MaxedOutMama
Thursday, July 15, 2010
Fiscally Speaking
People don't like the word "recovery" because while things are improving, they are improving at such a glacial pace for the employed that in effect, they are falling further behind:
This data is from the Monthly Treasury Receipts:
Medicare Receipts (Hospital Insurance 2.9%)
What's different about this economic downturn are wages - we just have never seen this persistent YoY drop in the post WWII era:
Click on this graph and open it in another tab or window. It shows real retail sales (red is discontinued series), household debt and disposable personal income as calculated by BEA. Disposable Personal Income is basically income (wages, salaries, etc, plus government transfers - taxes).
Obviously government transfer payments have become more and more of a factor holding up DPI.
A more detailed graph of the 1979-84 period:
Note that household debt was less than DPI, that DPI didn't drop, and that retail sales did a similar sickening dive.
Still, the fact that incomes were growing and that household debt had an entirely different relationship to incomes meant that the economy had considerable growth potential.
The current period in more detail:
Debt is slowly dropping, but incomes are stagnant. We have a long way to go to get back to a more normal income/debt ratio.
And here's my burning question:
HOW? Increasing taxes is going to drop DPI and it is not going to help job generation much, and it is going to worsen the debt/income ratio. Just ratcheting up government debt has a clear endpoint, and in any case really doesn't fix the debt/income ratio, because we will be swapping personal debt for government debt. Worse yet, individuals and businesses can shuck off unpayable debt in bankruptcy, but if our economy fundamentally relies on government borrowing to sustain individual incomes, our government cannot shuck debt in any way, shape or form without crashing incomes.
So this is the reason I can't get on board with either the current GOP or Democratic agendas. They both seem unrealistic to me. Clearly we have to create conditions which will induce job creation - that will help although not fix the government transfer payment deficits. And clearly we have to get more taxes from somewhere.
Our only real feasible option appears to be to crash CMDEBT, which implies that we have a pretty severe additional correction in the bag.
This data is from the Monthly Treasury Receipts:
Medicare Receipts (Hospital Insurance 2.9%)
June 2010:There is some slight YoY improvement. Compare to April's figures:
Wage Tax: 14,941
Self-Emp: 1,881
June 2009:
Wage Tax: 15,246 (-2.0%)
Self-Emp: 1,914 (-1.7%)
June 2008:
Wage Tax: 15,661 (-4.6%)
Self-Emp: 1,968 (-4.4%)
June 2007:
Wage Tax: 14,958 (-0.1)
Self-Emp: 1,839 (+2.2)
June 2006:
Wage Tax: 14,194 (+5.3%)
Self-Emp: 1,721 (+9.3%)
_____________________
April 2010:We are slowly growing again, but we have lost years. And it now appears that we will not get those years back. Fiscally, this has major implications for the Social Security and Medicare programs. This is the data the administration probably doesn't want to discuss until after the elections:
Wage Tax: 14,067
Self-Emp: 5,579
April 2009:
Wage Tax: 14,440 (-2.5%)
Self-Emp: 5,814
April 2008:
Wage Tax: 14,805 (-4.9%)
Self-Emp: 5,784
April 2007: Wage Tax: 14,250 (-1.3%)
Self-Emp: 5,410
April 2006:
Wage Tax: 13,529 (+4.0%)
Self-Emp: 5,013
Social Security Receipts (Old Age)Social Security is running a persistent primary deficit (money coming in is less than benefits going out). It may look like the old age (retirement) portion is still positive, but that is just because almost all the quarterly self-employment taxes show up in June. Here's May:
June 2010:
Wage Tax: 48,314
Self-Emp: 4,454
Total Benefits/Exp Paid: 48,360
June 2009:
Wage Tax: 48,832
Self-Emp: 4,615
June 2008:
Wage Tax: 49,567
Self-Emp: 4,613
June 2007:
Wage Tax: 47,392
Self-Emp: 4,398
June 2006:
Wage Tax: 45,119
Self-Emp: 4,160
Disability Receipts:
June 2010:
Wage Tax: 8,204
Self-Emp: 756
Total Benefits/Exp Paid: 10,556
May 2010:The primary deficit date was originally supposed to occur in 2017/18 (I had it at 2015), then it dropped back to 2016. From here, we probably will swing through to a few years where it sort of balances, but by 2013 I think we will surely be running a persistent deficit again.
