

Are the American people obsolete? - auxbuss
http://www.salon.com/news/feature/2010/07/27/american_people_obsolete

======
jdietrich
It is worth remembering that the average American consumes an exceptional
amount of resources. Compared even to the relatively profligate Europeans, the
average American consumes twice as much energy, twice as much water and lives
on more than twice as much land. The disparity with even wealthy urban Chinese
or Indians is greater still.

This lifestyle has in part been justified by the very high historical levels
of American productivity, but it is clear that American productivity is not
increasing at nearly the rate of that in emerging markets.

We are left with an obvious conclusion - as a factor of production, American
citizens continue to be very resource-intensive, but are becoming
comparatively less productive.

It seems to me that America is unique in a culture that sees consumption of
scarce resources as tantamount to a human right. Much of the cultural divide
in the US seems to rest on this basic notion. Many political issues in the US
are really debates about resources that no-one seems prepared to engage with -
the US healthcare debate ought to be a debate about why Americans spend such
incredible sums on medicine, but is instead primarily a debate about what kind
of accounting we use to pay those incredible sums.

The idea of what it means to be American is obsolete. The sprawling suburb,
the hour-long commute, the SUV, the McMansion, all artifacts of an empire in
terminal decline. American citizens simply cannot consume such vast resources
if they do not have the productivity to match. I see every reason why Chinese
and Indian productivity will continue to rise, but little reason why American
productivity would suddenly rally. The American people are left with an
obvious choice - produce more or consume less.

~~~
Kaizyn
All it would take to 'fix' our economic woes would be to reindustrialize.
Coupled with high import tarrifs - in the range of 30-60% as was set
historically during the periods of growth in the US, it wouldn't take long to
restore the US 'productivity' and industrial output. It would mean that the
large profit-seeking organizations in the US would make less money over time,
but it would be better for the average American workers.

~~~
yummyfajitas
Unless you are referring to the recent recession (from which the graphs
indicate we are recovering), we never de-industrialized. Our industrial output
is higher than ever before.

<http://research.stlouisfed.org/fred2/series/INDPRO>

<http://research.stlouisfed.org/fred2/series/IPMAN>

~~~
pohl
I wonder what those graphs would look like when normalized by the growth in
total GDP over time. (I took 're-industrialize' to mean as a percentage of
output).

~~~
yummyfajitas
Why wonder when you can use the search box?

<http://research.stlouisfed.org/fred2/series/GDPC96>

They both increased by about 6.5x from 1950 to 2007.

Of course, I'm also not sure why the growth of non-industrial sectors of the
economy is a bad thing, or represents a decline at all. I've learned a bit of
martial arts over the past year or two - does that mean I need to "re-
computerize" my skillset?

~~~
pohl
I'm no economist, but I believe the concern over manufacturing continuing to
shrink as a percentage of U.S. economic activity comes from the question of
whether the segments that are replacing it are things that bring money into
the national economy. Do service sector jobs represent exportable economic
activity? Are the sectors that replace manufacturing easily outsourced?

I think the issue is a little too complex than for a single rising trend-line
to put us at ease.

~~~
yummyfajitas
_...whether the segments that are replacing it..._

No sector has "replaced" manufacturing. Some sectors of the economy may have
grown faster, but manufacturing has also grown.

It's much the same with skills. My martial arts skills have grown more quickly
than my computer skills recently, but I've become more skilled at both
programming and fighting. Our economy provides both manufactured goods _and_
massages - historically it only produced the former. That's a good thing.

~~~
pohl
_No sector has "replaced" manufacturing._

That's not true if you think structurally, as a percentage of the whole.

The analogy to skills is dubious. A closer parallel might be the time you
spend at a given activity. If you become obsessed with your martial arts, and
you quit your job without finding a way to make your kata profitable, then you
would have need to worry about your finances, yes?

~~~
yummyfajitas
That clearly has not occurred, since (let me point this out one more time) _we
manufacture more now than ever before_.

But lets run with your time analogy. We became more productive at
manufacturing, and we now manufacture more stuff with less human input. Humans
have been freed up to perform other useful work (services).

