Ever flattening world, "Americans overpaid?"

[TheArtist]

  Little, "superpower, hows the world changing" play here.

 A couple years ago one could look at how the world was changing, specifically in relation to the rise of China, and make predictions as to when they would catch up to or surpass us in economic wealth and power.  My guess would have ranged anywhere from 2040 to 2080. But now with the recession here in the US, and China still growing,,, the earlier date seems ever more plausible.

 Plus I find it curious when I look on Skyscraper Page forums and see mega city after mega city in China. Skyscrapers in hundreds of cities that seem to go on forever, huge highway and infrastructure projects, etc. and wonder how it is that we compare each countries wealth? If its material goods/objects and you were to say that the same object in each country was worth the same... I wouldn't be a bit surprised in that scenario if China was close to being equal to, or even surpassing us in wealth already.  Now if you were to look investment/resource wise (what companies and the people of the country own around the world both other companies and natural and people resources) then that could make a difference. How much of a difference I cant begin to guess. China has been on quite a buying spree worldwide, but I am sure it will take a while to get where we are in that respect. The third "wealth indicator" might be people and educational/research institutional wealth, as in education and abilities of people, "brain power", research colleges, etc.  Again, I wouldn't know how to start comparing, but suspect that they are catching up and again from what I have seen, and most Americans aren't aware of, is how incredibly far China has come in those regards in a VERY short time. What you could have said 10 or 15 years ago, does not apply today.    

We have all heard that "the world is getting flatter", appears this recession is hastening the inevitable.    

Interesting article here that kind of speaks to this subject...


Americans are overpaid
http://money.cnn.com/2009/11/11/news/international/global_american_wages.breakingviews/index.htm?cnn=yes

[USRufnex]

I think the perspective is wrong here.  Typical of Money and Fortune magazines....

First, the comparison is between Americans versus the citizens of third world countries..... maybe the writers who editorialize would like to see Americans living in grass huts?..... instead of the headline, "Americans overpaid," wouldn't it be more appropriate to state unequivocally that "third-world workers are underpaid"....  and why is there no comparison at all with the wages and labor in other industrialized Western nations?

Here's another perspective:

The American productivity myth — and the real truth about real wages
Wednesday, 08/12/2009
http://www.newdeal20.org/?p=3870

So whose incomes did grow? It's a familiar story: In 2002, Capital One Financial CEO Richard Fairbank exercised 3.6 million options for gains of nearly $250 million, on which he pay tax on the lower capital gain rate rather the income tax rate. His personal take exceeded the annual corporate profits of more than half of the Fortune 1000 companies, including Goodyear Tire and Rubber, Reebok and Pier One. Median pay among chief executives running most of the nation's 100 largest companies soared 25 percent to $17.9 million in 2005.

The average gain by typical U.S. workers in the same period? A piddling 3.1 percent. A Federal Reserve survey shows that between 2001 and 2004, the median income of US workers with college degrees barely budged, rising from $72,300 to $73,000, after adjusting for inflation. Even former Treasury Secretary Robert Rubin (who spent 26 years at Goldman Sachs) noted during his time in government, "Prosperity has neither trickled down nor rippled outward. Between 1973 and 2003, real GDP per capita in the United States increased 73 percent, while real median hourly compensation rose only 13 percent."

US corporate earnings reached all-time highs because wages have been stagnant. Corporations were flooded with cash — but they refused to pass it on to their workers. Instead, corporations adopted share buybacks scheme with the surplus cash to raise the market value of the stocks.

---While on the subject of "perspective," I was reminded of a little blurb that showed up in Fortune magazine about our favorite billionaire, George Kaiser....

http://www.forbes.com/lists/2008/10/billionaires08_George-Kaiser_OXNB.html

The World's Billionaires
#68 George Kaiser
03.05.08, 6:00 PM ET

Education: Harvard University, Bachelor of Arts / Science
Harvard University, Master of Business Administration
Family fled Nazi Germany 1938, settled in Oklahoma. Parents developed oil and gas business. Took over 1969; expanded into real estate, banking, derivatives. Today Kaiser-Francis produces 12 million barrels of oil and natural gas equivalents annually. Owns 45 million shares of BOK Financial worth $2.3 billion. Also runs liquefied natural gas outfit Excelerate Energy; has invested more than $1 billion in LNG ships and terminals over past few years. Fights childhood poverty through George Kaiser Family Foundation; pledged $60 million to redevelop a blighted community alongside a 42-mile stretch of Arkansas River.

-----Blighted?..... cough, cough...... Really?  

[FOTD]

It takes a unique human being to amass that type of fortune.

Great point about third world "employees"...as our dollar drops and drops, we will hear more of that old time religion about worker's pay being too high in America. That, in order to compete for our goods worldwide, America needs to pay more in line with what other Nations pay. $1/hr in foreign labor equals $24/hr in the USA. So, your point will be a very necessary part of the discussion with the rest the world while arguing against the idea of one world currency and other trade issues.


Like how you tee it up.


