Paul Krugman: Crisis of Confidence

People are not happy about the economy:

Crisis of Confidence, by Paul Krugman, Commentary, NY Times: The Survey Research Center of the University of Michigan has been tracking American economic perceptions since the 1950s. On Friday the center released its latest estimate of the consumer sentiment index — and it was a stunner. Americans are more pessimistic about their situation than they have been for more than a quarter century.

Meanwhile, a recent Pew report found that the percentage of Americans saying that they’re better off than they were five years ago is at its lowest level in 44 years of polling.

What’s striking about this bleak mood is that by the usual measures the economy isn’t doing that badly — at least not yet. In particular, the official unemployment rate of 5.1 percent, though rising, is still fairly low by historical standards. Yet economic attitudes are worse now than they were in 1992, when the average unemployment rate was 7.5 percent.

Why are we feeling so down?

Our bleakness partly reflects the fact that most Americans are doing considerably worse than the usual economic measures let on. The ... percentage of prime-working-age Americans without jobs ... is historically high. Gross domestic product is up, but the inflation-adjusted income of the median family is probably lower than it was in 2000. ...

A major reason we’re feeling so down now is that for working Americans the boom never did come back. Job creation in the post-2001 recovery was pathetic by Clinton-era standards; wages barely kept up with inflation. Instead, corporate profits and the incomes of a tiny elite surged — sucking up so much of the economy’s growth that only crumbs were left for everyone else.

Now the boom that wasn’t has gone bust — and Americans, understandably, have lost confidence in the prospects for a return to real prosperity.

They have also, I’d suggest, lost confidence in the integrity of our economic institutions.

Early this decade, when the great corporate scandals broke — Enron, WorldCom, and so on — I expected big-business corruption to become a major political issue. It didn’t, partly because the march to war had the effect of changing the subject, partly, perhaps, because Americans weren’t ready to take a broadly negative view of the system that brought them the previous decade’s boom.

But my impression is that the subprime crisis — with its revelation that titans of finance were dealing in funny money and its tales of failed executives receiving hundred-million-dollar going-away presents — has resurrected the sense that something is rotten in the state of our economy. And this sense is adding to the general gloom.

The question is, can the next administration end America’s malaise?

Some of the causes of poor economic performance since 2000 are probably beyond any administration’s control. Raw materials were cheap in the 1990s, but in the years ahead the rise of China and other emerging economies will place increasing pressure on world supplies of oil, copper and so on, no matter what the next president does.

But reinvigorated regulation could help restore confidence to the financial system. A return to pro-labor policies could help raise real wages. Pro-competitive policies — which are not the same thing as giving powerful businesses whatever they want — could help America regain its leadership in information technology. In other words, there’s a lot that could be done to perk up our sagging confidence.

That won’t happen, however, unless the next president is someone who understands what went wrong. And right now, that doesn’t look at all certain.

Comments

[cm]

At the risk of echoing recent prior threads, unemployment and various poverty related of social program statistics don't tell the full story, as they to an extent measure yes/no phenomena.

Things have been slipping and/or become more precarious for people who are neither unemployed nor technically poor. We have, among other things, fingered the defining down of jobs from regular employment to temping/contracts, scrapping of pensions, benefit reductions, and declining purchasing power at the pump, grocery store, education accessibility, etc.

Sentiments and personal confidence are majorly influenced by forward-looking expectations of stability and perspective vs. volatility.

[Bruce Wilder]

I am not at all sure that Krugman fully grasps what is going on.

Bush may have been, by any of several standards, one of the most unwise of Presidents. But, he has also been one of the most powerful -- mostly, he got what he wanted, on behalf of the people he wanted to get for. Oh, maybe not the fantasy island version, where the Iraqis were insanely grateful. But, the version where his "base" got the money -- he succeedly mightily.

The elite -- for the lack of a better word -- doesn't really care if America works for most people, as long as America works for them.

I am really not sure if there is any good way out of where America is. The Washington Post reporter, who cannot distinguish between truth and truthiness. The Berkeley law school dean, who cannot figure out why he should fire a lawyer, who facilitated torture. "No one could have anticipated" . . . [fill in the blank] terrorists flying planes into buildings, an insurgency in response to long-term occupation of an Arab country, an orgy of fraudulent and predatory lending driving the largest housing bubble in history right into financial crisis.

We don't expect anything from elite anything. We don't expect integrity or accountability. Bush has put innocent people in jail to further his political agenda. Bush has tortured people to further his political agenda. Bush has destroyed a Middle Eastern country to further his political agenda. Bush has seriously damaged American prestige, American alliances and the American dollar, to further his political agenda.

The Democratic Congress could not figure out how to stop an idiotic President. What is that about? I fear that is about a whole lot of officeholders on one side of the aisle, who are actually evil, and, on the other side, are just complacent opportunists.

I was watching the hoo-haa over Obama's "bitter" remark, and I have to wonder if we have lost our marbles. Hillary Clinton did nothing to repair my esteem for her. But worse, I watched various reporters pursue gotcha journalism in the most cynical way imaginable -- in a case, where it is not even clear that there is a gotcha. They just rolled right into it, like it was all carefully rehearsed -- from NPR to CNN, they just did it, mindlessly. Maybe, Clinton is right to just play along -- this is political journalism, and it does no good to fight it or even resist it. It's a sickness.

But, behind the sickness, is a relatively small number of powerful and wealthy people successfully manipulating American politics to make themselves richer, still.

I know where McCain stands. I fear that neither Clinton nor Obama are free of the domination of great, greedy wealth.

[ECONOMISTA NON GRATA]

Bruce Wilder said:

"The elite -- for the lack of a better word -- doesn't really care if America works for most people, as long as America works for them."

Bruce:

The fact is, that in todays "global economy", the "the elite" don't really care if America works at all. All we have to do is jet over to Dubai once we're done raping and pillaging the here in the U S.

You don't really think we're going to hang around here and listen to you're whinning, do you? Hell, I don't know about you but me and my buddies are going to go ski indoors in our little Hermes outfits. Who do you think that they built Dubai for...? Who do you think can afford to live there...?

Best regards,

Econolicious

[a]

"That won’t happen, however, unless the next president is someone who understands what went wrong."

If economists don't understand what went wrong with the economy, why should the next president? Why would he? How would he?

[Gil]

Are Randians dreams coming true? Are the high flying plump middle class Western lifestyles coming to an end? The oh-so-wonderful entrepreneurs are fleeing from the clutches of the evil Western guvmints and trade unions and are finding safe havens in China and India? If the Chinese Government is smart (and I believe they are) they'll give low taxes and regulation for businesses and keep labour cheap. The West can't possibly with this if they hope to keep a middle class lifestyle. The only real way the West can compete is to lower their lifestyles and prices in line with Chinese labourers . . .

[anne]

"If economists don't understand what went wrong with the economy, why should the next president?"

Economists understand quite well what went wrong with the economy, and have been discussing this for years while financial analysts have been taking investing on the basis of what has been going wrong for several years. I would suggest reading Paul Krugman and Joseph Stiglitz and Mark Thoma and Brad DeLong and Warren Buffett among others.

[anne]

We have had a Republican President and Republican Congress that slanted economic policy wildly to business management interests at the mounting expense of employees and consumers and even ordinary shareholders. Fiscal policy has amounted to military spending becoming a continually increasing portion of national income, while social spending has decreased as a portion of national income and per capita social spending has declined in real terms. Taxes have been repeatedly cut, especially for the wealthiest.

[Don Quijote]

If economists don't understand what went wrong with the economy, why should the next president?

You don't need to be an economist to understand what is wrong with our economy.

Let me give a two word answer "Labor Arbitrage", translated in plain English: American Capitalist have been moving high paying manufacturing jobs from the US to third world rat holes where equivalent labor can be had for pennies on the dollar. Move an American Factory (lock, stock & barrel) from Ohio to Shenzen, China, you drop your labor cost by 90% or more and if the factory is slightly less productive you still make out like a bandit. American Capitalist have been doing this since the 80's and pumping out propaganda to keep the middle & working classes in a frenzy about Abortion, Race, immigration & various culture war issues so that they are to busy noticing their economic future being stolen from them.