It's kind of like me becoming really good at my job, finishing all my work by
Tuesday night, getting a pay raise, and then spending Wed-Fri at a second job
(e.g., martial arts instructor). Oh noes! I hope this never happens to me!

~~~
pohl
_we manufacture more now than ever before_

I don't understand how you can expect this statement to carry your thesis in
isolation.

Let's say you earn more money in your job than you ever have before.

Does that mean you're running "in the black"? No, because you might have also
increased your expenditures out of proportion with your increase in income.

It's not enough to observe that manufacturing has increased, for imagine a
country with ever-increasing manufacturing but declining exports of
manufactured goods. Clearly it's possible for your observation to be true
whilst not indicating a strong economy.

Again, I'm no economist, but I know enough to distrust one Pollyanna graph
when I see one.

------
yequalsx
Before globalization and free trade it was roughly true that what was good for
American industry was good for the American people. Now that money can be
transferred from country to country easily, that factories can be transferred
easily, etc. it is no longer true, necessarily, that what is good for American
industry is good for the American people.

The economic and political beliefs of the masses have not caught up to this
new reality. They still think in terms of Ford being an American company
rather than a company whose headquarters are in America. The interests of a
corporation are to its shareholders and not to any particular country.

Mega corporations like Shell transcend the nation state. They are able to
influence the national policies of multiple countries at once. Unfortunately
politics is local and the big picture is lost on the majority of people.
People are largely stuck in the paradigm of my country versus your country.
This is allowing corporations to commit morally dubious acts on a grand scale.

~~~
yummyfajitas
Why do you feel it is bad for the American people to have our computers and
televisions made in China? Are consumers enjoying cheaper goods not also
Americans?

(Note: Ford is a silly example. Many of our cars are already made in the US by
machines owned by domestic subsidiaries of foreign corporations. The machines
are operated by a small number of non-union laborers earning high wages.)

~~~
jimbokun
"Why do you feel it is bad for the American people to have our computers and
televisions made in China?"

I do not see this claim in the comment you are replying to.

~~~
krschultz
"Before globalization and free trade it was roughly true that what was good
for American industry was good for the American people. "

Offshoring manufacturing may leave a small group of people without jobs, but
it lowers the cost of goods for everyone.

~~~
okaramian
That statement does not only relate to manufacturing. You're putting words in
the poster's mouth.

------
muhfuhkuh
Let's get down to brass tacks. It's not the American people who are obsolete,
it's the notion that corporations are something more significant to us than a
place to temporarily lay down our investment bet for a brief while. Anything
more is asking for heartbreak. Just because the government personifies a
corporation doesn't mean we have to as individuals.

Hows about this for a radical idea: We don't NEED our corporations, or our
rich. No, seriously, we don't.

"But who will make our products," you ask. Well, who does that now? Not us,
not anymore. Does it matter? Consumer products will always be relatively
easily manufactured, and why would we focus on making easy stuff?

Look at the Germans: They have trade surpluses not because they make the
latest Christmas toy craze or plates and sporks, but because they make
precision tools, gauges, and other engineered products for industry. Their
concept of manufacturing, called Mittelstand, sees small and mid-size
companies -- over 90% of German companies are that size and they employ over
70% of the German population -- doing the lion's share of manufacturing, much
of it for export to other countries.

Germans are, as a people, self-reliant to the detriment of their corporations;
we in the US are the opposite. But, if this article is true in any measure,
that will have to change.

It's unfortunate that Obama and others in our government don't place enough
emphasis on things like YC and the SBA. We need _everyone else_ to see that
there is an alternative to becoming a 99er and/or relying on either Big
Government or Big Corporate (BG/C) to save us. BG/C will always stand
together, whether through regulatory capture, (de)regulation that only serves
to curtail competition from upstarts, or blatant TBTF corporate welfare.

I know, Germans and Chinese small business ownership is a very cultural thing,
and I can't pretend that it takes a certain mentality to start and run a
business. But, that's the excitement of risk. I think everyone can agree that
we're at a really low point in American morale. That "can do" spirit that used
to pervade our psyche is replaced with rage and finger-pointing. What we need
to do is learn to bootstrap again. I want people who have been or know someone
who has been affected by this corporate "pivot" away from America to ask them
what do they have to lose by starting their own business. The hustle
atmosphere is what causes job growth in the first place. If ideas are too
expensive to bootstrap, join or start an incubator. I see life science and
biotech incubators in every r&d park in every major city in the US, more so
than other technologies. Why? Pooling of resources, and volume discounts on
lab and materials.

It's all in how you look at things: It may be a lot harder to start a business
than to work for a corporation, but what if it's impossible to find a job at
one now? What is the possible alternative? Becoming a 99er, then switiching
straight over to welfare? Is that really what people are resigning themselves
to when the corporations won't hire them?

Trite but apropos movie quote conclusion? "It's only after we've lost
everything that we're free to do anything."

------
ovi256
"the only thing missing is a non-voting immigrant mercenary army, whose
legions can be deployed in foreign wars without creating grieving parents,
widows and children who vote in American elections."

That is already well under way, the Marine Corp in particular recruits heavily
amongst immigrants without asking many questions about their legal status and
promising (and _delivering_ ) citizenship afterwards.

SERVICE GUARANTEES CITIZENSHIP. WOULD YOU LIKE TO KNOW MORE ?

