Hell Has Frozen Over by Karl Denninger 201
Post# of 5789
Posted On: 04/22/2015 2:11:33 PM
Hell Has Frozen Over
by Karl Denninger
2015-04-22 07:00
Call Satan, he needs to get one of his many to check the furnace down there.
I actually agree with Bernie Sanders (US Senator and an avowed socialist) on something. http://tinyurl.com/pq9ee5h
Specifically, I agree that so-called "free trade" treaties and other agreements we have entered into with various nations over the last 30 years have utterly decimated American manufacturing and threaten to destroy our economy if not halted and reversed.
Bernie is right that asking Americans to "compete" with starving Vietnamese peasants who are willing to accept 56 cents/hour, made possible by so-called "free trade" that exempts such goods from tariffs, is a gross abuse of Americans. The Vietnamese might be ok with it, but we should not be.
Bernie is also right in that literal millions of American jobs, upwards of five million in fact, have disappeared as a direct and proximate result of both NAFTA and Chinese "free trade" agreements.
But the real problem that faces America is that offshoring, even if there was not such a gross wage disparity (and there is) ultimately cannot work and neither can the so-called service economy.
Consider this folks -- all economies are, at their root, about providing what you need and that is where value creation resides. It is the creation of value that allows for pulled-forward production through the mechanism of borrowing.
What value is created when I cut your hair and you, in turn, do my taxes? I can't eat the hair or the tax return and your car won't run on either.
At the core you must mine, manufacture or grow things in your nation for it to be prosperous. That is what increases your asset base, not "stawk prices" or any such claptrap as "intellectual property." Price is not value nor is it an asset; the "service" side of the economy distributes wealth that comes from the goods-producing side. If there is no, or an insufficient, goods-producing side then your economy is destined to collapse.
There is a common screed from people like Bernanke and other so-called "academics" that as economies mature and become "better" (maturation being thought of as positive) it trends toward service-oriented. This is simply false; a fully-service economy instantly implodes as everyone starves!
There are no simple or fast solutions to this problem but we had better cut the crap or we'll find out what happens when you get on the wrong side of the curve with these "developments" -- and I guarantee you won't like it.
http://market-ticker.org/akcs-www?post=230050
by Karl Denninger
2015-04-22 07:00
Call Satan, he needs to get one of his many to check the furnace down there.
I actually agree with Bernie Sanders (US Senator and an avowed socialist) on something. http://tinyurl.com/pq9ee5h
Specifically, I agree that so-called "free trade" treaties and other agreements we have entered into with various nations over the last 30 years have utterly decimated American manufacturing and threaten to destroy our economy if not halted and reversed.
Bernie is right that asking Americans to "compete" with starving Vietnamese peasants who are willing to accept 56 cents/hour, made possible by so-called "free trade" that exempts such goods from tariffs, is a gross abuse of Americans. The Vietnamese might be ok with it, but we should not be.
Bernie is also right in that literal millions of American jobs, upwards of five million in fact, have disappeared as a direct and proximate result of both NAFTA and Chinese "free trade" agreements.
But the real problem that faces America is that offshoring, even if there was not such a gross wage disparity (and there is) ultimately cannot work and neither can the so-called service economy.
Consider this folks -- all economies are, at their root, about providing what you need and that is where value creation resides. It is the creation of value that allows for pulled-forward production through the mechanism of borrowing.
What value is created when I cut your hair and you, in turn, do my taxes? I can't eat the hair or the tax return and your car won't run on either.
At the core you must mine, manufacture or grow things in your nation for it to be prosperous. That is what increases your asset base, not "stawk prices" or any such claptrap as "intellectual property." Price is not value nor is it an asset; the "service" side of the economy distributes wealth that comes from the goods-producing side. If there is no, or an insufficient, goods-producing side then your economy is destined to collapse.
There is a common screed from people like Bernanke and other so-called "academics" that as economies mature and become "better" (maturation being thought of as positive) it trends toward service-oriented. This is simply false; a fully-service economy instantly implodes as everyone starves!
There are no simple or fast solutions to this problem but we had better cut the crap or we'll find out what happens when you get on the wrong side of the curve with these "developments" -- and I guarantee you won't like it.
http://market-ticker.org/akcs-www?post=230050
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