The only real way the West can compete is to lower their lifestyles and prices in line with Chinese labourers . . .

You can always raise tariffs.

[anne]

"The only real way the West can compete is to lower their lifestyles and prices in line with Chinese labourers . . ."

Rubbish, complete prejudiced fear-mongering rubbish.

[save_the_rustbelt]

"Economists understand quite well what went wrong with the economy,...."

No, I don't think so.

Economists see the world as a vast sea of averages, and over the past decade have missed the distributions within the averages.

Krugman is still having trouble admitting that globalization is hurting workers, although he has tip-toed into that water lately.

Economists do not want to give up their trade dogma.

[anne]

"Krugman is still having trouble admitting that globalization is hurting workers, although he has tip-toed into that water lately."

"Krugman is still having trouble admitting that globalization is hurting workers, although he has tip-toed into that water lately."

"Krugman is still having trouble admitting that dolphins are hurting workers, although he has tip-toed into that water lately."

"Krugman is still having trouble admitting that radishes are hurting workers, although he has tip-toed into that water lately."

Always, the point of being an American is to find a way to blame others for any problem we may admit to having. Problems in America are never ever actually ours.

I say killer giraffes.

[anne]

http://www.nytimes.com/2008/04/14/us/14drug.html?hp&pagewanted=print

April 14, 2008

Co-Payments Go Way Up for Drugs With High Prices
By GINA KOLATA

Health insurance companies are now asking patients to pay hundreds and even thousands of dollars for prescriptions that may save their lives.

[Killer Chinese giraffes are the problem; save the women and children.]

[save_the_rustbelt]

Anne:

Putting bourbon in the morning coffee?

Read Krugman, HE admits he may have missed some trends.

[anne]

A needless immoral $3 trillion war and occupation is no problem, only killer Chinese giraffes. An impossible health care insurance system is no problem, only those giraffes. Tuitions that are increasingly burdensome are no problem. Primary and secondary school education weakness is no problem. Crumbly hard infrastucture is no problem. Turning from conservation and efficiency for decades has been no problem. Growing corn for cars has been no problem. Economic policy designed to increase inequality is no problem.

On and on, the problem for America only comes to killer Chinese giraffes.

[lonesome moderate]

To me, saying that our problems stem from globalization is like saying they stem from increasing oil prices, or an aging population. Whether or not our problems are caused by globalization, anything we try to do to stop it would cause more problems than it would create, just as if we tried to do anything to keep oil prices low, or our population younger. You have to recognize what can be changed, and focus on that.

Also--what Bruce Wilder said.

[lonesome moderate]

Pro-competitive policies — which are not the same thing as giving powerful businesses whatever they want — could help America regain its leadership in information technology.

I don't believe this, and I don't think that Krugman really does either. Indian programmers, and some other types of computer/software engineers, are perfectly good--certainly good enough that an American programmer making five times as much can't really expect to compete. The bulk of IT work going forward will be done in India and similar countries. There will, however, be a number of niches that American countries can defend going forward, mostly having to do with India's poor overall business environment.

This of course leads back to the Krugman's basic point. If we want to keep middle class IT jobs in this country, we need to ensure that our business environment is world class, which means (among other things), efficient and transparent (but not absent) government regulation.

[anne]

http://www.nytimes.com/2008/04/14/world/americas/14colombia.html?hp&pagewanted=print

April 14, 2008

Union Killings Peril Trade Pact With Colombia
By SIMON ROMERO

A surge in killings of labor union members in Colombia is emerging as an issue in the battle over a trade deal.

[Speaking of the theater of the absurd.]

[Noni Mausa]

Quite simply, US problems derive from the well-being of the citizens being of no interest to the rulers -- big business and government. They have deliberately moved to a "bigger slice of a smaller pie" economic model over the past generation.

The parasites have convinced the hosts that all value derives from the parasites, and thus what the nation needed was richer, glossier parasites.

In slow motion, what this amounts to has been a steady policy of treason to the American people.

[bob]

>> Indian programmers, and some other types of computer/software engineers, are perfectly good

There's the problem right there.

Ignorant fools shooting off their mouth about matters they have no knowledge of.

I've been in multiple code reviews of Wipro's product and it looked like it had been written by people with about 2 days of programming experience.

The storys from my other contacts seem to indicate Tata is turning out the same crap.

Outsourcing is about instilling fear in first world labor.

It's not about better products or cheaper products.

[ken melvin]

It ain't agonna happen, and even if it did again, that's more wishful thinking than decision making. Silicon Valley saved our butts for a day and some believed there'd always be another, but what's happening is much bigger. We've exited an industrial age that hired lots of people and it'll never be back and the economies associated will never be back. The exporting of jobs during made for a convergence disaster. A disaster based on ignorance and greed. A combination for a disaster at any time with very little hope of ever in a million of coming out right.

[ken melvin]

It ain't agonna happen, and even if it did again, that's more wishful thinking than decision making. Silicon Valley saved our butts for a day and some believed there'd always be another, but what's happening is much bigger. We've exited an industrial age that hired lots of people and it'll never be back and the economies associated will never be back. The exporting of jobs during made for a convergence disaster. A disaster based on ignorance and greed. A combination for a disaster at any time with very little hope of ever in a million of coming out right.

[paine]

"The (corporate ) elite -- for the lack of a better word -- doesn't really care if America works for most people, as long as America works for them."

exactly
and it has now for close to thirty years
like all those aging commercial passanger jets
about time for an overhaul

[anne]

http://matthewyglesias.theatlantic.com/archives/2008/04/foreign_legions.php

April 14, 2008

Foreign Legions
By Matthew Yglesias

Michael O'Hanlon explains * that the current pace of deployments in Iraq and Afghanistan isn't sustainable. He also notes that the situation in Iraq is "nowhere near an acceptable or sustainable outcome." Under the circumstances, one might think that giving up on the Iraq operation in order to focus on Afghanistan in a sustainable way would be a good idea. But, of course, O'Hanlon believes we need to continue the war in Iraq indefinitely, even though he knows that such a policy isn't sustainable.

The solution, naturally enough, is foreign mercenaries. As he puts it, we need to go into "countries that have a fairly strong pro-American tendency and a very minimal al-Qaeda presence" and try to get their citizens to sign up, with the lure of U.S. citizenship offered as the bait. He gave the Philippines as an example....

* http://www.brookings.edu/multimedia/video/2008/0407_military.aspx

[Beyond any mere insanity.]

[wogie]

Anne:

"Putting bourbon in the morning coffee?"

No, just a little Scotch in afternoon tea.

BTW think I saw one of those giraffes yesterday

says...

"If economists don't understand what went wrong with the economy, why should the next president? Why would he? How would he?"

because "experts" sometimes get bound up by their own orthodoxy, and sometimes it takes an outsider to cut the gordian know or bring fresh thinking to an issue - much as FDR, who actually ran in 1932 vowing to keep the budget balanced, realised that only the government could stimulate the economy to end the depression.

[paine]

once again

the gilman squawcks among us

his trolleration acts apon
the dry wood of our hyper seriosity
like lucifers spark

anne suggests

"... reading Paul Krugman and Joseph Stiglitz
and Mark Thoma and Brad DeLong and Warren Buffett
among others "

to get a better purchase
on the present watershed moment anne ???
or to gleen
what is the best to be done
in this second best of all possible second best worlds ???

i fear none of these souls
are bold enough
and wise enough
and disinterested enough
to meet the challenge

all of em
fail at least one of these three tests

[wogie]

"The solution, naturally enough, is foreign mercenaries"

Back when the draft was being eliminated I used to argue (tongue in cheek) that it was OK for us to have a mercenary army -- after all Gurkhas (sp) are good soldiers, and thy come cheap. It stunned many people. As you may gather, I opposed reliance on a volounteer military, mostly composed of the sons (and daughters) from lower income families. I still do.

