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The Hole In The Whole

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Do attempt to convince me that the economy is not now in recession. Please. I want to have something to laugh about when you brag about all those bargains you picked up on the way down. Will they be worth anything a year from now?

I've been through many recessions in my time, and over the years, I have discovered one sure-fire sign that the economy is in recession: employers carp about having to pay their workers more than they "deserve". "Expensive" labor causes employers to take out their poor management on their employees' incomes, including reducing their hours of work (if workers aren't terminated completely) even though productivity improved. As Nigel Gault, chief U.S. economist at research firm Global Insight, insists, "As long wages stay under control, inflation is not going to be able to get out of control like it did in the 1970s".

No matter how the captains of industry and commerce attempt to spin the facts, workers know that they are being made the fall guys. Those who have jobs are doing all that they can to keep them, and those who were thinking of changing jobs are delaying taking action. There is a significant correlation between workers' impressions of the condition of the job market and the onset of recessions. As people lose jobs and seek work, their neighbors are approached to aid in the search for replacement income, being asked if their own employers are hiring. That condition is more likely to be seen as an accurate assessment of the state of the economy no matter what so-called experts like Ben Bernanke and Henry Paulson say. These jobless facts don't lie.

The search for new employment isn't being helped by the record oil prices. Local LA television news is reporting, as of this writing, gas prices as high as $3.80 a gallon, and the effects of the record wholesale oil prices aren't going to hit the pumps for several weeks yet. Few of those interviewed by the local reporters doubt that $4 gas is on the way.

Without that job, even those with good credit aren't going to be able to continue to pay the mortgage. Those not yet caught up in the record numbers of foreclosures are instead walking away from their homes before they are foreclosed.

Just to show that the trickle-down theory can work only if one inverts the scale — as homeowners lose their homes, the investors who originally funded the mortgages are increasingly in borrowing trouble themselves. This will only lead to more investors distancing themselves from the mortgage market, making home loans as rare as a truthful statement from the Bush administration.

Mortgage investors and homeowners in distress are being joined by local governments, who are losing funding for their bonds as the costs of borrowing to float these notes exceeds the value of the notes' collateral. Foreign investors are now seeking more profitable opportunities until the US economy stabilizes.

It doesn't get any better soon. The Federal Reserve's "Beige Book" report noted that the U.S. economy nearly ground to a halt in the fourth quarter of 2007 and that all of its districts reported decelerating economic growth in early 2008 as prices increased almost everywhere in the United States.

Throwing the effort to contain inflation overboard, the Fed has now clearly shifted its meager efforts to keeping the economic furnace of the ship of state stoked. Large banks are reporting tens of billion in losses, and expect more losses to emerge soon. The Fed is easing interest rates for large bank borrowing among themselves to deal with their short-term cash flow difficulties. This move does not change conditions for anyone else.

One move that will change conditions for the rest of us is the order from on high to increase the money supply by $100 billion in March. Allegedly, this is a move that will increase employment, but I expect to hear soon that the dollar is rapidly inflating and causing exchange rate slippage. Two dollar euros, anyone?

But even with all of these openly discussed difficulties, some CEOs still think they can party like there is no tomorrow. Countrywide Financial Corp. CEO Angelo Mozilo told a U.S. House panel that credit tightening has "gone too far", but he's only thinking of the poor homeowner who "can't take advantage of lower home prices".

Male. Bovine. Excrement.

After far too long, the Congress is beginning to look into the exorbitant remuneration executives receive even though their companies have gone in the tank. Angelo Mozilo is himself just one of the persons of interest to the House Committee on Oversight and Government Reform chaired by Rep. Henry Waxman.

Things should get even more interesting now that the Bush Family's Carlyle Group subsidiary Carlyle Capital Corp. couldn't meet several of the margin calls placed by investors concerned with saving at least a portion of their investment from that political slush fund. This indicates a loss of investor confidence in the Bush style of business management, but is not the only clue. For example, one of the largest corporate sector beneficiaries of Bush economic policy and tax cutting is now backing Democratic presidential candidates more than they are Lame John McCain.