~~~
J3L2404
Want to stop war. Bring back the draft.

~~~
randallsquared
This is equivalent to killing people until they agree with you, which is
basically just making war on a different group of people in the name of
"stopping war". And as the Vietnam era shows, it's not even immediately
effective, nor a lasting effect.

~~~
J3L2404
No. If everyone is _personally_ in danger of losing a loved one they will be
reticent to go along with an unnecessary war, precisely because of the lessons
learned in Vietnam.

~~~
yummyfajitas
If everyone is personally in danger of having a loved one enslaved or killed,
they will be reticient to go along with an unnecessary policy of {free trade,
socialism, net neutrality, fish&game regulation, pigouvian taxes on alchohol}.

Since I oppose the current fish&game regulations, we should enslave random
people and force them to work as commercial fishermen (note: this is even more
dangerous than the military) until the regulations are changed. This will
cause people to agree with me.

------
eru
So much whining. Just have a look at how, say, Germany copes with
globalization. It's a rich country that exports to China.

~~~
cdavid
germany had an anemic gdp growth in the last two decades, significantly worse
than most countries of comparitive size (population and gdp-wise). Look at gdp
growth of other big european countries, or worse USA, it is quite striking

~~~
jwh
Part of that slow GDP growth can be attributed to having to absorb an entire
communist country (East Germany) into a capitalistic society (West Germany).

~~~
cdavid
This is indeed no small accomplishment - but I doubt that that's what people
have in mind when they say Germany's economy is an example to follow. It seems
to have become a popular meme in the US (has been for a long time in Europe
media), but it has little rationale. Generally, it goes around Germany exports
a lot, and Germany has not followed the model of shareholding as much as the
US (or UK).

Those ideas are extremely popular in general, and even more so in Europe, I
think partly because it can reinforce anti-americanism (the US became a symbol
of companies owned by shareholders instead of families, supposedly more geared
toward long term).

------
pbhjpbhj
From the article

>They [Wall Street traders] can flourish even if the U.S. declines, as long as
they can tap into growth in other regions of the world.

They can flourish by forcing US decline. This is part of the problem.

~~~
rbanffy
> They can flourish by forcing US decline

I'm not sure how that would work out. US is a huge consumer pool and forcing
its decline would damage everyone.

~~~
pbhjpbhj
Short-termism.

I wasn't suggesting that as a "species" they could flourish and continue to do
so (though that's possible) but that just as one can profit by driving a
company into the ground (remember naked short selling) one can profit by
destabilising a whole economy and destroying entire industries. Generally
speaking if you've made billions of dollars you don't care that you can't earn
any more the same way.

Indeed if I can destroy US car manufacture and have stakes in Japanese car
manufacture then it's a plus for me.

If you make money destroying society then you switch to selling anti-
depressants, DIY divorce kits, handguns, etc. and make more money. It's the
capitalist way. Ain't it fine.

------
jimbokun
"New York Mayor Michael Bloomberg recently revealed the plutocratic
perspective on immigration when he defended illegal immigration by asking,
"Who takes care of the greens and the fairways in your golf course?""

