Generation Y Wakes Up From The American Dream, Faces An American Nightmare

Tyler Durden's picture




 

Three and a half years after the worst recession since the Great Depression, the earnings and employment gap between those in the under-35 population and their parents and grandparents threatens to unravel the American dream of each generation doing better than the last. We have noted a number of times that these divides are growing and warned of the social tension this could create and, as Bloomberg notes, it does not appear to be getting any better, Generation Y professionals entering the workforce are finding careers that once were gateways to high pay and upwardly mobile lives turning into detours and dead ends. "This generation will be permanently depressed and will be on a lower path of income for probably all of their life - and at least the next 10 years," as middle-income jobs are disappearing. A 2009 law school graduate sums it up rather succinctly: "I had a lot of faith in the system, the mythology that if you work really hard you can achieve anything, and the stock market always goes up. It was pretty naïve on my part."

 

Via Bloomberg:

Generation Y professionals entering the workforce are finding careers that once were gateways to high pay and upwardly mobile lives turning into detours and dead ends. Average incomes for individuals ages 25 to 34 have fallen 8 percent, double the adult population’s total drop, since the recession began in December 2007. Their unemployment rate remains stuck one-half to 1 percentage point above the national figure.

 

Three and a half years after the worst recession since the Great Depression, the earnings and employment gap between those in the under-35 population and their parents and grandparents threatens to unravel the American dream of each generation doing better than the last. The nation’s younger workers have benefited least from an economic recovery that has been the most uneven in recent history.

which is leading to an increasingly disenfranchised generation:

“This generation will be permanently depressed and will be on a lower path of income for probably all of their life -- and at least the next 10 years,” says Rutgers professor Cliff Zukin, a senior research fellow at the university’s John J. Heldrich Center for Workforce Development. Professionals who start out in jobs other than their first choice tend to stay on the alternative path, earning less than they would have otherwise while becoming less likely to start over again later in preferred fields, Zukin says.

 

...

 

Only one-fifth of those who graduated college since 2006 expect greater success than their parents, a Rutgers survey found earlier this year. Little more than half were working full time. Just one in five said their job put them on a career path.

As the dream fades:

“I had a lot of faith in the system, the mythology that if you work really hard you can achieve anything, and the stock market always goes up,” says 2009 law school graduate Elizabeth Hallock, 33. “It was pretty naïve on my part.

And fingers are pointed:

Hallock is the named plaintiff in one of 14 lawsuits against some of the nation’s best-known law schools, including her alma mater, the University of San Francisco School of Law. The civil complaints, filed in 2011 and 2012, accuse the institutions of overstating graduates’ job-placement results and incomes.

 

Young Americans are struggling to reconcile their lack of economic rewards with their relatively privileged upbringings by Baby Boomer parents and the material success of their older peers, Generation X, born in the late 1960s and 1970s...

But whose fault is it?

“It’s a generation that had really high expectations, in some part driven by the way they were raised by their boomer parents,” she says. “Yet in the past five years they have had reality slammed in their face by the employment situation.”

As...

The same housing crash that hammered young architects and loan officers also slammed lawyers. Law schools are turning out about 45,000 degree holders a year for about 25,000 full-time positions available to them, according to the National Association for Law Placement Inc. in Washington. The class of 2011 had the lowest placement with law firms, 49.5 percent, in 36 years.

 

“It is not the perfect path to wealth and success that people may have envisioned,” says Robin Sparkman, editor in chief of The American Lawyer magazine in New York.

Which is leading to lawsuits - by the new lawyers against their schools...

“It’s hard to look at the information the schools were putting out and say it’s not misleading,” says Derek Tokaz, research director of the nonprofit Law School Transparency initiative. It published research showing that the chance of recent graduates getting permanent full-time work in law was far lower than the 80-95 percent total employment rates the schools typically boasted.

But for some - a new different life is peeking through...

“As it is, all of my possessions still fit in the back of my truck,” she says. “I can pack it in a couple hours, pick up the trailer and horses and move anywhere the gas tank will take me at the drop of a hat. What can the system take away from you when you have that kind of freedom?

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Wed, 12/26/2012 - 13:53 | 3096577 AustriAnnie
AustriAnnie's picture

They will print money and pay it out as military pay.  Many will have no other option.

And it isn't the war so much we need to worry about, as what they will do with all those troops here at home when the war is over.  Enemies "both foreign and domestic", one after the other?

