A Shrinking Middle Class?
Sicko libtards are gleefully clicking their heels over data showing America’s middle class may be shrinking
Reality Zone (not a libtard) is the rare liberal blog that has some rationality to it some of the time. He featured an article from lefty website Business Insider that seeks to prove that the middle class is being wiped out of existence.
It is lefty skewed, and there are a few statistical tricks in there, but its factual foundation is fairly sound. Typical of the genre, it offers no solutions, other than to punish businesses for moving overseas.
It is also rife with trite talking points...
China can't keep its workers down forever
The article asks how we can compete with low wage countries. Well, we do! US Manufacturing has grown for the 13th straight month. Daniel Ikeson at CATO has the details. We have better infrastructure and more educated workers. As these third-world labor pools become more educated and developed, their labor costs go up, and their competitive advantage, like ours, must come from efficiency.
Another thought occurred to me as I was scrolling through the slide show. These Americans who have saved nothing and live paycheck to paycheck, etc... are the same ones who have been on an unprecedented 30 year spending binge, gorging themselves on big cars, bigger houses, XBoxes, you name it. These are people who use a credit card to pay for a vacation instead of saving up for it.
It also strikes me that Keynesian liberals think the solution is for us to spend more, when that is what got us here in the first place, on a personal and a government level.
They also schizophrenically lament the fact that home prices are too high while simultaneously funding programs that keep the bubble inflated. Keeping homeowners from going underwater and making housing more affordable are mutually exclusive goals, proving again that government has no business manipulating markets.
Once home prices find their bottom, more people will be able to afford them, inventory will go down, and prices will rise. All without the nanny state cajoling it along.
Do you want a jobs program, or do you want a jobs economy?
As for the middle class, we need jobs, and only a booming economy can provide that. Here’s a quick story about Milton Friedman’s visit to an Asian country's job site where they were building a canal:
Reality Zone (not a libtard) is the rare liberal blog that has some rationality to it some of the time. He featured an article from lefty website Business Insider that seeks to prove that the middle class is being wiped out of existence.
It is lefty skewed, and there are a few statistical tricks in there, but its factual foundation is fairly sound. Typical of the genre, it offers no solutions, other than to punish businesses for moving overseas.
It is also rife with trite talking points...
"The truth is that most Americans are absolutely dependent on someone else giving them a job."Since Jefferson's passing, when has this ever not been true?
China can't keep its workers down forever
The article asks how we can compete with low wage countries. Well, we do! US Manufacturing has grown for the 13th straight month. Daniel Ikeson at CATO has the details. We have better infrastructure and more educated workers. As these third-world labor pools become more educated and developed, their labor costs go up, and their competitive advantage, like ours, must come from efficiency.
Another thought occurred to me as I was scrolling through the slide show. These Americans who have saved nothing and live paycheck to paycheck, etc... are the same ones who have been on an unprecedented 30 year spending binge, gorging themselves on big cars, bigger houses, XBoxes, you name it. These are people who use a credit card to pay for a vacation instead of saving up for it.
It also strikes me that Keynesian liberals think the solution is for us to spend more, when that is what got us here in the first place, on a personal and a government level.
They also schizophrenically lament the fact that home prices are too high while simultaneously funding programs that keep the bubble inflated. Keeping homeowners from going underwater and making housing more affordable are mutually exclusive goals, proving again that government has no business manipulating markets.
Once home prices find their bottom, more people will be able to afford them, inventory will go down, and prices will rise. All without the nanny state cajoling it along.
Do you want a jobs program, or do you want a jobs economy?
As for the middle class, we need jobs, and only a booming economy can provide that. Here’s a quick story about Milton Friedman’s visit to an Asian country's job site where they were building a canal:
He was shocked to see that, instead of modern tractors and earth movers, the workers had shovels. He asked why there were so few machines. The government bureaucrat explained: "You don't understand. This is a jobs program." To which Milton replied: "Oh, I thought you were trying to build a canal. If it's jobs you want, then you should give these workers spoons, not shovels." (Moore - WSJ)
Excellent post, as usual. Do you ever feel that you're just preaching to the choir, though?
ReplyDeleteMy concern would be how much longer will the statement we have better educated remain true.
ReplyDeleteAnd it will be some time before the cost of labor approaches ours. I work for a global company and the two primary advantages we have are we can get the product to the domestic and North American markets aster than our overseas manufactures and our shipping costs are lower.
Of course Silverfiddle is preaching to the choir and its because this is all spin!
ReplyDeleteOur manufacturing base, has been steadily declining over the years and that is reflected in the number of manufacturing jobs in this country and in our trade imbalance.
The manufacture of goods accounts for 18% of our GDP and the service sectors account for over 70%!
You can get some factual information here: http://liberalideology.blogspot.com/2010/09/service-economy.html
Of course what CATO says is true....because of two wars we are producing more military goods, which are very expensive and will dramatically increase the total value of what we manufacture. But the government is the purchaser not consumers.
Manufacturing bombs and airplanes will dramatically increase the VALUE of your manufacturing but it does not mean that your manufacturing base is increasing.
Thus to compare the manufacture of consumer goods vs military goods is not all that logical especially since you and your choir are so much wanting smaller government.
"These Americans who have saved nothing and live paycheck to paycheck, etc... are the same ones who have been on an unprecedented 30 year spending binge, gorging themselves on big cars, bigger houses, XBoxes, you name it. These are people who use a credit card to pay for a vacation instead of saving up for it."
That is called DEMAND! When wages have stagnated for thirty years and you have an economy where the largest sector is FINANCE AND BANKING...then of course credit is going to grow dramatically...credit is what finance and banking make their money on....savings are actually an expense for them.
By the way, until you soak up all the excess value in the economy you will not have a booming economy. Too many houses and too much debt...
For the economy to BOOM there must be demand....and since consumers are avoiding credit and since credit is the primary economic activity of your economy you might never see a booming economy....
Might just have to keep going to war......
I am all for limited governemnt, and maximum freedoms, and the individuals taking responsibility for themselves.
ReplyDeleteQuite Jeffersonian and Randian I believe. Until the majority of the nation actually begins thinking along these lines I fear things will pretty much remain the same.
Bigger governemnt and growing deficits.
Call me a conservative. Use whatever modifier you might like TAO.
'Sicko libtards'
ReplyDeleteNice to see Silverfiddle still sticks to the high road in these discussions.