Social Security Receipts:
Wage Tax: 44,220
Self-Emp: 622
Benefits/Exp Paid: 48,229
Disability Receipts:
Wage Tax: 7,509
Self-Emp: 106
Benefits/Exp Paid: 10,693
What's different about this economic downturn are wages - we just have never seen this persistent YoY drop in the post WWII era:
Click on this graph and open it in another tab or window. It shows real retail sales (red is discontinued series), household debt and disposable personal income as calculated by BEA. Disposable Personal Income is basically income (wages, salaries, etc, plus government transfers - taxes).Obviously government transfer payments have become more and more of a factor holding up DPI.
A more detailed graph of the 1979-84 period:
Note that household debt was less than DPI, that DPI didn't drop, and that retail sales did a similar sickening dive.
Still, the fact that incomes were growing and that household debt had an entirely different relationship to incomes meant that the economy had considerable growth potential.
The current period in more detail:
Debt is slowly dropping, but incomes are stagnant. We have a long way to go to get back to a more normal income/debt ratio.
And here's my burning question:
HOW? Increasing taxes is going to drop DPI and it is not going to help job generation much, and it is going to worsen the debt/income ratio. Just ratcheting up government debt has a clear endpoint, and in any case really doesn't fix the debt/income ratio, because we will be swapping personal debt for government debt. Worse yet, individuals and businesses can shuck off unpayable debt in bankruptcy, but if our economy fundamentally relies on government borrowing to sustain individual incomes, our government cannot shuck debt in any way, shape or form without crashing incomes.
So this is the reason I can't get on board with either the current GOP or Democratic agendas. They both seem unrealistic to me. Clearly we have to create conditions which will induce job creation - that will help although not fix the government transfer payment deficits. And clearly we have to get more taxes from somewhere.
Our only real feasible option appears to be to crash CMDEBT, which implies that we have a pretty severe additional correction in the bag.
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"Our only real feasible option appears to be to crash CMDEBT, which implies that we have a pretty severe additional correction in the bag."
Touche!
It came down to that the day the banks took government hostage and bailed themselves out.
The wages of Sin suffered, in this case, by the innocent.....
Touche!
It came down to that the day the banks took government hostage and bailed themselves out.
The wages of Sin suffered, in this case, by the innocent.....
Both the House Majority and Minority Leaders are out talking about raising the Social Security retirement age to 70 and means-testing as though it's a done deal.
I'd say that's a start, but they're only talking about applying it to people 50 and younger, and I'm not sure that'll do the job. Still, it's a breath of fresh sanity.
I'd say that's a start, but they're only talking about applying it to people 50 and younger, and I'm not sure that'll do the job. Still, it's a breath of fresh sanity.
Charles - It's a repudiation of a lie. The SS "fund" was always a simple transfer payment, not a debt. We've maintained that fiction for what, 70 years now? It's time to admit that it's just welfare.
Neil, if it's a lie, then the smart thing is to repudiate the entire thing, not mere pieces of it. Having two separate welfare systems is a lie in itself.
# posted by 
: 11:59 AM
: 11:59 AM
Debt is slowly dropping, but incomes are stagnant. We have a long way to go to get back to a more normal income/debt ratio.
And here's my burning question:
HOW?
I think it will eventually be getting even worse.
Robots Take Over
In a Hyundai factory, machines assemble and paint the body of the whole car before human hands touch a single screw.
Hyundai's billion-dollar commitment.
The occasion was the "official" opening of a $1.1-billion manufacturing facility which, if nothing else, indicates just how serious Hyundai is about the U.S. market. The two-million square foot plant is capacitized to produce 300,000 vehicles per year.