BTW I served, and because I was never shot at in anger, didn't claim any GI benefits. It was a privilege to serve; my country owes me nothing

[paine]

"Krugman is still having trouble admitting that globalization is hurting workers, although he has tip-toed into that water lately." = killer han geee raffffs

anne why keep that level of mockery up ???
its indeed not globalization as outlined in theory
that isa menace to america's job force
its globalization as practiced
by america;s own multi national corporations

forget the bush occ and its trillionation for a second
that's for the goo goo side of us all
plenty of time for indignation and moral high horsing
there

but here lets face the facts

competition with low ball producers is a real job killer here

you never say more then generously bind the wounds
and by use of the public purse and credit
rebuild zillion losers
like so many 6 million dollar men

where is the total picture here ???

your part only and partial picture
ignores the source ..
corporate ..american corporate
cross border arbitrage profits
unless you battle that
we lose and lose and lose
at some point even the best
loser rehab system fails
because
folks no longer want to just go out there
and lose again

where's the plausible
win streak for the base job class here
since as the sage sez
no matter what
approximately half of them
must end up below the falling median

[paine]

It was a privilege to serve

wogie

is that some kind of blanket hall pass for uncle sam ???

serve what by how for why

citizens get to define all these

and they are not required to take dictation from
their superiours

i've never found it consoling
that some one faithfully
and with good intentions
served the devil

obviously
we can make certain distinctions here

putting your life on the line is indeed noble
but with the proviso
its for a noble cause

nam and iraq were not noble causes
want to serve

try the fire department
or the farc

[swells]

Well, it seems to me that the political system in the US has pretty much always been gamed to serve the interests of thw wealthy and politically influential. I would argue that any countervailing trend that resulted from new deal politics was a blip on the radar screen that lasted just long enough for new methods of subverting the public interest to be devised. As the power of the central government has grown, the inequality of income distribution has risen. That seems to be factually the case. I am consequently distrustful of calls for more centralization of power. Putting the spoils of political warfare in one place seems just to make it easier for those spoils to be pilfered more thoroughly.

[paine]

"experts" sometimes get bound up by their own orthodoxy"

ivy league pharasees especially

[paine]

"As the power of the central government has grown, the inequality of income distribution has risen"

not so ..at all

the new deal is the best conuter example
if anything we need a greater
focus of power
at the national level
example
if we want both open immigration
and real full employment
( 48 hour job search max for anyone )

then we need to
regulated the corporate sector's
"independent " price making system

we need a federal mark up warrent system
and a warrent trading market

in fact we need it
as much as we need such a system(s)
for utility pollution

[save_the_rustbelt]

Wogie - thank you for your service

Paine - Pharasees - love it

The fastest growing economies these days are those with the widest inequality - the very rich and everyone else (China, Dubai, etc.).

If that is the model for the brave new world we are gonna have some folks picking up pitchforks and storming the walls.

[paine]

"and even ordinary shareholders."
ahh anne
issue the long spoons

[swells]

Paine, how am I supposed to view new dealism as anything other than an outlier, a temporary aberration? Bruce Wilder has said that it lasted about 35 years and then was gutted. Seems to me that there are still significant aspects of it with us but that it has been subverted and its ends have been effectively frustrated. Or is there something about income inequality at present that I am missing? I'm not denying that there is some ebb and some flow to these things, just that, in the long run, priviledge will win out and that piling all that loot in one place makes the looters job a bit to easy.

[anne]

Paine:

"It's indeed not globalization as outlined in theory
that is a menace to America's job force
it's globalization as practiced
by America's own multi national corporations"

What is globalization is subject to policy of small or large countries, so that Vietnam which is an important food exporter but is limiting exports now to be sure to continue to have a domestic food surplus. George Bush however wishes to counter Venezuelan influence by forcing a trade compact with Colombia while union members are steadily being killed as a sort of emphatic means of limiting the problems of collective bargaining.

[lonesome_moderate]

bob:>> Indian programmers, and some other types of computer/software engineers, are perfectly good

There's the problem right there.

Ignorant fools shooting off their mouth about matters they have no knowledge of.

I've been in multiple code reviews of Wipro's product and it looked like it had been written by people with about 2 days of programming experience.

Ah yes, the good old days. I of course don't know Bob personally, but I've no doubt that he's a crackerjack programmer. There's something about the culture of software development that makes gratuitous insults part of the day-to-day practice, and the better a programmer is, the more likely he is to hurl them randomly at anyone who crosses his path (Bill Gates was famous for this). Myself, I haven't written code regularly since before the Indian tsunami hit, but I can assure Bob that red-blooded American programmers are perfectly capable of cranking out garbage too, and that periods of strong industry growth are when you see the highest trash percentage. Busy programmers can make lousy hiring decisions, or simply be totally unable to find anyone qualified, so in boom times you wind up hiring people simply because they "pass the 98.6 test". It happened here during the dot-com boom, and no doubt it's happening in India now.

I don't know how long you've been in the industry, but back in the days before large-scale offshoring half the programmers were Indians anyway, even though we we made them move to this country first. We still have better education and infrastructure here, but Indians in India are nonetheless quite capable of learning to become good programmers, even if the ones you've dealt with personally haven't been among them.

My current employer has brought some of our longtime Indian employees over to work in Silicon Valley HQ, and they have been uniformly excellent. The work from India has been spottier, largely because of the turnover, but it's clear that they have a lot of good people there, many of them doing good work. Yes, it is very easy to spend more on an offshored project than would have been the case here, and some things can't be done here at all. But to use their problems as an excuse for complacency is wrong.

[Alex Tolley]

PK seems to be arguing that the time should be right for a "new deal", but is pessimistic that a new FDR is around to implement it.

BW echoes the thought that we are in a new Gilded Age. Certainly none of the current crop of presidential candidates is espousing any FDR-like ideas or solutions.

Previous empires have taken our current path on their road to eventual fall. It may well be that the events of the 1930's and 40's which resulted in a turn leftwards of the industrial nations of the time is just an historical anomaly, unlikely to be repeated.

[bob]

>> Ah yes...

Well I'm trying to figure out why i should keep reading you considering the quality and accuracy of the "info" in your past post.

I mean slight errors are no problem but you were pretty far off the mark and it seems like you were that far off even though you work in the industry.

Thats a bad sign.

[paine]

"What is globalization is subject to policy of small or large countries, "

there is another half a partner

and the conutries
don't even hold up their half of the sky anne

their partner
the large border crossing private corporations
not only drive their own half on their own behalf
but haunt levitate or torture the other half's behalf

the policy of "countries " is bag jobbed tanked
log rolled bambooozled bombed by proxy
and otherwise set one against the other
or made to sing in chorus
by their bevy
of limited liability
courtiers ravishers creditors and grooms

[paine]

"Paine, how am I supposed to view new dealism as anything other than an outlier, a temporary aberration"

great question

i think you can find other episodes of a public purpose contrary to private ends emerging in earlier era's of corporate muck up

the first progressive/pop age
with its prog tax its fed and its reg agency movement

---the new deal being a second sych age ---

the jacksonian age

fdr and co was not the first nor likely to be the last
effective modifier of commercial and hi fi
" corporate interests"

[hari]

The original sin was not Globalization (as we knew it) but its politicization by this WH for other motives - its war on terror and whatnot.

In principle, globalization literally means frontier-free trading across the high seas.

WTO and its new rules made it possible....until the chickens began to come home to ....

[paine]

in the long run, priviledge will win out

i'd prefer to say
in the long run, priviledge will once again as always before
so get itself in trouble
that
it must ---at least for a period ---
abdicate its hegemony

[plschwartz]

Since we all know about string theory and alternate universes, would any of you anti-globs want to posit a world where Nafta and WTO did not become law, and we continued to exist say at a Reagan-level tariff system.
Do you think the economy and the middle class would be better off?