I'm sure that this support is intended to act as a rear-guard defense as these same companies leave the United States – and the high-wage jobs they offer American citizens – in search of more profitable venues elsewhere in the world. Care for some lead in your Lipitor? You'll be getting it soon enough!

Having destroyed our national regulatory capability, the mad scramble is now on in the corporatist sector of our society to retain as much of the wealth they acquired, whether by fair means or foul, and move it offshore. This alone is a sign that the party is over, and the piper is coming up the walk to demand payment. Those who have the assets, such as Pfizer, will relocate out of the United States before the offal obstructs the aerodynamic obdurator. Others, like General Electric's GE Money, already have, removing itself – and all of its top executives – to London.

That way, these companies won't have to settle accounts for their share of the mess.

We, the People of the United States, have this penalty coming. We believed Ronald Reagan's Morning in America lies despite much evidence to the contrary, not to mention PATCO. We accepted George HW Bush's excuses for suppressing investigation of the economic and international treasons committed under his watch as both VP and president. We failed to recognize that Bill Clinton was selling us out with NAFTA and GATT, and we didn't life a finger to limit the predations allowed under George W. Bush. We aren't going to escape the consequences of our 30-year inaction, for the sheriff is coming to reclaim the homestead we can no longer afford.

He has no choice — he doesn't want to lose his.

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About pessimist

  • http://www.republicofdave.com Dave Nalle

    Rather than try to convince your closed mind of anything, Propagandist, I’m just going to quote the textbook definition of a recession:

    Have we had two successive quarters of GDP decline or negative real economic growth?

    Oh, and BTW, I heard a report today of gas prices in California over $5 a gallon, so your article is already dated. Think how much more you could have fearmongered if you’d had that bit of data to work eith.

    Dave

  • Propagandist

    Hey! What did I do?!

    As for the article – I have two words;
    Business Cycle.

  • STM

    Yeah, I guess that’s pretty much where it’s at.

    It’s not a recession until it meets the criteria for a recession.

    And it’s a ways from that at the moment.

    A poorly performing economy doesn’t automatically add up to an economy in recession.

    In which case, is propagandist’s work here just a) plain wrong, b) wishful thinking in regard to the demise of America, c) a complete waste of time and effort, or d) dreadfully misinformed?

    Or e) all of the above.

  • Clavos

    It’s “realist” (the quotes are obligatory), Dave.

    But it’s still bullshit.

    The tone of “realist’s” article is telling.

    It’s gleeful and triumphant.

    He’s rooting for the economic collapse of the US.

    You’re going to be soooo disappointed, “realist.”

    Even if there is a recession, the US economic juggernaut will continue rolling right along (albeit at a temporarily slower pace), leaving you with egg all over your face.

    If you’re going to be cutesy in your writing, at least try do so intelligently:

    “Obdurator” is nonsense; there is no such thing, aerodynamic or otherwise.

    If somebody taught you that this is good writing, you should sue for malpractice.

  • STM

    Or are realist and propagandist really two different people. Stay tuned …

  • Clavos

    Well, “realist” is a propagandist…

    (Sorry, Propa)

  • STM

    Yeah, sorry Propa. Mistaken identity

    … flummed by Dave’s comment :)

  • http://drdreadful.blogspot.com Dr Dreadful

    Ah yes, but is Propagandist a realist?

  • http://www.republicofdave.com Dave Nalle

    When I called ‘realist’ ‘propagandist’ I had forgotten that we had a commenter using that name, hence the terrible confusion.

    But here’s the question. Since ‘realist’ is actually a propagandist, does that mean that ‘propagandist’ is actually a realist?

    Dave

  • Cannonshop

    I think “realist” goes too far, but he’s not entirely wrong, just taking what “Is” a bit beyond what is, and to what he wishes it to be.

    (this would be consistent, incidentally, with propogandists on both sides of the economic aisle.)

