Globalization Lead to U.S. Standard of Living Drop Wose Than Great D

This is a somewhat dense argument, but fairly well written. And its findings are startling and frightening, from an American-centric point of view.

It seems no matter how you cut this economic cake, we Americans are going to see a dramatic slip in our quality of life here, due mainly to globalization -- and the sheer rapidity in which that has taken place.

This, according to one noted Bear economist.

The final factor depressing long-term living standards is the unwise policy response in the last few months to the credit crunch and the beginnings of global downturn. Throughout the world, but particularly in the United States and Western Europe, governments have resorted to bailouts and "stimulus packages" that have exploded public sector deficits and increased the power of government in the economy. Contrary to popular and journalists' beliefs, these expenditures are not free; they must be borrowed. In a time of tight credit such as we are now experiencing and are likely to continue experiencing for some time to come, that borrowing crowds out other more productive uses of capital. It has been remarked the total cost of bailouts by the Federal Reserve, the Treasury and other public sector authorities approaches that of World War II, corrected for inflation. However, from World War II, we got the jet engine, rocketry and the computer, whereas no significant technological spin-off is likely to result from $600 billion invested by the Fed in redundant home mortgages.

The ultimate conclusion is stated thus:

Nevertheless, the probability of a long-term decline in U.S. living standards comparable to if not deeper than the Great Depression must be rated as fairly high. It will take the form, not of a single catastrophic collapse as in 1929-33, but of a series of sharp unpleasant recessions, interspersed with feeble unconvincing recoveries in a downward saw-tooth pattern. The result will be the same, albeit over a longer period. The only saving grace is that the decline will eventually bottom out and be followed by gradual recovery, as global growth continues and the United States shares in it. Even so, this is far from the future Americans have envisioned for themselves.

This is like s slow death, and the time frames that this author seems to indicate mean I will be well past my working life by the time we turn around, and my kids -- maybe -- will benefit from the tail-end of it. So really, we're talking not one, not even two, but nearly three lost generations of economic growth and opportunity.

Nevertheless, the probability of a long-term decline in U.S. living standards comparable to if not deeper than the Great Depression must be rated as fairly high.

I have question for this. What If I am a person who has money saved not much but over $20,000. cash. It says our living standards will go down. Now by down do you mean we wont be able to afford a cell phone for our 5yr olds, have 4 cars, gamesystems wii, xbox 360. Or is it going to be worse than that like no food. This doesnt count if a natural disaster happens. I can live without the materialistic things really as long as I have a home and food. This will bring families close again going out for hike or to the beach.

reply to post by behindthescenes


I'm almost completely on board with the above conclusions...I would say that living standards will certainly decline for many, but "living standards" is a relative term.....an existence free of consumer slavery sounds like an increase in living standards to me

I am always skeptical about what "analysts" say and predict. Not many of them predicted anything bad prior to the start of the problem, and those who did were laughed off the media.
These people all have a vested interest in the financial institutions, and we cannot trust a word any of them say.

Imagine actually following the advice and heeding the words of your enemy during wartime. That's a stupid idea right? And yet that's what we are doing.

These financial analysts, banking moguls and corporate leaders got the entire world into a financial catastrophe while making a profit. And now we continue to listen to them as if they were not responsible for anything, we're even giving them more money to stop it from getting worse!
"Give us a few billion now, or we'll fold, sending millions of people knocking on your door for government support! And no, you can't dictate what we do with that money!"



As for the suggestion that nothing good will come out of this crisis, I beg to differ. Technological evolution doesn't simply stop.
During times of war and hardship, people are their most creative. I envisage that over the next three to four years we'll see leaping advances in energy efficiency, new energy production technology, advancement in solar and wind generated power specifically, a greater public investment in recycling and improved communities as a result. People will become more self-sufficient for energy and food where possible. Expect an increase in people growing produce and more community farming.
That's if there isn't a social meltdown first, in which case this will happen afterward, and to a greater effect with more individuals and smaller communities.

We all know that these are things we absolutely should be doing already, global warming or not.
And I think a less commercially driven society is something we can all appreciate and support. If people just learn to adapt, accept that they can't afford the next games console or mobile phone produced, and spend that time and effort contributing to their own existence, the next few years won't be very hard at all.

