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It's really simple were America went wrong. It got the bad end of trade deals.
In 1990, the US would have been the only country in the world that could have closed its borders and never traded with anyone. There would have been some pain, but it could have been done.
Energy resources: oil from TX, WY, OK, CO, and AK, gas from there, too.
Lumber in plenty of supply, factories able to make everything needed
Population big enough to make it worthwhile for at least 2 or 3 competing suppliers in any category that helps keep the market efficient.
Agriculture big enough to feed the world is big enough to feed America.
Try doing that if you are France, Sweden, New Zealand, Japan.
The people who made the trade deals benefited greatly.
This is what happens when government is co-opted by business. Maybe it's always been that way, but at least in the past the oligarchs were dependent on domestic consumer wealth and buying power. Not anymore.
His overall point is completely true - the USA does not distribute its money in such a way as to benefit the country. Instead, under the influence of a few and subject to special interests, money is distributed to benefit the few. Now that we have a government of, by and for billionaires, that has never been more clear.
Of course we don't distribute wealth!!! The Republicans scream bloody murder at the mere thoughts of "distributing wealth"!!! During the 2008 election, McCain even made this a key point of his critique of Obama. And after Obama took office, they kept calling him a "socialist" for his wealth distribution programs that only existed in their heads!
The problem is that we went from a system that had strong incentives for increasing wages (closed-loop consumer-capitalism) to one where the rich could get far richer and not depend on consumer wealth.
Globalization, trade deficits, fiat money, and easy credit made this possible. It isn't like any of these are necessarily "bad" at all, they simply *allowed* the oligarchs to put a greater share of wealth into their own pockets.
Putting a tax and social redistribution bandaid on to try and solve the problem would be the worst approach. Rather we need to instate a playing field that naturally supports wages.
There isn't a playing field anymore than support wages. Most people are going to be in a low end job. There has always been and always will be more peasants than kings and knights. Automation is only going to increase in pace exponentially and more and more jobs are going to go away.
We are going to have to rethink the entire economic system at some point because free market capitalism is very slowly starting to edge it's way towards monopolistic capitalism. We continue to erode our free market with mergers and acquisitions to drive profits and the current crop of high growth companies are mostly cannibalizing old growth, old world services and already valued at quite a premium since there is very little growth anymore. The trend is very clear and it will only accelerate with self driving cars, trucks, touch screen ordering etc. Wokers are ****ed.
We have always had globalization. The Commerce Clause exists in the Constitution because of it. We went off to North Africa to fight the Barbary pirates because of it. We fought the War of 1812 over it.
You cannot possibly have a honest conversation about what went wrong without talking about politics.
Quote:
Originally Posted by rruff
The problem is that we went from a system that had strong incentives for increasing wages (closed-loop consumer-capitalism) to one where the rich could get far richer and not depend on consumer wealth.
Globalization, trade deficits, fiat money, and easy credit made this possible. It isn't like any of these are necessarily "bad" at all, they simply *allowed* the oligarchs to put a greater share of wealth into their own pockets.
Putting a tax and social redistribution bandaid on to try and solve the problem would be the worst approach. Rather we need to instate a playing field that naturally supports wages.
You mean in a perfect world where the people are well informed and able to choose the best policy?
Trade isn't an issue at all, rather trade tends to be more efficient and productive, and productivity = prosperity. The basic problem we have is a systemic trade *deficit*, which can be very easily fixed by reducing the US$ exchange value. Then we will specialize in producing and exporting goods and services where we have a competitive advantage, maximizing prosperity.
What else? In addition I'd support a BI (~15% of GDP to start, pegged to tech unemployment rate), along with a welfare overhaul (most of it disappearing) and SS adjustment (BI eventually replacing SS). This will directly benefit the job situation (pay and demand) at the low end, since anyone can survive without a job. A voucher system for privatization of healthcare and education will greatly improve efficiency in those areas. Eliminate professional licensing requirements. The government's role in all this will be watchdog rather than providing services.
That's about it.
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