Political Roundtable - Part V

[dckingsfan]

"The lack of income growth has occurred more than a decade. Workers have not been receiving the fruits of their increases in productivity. In some periods, the shortfall was explained by increased benefits costs or regulatory compliance. That is, if the households had people working, their costs to their employers were increasing for benefits (usually medical insurance costs) and regulatory compliance, such as increased Social Security and Medicare payments when increases in the income thresholds for the employer contributions applied. Those payments do not show up as income, but they are costs to the employer for total payroll."

Regulatory costs, taxes and medical payments have been eating up a lot of what should have gone to the bottom line of the middle class. But not all.

http://blogs.whattheythink.com/economic ... -322082785

[dckingsfan]

Nate if what you say is true, why are unions still effective in Germany?

I mean, I know why - it's written into the law that blah de blah de blah. But if what you're saying is true Germany's blue collar workers should be in the same boat ours are.

Those workers in Germany that are outside of the manufacturing sector have faired the same. They difference is their manufacturing sector has retracted much slower than our manufacturing sector.

[dckingsfan]

And remember, Germany's GDP growth is at .4% - so there are some hard times coming their way too and have impacted those workers bottom line as well.

http://uk.reuters.com/article/2014/08/1 ... ME20140817

[Zonkerbl]

Uh... TL;DR.

But all professional economists know that "income" is a meaningless statistic and what we are really interested in is compensation, which includes benefits.

So not sure what this guy is getting at.

[dckingsfan]

Uh... TL;DR.

But all professional economists know that "income" is a meaningless statistic and what we are really interested in is compensation, which includes benefits.

So not sure what this guy is getting at.

He is making two points.

One, that the economy can’t grow until incomes rise in a general way (he is arguing your point ) He takes issue with the GDP numbers as well. If the economy was really growing, incomes would have confirmed the rise in GDP.

Two, we aren't out the recession in a meaningful way.

[dckingsfan]

He also makes the point that some of the $$s that should go to the workers are getting syphoned off to the government.

[Zonkerbl]

No, he's not arguing my point. The economy can't grow unless compensation grows. As I said, income is a meaningless statistic and any argument based on measuring income growth is a specious one.

Syphoning money off to the government is also completely specious, since that money doesn't get burned by evil government robot lasers but is paid, in compensation, to government workers. Complete red herring.

[dckingsfan]

Edit: retracted - thought you were talking about the other article.

BTW, that article was just showing that Germany has many of the same issues. They aren't exact but they still have a more of the income floating to the business owners than the employees when productivity rises.

[dckingsfan]

But I disagree that regulatory taxes and healthcare don't reduce remuneration.

[popper]

My post (can the German model work in the US?) was intended as a very general inquiry into the relationship that stakeholders have in the operation and success of a business enterprise. Having worked and lived in Germany for a year, it seemed to me that the unions, ownership and management had a much more cooperative relationship than do their counterparts in the US.

I also observed (while partnering with Intel Gmbh) that the Germans were more enlightened in their understanding that over the long term, neither union, mgmt nor owners would succeed unless they operated in a synergistic way. The article I linked to mentioned the pressure applied by owners in the US for short term growth, valuations and dividends. In many instances, mgmt. compensation linked to these priorities invariably rewards short term success at the expense of long term viability and labor productivity/compensation/satisfaction.

So I'm back to my original question. Can the good aspects of the German model be imported to the US or are there impediments, be they social, govt or cultural that make this an unrealistic goal?

[Zonkerbl]

My post (can the German model work in the US?) was intended as a very general inquiry into the relationship that stakeholders have in the operation and success of a business enterprise. Having worked and lived in Germany for a year, it seemed to me that the unions, ownership and management had a much more cooperative relationship than do their counterparts in the US.

I also observed (while partnering with Intel Gmbh) that the Germans were more enlightened in their understanding that over the long term, neither union, mgmt nor owners would succeed unless they operated in a synergistic way. The article I linked to mentioned the pressure applied by owners in the US for short term growth, valuations and dividends. In many instances, mgmt. compensation linked to these priorities invariably rewards short term success at the expense of long term viability and labor productivity/compensation/satisfaction.

So I'm back to my original question. Can the good aspects of the German model be imported to the US or are there impediments, be they social, govt or cultural that make this an unrealistic goal?

This is a great question. I don't know the answer.

[dckingsfan]

Or another way to look at it...

http://fortune.com/2014/09/03/us-econom ... -slowdown/

“The American economy has evolved from a fast-moving rabbit to a slow-moving turtle, and the community of academic economists, business economic forecasters, and policymakers inside the government have been slow to recognize this profound transformation.”

[Induveca]

Or another way to look at it...

http://fortune.com/2014/09/03/us-econom ... -slowdown/

“The American economy has evolved from a fast-moving rabbit to a slow-moving turtle, and the community of academic economists, business economic forecasters, and policymakers inside the government have been slow to recognize this profound transformation.”

It's a sad state of affairs when the great hope is the US will once again "manufacture" and the "reshoring" mantra. That's not happening, it's newsworthy propaganda from my perspective.