Unemployment Extension Adds Up to 99 Weeks of Benefits
 http://blogs.wsj.com/economics/2009/11/06/unemployment-extension-adds-up-to-99-weeks-of-benefits/  
"The additional 20 weeks in hard-hit states means the maximum a person in one of those states could receive is now up to 99 weeks, or nearly two years — the most in history."

Thank you Bush for setting the table while socializing our banks. And this one does not recall Fortune Magazine warning us about the lack of regulatory control over Trillions in risky securities.

Keep in mind, corporate profits should continue to improve through attrition, lower labor costs resulting from layoffs, and lower rates, all on the backs of what was the old middle class.

[TheArtist]

Overpaid or underpaid isnt really what I was getting at.  Allow me to throw out some things I have been pondering which will give some idea of what has been shading my thoughts.

I am an artist. Its become more and more difficult to sell paintings of the type many artists used to sell when I was a kid going to art shows because people can now buy very inexpensive reproductions from China.  As soon as you come up with and perfect a "new look" a "unique style" that sells, "they" spot it, and you suddenly see knock offs of that style everywhere and in every conceivable form (paintings, prints, carpets, t-shirts, calendars, coasters, etc.).

As the value of the dollar gets weaker, or wages amount to less in the world market relative to China, or as wages there go up relative to ours, or our goods become cheaper relative to theirs (however you want to see it) It enables me to compete on a more level playing field. (though most of what I currently do is in a niche market working in peoples homes)  

What I am looking at is the painting in the shop, painted or printed in China. It appears that it is likely to get more expensive to the average consumer (commodities are becoming worth more) which gives me (a commodity producer) a more level chance to compete for wealth.  As the world becomes flatter, China more wealthy, Americans "in comparison" less wealthy,,, goods should become worth about the same in each country, wages about the same, and one should be able to compete on a little more level playing field.

Again, if I look at assets in China like buildings and roads, etc. They arent worth as much as similar buildings and things in the US. Their wealth isnt equal to ours. If an alien from another world came down and started making a list of each countries assets, it might think China had more value than we assess it to have, after all it has more buildings, roads, etc. than the US. (probably not completely true but just trying to make a point) Our means of assessing value seem our of whack and artificial in that light. Though, one could say that they arent paying the true cost for a building for instance,,, they dont have to pay as much attention to environmental costs, health concerns, etc. But the fact remains, an asset is still an asset no matter how it got there and, all other things being equal, shouldnt it be counted as having the same amount of value as a similar thing in a similar place? Especially as the world gets flatter.  If a person in China is doing a similar job to what an American is doing, has similar comforts, nice clothes, eats well, lives in a high-rise in a large city,,, why are his wages, clothes, furnishings, rent, etc. valued as being so much less in comparison? There are probably as many people in China that are doing just as well as most here in the US, but their GDP, their economy and assets are worth considerably less?  We can "say" the country doesnt have as much wealth as us. But is that really true? Or is it just because of how things are currently
valued?  

In other words, in the pics I see, it looks like they have more stuff in their country than we do, yet we are considered to be the far far richer country?  How come their stuff is worth so much less?

Sorry for the ramble lol.        

[USRufnex]

Artist:  "In other words, in the pics I see, it looks like they have more stuff in their country than we do, yet we are considered to be the far far richer country?  How come their stuff is worth so much less?"

Because of a largely outdated pro-western capitalist-yet-Keynesian monetary policy agreed upon July 1944 in Breton Woods, New Hampshire.

Google, my little grasshopper.... google....

Master Kan: Quickly as you can, snatch the pebble from my hand.
[Young Caine tries to do so and fails]
Master Kan: When you can take the pebble from my hand, it will be time for you to leave.

Caine: Is it good to seek the past, Master Po? Does it not rob the present?
Master Po: If a man dwells on the past, then he robs the present. But if a man ignores the past, he may rob the future. The seeds of our destiny are nurtured by the roots of our past.

Caine: I seek not to know the answers, but to understand the questions.

Six Ways to Compute the Relative Value of a U.S. Dollar Amount, 1774 to Present
http://www.measuringworth.com/uscompare/
George Washington, The Erie Canal, The Civil War, The Model T Ford, Babe Ruth, Putting a man on the moon, The "real" price of gasoline....


"Don't run! We are your friends."

So..... has your head exploded yet.... ?  

[USRufnex]

What "Chimerica" Hath Wrought   
Niall Ferguson

http://www.the-american-interest.com/article.cfm?piece=533

Ten years ago, a strange competition formed in the United States to see who could be more arrogant. Neoconservatives argued that the rest of the world should hurry up and embrace the American political way, or prepare to be bombed into the democratic age. But equally smug were the neo-liberal economists—liberal in the sense of Adam Smith, that is—who argued that the rest of the world should hurry up and embrace the "Washington Consensus", or prepare to be sold short. One lot derided the political failure of the Muslim world; the other lot heaped scorn on Asian "crony capitalism", supposedly the root cause of the 1997–98 Asian financial crisis.

[rhymnrzn]

One thing I know is, however necessary or unnecessary, however willingly or unwillingly, one can not work and fast at the same time......

