I guess I'm part of the problem

Ah, "value."

I think we're talking about the same thing, but you are approaching it from the ground up, saying that workers should take voluntary pay cuts.

I'm approaching it from the top down - saying that if companies move all their operations overseas, and fire all the US workers, the *market* for their goods and services (those same individuals who used to work for the US companies) will basically dry up.

At your end you see wages being depressed, because of the glut of unemployed workes. At my end, I see prices being depressed, because nobody want to by the cheap stuff the companies try to import.

Kinda looks like deflation, and depression to me.

Jim

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Didn't the last one start with a trade war too?

Best regards, Spehro Pefhany

Yes, and ended with a big war, WW2

Likely a formula for success in raising your daughter, Jim. The garbage on TV these days is mind numbing, about the same level of quality as the advertising.

Your library runs seem to reflect the attitude of those that have been educated. The typical run made by many would be for beer and videos! :-) In our household, we're more inclined to listen to some Monk or MJQ with leisure time. We might even toss in some Sinatra or Nat King Cole.

While I read books, I generally am seeking particular information when I do. I think by poor study habits, and the fact that I was not a good student is reflected in my reading habits, even now. Susan enjoys reading, though, and does so every night before going to bed.

Harold

Thanks, Gary. I don't claim to be any kind of financial wizard, but what we do seems to work for us. I attribute the overall success to having avoided the debt trap, and being married to a fine woman that is not in competition with the human race.

We pay cash for everything. That includes new vehicles, which we do not buy yearly, choosing instead to "drive them until they drop". We're not concerned about how we may look to "The Smiths", especially when competing with them would keep us hopelessly bound in debt. Yep, life is good, and yours can be, too, Gary.

I wish you well with your upcoming retirement. I can say with total honesty, I've never regretted retiring when I did, and I have enjoyed, beyond words, my retirement days. I earned them by working hard and long. The joy of being retired is the reward for having done so.

Harold

Not until the last job has been shipped to India, anyway! :-)

I rest my case!

Harold

Now I see it from your eyes, and, yes, we are both saying the same thing. There's no way in hell we can survive with things as they are. For workers to come to terms with the fact (yes, it is a fact, almost to the man, we are all overpaid when it comes to our VALUE) that we are not competitive in the world market and will lose our jobs as a result if we do not adjust our expectations and our hourly rate, removing the advantage corporations are now enjoying by moving to foreign countries.

Ed seems to ridicule my suggestion that the jobs are headed for other countries, something that baffles me no end, for just as I'm typing this, Susan just brought to my attention the fact that AT&T is shipping work to India because of the lower cost of doing business there. It was just mentioned on the news. I have no clue what will be shipped, but, according to Susan, they made explicit mention of the fact that it was cheaper to go to India than to remain here, at least with that particular project. Sigh!

Harold

Well we do that too on occasion. It used to be that when my daughter was very small, that was the ultimate figure of merit, being able to get her in bed in time for us to sit and watch a video. That happened once a week, maybe!

Now we manage to watch, on average, about 1/4 of a film per night. This week it's _The_General_.

But hey, you're reading. That's what counts. Peekskill has a nice library, and it's within walking distance of our house, when it's not pouring rain (it is).

I never did seem to figure out *any* study habits. Just read the stuff, do the problem sets. If you could do the problem sets, there was really no need to go to class.

Jim

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But this is something that will happen on its own. The market will 'give the pay cut' if it's going to happen. There's no need to rush out and volunteer!

How odd, because Ed's comments on this subject, which began nearly a year ago, made it painfully clear that he was predicting exactly *that* - a departure of manufacturing jobs to china. He's been saying that all along, and I quote his "1/20th" number almost every day. Frankly it seems like *every*

But there is no head-in-the-sand effect with any of them.

That's right, Verizon is laying off and buying workers out. Will the work still get done? Yes, but offshore wherever possible.

You can be darn sure that the laid off verizon workers will

I personally think that after 10 years, the overall equilibrium in the economy will be much clearer. Until then, it's going to be a bumpy ride.

Jim

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I didn't let doing the problem sets interfere with anything. Do them or not, I didn't study. I'd do it in a different way if I had it to do over, assuming I could take a brain with me on that trip. I'd likely do it all over the same way otherwise. Some people never learn! :-)

Harold

Oh, but there is! To preserve the job is the reason. If that doesn't matter, then I agree. I offer you the steel industry as an example. Assuming we could suddenly become competitive, and wanted to be back in the market place, how would we? The industry is largely gone now. Gone to other countries, likely never to return in our life times. That might have been avoided had workers and management had a different attitude.

Agreed, and your comments about the engine, that would have been made in China, is helping me see things slightly differently. Given enough time, perhaps this whole thing will iron itself out just fine. I can't help but think that our country went through something similar to this as it developed. State against state, perhaps?

Harold

I didn't hear Harold say those jobs are headed for other countries. I thought he said that we have to drop our wages to compete with them.

A lot of the jobs have already left. There's a range of opinion on this, but the median opinion among economists right now seems to be that, of the 2.7 million US manufacturing jobs that have been lost over the past three years, between 500,000 and 800,000 of them have been lost to low-wage countries, primarily to China. The rest have been lost to recession and the collapse of a capacity bubble.

But I don't see any way that wages are going to drop drastically. The Chinese are competing in only a few small segments of our economy. I doubt if they're actually in competition with more than maybe 15% of our workers. The US economy is exceptionally flexible and it seems much more likely that people will simply find other work before they'll work in manufacturing for a fraction of the present wages.