Me I think we globalized because we had to. IIRC Already there were maquiladoras and textile agreements. We had been fighting a long war on steel imports etc.
Wasn't the Nafta fast-tracked by Bush I and Clintononly followed through?
The big WTO blunder,forgotten in his endless list of blunders was by BushII first letting China into WTO and second getting nothing back from China in return.

[anne]

http://economistsview.typepad.com/economistsview/2008/01/paul-krugman-th.html#c110590908

Thomas Riccardo:

Come August I will Attend Lethbridge College in Canada for their BZEE Certified Wind Energy Program which is a International Standard for Wind Turbine Technicians and Engineers in the Wind Industry.

My Goal is to work in Europe because they are the World Center for Renewable Energy and Germany is at the very Core of this new Renewable Economy.

An Experienced Wind Turbine Technician Salary in Germany may be around $60,000 Euros Yearly which would equal $88,800 Dollars Yearly. The Benefit Package in Germany would cover 100% Healthcare expenses including Eye Care, a Company Pension or perhaps stock options and some Companies are Cooperatives which ownership rests with the local Community and Employees! They receive 50 days off a year including holidays and employees are given a 13th month salary to cover Vacation Expenses. It also covers workers Compensation insurance which if 100% disabled a worker would receive $2700 Euros Monthly+Health Insurance for the rest of their lives.

Vocational Training in Germany is Free and your Paid as you learn the Trade such as with the BZEE Program (10-12 Euros an hour while Training).

College expenses in Germany are Free in Certain States or they charge on average $800 Euros Yearly in other states with poor students getting Government Aid worth $600.00 Euros Monthly, Health Insurance, Free Books, Cheap of free Transit Ticket Prices, 1 euro meals, $200.00 monthly students studio apartments including Electricity and heat.

The Company benefits are worth $23,000 Euros Yearly which equals $36,340 US Dollars.

So the total Wage and Benefit Package for an Experienced Wind Turbine Technician (3 or 4 years) would be $125,000 yearly and the average taxes on Wages would be around 39% or so.

In Germany you also have some write-offs such as having Children, Commuting, etc. so the taxes will vary depending on your family size and so forth. Real estate taxes are very cheap compared to the states and so is House Insurance.

Would a Wind Turbine Technician have a low or high standard of living in Germany?

One more example, BMW has a factory in South Carolina and they pay their workers on average 14 dollars an hour plus 5 dollars an hour in Benefits which equal 19.00 an hour or 38,000 Yearly.

The same German Factory would pay their workers $26.50 Euros ($53,000 yearly) per hour plus $23,000 yearly in Benefits which equals $76,000 Euros a year or $112,000 yearly versus $38,000 Yearly in Carolina.

Total Taxes in South Carlina including State would probably equal 28 % or so not including any land taxes if one owns a home.

The Germans would pay perhaps 38% but they still take come more money and have a much much better benefit package.

[Fascinating.]

[anne]

http://www.nytimes.com/2007/08/03/us/03bus.html

When the bridge in Minnesota collapsed, there was a young day-camp counselor who happened to be riding on a bus filled with children and who had the courage and presence of mind to rescue each child. As the story developed, the counselor happened to be working for the camp having left a vocational school for auto mechanics because the tuition was proving too expensive for continual enrollment. The tuition for the voctional school was a startling $15,000.

[anne]

We seem incapable of thinking rationally, incapable of understanding why German workers, French workers, Swedish workers, Dutch workers are thriving in the midst of a globalized economy where American workers are continually being pressured as we develop ever more barriers to workers competing and living successfully.

[Francois]

Gil wrote:

"If the Chinese Government is smart (and I believe they are) they'll give low taxes and regulation for businesses and keep labour cheap."

Thing is, they're already moving AWAY from this policy, and for a very good reason: social unrest. If there is one thing that the Chinese leadership fears above everything else, this is it. Their history is marked with episodes of upheaval that did away with the ruling elites in a, shall we say, not very subtle way.

There have been a steady stream of violent riots in the interior provinces of China for the last 2-3 years. That is why new laws targeting better conditions for workers have been passed. (IIRC)

Oh! Let's not forget their domestic inflation that will reflect on us pretty soon.

[Francois]

"We seem incapable of thinking rationally, incapable of understanding why German workers, French workers, Swedish workers, Dutch workers are thriving in the midst of a globalized economy where American workers are continually being pressured as we develop ever more barriers to workers competing and living successfully."

Those who can't think rationally about this situation resides in Washington DC. For a little taste of how disconnected and uncaring our Unrepresentatives have become, listen to Bill Moyer's installment "Hunger in America".

Pay special attention to the tribulations of an advocate who tried time and again to lobby Congress about the farm subsidies bondoogles. If children hunger* cannot motivates Congress to "do the right thing" and say NO to special interests groups, how much of a chance do you think the working stiff has?

*Yes, the numbers are not improving, far from it, and yes, there is a relationship between food prices and the drop in supply to food pantries.

[Callahan]

Understated by eekonomists, yup, but what is the cure?

There may not be one.

One thing for sure, there are plenty of problems, enough to burden a bundle of the GREATEST leaders we ever had, if we ever had any. Any which way you look, you see problems, not little problems, but GREAT BIG UGLY ones.

If you've a hat, hold onto it.

[anne]

http://www.pbs.org/moyers/journal/04112008/profile4.html

April 11, 2008

HUNGER IN AMERICA: Why are America's food banks suffering shortages?
By Bill Moyers

[Agreed. That we offer billions of dollars in agricultural subsidies, and have hunger in America is astounding.]

[Bruce Wilder]

str: "Economists do not want to give up their trade dogma."

Don Quijote: "American Capitalist have been moving high paying manufacturing jobs from the US to third world rat holes where equivalent labor can be had for pennies on the dollar. Move an American Factory (lock, stock & barrel) from Ohio to Shenzen, China, you drop your labor cost by 90% or more and if the factory is slightly less productive you still make out like a bandit."

Obviously not just economists, str. I fear that we are attracted like the moth to the flame to a two-sided dialogue between Simple-Minded Ricardian Comparative Advantage on the one side and Pure Build a Wall Protectionism on the other. Neither impresses me -- it will be a conversation between the blind and the deaf.

anne: "A needless immoral $3 trillion war and occupation is no problem, only killer Chinese giraffes. An impossible health care insurance system is no problem, only those giraffes. Tuitions that are increasingly burdensome are no problem. Primary and secondary school education weakness is no problem. Crumbly hard infrastucture is no problem. Turning from conservation and efficiency for decades has been no problem. Growing corn for cars has been no problem. Economic policy designed to increase inequality is no problem."

anne goes in the right direction. Look at the choices we have made and are making, and accept that choices have consequences.

Somehow, we have to recognize that economics sometimes is a zero-sum game, without insisting that it is always a zero-sum game. The Bush Boom, during which the top 1% got it all, and the rest of us got exactly nothing, ought to be sufficient instruction. Those $100 million pay packages come out of broken pensions, proliferating payday lenders, tuition hikes, financial "innovation", health care cost inflation and low-cost, low-wage Wal-Mart.

Alex Tolley: "historical anomaly"

Indeed. The American Empire may end quickly enough, whether it's destroyed by the hubris of the Neocons and their successors, the complacency of the Neocons' ignorant fellow-travellers, or by the disgust of we rebels triumphant, and I say, good riddance.

Everyone seems to think China succeeds to the Anglo-American throne. I am inclined to think the Eurocrats have a better claim and better leverage. The EU has locked up constitutional democracy in a titanium cage of unworkable institutions, and left the technocrats in charge. Those technocrats are more than willing to simply expand the scope of international institutions through the UN. The challenges of overpopulation and global warming seem tailor-made for the Eurocrats.

If latter-day pop/progs fail at revolution, the next Republican will bring America to real collapse, and the Eurocrats will come to our "rescue". That's my maximum likelihood estimation, for what it is worth.