Joel 1:13
"Gird yourselves, and lament, ye priests: howl, ye ministers of the altar: come, lie all night in sackcloth, ye ministers of my God: for the meat offering and the drink offering is withholden from the house of your God. (14)  Sanctify ye a fast, call a solemn assembly, gather the elders and all the inhabitants of the land into the house of the LORD your God, and cry unto the LORD, (15)  Alas for the day! for the day of the LORD is at hand, and as a destruction from the Almighty shall it come. (16)  Is not the meat cut off before our eyes, yea, joy and gladness from the house of our God?"

[FOTD]

One thing I know is, however necessary or unnecessary, however willingly or unwillingly, one can not work and fast at the same time......

Joel 1:13
"Gird yourselves, and lament, ye priests: howl, ye ministers of the altar: come, lie all night in sackcloth, ye ministers of my God: for the meat offering and the drink offering is withholden from the house of your God. (14)  Sanctify ye a fast, call a solemn assembly, gather the elders and all the inhabitants of the land into the house of the LORD your God, and cry unto the LORD, (15)  Alas for the day! for the day of the LORD is at hand, and as a destruction from the Almighty shall it come. (16)  Is not the meat cut off before our eyes, yea, joy and gladness from the house of our God?"

Yes they can....drink water.

Who the hell is Joel?

[rhymnrzn]

Yes they can....drink water.

man, it must be rough going under those circumstances.

Who the hell is Joel?

Someone who was sent by the Almighty.

[shadows]

If there were a  definition of wealth then some of the arguments would have a standing,  Japan prior to the war drove the scrap metals to a high dollar.  China just lowered their price from an all time high on scrap metals.  Is wealth included in a house that was built and sold for 18,000 dollars with 50 years of weathering now considered wealth when appraised at 125,000 dollars?  Is the computer that has replaced millions of jobs wealth?
Is paying bills over the internet replacing thousands of jobs wealth?

From school days I recall:

"The auto rules the rural roads,
The tractor pulls the plow,
The truck totes its lusty loads:
Who needs a horseshoe now"

The computer was a great toy that was turned into the Midas Touch that has affected the labors of the world.  It will even duplicate painting within seconds.  We are not the richest country in the world but the one with greatest debt in a balance of payment to those we owe.  America should wakeup the coffee is burning.  The time is to place controls on all cost, private, public or governmental.   It might hurt a little now but nothing like it will in the future if history repeats itself again.   

[TheArtist]

   Was watching something on PBS last night which rang a little bell,,,

The Chinese have pegged their currency to the dollar.

  (The Obama admin wants that changed).  The effect is that; as the dollar falls, the cost of Chinese goods CONTINUE to go lower as well.  So back to my "I am looking at the paintings in the store" analogy.  The prices on what I make would normally become more affordable...but instead of Chinese paintings costing a bit more in comparison, they dont, their prices continue to go down as well. Thus they keep their competitive advantage. So it appears the Chinese gov. isnt allowing any "flattening".  Even though my prices and products should be more competitive to theirs, if their currency was allowed to float like other major currencies,,,well, it ain't happenin.  But on the other hand, I hear that TVs and Toasters are gonna be real cheap this Christmas. 

[shadows]

Blessing on those from the land of OZ.  As the rabbit was always saying "Lets have a party".  We have had the party now it is time we clean up the mess.  China concern seems to be based on the billions of dollars of merchandise we bought from them that we now want to pay for with devaluated dollars.  The failure to stabilize the dollar affect their economy.

We have developed the greatest military that has ever existed since the days of the Romans and will never be defeated on a field of battle.  China by Ripley's "believe it or not" estimated that they could march over a cliff, six abreast  forever.

How are we going to regain our standing as a world giant in productive when our labor cost to repair a printed circuit board is twice and more that the cost for China to produce it?  Kitchen appliances can be purchased cheaper that a person can diagnose its defects. A German produced CNC computer mill can produce a part in 30 minutes that a machine operated by a worker once requited 4 hour to produce?  A computer driven auto parts stamping machine produces in minutes what once took 10 men a hour to do.  The steel plate industry along with the pipe industries have been taken over by the mini-mills located throughout China.  Our GNP includes the land, industries and buildings being bought by foreign interest with the bargain inflated money.

We are laying the foundation for world war lll where the skies will be filled with star war rockets while whole cities disappear.   How can we cope with it?   

We need to issue more college diplomas on how to put the screws on getting more government promised bogus Federal Reserve notes.       

[Inveree09]

I hate to be the party pooper, but compared to most of the world, we really are overpaid.  We do have loads of disposable income.

Look at someone who is poor in the US.  They probably still have a car, at least 1 tv, probably cable, probably internet, eat out once a week, etc.  Now compare that to the poor in Latin America who may not even have running water. 

Im not saying that everyone in the US is evil, but I laugh when people say the US doesnt have it good.  The poor in the US are better off than the average person in large chunks of the world.

[USRufnex]

....large chunks of the world, yes...
.....large chunks of the industrialized world..... not so much.

http://www.mapsofworld.com/world-top-ten/world-top-ten-quality-of-life-map.html