I'm not american, nor live in the US, so I can't directly speak of the why's and how's of your predicament; still I perceive you are hinting at an scenario where the US somehow adopts the lower wages-producing-exporting model of China. But isn't the US the biggest consumer of all? Who's going to take on the role of client? When is this model going to pay off?
I concour there are hidden rewards in this crisis, like Sense slapped into a credit (not real money) dominated economy, but we are talking about the foundation of the building. Self reliance would have to be a priority, boosting the health of the some producers but probably harming foreign commerce. The auto industry will die or else produce a flying solar car. And so on.
Obama is just a man, hopefuly a symbol of the will to change. Let's hope for the best, cautiously.
Ted
· 10 months ago
I think many employers in the U.S. have adopted lower wages for decades -- it's just that many Americans have supplemented their income with credit. And if the retail sector is any indication of what's going on in the consumption side in the U.S., then the market for certain goods (i.e., those sold at home improvement stores like Home Depot, cell phones, personal computers, and cars) will have to be re-priced for other markets that are "emerging."
I have no idea if this new economic model is going to pay off, but I agree with NYU economist Nouriel Roubini who said that the U.S. will survive this economic crisis, but it will be a far different country than it was before.
DwDunphy
· 10 months ago
America lost it's way when technology got so cheap (relatively.) My father once owned a television repair shop, but the business fell apart because people stopped having their electronic equipment repaired. If the stereo stopped working, time for a new stereo. TV on the fritz? New TV time.
Then that mindset started spreading into cars and homes. Major investments soon had the commonality of replacing a busted Walkman, so the lesson that Americans need to relearn is the old common sense notion of fixing and maintaining what you have versus always looking for the trade-up.
steve
· 10 months ago
DW, I fully agree but it's gone far beyond that. Americans now routinely replace stuff that's not even broken. There's nothing wrong with the 27" CRT TV, but they want that 40" flat-screen. So they get it. And how about cell phones? See one you like better - more features - get it! Consumerism has gotten out of control, and the ever-consuming need for most Americans to have the newest/coolest/latest/hippest/trendiest things to keep up with the Jones's is gonna spiral the globe into major problems.
JonCummings
· 10 months ago
Tom Abate's column spends all of about 25 of its 1000 words discussing exactly WHAT America is supposed to begin exporting. Financial services? What do we have to export that the world can't get cheaper and, from all the recent evidence, better elsewhere? Biotech? Maybe (and it would be great for me, because my wife works at a biotech firm), but that's an awfully small piece of the economy to base a recovery on.
I think Tom Friedman has this one right. If we're to re-establish ourselves as an export economy, it's going to have to be through racing to develop green technologies, convincing the world of their importance, and then ramping up our manufacturing to corner the market on their production.
As for the other half of Abate's equation--consuming less, which actually means importing fewer of the goods we no longer make ourselves--he probably needs to be reminded that China owns a whole bunch of US debt, and that any significant curb of US imports from China might make the Chinese reluctant to continue floating us.
steve
· 10 months ago
Good points Jon. I guess I agree with Friedman somewhat but I think it'll still be very difficult to "corner the market" on the production of anything unless it's so difficult/complicated to produce that others can't do it. My best buddy works for a large firm that makes high-end communication radios for police/fireman etc. He's a purchasing manager so he buys the parts for the radios to keep the operation moving. Now, the white-collar engineers at his company design new radios and parts, but once a new part is needed and it's engineered, every single time a company in Taiwan or China will come up with the exact same part for one-quarter the price. So, as much as he doesn't want to buy the foreign parts for the assembly line, in order to keep the cost of his companies radios lower than his competitors, he's forced to. He wants to keep the business in America, but he can't. It's Friedman 101. And he says the Chinese are getting better and better at making even the complex parts that just a few years ago they had trouble with. It's troubling. What are we seriously gonna manufacture on a large scale that they won't be able to under-cut us on?
And BTW, regarding consumerism and the outta-control American need for more "stuff", check out "The Story Of Stuff" if you haven't seen it. It's an entertaining video that - while oversimplifying things a bit - is still pretty good. - http://www.storyofstuff.com/
MarlboroTestMonkey7
· 10 months ago
1. The Story of Stuff should be requiered viewing for everybody these days. 2. I half jokingly suggested flying solar cars; but one way out of this mess, IMHO, would be to turn the existing infrastructure to produce not a competitive solar-whatever car, but a competition demolition one.
Ted
· 10 months ago
Green tech as an export commodity is something that could be transformative in terms of poorer countries with energy infrastructures that are so rickety that frequent blackouts are an everyday occurrence. However, the countries that would benefit from such technology do not have the means to purchase it without massive financial help. And it's going to take at least a decade before green tech is affordable both here and abroad. As a long term investment it will eventually pay dividends, but getting there is going to be a tough slog.
MarlboroTestMonkey7
· 10 months ago
Well, I've seen some numbers and most green tech is simply not affordable by us 3rd world countries; the difference is that while for an 1st world household or industry the investment might seem onerous, the results might back it; not for us, at homeowner level, the bills aren't that high and for the industry, there would not be a way to recover the investment. Green -at is it, as it means- is not exponentially scalable, it feeds but won't fatten.
So, green tech might be better suited for you people, in order to produce a quality product that might fuel your own internal production rather than try to compete with China/else. It's the demand that drives the market, a reaserting of real (not created) needs should cut off the slack the excessive consumption spawns.
All Comments
I concour there are hidden rewards in this crisis, like Sense slapped into a credit (not real money) dominated economy, but we are talking about the foundation of the building. Self reliance would have to be a priority, boosting the health of the some producers but probably harming foreign commerce. The auto industry will die or else produce a flying solar car. And so on.
Obama is just a man, hopefuly a symbol of the will to change. Let's hope for the best, cautiously.
I have no idea if this new economic model is going to pay off, but I agree with NYU economist Nouriel Roubini who said that the U.S. will survive this economic crisis, but it will be a far different country than it was before.
Then that mindset started spreading into cars and homes. Major investments soon had the commonality of replacing a busted Walkman, so the lesson that Americans need to relearn is the old common sense notion of fixing and maintaining what you have versus always looking for the trade-up.
I think Tom Friedman has this one right. If we're to re-establish ourselves as an export economy, it's going to have to be through racing to develop green technologies, convincing the world of their importance, and then ramping up our manufacturing to corner the market on their production.
As for the other half of Abate's equation--consuming less, which actually means importing fewer of the goods we no longer make ourselves--he probably needs to be reminded that China owns a whole bunch of US debt, and that any significant curb of US imports from China might make the Chinese reluctant to continue floating us.
And BTW, regarding consumerism and the outta-control American need for more "stuff", check out "The Story Of Stuff" if you haven't seen it. It's an entertaining video that - while oversimplifying things a bit - is still pretty good. - http://www.storyofstuff.com/
2. I half jokingly suggested flying solar cars; but one way out of this mess, IMHO, would be to turn the existing infrastructure to produce not a competitive solar-whatever car, but a competition demolition one.
So, green tech might be better suited for you people, in order to produce a quality product that might fuel your own internal production rather than try to compete with China/else. It's the demand that drives the market, a reaserting of real (not created) needs should cut off the slack the excessive consumption spawns.
Whew! -----ramblin' ends.