whatever breakthroughs they've stumbled on. Can always change, of course, but that's one of interesting little things about the Chinese . . .

 

[xssve]

I think that's overly pessimistic, things will certainly change, but China has it's own problems: they're are suffering form the same problems as the West did during the industrial revolution, environmental and social degradation create organizational difficulties of their own, and tend to destabilize governments even in the absence of dissent from independent institutions: it's difficult to maintain productivity when everybody is getting sick, and social institutions are breaking down.

We have a greater capacity to bounce back from this, and our ability to do so will depend a lot on just how much we are forced to coddle the financial sector - there is going to be a significant amount of disgust that we are forced to bail them out due to interconnectedness, i.e., in spite of our better instincts, because it reinforces the moral hazard: i.e., in some sense, it's saying they were right in spreading their risks out so broadly that they became invulnerable to failure, regardless of how much risk they were taking on.

Those who managed to steer clear of this, and who have already been punished for their prudence through lower returns throughout all of this, are essentially being punished again for their foresight, in this sense, and there is a danger that they will end up impotently kvetching instead of asserting their proper place in the order of things.

Absent any significant market "punishment", i.e., failure, means that regulation will have to be substituted for experience, all the more difficult since experience itself is only encouraging the old edict, "give 'em and inch and they'll take a mile", meaning that having taken the inch, they have no reason to balk at pushing their luck.

Even as we speak, conservatives are still trying to push the same regulatory dismantling that got us into this in the first place, and social decoupling of corporate profit seeking from social-economy that leads to industrial revolution excesses, etc., etc.

The Reaganesque vision of corporate institutions isolated units of capital formation above the petty concerns of life, liberty and happiness, as innocent victims of a parasitic regulatory state, is now firmly established as fallacy - as long as the wreckage was confined to working class stiffs being stripped of their jobs and pensions, farmer stripped of their land and living, and pockets of abused and impoverished subcultures popping up all over, international or otherwise, the collateral damage was deemed acceptable, and they could be gaffed off as victims of their own lack of ambition - now that stockholders and investors have gotten a bloody nose, perhaps some rethinking about the whole thing might occur - see moral hazard, above.

So far, I'm seeing signs of this, but I also see the "take the yardstick" crowd huddling and working in their next move, and I suspect they'll try to retake some of the yardage they've lost the second things ease up a fraction.

 

[dr_mabeuse]

Suppose Chinese researchers get close to an "end-to-end solution". They make cheap hydrogen cars, and develop compact wind-turbines that transform filling-stations into electricity-generating/hydrogen-producing centers, or something. Once they have decided what that technology will be, they have the economy of scale to effectively dictate hydrogen (or whatever)-power to the rest of the world. They'll have a huge head-start on the manufacture and expertise in the field, and much of the profits produced by a burgeoning new market. Corporate China.

That's possible, but as far as I know, the Chinese government spends like zero on basic research and they don't have the R&D economies of scale in their "private" sector to undertake any project that big. They're still using coal-fired technology from the 50's to generate electricity, and I don't see any rush to change things.

JBJ'a right in that: the Chinese are great manufacturers and reverse engineers, but their flair for innovation and R&D is like nil. They're not a society that rewards initiative and risk. They prefer to manufacture what they know will sell rather than embark on speculative ventures.

It'll take a massive shift in culture and psychology to change that. I think we'd see a more adventurous culture in India, which isn't so bogged down in state control.

 

[WRJames]

We have an opportunity to fix a few things in the economy. Whether or not we have the collective courage to do it is questionable. The reaction to the attempt to help people in foreclosure shows just how selfish and self righteous the American public is at core. We may have to sink very deep into a depression before that attitude changes.

I think we are going to see significant deflation, unemployment up over ten percent, maybe as high as fifteen or twenty. As for China -- they are headed for even more trouble than we are. Their whole economy is going to collapse like a house of cards and the government will go down with it, or it will revert to a grim military dictatorship.

Pakistan is going to dissolve completely, and the US and India will be allied in a desperate attempt to restore order to the region. Military spending and disruption of our third world competition will bring the economy back to life again. That's assuming we don't get nuked in the process.

 

[trysail]

Government regulation and intervention have NEVER prevented bubbles and the operation of the business cycle. The collapse of economic bubbles has always been followed by false prophets and manipulative opportunists promoting painless quack remedies. The mountebanks never fail to claim the efficacy of their solutions when recoveries occur— as free market economies inevitably do— after the excesses that created the bubbles are purged naturally by operation of markets. The promoters of the simple fixes are as dishonest as the first set of schemers— merely another set in a long line of charlatans, foolish dreamers and would-be dictators.