[Bruce Wilder]

Robert Reich's Blog: Obama, Bitterness, Meet the Press, and the Old Politics is pretty good.

[DH@TH]

The "boom" was a boom for home builders and construction workers that were sponsored by synthetic derivatives and subprime chicanery.

Thus, as these high priced labor jobs from fairly un-skilled people hit the brick wall of economic reality, the notion of what's next really hit home (no pun intended) that is, these relatively un-trained, un-skilled people using subprime magic and depending on the housing bubble to last forever -- are now not even factored into unemployment statistics -- and as to what's next for this army is a recession that will last several years. In the meantime, the decrease in service jobs and the increase of cashburn will make this all very challenging for a great deal of interconnected businesses which were sustained by subsidizing credit card magic with low interest liquidity. The cash tsunami is now a liquidity trap!

[paine]

"German workers, French workers, Swedish workers, Dutch workers "
vs american workers

anne the euro is over valued right now
watch these " workers " high wage jobs languish
and compact

its already happening

yes they got a better safety net

but but but
a safety net no matter how good is not.... a high wage job

[paine]

bruce wild one

if not protectionism
what ??

i've my plan
its simple straight forward and politically impossible

step one
cut payroll taxes back to paygo
and re rate the system
with a new un capped rate to the top
step two
continue the forex dollar drop
by a quota freeze/roll back
directed at fiddled currency trade partners
step three
declare a new jobs policy
goal 48 hour job search max

step three

after warning about a price level surge
the moral equivalent of a thousand foot tsunami
set up a mark up warrants system

step four
run
vast federal deficits
including massive rev sharing with the states
that effectively takes states out of
the tax and transfer business

step five
for circus effects as much as bread
a tit twister of a fedreal global base wealth tax

step six
build a pub/pri
great green machine industrial sector
run like
the arms sector 1940-1944

mission clean green product
self sufficiency max
while pushing labor input min

etc etc etc

last but not least
step seven

since we'd by then have turned our back
to the world
trade wise
open the borders wide
let any one in
that wants in
and with a three year citizen ship wait

what's your mad plan
or are you not into the agitprop art
of the possible impossible

[lonesome_moderate]

"We seem incapable of thinking rationally, incapable of understanding why German workers, French workers, Swedish workers, Dutch workers are thriving in the midst of a globalized economy where American workers are continually being pressured as we develop ever more barriers to workers competing and living successfully."

A very powerful argument.

[anne]

http://krugman.blogs.nytimes.com/2008/04/14/bartels-bash/

April 14, 2008

Bartels Bash
By Paul Krugman

We’re having a panel discussion this afternoon about Larry Bartels’s new book, Unequal Democracy. One of Larry’s really striking results is his finding that inequality systematically increases under Republican but not Democratic presidents. I’ve written that I’m tormented * about this result: the data seem really compelling, but the policy differences — though real — don’t seem big enough to account for the drastic results.

I haven’t solved this conundrum, but I have tried to get a sense of which presidencies account for the difference. Below is the change in the Gini coefficient under each 4-year administration since Truman. I measure from the 1st year of an administration to the 1st year of the next, on the presumption that, say, inequality in 2001 had more to do with Clinton’s policies than Bush’s.

[Chart] Unequalizing GOP

You can see how robust the result is. It’s true that inequality was flat before 1980, when the White House was occupied by Democrats half the time, and rising after 1980, when Republicans held it 2/3 of the time. But the pattern is still there if you look either at pre-1980 or post-1980, and if you take out any one president, even Reagan.

It’s like the GOP has a magic inequality spell that it chants while in office. Clearly, we’re missing something.

* http://krugman.blogs.nytimes.com/2008/04/02/bartels-alfred-wegener/

[Mike]

"The Democratic Congress could not figure out how to stop an idiotic President. What is that about? I fear that is about a whole lot of officeholders on one side of the aisle, who are actually evil, and, on the other side, are just complacent opportunists."

Or are just frustrated. It's possible that the Pelosi-Reid crowd reason as follows: the only thing that will reign in Bush is impeachment. Impeachment is impossible because there are enough Republican votes in the Senate to stop it. In Nixon's day some of those would have put their country before their party, but not now. And it's likely that moderate voters, whom we need to take back the Presidency and perhaps get complete control of the Senate, would see it as simply vindictive payback for the Clinton impeachment, and would either vote against us or stay home. Therefore, our best, and only viable, strategy is to grit our teeth and wait until 2009.

I don't know what they think, of course. And personally I'd like to see the Democrats go for blood. But I'm not sure the reasoning above is wrong. If it's right, then doing nothing now is the indicated course of action; not risking the possible trying to get the impossible is wise.

On the subject of free trade Dean Baker, one of the good guys and a mainstream economist, wrote this:

http://www.paecon.net/PAEReview/issue45/Baker45.pdf

Everyone who hasn't read it (and is not an economist), go do so at once. PLSchwartz, this means you.

Don Quijote:
"You don't need to be an economist to understand what is wrong with our economy.

Let me give a two word answer "Labor Arbitrage""

Not solely. China is getting a huge Intel plant. The proportion of the cost of making chips represented by manufacturing labor is approximetly zero. The plant, and a technology transfer agreement, is going there because of a subsidy of about $500M. And a bargain, I'd say.

A good deal (estimated at about 45-50%) of the Chinese advantage in manfacturing is due to better location/organization of resources rather than cheap labor.

[Bruce Wilder]

Mike: "A good deal (estimated at about 45-50%) of the Chinese advantage in manfacturing is due to better location/organization of resources rather than cheap labor."

I thought you were going to make a point about the financial advantages of a depressed currency exchange rate and vast domestic savings, things like that.

But, better location? On the wrong side of the Pacific Ocean from your major market is better location?

And, better organization? Have you been in China? FDI is often instrumental in bringing about better organization, and the Chinese are clear that they are striving for better organization. But, the baseline for Chinese organization is pretty low, although very much higher now in Shenzen and Shanghai than it was even ten years ago.

[DH@TH]

From December:

The big rise in inflation demonstrated the pressures facing the Federal Reserve, which is trying to combat a sharp slowdown in economic growth while at the same time making sure that inflation does not get out of hand.

At the White House, press secretary Dana Perino said that one bad report on inflation "doesn't make a trend."

[paine]

"a good deal (estimated at about 45-50%)
of the Chinese advantage in manfacturing
is due to better location/organization of resources
rather than cheap labor."

better location/organization of resources
relative to other low wage asian production platforms
or compared to norte america

by location do u mean near existing
input suppliers and next stage output buyers
by organization
do you mean a docile plentiful wage force
are you talking about spill over effects
like silicon valley has

btw

by who's estimate ??

[kthomas]

LOL, good one paine.

[Masonik]

"We seem incapable of thinking rationally, incapable of understanding why German workers, French workers, Swedish workers, Dutch workers are thriving"

Interesting point. Anyway I did a quick lookup (please verify) of the unemployment rate in those countries. In Germany it's 10%. In France it's 8%. In Sweden it's 7.8% (some say it's really at 20%).

Many More Are Jobless Than Are Unemployed
by FLOYD NORRIS
Published: April 12, 2008

THE unemployment rate is low. The jobless rate is high.

Those two seemingly contradictory statements are especially true for American men in what should be the prime of their working lives. Those facts may help to explain the stark pessimism of Americans about the economy, and shed some light on the rise of illegal immigration as a political issue.

Men in the prime of their working lives are now less likely to have jobs than they were during all but one recession of the last 60 years. Most of them do not qualify as unemployed, but they are nonetheless without jobs.

The unemployment rate paints a less gloomy picture. Among men ages 25 to 54 — a range that starts after most people finish their education and ends well before most people retire — the unemployment rate is 4.1 percent. That is not especially low, but it is well below the peak rate in all but one post-World War II recession.

Only people without jobs who are actively looking for work qualify as unemployed in the computation of that rate. It does not count people who are not looking for work, whether or not they would like to have a job.

