I am not sure how well college economics explains the reality of how politics and oil influences our economic decisions. For example, we could use textile jobs to employ the large number of citizens who are not college educated, but because of international relationships, it is better for the US to promote “free trade” with other countries, as opposed to protecting jobs for citizens at home. The following is from one of favorite sources of information.
The full article explains the impact of discovering oil in Cambodia. This may not be a good thing for Cambodia at all, and our insistance that capitalism is good for everyone, is a major cause of global problems. 80% of Cambodia’s export income comes from its garment industry, and considering the oil interest and competition with China, this is not a good time to hurt Cambodia by ending the favorable trade status with Cambodia. Cheap Walmart clothing is better for America than most people think.
Lowering tarrifs on textiles and depriving Cambodia of a market, may leave it dependent on its oil market. And resources do not provide near the rate of employment that other exports, in this case textiles, do. So it would be penurous on Canbodia to lift tariffs on textiles, depriving them of of our market.
Typically, developing countries that are resource rich due are vulnerable to what is called the “natural resource curse”. This refers to how so many developing countries are left vulnerable to only having natural resources to market and are economically dependent on the revenue they provide.
Resource rich countries tend to be wealthy countries with poor people. What LDCs need is help in getting full value for their resources and in ensuring that the revenues they receive are spent well, on such vital priorities as education, physical infrastructure, transportation and representative capital instititutions.
So assuming Cambodia receives a fair price for her oil and that the revenue is properly spent, there is no reason she shouldn’t enter the free market. She should be wary not to become soley dependent on oil revenue in the event that that resource is depleted or there is a drop in the price of oil. A more immediate problem is whose pockets the revenues would wind up in. Cambodia has a record of political and economic corruption and it is a dictatorship, under Hun Sen, who is less than reputable. Whether oil revenues would go to addressing the right priorities is questionable.
I think you know a whole lot more about the subject than I do. I tried googling “favor trade status” to get a better understanding of it, and I couldn’t understand anything except unions objected to China’s favored trade status. That must mean the practice is harmful to US citizens who must compete with the people who work for $2 a day.
The larger argument is our own workers do not deserve housing, food, and medical assistance, and some even are opposed to Social Security.
They argue these social programs rob from hard working people to support a welfare state.
My question is, considering the role politics play in if we have jobs and good wages, or not, should we be more willing to assure our workers a decent standard of living? Should we compensate for the fact that our workers are competing with third world countries for a living? Are these workers less deserving, because their product is being under cut by trade agreements?
Athena - this is a complex issue. I will start by saying that we do have a responsibilty, expressed politically, to assure a high standard of living. But I will repeat myself here - wealth, which purchases a standard of living, is not measured by income, but by purchasing power. The wage comparison alone is specious from the start.
But just as specious is the assumption that america is filled with truly poor people, who are getting poorer. It just isn’t so. And most of the poor in America are poor not because of trade agreements, but because thet just got here (mostly illegally) and lack language and job skills (which is a condition that ususally improves over time) or because they are kids whose daddies don’t pay the bills.
And even these poor people live better than most of the world, better than their parents did, and much better than their grandparents did. Among the officially poor are a great many homeowners, cellphone owners, and automobile owners. And even flat-screen TV owners.
Look it up. I’m sure this information is avaialble on the web somewhere.
Does anyone here, besides me, actually know any poor people? To read what is generally written here, one would think not.
That’s incorrect, SIATD, or at least incomplete. The price of goods and services is historically very low right now - inflation has been kept in check, partly through monetary management, but mostly through increased efficiencies in the economy. The availablitiy of credit helps, but credit is underwritten - there is a limit, even in the US.
Wealth is measured by purchasing power - credit increases this, but price means much more.
You and I sure have different opinions. We have govenment by the people, and they need to vote for their best interest. However, I like your statement that income is not about wages alone. I think the Section 8 Housing Program should be universal. By that I mean, instead of there being a 5 year waiting list for low income people to get housing assistance, the program should provide housing assistance for all qualified people. We have an agreement that families shouldn’t have to spend more than 1/3 of their income on rent, but the housing program isn’t strong enough cover all qualified people. This is a disincentive for personally doing better, because if a person has Section 8 Housing and temporarily makes good money, the person could end up on the streets the next year.
Which leads me to think about the employment problem. We have been preparing our young to be products for industry, and this leaves them dependent on someone providing that industry. Now we are back to political decisions that mean they do or do not have jobs.