In the latest episode, demagogues railed and browbeat and threatened and harangued and strong-armed and bullied— anybody with a pulse has a god-given right to a mortgage. Bankers lost their minds and "bought" their own pitches. Greenspan lowered rates to irresponsible and unconscionably absurd levels— all in the name of a quick and pain-free solution to the tech-bubble-insanity and 9/11. The media whooped and hollared about how everybody was getting rich flipping houses. Gurus proclaimed that residential real estate prices never decline. Result: the lemmings drank the Kool-Aide and produced another old-fashioned bubble— just like the tech stock insanity of 1997-2000, just like the commercial real estate madness of 1986-1989, just like the Nifty Fifty of 1966-1972, just like the conglomerate madness of 1966-1968, just like the South Seas bubble of the 1720s, just like the Tulip Bulb insanity of 1636.

The business cycle is and always will be. If you believe otherwise, I've got a bridge I'd like to sell you.

http://en.wikipedia.org/wiki/Recession_of_2001
http://en.wikipedia.org/wiki/1973–1974_stock_market_crash
http://en.wikipedia.org/wiki/Recession_of_1958
http://en.wikipedia.org/wiki/Recession_of_1953
http://en.wikipedia.org/wiki/Recession_of_1937
http://en.wikipedia.org/wiki/The_Panic_of_1907
http://en.wikipedia.org/wiki/Panic_of_1893
http://en.wikipedia.org/wiki/Panic_of_1890
http://en.wikipedia.org/wiki/Panic_of_1884
http://en.wikipedia.org/wiki/Panic_of_1873
http://en.wikipedia.org/wiki/Panic_of_1866
http://en.wikipedia.org/wiki/Panic_of_1857
http://en.wikipedia.org/wiki/Panic_of_1847
http://en.wikipedia.org/wiki/Panic_of_1837
http://en.wikipedia.org/wiki/Panic_of_1825
http://en.wikipedia.org/wiki/The_Panic_of_1819
http://en.wikipedia.org/wiki/South_seas_bubble
http://en.wikipedia.org/wiki/Mississippi_Scheme
http://en.wikipedia.org/wiki/Tulip_bubble

http://en.wikipedia.org/wiki/Austrian_Business_Cycle_Theory
http://en.wikipedia.org/wiki/Business_cycle
http://en.wikipedia.org/wiki/Extraordinary_Popular_Delusions_and_the_Madness_of_Crowds

 

[DeeZire]

Suppose Chinese researchers get close to an "end-to-end solution".....

http://www.npr.org/templates/story/story.php?storyId=99286134

The Chinese are already rolling out an electric car/recharging system for the USA a year or two ahead of the American manufacturers. With a situation like that, it's usually the first one out of the chute that wins the market - especially with an integrated system that requires infrastructure. The infrastructure for the Chinese cars would be charging stations enabling a 50% recharge in ten minutes, as opposed to a full recharge taking 9 hours via a wall socket at 110 volts.

 

[dr_mabeuse]

The business cycle is and always will be. If you believe otherwise, I've got a bridge I'd like to sell you.

So you don't see any difference between what's happening now and a normal cyclical recession of the past? You don't see globalization and the loss of American jobs as major factors driving this downturn? You don't see the toxic loans poisoning mortgage-backed securities as a novel situation? Or the credit crunch?

Personally, I don't think we've faced anything like this before. This is more than the collapse of the housing bubble. This is world-wide systemic toxicity.

I've got another reference from Wiki: this one on jobless recoveries. I think when and if we recover, that's how it's going to be, and it won't be good.

 

[JAMESBJOHNSON]

DOC

Youre right, this one is different.

It's different because the world used the USA as a safe haven for its money and we pissed away every nickle they deposited.

My town has about 300,000 people and a tax revenue deficit of 30 MILLION Dollars. Thats about 100 Dollars per person. And next year it will be much worse because real estate is deflating, unemployment increases every month, and spending has ceased. The building department fired just about everyone because new construction died. People stopped buying gasoline, so the road crews are next.

The paper featured several articles, today, about why the economy is worse than we're told. If GM gets the money it wants, it still plans to close 5 more plants. Car sales are in the toilet. According to the paper GM cant get a commercial loan because the banks wont loan money.

