The New Wave of Globalisation: This Time, It’s Really Different

The "Great Unbundling" is more unpredictable, sudden, and individual than in the past:

Globalisation as the great unbundling(s): What should governments do?, by Richard Baldwin, Vox EU: The Kiel Institute’s Global Economic Symposium – something like a New Century Davos – is being held in a Northern German castle... Globalisation is on the agenda. Alan Blinder has contributed his thoughts on “Offshoring, Workforce Skills, and the Educational System.” Here are my comments on the subject.

The new new

This is the second time in as many decades that I write about “the new wave of globalisation”. But this time, it’s really different. It’s tempting to rattle off the conclusions and hope readers have forgotten the 1990s contributions on globalisation. But that would be too easy. It is important to understand why things are different this time.

The new ‘new wave of globalisation’ in perspective

Globalisation is the great unbundling, or rather many.[1]

In the late 19th Century and first three-quarters of the 20th, globalisation meant the spatial unbundling of factories and consumers. Costs of moving goods, people, and ideas fell rapidly – especially for goods. Steamships and railroads allowed things to be profitably made far from where they were consumed. The first (steam) and second (chemical/electric) industrial revolutions fostered and were fostered by the first unbundling. These revolutions also transformed the skill mix a nation needed for success; universal, free, and compulsory primary education was one governmental reaction, but far from the only.

Social consequences of the first unbundling were dire. While winners won more than the losers lost, the winner-loser pattern stressed societies to the breaking point. Governments reacted by partially unbundling income and consumption – the ‘social market economy’ in Europe, the ‘New Deal’ in the US.

And economic unbundling rolled on. Costs of moving goods, people, and ideas fell rapidly – especially for ideas. Cheap and reliable telecommunications made it profitable to organise complex manufacturing tasks that previously required physical proximity. Late in the 20th century, factories were unbundled. Supply chains were internationalised. Today’s factories don’t make things, they make bits and pieces that are assembled somewhere and sold somewhere else. Globalisation began operating at a higher resolution. Instead of harming or helping the fortunes a firm as a whole, it could reach right into the factory and help or harm a particular production stage, a particular department, or even a particular job.

Due to the government’s earlier unbundling of incomes and consumption, the resulting winner-loser pattern caused few problems – at least compared to those experienced in the 1920s and 1930s. But problems were small since the affected sector, manufacturing, was small. Two-thirds of Europe’s value added was profoundly non-traded. Two-thirds of Europe’s labour-force faced little international competition. Moreover the affected workers shared common traits: low-skill, low-education. Government policies could readily be designed to redress their plight.

But economic unbundling rolled on. Costs for ideas fall rapidly. The cheap-and-reliable sharing of audiovisual material and documents in editable form combined with cheap-and-reliable continuous communication. Email and Skype instead of fax and phone. Since audiovisual and textual materials are critical to much of Europe’s service sector – as intermediate or final goods – the new wave of economic unbundling expands on a new axis. In the New Century, Europe’s offices are unbundled. Various service components are outsourced and increasingly offshored. This radically widens the circle of affected workers.

The new wave’s implications for policy

As far as policy making is concerned, high-resolution globalisation has three key elements:

1. Unpredictability.

The winners and losers from globalisation are much harder to predict. By their very nature, lower trade costs for goods tend to affect all traded goods in roughly similar ways, and this is why one could tell which sectors would win from further trade cost cuts. When the main barrier is the cost of exchanging information across distance (trading ideas), it is difficult to identify winning and losing tasks. Knowing the direct cost of telecommunications is not enough since it interacts in complex and poorly understood ways with the nature of the task and the task’s interconnectedness with other tasks. Economists do not really understand the “glue” that resulted in the bundling of various tasks into packages (factory and offices), so the way in which various tasks come unglued will unpredictable until economists know much more about the glue.