But there is another rate — called the jobless rate in this article — that counts the proportion of people without jobs. To be sure, some of them do not want to work. Some are raising families on a spouse’s income, or are disabled, retired or independently wealthy. But others may be discouraged workers, who would take jobs if they thought any desirable positions were available.

In the latest report, for March, the Labor Department reported the jobless rate — also called the “not employed rate” by some — at 13.1 percent for men in the prime age group. Only once during a post-World War II recession did the rate ever get that high. It hit 13.3 percent in June 1982, the 12th month of the brutal 1981-82 recession, and continued to rise from there.

http://www.nytimes.com/2008/04/12/business/12charts.html?_r=2&ref=business&oref=slogin&oref=slogin

[plschwartz]

Bruce Wilder:
Thanks for that link. I will read my way through the back journals.
And I did like Baker's point about the guild-like attitude of professional groups here.

I was undoubtedly my usual oblique self in my post above.
But what was Bush the Elder to do about international trade?
High tariffs, stay the same or low tariffs.
Behind the first alternative lurked Smoot-Hartley.
You would know the history of the second alternative better then I. But having lived through those times I remember a series of crises over cars, steel textiles etc. It was a lobbyists wonderland. And also this system depended ultimately on a reciprocal altruism. That someone in NE was willing to pay more for a car so that an autoworker in Detroit could have a decent job. But the right to work stdid not agree to play by these implicit rules. And neither did the CIO unions. I feel that this was a meta-stable situation.
Perhaps you disagree and though this system actually was working.I would like to hear more.
So I guess Bush chose door #3. At the time I thought Nafta pretty fair. It ensured us entry to Canadian raw material, and a low-wage workforce in a semi-colonial Mexico. (but then Bush the younger gave away the store to China).

[anne]

http://www.nytimes.com/2006/09/30/business/30chart.html?ex=1317268800&en=ad5705f838858638&ei=5090&partner=rssuserland&emc=rss

September 30, 2006

A Statistic That Shortens the Distance to Europe
By FLOYD NORRIS

Europe has high unemployment, brought on by tight labor laws that make it hard to fire workers and therefore discourage hiring them. The United States, on the other hand, has low unemployment thanks to its vigorous and flexible economy.

That has long been the consensus view, and it is supported by official unemployment rates, which are much lower in the United States. But there is another rate that can be considered — the employment rate — and that shows that the differences are narrowing, if not vanishing, for those in the prime working ages. The employment of women in Europe has been rising at an especially rapid pace.

The employment rate simply shows the percentage of a given population with jobs. Unlike the unemployment rate, which ignores those who are not seeking jobs, the employment rate is not affected by the reason people are not working.

A decade ago, in 1995, the employment rate in the United States for men aged 25 to 54 was 87.6 percent. In Europe, including the 15 countries that were then members of the European Union, the rate was 85.3 percent, a difference of 2.3 percentage points. By 2005, the United States figure had slipped and the Europe figure was up, leaving a difference of just 0.3 percentage point.

Statistics released by the Organization for Economic Cooperation and Development, as compiled by the Center for Economic and Policy Research, show that in that age bracket European employment was higher than that of the United States in 2002 and 2003, when the American economic recovery was producing fewer jobs than it has since. The return to a higher employment rate in the United States probably does reflect the faster-growing American economy.

Among women, the percentage of workers in that age group slipped over the decade in the United States, to 72 percent from 72.2 percent, while in Europe it rose to 69.8 percent from 61.1 percent. That cut the gap from 11.1 percentage points to just 2.2 percentage points.

The accompanying charts show the differences between six major European countries and the United States. A decade ago, all of the European countries had fewer men and women working than did the United States. Now both men and women in Britain are more likely than those in the United States to have jobs, and while French men remain a little less likely to be employed, French women are more likely to have jobs.

Some of the most impressive changes have come in the countries that traditionally were least likely to provide jobs for women. In 1995, three out of five Spanish women aged 25 to 54 were not employed. By 2005, the proportions had reversed. Italy also experienced a surge in female employment.

Whether or not those changes are good is not clear from the statistics. A rise in the number of women with jobs may reflect greater opportunity, or a greater need for a second income in a family. And of course they say nothing about the quality of a job, or how well paid it is....

[Mark Thoma]

For comparing across countries, new from the BLS (I think it's new - not sure):

http://www.bls.gov/fls/

fls = Foreign Labor Statistics

It attempts to use consistent definitions.

[lonesome_moderate]

I have also seen references to something called the Standardised Unemployment Rate (SUR) which seems to be increasingly used in Europe. As of February, Germany's SUR unemployment rate was 7.4% and the Euro zone as a whole was at 7.1%, while the USA's SUR was 5.1%: http://www.world.xorte.com/0,6,OECD-Standardised-Unemployment-Rate-Remains-Stable-at-5-5-in-February-2008,4924.html.

[anne]

http://krugman.blogs.nytimes.com/2008/04/14/watch-frontline-tomorrow/

April 14, 2008

Watch Frontline Tomorrow
Edited by Paul Krugman

Sick Around the World:

Four in five Americans say the U.S. health care system needs “fundamental” change. Can the U.S. learn anything from the rest of the world about how to run a health care system, or are these nations so culturally different from us that their solutions would simply not be acceptable to Americans? FRONTLINE correspondent T.R. Reid examines first-hand the health care systems of other advanced capitalist democracies–UK, Germany, Switzerland, Japan and Taiwan–to see what tried and tested ideas might help us reform our broken health care system.

* http://krugman.blogs.nytimes.com/2008/04/14/watch-frontline-tomorrow/

[BJ Feng]

Is it just me or have people forgotten that the President has very little direct control over employment? Other than the usual platitudes of "help the little guy", and "increase opportunities for all", what exactly should the President do?

It should be evident that the best way to increase employment is to help businesses by lowering regulatory burdens as much as possible, lowering taxes and fees, and create international trading opportunities so that businesses can sell their products overseas. I suppose the President could hire hundreds of thousands of workers to dig and fill holes, but that would be a complete waste of money. So other than regulation, taxes, and trade opportunities, what can the President actually do to help?

As for subsidies to big business, I'm generally against them, but in theory they should increase employment, no? I think much of the blame is misdirected and unwarranted, the President does not have a button he can press that automatically increases employment. The tools he has are crude and often create unintended consequences. Standard economic theory calls for less regulation, lower taxes, and an increase in free trade across borders to increase employment. The standard theory is backed by years of research and academic review, where is the evidence to back up your claims?

[anne]

"Other than the usual platitudes of 'help the little guy', and 'increase opportunities for all', what exactly should the President do?"

Other than the sneering rottenness, the President should develop a fiscal policy that is constructive. The point of Republicanism however is to dent that Bill Clinton had anything to do with the superb fiscal policy and economy of the 1990s, and after violently changing the policy in destructive ways to deny that George Bush had anything to do with the faltering ecvonomy of the 2000s.

[Andrew]

You will find the definition of SURs and cross country data sets at OECD Stat. If there is a better free source of cross country econ data, I am not aware of it.

[BJ Feng]

If I remember, Bill Clinton was instrumental in pushing for NAFTA and went along with Congress' push to reduce the growth rate of Federal spending. He also agreed to streamline regulation in several sectors including finance. In my opinion, Bill Clinton was a better than average President and President Bush would be well served to emulate Clinton's approach to free trade and government spending. However there are limits to what any president can do, the majority of the praise for the boom as well as "blame" for the bust should fall on the American people.

Senator Clinton should likewise, remember NAFTA and openly push for a free trade agreement with Columbia instead of playing politics and deceiving the public. She should be proud of such a sensible policy and fight as hard as President Clinton did to see it implemented.

[BJ Feng]

We should remember that for all the comparisons of employment, both France and Germany are working towards adopting a more American type labor market with fewer regulations and distorting subsidies. They clearly see a need to reform, and it would be foolish of us to adopt a system that they're trying to abandon, while discarding a model that they dream one day they will have.