Manufacturing at this point has become "Proudly Assembled in America" vs actually "Made in America". A real manufacturing boom would be the rise of US based component suppliers, not minimum wage workers manning robots slapping together parts from S. Korea and China. The whole "reshoring" craze in reality is little more than taking an existing supply chain from Asia and changing the last "assembly" hop from Shenzhen to Anywhere, USA.

A supply chain shift back to the US is something that will not occur in this generation. Much like the US dominated car manufacturing for 70 years China/S. Korea/Taiwan have a stranglehold on component manufacturing for semiconductors/computing for decades. People shouldn't celebrate Apple manufacturing a small percentage of Macs in Arizona. In reality, any components of real value are from Taiwan/S. Korea and China (sadly even many of the Intel processors now come from Dalian, China).

What's the solution? My child will be required to understand/code basic object oriented programming by high school. He'll also have to manage a small portfolio of international and US based stocks based purely on perceived trends within his age group. It's a tech/investment driven path to success for the US for the next few decades. Graduating with a degree in marketing/liberal arts is a path directly to the lower middle class.

[dckingsfan]

I would add that anything in Robotics/AI is good. Anything in nano technology and where it intersects with 3D printing is good. Anything in biotech around DNA sequencing. Mechanical engineering either in the Macro or Micro areas. Or any engineering that combines design and development.

[Induveca]

Also, for those not aware of the "Global Creativity Index" it's really fascinating.

http://martinprosperity.org/media/GCI%2 ... 202011.pdf

While jobs and the economy have suffered, US kids are still enjoying a top 5 (top 2 overall) creativity climate. It explains why the US is dominating in software/online services globally. Western Europe is catching up rapidly. Programmers in Sweden/Netherlands/UK seem generations away from 2005 already. Merging science with creativity and speculative risk is an avenue all kids should take until they have no choice but to take an exempt/salaried job. The rewards over the past 20 years have been too great to not take that approach. It's also a damn fun way to live.

[Induveca]

I would add that anything in Robotics/AI is good. Anything in nano technology and where it intersects with 3D printing is good. Anything in biotech around DNA sequencing. Mechanical engineering either in the Macro or Micro areas. Or any engineering that combines design and development.

Agreed completely.

It's up to the parents to ensure that possibility exists by recognizing the market into which their children will mold their careers. It's also crucial to ensure they graduate with as little debt as possible.

Have an exceptionally smart child? Get tutors from private universities and pay them hourly in lieu of college.

Being tutored by top notch professors bi weekly for 8 months is far cheaper and more impressive/productive than another kid churned out of the establishment quoting Shakespeare and simple algebra.

Professors from top institutions make a good hourly wage doing the same for business owners. They would happily do so for a young entrepreneur in training. All it takes is an email and ask for their remote hourly rate.

In some cases, locating recently retired industry experts instead of professors can be just as lucrative for an adult/child.

[dckingsfan]

I would add that anything in Robotics/AI is good. Anything in nano technology and where it intersects with 3D printing is good. Anything in biotech around DNA sequencing. Mechanical engineering either in the Macro or Micro areas. Or any engineering that combines design and development.

Agreed completely.

It's up to the parents to ensure that possibility exists by recognizing the market into which their children will mold their careers. It's also crucial to ensure they graduate with as little debt as possible.

Have an exceptionally smart child? Get tutors from private universities and pay them hourly in lieu of college.

Being tutored by top notch professors bi weekly for 8 months is far cheaper and more impressive/productive than another kid churned out of the establishment quoting Shakespeare and simple algebra.

Professors from top institutions make a good hourly wage doing the same for business owners. They would happily do so for a young entrepreneur in training. All it takes is an email and ask for their remote hourly rate.

In some cases, locating recently retired industry experts instead of professors can be just as lucrative for an adult/child.

Another possibility is to skip the last two years of HS and get an AA from the local JC. Then you just have to pay for two years at college.

[montestewart]

Also, for those not aware of the "Global Creativity Index" it's really fascinating.

http://martinprosperity.org/media/GCI%2 ... 202011.pdf

While jobs and the economy have suffered, US kids are still enjoying a top 5 (top 2 overall) creativity climate. It explains why the US is dominating in software/online services globally. Western Europe is catching up rapidly. Programmers in Sweden/Netherlands/UK seem generations away from 2005 already. Merging science with creativity and speculative risk is an avenue all kids should take until they have no choice but to take an exempt/salaried job. The rewards over the past 20 years have been too great to not take that approach. It's also a damn fun way to live.

I've read about it but never seen this report. Very interesting, sending to my wife, who is more creative. Thanks.

[Zonkerbl]

The new U.S. economy will be based primarily on transgenic products (spiderpig!) and digital entertainment.

Invest appropriately.

[Induveca]

The new U.S. economy will be based primarily on transgenic products (spiderpig!) and digital entertainment.

Invest appropriately.

Where are the requisite all caps and screaming Zonk!?