    One of the things that both Liberals and “Conservatives” seem to miss is this: if you’re going to have “Free Trade” you can NOT have aggressive, Punitive, nanny-state regulations-that’s creating a carrot-and-stick situation to drive your industries overseas and put your citizens out of work. If you’re going to have Nanny-State Socialist economics with all the regulations, exemptions, and special treatment laws WE have, you have to accept Protectionism as the price- and Theory-X management/micromanagement of the economy rarely works well for long outside of a major war.

    There is a balance, but it’s generally repugnant to so-called “progressives”, along with anyone who makes their cash off taxes.

    Wealth is not manipulating numbers on a spreadsheet, it’s also not a zero-sum game, you need to CREATE wealth to have it- this means you have to make things rather than trying to live off of what your ancestors made. This isn’t popular with the American Left, or many sectors of the American Right-both benefit heavily from being able to manipulate the system at the topmost levels, and both gain a lot of their power from claiming to represent the rest of us.

  • troll

    while BC’s comments form frowns on charts here’s some perspective (from bls)

    Year Unemp. Rate
    1929 3.2%
    1930 8.7
    1931 15.9
    1932 23.6
    1933 24.9
    1934 21.7
    1935 20.1
    1936 16.9
    1937 14.3
    1938 19.0
    1939 17.2
    1940 14.6
    1941 9.9
    1942 4.7

  • http://www.parttimepundit.com John Bambenek

    To be fair, a recession may be 2 consecutive quarters of negative growth, but the recession *is* those 2 quarters. So while he can’t say we are definitively in a recession, you can only recognize a recession in hindsight based on the definition.

    But yes, he’s throwing all the bad economic data against the wall as a way of rooting for a collapse. We’re in trouble, to be sure, but even a recession isn’t the end of the world. A recession is a far cry from an economic collapse. But we’ve societally established that anything other than great growth every year forever is a catastrophic failure of the government. In reality, every market including housing has its up years and down years, and the infantilizing of the American people to make sure we live in Disneyland disconnected from the reality of how the world works only contributes to the latest pushes for statism…

  • troll

    Clavos says – *Well, “realist” is a propagandist…*

    …and I suppose that he represents the unbiased and agenda free voice of reason

    we’re all propagandists here

  • Clavos

    Not unbiased and agenda free, no.

    Voice of reason: absolutely. :>)

  • troll

    …further complicating the recession call is that present figures will be ‘adjusted’ in hindsight

  • Clavos

    Bambenek #13:

    Well said.

  • troll

    John says – *We’re in trouble, to be sure, but even a recession isn’t the end of the world.*

    a quick perusal of suicide stats might well show this to be a hasty conclusion – for some it will prove to be just that

    we live in a world of individuals…(taking some liberty with the original): to destroy one life is to destroy the entire universe

  • Clavos

    “a quick perusal of suicide stats might well show this to be a hasty conclusion – for some it will prove to be just that”

    True, but so what?

    Suicide is:

    A) Illegal

    B) Irrational

    C) Stupid

    D) Cowardly

    E) For many religious believers: a sin

    There will always be unstable people in any society, who even in the best of times will commit suicide.

    Bambenek is right: it’s not the end of the world, it’s another stage in the normal rotation of business cycles.

  • troll

    Yes John is correct – recessions and the devastation that they cause are normal and necessary to the capitalist process

    as for your rigid ideas about suicide let me remind you that it all depends and you never can tell

  • Clavos

    “as for your rigid ideas about suicide let me remind you that it all depends and you never can tell”

    Whatever that means…

  • troll

    just something an old shaman shared with me…when you figure it out you will have attained enlightenment or something like that

  • Maurice

    It is interesting to contrast our governments tax strategy vs. Hong Kong’s.

    It should be noticed that they are benefiting from a trickle down philosophy. In fact the article points out that they are getting ready to cut corporate taxes again because they have such a large surplus. U.S. business could learn a lot from this model.

  • Les Slater

    Formal definition notwithstanding, we ARE in a RECESSION. Yesterday, economists at JPMorgan Chase stated that a recession appeared to have started earlier this year. The trend is clearly down. Nobody of any credibility is talking reversal anytime soon. Even if it’s not official till the end of the year, we’re in one now.

