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A quick read from Jack Ma, founder of Alibaba. He succinctly put American woes not to globalization, but the failure to properly distribute gains from globalization. His argument is that money was pooled not into ever increasing engineering successes and IP development for products that would be manufactured by other countries, but skewed to Silicon Valley and Finance companies.
Finally, the money was blown on $14.2T in military spending and the financial bubble that wiped out $19.2 trillion in US income. Money that could have been better spent making the next gen products in the Midwest.
On the other hand, perhaps Jack Ma is overlooking military advances that have later been developed into commercial applications because the government provided the funding when something. Would the internet and mobile telecommunications have reached the level it did without military funding at startup?
Is Mr. Ma errant in thinking that innovation in an area will continue once the production and related supply chain have left for foreign shores?
Personally I find Mr. Ma's position hysterical and rather contradictory to the forces that have allowed Alibaba to blossom. By becoming the world's workshop, China's long game plan is that the IP will of course follow, and be readily copied for alternative developments. A rather limp...oh it's your own fault.
So basically he states that our problem is income inequality, specifically finance having a larger and larger share of the pie. Funny, coming from someone from a country like China.
We do over spend on military. More than the next 8 highest spending countries combined IIRC. We also pissed away a lot of debt on tax cuts which have not trickled down at all and poorly designed stimulus like Obama's reduction of FICA taxes. While that stimulus hit the proper wallets it was small and hurt a program already running short of money.
The issue with manufacturing jobs heading overseas was always going to be a problem. Capitalism is a brutal mistress at times and the profits generated from exporting manufacturing were not going to be ignored forever. The benefits are numerous and the real costs savings are incredible. Short of some massive, fundamental change in how we view economics, the environment etc it will never come back in any fashion like it was. Regardless until automation completely removes the need for most human involvement, there will always be some other **** hole you can exploit and save x%.
I don't think people really understand that what we experienced post WW2 and the subsequent boom through the 90's was simply not sustainable. We saw ourselves in a situation where Europe and much of the rest of the civilized world were decimated, rebuilt and/or barred off from most everyone else with the exception of the USA. We squandered our advantages and made poor investments. Now our grip on the world is slowly slipping away from us and it has been as the world recovered from the War and emerged from the Iron curtain.
What we are seeing is the end of our dynasty. We can continue to grasp at control by throwing more money at our military and of course tax cuts! for everyone but those that need them but ultimately that is only going to speed our demise.
Our education system is really in shambles, our competitiveness in math and science is a joke and eventually even our military and its power will be greatly diminished. We are rapidly entering an era where all the key players have nukes and that simply changes the rules of the game.
The next boom is in energy (not oil), space and exploiting emerging markets who demand to have products that we've been enjoying for decades. All areas where we have been sitting on our heads.
We have nearly lost all of our advantage we built in space. We should have been investing much more in our space program. The fact we are reliant on corporations and Russia for much of it speaks volumes as to how far we've fallen. The amount of money out there is simply incomprehensible. Leaving it to other nations or corporations to shelter in some tax haven is simply stupid. The path to space should be through NASA not on some Soyuz.
Our energy policies are laughable with little interest in renewable, nuclear and in general a lack of interest in anything other than Drill baby drill! Shame because the writing is on the wall for fossil fuels. The reliance on such is going to be a disaster for many states that have chosen to not diversify.
We don't make much of anything anymore to exploit the emerging markets. We've become a house of paper that says there is value, just make sure you cash it out before everyone decides it is worthless.
We should be investing in education, not pissing away money like we are now. Really pushing for quality of life improvements so parents can be more involved with their kids and not just shipping them off to sit with some $10/hr random at the day care facility. We've gone from having parents home in the house raising our own kids to letting some other person raise 15 or 20 kids at a time. The level of parental support has fallen tremendously and our schools are suffering as a result. The middle class and below is in desperate need of some help. They are over worked, under paid and costs for essential items have risen far faster than inflation.
Instead of tax cuts for the top end we should be looking for ways to improve life for the 50% and lower. We shouldn't be pushing for more tax cuts and military spending, we should be pushing for that money to be funneled to developing alternative sources of energy, freeing up time and resources for research and space related investments.
There is no wonder we are falling from the top. We squandered our half century advantage, ensured that only the very top gained and at every opportunity eroded worker rights and spent like drunken sailors on bullets and tanks. When instead we should of been investing in our own population and expanding our lead in space and education.
Now we are left with crumbling infrastructure, massive amounts of debt and a dwindling job base. We just came off one of the most prosperous times in the world's history and we are a bunch of broke dicks. Well done America.
Hard to say. I agree with him about the financialization of our economy. It's way out of hand. Far to much money cycles through Wall St. It's become gambling instead of investing.
But there are other things that are unique to America that have hurt. The medical system is way to big and way to expensive. We are far to litigious. Our education system is much too expensive and much too mediocre.
25 years after we won the Cold War, the US shouldn't have to defend the world alone. Europe should do twice as much as it does. So should Japan.
Ma is an outsider looking in, a different perspective. So what he says is valuable. He sees things from a different angle than we do. No doubt he's very smart. Our leaders should listen closely to people like him.
...poorly designed stimulus like Obama's reduction of FICA taxes. While that stimulus hit the proper wallets it was small and hurt a program already running short of money.
The FICA tax holiday was forced on Obama by Republicans who refused to extend the Make Work Pay tax credits. Those after all were phased out for incomes above $75K. The FICA cuts gave a break to every fat cat under the sun. Resulting losses to Social Security were however made up from general revenues.
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.
I don't think people really understand that what we experienced post WW2 and the subsequent boom through the 90's was simply not sustainable. We saw ourselves in a situation where Europe and much of the rest of the civilized world were decimated, rebuilt and/or barred off from most everyone else with the exception of the USA.
I liked the rest of your post, but it bugs me when I see this parroted so often.
The US didn't benefit from devastation in other parts of the world. Else we would have had a big net export surplus and we did not. Actually the US economy took off in a big way starting in the early 1930s, not post WW2. What we experienced was a big ramp up in domestic investment in production. We made great strides in automation and productivity, and those gains were shared with employees. This went on for ~40 years. The median worker income actually rose at the same rate as per capita GDP.
Since the mid 70s it has been very different. The oligarchs used finance (helped by fiat money) and globalization to greatly reduce their dependence on consumer wealth, and to make themselves massively wealthy. GDP has been great, but the gains are only split among the few.
A quick read from Jack Ma, founder of Alibaba. He succinctly put American woes not to globalization, but the failure to properly distribute gains from globalization. His argument is that money was pooled not into ever increasing engineering successes and IP development for products that would be manufactured by other countries, but skewed to Silicon Valley and Finance companies.
Finally, the money was blown on $14.2T in military spending and the financial bubble that wiped out $19.2 trillion in US income. Money that could have been better spent making the next gen products in the Midwest.
On the other hand, perhaps Jack Ma is overlooking military advances that have later been developed into commercial applications because the government provided the funding when something. Would the internet and mobile telecommunications have reached the level it did without military funding at startup?
Is Mr. Ma errant in thinking that innovation in an area will continue once the production and related supply chain have left for foreign shores?
Personally I find Mr. Ma's position hysterical and rather contradictory to the forces that have allowed Alibaba to blossom. By becoming the world's workshop, China's long game plan is that the IP will of course follow, and be readily copied for alternative developments. A rather limp...oh it's your own fault.
But, what do you think?
China is the world's biggest example of crony capitalism and malinvestment in the history of economics, and the place will come apart at the seams some time in the near future as a result.
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