...
HMMA employs approximately 2,000 people...
That's 150 cars produced per employee per year.
Or how about this one...
Jobs of the Future, Part 3
For those keeping score of our productivity at home, that's at least 2 million pounds of product per additional American worker, per year.
Real wages rose until the mid-1970s and they haven't climbed since. That Hyundai factory in the link above is brand new. The automation that we've striven so hard to achieve is just now starting to hit.
And here's my burning question:
HOW?
I think it will eventually be getting even worse.
Robots Take Over
In a Hyundai factory, machines assemble and paint the body of the whole car before human hands touch a single screw.
Hyundai's billion-dollar commitment.
The occasion was the "official" opening of a $1.1-billion manufacturing facility which, if nothing else, indicates just how serious Hyundai is about the U.S. market. The two-million square foot plant is capacitized to produce 300,000 vehicles per year.
...
HMMA employs approximately 2,000 people...
That's 150 cars produced per employee per year.
Or how about this one...
Jobs of the Future, Part 3
For those keeping score of our productivity at home, that's at least 2 million pounds of product per additional American worker, per year.
Real wages rose until the mid-1970s and they haven't climbed since. That Hyundai factory in the link above is brand new. The automation that we've striven so hard to achieve is just now starting to hit.
We tax employee production at high levels and do
not tax consumption at nearly the same rate. Is there
any wonder why we have a trade deficit ?
Sporkfed
not tax consumption at nearly the same rate. Is there
any wonder why we have a trade deficit ?
Sporkfed
# posted by : 3:52 PM
: 3:52 PM
M_O_M:
I haven't carefully examined the underlying data, but I'm cautious about using individual income data for historical comparisons, given the shrinking size of households. Even if disposable income is the proper measure, I wonder if the result would be different if one looked at households?
I haven't carefully examined the underlying data, but I'm cautious about using individual income data for historical comparisons, given the shrinking size of households. Even if disposable income is the proper measure, I wonder if the result would be different if one looked at households?
Carl,
That is some seriously biased analysis you've found.
It's common knowledge that American families have fewer children than before. So Professor Perry makes the correction:
When adjusted for household size, real median income per household member reached an all-time high of $19,546 in 2007, 65.6% higher than the $11,820 income per household member in 1967, and more than 2 times the unadjusted increase per household of 29.6%.
Babies don't hold jobs near as I can tell. Therefore, the #1 way to increase real median income per household member is to simply opt to not have a baby. Hey, and once you opt not to have a baby then why not let the wife work too? Two incomes! Woohoo!
And what exactly should be our conclusions from that? Is that the new prosperity model for the middle class? More work? Fewer children?
Here's a plot of average hourly earnings of total private industries adjusted for inflation from 1964 through 2007.
Historical Real Hourly Wages
That's not just alleged middle class wage stagnation. It is actual middle class wage stagnation.
You will note that this was not always the case, as seen in the charts in the video within the following link.
Employment Situtation
Just opinions of course.
That is some seriously biased analysis you've found.
It's common knowledge that American families have fewer children than before. So Professor Perry makes the correction:
When adjusted for household size, real median income per household member reached an all-time high of $19,546 in 2007, 65.6% higher than the $11,820 income per household member in 1967, and more than 2 times the unadjusted increase per household of 29.6%.
Babies don't hold jobs near as I can tell. Therefore, the #1 way to increase real median income per household member is to simply opt to not have a baby. Hey, and once you opt not to have a baby then why not let the wife work too? Two incomes! Woohoo!
And what exactly should be our conclusions from that? Is that the new prosperity model for the middle class? More work? Fewer children?
Here's a plot of average hourly earnings of total private industries adjusted for inflation from 1964 through 2007.
Historical Real Hourly Wages
That's not just alleged middle class wage stagnation. It is actual middle class wage stagnation.
You will note that this was not always the case, as seen in the charts in the video within the following link.