Those who cling to their material wealth and monetary gain and appreciate that over their quality of life, will be the ones who truly suffer.

That's my opinion anyway.

[edit on 9-12-2008 by detachedindividual]

Drop in standard of living is not about how much can you spend or not is about Work and the wages

While we have a minimum wage inthis nation is impossible for a family to be able to live in a minimum wage salary alone as the prices of goods do not support that minimum wage.

So in America we have jobs that will pay more than that minimum wage or either a family has to juggle two jobs to survive.

As the unemployment raises now loses in one year accounts for 1.7 million jobs the economy stagnates, so the jobs that are available are not enough to support a family.

Standards of living for a country like the US starts to downgrade, people loses their homes, they can not pay their bills and credit is not longer available.

Guess what people that is what is going on right now in front of your eyes.

[edit on 9-12-2008 by marg6043]

Naturally, globalization will tend to cause a redistributive shift in the world's current allocation of wealth. The current wealth distribution scheme is totally out of proportion with the world's potential for production. All the world is rich in resources, and since capital is now freely being moved across it, we should see wealth being shifted to centers of the globe that are the most productive and most creative, as opposed to those protected by century-long national economic policy. At the moment, the U.S. is suffering from a major deficit in competition, creativity and ingenuity. Most of all, this country suffers from complacency, as can be seen in its failed automobile industry. The government won't be able to provide a market for failed industries much longer. Competition has to be stimulated, otherwise stronger nations will emerge.

For the past several centuries, national economic policy has granted this country's citizens with unparalleled wealth at the expense of others. Access to capital from industrial revolution Britain allowed for technological superiority, combined with North America's abundant resources. But now we are approaching the limit of that lucky spell, as the rest of the world catches up and demands an equitable portion of the international trade market, which was once held chiefly by but a few Western colonial powers.

So I wouldn't doubt that the U.S. might even enter a permanent economic collapse, if things continue to go as they do today. Freeing up credit and forcing banks to make loans isn't enough, when the entire country is incapable of producing anything actually worth something.

[edit on 9-12-2008 by cognoscente]

reply to post by marg6043


But the vast majority of those families have been living a life well beyond their means. As seen by the ridiculous debt and risky mortgages.

The government and lenders cannot allow millions of people to lose their homes, this is a fact. Yes many will lose out in the beginning, but the majority will be saved as the problem escalates and more action needs to be taken to prevent massive homelessness.

There are ways to manage this financial situation, but most seem too ignorant to actually think about it, or they think they shouldn't have to sacrifice.
How many of these people who are going to "struggle" have two or more cars, run appliances all day every day, each drive a car to work with only them in it, waste money on needless luxuries every day?

There are such things as public transport, car sharing, home farming, recycling, prioritizing...

I know what you are trying to say, and I know that there are millions already struggling to make ends meet. But I honestly think (and this is only my perception) that an American idea of "struggling" isn't nearly equal to the struggles that many face every day all over the world.

Call me ignorant or generalizing all you like, but I really do think that most Americans believe that if they have to share a car with a neighbor to get to work it's "struggling". If they can't afford their latte from Starbucks at lunch time their quality of life is below standard.

It's not, it's just being practical.

If you want to see real struggling, look to India, Iraq, Zimbabwe...

reply to post by detachedindividual


America is not a wealth producer anymore, we are relegated to consumerism on debt and credit.

Now that jobs have been dying so our economy, because spending is coming to a halt by the consumers.

Trust me even recycling is going down the drain that is how bad the domino effect of the baking system failures has hit us.

China Trashes U.S.

In yet another example of China’s enormous influence over the U.S., the worldwide economic downturn has severely decreased China’s demand for recyclable products from the U.S., bringing the industry to a near standstill.

With consumer’s reining in spending, the market for recyclable products continues to decline. Recyclable materials range from car doors to shoe soles to electronic boxes, but without people buying those products there is little need to recycle them. Now, they are piling up and are starting to cost recycling contractors money.

www.nytimes.com...

What we have is not so much as a nation that people were living beyond means, see that is how the greedy banking system and corporate America wanted the citizens to be.

Spend, spend and spend some more.