Any ambitions Bloomberg may have had to run for President, are pretty much put
to rest by this quotation.

~~~
stevenbedrick
Indeed, but it's still a fair question, just framed badly. What he should have
said was "who works in every kitchen in every diner, and who maintains every
public green space, and who builds every house?"

~~~
hugh3
Whoever is willing to do the job for least?

Other first-world countries get by just fine without an illegal-immigrant
underclass to do the menial jobs. In Australia, building houses is a
respectable and well-paid trade. Kitchens in fast-food restaurants are worked
by high school students with part-time jobs. And public green spaces are
maintained by... well I dunno, some low-skilled worker making a decent wage.

We also have a 5.2% unemployment rate, and no real social underclass the way
there is in America.

~~~
thomas11
And all these people use their decent wages in turn to build houses and eat
out, keeping the money circulating in the economy.

------
daniel-cussen
There are so many reasons manufacturing in US is declining.

It used to be the US was one of the few places you could set up a factory
without it getting bombed or confiscated. It then had a monopoly on
manufacturing and the rest of the world competed to produce commodities to
trade for the finished products. With protracted peacetime came establishment
of factories elsewhere and competition for manufacturing without a
corresponding increase in commodity production. So now an American worker has
to compete with a Chinese or Hindu worker, and if he's more expensive, he'll
lose and the Asian will win.

An American worker is more expensive than his Chinese counterpart _at any
exchange rate_ because of the prices of commodities they consume. A worker
can't work without a car in most US cities, but in China he sure can. Beside
commutes, housing is expensive (for whatever reasons). Then you have
healthcare costs that are globally superlative and that the employer has to
pay for, and taxes that are by no means small.

Then you have the legal system, which themselves are a huge burden. Court
awards and consequently settlements are very large by global standards. This
also costs a business more than money; it costs it time and requires the
bureaucratic complexity to deal effectively with liability. Then there's
Sarbanes-Oxley and lobbying. On top of that there's IP law: if part of a
product is patented in the US, that product can't be imported by foreign
companies, but it can be sold outside the country. But an American company
can't sell it in US or export it. And on and on.

Under such conditions, who would want to build a factory here?

------
pbhjpbhj
I don't think it's that the American people in particular are obsolete I think
that we have over-population and that a proportion of the worlds population
are not required for industry, food production. That the rich elite would
choose to pay as little as possible in wages is simple capitalism enabled by a
global market; it's basically a war for survival. Those in power offer barely
enough to work yourself to survival and we get to battle amongst ourselves to
see who gets those scraps - my view of the next few decades is pretty bleak.

------
jscore
While labor is shifting overseas, consumers are not.

America is the most consumer driven economy in the world and should remain so
for a bit even given the recession (thank quantitive easing and low interest
rates for that). All those trade surplus countries like Germany, China most
sell to someone when their domestic consumers are not buying.

China will probably catchup at some point (in consumer demand) but that won't
be for another generation or more.

------
DanielBMarkham
_If most Americans are no longer needed by the American rich, then perhaps the
United States should consider a policy adopted by the aristocracies and
oligarchies of many countries with surplus populations in the past: the
promotion of emigration. The rich might consent to a one-time tax to bribe
middle-class and working-class Americans into departing the U.S. for other
lands, and bribing foreign countries to accept them, in order to be alleviated
from a high tax burden in the long run._

This is an amazing bit of backwards reasoning. The rich, who don't need the
rest of us, will pay us to leave? In what kind of sense, even if the author is
correct on all other counts, would this work? Why pay a thousand people to
leave when you can just leave yourself?

I liked this article because it spotted a lot of trends, but to me it looked
at them all backwards. The rich have a lot more and are a very small minority
that no longer depend on us. But heck, that was true 100 years ago. I'm not
aware of any rich people that stayed in the United States because of the
military or the market here. Yes, if you go back to the robber barons they
needed to be near the workforce, but that's assuming that we have two states,
robber barron and the currently rich. The word "rich" covers a helluva lot
more ground than that.

In my opinion, the wheels are coming off the wagon, for whatever reasons. This
means that everybody will pull out their pet theories and causes and try to
nail them on to reality, as this author is doing.

The upside to this is that it doesn't matter which theory you choose: things
aren't working and folks are looking for people to blame for it. Emigration
might be a wise choice not for the poor and unwashed, but for most people,
middle-class and rich alike, leaving the truly poor helpless people the only
ones left. (along with the folks who prey on them, which, like the robber
barons, can't be very far from their "market")

I consulted with a startup 8 years ago that was doing just this: finding and
disseminating information about cheap foreign locations for middle-class
Americans to retire to. Looks like this is going to be a really good growth
industry.