 

[Dragonlipz]

Chicken little, the sky is falling!!!

This sidebar of opinion/BS is interesting in that the folks here care enough to post about their: concerns, fears, anxieties, predujices, and, in doing so, open themselve up to some major league critcism about their intelligence (or lack thereof!), sexual prowess (xx xxxx xxxxxxx!) or historical perspective (xx xxxx xxxxxxx!).
I'm not sure if I'd want any one of you next to me while I was on patrol in the Mekong - or Bagdad for that matter - but I'm glad that you're expressing your hopes and fears in a free society. Money, power, and influence will always be corrupt but know that it takes a while for the new bosses to learn the ropes......

My dad, a first-gen, big-city, catholic italiano white boy always said "New crooks never steal as much as old crooks."

Ciao

 

[sr71plt]

This sidebar of opinion/BS is interesting in that the folks here care enough to post about their: concerns, fears, anxieties, predujices, and, in doing so, open themselve up to some major league critcism about their intelligence (or lack thereof!), sexual prowess (xx xxxx xxxxxxx!) or historical perspective (xx xxxx xxxxxxx!).
I'm not sure if I'd want any one of you next to me while I was on patrol in the Mekong - or Bagdad for that matter - but I'm glad that you're expressing your hopes and fears in a free society. Money, power, and influence will always be corrupt but know that it takes a while for the new bosses to learn the ropes......

My dad, a first-gen, big-city, catholic italiano white boy always said "New crooks never steal as much as old crooks."

Ciao

All of which puts you right in there with the rest of us, of course.

 

[midwestyankee]

http://www.npr.org/templates/story/story.php?storyId=99286134

The Chinese are already rolling out an electric car/recharging system for the USA a year or two ahead of the American manufacturers. With a situation like that, it's usually the first one out of the chute that wins the market - especially with an integrated system that requires infrastructure. The infrastructure for the Chinese cars would be charging stations enabling a 50% recharge in ten minutes, as opposed to a full recharge taking 9 hours via a wall socket at 110 volts.

Actually, it's not usually the first one out of the box with a completely new product that succeeds. For example: IBM introduced the first PC in the early 1980s. Armed with a formidable amount of name recognition (bear in mind that IBM was synonymous with "computer" in those days), very deep pockets, and a very solid product, IBM was expected to dominate the market for personal computers. Think again: the IBM PC gave way to many "imitators" only a few years later.

While it's entirely possible that the Chinese plug-in electric car will do very well, almost no Americans have ever bought a vehicle manufactured in China. My money will be on firms like Toyota, Hyundai, and Kia to do better than the Chinese—at least in the short run.

 

[amicus]

Worst case scenario; as we are all fond of saying.

http://www.capmag.com/article.asp?ID=938

EAST MINUS WEST EQUALS (=) ZERO: RUSSIA'S DEBT TO THE WESTERN WORLD by Werner Keller (Hardcover - 1962)

Friday, on Fox, the Glen Beck show, I was somewhat taken aback to hear words I had spoken forty years ago being spoken again, and even quoted, from works I published a generation ago.

I was a trifle early predicting the downfall of the United States, but it seems others have picked up the torch in my national absence.

East minus west equal zero is an old book that outlines the bankruptcy of socialism; that it can exist only with the participation of the production and the wealth of the west, Capitalism, so survive.

Taking into consideration the policies of this new administration in America on top of the global retraction in the financial and economic market place, some curious scenario's were presented in that program on Fox.

One, that the United States can no longer afford to act as Policeman to the World, and will begin decreasing international military presence all around the world. This minimizing of the military is a typical Democrat platform and has been voiced as well by this one.

While the withdrawal of US forces from global influence will come as welcome news to many, the end effect will be violence and bloodshed on a huge scale that will come to active conflicts all over the world.

Mexico is about to become a 'drug nation', as the government is weak and an upheaval is expected in the near future.

With the absence of US support, the global market place will shrink. Isolationism is already a plank in the platform of the new administration.

With the export market declining, US business will continue to decline, inflation will rise as will unemployment and the interruption of crude oil imports from Mexico and the Arab States will bring about a severe energy crisis in the US and lead to further retractions in the economy and a falling standard of living.

Gated communities will become widespread and act as fortresses against the gang warfare that will spread from the inner cities to the suburbs and outwards.

Infrastructure, roads, power grids, water supplies, all will be under assault by the 'gangs' of drug cultured crazies and disappointed minorities who will discover that government cannot answer all their needs.