2. Suddenness.

A job which three years ago was considered absolutely safe – say a German computer programmer designing custom software for a Landesbank – may today be offshored to India, or outsourced to a German software firm that offshores the job to India. The deep reason for this suddenness lies in the nature of complex interactions within factories and offices. Telecommunication costs have fallen rapidly but the impact has been quite different for different tasks. This may be due to the organisation of tasks within offices and factories. This organisation has changed more slowly. At some point – what might be called the tipping point – cheap communication costs line up with new management technology and a new task can be offshored to a lower cost location.

3. Individuals not firms, sectors, or skill groups.

In the first unbundling, one could view firms as black-box bundles of tasks since firm-against-firm competition was globalisation’s finest level of resolution. In sectors where backward and forward linkages among firms were important, a nation’s sector could be viewed as a bundle of firms whose joint actions determined the sector’s competitiveness. The competition was sector-against-sector, so individual firms who were not competitive on a stand-alone basis might still prosper due to the agglomeration economies flowing from their location. The new wave suggests that the forces of globalisation will achieve a far finer resolution; it predicts that international competition will increasingly play itself at the level of tasks within firms. New paradigm competition is on a much more individual basis, and this has some implications for policy that I discuss below.

Governmental reaction: Not education alone

The first unbundling radically transformed society. Governments reacted or failed. But promoting more appropriate skills was just one element. It is deeply misguided to think of skills separately from the full governmental package.

In the first wave, governments realised that farm and factory require different skill sets. The first unbundling saw primary education brought into the public sector and radically transformed. But this was one piece of the puzzle. As farmers moved to factories, new vagaries faced them – redundancies, inflation, and more. Part of the reaction was to establish welfare states, but equally important was the establishment of labour organisations.

Likewise, the new unbundling will require a revamp of education policies, welfare states, and labour organisations.

Better education

The basic changes to education are well summed up by Blinder (2006). The new wave is associated with much greater uncertainty, so flexibility is the key to allowing Europe to seize the opportunities of globalisation while minimising the adjustment costs. Children must learn how to learn while they are learning reading, writing, and arithmetic.

Stronger families

New research, however, tells us that schools are not the only place of learning, and perhaps not the most crucial. As James Heckman recently wrote on VoxEU.org,

“Dysfunctional families retard the formation of the abilities needed for successful performance in modern society. … American public policy currently focuses on cognitive test scores or “smarts.” Yet an emerging literature shows that much more than smarts is required for success in life. Motivation, sociability, the ability to work with others, the ability to focus on tasks, self-regulation, self-esteem, time preference, health, and mental health all matter. … A substantial body of research shows that earnings, employment, labour force experience, college attendance, teenage pregnancy, participation in risky activities, compliance with health protocols, and participation in crime are all strongly affected by non-cognitive as well as cognitive abilities.”

And governments can do something about it:

“Experiments that enrich the early environments of disadvantaged children demonstrate causal effects of early environments on adolescent and adult outcomes and provide powerful evidence against genetic determinism.”

Europe needs stable families, especially those with young children.

Better structured trade unions

Trade unions were a central element in making factory life attractive for workers in the first wave, counterbalancing the market power of firms and stabilising the vagaries of manufacturing employment. Today’s trade union structure arose in the first half of last century. As the recent “industrial action” at Lufthansa shows, this structure is not always the most appropriate for the new wave. Shocks are no longer mainly associated with skill groups or particular sectors. Globalisation operates at a much great resolution, so trade unions either need to become more narrowly focused, or more broadly focused.

References

Baldwin, R. (2006). “Globalisation: the great unbundling(s),” Chapter 1, in Globalisation challenges for Europe, Secretariat of the Economic Council, Finnish Prime Minister’s Office, Helsinki, 2006; ISBN 952-5631-15-X.

Blinder, Alan S., (2006), “Offshoring: The Next Industrial Revolution?” Foreign Affairs, 85:2, 113-128.

Blinder, Alan S., (2008). “Offshoring, Workforce Skills, and the Educational System.” Virtual Global Economic Symposium.

Footnotes

¹ For the longer version, see Baldwin (2006).

Comments

[National Health Care]

Since job changes are unpredictable and sudden, decoupling health care from employment would also help. National health care is provided at half the cost per capita by every other advanced nation. Its time.

