American Economics Thread

Discussion in 'Members' Club Room' started by Bernard, May 16, 2015.

  1. Bernard
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    Bernard Junior Member

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    I just think this would be a good place to post news on American Economics. We have a Nasa thread, so I wouldn't think this is stepping out of bounds.
     
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  2. Bernard
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    Bernard Junior Member

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    http://blogs.wsj.com/economics/2015...-their-money-restaurants-and-online-shopping/
     
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  3. Bernard
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    Bernard Junior Member

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    http://fortune.com/2015/05/13/savings-retail-sales/

    Just to get it started
     
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  4. Blackstone
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    Blackstone Senior Member

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    So the Baby Boomers are saving more for their retirement, but the young are still racking up debts. Nothing changes in the end, and there will be more borrow-spend in the US and not less.
     
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  5. Equation
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    Equation Senior Member

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  6. PanAsian
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    PanAsian Senior Member

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    A lot of Americans don't want to hear it or talk about it, but all these trends point to continued US transformation into a high-low-only no middle class society economically and otherwise. There have been lots of warnings ahead of time since at least the early 2000's. The financial crisis was a systemic opportunity to reset but we got "too big to fail" bailouts, and quatitative easing instead.

    This means the same big players who messed up get to stay in, and continue to dominate, the markets without having to sustain due losses and they are actually given more relative power over other players via QE. Inflation is mostly vaguely reported, the way QE works is to channel money into large corporations and large investors who inflate asset prices thereby actually shutting out the little guys and creating an opportunity gap from the get go. The supposed trickle down effect from this would only at best be a trickle and at worst not happen at all as those in control of the big bucks pursue increased profits for themselves rather than genuine growth.

    I'm barely getting started but gotta go deal with real life...
     
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  7. Bernard
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    Bernard Junior Member

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    http://www.forbes.com/sites/laurash...-affect-the-economy-over-the-next-five-years/
     
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  8. Bernard
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    Bernard Junior Member

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    Since I'm from Kansas and live in Kansas, and everyone likes to dog on Gov. Brownback, here is a legit source about what he has done with small business tax cuts, and since the biggest city in the state "Kansas City" is split between two states, you can see a real difference in growth from either side.

    http://www.wsj.com/articles/seeded-with-tax-cuts-kansas-harvests-the-benefits-1431729743
     
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  9. Equation
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    Equation Senior Member

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    In my opinion it's the manufacturing labor middle class Americans that are diminishing but the service labor middle class are still in intact and rising as more and more Baby Boomers are in retiring stage.
     
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  10. delft
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    delft Senior Member

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    From Asia Unhedged:
    http://atimes.com/2015/05/why-american-productivity-has-gone-down-the-drain/

    Why American productivity has gone down the drain

    Author: Asia Unhedged May 19, 2015 0 Comments

    Asia Unhedged

    Capital expenditure, innovation, Internet revolution, U.S. economy

    Former Fed Vice-Chairman Alan Blinder writes about the “Mystery of Declining Productivity Growth” at the Wall Street Journal. Growth of output per manhour is the worst since the Great Stagflation of the 1970s.

    [​IMG]

    But why? Maybe it’s a statistical illusion, maybe it’s mean reversion from high productivitygrowth in the past, maybe it’s less rotation of workers through different jobs.

    Of course, it could be the fact that capital investment is miserably low compared to past periods. Blinder allows:

    A third hypothesis, weak investment, is more promising. The basic idea is straightforward: If the capital stock grows more slowly, as it has in recent years, workers will have less new capital to work with, and their productivity will therefore improve more slowly. But when it comes to making that intuitive idea numerical, the time period matters a lot. I’ll spare you the calculations, but the necessary data, which end in 2013, show that weak investment can account for about 70% of the sharp slowdown after 2010. But three years is too short a time period to draw any conclusions. If we date the productivity slowdown from 2005, weak investment accounts for only about 25% of the slowdown.

    Here are two less conventional, even counterintuitive, hypotheses.

    Wrong, wrong, wrong. It’s not just that overall CapEx is down, but that 40% of all CapEx in the S&P 500 has gone to energy, up from 28% in 2007. The U.S. invested disproportionate amounts of its dwindling pool of capital investment to replace imports of oil with domestic shale oil. That’s well and good, but it doesn’t have broader productivity effects like investment in computation and telecommunications.

    [​IMG]



    Maybe, Blinder continues, technological progress “actually slowed in recent years, despite all the whiz-bang stories you read in the business press.” He explains:

    Impossible? Well, keep in mind that to an economist “technological progress” means getting more output from the same inputs of capital and labor. Does Twitter do that? Or Snapchat? Some popular online services might even reduce productivity by turning formerly productive work hours into disguised leisure or wasted time.

    In somewhat different ways, John Fernald of the Federal Reserve Bank of San Francisco and Robert Gordon of Northwestern University, two leading productivity experts, have argued that the greatest productivity gains from information technology came years ago, and that recent inventions look puny by comparison. Compare Facebook with the Internet, or the Apple Watch with the personal computer. Maybe inventiveness has not waned, but the productivity-enhancing impacts of inventions have.



    Those are good points, but Asia Unhedged has a simpler view of the matter: America used to have tech companies that produced disruptive technologies. Now it has stable consumer franchises run by patent trolls from the legal department rather than engineers. Our logic is simple: If it walks like Proctor and Gamble, quacks like Proctor and Gamble, and flies like Proctor and Gamble, it’s Proctor and Gamble. The S&P Tech Sub-Sector (the contents of the XLK SPDR ETF) traded with twice the volatility of the S&P 500 index in the late 1990s and early 2000’s, and now it trades with the same volatility of the overall index. In other words, tech isn’t risky anymore. It’s not risky because the patent lawyers have ringfenced their little monopolies, kept new entrants at bay with patent lawsuits, and turned into cash cows.

    [​IMG]

    Of course there’s no productivity growth! There’s less investment, and the companies that used to drive productivity growth now suppress it.

    (Copyright 2015 Asia Times Holdings Limited, a duly registered Hong Kong company. All rights reserved. Please contact us about sales, syndication and republishing.)

    Is this were China wins?
     
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