[bob]

>> The "boom" was a boom for home builders and construction workers

Sorry but i had 20 years experience in construction before i got my expensive toilet paper (aka computer science diploma).

The contractors and builders did fine.

The construction workers never did worse than during the Bush Boom. Where i live (near NYC) and where my contacts live (up and down the east coast) the ameican construction worker was dumped for the illegal latino construction worker.

And the sheer delight expressed by many of the contractors over such a development would have warmed the heart of Scrooge himself.

I have a few friends still working construction that are uniformly being told by contractors that they are either going to work for MUCH less money or they are going to be replaced by mexicans.

[bob]

>> Is it just me or have people forgotten that the President has very little direct control over employment?

Bartels work clearly shows you to be incorrect.

As a matter of fact it shows that one of the stronger indicators that the middle-class is going to do well is a Dem president in office.

Also if you look at these numbers you will see that job creation under Dem presidents is much, much better than under Repub presidents.

This baloney about good ecnomies and high levels of job creation being some cyclical event is just that.

http://en.wikipedia.org/wiki/Jobs_created_during_U.S._presidential_terms

[dale]

We clearly see a need to reform, and it would be foolish of them to adopt a system that we're trying to abandon, while discarding a model that we dream one day we will have.

[don]

"A return to pro-labor policies could help raise real wages." And what might those be - stricter immigration standards? Policies to curtail imports? Giving unions more power?

[im1dc]

wogie1 said

"No, just a little Scotch in afternoon tea...BTW think I saw one of those giraffes yesterday"

No more tea for you!

And,

"BTW I served, and because I was never shot at in anger, didn't claim any GI benefits. It was a privilege to serve; my country owes me nothing"

I've always looked up to wogie1 and still do but I think you took JFK's call "Ask not what your country can do for you, but what you can do for your country" a tad more literally than he intended. You deserve your GI benefits.

[Detlef]

Okay, that last one was too much. :)

BJ Feng,

We should remember that for all the comparisons of employment, both France and Germany are working towards adopting a more American type labor market with fewer regulations and distorting subsidies. They clearly see a need to reform, and it would be foolish of us to adopt a system that they're trying to abandon, while discarding a model that they dream one day they will have.

Care to tell me how you know this?
As a German, let me tell you that we really, really don´t want to copy the "American type labor market". Sorry, no dreams about it.
Except maybe for some CEOs who dream of American-like CEO compensations and "Golden parachutes".

Is it just me or have people forgotten that the President has very little direct control over employment? Other than the usual platitudes of "help the little guy", and "increase opportunities for all", what exactly should the President do?

How about spending some of that borrowed money for the Iraq war on US infrastructure? Like failing bridges or levees for example?
You might want to take a look at the infrastructure report card of the American Society for Civil Engineers.
It would improve US infrastructure and provide jobs for Americans. Not to mention that infrastructure is one criteria for investment.

Or spending some money/regulation on real broadband access?
Defining a 256kbps Internet connection as broadband is a joke IMO.

Or spending some money on energy saving regulations/laws?

US public debts outstanding (according to the US Treasury):
$ 5,807,463,412,200.06 - 09/30/2001
$ 9,007,653,372,262.48 - 09/30/2007
§ 9,442,757,563,045.54 - 04/11/2008

That´s roughly $ 500 billion per year.

It should be evident that the best way to increase employment is to help businesses by lowering regulatory burdens as much as possible, lowering taxes and fees, and create international trading opportunities so that businesses can sell their products overseas.

Care to explain to me the relationship between "international trading opportunities so that businesses can sell their products overseas" (= exports) and "regulatory burdens"?
Since Germany with one quarter of the US population exports more than the USA? And don´t tell me that we Germans have fewer "regulatory burdens"!

Standard economic theory calls for less regulation, lower taxes, and an increase in free trade across borders to increase employment. The standard theory is backed by years of research and academic review, where is the evidence to back up your claims?

That´s nonsense.
- Less regulation?
You like lead in children´s toys?
Or poison in toothpaste or pet food? And probably in human food too? Or ingredients for medical drugs? Does heparin - China ring a bell?
- Lower taxes
Lower taxes means less money to build/maintain the infrastructure. And less money for the government agencies testing all these imported products (see above).
(Mind you, I´m not against lower taxes. :) There are government programs that could be cut. I´m just against the "drown government in a tub crowd.)
- An increase in free trade across borders to increase employment
I suspect that would only work in "similar" countries.
Country A producing product X cheaper, country B producing Y cheaper.
With roughly similar wages and regulations.
It´s pretty obvious today that a country without any environmental laws and without any labor protection laws can produce (at least some) goods at a lower price than any developed country. Throw in an authoritarian government and multinational companies will love you. :)
You wanna compete with a Vietnamese worker earning $59 a month producing Nike shoes?

[paine]

"Behind the first alternative
lurked Smoot...."

do you know what mr smoot et al
were really up to back
in those fark days ....after the crash ??

or is this just a bark line
like
that way leads to a fed that... lets banks fail

the relative strength and guilt
of the various "indicted drivers "
behind the Great Depression
are still little enigmas

true
like the value of outstanding loans
cross border industrial trade
contracted wildly too
but hey
look at plant construction
or industrial equipment production
if you want to
in fact
what positive economic indicator
didn't contract wildly during those early 30's years

what keynes offered was an inward looking
macro policy for britain ...
that was not a closing of its cross border economy
......under emergency conditions

in his mind an alternative to beggar thy neighbor
and yet even if it had a possible general application
to any other great power of the day
.... herr schacht provided
a plan to fulfill quite another vision of ...recovery
one based on the same apparent zero sum result
of expanding the external sector
any way both co existed in fact
facilitated rather then scotched
the great game approach
both plans ... far from preventing
the set of final solutions
brewing in europe from 1919 on
probably brought them forward in time
ie .... the second and final round
of the great civilized war to neuter
a frightfully united
and rampant germany

btw
i tracked down
the keynes source for
the debauch the currency is lenin's plan etc
passage

the one
that is prolly
so much ron paul's fetish
counter spell
because it appears
as if
in that passage
the anti christ himself ...keynes
is pre emptively condemning
out of his own mouth
his future followers with their fiscal spend spend spend ...on credit Rx

its from a very broad and belle letristic pamphlet
composed in 1919 on the uncaged horrors
of the great peace treaty
a pamphlet
that istantly made him as famous
as its contemporary
'this side of paradise'
made f scott f

ie the keynes before he was
the keynes still 16 years away
from the keynes we mean
when we speak of keynesian economics

[Patricia Shannon]

Our unemployment statistics are helped by the fact that we have one of the highest percentages of our population in prison. The wonderful results is that we have one of the highest rates of violent crime.

In regards to BJ Feng,

definition of insanity : doing the same thing over and over again and expecting different results.
- attributed to Albert Einstein

[paine]

bj feng
must live in a time capsule
buried back in 1927
outside
silent cal's summer cottage in vermont

his naive babbit like perspective is refreshing

its spring time in america ....1927

[dd]

mayhaps the vision
will be seen
but the shared hope
of sharing too distant for some
to see to a future where
safety nets swinging from governments
supporting the trans nats
that do not exist but for
the sufferance of voters
in need of safe havens
from representative creations
that provide a steady cash stream
such that some may see the time to close
the circle against it
Krugman struggles mightly
but still the butter on the
bread is a Prince Ton.

[paine]

dd

very dense encryption indeed

reads like silk
but the glint has its oracular enigmas

in particular

"future where
safety nets swinging from governments
supporting the trans nats
that do not exist but for
the sufferance of voters
in need of safe havens
from representative creations
that provide a steady cash stream
such that some may see the time to close
the circle against it"

[cm]

anne: Back in Germany, my effective tax rate (income + payroll) was about 45% of my gross. Payroll taxes would include social security, healthcare, unemployment (in that order of contribution) and a few minor line items. My healthcare contribution was about 7%, so when you deduct that you get to about 38% as you quoted. My pay was above median but not exorbitant. Just a data point.