Employment Situtation
Just opinions of course.
One more thought.
As seen here, total household debt grew from $0.7343 trillion in 1975 to $13.6021 trillion in 2009. That's a 9% annual pace. That's a full 5% faster than the annual rise in the CPI. Seeing as how real average wages were stagnant over the period I think it is pretty clear why I am not optimistic about the outlook for the typical middle class American.
That's especially true when one factors in the impacts of automation and outsourcing on the future middle class American's job prospects.
We're dreaming if we don't think the cumulative trade deficit will someday matter to the average middle class American too. We've pretty much conveniently ignored it so far. When's the last time you even saw "cumulative trade deficit" in the headlines?
By the way, I'm neither a republican nor a democrat. I'm not even sure independent is the best word to describe my political beliefs. I'm really starting to feel like a banana republican though.
As seen here, total household debt grew from $0.7343 trillion in 1975 to $13.6021 trillion in 2009. That's a 9% annual pace. That's a full 5% faster than the annual rise in the CPI. Seeing as how real average wages were stagnant over the period I think it is pretty clear why I am not optimistic about the outlook for the typical middle class American.
That's especially true when one factors in the impacts of automation and outsourcing on the future middle class American's job prospects.
We're dreaming if we don't think the cumulative trade deficit will someday matter to the average middle class American too. We've pretty much conveniently ignored it so far. When's the last time you even saw "cumulative trade deficit" in the headlines?
By the way, I'm neither a republican nor a democrat. I'm not even sure independent is the best word to describe my political beliefs. I'm really starting to feel like a banana republican though.
Mark,
I'm confused--having fewer children per houshold and more working members per household certainly increases the household free cash flow (or disposable income, if you prefer). That increases the household's ability to carry debt or to make investments, and increases the potential for government revenue.
How is that not a relevant analysis?
Now, if you mean that this doesn't gain us the ability to live the same way our parents did, I guess you've got me there. And having fewer children per household does have negative effects on GDP in the next generation, so we have to account for that, but those are different criteria.
I'm confused--having fewer children per houshold and more working members per household certainly increases the household free cash flow (or disposable income, if you prefer). That increases the household's ability to carry debt or to make investments, and increases the potential for government revenue.
How is that not a relevant analysis?
Now, if you mean that this doesn't gain us the ability to live the same way our parents did, I guess you've got me there. And having fewer children per household does have negative effects on GDP in the next generation, so we have to account for that, but those are different criteria.
Neil,
I'm confused--having fewer children per houshold and more working members per household certainly increases the household free cash flow (or disposable income, if you prefer).
True. But that would have been just as true in the 1970s. My parents could have clearly done better economically if they had chosen not to raise me for instance. I don't think that is or was the American dream though.
Now, if you mean that this doesn't gain us the ability to live the same way our parents did, I guess you've got me there.
I am not going to argue that we aren't living at least as well as our parents did, at least so far. However, I might argue that much of our living better is an illusion though, since we have used debt to fill in the gap that stagnant real wages helped to create. It's as if we continued to spend like real wages would catch up someday, but they never did.
Here's a serious chicken and the egg question.
Did Japan stop having children because their economy stagnated/deflated or did their economy stagnate/deflate because they stopped having children?
I am concerned that it may be the former.
Baby Bust
A sudden decline in the birthrate, especially the one in the United States from about 1961 to 1981.
Not exactly a great economy during that period.
Recession baby bust: Births drop 2 percent
U.S. births fell in 2008, the first full year of the recession, marking the first annual decline in births since the start of the decade and ending an American baby boomlet.
Somewhat tongue in cheek I wrote the following today.
An Alternative Theory for Japan's Deflation: Robots!
For over 100,000 years, humans have competed with humans for work. The world's population has doubled in the last 42 years.
The growth rate in humans has nothing on the growth rate in robots though. This is especially true in Japan.
I'm confused--having fewer children per houshold and more working members per household certainly increases the household free cash flow (or disposable income, if you prefer).