~~~
bhousel
_This is an amazing bit of backwards reasoning. The rich, who don't need the
rest of us, will pay us to leave? In what kind of sense, even if the author is
correct on all other counts, would this work? Why pay a thousand people to
leave when you can just leave yourself?_

The article seemed an obvious satire to me. You read it literally?

~~~
colomon
Apparently a lot of people here did, as did I. But now that you mention it, it
did seem completely freaking insane to me...

------
wazoox
_> They can flourish even if the U.S. declines, as long as they can tap into
growth in other regions of the world._

Except that other regions of the world may not accept them so easily... Who
need rich parasites?

------
known
American people and _not_ obsolete. I think Adam Smith's
<http://en.wikipedia.org/wiki/Profit_motive> concept is obsolete.

------
known
Refugees viz Albert Einstein & H1Bs viz Linus Torvalds contributed to the
prosperity of America. Talented Americans should now migrate and contribute to
the rest of the world.

------
known
American people are obsolete only when American rich are willing to pay the
$200 trillion debt. <http://goo.gl/3fleL>

------
giardini
Satire? Anyone remember the term "satire"? Please remain calm and use your
dictionary. The author is making fun of a particular type of individual.

------
fredBuddemeyer
no but marxism is. the author's classification of people into these sets of
workers and owners is a product of his imagination; pension funds made them
the same people a long time ago to say nothing of entrepreneurs, professionals
and folks like us that old karl couldn't have imagined. this thinking shows
even more disregard for people than the author's facetious proposals.

------
kmfrk
Has yellow journalism destroyed good reporting?

Also, the internet is dead.

~~~
jimbokun
I thought the "recommendations" for action at the end were a bit superfluous.

Besides that, what parts of the analysis in the article do you find
inaccurate, specifically?

~~~
kmfrk
I just hate the kind of title the article uses. Don't write a question in the
title, especially while making such a big prediction like that.

It's very Wired-esque.

------
known
Free market economy in globalization == Race to the bottom

------
fredBuddemeyer
no but marxism is

------
J3L2404
'Of course there are alternative options, which would not require the
departure of most Americans from America for new lives on distant shores. One
would be a new social contract, in which the American people, through
representatives whom they actually control, would ordain that American
corporations are chartered to create jobs in the U.S. for American workers,
and if that does not interest their shareholders and managers then they can do
without legal privileges granted by the sovereign people, like limited
liability.'

~~~
yequalsx
I think too, in addition to what you suggest here, is that the size and scope
of corporations needs to be limited. A company like Citi is too big to
control. It is so big that its collapse would cause problems for the country
even if the source of the collapse comes from its dealing in other countries.

We need a new system but it appears to me that what we have in the U.S. and
elsewhere is regulatory capture. I don't see anything changing in the near
term.

~~~
eru
How about breaking the country up into smaller pieces? Citi can only be too
big to fail, if there's a big country behind for the guarantee. Small
countries would also ease regulatory capture, since all those small regulatory
regimes would have to compete with each other.

~~~
arethuza
It is arguable that creating a very attractive environment for international
corporations can actually make the problem worse - look at Ireland.

~~~
patrickk
Creating an attractive environment for international corporations has largely
been good for Ireland, and not the root cause of our current woes - that would
be the ridiculous decision by our Minister of Finance to issue a blanket
guarantee to our major banks, which were oversized relative to the size of our
domestic economy. This has resulted in the current bailouts and humiliation.

The 'Celtic Tiger' (booming Irish economy) went through two main periods -
c.1995 - 2001 (Celtic Tiger part 1), and 2003-2007 (part 2). The first period
was fueled by foreign direct investment by American multinationals - if I
recall correctly, American companies have more net investments in Ireland than
they do in China. Ireland exported more computer services in 2002 than the US
did, which is pretty mind-boggling. This export-led growth teed up the next
stage, which was simply an out of control housing bubble. See this for more
information:

[http://en.wikipedia.org/wiki/Celtic_Tiger#Downturn.2C_2001.E...](http://en.wikipedia.org/wiki/Celtic_Tiger#Downturn.2C_2001.E2.80.932003)

I'm hoping our open nature, which leaves a country vulnerable in a global
recession, will allow us to recover quickly. Iceland seems to be doing ok and
they were worse off than we were. There are some signs of a recovery e.g.
Facebook recently announced expansion in their Dublin office. Google and Apple
are also expanding here, exports are up, and curtailing the out of control
public servants wage bill will make us more cost competitive internationally.