    There are many signs pointing to this becoming a very severe one. For many, it’s already quite severe.

  • Maurice

    Certainly a large cause of the current economic woes are due to our unfriendly business climate. I work for Micron Technology. We are the last U.S. manufacturer of DRAM memory. We had a large layoff in July of 2007 and will have another in April of 2008. The taxes (even our property taxes!) are killing us. We are moving some of our manufacturing operations overseas. Taxes in the U.S. and tariffs from other nations (China in particular) make business in the U.S. impractical.

    The U.S. is losing the global economic race because we have continued to move to the left when the rest of the world is moving more to the right (economically). If you don’t believe that last sentence please click the link in my #22 post.

  • Les Slater

    Maurice,

    “…due to our unfriendly business climate.”

    A lot more friendly to businesses than workers.

    “…we have continued to move to the left when the rest of the world is moving more to the right (economically).”

    Nobody’s moving to the left. Capitalists are competing by driving down wage and social benefit costs. Many social benefits are funded through taxation. Getting behind the boss’s drive to gut social benefits only makes us weaker.

    A good example is in Detroit where I presently live. Caving in to the demands of the bosses only emboldens them and we end up with neither jobs nor even a city to live in. No better will come to Boise with similar tactics. You can’t win that way.

    Les

  • Maurice

    Les,

    I appreciate your comments and realize that workers are taking a hit. I lived in Detroit and drove the Walter P. Reuther freeway every day. My only point here is that corporations are abused in the U.S. vs. other countries. Korea will build a wafer foundry for my company and provide us with water and power for ten years if we will agree to employ their people. How can we resist this when our own country wants to tax the crap out of us and punish us with EPA regulations?

    It is amazing to me when companies are able to stay here and do any manufacturing!

    Workers are getting a raw deal here; so are corporations.

  • Clavos

    Maurice,

    Don’t look for the taxation of corporations in the US to abate any time soon.

    On the contrary, most Americans (including those in Congress) don’t understand how corporations deal with taxes, so they’re in favor of taxing business even more than it is now.

    When (not if) Micron moves to Asia, will you have the opportunity to move with them and keep your job?

    Would you?

  • Les Slater

    “We are the last U.S. manufacturer of DRAM memory.”

    I am not personally familiar with Micron. I am sure they have a good handle on quality but this wasn’t always true of U.S. companies. There was a point in the late 70’s through at least the 80’s that if you wanted quality in large scale CMOS semiconductors you would go to Japan and then Korea. This was true with memory and even uProcessors. There was a time when I took Intel off the approved list for their 8085. NEC could make them to Intel’s spec but Intel couldn’t. Price had nothing to do with it. It was quality. Intel offered a work-around and changed the spec but never fixed the part.

    It was the engineering, quality and production competence that first moved to Japan and then elsewhere. This was based on them developing the infrastructure including in education. It had nothing to do with high wages or taxes.

    There is still quite a bit of engineering excellence in the U.S. but HP changing its research focus as it has done in the last couple of days does not bode well for the future.

  • Les Slater

    The 8085 was nmos not cmos. Japan was already becoming a powerhouse in cmos which dominated much of digital technology in the coming decades.

  • http://www.republicofdave.com Dave Nalle

    Maurice, it sounds like Hong Kong is heeding the lesson of the fantastic economic turnaround in Ireland. Apparently the French are looking at cutting back corporate taxes as well. It’s sad when the US lags behind such traditionally anti-business countries because of head-in-the-sand thinking like that displayed by Les.

    If we destroy our entire manufacturing base, as seems to be the goal of the left and of those who place the compensation of workers ahead of actually having JOBS for those workers, then we’re going to be left with all our eggs in the development/management/services basket, moving even more towards a society divided between the technolocratic elite and a mass of service industry peons.

    Dave

  • bliffle

    “Korea will build a wafer foundry for my company and provide us with water and power for ten years if we will agree to employ their people.”

