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I read Krugman's articles you posted. I disagree. He is known to be a far left-wing ideolog. I am not discussing this from an ideological perspective but rat
by robomartin 14y ago
I read Krugman's articles you posted. I disagree. He is known to be a far left-wing ideolog. I am not discussing this from an ideological perspective but rather a mathematical perspective. I detest both the Democratic and Republican parties for what they've done to us over the last, say, fifty years. They both have blood in their hands.
I recognize that looking at this mathematically takes time that many of us don't have. I couldn't sleep last night and was too mentally tired to program, so I blew an hour playing with numbers in Excel. I don't expect everyone to do this.
However, having said that, I would urge you and others not to jump at conclusions before taking the time to quantify them. This is about arithmetic. It's fine to have beliefs, we all have them, but at one point you have to fire-up a spreadsheet and verify --in some form-- if what you believe adds-up.
Yes, I did not include inflation. I also didn't include interest. I also did not include mortality rates. Or the reduction of the workforce. Or the increase in retirees in proportion to working Americans. Or the erosion of the industrial base due to our increasing costs and the reality that manufacturing in the US is nearly impossible today. And so on.
In other words, there are a lot of additional factors that could be added to the model in order to try to get more realistic numbers. Admittedly my calculations are only an approximation of the simplest possible model. The way I look at it is that it provides a first-level sense of proportion of the problem. It's the start of a conversation and the exploration rather than the final solution. I understand this and so should others.
As a first approximation it shows a really grim picture of what we've done to our country in the last fifty years. This is not about this administration or the prior. This is about bad decision making for a long, long time.
Krugman's use of the debt situation after WWII to justify his point of view is plain old bullshit with a cherry on top. The economic expansion we had after WWII is without precedent. The US was the manufacturing capital of the world. We made everything. Countless industries rose and flourished. From aircraft to electronics and beyond. The world went from the "technological dark ages" if you will into a pretty fantastic era of invention, development and expansion. And, as I said, the US was at the center of that.
That is not the situation we have today. China is the center of attention. China is where jobs are going. China is where you manufacture stuff. We can't even attempt to manufacture an iPhone in the US. You could not do it. And, believe me, I know, I owned an electronics manufacturing company for twenty years. Finally said "fuck it", shut it down and focused on the software portion of our business. Eventually you get sick and tired of contracts always going to the Chinese because they come in at half your price and there is no way to compete.
So, Krugman is absolutely wrong and is using typical ideolog spin to create and justify an alternate reality. Words are easy. Numbers are hard and they don't lie. I'd like to see him (and anyone else who wants to propose any kind of a solution) publicly post a spreadsheet with a solution to the problem. Then we can evaluate his ideas from a mathematical perspective, all ideology aside. I'd like to see him start a manufacturing business in the US, hire nothing but unionized workers with ridiculous pay and benefits, comply with all rules and regulations and succeed. He couldn't do it. He wouldn't know how. And he'd quickly discover that his ideology sounds great in NYT articles but is utter bullshit where the tire meets the road. Just nice-sounding words, not reality.
A lot of this talk is analogous to basic physics approximations "let's assume that a cow is a uniform sphere of milk moving in a vacuum". That's all well and fine, but a cow isn't and it certainly does not move in a vacuum, so the real answer will be a little different and far more complex to arrive at.
So is the case for my simple exploration of the numbers. It is useful in that it provides a simple answers to get a rough idea of where we might be. It isn't useful because, well, it's a cow and it isn't moving in a vacuum. Yet, Jedi tricks are not real, so the problem requires a real solution.
As for your proposal to slash military spending and homeland security, etc. That's fine and dandy. I want all of our military bases on foreign soil shut down. All of them. And I want our military to be cut in half. And, of course, no more financial aid to any country --not one.
But, guess what, if you look at the numbers --what an asshole! always wanting to look at real data!-- that would be a good step, but not a solution at all:
http://en.wikipedia.org/wiki/File:U.S._Federal_Spending_-_FY_2011.png http://en.wikipedia.org/wiki/File:U.S._Federal_Spending_-_FY...
If you cut the entire Defense Department in half you are only addressing about 9% of total spending.