~~~
yequalsx
I don't know much about the situation in Ireland. My understanding corresponds
with what you wrote in your first paragraph. I wonder, though, if there was a
perceived need to guarantee the banks in order to keep Ireland attractive to
multi-nationals. Iceland, I believe, did not guarantee its banks' deposits
outside of Iceland. Iceland has been able to recover much better than Ireland
has. Iceland had no need to placate the business environment for multi-
nationals though.

I'm interested in knowing your thoughts on Ireland still being part of the
Euro. Do you think it's a good idea? Is it a good idea simply because it's
good for multi-nationals?

~~~
patrickk
" _I wonder, though, if there was a perceived need to guarantee the banks in
order to keep Ireland attractive to multi-nationals. Iceland, I believe, did
not guarantee its banks' deposits outside of Iceland. Iceland has been able to
recover much better than Ireland has. Iceland had no need to placate the
business environment for multi-nationals though._ "

I don't think it was to placate multi-nationals that the banks were
guaranteed- it was partly to keep peoples' confidence in the banks (preventing
a run on the banks, see this for an explanation of a bank run:
<http://en.wikipedia.org/wiki/Bank_run>) and partly to keep investor
confidence up so that the banks could continue issuing bonds to investors in
London and New York. The first part worked, I can still get cash from an ATM
as normal, without fear that my current account will evaporate. The second
part, investor confidence, failed spectacularly and now the government is
pouring billions into the banks, as is the European Central Bank, which is
into the Irish banks for well over a €100bn and no end in sight yet. It's
necessary for government intervention because the markets won't touch the
banks with a 10-foot barge pole at the moment.

[http://www.ft.com/cms/s/0/21920684-046d-11e0-8a3c-00144feabd...](http://www.ft.com/cms/s/0/21920684-046d-11e0-8a3c-00144feabdc0.html?ftcamp=rss#axzz17jLupkAC)

The boys in Brussels and Berlin are getting completely fed up with this
situation I'd imagine.

" _I'm interested in knowing your thoughts on Ireland still being part of the
Euro. Do you think it's a good idea? Is it a good idea simply because it's
good for multi-nationals?_ "

Up until the current recession, I'd have said the euro has been good for
Ireland. It's great for tourism, trade, it's very convenient and yes, it's
good for multinationals too. It's easy to see how much you're getting screwed
buying a meal in Paris, and lowers transaction costs from currency exchanges.
However, what we really need now is more control over our fiscal policy,
currently impossible due to ceding that power to the ECB - which is mainly
concerned with keeping inflation under control in Germany, and keeping the
whole Euro project from collapsing. The ECB doesn't really care about Ireland
as such (our economy like a tiny bug on the hide of a massive elephant), but
they need to keep us afloat due to contractual arrangements and to keep the
euro alive. Currently, we really need to devalue our currency, something our
government did in 1993, which would make us more attractive to investment and
make us more competitive. We also need to keep interest rates low for a long,
long time, so homeowners don't start defaulting on their mortgages in massive
numbers like the US subprime situation. If the German economy starting picking
up as people start buying Mercs and Beemers again, the ECB will hike up
interest rates, which will be disastrous for Irish homeowners potentially
leading to an even worse situation than we're in now. So it would probably be
good for Ireland to not be part of the euro at the moment, but if the world
doesn't fall apart and things get better (and the euro doesn't collapse, which
is still a very real prospect) then the benefits of the euro will start to
outweigh it's disadvantages once again.