    This describes a business nanny-state. Is this what you want for the USA?

    Should the USA provide such facilities for Ford to compete with Acura?

  • troll

    I only hope that when companies like Micron go off chasing the logic of maximized profit (don’t let the door catch you on the ass) they leave their production facilities here in reasonable good shape…less problems for the co-operatives come the ‘take’

  • Rob J (San Fran/Chic)

    “Realist” did a fine job of sharing some thought opinions. “Realist” lays a path of thought to ponder. Even if partially true, “Realist” conveys numerous angles with forthright impressions.

    I say good job.
    But, I also connect with, let’s say, about 1/3 of the material and 1/4 of the logic.

    Thx.
    acommonthought
    rob j>

  • Maurice

    Clavos #27 – I have been designing semiconductors for 26 years and have worked in Hong Kong in the past. Soon my wife and I are going to be empty-nesters and could follow the job overseas.

    Les #28 – Not sure what your point is. When I worked for Intel in the early 80’s we did all of our R&D work locally but all production manufacturing was done overseas. Are you saying Intel produced parts locally? If so I was not aware of it. I will confess I did not work for Intel long and am primarily a bipolar linear guy.

    Dave #30 – Spot on! That is precisely why I made the earlier comment “…we have continued to move to the left when the rest of the world is moving more to the right (economically).”

    bliffle #31 – Not at all. I would prefer government to be neutral to business.

    troll #32 – It is not too late for the U.S. to reverse its policies against manufacturing.

  • Clavos

    Maurice,

    I was relocated periodically all during the 30 years I worked in the airline industry in order to follow (keep) my job. I was the company’s troubleshooter, sent to correct problems in stations that had declined; when I was done with one, I would be sent to the next, etc.

    My wife and I never had any problem with that; we weren’t the only ones in the industry who were moved around, and we always regarded it as an adventure and an opportunity to get to know a new place.

    We were never sent to another country (I was, short term, several times), but would have gone had we been asked. I actually asked to be transferred permanently overseas on more than one occasion.

  • Maurice

    Clavos,

    no kids? We have 5 and the oldest (as you and I have discussed) is severely mentally and physically handicapped. Youngest is now 16 and I can see the day when we will be empty nesters and free to live where ever life takes us.

    My wife is very open minded to travel and has enjoyed our many moves. I agree with you that the idea of a gypsy lifestyle can be fun.

  • bliffle

    Maurice,

    bliffle #31 – Not at all. I would prefer government to be neutral to business.

    But you’re arguing for US subsidies for your industry.

  • Maurice

    bliffle #37 – I never said I wanted subsidies. I said other countries are willing to subsidize corporations while the U.S. taxes theirs out of existence. Just pointing out the contrast between the policies of the U.S. vs. the pro business attitude in Asia.

    Here is my quote: “How can we resist this when our own country wants to tax the crap out of us and punish us with EPA regulations?”

    Can you answer that question?

  • Clavos

    Maurice,

    I was relocated periodically all during the 30 years I worked in the airline industry in order to follow (keep) my job. I was the company’s troubleshooter, sent to correct problems in stations that had declined; when I was done with one, I would be sent to the next, etc.

    My wife and I never had any problem with that; we weren’t the only ones in the industry who were moved around, and we always regarded it as an adventure and an opportunity to get to know a new place.

    We were never sent to another country (I was, short term, several times), but would have gone had we been asked. I actually asked to be transferred permanently overseas on more than one occasion.

  • http://drdreadful.blogspot.com Dr Dreadful

    Just deleted your dupes, Clav. I was wondering why you re-posted a comment you’d made several hours ago.

    The comments thing is being a bit weird today. To the point where Chris gave up in frustration and went to bed early!

    No problems this end, though (so far) so behave yourself!

    ;-)

  • STM

    DD: “I was wondering why you re-posted a comment you’d made several hours ago”.

    Because he’s turned into a prize-gibberer like some of the other posters?? :)

  • STM

    Maurice: Corporations in America actually get a much better deal in tax terms than they do in other developed western countries, most of which have managed to keep a fair bit of their manufacturing sector competitive, whilst still paying good wages.