True. But that would have been just as true in the 1970s. My parents could have clearly done better economically if they had chosen not to raise me for instance. I don't think that is or was the American dream though.
Now, if you mean that this doesn't gain us the ability to live the same way our parents did, I guess you've got me there.
I am not going to argue that we aren't living at least as well as our parents did, at least so far. However, I might argue that much of our living better is an illusion though, since we have used debt to fill in the gap that stagnant real wages helped to create. It's as if we continued to spend like real wages would catch up someday, but they never did.
Here's a serious chicken and the egg question.
Did Japan stop having children because their economy stagnated/deflated or did their economy stagnate/deflate because they stopped having children?
I am concerned that it may be the former.
Baby Bust
A sudden decline in the birthrate, especially the one in the United States from about 1961 to 1981.
Not exactly a great economy during that period.
Recession baby bust: Births drop 2 percent
U.S. births fell in 2008, the first full year of the recession, marking the first annual decline in births since the start of the decade and ending an American baby boomlet.
Somewhat tongue in cheek I wrote the following today.
An Alternative Theory for Japan's Deflation: Robots!
For over 100,000 years, humans have competed with humans for work. The world's population has doubled in the last 42 years.
The growth rate in humans has nothing on the growth rate in robots though. This is especially true in Japan.
Mark,
I don't think that is or was the American dream though.
A fascinating topic, perhaps I'll have the capacity to think on it after the storm blows over. For now, though, I'm worried about how we, as a nation, pay the bills. For that purpose, aggregate free cash flow is the key metric, as far as I can tell.
Did Japan stop having children because their economy stagnated/deflated or did their economy stagnate/deflate because they stopped having children?
Good question. It's well-known that human birth rates tend to decline in bad times and vice-versa. It's less well-known that bad times tend to happen because of the low birth rate during previous bad times! We've currently got a global shortage of 40-year-olds just entering their peak earning years, which is playing all heck with the established order of things. Blame it on Nixon and Carter, maybe.
Personally, I'm optimistic about automation. Making people more productive has never once led to a decrease in wealth. The Industrial Revolution was largely about automation, and it certainly increased wealth--although one can argue that it did tend to concentrate power more centrally. The new automation tends to disperse economic power, while increasing productivity even more. How can that not increase everyone's wealth? Once you're getting your food and widgets nearly for free, how much does your hourly rate really matter?
Besides, as automation provides our basics more and more cheaply, people have begun to prize hand-made objects more highly. That requires hands, which require wages. It's not that there's not going to be things for people to do, they'll just be different. Maybe better.
I don't think that is or was the American dream though.
A fascinating topic, perhaps I'll have the capacity to think on it after the storm blows over. For now, though, I'm worried about how we, as a nation, pay the bills. For that purpose, aggregate free cash flow is the key metric, as far as I can tell.
Did Japan stop having children because their economy stagnated/deflated or did their economy stagnate/deflate because they stopped having children?
Good question. It's well-known that human birth rates tend to decline in bad times and vice-versa. It's less well-known that bad times tend to happen because of the low birth rate during previous bad times! We've currently got a global shortage of 40-year-olds just entering their peak earning years, which is playing all heck with the established order of things. Blame it on Nixon and Carter, maybe.
Personally, I'm optimistic about automation. Making people more productive has never once led to a decrease in wealth. The Industrial Revolution was largely about automation, and it certainly increased wealth--although one can argue that it did tend to concentrate power more centrally. The new automation tends to disperse economic power, while increasing productivity even more. How can that not increase everyone's wealth? Once you're getting your food and widgets nearly for free, how much does your hourly rate really matter?
Besides, as automation provides our basics more and more cheaply, people have begun to prize hand-made objects more highly. That requires hands, which require wages. It's not that there's not going to be things for people to do, they'll just be different. Maybe better.
Neil,
I admire your optimism and I really do hope you are right. I really do and I will admit that there is a chance you are.
I'm not really down on automation.