Look at the chart. The bulk of our spending is in entitlements and the wonderful "Discretionary" slice. According to my simple spreadsheet model we'd have to cut our spending in HALF for FIFTY YEARS in order to get back to even-Steven. HALF for FIFTY YEARS. Even if I was 100% off you'd have to cut 25% of our budget for the same fifty years. In other words, focusing on military spending will do almost zero to fill the hole we have dug ourselves into.
Finally, there's the assertion that the main problem is that we don't have jobs and that is the key issue. OK, I'll agree. Here's the problem, where do jobs come from? And why are jobs created? I just closed a pretty nice manufacturing operation about two years ago as my large customers started to default on contracts. Guess what, I am not re-opening that venture. No fucking way. I am done with manufacturing. Why? Can't compete. Why? Taxes, costs, unions, regulations, bullshit, lawsuits, etc. Those jobs are not coming back. Not unless we get our shit together and become uber business-friendly. This does not mean going down to third word wages. It does mean getting the government monkey off our backs so we can do what we know how to do best: innovate and produce.
You say that you are part of a startup. Presumably a software startup. Rest assured that what you are doing is a hundred, no, a million times easier and cheaper than playing with physical product. There's a reason why companies like YC don't touch hardware startups: the probability for failure is far greater and the cost to achieve critical mass is at least a thousand times higher than for software. Most people who have only touched software as a means to earn a living don't develop a sense of just how tough things can be in other segments of the economy, and, in particular, in the industrial and consumer manufacturing segments. Software is great. I am focusing on that 100% today. However, a typical software business doesn't employ the numbers of people that industrial and manufacturing enterprises employ. And, frankly, it is far easier to outsource and find great talent around the world. You have industrial companies like GE who employ some 300,000 people. And there are many examples like that. I could go on, but I have to get back to coding.
Bottom line: Government should only spend the absolute minimum required to run our affairs and nothing more. They should be out of social programs, healthcare and other crap. They are the managers of our store, and that's all they should be spending money on. We have given them too much leash and now we are paying the consequences of our inattention.
Any discussion of this topic really needs to be backed-up by an accompanying economic model showing that the conclusions are mathematically possible. I went through a rough first approximation. I'd love to see someone smarter than me show me what a more refined model looks like and how the problem can be solved in half the time and with half the cuts. Mathematically, not ideologically.
- lsc 14y agothe problem is that you can't have our current levels of unemployment without a welfare state or serious social unrest (and usually both.) We need the jobs. Now, my understanding is that in terms of dollars, our manufacturing sector is growing, not quickly, but it is growing; but in terms of jobs, it's shrinking. Technology marches on. Chinese labor doesn't usually compete with American labor. Chinese labor competes with American machines. China isn't the problem; the fact that we've automated away manufacturing the way we've automated away agriculture is. 200 years ago, nearly everyone was involved in some sort of agriculture or agriculture-support position. Now? that's less than 2% of the economy. We found things for people to do when we automated away nearly all the agriculture work. We need to do the same thing now that we've automated away nearly all the manufacturing work. It's not the tax rate that stops people from hiring. You could argue that it's the tax complexity; I mean, the complexity does cause problems and increase risk. but I don't think that's the real problem. I think the real problem is that nobody has come up with a new business model to employ the masses and turn a good profit while paying a reasonable wage. China is doing it by having humans do work that Machines could do better. Essentially turning back the clock on automation of manufacturing. Personally, I think that's a bad idea. For the things that Machines can do, they are usually way better than humans. And I don't think it would work for us, either, because the humans involved create less value, and thus can't be paid what we'd consider a reasonable wage. It works for China because they have so many people that are so poor that what we'd call an unreasonably small wage is a step up. That's not where we should go with this. We should come up with a new class of jobs; start new businesses that do new things that turn the labor of the masses into more value than having them poorly mimic the work of machines. so yeah. what I'm saying is that living in a state with no debt but where only one person out of five can get a job? that's worse than living in a state with near full employment and a bunch of debt. Even if you don't care about human suffering, think of the crime rate and how much effort you'd need to put into keeping your stuff safe. The jobs problem needs to be solved first. I mean, I'm not saying that the government is the solution to the jobs problem (maybe they have a part to play and maybe they don't) - just that the jobs problem is a much bigger deal than the debt problem. And as the previous poster pointed out, it's easier to solve the debt problem once we have more people working and paying taxes.