What do we do?

[Michael Hardner]

I think otherwise. If your neighbour finds a faster way to get to work in the morning, is that bad for you? And, if a Chinese worker manages to find a way to earn more money, is that bad for you?

Life is not a zero-sum game.

August, I agree with approach in this argument: you're arguing the orthodoxy of economics, which cuts the legs out of the "jobs jobs jobs" argument, but there is also the problem of how to reverse the decline of the middle class. The government should be as concerned about this as it is about trade agreements.

I'm not bringing a solution as to how that could happen, though. Does anybody here have one, aside from just turning back the clock by putting up trade barriers ?

[Wild Bill]

Would you keep the jobs of typists, bank tellers, telephone operators? Do you believe that their jobs are less important because women usually did these jobs, or these jobs are not "manufacturing"? Does a modern economy need typists, bank tellers, telephone operators? Does it need "manufacturers" of toasters?

We've had such arguments before, August. While I have always agreed with you in theory I still think your view is too academic.

You see, we don't have capitalism in Canada - never had!

The market is skewed and I believe that adds much to the pain of change. Politicians have meddled without understanding or likely even caring about the eventual effects!

We have lost so much manufacturing far more rapidly than we had to and this has caught so many workers in a position where they are too old to change to another source of income anywhere near as lucrative. It took far longer for automobiles to kill off the horse carriage industries than the loss of manufacturing jobs here in Ontario.

Why? Several reasons. One is how we have levied high anti-pollution costs on our industries while allowing countries like China access to our market with NO such extra costs!

We also had a Liberal government hand over our entire telephone and telephone system manufacturing industry to China - decimating our domestic electronic manufacturing industry. This was NOT a case of another country getting into the game and later out-competing us! The Liberals greased the entire deal with a country that had NO such existing industry, actually throwing shovelfuls of OUR money into the deal to grease the way!

There are many other such examples. If the market had been allowed to proceed at its own pace it is likely that much of our domestic manufacturing would still be here and still be profitable. It is mind boggling to consider that Chinese and Russian steel can be shipped into Canada in flippin' immensely heavy ingots weighing tons and tons and tons to be sold at a price FAR below that of steel produced right here in Hamilton! Mind boggling indeed, until you realize that those countries have ZERO "green" costs.

For that matter, some days it seems the entire green movement is a plot to transfer all our manufacturing to other and ironically dirtier countries! There are about a BILLION dollars of vacuum tubes still being manufactured and sold today, virtually all for the audiophile and guitar musician market yet NONE can be profitably made in Canada or the USA!

5 minutes away from my home is a site where once Westinghouse made hundreds of thousands of such tubes every month, until the transistor revolution became the mainstream in the 60's. One might think that with such a niche market today someone might consider opening a vacuum tube plant here again, perhaps on a bit smaller scale.

Forget it! NOT possible to be profitable! He could not compete against the Chinese and former countries of the old USSR. Why not?

Are you familiar with the term "WHMIS"? The Workplace Hazardous Materials Information System? If not, it's worth a google. Thanks to WHMIS we are forever locked out of such an industry.

I am NOT saying we should be just as "dirty" as those other countries. I am saying that we should mplement green tariffs against those countries to equalize the market!

As I said, there are many, many examples, August. How on earth could anyone think this to be a capitalistic economy? It is so badly skewed by politicians operating by ignorance, greed or both.

Maybe you should leave your ivory tower once in a while, my friend!

[cybercoma]

I didn't think this needed its own thread, so I'm putting it in here.

StatsCan: Canadian families median income unchanged for third straight year

Statistics Canada says median, after-tax income for families of two or more people amounted to $65,500 in 2010, virtually unchanged from 2009.

[Michael Hardner]

Hi WildBill - ivory towers are one thing, but they do at least insist on facts in their argument.

I am saying that we should mplement green tariffs against those countries to equalize the market!