I love it personally. I love that I can type this response to you on a modern keyboard. The Internet never fails to amaze me.
I do know what automation did to the farm industry though. There's a reason we refer to non-farm payrolls. I know what it can do to the manufacturing industry too. (I'm not bullish on China.)
For now, though, I'm worried about how we, as a nation, pay the bills.
Like you, my main concern is and was debt. Automation is a side topic that also reminds me of The Great Depression though.
The new automation tends to disperse economic power, while increasing productivity even more. How can that not increase everyone's wealth?
The problem is that we better think up new jobs at a rate at least as fast as we destroy the old ones. I think that was at least part of the problem during The Great Depression. Think mass production.
The Roaring Twenties
Mass production, as it was developed in the United States in the early years of the twentieth century, was the carrying of the American system on to its logical extreme. Henry Ford planned large scale production of his Model N in 1905 to reduce expensive skilled work to as small a part of production as possible.
It is all about jobs in order to pay the debts to me, and for the life of me I don't see where they are going to come from. That makes me nervous. That makes me not want to have children. That makes me a part of the problem rather than part of the solution. I would therefore love to be convinced that I am wrong to be bearish.
What I see is 6.7 billion people on this planet though and the rise of the robots just getting started. They aren't necessarily even American robots. We continue to send our paper dollars and IOUs to China in exchange for hard goods and to the Middle East for oil. That's a debt too you know.
I'm having such a hard time seeing actual job creation programs. Take this one.
Capitalist/Socialist Utopia!
Itron was on CNBC today. Although their production is fully automated (the robotic arms are amazing), the company said they will be hiring 100 employees to help meet the demand of their products. You heard me right. 100 employees will be hired. Itron does indeed have "significant skin in the stimulus-funded game". It isn't human skin though. It's robotic skin.
...
In science fiction, automation often shows a worker with little to do in a somewhat utopian environment. This is not science fiction though. Workers with little to do these days can't actually afford to buy a house and/or pay down years of accumulated debt. In sharp contrast, they are currently sitting at home collecting unemployment checks at a fraction of what they would normally be paid.
I admire your optimism and I really do hope you are right. I really do and I will admit that there is a chance you are.
I'm not really down on automation.
I love it personally. I love that I can type this response to you on a modern keyboard. The Internet never fails to amaze me.
I do know what automation did to the farm industry though. There's a reason we refer to non-farm payrolls. I know what it can do to the manufacturing industry too. (I'm not bullish on China.)
For now, though, I'm worried about how we, as a nation, pay the bills.
Like you, my main concern is and was debt. Automation is a side topic that also reminds me of The Great Depression though.
The new automation tends to disperse economic power, while increasing productivity even more. How can that not increase everyone's wealth?
The problem is that we better think up new jobs at a rate at least as fast as we destroy the old ones. I think that was at least part of the problem during The Great Depression. Think mass production.
The Roaring Twenties
Mass production, as it was developed in the United States in the early years of the twentieth century, was the carrying of the American system on to its logical extreme. Henry Ford planned large scale production of his Model N in 1905 to reduce expensive skilled work to as small a part of production as possible.
It is all about jobs in order to pay the debts to me, and for the life of me I don't see where they are going to come from. That makes me nervous. That makes me not want to have children. That makes me a part of the problem rather than part of the solution. I would therefore love to be convinced that I am wrong to be bearish.
What I see is 6.7 billion people on this planet though and the rise of the robots just getting started. They aren't necessarily even American robots. We continue to send our paper dollars and IOUs to China in exchange for hard goods and to the Middle East for oil. That's a debt too you know.
I'm having such a hard time seeing actual job creation programs. Take this one.
Capitalist/Socialist Utopia!
Itron was on CNBC today. Although their production is fully automated (the robotic arms are amazing), the company said they will be hiring 100 employees to help meet the demand of their products. You heard me right. 100 employees will be hired. Itron does indeed have "significant skin in the stimulus-funded game". It isn't human skin though. It's robotic skin.
...
