Sigh. As usual, Stirling ggets it. Sometimes I wonder why I read anyone else. Or bother to write anything. ;^)
Our last great American development was our computing ability and the Internet, and I’m proud to have been a part of creating that. I’m truly saddened that America hasn’t valued education enough to train our kids to do much else these days, and that our economy has been used to fatten the wealthy pigs instead of sharing the wealth so others could move up as well. We’re left with so few people in this country who can truly create and innovate, and drive new development and investment. Our leaders value wealth over creativity, and it’s going to kill our economy. It may take a while, but some of us, like Stirling, and like me, are already seeing it start to happen.
Waste, Fraud and Abuse | TPMCafe
The housing boom was the last popular thread upwards, it provided construction jobs – that is, jobs for people who don’t want to work in an office and are good with their hands – and it provided a way for middle class people to cash in on the inflationary monetary policy. Take this away from the US economy, and we never really left recession, and we’ve had inflation on top of it. Stagflation is never popular, and yet that is exactly what most Americans have seen – a massive shift of earning power away from them, and to other people.
In economic analytic terms there is a simple reason for this, most of the American economy is no more productive than it was 20 years ago. The real productivity of much of what we do has been just slightly ahead of zero, particularly when you take out Wal*Mart’s wage reduction strategies and the offshoring to China. The reason Americans aren’t being paid more – is because we are doing the same things, in more or less the same ways – that we did 20 years ago. No improvements to labor and capital, no productivity rises. American wages are not going up, because American labor is not getting better, and certainly not getting better relative to the rest of the world.
Americans haven’t come to a full awareness of the fact that China and India are catching up to 1980, and doing so quickly. It will take another decade before they have equalized large chunks of their economies – but that will mean that there will be more middle class people in China, than there are people in the US. More middle class people in India, than there are people in the US. The challenges that India and China face are large, but they are also known – the are following what Europe and the US-Canada economic areas have already done.
What they do know is that the last ladder out of steerage just got pulled up. And water is coming in from the sides.
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