These things are negotiated as part of trade deals, and countries are leery about allowing arbitrary penalties to be allowed. In any case, the labour costs are a fraction of what they are here, so how would a tariff 'equalize' the market ?

I don't think it would.

As for Nortel, aren't they to blame for their own demise ?

In the late 1990s, stock market speculators, hoping that Nortel would reap increasingly lucrative profits from the sale of fibre optic network gear, began pushing up the company's share price to unheard-of levels despite the company's repeated failure to turn a profit

[eyeball]

I'm not bringing a solution as to how that could happen, though. Does anybody here have one, aside from just turning back the clock by putting up trade barriers ?

Souveillance. The only thing that's never ever been tried in all of human history.

[Canuckistani]

Would you keep the jobs of typists, bank tellers, telephone operators? Do you believe that their jobs are less important because women usually did these jobs, or these jobs are not "manufacturing"? Does a modern economy need typists, bank tellers, telephone operators? Does it need "manufacturers" of toasters?

Typists lost their jobs years ago, and now you talk of the middle class. Should we return to a 1950s world of the typing pool?

Canuckistani, I hate to sound like Bill Clinton but the world moves on. As the scriptwriter of the movie Primary Colors put it, America has to learn to use the muscles between its ears.

-----

I think otherwise. If your neighbour finds a faster way to get to work in the morning, is that bad for you? And, if a Chinese worker manages to find a way to earn more money, is that bad for you?

Life is not a zero-sum game.

So we keep going down the road we have been? How's that working out for us (not just the 20%)? Seems to me China has become the powerhouse it has exactly because of old school manufacturing, while the US, the vaunted innovator of the new economy, has become China's biggest debtor nation. The sum does seem to zero. If the US had not borrowed so heavily outside it's borders, the realization would have sunk in a long time ago that their way isn't sustainable.

[bush_cheney2004]

So we keep going down the road we have been? How's that working out for us (not just the 20%)? Seems to me China has become the powerhouse it has exactly because of old school manufacturing, while the US, the vaunted innovator of the new economy, has become China's biggest debtor nation.

Several points you have overlooked:

1) The USA is still the largest manufacturing nation on the planet and largest economy

2) Germany is the #1 exporter, not China. Germany is about the size of Montana.

3) Much of China's manufacturing capability came from purposeful technology transfer from the West and Japan. I have personal experience with this.

4) China only holds about 12% of US public debt.

The sum does seem to zero. If the US had not borrowed so heavily outside it's borders, the realization would have sunk in a long time ago that their way isn't sustainable.

The US has grown to be the largest world economy for several reasons, one of which is access to capital, the very thing that starved Canada's economy for decades.

Edited June 18, 2012 by bush_cheney2004

[Canuckistani]

Several points you have overlooked:

1) The USA is still the largest manufacturing nation on the planet and largest economy

2) Germany is the #1 exporter, not China

3) Much of China's manufacturing capability came from purposeful technology transfer from the West and Japan. I have personal experience with this.

4) China only holds about 12% of US public debt.

The US has grown to be the largest world economy for several reasons, one of which is access to capital, the very thing that starved Canada's economy for decades.

1 People's Republic of China $1,898,000,000,000 2011 est.

2 United States $1,511,000,000,000 2011 est.

3 Germany $1,408,000,000,000 2011 est.

wikki

Whatever the reasons for China's rise in manufacturing, it has greatly enriched the country, while the US has massive debts held by China. And it's disingenous to say it's only 12%, the point is that the US went on a massive borrowing spree. If they had not, they would have had to raise taxes or cut way back on expenditures, either way would have contributed to the middle class in the US getting hit far harder than they already have.

Not sure of the relevance of your last sentence?

If you feel sanguine about the prospects of the US with it's model of gutting the middle class and moving to a "new economy" I guess there's not much to discuss if you don't see any problems.

[bush_cheney2004]

wikki

Whatever the reasons for China's rise in manufacturing, it has greatly enriched the country, while the US has massive debts held by China.