Social Security checks will falter and stop, as will Veterans Pensions, Pensions in general, and the cessation of Medicare payments will drive the medical profession into bankruptcy.

Martial Law will be invoked and our lovely lefties here on the forum will finally get the collectivized society they have dreamed of.

I hope you like it.

Amicus...

 

[Le Jacquelope]

I think you're about right. Expecting the private sector to come to the rescue during the present crisis is fallacious when you consider they're sending their jobs overseas as fast as they create them. All the gains in the private sector now go toward helping China, India, and Brazil.

No one saw that globalization actually is a zero-sum game, but it is. The third world will get richer at our expense, and we'll get poorer in the process. The only kinds of jobs that will stay in America are health care, auto repair, and sex worker. (Infrastructure too, which can't be outsourced.)

On the other hand, our strength is in the free market for financial services and invention, which China can't match with their regulated economy. That might save our asses yet.

^^^^
Let
us
pray.

 

[trysail]

Actually, it's not usually the first one out of the box with a completely new product that succeeds. For example: IBM introduced the first PC in the early 1980s. Armed with a formidable amount of name recognition (bear in mind that IBM was synonymous with "computer" in those days), very deep pockets, and a very solid product, IBM was expected to dominate the market for personal computers. Think again: the IBM PC gave way to many "imitators" only a few years later.

While it's entirely possible that the Chinese plug-in electric car will do very well, almost no Americans have ever bought a vehicle manufactured in China. My money will be on firms like Toyota, Hyundai, and Kia to do better than the Chinese—at least in the short run.

Correct-a-mundo! Think Netscape. Think AOL. Think Lotus. Think Visicalc and WordPerfect. Think Osborne... and a thousand other examples, including the automobile industry in its nascent years. While it has some elements of accuracy, the so-called "first mover advantage" has frequently been greatly overestimated.

Amazingly, electric cars actually require electricity to operate and if you think wind power or solar are panaceas, you need to break out a calculator while referencing a table of energy conversion factors.

 

[sr71plt]

I'd rather not think large green font. That gets awfully tiresome. (and screamy.)

 

[amicus]

And the new administration is giving, 'stimulus' to those 'green' industries that produce Electric Cars which are already subsidized by State and Federal funds?

Shhhhh...don't tell anyone they run on energy currently created by coal fired plants, over half, which they don't want, by hydro electric, which they won't build and are actually destroying, by Natural Gas, which they don't want, and when push comes to shove...and it will...then wat?

Oh, the new administration does not have an energy policy?

Really?

Who'da thunk it?

Amicus...

 

[Le Jacquelope]

And the new administration is giving, 'stimulus' to those 'green' industries that produce Electric Cars which are already subsidized by State and Federal funds?

Shhhhh...don't tell anyone they run on energy currently created by coal fired plants, over half, which they don't want, by hydro electric, which they won't build and are actually destroying, by Natural Gas, which they don't want, and when push comes to shove...and it will...then wat?

Oh, the new administration does not have an energy policy?

Really?

Who'da thunk it?

Amicus...

We now have solar technology that can produce power at night. Plus we have pebble bed nuclear power.

You really think that coal fired or natural gas power is the pinnacle of technology? Really?

 

[amicus]

Damn, I left out Nuclear that produces 20 percent of our electricity?

My omission.

Another industry that has lain idle for nearly 40 years and under this administration....I will send you a bouquet of red roses if there is a single plant built.

Amicus...

 

[xssve]

I've got another reference from Wiki: this one on jobless recoveries. I think when and if we recover, that's how it's going to be, and it won't be good.

We've had three jobless recoveries in a row now.

 

[xssve]

Correct-a-mundo! Think Netscape. Think AOL. Think Lotus. Think Visicalc and WordPerfect. Think Osborne... and a thousand other examples, including the automobile industry in its nascent years. While it has some elements of accuracy, the so-called "first mover advantage" has frequently been greatly overestimated.

Amazingly, electric cars actually require electricity to operate and if you think wind power or solar are panaceas, you need to break out a calculator while referencing a table of energy conversion factors.

Of course it also helps if you actually have the manufacturing capacity.

You need to break out the calculator while referencing a table of transmission capacity, since it will be a race to see whether sudden increases in demand will cause the cost of electricity to skyrocket, or crash the grid first.

http://www.aip.org/tip/INPHFA/vol-9/iss-5/p8.html