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> That's the essence of what its dectractors (including myself) call the neoliberal economic model. The impact of "cheap and often undocumented labor from poor

by dvt 4y ago

> That's the essence of what its dectractors (including myself) call the neoliberal economic model. The impact of "cheap and often undocumented labor from poor countries" is minuscule, especially considering the sectors that have the highest profit margins aren't low-skill manufacturers, but rather finance, tech, real estate, private equity, and so on. There are two main issues at play here: corporate debt levels, and interest rates. The article does a pretty good job of covering both, and trying to spin the past few decades as some sort of "corporate colonialism" is missing the forest for the trees.

leereeves 4y ago
The profit margins in finance and real estate were only possible because "corporate colonialism" prevented wages and consumer prices from rising along with asset prices. If real consumer prices hadn't been driven down by reduced manufacturing costs, then the lower interest rates that drove up asset prices would have led to consumer inflation and wouldn't have been politically viable. And if American labor had been able to demand a greater share of the wealth created over the past forty years, then corporate profits would have been far lower.
- dvt 4y ago
  > easy money policies that were only possible because.. I would push back a bit. First, I think these easy money policies are basically "possible" whenever the Fed mandates them (and the markets simply react accordingly). My point here is that they actually don't have to be rooted in any kind of fundamentals. Even now, the Fed is basically willing to blow up foreign markets (which might seem irrational) because it doesn't want Americans to go through inflation. Second, while I do agree that cheap labor has enabled some of this, it's mostly due to China's insistence on treating its citizens like chattel; and, yes, to some extent the West being complicit, though calling it colonialism deflects blame from the true architects of this evil: the CCP. > and if American labor had been able to demand a greater share of the wealth The way I see things, wealth demanded is a function of leverage. American labor has no leverage when compared to Chinese labor (maybe apart from quality), and therefore always loses out.
  - leereeves 4y ago
    It actually seems like we agree. > Even now, the Fed ... doesn't want Americans to go through inflation. Exactly. The Fed's current behavior shows that they probably would not have lowered interest rates so much if the resulting inflation hadn't been countered by lower manufacturing costs. > American labor has no leverage when compared to Chinese labor Yes, and this was, I believe, that issue that photochemsyn was referring to. If all manufacturers making products for the American market had to obey American labor laws (and other regulations), then American labor would at least be competing on equal footing.
photochemsyn 4y ago
Finance and private equity gets much higher returns from its investments in technology, agribusiness, construction, the service industry, the big chain stores etc. because those subsidiary entities have vastly reduced labor costs via exploiting neoliberal government policies, both abroad (outsourcing) and domestically (labor importation). As far as real estate, that's been highly manipulated (tax havens, money laundering etc.) as well as heavily subsidized (in favor of large owners) by the federal government (i.e. subprime bailouts, etc.).

by dvt 4y ago

leereeves 4y ago

The profit margins in finance and real estate were only possible because "corporate colonialism" prevented wages and consumer prices from rising along with asset prices. If real consumer prices hadn't been driven down by reduced manufacturing costs, then the lower interest rates that drove up asset prices would have led to consumer inflation and wouldn't have been politically viable. And if American labor had been able to demand a greater share of the wealth created over the past forty years, then corporate profits would have been far lower.

dvt 4y ago
> easy money policies that were only possible because.. I would push back a bit. First, I think these easy money policies are basically "possible" whenever the Fed mandates them (and the markets simply react accordingly). My point here is that they actually don't have to be rooted in any kind of fundamentals. Even now, the Fed is basically willing to blow up foreign markets (which might seem irrational) because it doesn't want Americans to go through inflation. Second, while I do agree that cheap labor has enabled some of this, it's mostly due to China's insistence on treating its citizens like chattel; and, yes, to some extent the West being complicit, though calling it colonialism deflects blame from the true architects of this evil: the CCP. > and if American labor had been able to demand a greater share of the wealth The way I see things, wealth demanded is a function of leverage. American labor has no leverage when compared to Chinese labor (maybe apart from quality), and therefore always loses out.
- leereeves 4y ago
  It actually seems like we agree. > Even now, the Fed ... doesn't want Americans to go through inflation. Exactly. The Fed's current behavior shows that they probably would not have lowered interest rates so much if the resulting inflation hadn't been countered by lower manufacturing costs. > American labor has no leverage when compared to Chinese labor Yes, and this was, I believe, that issue that photochemsyn was referring to. If all manufacturers making products for the American market had to obey American labor laws (and other regulations), then American labor would at least be competing on equal footing.

photochemsyn 4y ago

Finance and private equity gets much higher returns from its investments in technology, agribusiness, construction, the service industry, the big chain stores etc. because those subsidiary entities have vastly reduced labor costs via exploiting neoliberal government policies, both abroad (outsourcing) and domestically (labor importation). As far as real estate, that's been highly manipulated (tax havens, money laundering etc.) as well as heavily subsidized (in favor of large owners) by the federal government (i.e. subprime bailouts, etc.).