[cm]

I believe that in much of manufacturing, the effect of labor cost savings is overstressed. There is a probably a not unsubstantial component of lax environmental standards/enforcement, esp. for domestic operators who are faced with the looming decision of retrofitting pollution controls, upgrading plant equipment, or paying up for environmental remedies, vs. offshoring.

There could even be an irony if at some point after the offshoring decision it turns out the offshore factory is actually fitted with the new pollution controls or state of the art equipment. I don't know how to which extent this has been happening.

[BJ Feng]

Bob, legislation is written and passed by Congress. While the President can veto and has influence over legislation, it is not enough to give credit, or assign blame (though it is much easier to screw up and do harm than good) for job creation. I'm sure I can find a correlation somewhere, perhaps when the AFC wins the Superbowl, job creation is higher than when the NFC wins, but is there a link? How does a Democratic President specifically create jobs? We need more of an answer than just, "because he cares about the worker". By what mechanism? Lowering taxes? Raising taxes? Increasing regulation?

I don't understand how more environmental regulation would create jobs, if anything, they'd force companies to close down or prevent new ones from forming as the cost to do business would increase. As for more infrastructure and government work programs, can enough jobs be created to make a large difference? Plus such programs are temporary unless you talk about maintenance, which is already supposed to be provided for in the vast transportation budget. Again, I'm not sure how much power a president has over these job programs, they have to be written and passed by Congress.

Trade opens opportunities in sectors where we have a comparative advantage. No, we will not open a factory to make Nike shoes, but perhaps a new building occupied by IT consultants will be needed. Certainly it is more complicated than that, but overall, trade is beneficial to both countries.

From news reports, I'm under the impression that both Germany and France want a more "flexible" labor market, and are working to reduce worker "protections" and regulations (the exemption to the 35 hour work week in France for example). The labor unions are against this, but the governments are clearly for "liberalization" of the workplace.

[BJ Feng]

Patricia, when we are the world's #1 economy, perhaps it is wise to continue to do the same things that made us the #1 power, instead of emulating less successful nations. Maybe the A student should continue doing what he has always done, instead of copying the study habits of the C student. I know this unconventional view can be interpreted as utter madness to many, but at least it should be given some consideration, no?

[anne]

CM:

"I believe that in much of manufacturing, the effect of labor cost savings is overstressed. There is a probably a substantial component of lax environmental standards/enforcement, esp. for domestic operators who are faced with the looming decision of retrofitting pollution controls, upgrading plant equipment, or paying up for environmental remedies, vs. offshoring."

A German's interesting conjecture that is worth thinking through and adding to.

[anne]

That Germany is so successful an exporter, no matter the relative Euro value or integragation of economies of eastern Europe with the European Union needs far more discuession.

CM, thank you for adding to the German tax anecdote. I am thoroughly impressed with what West Germany has accomplished from integration of East Germany, through all the difficulty, on.

[anne]

http://krugman.blogs.nytimes.com/2008/04/14/trina-bachtel/

April 14, 2008

Trina Bachtel
By Paul Krugman

There is more information on the Trina Bachtel story, which I wrote about in Friday's column — and a correction is in order.

It has been clear from early in this controversy, including from Times reporting, that Bachtel was insured at the time of her death. Some people read my column to say otherwise. That was not my intended implication, although I obviously didn't write clearly enough.

Her family asserted, however, that she had been unable to receive care from a local clinic, even though insured at the time of her pregnancy, because of unpaid bills from an earlier period in her life when she had been uninsured. It was in that sense that lack of insurance allegedly contributed to her death, the assertion I made at the end of the column.

I went with that account, based on this Associated Press report. * I should, in retrospect, have worried about some lack of detail in that report. The Columbus Dispatch reports ** that the debts in question had been written off as uncollectable long before her pregnancy, so that it does not appear that they were a barrier to care.

So Bachtel, unlike Monique White (the other example in the column), *** is not an example of death from lack of insurance.

Two points that are not affected by this correction:

1. Hillary Clinton repeated in good faith a story she had been told, although she should have vetted it.

2. Many people do in fact die from lack of insurance.

* http://www.washingtonpost.com/wp-dyn/content/article/2008/04/07/AR2008040701942_pf.html

** http://dispatch.com/live/content/national_world/stories/2008/04/11/hilflap.ART_ART_04-11-08_A1_UE9T91B.html?sid=101

*** http://www.medicalnewstoday.com/articles/58256.php

[anne]

"Some of the causes of poor economic performance since 2000 are probably beyond any administration’s control. Raw materials were cheap in the 1990s, but in the years ahead the rise of China and other emerging economies will place increasing pressure on world supplies of oil, copper and so on, no matter what the next president does."

I have serious doubts as to whether even this is true.

Republicans simply have fought moves to increased conservation and efficiency for decades and the fighting was increasingly successful, so successful that fuel standards for vehicles for 2 decades were repeatedly rejected only to leave American manufacturers completely unprepared even to be commercially competitive as gasoline prices began to rise seriously. The serious rise in gasoline prices as such has to some extent been a political occurrence, as has been the following rise in prices for foods.

[anne]

"Pro-competitive policies — which are not the same thing as giving powerful businesses whatever they want — could help America regain its leadership in information technology."

How expressly would competitiveness in information technology be fostered, at least beyond encouraging a school emphasis on the sciences from grade school on?

[bob]

BJ spouts the failed conservative economic strategys.

I understand why he can't accept Bartels work since it contradicts his belief system.

He's gonna go down with the ship as are the rest of the cons that see this mess of an economy as nothing more than the public's inability to understand just how good it really is.

I don't know if bj sees it the same way as "the rest of the cons" but he is pushing all the same ideas that have crashed and burned.

[Patricia Shannon]

BJ Feng
What cave are you living in? If you don't know by now how silly your claims are about America being number 1, and therefore we should continue in the path that got us to where we are today, there is no use wasting my time trying to communicate with you. I will mention one factor - life expectancy. If you don't immediately get the point, you have proven that I am right about you.

[anne]

http://krugman.blogs.nytimes.com/2008/04/15/memories-of-the-nixon-ford-administration/

April 15, 2008

Memories of the Nixon-Ford Administration
By Paul Krugman

[Chart] Is this a rerun?

This isn’t the first time we’ve had a worldwide surge in food prices. There was a huge price rise in 1972-1974 — bigger, in percentage terms, than the current spike. (The chart has a log scale, so that equal vertical distances are equal percentage increases.) Some of the causes look similar: droughts in the Southern Hemisphere (the Peruvian anchovies disappeared, too) and a period of rapid world growth. It even included some similar panic reactions: Nixon banned soybean exports!

That price spike proved temporary — although it wreaked terrible havoc at the time (a million people may have died in the Bangladesh famine of 1974). In real terms, food got steadily cheaper over the next quarter century.

Is this a rerun? Or is it more fundamental? I don’t know the answer …

[Patricia Shannon]

Anne.
I appreciate it when you give us helpful information, but re-posting the whole article that leads of the thread is not helpful. It wastes people's time, turns them off of you, so they miss out on the things you do contribute, and by using computer resources, which ultimately means more equipment or storage medium are used, is very unfriendly to the environment.
It is also insulting to us.

[anne]

"This isn’t the first time we’ve had a worldwide surge in food prices. There was a huge price rise in 1972-1974 — bigger, in percentage terms, than the current spike."

I was completely unaware of the pronounced food price problem in the 1970s, recalling no reading of such a problem. I must find about more, especially about the problem in Bangladesh which had only been founded in 1971 on breaking from Pakistan and India respectively.

[Patricia Shannon]

Farmers are smarter than a lot of people. On NPR a couple of days ago, there was a program about how the surge in crop prices is helping farmers. They interviewed a farmer who said that the farmers figure it's a bubble that will reverse in a couple of years.