The reality is that we have a government that has been spending at the expenses of tax payer and borrowed money to work with a corrupted banking system that were profiting from the debt of the citizens of this nation.

Now we are in a hole and to try and fix the problem we have a new administration that thinks a mammoth bail out will fix the problem.

But the reality is that without wealth builders in this nation this nothing more than another deeper whole in our nations debt.

And this time is not going to be enough taxable income to pay the interest on the debt.

I play guitar. I have one electric, one acoustic, but 3 amps.

This thread got me thinking ... I bought the amps at different times because on one I got a really good deal, I needed one for a gig, and one was a gift.

But do I really NEED three amps?

I started thinking about other things around my house and how necessary they are. Now they all may become worthless trinkets if the SHTF but I have a lot of crap I don't really need. Possibly barter material?

Or should I just sell all the crap now. Hrm.

I can tell you ... things would be a hell of a lot better for the people in this country (long-term) if things fell apart. If we were forced to realize what really matters: food, water, shelter, love. That's about all that's NECESSARY in our lives. I think we've almost lost touch with what makes us ... well ... human.

That's a tough pill to swallow and I'm sure many will disagree with me, but take a look right now at the desk/table/whatever you are using your computer on. The comp might be essential, but what else around you do you REALLY need?

I honestly think it would do a lot of people good getting knocked down a peg or two.

A $7 super-sized value meal just doesn't taste as good when you are reading stories about a family of 4 splitting an onion sandwich as their only means of sustenance for the day.

I am extremely happy that this is finally happening.

There is nothing noble whatsoever about crushing other countries under the heel of our boot so that we can live better than them.

We have been parasites for too long. It's time to live within our means. That means stop exploiting other countries.

No duh, that the standard of living is declining due to globalization. I saw it with my own eyes in Silicon Valley.

I watched as my peers were pushed out of jobs in Silicon Valley, you could hire ten Indian developers for the price of one American engineer, and they were as productive as two Americans. There were mass outsourcing efforts to push development overseas, where first American managers, then Indian managers scoured the companies looking for outsourcing opportunities. Nowadays Indian productivity and quality has increased, and you just don't bother to learn new programming languages, you just find some cheap contract development team to code for you.

This I'm sure was similar to how manufacturing jobs were pushed overseas. Americans watched as management pushed manufacturing jobs overseas until their greed disemboweled an entire industry.

That's one thing we're good at; sabotaging our own industries for the sake of competitiveness (executive greed).

I also see the decay of European nations also, at one time there were cultures unique to villages or regions; craftsmanship, traditions, values, and DNA. Globalization is encouraging residents to move to cheaper villages, immigrants to move in, and the things that made each village valuable and unique is lost. There should be preservation of culture, a protection of values, retention of a family's line of work and the craftsmanship that is passed from generation to generation.

Once upon a time, borders protected what was of value. These days borders conveniently outline target areas for international looting.

[edit on 10-12-2008 by Dbriefed]

Originally posted by Dbriefed
That's one thing we're good at; sabotaging our own industries for the sake of competitiveness (executive greed).

Look. That's inevitable. National economic policy is not going to be able to protect the majority of working class individuals in this country anymore. Anything to disrupt this trend will have severe implications for the rest of the world, which is dead set on productivity and competition. There's no need to delay the inevitable, and "shore up jobs", so to speak. It's time to reinvent culture itself, reform our education system, invest in science and technology, and raw research, and bring ourselves back up. In the ideal future, people will not look at each other as fellow nationals, but as individuals and rivals. And we will bring ourselves up through this rediscovered competitive nature. In such a system, if the American standard of living were to drop below what is deemed "acceptable" levels, it would be at their own fault, and no one would be there to bail out those parties involved.

[edit on 10-12-2008 by cognoscente]

Originally posted by Dbriefed
I watched as my peers were pushed out of jobs in Silicon Valley, you could hire ten Indian developers for the price of one American engineer, and they were as productive as two Americans.

You are not far from the truth, it is predicted that by 2010 70 to 80 percent of the jobs in America will be outsourced oversea.

And that will add to the massive millions in job loses to this nation.

Developing countries will be the Mecca for job seeking while America will become a third world country with jobs only related to service sector.