I suspect that when the trade deficit becomes ~6% of GDP (as it is about in the United States) and increasingly our economy components have global or other national economies mixed in, we're getting a distorted picture.
To summarize, it looks like the official statistics have been miscounting the impact of offshoring. Unless I’m crazy, cost gains and productivity improvements in the global supply chain are being credited to the U.S. economy—in effect, creating “phantom GDP.” In reality, both domestic GDP and domestic productivity have been growing slower than the official statistics show, and manufacturing is in much worse shape
.
So, what we have I think is domestic economic indicators in a globalized world.
I've been reading these other posts and there is a sta, PPP or purchasing power parity.
I found this paper (pdf) interesting in that it states the world bank is arbitrarily calculating Purchasing power to create a poverty line of fiction.
At least in the United States I can believe it. They have the poverty line so low for one person, there is no way that person can afford even a room to rent.
Here(pdf), is the world bank GDP by PPP indicators from 2008. Check this out!
by PPP the nation ranking (top 5) is:
USA
China
Japan
India
Germany
So the next time some a**nut screams about how China and India need our jobs because of all the evil doings in history, present them with this one!
Lobbyists have teams of public relations specialists who pump out article after article claiming there is a worker shortage when clearly by the statistics there is not one.
They also pump out the spin that all of this is about racism instead of labor economics continually.
That said, I know trade, outsourcing of jobs is a huge issue and the problem is the American people don't have a clear cut choice in the Presidential election.
Both Obama and McCain have promised corporations more guest worker Visas and this issue runs both sides of the isle.
The real problem is these lobbyists have so much money, they plain buy votes. I don't know how to put it any kinder.
I wrote about that earlier, the minute the United States even hints at doing something that's good for America, it gets labeled protectionist. They believe it's akin to calling out ya mama as an economic insult.
"No, I'm sorry, last I heard outsourcing US jobs is one of the things most Americans are outraged about."
I'm sorry, but I am not sure that is true. I think that most Americans have bought into the pop-media blitz that keeps claiming there is a shortage of US workers, especially STEM workers. The same pop-media blitz also claims that those who oppose the invasion of off-shore labor are protectionists, xenophobic, anti-free trade, anti-capitalism, and therefore un-American.
I may be preaching to the choir here, but I would like to point out something that the so-called "free trade" advocates overlook: in truly free market place, sustained labor shortages can not possibly exist. In fact, the very idea does not even make sense. In a truly free market: if demand starts to exceed supply, then prices will go up, which will cause supply will go up with the prices, thereby leveling out the equation.
For example: if there were a shortage of PHP developers, then wages for PHP developers would go up, thereby attracting more PHP developers. A long term shortage would be impossible.
If something drastic, sudden, and unexpected, were to happen, then there could be a short-term shortage. But, let me emphasize that such occurrences would be extremely rare, and very short-term. A flood of six year visas, year after year, would certainly not be needed. But the so-called "free trade" advocates have been claiming a sever shortage of STEM workers for, at least, the last 15 years.
Also, McCain's claim that Americans would not pick lettuce for $50 an hour is unbelievably stupid, and verifiable untrue - put an ad on craigslist if you don't believe me. Americans will do almost anything if you pay them enough, watch that "Dirty Jobs" series if you don't believe me.
The claims that Americans no longer want STEM jobs is equally stupid. Of course enrollment is down, who wants to spend all those years, and all that money, just to be replaced by cheap foreign labor a few years from now?
Talk about the pot calling the kettle black - china and india practice all sort of their own protectionism, subsidies manipulation and other unfair trade practices.
Protecting US jobs, technology, economic health and national security is a bad thing how?
>>"While our business in the US has not been affected by the slowdown so much, the failure of WTO talks and the election of a new president may impact us. Protectionism can rear its head in some form," said Sudip Nandy, president—technology, media & telecom, Wipro Technologies. <<
The historical perspective is more interesting. Corporate Federal rates were 60% in the 50's and 60's dropping to 50% in 1969 and again dropping in 1981 with a slight rise in 1986.The rate has been 35% after 2001.
In the last 7 years more than 3.5 Million manufacturing jobs were lost despite a drop in Corp Rate to 35%. A similar manufacturing job loss occurred in the late 1980s through 2000 after TEFRA cut rates in 1986. But if you go back to the 50s the trend is even clearer. More than a quarter of the work force was in manufacturing at the time of the Korean War. Corporate Tax rate? A confiscatory 90% when the Excess Profits Tax was enacted in 1950. Manufacturing employment increased between 1950 and 1956.
