American Capitalism’s Great Crisis

[whell]

Interesting article in Time Magazine this month. There's probably something in here for you no matter which side of the aisle you're on. It does try to pop a few memes that are quite popular on both the left and the right. This one is worth the time to read it.

http://time.com/4327419/american-cap...-great-crisis/

Here's a sample of the author's "equal opportunity" approach to illustrate the current issues with the US economy:

The Carter-era deregulation of interest rates—something that was, in an echo of today’s overlapping left-and right-wing populism, supported by an assortment of odd political bedfellows from Ralph Nader to Walter Wriston, then head of Citibank—opened the door to a spate of financial “innovations” and a shift in bank function from lending to trading. Reaganomics famously led to a number of other economic policies that favored Wall Street. Clinton-era deregulation, which seemed a path out of the economic doldrums of the late 1980s, continued the trend. Loose monetary policy from the Alan Greenspan era onward created an environment in which easy money papered over underlying problems in the economy, so much so that it is now chronically dependent on near-zero interest rates to keep from falling back into recession.

[nailer]

The global empire is afloat on a sea of debt crisis? Trump's bankruptcy experience may just make him the most qualified candidate.

[donquixote99]

Nations can be insolvent, but not bankrupt. You can negotiate with creditors, but you can't reorganize and get a new credit rating.

[nailer]

I read/hear regularly that we are bankrupt as a nation.

How do you know that if we default on our debt we won't be able to reorganize and in effect get a new credit rating? I think we could. As the largest debtor by far, we own the bank.

[BlueStreak]

Admittedly, I only skimmed over this article. It's late, I just got home from work and I'm still recouping after battling the flu for the last four days. But it looks fascinating.

Perhaps my following comments aren't quite relevant to the article, but here is my input at this point;

I've been thinking that at some point, maybe in the 1970s sometime, we decided to rein in inflation by outsourcing certain manufactured goods to lower cost labor markets and those with "more favorable business conditions"; Mexico, S. America, Taiwan..... Of course this meant sacrificing manufacturing jobs, mostly in what is now called the "Rust Belt". At the time the trend may have been small but, obviously, with GATT, NAFTA and so on, the trend grew until we have what we have today.

To try and make my point as simply as possible,

I believe the thought all along is that the American worker would simply adjust to the new conditions, adapt and overcome the challenges of the changing job markets. Indeed if this had occurred according to theory, we would be in far better shape that we are today. So, what went wrong?

I recall an older brother, a degreed engineer, telling me that the job market was "going high tech". He said that "....anyone who doesn't get with it, will simply get left behind.". I remember thinking about how unrealistic this line of thinking was.

To my mind, the ideal job market should contain a mix of opportunities for workers at all skill levels. To say that "......the market is going to ________ and everyone that fails to do ______ will simply get left behind." can only mean one thing; That many people will simply get left behind. As unpleasant a fact it may be to face, we do not all possess the aptitude or the IQ to become software programmers and neuro-surgeons. Nor are we all apt to work assembly lines or drive garbage trucks. A healthy job market has decent employment to offer to everyone.

So, what does "left behind" mean? It seems to me that we have the answer to that question before us.

This is Mitt Romneys 47%. The millions disenfranchised with nowhere to go.

Guys, when we were in high school the burger flipper/ chain store shelf stocker job was strictly for teenagers learning a work ethic, trying to pick up some money to buy his first car. After that you went to college and on to that "high tech" job my brother spoke of, or you went to work in a local factory or mill and started a family............. Those were the "Good ol' Days".... (I know, I know....)

Now, take the factory and mill out of the picture.............welcome to 2016.

This is what has happened to way too many communities across America. We've cost cut ourselves into oblivion. We decided to save ourselves a buck by exporting our own job base......... And now we wonder why we have so many people out of work. It would be a joke, if it was funny.

No, I'm not implying that these people are "stupid" or "hopeless" in any way. I'm simply saying that we are not all the same. That the job market we build has to meet the realities of humanity, humanity is not going to magically change to meet the job market.

How do we achieve that? Hell if I know. If I had that answer, do you think I would still be turning a wrench at 52?

Hopefully, my half awake, mildly stoned on Nyquil Severe Flu Formula comments make some sense to you.

Good night, All!

Dave

[BlueStreak]

Originally Posted by nailer

I read/hear regularly that we are bankrupt as a nation.

How do you know that if we default on our debt we won't be able to reorganize and in effect get a new credit rating? I think we could. As the largest debtor by far, we own the bank.

Because we don't "make" money anymore? Because we borrow it from the same people whose crap we buy with it?

How is that supposed to work?

[whell]

Originally Posted by nailer

I read/hear regularly that we are bankrupt as a nation.

How do you know that if we default on our debt we won't be able to reorganize and in effect get a new credit rating? I think we could. As the largest debtor by far, we own the bank.

I think it would kick our house of cards all the way to the curb and beyond. The economy is growing at a mere 2% on average. To support the growth of our spending and mounting debt, it would have needed to have been growing far faster than that over the last 30 years, and continue on that pace into the future. There's no sign that a growth rate like that is achievable at this point with our financial system in its current state of disrepair.

In otherwords, if an organization reorganizes its debt in bankruptcy, there's a agreement by creditors that there's a plan to pay back a share of the debt and that the organization has a plan to return to solvency.

What's our gov'ts plan?

[finnbow]

Originally Posted by whell

I think it would kick our house of cards all the way to the curb and beyond. The economy is growing at a mere 2% on average. To support the growth of our spending and mounting debt, it would have needed to have been growing far faster than that over the last 30 years, and continue on that pace into the future. There's no sign that a growth rate like that is achievable at this point with our financial system in its current state of disrepair.

In otherwords, if an organization reorganizes its debt in bankruptcy, there's a agreement by creditors that there's a plan to pay back a share of the debt and that the organization has a plan to return to solvency.

What's our gov'ts plan?

We don't need a plan. As long as creditors are willing to buy our bonds at 2%, there's no issue.

[donquixote99]

What if that willingness to buy changes?

[MrPots]

Originally Posted by donquixote99

Nations can be insolvent, but not bankrupt. You can negotiate with creditors, but you can't reorganize and get a new credit rating.

But can your country be forclosed? That has yet to be determined. How much is a country worth?

Wouldn't it be a bitch if our "leaders" forfeited your country to a foreign debtor as collateral? The leaders are rich...they can live anywhere so why would they care?