Register to reply

What U.S. Economic Recovery? Five Destructive Myths

by rhody
Tags: destructive, economic, myths, recovery
Share this thread:
rhody
#1
Jul14-11, 09:14 AM
PF Gold
rhody's Avatar
P: 765
I am no economics expert but I think this article is fair IMO, however, you decide...
Nobel laureate Michael Spence, author of The Next Convergence, has looked at which American companies created jobs at home from 1990 to 2008, a period of extreme globalization. The results are startling. The companies that did business in global markets, including manufacturers, banks, exporters, energy firms and financial services, contributed almost nothing to overall American job growth. The firms that did contribute were those operating mostly in the U.S. market, immune to global competition — health care companies, government agencies, retailers and hotels. Sadly, jobs in these sectors are lower paid and lower skilled than those that were outsourced. "When I first looked at the data, I was kind of stunned," says Spence, who now advocates a German-style industrial policy to keep jobs in some high-value sectors at home. Clearly, it's a myth that businesses are simply waiting for more economic and regulatory "certainty" to invest back home.
and
And let's not forget the youth-unemployment crisis. There's now a generation of young workers who are in danger of being permanently sidetracked in the labor markets and disconnected from society. Research shows that the long-term unemployed tend to be depressed, suffer greater health problems and even have shorter life expectancy. The youth unemployment rate is now 24%, compared with the overall rate of 9.1%. If and when these young people return to work, they'll earn 20% less over the next 15 to 20 years than peers who were employed. That increases the wealth divide that is one of the root causes of growing political populism in our country. While Republicans have pushed back against spending on broad government-sponsored work programs and retraining, it would behoove the Administration to keep pushing for a short-term summer-work program to target the most at-risk groups.
I am interested in what PFer's below the age of 30 have to say about the above paragraph, particulary the section I highlighted. What plans do you have to adapt to this, and even turn it to your advantage ?

Rhody...
Phys.Org News Partner Social sciences news on Phys.org
Multidisciplinary study reveals big story of cultural migration (w/ Video)
Scientists find growing consensus: Political attitudes derive from body and mind
Congressional rift over environment influences public
Greg Bernhardt
#2
Jul14-11, 05:55 PM
Admin
Greg Bernhardt's Avatar
P: 9,334
Quote Quote by rhody View Post
I am interested in what PFer's below the age of 30 have to say about the above paragraph, particulary the section I highlighted. What plans do you have to adapt to this, and even turn it to your advantage ?
I've got a lot of young adult friends straight out of college who are having to take low income jobs not in the fields they are studying for. Not only does that not help society, but it will seriously delay and hamstring these peoples careers. One friend who graduated in finance is working at a coffee shop.
Ivan Seeking
#3
Jul14-11, 06:02 PM
Emeritus
Sci Advisor
PF Gold
Ivan Seeking's Avatar
P: 12,498
Quote Quote by Greg Bernhardt View Post
One friend who graduated in finance is working at a coffee shop.
Yeah, now everyone's a physicist.

WhoWee
#4
Jul14-11, 06:47 PM
P: 1,123
What U.S. Economic Recovery? Five Destructive Myths

"Nobel laureate Michael Spence, author of The Next Convergence, has looked at which American companies created jobs at home from 1990 to 2008, a period of extreme globalization. The results are startling. The companies that did business in global markets, including manufacturers, banks, exporters, energy firms and financial services, contributed almost nothing to overall American job growth. The firms that did contribute were those operating mostly in the U.S. market, immune to global competition — health care companies, government agencies, retailers and hotels. Sadly, jobs in these sectors are lower paid and lower skilled than those that were outsourced. "When I first looked at the data, I was kind of stunned," says Spence, who now advocates a German-style industrial policy to keep jobs in some high-value sectors at home. Clearly, it's a myth that businesses are simply waiting for more economic and regulatory "certainty" to invest back home."

My bold
I don't doubt this at all.

We faced similar job challenges in the late 1970's and early 80's in the Rust Belt. Fortunately for us, if we headed West or South the prospects improved. Now it's not so simple.

