

Business Is Booming - wyclif
http://www.prospect.org/cs/articles?article=business_is_booming

======
yummyfajitas
The author of this article has internalized some Keynesian assumptions so
deeply that he doesn't realize the story he is writing directly falsifies one
of them. A major assumption of Keynesian economics is that employment scales
with production. Thus, if you stimulate aggregate demand, you will increase
production, and thereby increase employment. This hasn't happened - aggregate
demand and production have recovered, but employment has not.

The fact is, our economy is a lot more complicated than it used to be. Workers
are not interchangeable cogs and expanding profits does not necessarily
involve expanding employment. Stimulating demand in retail will not raise the
employment of construction workers or realtors. Many employees produce nothing
directly, but merely improve the value of capital [1] - increased profits
don't demand hiring more employees, and reduced profits don't demand firing
them.

Until economics catches up with the times, all we will get are silly ideas
like "invest in infrastructure" and "stimulate demand". Really, you think jobs
are moving to India because of their infrastructure? Lets get real here. I've
done a little work for someone who created about 30 jobs in Pune. He drives
for 2-4 hours on crappy roads to get from his house in Bombay to the office,
only to discover that the power is out and no work can be done today. You
think he'll come back to the US if you widen a few highways?

[1] I'm a good example. My labor is directly worth nothing - all of my
companies profits are directly attributable to capital (a trading system +
money in the brokerage account). My employment is an investment - I have a
significant probability of increasing the value of that capital.

~~~
muhfuhkuh
"The fact is, our economy is a lot more complicated than it used to be."

Or, our economy is actually just not the top of the heap anymore, and probably
never will be unless Asia suddenly slides off and sinks into the Pacific. If
it weren't for anomalously successful companies like Apple or Wal-Mart, multi-
nationals will eventual write-down the US market as dying and move everything
overseas. If KFC can make more money in China than here, we're not really
going to recover and be their #1 market again, unless we just open the
immigration floodgates (even then, that adds 100 million TOTAL Mexicans, which
is a drop in the bucket in comparison). GM sells more cars in China than in
the US. You think that's ever going to "pivot" back to us, no matter if we
build infrastructure or let it crumble?

It's simpler than you think. Multi-nationals will continue to benefit from the
stable political structure and docile and manipulable populace, executives
from said companies will continue to live here with its favorable individual
tax and seasonal climate (not everyone can stomach the heat in Singapore no
matter how tax advantageous it may be) and liquid assets can be increasingly
secreted away in wherever pleases them (Caymans, Switzerland, etc.). The only
thing that actually changed is that their money makes the world flat.

This is the end of the empire, whether by brute force (Chinese market and
labor force) or by increasing political and military irrelevance. We used to
own all the money and guns. Now everyone's got guns and everyone's getting
money. Now we're just 300 million people pointing fingers at each other.

It's not complicated; there just isn't going to be any solution that we want
to hear.

~~~
ido

        unless we just open the immigration floodgates 
        (even then, that adds 100 million TOTAL 
        Mexicans, which is a drop in the bucket in 
        comparison).
    

Why do you assume immigration would be restricted to Mexicans?

~~~
muhfuhkuh
It's the hot-button issue in immigration politics and they would obviously be
the biggest beneficiary of an open border policy.

------
zdw
Fundamentally, the businesses (outside of technology focused firms) are
nothing more than middlemen that add little value.

I'm waiting for Foxconn or similar to start making their own commodity items
and selling them directly - you can, for example, already buy SFF computers
with the Foxconn label on them.

It's just a matter of time for the profit engines that US corporations have
created to be cloned and have the entire profit center go overseas.

~~~
nickpinkston
The businesses that "add little value" are envied in China because they have
access to demand, and he who owns demand is key. The Chinese are making it a
priority to advance their marketing, design, etc. abilities to compete in the
West's consumer culture. While you may not like marketing, it brings in the
money - and in our consumerist economy that's our GDP...

I'd like to see Foxconn try to replace Apple - hell even Dell. Lenovo had to
buy their business from IBM to get the marketing / brand support to be
successful beyond their manufacturing capabilities.

It's hard to market from a culture from the outside. VW made their German
designers live with US families - which is when they figured out why we want
cup holders so badly ;-)

------
fredBuddemeyer
its usually observers that keep such nationalistic score cards; participants
just see people and markets.

------
bryanlarsen
Look on the bright side: if it is American companies who are making these huge
profits overseas, then there is some chance of the jobs being created in
America, whether forced to by government or voluntarily. Foreign companies
making huge profits outside of America are not going to spend money or hire
people in the U.S.

~~~
muhfuhkuh
"there is some chance of the jobs being created in America"

Wow, so we have to pin our hopes on a chance that American companies will
throw us a couple pity jobs in America _maybe_?

We need a term describing the labor equivalent of "regulatory capture";
something that describes our collective misguided hope that corporations will
somehow give us back "our jobs".

I think everyone should just try to start a business. Seriously, everyone who
is out of work or underutilized in some job they are completely overqualified
for should just start any kind of hare-brained scheme or hustle or side-
somethingorother. Move if you have to, to some tax-advantaged or microscopic
cost-of-living state. Anything has to be better than {un|under}employment or
working under the thumb of an employer who not only knows but (perhaps)
relishes in the workload they can continue to offload on you because they know
you can't leave in this environment.

To heck with getting "our country back", we need our individual (and
collective) dignity back.

------
csomar
_At Apple, the ratio of Foxconn employees at work on Apple products to
U.S.-based Apple employees is 10-to-1: 250,000 Foxconn workers to 25,000 Apple
workers. The same ratio exists at Dell._

Huh, bullsh*t. I don't know what the average Apple worker gets paid but I'm
assuming that most of them are developers (or related), so it's in the
$100K/year. What about their Chinese counter part? I don't have any data but
based on my country which has better wages in average it should be in the
$10K/year ballpark if not less.

And it's quite a lot different, the USA developer buys a nice car in his first
year, while the poor Chinese worker may never figure out how to get an old
one.

------
fedd
in capitalism, if you own, you don't have to work with hands. the nation in
general owns plants abroad, so everything okay :) in general :)

(just don't stop to spend on military, or the ownership right could be
questioned)

------
davnola
> According to a survey this summer from the National Employment Law Project,
> only a third of the jobs lost in 2008-2009 were in industries paying less
> than $15 an hour, but fully three-quarters of the job growth in 2010 came in
> these same low-wage industries. Among the industries that grew in 2010, the
> top three occupations were retail sales clerks, cashiers, and food preparers
> with a median hourly wage of less than $10.

So? It takes longer to hire higher waged staff. Hiring higher waged staff is
ceteris paribus more of a risk so you'd expect it to pick up later in the
recovery.

------
davidmathers
The amount of logical and economic fail in this article is overwhelming. The
Atlantic version was better, probably because it didn't have an axe to grind:
<http://news.ycombinator.com/item?id=2072200>

Disclaimer: I lean socialist but not nationalist which means I'm biased
against the basic premises of the article. But it's not the premises that
fail, it's the reasoning.

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thisisananth
The article talks that Germany is able to export even after giving full wages
in the workers. How is it that their products are competitive for exports even
after paying good salaries compared to China or India?

~~~
obxerve
Different product class and/or different product altogether. Think BMW or Merc
and many other good quality brands that are well marketed. Different buyers.
And yes there are a lot of rich buyers outside US.

------
thisisananth
The article talks that Germany is able to export even after giving full wages
in the workers. How is it possible?

~~~
rdouble
Germany exports expensive stuff.

------
known
I think America is becoming a nation of products/services _resellers_

