Quote:
Originally Posted by Captain Awesome
True, we do demand low prices, but the the question "Why does it cost so much to make stuff here?" is the 500 pound gorilla in this thread.
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Actually, I'd consider it more of a 15lb chihuahua that everyone keeps stepping over....we have a far better standard of living in this country. If you want to maintain that...you've got to pay for it. It has much less to do with "greedy unions" and politics than one might like to think.
It's a catch-22 scenario that is much easier to explain away by blaming someone else. In truth...we as a nation made a significant amount of wealth for ourselves over the centuries...and we like to spend it. To support that way of living, we need to be paid.
But in order to compete with cross-seas labor, we would have to reduce ourselves to their standard of living, or darn close to it. Quarters on the dollar for wages, little in the way of benefits. Nobody was willing to do that, and I can't blame them. Factor in a state economy vs market...and we've got a very nasty-tasting soup on our plates...
Quote:
Originally Posted by a_Username
This is a long post, but it is necessary for people to get a good idea of what is going on.
Gross National Income (GNI), aka GNP (Gross National Product), is the best indicator of economic performance in regards to ownership. The difference between GNI and GDP is GNI refers to economic growth by ownership, whereas GDP refers to economic growth based on geographic location. For example, when Honda builds a plant in the U.S. this is reflected in the U.S.'s GDP but not GNI; this also holds true vice-versa.
http://data.worldbank.org/indicator/...desc&cid=GPD_7
GNI Comparison:
http://data.worldbank.org/indicator/...last&sort=desc
Nominal GDP Comparison:
Now in terms of growth you need to use real GDP; the difference between real and nominal GDP is real GDP is adjusted for inflation.
http://en.wikipedia.org/wiki/List_of...DP_growth_rate
Real GDP Comparison:
Notice how Inuyahsa's Brother's link to an Economist article says the following: "China’s natural rise could be turbocharged by its vast pool of savings. Today this is largely invested in rich countries’ government bonds; tomorrow it could be used to buy companies and protect China against rich countries’ devaluations and possible defaults." Capital accumulation is financed through investment, where investment is financed through savings. Capital accumulation is the key the long-term economic success; anyone who doubts this should go look at the Gilded Age.
The Austrians deem an economy to be "growing" when savings is increasing, while most schools of economic thought (Keynesians, Neoclassicals, etc.) dictate growth usually based on the expenditure approach of GDP. This is not to say that GDP isn't a good indicator of economic performance given certain conditions, notably a true free market. The only issue with it is that it fails to distinguish between "actual" economic growth, i.e. most of the "growth" in the recent decades are accredited to bubbles and other artificial influences that distort true economic growth and performance. An example would be that GDP accounts for government expenditures, which is why real GDP during WWII continued to rise due to obvious reasons. Also, be careful when looking at the unemployment rate during war-time periods; you see decreased unemployment in days of WW2 simply because it counts conscription as employment.
The point of all this is simply to say you having nothing to fear of China's growth; we are still greatly ahead of them in nearly all indicators (in fact, the only entity that rivals us is the European Union). I will say this though, some people need to stop blaming China and blame the ones who are the actual cause of our economic regression: our government and the federal reserve. |
Nice post. You point out some very relevant points!