How to "fix" the U.S. economy

Discussion in 'Economics' started by shbhanda, Jul 7, 2010.

  1. shbhanda


    I'm of the opinion that "high unemployment" is a trend largely due to the benefits private corporations accrue investing in technology rather than human capital.

    If the above is a somewhat irreversible technological trend that is serving to greatly undermine the labor markets and in a sense the overall economy, perhaps the only solution is to "force" our most successful corporations to hire extra workers.

    The only thing to keep in mind is whether it will be good for Wall St., and in that sense, one's personal feelings towards government intervention don't really matter.

    Perhaps a coefficient could be created using profits, market cap, or some other metric and this coefficient could be used to determine how many employees the Apple's, Google's, and Exxon's of the world would have add. These three companies are obviously of no danger of going bankrupt anytime soon and if their balance sheets changed I would hope it would be extremely easy for them to "leave" this fairly drastic government program.

    Anyone else believe the developed country labor markets are broken and need to be fixed?
  2. I think the root cause is the policy:
    Privatizing profits and socializing losses.
  3. +1
  4. achilles28


    It's that simple. Let free markets work.

    That includes:

    1) No income tax
    2) 15% Sales Tax
    3) Cut Government Programs by 50-70%
    4) Generous tariffs against Chindia, Mexico and other cheap-labor producers.
    5) Eliminate tax subsidies for off-shoring
    6) End moral hazard (no bailouts) and let bankrupts fail.

    Even if we did just that, unemployment would be under 4% in 5 years. Economy would be on fire.

    But, they wont. The Feds want to kill the economy. It's in their best interest to consolidate more power.
  5. Perhaps a coefficient could be created using profits, market cap, or some other metric and this coefficient could be used to determine how many employees the Apple's, Google's, and Exxon's of the world would have add.

    One metric is labor costs as a % of sales.

    I can't say for sure but over the years this hasn't changed much.

    I wonder why that is.
  6. #3 means remove medicare/social security since it is the bulk of spending and we have to remove all our forces from the globe as well.

    How do the feds consolidate power if lets say 90% of the US has no jobs?

    Look what happened to the Czar of russia.
  7. +1.

    I strongly believe our countries labour markets are broken not because China and India started to grow (and learn and produce the same we did), but because we slowed our innovation pace.

    When your commitment is in moving plants, you're not committed to improve products, processes, organization and moreover technologies and business areas. Downsizing and moving to cheaper labour is simple. No brain needed. No risk. Just simple management decision. Can we blame managers to having chosen the simplest road to find results to sell themselves?
    What kind of incentives they have to behave differently?
    How can we add that kind of incentives into the system?

    I believe we need to start thinking to challenges again, to restart real innovation and investing on long term returns again. A new project Apollo or something with the same magnitude for the former, a new transportation network (maybe undergroound vacuum maglev railways) for the latter, just as an example.
    ROI will show in 10-20 years (just when boom generation will need them, at retirement). We already printed so much money that paying this kind of challenges should be simple, and gains in productivity on the long run (by innovations needed to achieve) will make the system sustainable again, even when Boom generation start to retire.

    But maybe "who can" thinks the gains with this policy do not move in the "right" direction. But I'm not sure we can avoid to live what USSR people lived some years ago, at this point.
  8. But lets say 3 guys come up with an innovative product.

    The product will then be manufactured in china.

    So the 3 guys make it big but the jobs go overseas.

    But not everyone can innovate.

    Cisco routers - made in mexico/china
    Computers same thing
    electronics same thing

    All our inventions are not made here.
  9. TheMan


    so basically you are saying the gov't should be able to tell a company exactly how many people they HAVE to hire?

    maybe you should renounce your citizenship and move to China.

    and people wonder why our Country is in the shitter
  10. TheMan



    it is so simple and easy

    too simple and easy

    but you are correct, they do not want that ---- they want power and control
    #10     Jul 7, 2010