Manufacturing job losses correlate inversely with corporate tax rates. The simple economic reason is 'take the money and run'. There is simply nothing in a tax rate that binds a U.S. corporate manufacturer to the U.S. shores.
To put the Corporate Rate in perspective, it is 3% of sales.
Even big changes in rates add only a penny or two to margin income as a percentage of sales. But wages are a much bigger slice of total sales. In a manufacturing company in the U.S., wages are about 70% of sales. Engage in Labor Arbitrage and the percentage sales represented by wages can drop in half or more.
Hi, Just subscribed to your blog feed. This blog seems to have some very good advice, interesting articles and great analysis. I look forward to reading more!
Well, it still doesn't completely add up, I mean how many are that stupid to dump so much risk into assuming a commodity will drop? (don't answer that!) I guess this is something to watch the facts come out on.
Well, dismissals are nothing new in a knee jerk reactionary plane of sliced reality based on philosophy or feeling. ;)
I'm just thrilled that we're growing, so hopefully the methodology of civil debate, researching one's topic and making conclusions that are fact based can help in grounding the blogosphere to hard cold numbers. ;)
That would make a very good blog post if you care to research it out. Is there any correlation to corporate tax cuts and offshore outsourcing (in the negative).
This makes no sense to me. (Naked Capitalism). Are you saying because they have physical oil in storage there demise would increase supply, thus causing a drop?
Did they go short (as in when oil was closer to $100), long before the pop and as oil hit $147 crash and burn? Did they have options that expired before the drop in price?
Why would they horde physical oil if the price was going up anyway?
I saw they are being investigated for fraud and have moved money to the Cayman Islands.
The oil companies just pulled the biggest profit in history, yet this article claims that's not enough for investors!
On China, one of the issues is supply chain costs so to me if oil goes back down to $100, any sort of dip in their economic growth seems highly unlikely.
Nice call on oil by the way, you said this when we had hundreds of the sky is falling on energy prices.
Chau has defined her job as Secretary as finding as much cheap labor for business as possible - the Cheap Labor Department. It is surprising that she is so openly corrupt.
Now, corporate America can use the credit for international profits to shudder factories, and even get financing to move offshore. That cycle has to be broken.
- Targeted Asset Financing for Plant & Equipment for domestic manufacturers.
- Revive the Investment Tax Credit (thrown away because of Tax Shelters). ITC was directed at tangible fixed assets.
- Remove the tax incentives to go offshore and incredibly, Commerce Dept. financing.
The last and most important element is leadership akin to what Teddy Roosevelt did in 1907 by assembling the Robber Barons (Rockefeller, Carnegie, J.P. Morgan and Mellon) to buy stock and reverse the Bear Market. We have the opposite
of that kind of leadership now. If we had leadership, we would appeal to the private equity guys and VCs with the incentives discussed.
What has been show to fail is the nonsense of cuts in the corporate tax rate. In the last 30 years, off-shoring of manufacturing has followed all corporate rate cuts.
1. Large energy companies already own (but aren't developing) the tar sand and shale deposits.
2. A small company that started to develop those deposits wouldn't have the firepower to resist competitive attacks by the huge energy companies (so why try in the first place?).
Will we ever see Oil return to cost+ pricing instead of supply and demand?
From what I've read, even tar sand or shale or coal based oil production *should be* someplace around $25/barrel, cost.
Add the standard 10% for labor and profit, and that makes $27.50/barrel oil.
I just don't understand why somebody hasn't undercut the big oil production companies with these alternative synthetic oils yet. There's obviously something going on that we can't see.
All the indicators suggest there is no shortage of skilled workers
Introducing even more lower cost labor to the pool at a time when we are shedding jobs is madness.
Why is it that many of the left fail to understand how important middle and working class prosperity is to our national security and long term economic health? Little wonder that the left has struggled in the inbdustrial midwest in recent years - they no longer care about labor - the very forces that put the left back into power in congress.
I suspect that when the trade deficit becomes ~6% of GDP (as it is about in the United States) and increasingly our economy components have global or other national economies mixed in, we're getting a distorted picture.
Here's another one:
.