[a]

"While winners won more than the losers lost..." Is there a normative judgment wrapped up here? E.g. if the top 1% wins more than the bottom 25% loses, should society be happy with the situation?

[ken melvin]

It isn’t perfectly clear that unbundling is a good thing. Maybe, in toto, it would be better if most things were produced locally.

Again, trade unions, education, effect selection and distribution. Neither, per se, provide jobs.

[Lafayette]

Article: A job which three years ago was considered absolutely safe – say a German computer programmer designing custom software for a Landesbank – may today be offshored to India, or outsourced to a German software firm that offshores the job to India.

Bad example. The Indians have "off the shelf" boxed solutions. Ya pays for what ya gets from India ... and don't holler. They can put together deftly some very good solutions, as long as custom complexity is not OTT.

Custom application software is extremely difficult to write if dislocated to a country that does not speak the local language. But, this is a minor point, even nitpicking. (Except in a discussion regarding the rescue of national employment -- which is not this thread's subject.)

The major point is "What about Services as we transit from the Industrial Age of Mulitinational corporations to the Information Age. One needs to look at the construct of both Services Industries and Multinational Companies to see how the former is morphing into the latter.

The Industrial Age of multinationals such as Boeing, IBM, Seimens, Bouyges, Nokia, FIAT, Ikea ... have spread their networks around the world. They will pick new technologies from wherever they arise and outsource manufacturing where cheapest-to-market. This has all happened already in the latter half of the last century.

Nothing will change those names in the future, as they are likely to remain international purveyors of goods and services. What could change significantly is their Services Offering, largely because the margins on services are larger and therefore more profitable. IBM made a major transition over the past decade from a machine- to a services-oriented business.

For the moment, globalization is fixated upon the "China price". This will prevail for another ten years, but since the Chinese have employed the Japanese Strategy for economic growth, they too will find the same results. Inevitably, their internal market will need to take over the job creation burden that their external markets have afforded them. This happened in Japan and there is no reason why it should not happen to China.

However, the one key criteria that should be sought, regarding China, is when will it be the parent to a Major Multinational -- as have Japan (Sony, Mitsubishi, Panasonic, etc.) and Korea (Samsung, etc.) For the moment, the only major player on the horizon is a Chinese manufacturer of telecoms equivalent that has cherry-picked its market niche and is giving Cisco a major headache. The Chinese company is not yet a household word.

So, I submit, that the Globalisation Story has not yet been fully written. I doubt that China will ever be a major Financial Services player. User yes, player no. And, where it will find other niches in the Services Industries in our Brave New Services World is yet another tantalizing question.

But, it is THE way to go.

[Realist]

"Learning how to learn" is one of those comforting phrases like "multi-tasking." People can't multi-task; research shows this conclusively and anyone who thinks otherwise is deluding themselves. Likewise, it takes about ten years to become really good at a skilled activity; how many times in a career do you think that's even possible, let alone economically justified?

[hari]

I think it will all depend on developments subsequent to WTO/Doha Round, if and when it's concluded with acquiescence of OECD bloc.

Meanwhile, serious wave of bilateral FTAs are being enacted officially by ASEAN bloc; namely, (1)India (2) Aus/NZ (3)Japan (4)China (5) S Korea/Taiwan. [India-Asean FTA is signed..rest follows].

If Asean follows-up FTA with additional sectoral agreements, for example, on regional credit markets for fixed income derivatives, it'll surely give an impetus to emerging Asia to establish a regional currency of its own (ie. Asian Dollar) with a view to protecting its emerging global financial markets.

It seems the emerging framework will more or less reflect EU bloc developments since the Rome Treaty.

[Real Person from the Real World]

Note the part about "dysfunctional families". How do permatemps who don't make enough to live or contract workers who have to move like gypsies from one gig to the next, feast or famine, sometimes with long periods on the bench, contribute to increasing functionality in families. Heck, I barely know my relatives as they are spread all over the map. This IS the prime reason (some) schools (among poorer and more mid income people) are having such a tough time. They HAVE TO DO IT ALL, despite trying to enlist the family. (The well paid can mitigate some problems by certain forms of social and educational enrichment available for money.)