In science fiction, automation often shows a worker with little to do in a somewhat utopian environment. This is not science fiction though. Workers with little to do these days can't actually afford to buy a house and/or pay down years of accumulated debt. In sharp contrast, they are currently sitting at home collecting unemployment checks at a fraction of what they would normally be paid.
Mark,
Funny you should bring up what mechanization did for farming. Farming is one of the reasons I'm optimistic in the medium term, and pessimistic in the short term. My family is full of farmers. I grew up with the smell of pig manure in my nose as often as not, and pig snouts banging their feed bin lids was my alarm clock.
As you point out, the Great Depression is instructive. Automation is doing to manufacturing what mechanization did to farming in the 1930s--destroying the old order of things. The 40-acre one-man farm is no more.
The farmers that made it are, by and large, wealthy folks now. If they don't get wealthy, they go broke in a hurry, so there's some risk. But basically, it's a really nice way to make a good living. It used to be a gawdawful way to get by, but mechanization made farmers phenomenally productive and got eliminated the worst jobs. It's just that when your one-man or two-man farm is a couple thousand acres, there's not much room for a lot of small farmers.
Everybody else just has to leave, so the small towns suffer some. But personally, I left to do something I enjoy much, much more than I would have liked farming. All those country kids just left the farm and went to do something that, on average, has much higher value.
Folks will find something to do, and it will probably be more valuable and more enjoyable than turning the same bolt on a '93 Pontiac day after day after day. We're suffering a slight innovation slump here (partly because there are fewer of the innovative 30- and 40-year olds), but stuff will turn up soon enough. Just like in the 30's.
Funny you should bring up what mechanization did for farming. Farming is one of the reasons I'm optimistic in the medium term, and pessimistic in the short term. My family is full of farmers. I grew up with the smell of pig manure in my nose as often as not, and pig snouts banging their feed bin lids was my alarm clock.
As you point out, the Great Depression is instructive. Automation is doing to manufacturing what mechanization did to farming in the 1930s--destroying the old order of things. The 40-acre one-man farm is no more.
The farmers that made it are, by and large, wealthy folks now. If they don't get wealthy, they go broke in a hurry, so there's some risk. But basically, it's a really nice way to make a good living. It used to be a gawdawful way to get by, but mechanization made farmers phenomenally productive and got eliminated the worst jobs. It's just that when your one-man or two-man farm is a couple thousand acres, there's not much room for a lot of small farmers.
Everybody else just has to leave, so the small towns suffer some. But personally, I left to do something I enjoy much, much more than I would have liked farming. All those country kids just left the farm and went to do something that, on average, has much higher value.
Folks will find something to do, and it will probably be more valuable and more enjoyable than turning the same bolt on a '93 Pontiac day after day after day. We're suffering a slight innovation slump here (partly because there are fewer of the innovative 30- and 40-year olds), but stuff will turn up soon enough. Just like in the 30's.
Neil,
I do not think the worst is over for us, but all is not lost.
Let's just say that I have absolutely no interest in moving to China. I find the idea well beyond laughable. They are embracing the one industry that will be most easily automated long-term. Further, I can't imagine wanting to live in a country that wouldn't let me criticize my own government. That is not a right I would ever want to give up.
The grass looks pretty darned green right here in the USA, if only by comparison. I consider myself fortunate to live here. That's true no matter what happens.
I do not think the worst is over for us, but all is not lost.
Let's just say that I have absolutely no interest in moving to China. I find the idea well beyond laughable. They are embracing the one industry that will be most easily automated long-term. Further, I can't imagine wanting to live in a country that wouldn't let me criticize my own government. That is not a right I would ever want to give up.
The grass looks pretty darned green right here in the USA, if only by comparison. I consider myself fortunate to live here. That's true no matter what happens.
Re China, apparently an association of Chinese apparel manufacturers has asserted that a FIVE PER CENT increase in currency valuation will wipe them out. If 5% will destroy you, your business model isn't very robust, to say the least.
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