Are the good times over?

Town Hall ^ | April 30, 2003 | Paul Craig Roberts

[A. Pole]

America's high standard of living makes it difficult for U.S. pay to adjust downward quickly.

Free market bump.

[JmyBryan]

Or ... if everyone switches to the Euro as the reserve currency, the US dollar could actually gain in value.

But then that wouldn't be worth worrying about, would it?

[snopercod]

Not to worry. America still has plenty of lawyers.

[michigander]

Darn, that mammon worship can be a beach.

[alisasny]

America's export of high-wage jobs to low-wage countries.

Wow, this just started 27 months ago, I am shocked I tell you.

Much of this loss is from the fall in profits

YOu mean the new sheriff in town didn't do an nod and wink to wall street??

Totally shocking... Perhaps if the former administration would have took the computer industry serious they would not have allowed bootlegged software..but what do I know.

[Poohbah]

As long as cheaper and equally productive foreign labor can be hired, a growing number of Americans will find their hopes and expectations frustrated.

And there's the problem, in a nutshell.

Of course, you COULD agitate for a nice, destructive war overseas, and wipe out the oversupply of labor and capital assets THAT way.

BTW, a lot of Indian software companies are starting to complain--apparently, contracts that were heading to the subcontinent are being cancelled for nonperformance.

But if American coders produce bloated, buggy crapware at $80/hr loaded, and equally bloated, equally buggy crapware can be obtained for $40/hr loaded...the cheaper crapware will be the winner.

[Balto_Boy]

The labor savings allow U.S. firms to be more price-competitive, or the savings flow directly into profits, thereby raising stock prices and managerial bonuses.

So why are profits dropping? Could it be that the companies can't sell their products because their consumer base happens to be the Americans they are laying off?

[mlocher]

this guy doesn't get it. we are occupying iraq so we can get cheap oil to keep our standard of living high. (smile).

[Feldkurat_Katz]

So why are profits dropping? Could it be that the companies can't sell their products because their consumer base happens to be the Americans they are laying off?

Well, just because our executives have MBA degrees, that doesn't mean they know basic economics, does it?

[Nick Danger]

A stupid person could be forgiven for wondering why a guy who says...

• Persistent large trade deficits, such as ours, can put pressure on a country's currency.
• As long as the dollar is strong, the United States cannot close the trade deficit by exporting more and importing less.
• A dollar collapse would shorten the adjustment period by raising the cost of both foreign labor and imported goods and services, thereby reducing the cost advantage of offshore production.

... also says this: "Fortunately for us, the U.S. dollar is the world's reserve currency. This means that the United States can run large trade deficits for a long time before the deficits force dollar devaluation."

It seems to me the solution is staring him right in the face, and it the normal thing that a market would do all by itself to redress the imbalance. But instead of thinking that having the market "do its thing" and fix the problem is a Good Thing, the author joins in this baffling blizzard of BS we get from all over the place about how there is something just wonderful about having a "strong" dollar. Hello? The "strong dollar" is what makes US products appear overpriced in foreign markets; it's why our export sales aren't what they could be. The "strong dollar" is what makes imported goods (amd services) seem cheap here. That's nice, but not if it puts everybody here out of work. What is so hot about a "strong" dollar? My feet have a "strong" smell, too... but that doesn't mean it's good.

[Feldkurat_Katz]

we are occupying iraq so we can get cheap oil to keep our standard of living high. (smile).

I am shocked - Shocked! to find that we are occupying Iraq for reasons other than bringing democracy to the people of Iraq.

[Chancellor Palpatine]

Is crapware the successor term for bloatware? You know, where a $400 program does 4837 separate functions, 3593 of which no sane customer ever asked for, wanted, or can find any use for in the first place.

[BibChr]

Dang!

There were good times?

Where was I???

How come NO ONE TOLD ME????!

Grr-r-r-r!

Dan

[Poohbah]

Crapware = buggy and tempermental. Of the 4,837 separate functions, only 3 work in the manner they are described to in the operator's manual.

Bloatware:

1. 4,837 functions, 3,593 of which no one wants.

2. 10 million lines of code for a program that prints out "Hello World!"

[NoControllingLegalAuthority]

Exactly. Wal-Mart will be full of cheap merchandise no American can afford because he/she will be unemployed.

[templar]

Could it be that the companies can't sell their products because their consumer base happens to be the Americans they are laying off?

Nah, couldn't be. That's too simple an explanation.

[RightWhale]

What is so hot about a "strong" dollar?

Means you can retire abroad and live like a king on pennies a day, and foreign cars and wine are cheap, too. Based on these criteria, one might not consider the dollar to be particularly strong.

[Dr. Frank fan]

There were good times? Where was I??? How come NO ONE TOLD ME????!

The good times were precisely between 1993-2001. And you are mistaken that no one told you.

Bill Clinton was on TV telling you, every day, how great the times were because of him. He even personally "created" a hundred thousand (or some other nice, round number) new jobs. He also personally "oversaw" the longest, sustained expansion in peacetime history.

Starting to ring a bell yet? ;-)

[RightWhale]

He even personally "created" a hundred thousand (or some other nice, round number) new jobs.

Clinton-Algore promised 30 million new jobs. We should start seeing some of those new jobs any day.