    Many US industries are propped up by tariffs and subsidies, which was partly the result of them being unable to compete because of the high value of the dollar (one day Americans will work out that having the world’s strongest currency isn’t a good thing if you plan to export and want to make money by doing stuff other than having perpetually nervous yuppies in pin-striped suits shuffling bits of paper on Wall St).

    The real answer to this is to have the dollar at a lower level on the world’s currency markets, and to manufacture quality goods (which is what the US is still good at), and sell them overseas.

    That is, as everyone knows, how the US became the world’s wealthiest country in the first place. Also, if companies pay higher wages, it means US consumers can buy American-made rather than buying from China or South America, which also stimulates the slowed-down US economy.

    Some countries and overseas consumers now might actually be able to afford to buy them – thast’s what stuffed you in the first place: it was more attractive to buy from elsewhere.

    Plus, US corporations, interested only in the shareholders’ bottom line and the jobs of the multi-million-dollar-earning executives (too often at the expense of good and loyal workers, who are actually the people who do really make the money for a corporation), have been moving manufacturing and service sectors off shore at a rate of knots for the past 2 decades.

    All about the bottom line, again.

    I say, bring it all back, pay decent wages, create jobs for Ameericans tied and tie pay and conditions to productivity and quality, and keep the dollar low so that you can sell once again around the world.

    But if you are looking for someone to blame, it’s not the government in this case.

    It’s the big corporations and the greed-merchants on Wall St who need to carry the can for much of what’s gone on.

    While they’re earning the big bucks, the jobs and pay of the little people don’t mean squat, and that’s part of the “I’m alright Jack, bugger you” malaise currently afflicting the US.

    And here’s a thing about American manufactred (produced, grown, or made) goods: quality NEVER goes out of style, and if it’s good enough, and can be bought at a reasonable price, people will buy it.

    Where I live, American cars haven’t been on the roads since the 1960s, expect for the odd brand.

    They are now back here and competing nicely thanks to the falling dollar, and Detroit is making a big push to feel the water against the local manufacturers.

    Considering that Australia and New Zealand drive on the left-hand side, and our cars are all right-hand drive, that means a considerable expense to retool, but they are doing it.

    It might not seem much when you only see a few hundred US-built cars on the roads every day among many, many thousands, but it’s a start and it’s the way all US companies should going.

    At least Detroit has been smart enough to pick up the ball and run with it instead of whingeing about what the US government isn’t doing for them.

    Just remember too: all the wailing and gnashing of teeth over the falling dollar really meanas diddly squat except to the collective ego of the US as the dollar falls against the Euro. But it won’t make any difference to Americans at the supermarket unless they’re buying luxury goods from overseas. It will still buy as much as it ever did. BUY AMERICAN instead.

  • bliffle

    “How can we resist this when our own country wants to tax the crap out of us and punish us with EPA regulations?”

    The obvious answer is to withdraw from excessive international trade.

    US corporate taxes are comparatively low, so that is not the problem.

    EPA regs are weak and easy to work around, so that isn’t the problem.

  • STM

    Good points bliff. Maurice and co aren’t getting this …

    Tax? EPA?

    What, so other western countries with strong economies don’t have these, but still manage to remain competitive and are creating jobs rather than losing them?

    Many are far more restrictive in tax and environmental protection terms than the US.

    No, it’s all about the manufacturing/exports sectors, silly, and the high value of the dollar making America uncompetitive, and big problem is the concept that you can make wealth by shuffling around of bits of paper on the stockmarkets of NYC and London instead of by actually making/growing/producing stuff in the US and selling it at a profit like you used to.

    So much bollocks, so little time.

  • troll

    *It will still buy as much as it ever did*…not exactly – prices are rising here surfer dude

    hypo-thesis: forcing down the value of the dollar by flooding the market with them through the overly liberal use of the printing press has led to inflated prices at the supermarket…

    (add the growing transportation costs and an egg is getting pretty expensive)

  • STM

    OK troll, but prices are rising here too … and the value of our dollar is going up.