[paine]

hari
i don't expect
a clone of the kold war nurtured
euro-com-mart
culminating in a regional currency
to emerge in east/southeast asia
at least not
any time soon enough
for u or me to factor into
our own personal
life plans

even if its in china's interest
--and i'm far from sure
it would prove to be so ---
its probably
not in japan's
and far more signifigantly
its definitely
not in uncle's interest
asean is asean
without the east asain miracles joining in
a common asian market
would be barely important
much like hugo-lulu et al's
latinomart
sure the biz has been good with the celestial kingdom recently
but ....
"beware the han menace "
still plays well 'round there
and a com mart over there
without the PRC and korea
is like ...
well...
the 27 yankees without ruth and gehrig

[Real Person from the Real World]

Unpredictability, yup. You invest in learning for one occupation, only to find that a few years later, it is being done by someone overseas. You are supposed to then happily go back to school paying Education, Inc. for the next wave of employment. At what point do you just get too tired of retraining?

Just about any job, except those that involve face-to-face interaction, can be done anywhere. While knowing this is being forewarned, exactly how many car mechanics, plumbers, lawn maintenance people, garbageman, maids, janitors, etc can we actually use in one location? AND these jobs are all among the lowest paid already. With more people available for them, they will pay even less.

[paine]

addendum:
conjure
the hindu -han grapple

neither emerging giant
can close out the other
in the asean bloc
but both will eventually want to
insure equal access
though neither would join the others ...club
result
impasse in south asia
as each powers proxy corporations
work to rip apart
merg moves

[paine]

"AND these jobs are all among the lowest paid already"

two countering policy moves
could change the landscape

a hyper weak dollar
and
a chock-full employment fed-budget

ogre on road to there ???

the inflation phantom

[paine]

"offices are unbundled. Various service components are outsourced and increasingly offshored. This radically widens the circle of affected workers"

for us yanks
office function automation
and out sourcing
don't mean off shoring
unless the dollar forex makes it so..
right now it still does

[paine]

"Europe needs stable families, especially those with young children "
reactionary romanticism
the fickle fate we call our family
must be removed from the crucial aspects of the
raw person rearing and nurturing game
ie
we must socialize socialization

not public ed past 8th grade
---you oughta be self motivated by then---
but
public care
from - 9 months to + 5 years

[hari]

Paine - lot of sympathy with your reservations - they make sense today, for sure.

However, things are a foot (as they say...) with Asean-India signing FTA last month (I reportd here!).

Next, Asean is porposing one with Aus/NZ to cover commodities trade and whatnot.

China and Japan will not sit idle while Asean signed its FTA with India, me thinks.

That leaves us S Korea, Taiwan....

PS. Nothing to panic while they sort of get their act together - common Asian currency discussions have been going on for a while - with ADB leading the charge.

[reason]

I wonder why nobody talks about the even bigger threat coming down the road - robots? There is no guarantee at all, that the marginal productivity of workers will remain above subsistance level, when never sick, never tempermental, unpaid workers (net of energy and maintenance costs) are a possibility. For undifferentiated workers, the least productive defines the wage.

I repeat - there is no guarantee at all that wages won't again fall to subsistance level and lower (meaning you can survive with subsidy).

It is a fundamental threat, if we continue to assume that it is OK to have a large proportion of the population relying on wages for survival.

And don't let me start on the dysfunctional financial system.

[paine]

"I wonder why nobody talks about the even bigger threat coming down the road - robots"

mechanization plus cheap computers equals robots

what's new here reason???

the office cubicles and the factory floors of amerika
are obviously already
both hefty targets
for labor reduction thru mechanization
and the profit motive will continue to find
more

ironically
the cheapsubstitute over in asia
prolly retards the profitable implementaion
of robotization
their tech progress
maybe be in part
the globes innovation regress

put out of all jobs by robots ???

there is no lump of socially valuable production
that remains fixed over time..right ???

no generalized peak of production

at the margins of any on going
production system
innovations emerge
it takes---err for now anyway ---
people to discover
and cook up these new recipes
(as doc Romo calls em )

PONDERABLE :

just how big --relatively --
might the FUTURE R and D sector get
to be ???