I worry more about the social structure of an economy that doesn't provide the entrepreneurial opportunities and the good wages provided by a strong manufacturing base. Those jobs will continue to drain away, inevitably, perhaps. But the natural process would be a slow movement. The radical surges of imports we're experiencing aren't part of any natural evolution.

BTW, Robert Rubin (former administration economist and one of the top two or three policy-type economists in the world) was on Charlie Rose tonight, and he had some surprising things to say about China's trade situation. He says that some economists on the ground in Asia expect China to run a trade

Ed Huntress

What we have done is visit the local tape and DVD rental places that go out of business. Often the good shows are new or once played. Typically the ones worn out are not our type of movie.

Our only fear is obsoleting of CD in 5 years when is DVD ? and VHS is dying now ? Hum.

Martin

Pick yer pony, take yer ride. A business must be competitive to survive. Every individual is a business even if he/she works for an hourly wage providing value for compensation received. It's up to each to deliver value commeasurate with compensation and with success of the enterprise. If they can't or won't do that, they're not competitive or earning their keep. Life lurches on.

Once a biz is viable, then those that run it can choose how the rewards of being competitive are distributed. They can choose to greedily exploit the wage-earners or they can share the wealth -- but the wealth must first be won in a competitive world market,

Many U.S. corporations still do that quite well, most of them fairly small and privately-owned so they're insulated from Wall Street greed.

We surely should provide for the infirm, disadvantaged and unfortuate to the extent we can do so as a wealthy nation with a healthy economy. But life is competitive, now on a global scale where there are hungry people eager to compete and getting better at it every day.

Leaders must work to chart the course, followers must work to help make it happen. Ohshitohdear poor-me whining won't get it done.

I may not have said that in any particular post, but I have said it, and it is the basis of my suggestion that we all must learn to compete by lowering our excessive (read that unearned, or more than value) wages, but that would obviously only apply to those that wish to keep their jobs, even at lower pay. If one chooses to sit with their thumb up their butt, unemployed, still talking about the good old days when they made money hand over fist, because they helped their employer send his/her job over seas because they demanded a raise when they were already overpaid, then perhaps it wouldn't apply.

Nor do I, especially if they have to drop to the same level as the developing countries, but surely we could take a more realistic approach and pay workers appropriately for their contribution. That could encourage corporations to keep some of the work here.

I still maintain that we are paid wages beyond those that we earn. Unrelated to manufacturing, I've offered examples, one of which is UPS drivers that make near $30/hr., assuming it's true. If it is, how in hell can anyone justify wages like that when they have little, if any, training, and the job is far from a skilled profession or trade. The main point is you or I could learn to do their job in a day. Do you think anyone out there could have learned tool making over night? Could I take your job of writing from you? Could the man off the street push me out of my job (as if I have one!) because he could do it cheaper, yet he's never done it before? Some things are unlikely, but not this one, because it is a resounding NO. It takes years of experience and training to do work of that nature, at least to do it properly and achieve success routinely. Once again, if anyone can easily take any given job away from another, it isn't worth much. I don't think a delivery van driver is worth as much as a tool maker, nor a well trained machinist. They certainly aren't worth more, yet they are paid far more. Does that make sense?

Harold

Ive heard from reliable sources that the next medium will be solid state storage. Much akin to those tiny USB tags that are now being used for portable hard drives. Key ring sized

Gunner

Antiquis temporibus, nati tibi similes in rupibus ventosissimis exponebantur ad necem.

Ok, but maybe you have to include the countries that are syphoning off the more service, software oriented jobs, like India? And don't forget, it's often quoted that the 15 percent number you mention above is direct manufacturing jobs - but there's another two or three service jobs that go along with one of those. So a bleak-minded individual might say those service jobs will go too, so the real number might be 30 percent or more.

I would think that one think the present adminstration should do here is to keep changes from happening too rapidly - they should do all in their power to be *true* conservatives. Instead I see things like the proposed federal rules that will pre-empt all the state banking regulations, and put the banks beholden only to the weaker federal laws. Who thought that one up?? It sounds like a recipie for 1929 all over again.

That, and the fact that the largest year ever for bankrupcies has been - last year.

Jim

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I already factored in the 3.28 service jobs/manufacturing job that the DoC has used in some of its reports. I'm basing my guesstimate on the actual segments of manufacturing and services in which the Chinese actually are competing with our domestic manufacturers.

Like the real figures on Walmart's Chinese imports, the facts of this don't jibe well with the common perception. If you want to see a profile of where the competition is, take a look at the product breakdown of China's exports to the US. It's somewhere in the DoC website.

Easier said than done. That's the kind of thing that stimulated the "export credits" plan that Warren Buffet wrote about recently.

My guesses are that a way to play CD's will be around for a long time. Mostly because it is trivial to make DVD players also play CD's. DVD's as such may not stay around as long. I noted that the Chinese are going to another standard for their Video discs to save big bucks on royalties but also technically better recordings. But I think this is all software changes and the player is the same. If that is correct, it will also be trivial to have machines that play CD's, DVD's, and EVD's.

My guess is that Solid State will not displace optical, regardless of what your friend predicts. Oh I do believe that Solid State will become much cheaper and would displace optical if optical would just stand still. But that is kind of like solid state displacing disk drives. Disk drives keep getting cheaper and bigger. It will be a while before Solid State can provide 100 gigabytes for $100, and by then disks drives will be providing terabytes for $100.

Dan