    It’s now at near-parity with the greenback, but a basket of groceries still costs a bit more at the supermarket than it did a few years ago when the Aussie was comparitively weak.

    It’s not the respective dollars that are causing this, however, and when you factor in wage growth and CPI increases it’s still not too bad.

    The thing that kills us here is interest rates. Our economy is so strong, we have underlying inflation of 2-3 per cent and the govt and the Reserve Bank are trying to slow it down. One of the Bank’s tricks is interest rate rises to discourage us from spending.

    My mortgage payment has gone up $500 a month in the past 12 months, and unlike the US, we can’t claim it on our tax.

    My point is, even if the US dollar had remained at its historically strong levels, the same thing would be happening at the supermarket regardless.

    A few years back, our dollar was quite weak against the greenback, but it didn’t make any difference locally on a basket of groceries.

    Goods still cost the same … it’s only when you venture across the borders that things start going awry, and especially when you bought imported goods from overseas.

    But like I say, it works both ways and you can buy a US-built car in Oz now, and at a reasonable price whereas a few years back the exchange rate made it prohibitive.

  • Clavos

    “and the value of our dollar is going up.

    It’s now at near-parity with the greenback”

    Though the Aussie dollar may be increasing in value as you say, Stan, the fact that it is now at near parity to the Greenback doesn’t confirm that.

    Is the Upside-down dollar increasing against other currencies as well? The EU, e.g.?

  • STM

    Ah but Clav, that’s not how it works, mate.

    The greenback is still the currency against which others are measured. It is still the benchmark. The Euro might be strong, but the US dollar is still the benchmark.

    Today, $A1 will buy you 60 Euro cents.

    $US1 will buy you about 65 Euro cents.

    $US1 can be exchanged today for $A1.07.

    All about the same, really, and I haven’t noticed much of a difference from last September (when I was over there) on the $A rate against the Euro, but the $A will certainly buy more $US currency these days.

    And compare today’s rate to that of about six years ago, when I got between 55-65 cents US. I can tell you I wasn’t too happy on one overseas trip, where I had to pay accommodation in Fiji in US dollars a few days after a spectacular fall by the Aussie.

  • Maurice

    bliffle – awfully flippant answers to questions that should be better examined:

    The obvious answer is to withdraw from excessive international trade.

    The only obious thing here is your lack of understanding concerning international markets. Micron is the last U.S. manufacturer of DRAM. China is our biggest customer. If we only sold to U.S. customers we would soon be purchased by Samsung.

    US corporate taxes are comparatively low, so that is not the problem.

    I’ve posted this before. Note those taxes are in thousands of dollars.

    EPA regs are weak and easy to work around, so that isn’t the problem.

    EPA regulations are very expensive for a company like Micron that has level 10 clean rooms and requires millions of gallons of ‘clean’ water. We have an entire building full of people dedicated to complying with EPA regulations.

  • bliffle

    International trade generally works to our disadvantage, as a country, tho it benefits numerous narrow segments of the economy. We simply import much more than we export. We’ve supported that policy since WW2 as a form of foreign subsidization in the belief that it is better to have international trade than international war. “World peace through World Trade”.

    It’s been a known and conscious US policy for over 60 years. For example, to rebuild Japan all US patents were suspended for Japan, resulting in floods of cheap Japanese copies of existing US products in the 40s and 50s.

  • Clavos

    “We simply import much more than we export.”

    Since the overvalued dollar began to normalize, that particular balance has begun to swing rapidly in the other direction.

  • http://www.republicofdave.com Dave Nalle

    Bliffle seems to have spewed some amazing misinformation on this thread. Maurice and Clavos cleared up most of the factual errors, but I have to point out that his fantasy of historically balanced trade is just that. The US has always, throughout its history been a nation with an economy driven by imports of both raw materials and manufactured goods. The one period where that was not true was in the period immediately leading up to the Great Depression.

    Dave