[Lafayette]

hari: I think it will all depend on developments subsequent to WTO/Doha Round, if and when it's concluded with acquiescence of OECD bloc.

If McBush is elected, all bets are off for Doha. The Replicants are wedded to farming interests.

Doha is all about reducing subsidies for that bloc.

[Lafayette]

RP: You invest in learning for one occupation, only to find that a few years later, it is being done by someone overseas. You are supposed to then happily go back to school paying Education, Inc. for the next wave of employment. At what point do you just get too tired of retraining?

When, perhaps, you get tired of eating or paying the electricity bills?

There's no choice, RP. The change is inescapable, so let's accept it and adapt. The world has changed since you and I were born. Let's admit it.

We pass our lives trying to negate the principle that the world is a continuous battle of survival of the fittest. Americans are no more privileged in desiring a decent lifestyle than the Chinese. The only way, methinks, to deal with the future is confront it, do what is necessary and carry on.

Nobody is owed a living. We must earn it and if learning is part of maintaining skills to do so, then we make an effort to learn. We don't need to be Einsteins, but our youth certainly need to make more of an effort than they have in the past.

[kthomas]

"Nobody is owed a living. We must earn it and if learning is part of maintaining skills to do so, then we make an effort to learn."

Slave talk, Lafayette. Shame on you. When Capital can move money and jobs overseas on a whim, then even the most educated worker is at risk. Please spare us your reality-based wisdom.

[paine]

laf
u comment soundly above
then turn in a later comment
to pompous gibbering

" Nobody is owed a living ...We must earn it "

tell that to paris hilton

the scions of the rich
are society pets
they free ride
compliments of ....us

[hari]

In principle, you guys have to give Marquis some slack because he's simply stating a fact-of-life today (in OECD) in which education and some vocational competence is a pre-requisite to success.

Although I'm a convinced Social Democrat, I've difficulty seeing how long (my) govs can subsidize uncompetitive workforce without political backlash - and more - thrown out of office. State and municipal budgets are getting tighter and tighter with social costs mounting...and communes unable to maintain budget targets (in most cases).

That's what behind his whimsical formulation based on managing IT labour force (long ago!).

[Patrick]

Trade unions have a big role to play. In the age of six figure bonuses for criminal management who drive companies into insolvency and mass layoffs, investors and labor will find they have more in common than they generally believe.

After leading a drive to organize fellow software engineers, I can say from experience that it's a really hard sell. So many people believe the lie that they can all join the ranks of the robber barons if they just sacrifice their health, family, job security and benefits for long enough. They were all like the cartoon donkey pulling a wagon desperately trying to catch the carrot Bugs Bunny dangles just out of reach. A few years latter, after management had raped the company and they all got laid-off, a few admitted that organizing had been the right idea, but not many.

[ken melvin]

The unions made the America of the now long gone halcyon days. 'Tis a new time, one requiring a new economics.

[dilbert dogbert]

Globalization vs the Nation State. Anyone want to comment on that? The purpose of the Nation State is to protect it's citizens. What happens when most in the state don't think they are being protected?

[Icarus]

"Nobody is owed a living. We must earn it and if learning is part of maintaining skills to do so, then we make an effort to learn."

Lafayette...finally, some sense.

Yes, you're correct. The well-educated in the US will not have much trouble. High end services will still require an on-shore presence. And, some semi-skilled work will not have problems either (in terms of globalization), as we will need our construction workers and other laborers.

There is, however, a section of the working class which is in trouble. Alan Binder has written about this group, estimating numbers a bit high, in my opinion.

But, we must remember, this is a good thing. We are moving labor to locations which are more competitive, and building a strong middle class in India.

The sacrifice is worth it. There's not much we're going to miss with the loss of a chunk of the american middle class.