The poor are not getting poorer? We sure see a different reality. Minimum wages have not kept up with inflation. The cost of housing is a huge factor in the problem. Some people with children to support and working full time, do not qualify for rent, and we can just forget the possibility of buying a home. When the rental industry disqualifies people for rentals, the people must be compensate to avoid homelessness. A civilization that leaves families homeless is not civilized, and when they are competing with 3rd world countries for jobs, the political powers need to correct the problem for these families.
Saying most of our poor are imigrants is a lie my sister believes too. I wonder how people get these crazy ideas. Please, do show me where you get your information. May be in big cities it appears everyone who wants a good job can find one, but in rural areas this is not true. Big problems develop when everyone moves to the city. Perhaps their poverty in big cities is better than poverty in third world countries, but it is worse than being poor in the country. I live in Oregon. Most of Oregon is rural. The rural areas have a serious employment problem. The whole of Oregon had a serious employment problem not long ago. Oregon does not have a lot of the high tech industry that some people just assume is there for those who want the jobs.
The federal minimum wage is superceded in more states than not. Leaving aside illegal immigrants (who often make more than minimum, by the way) and agricultural workers (who are not covered by the minimum wage law), how many poor people actually work for the federal minimum wage?
How many college-educated (“prepared”) young people can’t find suitable jobs? How many foreign nationals are recruited for these jobs every year by industry, because industry can’t find enough engineers, scientists, and tech workers domestically?
How many vacant section 8 units are there in the US? (A lot - some states actually go out and recruit tenants). The problem with Sec, 8 housing is distribution, not supply. And the distribution problem is a political one, not an economic one. That’s a bit complex, but I could address it if you make me.
A few years back, a major bank built three large facilities in the area in which I live. It’s a rural area. They couldn’t staff them. The jobs started at around $32,000 plus benefits plus incentives. Not enough people applied, despite that many residents of the area make less, and that basic language and math skills were the only requirement - these were entry-level phone-jockey jobs. The peeps didn’t want the jobs. The bank tried transferring workers from other areas - those transplants found the area “too rural”. And too cold. Poor babies. The facilties closed. The jobs went elsewhere.
The rural poor wouldn’t be so rural if industry moved in. The rural poor have been notoriously resistant to change to “better their lot”. The rural poor often work very little, and like it that way. Athena, do you live in a rural area? Do you know any of these rural poor? I do.
I grew up with (urban) poor people. My friends lived in projects. I didn’t claim that only immigrants are poor - there are a lot of single moms (by deabeat dads), drug addicts, alcoholics and ne’er-do-weels in these projects. I’m not sure we can blame all the single moms, but the rest…
Ever read “Random Family”? Try randomfamily.com. I think it’s still up.
I dunno about the US, but inflation in Britain exceeds the increase in wages by 1-2% a year for the average person. Making them poorer as time goes on. And the gap between rich and poor has been expanding for at least 30 years.
People are not wealthier because of capitalism.
Not for the Federal Reserve there isn’t, and they define the size and state of the US economy more than any other body.
I worked it out the other day - it would take nearly 2 years at the present GDP for the UK to pay off the governmental and private debt if we spent no money on anything else. Obviously everyone would die. So what happens? The same process of trying to pay it off by letting people die, but a bit slower.
As to the gap between rich and poor, a lot depends on the definitions. I’m also not sure that this measure, by itself, is of major importance. How many are rich and how many are poor might be interesting.
In this country, we keep talking about the disappearing middle class. Many think that this is a fact, mostly because many people say so. Again, it depends on the definitions. By most definitions, the middle class is shrinking a little - shockingly, more are leaving for the upper class than for the lower.
Numbers are fun.
But whether people are wealthier or not “because of capitalism” is a comparison between capitalism and other systems, not between capitalism now and capitalism a mere thirty years ago - unless I have read you wrong. In any event, I am not, I’m sure you realise, defending capitalism against other systems, but only describing extant conditions in the US.
Sorry to hear things haven’t been going as well over there as they have over here.
I was speaking of consumer credit directly, of course, which is indeed influenced by, but not dictated by, the Fed. But even the Fed has limits - practical ones and even theoretical ones. The discount rate can’t go below zero, for instance. More to the point, the Fed doesn’t operate in a vacuum. It has, for years now, concentrated on inflation - there are other parameters it could focus on. People are used to that. The Fed isn’t immune to the will of the people - or of Wall St.
A two year mortgage a G-8 economy isn’t very much. I think you folks could take a little more time.