I know several recent college grads that are going back to school - they hope things will be better in 2 years. I also know several unemployed adults that are back in school.
rhody
#5
Jul14-11, 07:50 PM
PF Gold
rhody's Avatar
P: 765
Quote Quote by WhoWee View Post
"Nobel laureate Michael Spence, author of The Next Convergence, has looked at which American companies created jobs at home from 1990 to 2008, a period of extreme globalization. The results are startling. The companies that did business in global markets, including manufacturers, banks, exporters, energy firms and financial services, contributed almost nothing to overall American job growth. The firms that did contribute were those operating mostly in the U.S. market, immune to global competition — health care companies, government agencies, retailers and hotels. Sadly, jobs in these sectors are lower paid and lower skilled than those that were outsourced. "When I first looked at the data, I was kind of stunned," says Spence, who now advocates a German-style industrial policy to keep jobs in some high-value sectors at home. Clearly, it's a myth that businesses are simply waiting for more economic and regulatory "certainty" to invest back home."

My bold
I don't doubt this at all.

We faced similar job challenges in the late 1970's and early 80's in the Rust Belt. Fortunately for us, if we headed West or South the prospects improved. Now it's not so simple.

I know several recent college grads that are going back to school - they hope things will be better in 2 years. I also know several unemployed adults that are back in school.
WhoWee,

I know a couple of young graduate's doing the same thing, going back for masters, and with it a ton of debt that comes along with it. I work with one guy who pays 800 $ a month to pay off 140K worth of student loans (undergrad degree only). He will be 40 before he can even think of buying a home. It just doesn't seem fair. I really feel for some of these people.

Rhody...
WhoWee
#6
Jul14-11, 08:19 PM
P: 1,123
Quote Quote by rhody View Post
WhoWee,

I know a couple of young graduate's doing the same thing, going back for masters, and with it a ton of debt that comes along with it. I work with one guy who pays 800 $ a month to pay off 140K worth of student loans (undergrad degree only). He will be 40 before he can even think of buying a home. It just doesn't seem fair. I really feel for some of these people.

Rhody...
It's probably still a good decision - I think it will take another 2 to 5 years for the economy to regain strength. The graduate degrees will certainly provide greater earnings potential long term. We dug in for $60k for my wife to go back for a Masters - I can assure you it hurt us a good bit at the time.
turbo
#7
Jul15-11, 12:32 AM
PF Gold
turbo's Avatar
P: 7,363
My younger sister's kids entered the job market at a good time. They secured pretty good positions before everything went to hell, and are doing OK. The youngest got engineering/type internships in pulp and paper mills every summer in college and has a solid position. His older sister is a very popular HS teacher and has pegged away at extra course-work for a few years until she was awarded her masters this spring. His other siblings are doing quite well for themselves, too though they had to move away to get employment opportunities that matched their talents.

The oldest sister has had to work full-time, leave some of the care of their toddler to her husband, who is a finish carpenter/cabinet-maker, and work long hours studying nights to earn that masters. I am very proud of her.
Astronuc
#8
Jul17-11, 09:31 AM
Admin
Astronuc's Avatar
P: 21,827
We’re Spent By DAVID LEONHARDT
http://www.nytimes.com/2011/07/17/su...7economic.html

Consider that what recovery there has been has been riding on borrowed money (federal deficit), and that cannot continue. Consumer spending is down, and probably will be for the forseeable future. The government cannot continue increasing debt indefinitely without severe consequences when the well runs dry.

Another commentary indicated that 2% growth in the GDP is the new norm. Compare that to a federal budget deficit of ~10% of GDP.

http://www.bea.gov/newsreleases/glance.htm
http://www.google.com/publicdata?ds=...hl=en&q=us+gdp

http://en.wikipedia.org/wiki/2010_Un...budget#Deficit

Eliminating the deficit in 2010, the GDP would have dropped 8%!


On the other hand, one cannot deficit-spend oneself toward prosperity. Chronic deficit spending increases indebtedness, and that is the opposite direction from prosperity!
edpell
#9
Jul19-11, 04:29 PM
P: 451
My oldest son now 27 could not find work after his B.A.. He worked chopping firewood, doing yard work, cleaning out freezers, etc. His highest standard of living since graduating was the year he taught English at a university in China. He is in the US now and thinking of returning to China.

