The Problem with the Economy as I See It
The economy has recessed. People like to poke blame at the president, government, etc. My view may not be popular, but I see it as the truth. The simple fact of the matter is Americans are over paid.
Before the internet, we lived a secluded existence. Outsourcing was not nearly as feasible; we knew the world outside America existed, but other then that little else... Then the internet "super highway" came into existence. Files can be transferred from one side of the world to the other nearly instantly. Accounting, among other things, became much cheaper for companies that want to employ in more then one country, with the exchange rates and taxes all being automatically calculated. Money transfer more reliable then ever. That explains the how, now the why.
Unions sprung up in the early 1900's to screw employers out of money. True, there were issues they helped correct, child labor and overworking employees for example, but the fact of the matter is they misused their powers. Employers of course had to stay in America, therefore they had to employ these extortionists because of laws making it illegal to fire them when they don't show up for work (went on strike.) The employer consequently had to give in to their demands, raise their wages, and lower the profit margin for the company, allowing them to employ fewer people, and hurting the unemployment rate. Over the years, they raised the Americans wages so much that we were making staggering amounts more then the rest of the non-unionized world when compared on the gold standard. The problem though is that the cost of everything went up in America as well because, simply, they could get it. Let us take for example the price of gnomes compared to gold. If we sell a gnome here for $15, the price of such gnome in India, if compared to the controlled price of gold, would be much less. Therefore if a company pays someone in India the same value gold wise (product wise) as it would cost to pay an American, it will cost them less cash. Therefore, in summarization, unions, raising Americans wages to undeserved levels pushes up prices, causing Americans money to be worth less then elsewhere in a global economy.
Side note:
Jimmy Carter, or the ignorant fool as I like to call him, took us off the gold standard. This caused inflation shoot like a rocket, causing all the money put away (in banks) to become worth less (not worthless,) hurting mainly companies and the upper class while helping those in debt (ex: the country and irresponsible people) because a debt of $100 is worth what $150 used to be. The idea sounds good (to a communist) but it is not because:
Thusly, if taking us off the gold standard let inflation go rampant, this increases prices
Let us briefly talk about inflation, filling something with air. If the price of everything becomes inflated, i.e.: made larger then it really is; it consequently becomes necessary to raise people's wages so they can afford to live. You raise these wages falsely the true value still exists, just not here. This true value, or at least much closer to it exists in other countries where there has not been such inflation. When we we're cut off from places where the real value existed, the economy flourished, but now with the internet, and more open trade, etc, companies can buy things for their real value, and hire people for their real value, instead of paying the *inflated* price of buying and hiring from and of Americans.
Americans regularly earn and pay more then they are worth, which is why it is not economically feasible to hire Americans. Banning outsourcing as many liberals suggest is a horrible idea because it is no longer difficult for a company just to completely up and leave America, we are not as important as we used to be. So how then you ask do we fix the economy. I suggest the following:
Of course none of these are an over night answer, but you can expect 100 years of bad economics to take time to fix.
Before the internet, we lived a secluded existence. Outsourcing was not nearly as feasible; we knew the world outside America existed, but other then that little else... Then the internet "super highway" came into existence. Files can be transferred from one side of the world to the other nearly instantly. Accounting, among other things, became much cheaper for companies that want to employ in more then one country, with the exchange rates and taxes all being automatically calculated. Money transfer more reliable then ever. That explains the how, now the why.
Unions sprung up in the early 1900's to screw employers out of money. True, there were issues they helped correct, child labor and overworking employees for example, but the fact of the matter is they misused their powers. Employers of course had to stay in America, therefore they had to employ these extortionists because of laws making it illegal to fire them when they don't show up for work (went on strike.) The employer consequently had to give in to their demands, raise their wages, and lower the profit margin for the company, allowing them to employ fewer people, and hurting the unemployment rate. Over the years, they raised the Americans wages so much that we were making staggering amounts more then the rest of the non-unionized world when compared on the gold standard. The problem though is that the cost of everything went up in America as well because, simply, they could get it. Let us take for example the price of gnomes compared to gold. If we sell a gnome here for $15, the price of such gnome in India, if compared to the controlled price of gold, would be much less. Therefore if a company pays someone in India the same value gold wise (product wise) as it would cost to pay an American, it will cost them less cash. Therefore, in summarization, unions, raising Americans wages to undeserved levels pushes up prices, causing Americans money to be worth less then elsewhere in a global economy.
Side note:
Jimmy Carter, or the ignorant fool as I like to call him, took us off the gold standard. This caused inflation shoot like a rocket, causing all the money put away (in banks) to become worth less (not worthless,) hurting mainly companies and the upper class while helping those in debt (ex: the country and irresponsible people) because a debt of $100 is worth what $150 used to be. The idea sounds good (to a communist) but it is not because:
- They owe that money to companies, which therefore take a hit.
- The wealthy whose money is now worth less own such companies and get hit again.
- The companies profit margins drop when they bring in the same amount of money, causing them to have to increase the price of products.
- These companies and wealthy who have been hurt employ middle and lower class people (many of whom are in debt) and are forced to lay off people making them unable to pay these debts.
Thusly, if taking us off the gold standard let inflation go rampant, this increases prices
Let us briefly talk about inflation, filling something with air. If the price of everything becomes inflated, i.e.: made larger then it really is; it consequently becomes necessary to raise people's wages so they can afford to live. You raise these wages falsely the true value still exists, just not here. This true value, or at least much closer to it exists in other countries where there has not been such inflation. When we we're cut off from places where the real value existed, the economy flourished, but now with the internet, and more open trade, etc, companies can buy things for their real value, and hire people for their real value, instead of paying the *inflated* price of buying and hiring from and of Americans.
Americans regularly earn and pay more then they are worth, which is why it is not economically feasible to hire Americans. Banning outsourcing as many liberals suggest is a horrible idea because it is no longer difficult for a company just to completely up and leave America, we are not as important as we used to be. So how then you ask do we fix the economy. I suggest the following:
- Abolishing unions, as their true purpose no longer exists and they just increase inflation
- Ease our way onto the global economy by taking wage hits
- Working our way back onto the gold standard
- Discouraging use of credit cards (it is the freaking late 1920's all over again)
- Imposing trade ratios, i.e.: countries can only export to us equal or more as they import from us all but eliminating increase in trade deficit, and pushing us out somewhat of the global economy until which time we do even out with them and can eliminate such ratio's
Of course none of these are an over night answer, but you can expect 100 years of bad economics to take time to fix.