China is dependent on an export economy that includes access to US markets, same as Canada. Both nations need each other.

And it's disingenous to say it's only 12%, the point is that the US went on a massive borrowing spree. If they had not, they would have had to raise taxes or cut way back on expenditures, either way would have contributed to the middle class in the US getting hit far harder than they already have.

The US still needs to do this. There is a growing "middle class" in other developing nations, so it is not a zero sum gain. I am unclear as to the relevance of the middle class in the US to fears in Canada (e.g. Occupy).

Not sure of the relevance of your last sentence?

Access to capital is important to economic growth.

If you feel sanguine about the prospects of the US with it's model of gutting the middle class and moving to a "new economy" I guess there's not much to discuss if you don't see any problems.

I never said there were no problems, but movement to a new economy has been going on for centuries. I do not understand why the focus is on the USA, complete with the usual hand wringing and fear by people outside the US border who cannot figure out the game.

BTW, the web resources you used and very internet itself did not come from China, but your PC or smartphone probably did.

Edited June 18, 2012 by bush_cheney2004

[Canuckistani]

You seem to be throwing everything into the pot you can think of. My point is that China has hugely prospered as it became a manufacturing nation. Meanwhile the US has sunk massively into debt while its manufacturing base has become substantially reduced. The US middle class has had the shit kicked out of it. I see those as connected. The same trend is true in Canada. We've avoided it partly by being able to export our raw resources to Asia. That's a mugs game we won't be able to play for ever.

Henry Ford realized that you have to pay your workers a decent salary if you want to sell your product to them. Modern capitalists have forgotten that lesson, or maybe they're just happy to create those consumers in other countries, who cares where they are.

If we can find productive work for our citizens that allows them to pay for the good lifestyle to which we've become accustomed, it doesn't matter what that is. But I haven't seen anything to replace manufacturing. We're creating societies of 20% elites who are doing well, and 80% who are not. No way to run a country and have a peaceful society. That is why I asked the question - what do we do? So far all I've read is boilerplate about the new economy, without taking into account what's actually happening. I don't know, maybe it's from posters being too young to remember how it used to be.

[bush_cheney2004]

You seem to be throwing everything into the pot you can think of. My point is that China has hugely prospered as it became a manufacturing nation. Meanwhile the US has sunk massively into debt while its manufacturing base has become substantially reduced.

Did you expect the USA to dominate forever? The US still competes well in manufacturing with 25% of China's population and higher productivity. American based multinationals have also thrived in China.

The US middle class has had the shit kicked out of it. I see those as connected. The same trend is true in Canada. We've avoided it partly by being able to export our raw resources to Asia. That's a mugs game we won't be able to play for ever.

Your concern is noted, but exporting US jobs to Canada didn't help the US middle class. Whether in Canada or the USA, adapt or expect a lower standard of living, which is still far better than in most other places, including China.

Henry Ford realized that you have to pay your workers a decent salary if you want to sell your product to them. Modern capitalists have forgotten that lesson, or maybe they're just happy to create those consumers in other countries, who cares where they are.

Correct...consumers are now a global target.

That is why I asked the question - what do we do? So far all I've read is boilerplate about the new economy, without taking into account what's actually happening. I don't know, maybe it's from posters being too young to remember how it used to be.

I remember exactly how it "used to be" and it wasn't a worker's paradise. As for "what do we do", the answer is simple: compete or somebody else is going to eat your lunch. It has always been thus. Moaning about what happens in other nations is not very helpful.

Edited June 18, 2012 by bush_cheney2004

[Canuckistani]

So we're doomed to play race to the bottom?

[bush_cheney2004]

So we're doomed to play race to the bottom?

Only if you resign yourself to such a fate. Did you really expect that the standard of living for billions of other people around the world would remain stagnant while we buy cheap HD televisions?

[Canuckistani]

Only if you resign yourself to such a fate. Did you really expect that the standard of living for billions of other people around the world would remain stagnant while we buy cheap HD televisions?