It is a global village no point in staying in an area that has no jobs. Go west young person far far west.
Pengwuino
#10
Jul19-11, 04:59 PM
PF Gold
Pengwuino's Avatar
P: 7,120
Oddly enough this is the most hilarious irony being a physics graduate. In a city with 17% unemployment, I don't know any physics grads without a middle class job (who all graduated within the last 2 years).
edpell
#11
Jul19-11, 05:05 PM
P: 451
Quote Quote by Pengwuino View Post
Oddly enough this is the most hilarious irony being a physics graduate. In a city with 17% unemployment, I don't know any physics grads without a middle class job (who all graduated within the last 2 years).
What city?
edpell
#12
Jul19-11, 05:10 PM
P: 451
Quote Quote by Astronuc View Post
Another commentary indicated that 2% growth in the GDP is the new norm.
That is with 1% immigration population growth per year. So 1% to support the enlarged population and 1% growth. This is assuming inflation is really zero like they say (no social security COLA). If they are off by 1% in their inflation calculation (as my experimental observations at the grocery store suggest) then that would be zero percent real growth.
Pengwuino
#13
Jul19-11, 05:22 PM
PF Gold
Pengwuino's Avatar
P: 7,120
Quote Quote by edpell View Post
What city?
Fresno, CA
WhoWee
#14
Jul19-11, 05:27 PM
P: 1,123
Quote Quote by edpell View Post
My oldest son now 27 could not find work after his B.A.. He worked chopping firewood, doing yard work, cleaning out freezers, etc. His highest standard of living since graduating was the year he taught English at a university in China. He is in the US now and thinking of returning to China.

It is a global village no point in staying in an area that has no jobs. Go west young person far far west.
My friend's son has been teaching English in Russia for about 6 years. He said the pay is modest by US standards but he doesn't have many expenses. I believe his housing and transportation are supplemented. He's enjoyed the experience and has traveled a good bit.
edpell
#15
Jul19-11, 06:10 PM
P: 451
Quote Quote by WhoWee View Post
My friend's son has been teaching English in Russia for about 6 years. He said the pay is modest by US standards but he doesn't have many expenses. I believe his housing and transportation are supplemented. He's enjoyed the experience and has traveled a good bit.
My son also taught in Russia for half a year. They pay a lot less than China. Or more carefully pay relative to expenses is much less in Russia.
WhoWee
#16
Jul19-11, 06:19 PM
P: 1,123
Quote Quote by edpell View Post
My son also taught in Russia for half a year. They pay a lot less than China. Or more carefully pay relative to expenses is much less in Russia.
Full disclosure, my friend's son met a Russian girl and...it looks like Christmas in St. Petersburg every few years might be the new norm for my friend.
ParticleGrl
#17
Jul20-11, 03:26 AM
P: 683
Oddly enough this is the most hilarious irony being a physics graduate. In a city with 17% unemployment, I don't know any physics grads without a middle class job (who all graduated within the last 2 years).
That is surprising to me. The phds I know who finished in the last year and a half are all out of work or in part time positions.

Admittedly, this depends on what you count as a middle-class job. I'm bartending, and make enough to be in the top half of households.
rhody
#18
Jul20-11, 05:11 AM
PF Gold
rhody's Avatar
P: 765
Something to ponder...

How to Raise a Global Kid
“I’m doing what parents have done for many years,” Jim Rogers says. “I’m trying to prepare my children for the future, for the 21st century. I’m trying to prepare them as best I can for the world as I see it.” Rogers believes the future is Asia—he was recently on cable television flogging Chinese commodities. “The money is in the East, and the debtors are in the West. I’d rather be with the creditors than the debtors,” he adds.

It has become a convention of public discourse to regard rapid globalization—of economies and business; of politics and conflict; of fashion, technology, and music—as the great future threat to American prosperity. The burden of meeting that challenge rests explicitly on our kids. If they don’t learn—now—to achieve a comfort level with foreign people, foreign languages, and foreign lands, this argument goes, America’s competitive position in the world will continue to erode, and their future livelihood and that of subsequent generations will be in jeopardy. Rogers is hardly the only person who sees things this way. “In this global economy, the line between domestic and international issues is increasingly blurred, with the world’s economies, societies, and people interconnected as never before,” said U.S. Education Secretary Arne Duncan in remarks in the spring of 2010 at the Asia Society in New York. “I am worried that in this interconnected world, our country risks being disconnected from the contributions of other countries and cultures.”
Interesting perspective, eh ?

Rhody...


Register to reply

Related Discussions
Economic Recovery Current Events 603
Best economic indicators for the economic health of a country? Social Sciences 14
Germany's Economic Recovery Despite Lack of Stimulus Current Events 36
How did the myths start General Discussion 35
Global Economic Recovery Current Events 7