So, what we have I think is domestic economic indicators in a globalized world.
I've been reading these other posts and there is a sta, PPP or purchasing power parity.
I found this paper (pdf) interesting in that it states the world bank is arbitrarily calculating Purchasing power to create a poverty line of fiction.
At least in the United States I can believe it. They have the poverty line so low for one person, there is no way that person can afford even a room to rent.
Here(pdf), is the world bank GDP by PPP indicators from 2008. Check this out!
by PPP the nation ranking (top 5) is:
So the next time some a**nut screams about how China and India need our jobs because of all the evil doings in history, present them with this one!
Lobbyists have teams of public relations specialists who pump out article after article claiming there is a worker shortage when clearly by the statistics there is not one.
They also pump out the spin that all of this is about racism instead of labor economics continually.
That said, I know trade, outsourcing of jobs is a huge issue and the problem is the American people don't have a clear cut choice in the Presidential election.
Both Obama and McCain have promised corporations more guest worker Visas and this issue runs both sides of the isle.
The real problem is these lobbyists have so much money, they plain buy votes. I don't know how to put it any kinder.
I wrote about that earlier, the minute the United States even hints at doing something that's good for America, it gets labeled protectionist. They believe it's akin to calling out ya mama as an economic insult.
"No, I'm sorry, last I heard outsourcing US jobs is one of the things most Americans are outraged about."
I'm sorry, but I am not sure that is true. I think that most Americans have bought into the pop-media blitz that keeps claiming there is a shortage of US workers, especially STEM workers. The same pop-media blitz also claims that those who oppose the invasion of off-shore labor are protectionists, xenophobic, anti-free trade, anti-capitalism, and therefore un-American.
I may be preaching to the choir here, but I would like to point out something that the so-called "free trade" advocates overlook: in truly free market place, sustained labor shortages can not possibly exist. In fact, the very idea does not even make sense. In a truly free market: if demand starts to exceed supply, then prices will go up, which will cause supply will go up with the prices, thereby leveling out the equation.
For example: if there were a shortage of PHP developers, then wages for PHP developers would go up, thereby attracting more PHP developers. A long term shortage would be impossible.
If something drastic, sudden, and unexpected, were to happen, then there could be a short-term shortage. But, let me emphasize that such occurrences would be extremely rare, and very short-term. A flood of six year visas, year after year, would certainly not be needed. But the so-called "free trade" advocates have been claiming a sever shortage of STEM workers for, at least, the last 15 years.
Also, McCain's claim that Americans would not pick lettuce for $50 an hour is unbelievably stupid, and verifiable untrue - put an ad on craigslist if you don't believe me. Americans will do almost anything if you pay them enough, watch that "Dirty Jobs" series if you don't believe me.
The claims that Americans no longer want STEM jobs is equally stupid. Of course enrollment is down, who wants to spend all those years, and all that money, just to be replaced by cheap foreign labor a few years from now?
Talk about the pot calling the kettle black - china and india practice all sort of their own protectionism, subsidies manipulation and other unfair trade practices.
Protecting US jobs, technology, economic health and national security is a bad thing how?
>>"While our business in the US has not been affected by the slowdown so much, the failure of WTO talks and the election of a new president may impact us. Protectionism can rear its head in some form," said Sudip Nandy, president—technology, media & telecom, Wipro Technologies. <<
http://sify.com/finance/fullstory.php?id=14735237
We ain't just fer readin' anymore! Lots of tools and stuff available to write your economic brain until your fingers bleed!
For a nation to nation comparison of current rates see this attachment: http://www.mof.go.jp/english/tax/tax001/E_15_16.pdf.
The historical perspective is more interesting. Corporate Federal rates were 60% in the 50's and 60's dropping to 50% in 1969 and again dropping in 1981 with a slight rise in 1986.The rate has been 35% after 2001.
In the last 7 years more than 3.5 Million manufacturing jobs were lost despite a drop in Corp Rate to 35%. A similar manufacturing job loss occurred in the late 1980s through 2000 after TEFRA cut rates in 1986. But if you go back to the 50s the trend is even clearer. More than a quarter of the work force was in manufacturing at the time of the Korean War. Corporate Tax rate? A confiscatory 90% when the Excess Profits Tax was enacted in 1950. Manufacturing employment increased between 1950 and 1956.