[Icarus]

Dilbert Dogbert...

In this battle, the "Nation" is losing. Nations require captive citizens, and our world is more and more about migration, both at the low end, and the high end.

Nations are a recent invention, and I suspect that history text books in a millenia will have a chapter entitled "The Age of Nations". They will dissolve, even conceptually.

This again is a blessing. Nations were probably the most violent form of political organization we have ever seen. The number of deaths attributable to nationalism is horrifying.

[Gegner]

Did any of you catch this piece from today's Asia Times by Henry CK Liu?

He made an interesting observation regarding 'globalization' and the, er, economists that support it.

This is just a snippit, the whole article is worth the read:

The market is merely the transactional record of the economy. Students of the market economy tend to confuse business, which is transacted in the market, as the whole economy itself. That is the problem with Business School economists who really should be called "busi-nomists" rather than eco-nomists because by definition and by design they are not concerned with eco, a Greek word oikos, meaning "house". The word describes the complex symbiotic relationships of all living organisms in relation to their environment in the eco-system. Business is only a subsystem of the socio-economic ecosystem. The goal of busi-nomists is to keep the business cycle from recurring crashes even if it means destroying the economy in the process. To achieve this goal, central banking was invented.

[reason]

paine...
Your imagination is not great enough, maybe we will have robots doing the R & D (Singularity and all that). All that neo-classicals can claim is that historically labour got their share. They cannot claim that it MUST be so (not if robots can replace wage slaves). Icarus can have his dream, the unwealthy can all starve.

[reason]

And paine...
please name a service that doesn't in the end require some natural resource input. And don't we need LEISURE time in order to consume services (or are all the services we consume in order to enable us to spend longer earning a pittance).
In case people wonder where this is all leading, I'm a tax and spread man, and an environmentalist. We need to do more with less, so in principle robots are part of the answer. But robots are capital - how do the capital-less survive in a world where ever more requires capital to produce and each receives his productivity (at best).

[reason]

Gegner...
why don't you provide a URL? The point is interesting, but seeing Central Banks as the enemy is a popular sport. Part of the problem is in finance I'm sure, but Central Banks are only a symptom not the disease. I'm quite taken with this:

http://www.itulip.com/forums/showthread.php?t=891

(Link courtesy of another poster here). I don't read any Fed demonization there. To out myself I used to play a very minor role in a central bank myself. Somehow I missed the evil when I was there.

[Real Person from the Real World]

Lafayette says : "Nobody is owed a living. We must earn it and if learning is part of maintaining skills to do so, then we make an effort to learn. We don't need to be Einsteins, but our youth certainly need to make more of an effort than they have in the past."

What planet are you living on? There are few jobs for the youth of this country other than the same low wage and sales jobs older people are also applying for. Retrain? At what point do you give up? 10? 50? 60? And what about POD PEOPLE HR who think that any job is about "your passion," not paying your bills?

It is MISERABLE in this country to get a decent job, and while Steven Spielberg may be following his passion, the most of us take the jobs we can get, to make ends meet.

You once said that you thought HR was useless. Unfortunately, most of us have to get past these gatekeepers who are sometimes pod people, cretins, and sometimes petty satraps of the corporate fiefdom.

Save your sermonizing soapbox for someone else.

[Icarus]

Real Person...

There are plenty of great jobs in the US, for many of our well qualified, highly educated people. I would advise anyone to work hard to 'make it' in that group. California, for example, is full of such jobs.

Just because you didn't 'make it', don't blame the system. The system does not guarantee the "great life" for all...just for those who excel.

[reason]

Icarus...
Have you ever thought what "excel" means. It isn't an absolute term, it is relative term. It makes life a zero sum competition.

Mankind is a co-operative (tribal) species. Your social darwinism really goes against our nature.

You may think you favour something that will end up with good consequences, but the end of the road that you want to follow is bloody revolution or equally bloody repression. FDR steered the USA away from such a danger in the 1930s. But Paris and St.Petersburg should not be forgotten. And the aftermath of such revolutions are always horrific.