Well, that's a good point. I used to be all for globalization, because I thought it would eliminate disparity across the world. But what I see now is the formation of a global elite, who have no sense of creating greater equality, along with a permanent underclass. I don't think that's any better than at least having some countries as models of increasing equality, the way we were.

[eyeball]

Only if you resign yourself to such a fate. Did you really expect that the standard of living for billions of other people around the world would remain stagnant while we buy cheap HD televisions?

No, but did you expect the income gap and concentration of wealth would keep accelerating on the basis of the moral imperative of the 1% to keep their gravy train rolling?

Good luck with that.

[bush_cheney2004]

Well, that's a good point. I used to be all for globalization, because I thought it would eliminate disparity across the world. But what I see now is the formation of a global elite, who have no sense of creating greater equality, along with a permanent underclass. I don't think that's any better than at least having some countries as models of increasing equality, the way we were.

So what you are really saying is that you were quite comfortable with the very same permanent underclass just as long as your standard of living remained unchanged. But now that your relatively elite status is threatened, it's time to mobilize against globalization? That's not how this game is played anymore....compete....adapt...or get left behind.

Even the wars are now fought by contractors.

Edited June 18, 2012 by bush_cheney2004

[bush_cheney2004]

No, but did you expect the income gap and concentration of wealth would keep accelerating on the basis of the moral imperative of the 1% to keep their gravy train rolling?

Good luck with that.

Yes....I am quite comfortable with the notion of winners and losers. It's a dynamic game for those who play it, but like the lottery, you have to play to win.

[Guest Manny]

Well, that's a good point. I used to be all for globalization, because I thought it would eliminate disparity across the world. But what I see now is the formation of a global elite, who have no sense of creating greater equality, along with a permanent underclass. I don't think that's any better than at least having some countries as models of increasing equality, the way we were.

Globalization is the problem, not unions. It allows the elite upper class to search for goods and services around the world, but it decimates local first-world economies reducing them to an equal playing field with low tech undeveloped countries like Bangladesh. We "the people" accepted globalization, because we are naive.

'nuff said

[bush_cheney2004]

'nuff said

Oh great...now we be hatin' on Bangladesh. Good thing George Harrison is dead so he can't read that.

[Guest Manny]

Oh great...now we be hatin' on Bangladesh. Good thing George Harrison is dead so he can't read that.

Yeah, but he made his money off it...

[bush_cheney2004]

Yeah, but he made his money off it...

....just like everybody else. "Globalization" doesn't suck just because others have learned how to play the game, and being "naive" is no excuse.

[Guest Manny]

....just like everybody else. "Globalization" doesn't suck just because others have learned how to play the game, and being "naive" is no excuse.

The difference is now, the elite are exploiting us because we are not poor.

[bush_cheney2004]

The difference is now, the elite are exploiting us because we are not poor.

Too bad...do you really think that is a valid justification for "outrage" after accepting that it was happening globally for centuries? Welcome to the game.....play it well.

[Wild Bill]

As for Nortel, aren't they to blame for their own demise ?

Look at the time scales, Michael. The events I described happened in the early 90's, before the swindle you describe. By the time the stock manipulation started happening, Nortel was already just a pyramid scheme, no longer having a giant base manufacturing business to support itself. Everything by then was in China. If Nortel needed phones for Canada it bought them from the chinese operations.

They no longer had a manufacturing revenue creation stream. They were just complicated deals at high levels that no one outside could clearly see and understand. I think they started down the path to pulling a swindle as a frantic attempt to stay solvent. In their own greed and ignorance they had killed their own goose!

But that's just my POV!

[eyeball]

Yes....I am quite comfortable with the notion of winners and losers. It's a dynamic game for those who play it, but like the lottery, you have to play to win.

Winning the game is more important than how it's played.

Right-on, I love games where you can ignore or make up your own rules up as you go.