Manufacturing job losses correlate inversely with corporate tax rates. The simple economic reason is 'take the money and run'. There is simply nothing in a tax rate that binds a U.S. corporate manufacturer to the U.S. shores.
To put the Corporate Rate in perspective, it is 3% of sales.
Even big changes in rates add only a penny or two to margin income as a percentage of sales. But wages are a much bigger slice of total sales. In a manufacturing company in the U.S., wages are about 70% of sales. Engage in Labor Arbitrage and the percentage sales represented by wages can drop in half or more.
Hi, Just subscribed to your blog feed. This blog seems to have some very good advice, interesting articles and great analysis. I look forward to reading more!
Well, it still doesn't completely add up, I mean how many are that stupid to dump so much risk into assuming a commodity will drop? (don't answer that!) I guess this is something to watch the facts come out on.
Well, dismissals are nothing new in a knee jerk reactionary plane of sliced reality based on philosophy or feeling. ;)
I'm just thrilled that we're growing, so hopefully the methodology of civil debate, researching one's topic and making conclusions that are fact based can help in grounding the blogosphere to hard cold numbers. ;)
They weren't hoarding oil, but they bought and sold physical oil for themselves and for accounts. As far as I know, no net gain or loss in supply.
But they were "caught short" and had to liquidate at enough of a loss that they went bankrupt.
At the Big Orange Political Blog, when I posted my first diary there were a bunch of derisive dismissals. Those voices have gotten quiet.
That would make a very good blog post if you care to research it out. Is there any correlation to corporate tax cuts and offshore outsourcing (in the negative).
This makes no sense to me. (Naked Capitalism). Are you saying because they have physical oil in storage there demise would increase supply, thus causing a drop?
Did they go short (as in when oil was closer to $100), long before the pop and as oil hit $147 crash and burn? Did they have options that expired before the drop in price?
Why would they horde physical oil if the price was going up anyway?
I saw they are being investigated for fraud and have moved money to the Cayman Islands.
I don't get this at all.
The oil companies just pulled the biggest profit in history, yet this article claims that's not enough for investors!
On China, one of the issues is supply chain costs so to me if oil goes back down to $100, any sort of dip in their economic growth seems highly unlikely.
Nice call on oil by the way, you said this when we had hundreds of the sky is falling on energy prices.
Chau has defined her job as Secretary as finding as much cheap labor for business as possible - the Cheap Labor Department. It is surprising that she is so openly corrupt.
Now, corporate America can use the credit for international profits to shudder factories, and even get financing to move offshore. That cycle has to be broken.
- Targeted Asset Financing for Plant & Equipment for domestic manufacturers.
- Revive the Investment Tax Credit (thrown away because of Tax Shelters). ITC was directed at tangible fixed assets.
- Remove the tax incentives to go offshore and incredibly, Commerce Dept. financing.
The last and most important element is leadership akin to what Teddy Roosevelt did in 1907 by assembling the Robber Barons (Rockefeller, Carnegie, J.P. Morgan and Mellon) to buy stock and reverse the Bear Market. We have the opposite
of that kind of leadership now. If we had leadership, we would appeal to the private equity guys and VCs with the incentives discussed.
What has been show to fail is the nonsense of cuts in the corporate tax rate. In the last 30 years, off-shoring of manufacturing has followed all corporate rate cuts.
I've got news for you; IT jobs and web design jobs are also being outsourced. Law and healthcare are another story.
2 non-exclusive possibilities:
1. Large energy companies already own (but aren't developing) the tar sand and shale deposits.
2. A small company that started to develop those deposits wouldn't have the firepower to resist competitive attacks by the huge energy companies (so why try in the first place?).
Will we ever see Oil return to cost+ pricing instead of supply and demand?
From what I've read, even tar sand or shale or coal based oil production *should be* someplace around $25/barrel, cost.
Add the standard 10% for labor and profit, and that makes $27.50/barrel oil.
I just don't understand why somebody hasn't undercut the big oil production companies with these alternative synthetic oils yet. There's obviously something going on that we can't see.
All the indicators suggest there is no shortage of skilled workers
Introducing even more lower cost labor to the pool at a time when we are shedding jobs is madness.
Why is it that many of the left fail to understand how important middle and working class prosperity is to our national security and long term economic health? Little wonder that the left has struggled in the inbdustrial midwest in recent years - they no longer care about labor - the very forces that put the left back into power in congress.
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