[cm]

reason: You can try to reason with Icarus, but he is a hate monger who is driven by some grudge, and quite likely a sense of supremacy, and even when some of his arguments appear to be technically accurate or based in rationality, his thinking is probably not very amenable to incorporating external input.

[Lafayette]

kthomas: Slave talk, Lafayette. Shame on you. When Capital can move money and jobs overseas on a whim, then even the most educated worker is at risk. Please spare us your reality-based wisdom.

Brave talk, kt. Do show how the above is even remotely true, especially the nonsense about the "most educated worker is at risk". Typical mindless crap from the troglodyte gloom and doom crowd. Besides, even if were true, how do you propose contending with the situation?

Preventing all outgoing FDI by law? That's more up your little creek, isn't it? Watch what happens if outgoing FDI were forbidden FDI by law. Watch what happens to FDI inflows and the consequent loss of jobs in America.

Think before you spout.

[Lafayette]

Icky: The system does not guarantee the "great life" for all...just for those who excel.

Oh, come off the high-horse. Excel? You gotta be kiddin.

Thank God, we need not excel. But, but doing good enough is going to take an effort in a globalized world of increasing competition. China is graduating thousands of engineers a year in its universities.

As China develops its middle-class economy, like America's, it will begin to compete in up-market international business, leaving by the wayside the small margin "make it for WalMart" business that depends upon huge volumes to make profits.

[Patricia Shannon]

Lafayette says...

RP: You invest in learning for one occupation, only to find that a few years later, it is being done by someone overseas. You are supposed to then happily go back to school paying Education, Inc. for the next wave of employment. At what point do you just get too tired of retraining?

When, perhaps, you get tired of eating or paying the electricity bills?

And if you can't eat or pay the bills because you can't find a job that pays more than your student loan payments?

[Patricia Shannon]

If you have to spend your entire life going to school and/or working, when are you going to have time to have children, go to concerts, take a walk? What would be the use of living? That's part of the reason many of the poor often don't bother taking care of themselves, and engage in risk behaviors.

[Real Person from the Real World]

I guess we all exist only for employers, and the wealthy. Only employers and well to do global elites who "excel" deserve adequate food, health care, and "a life". The rest if us are just road kill, or killed by the "blue ice" pooped out by a flying reptile who calls himself "icarus".

[reason]

cm
Yet I can't see him as exactly a troll (unlike some others). By the way his argument against nations is factually false, the proportion of people killed in wars between nation states is far lower than the proportion killed in tribal conflicts, and if one looks at wars between democratic states, far lower still.

[Lafayette]

Three-fifths

PS: And if you can't eat or pay the bills because you can't find a job that pays more than your student loan payments?

Which is why Student Loans should be free, gratis and for nothing. Why pay for tertiary education, when secondary schooling is free? And when tertiary education increasingly means the difference between unskilled unemployment and skilled employment.

An education is no guaranty of employment. There is no guaranty. An education makes one relatively more employable at a higher level of income, when jobs may or may be menaced by global competition or recurring economic downturns. We have not yet made obsolete the Business Cycle.

On another note: If America is in the mess its in, it is because they elected twice a dunderhead as PotUS. This administration has been catastrophically pro-business all down the line, cheerfully letting Finance Executives fumble and fail at Risk Management -- and sell their fraud to the world. Because, that is part and parcel of the Market Solution, which gets on with what has to be done, preferably without government oversight.

What mindless nonsense from a bunch of greedy plutocrats.

Will Americans realize that between free-for-all un-regulation and market stifling over-regulation, that there is a middle ground -- which does not menace an economy's capacity to maintain near-full employment?

It's time to pay the Piper, PS. A nation does not get away with financial bloody murder (on such a colossal scale) in policy management and still expect no dire consequences. Wakey wakey -- the 1950s are long since gone.

Consider how lucky you are: You live in a borderless country with one common language blessed by relatively high labor flexibility.

I.e., you do not live in Europe. Count your blessings. The chances of an American remaining on long-term unemployment (more than 24 weeks) is three-fifths of a European.

[hari]

Paine - et.al.

There are little gems in this thread which shld not be avoided - at the risk of misunderstanding.

Since I first wrote on Asean FTA signed/sealed with India.
They've done same now with Aus/NZ to cover their commodities trade and condition of supply. Recall Aus/NZ are bastion of commoditiy (not manufacturing) trade....

Then US sought and got waiver from IAEA (Vienna) on nuclear energy technology transfer (FDI) to India - taking into account objections from Pakistan. After 34years, India finally can plan/invest in its atomic energy sector. This sectoral energy development (FDI) is est. at USD40 Billion.

China originally objected to India's waiver under NPT rules.
But finally gave in and supported the final (waiver)resolution negotiated by IAEA/India/US. [Ref.IAEA blog.]

Beijing followed up the waiver and invited India to join mainland China in securing peace and progress in emerging Asian region - with a view to peaceful co-existence.[See China People's Daily].

So, my dear Piane, Han (Chinese) and Hindu (Indian) are not getting into each other's throat (as you tried to intimidate!). Instead they're moving the goal post and changing the regional/global paradigm for peace and security.

PS. US tried under GWB to forestall emergence of EU as a global startegic (soft) power in Europe - by using its proxy in Blair/Brown (UK). Seemingly, it failed. Because now Sarkosy has not only got Russia to vacate Georgian soil, by 1 Oct, but also agreed to meeting in Evian (Fr) to deal with the future of The Caucasus. Misha has also hailed Sarkosy's achievements in Moscow - after meeting Sarkosy in Tbilisi on same day (8 Sept). EU-Russia Cooperation agreement will eventually follow now....

EU-27 is finally emerging with its *soft power* and has given US notice from its FM/Session in Avignon (FR) that it wants a level playing field with US on global issues.

[cm]

Real Person: Finally you get it. Now perhaps Icarus can move on to other worthwile activities.

[cm]

reason: I didn't say "troll", I think there is something else going on. OTOH the "club swinging" part is certainly present.

[cm]

Lafayette: "The chances of an American remaining on long-term unemployment (more than 24 weeks) is three-fifths of a European."

How do you determine that? And is the "chance" to become unemployed a uniform draw? If not, then at best you can make a descriptive statement about employment indicators, not a predictive one.

And you have probably considered that receipt of benefits (in "Europe") will cause more of the unemployed to come out of the woodwork? And stay outside after 6 months?

Germany introduced a parallel "ILO definition" unemployment indicator (survey based) a while ago that uses a definition close to the US one. If memory serves, when official unemployment was at 12%, the ILO-based indicator was somewhere around 7-8%. And that's with German benefit levels which buy people more time.

[Lafayette]

cm: How do you determine that? And is the "chance" to become unemployed a uniform draw? If not, then at best you can make a descriptive statement about employment indicators, not a predictive one.

The length of time on unemployment insurance is reported by the ILO.

And you have probably considered that receipt of benefits (in "Europe") will cause more of the unemployed to come out of the woodwork? And stay outside after 6 months?

Nope, never said that. You did. Kinda silly, isn't it?

Only 2 to 5% of any given unemployed population willingly live off unemployment or other government subsidies ... and these percentages typically apply to young mothers with children and no husband to support them.

Germany introduced a parallel "ILO definition" unemployment indicator (survey based) a while ago that uses a definition close to the US one.

Thanks, but no thanks. I'll not go down the rat-hole of unemployment figures or indicators, how they are designed, how they are gathered or how they are employed in policy making.

Been there, done that, borrrrrinnnnnnng.

[cm]

Lafayette: By mentioning the benefits angle I wasn't suggesting that people prefer benefits to a job, but that expanded benefits (and in particular expanded in time) will keep more people in the reporting system. In order to keep getting benefits, you have to show up at the Labor Dept's door, or submit forms periodically. No benefits, no measurement. Once people drop out, you don't know what is happening.

And of course drilling down is boring, like any activity where you don't do just the fun parts.