Wed, 12/26/2012 - 14:51 | 3096696 Ballin D
Ballin D's picture

The draft was almost a failure in Vietnam and will be the last successful one in the history of the United States.  Turns out all those drafted kids were really bad at aiming their grenades and ended up tagging leadership on 'accident.'  Next time around it will be even worse.  The kids that will be drafted grew up into a broken system created by those who will benefit most from the war.  And it is worse this time than it was in Vietnam.  How many will decide to risk their lives fighting for a broken system that blame cannot be hung around their necks when they could rise up against the weakened government?  Risk their lives in a war that they lose no matter what or risk their lives in a war that they could gain personally from? I can tell you that Ill accept the government's training, shortly before deserting and turning it back on them.

Wed, 12/26/2012 - 15:06 | 3096746 BlueCheeseBandit
BlueCheeseBandit's picture

I know if they try and draft me I'll dodge. If they get me over there somehow, officers' death rates go up.

I think the boomers underestimate Gen Y's intelligence. You may not have provided us with much opportunity, but you did over educate us. Draft might be the straw that breaks the camel's back.

Wed, 12/26/2012 - 16:06 | 3096951 Shigure
Shigure's picture

Hmm, over-educated or over-schooled?

http://www.zerohedge.com/news/2012-09-24/confirming-us-dumbification-ver...

No, but honestly, some of the young people I know are far more politically aware than I was at that age.  They do question authority more, which I think is a good thing.  They give me hope for the future.

Wed, 12/26/2012 - 17:13 | 3097131 Ballin D
Ballin D's picture

I originally touched on this but deleted because I felt I had gone a bit off topic on a rant.

I see an interesting trend occuring with college aged kids with the terrible macro environment.  The tails are fattening quickly.  A LOT of kids are just giving up.  They dont see a reason to try when the difference between working your ass off and giving up and riding the government is essentially nil. The really interesting thing is that the top brackets are more competitive than ever before.  Theyre working harder and longer for less payout than anyone before them.

Wed, 12/26/2012 - 17:28 | 3097247 SpykerSpeed
SpykerSpeed's picture

Completely agree.  Gen Y knows they got screwed by the government, and the Obama re-election was a blessing in disguise.  It will permanently turn millions of young people against socialism and smooth-talking politicians.  There's no way this lasts another four years.  The "crack up boom" Mises predicted will occur during Obama's 2nd term.  And the internet and P2P technology like Bitcoin will lead to a superior monetary system, no matter what the central planners attempt to shove down our throats next.  People will simply walk away.

Wed, 12/26/2012 - 18:56 | 3097556 Blizzard_Esq
Blizzard_Esq's picture

Bitcoin is subject to hackers stealing the digital wallets. Forget it. 

Wed, 12/26/2012 - 21:26 | 3097856 Ballin D
Ballin D's picture

I did some research on the subject about 18 months ago (nothing major, just for a quick paper and presentation) and my feeling on the issue was that the system is actually fairly secure.  Im sure it could be beaten but it appeared to be a lot more secure than credit cards or digital accounts with banks.  The biggest risk I saw had nothing to do with the technology - just the value retention over time ("will bitcoins even be a thing a year from now?").

Of course someone could always grab the info with a keylogger or physical access but this is only really considered hacking by the out-of-touch 50+ crowd who can barely check their email without their children's help.

Wed, 12/26/2012 - 15:44 | 3096873 MrPalladium
MrPalladium's picture

You don't have to draft robots and drones, you just gotta build em and pay for em!

Wed, 12/26/2012 - 20:03 | 3097718 knowless
knowless's picture

Occupy proved that overt protests mean nothing. No cares what you thought of methods or ideology.

A homeless camp in front of every major city courthouse in the nation, and the public gave no shits, the "media" hired armed guards for their "reporting," and the government got every agency applicable together to shut people up. What it is, the government can no longer be petitioned by the populous, proof, act accordingly.

The only meaningful step after this is who retains/gains power in the decline, prey they hold some values.

Did you catch that?

Build community.

Wed, 12/26/2012 - 12:18 | 3096305 Tom_333
Tom_333's picture

Yup.

The only marginally useful advice I can give is - Pull a Galt. Besides there´s a big world out there.Take a couple of years off on a beach in the Phillipines. Who knows - something better may come put of that instead of being holed up in a corporate cubby-hole that goes for "work-space".After all taxes will only go up.

Wed, 12/26/2012 - 13:54 | 3096579 sethstorm
sethstorm's picture

You underestimate the ability of a sufficiently motivated hyperpower to moot that option.

That, and they will not have a shortage of US citizens willing to do it to preserve the way of life that they have known.

Wed, 12/26/2012 - 13:25 | 3096312 Richard Chesler
Richard Chesler's picture

If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered.

 

RIGHT ON TRACK.

Wed, 12/26/2012 - 14:53 | 3096702 Silver Bully
Silver Bully's picture

"first by inflation, then by deflation"

Buy high, sell low! Waitaminute  . . .

Wed, 12/26/2012 - 20:04 | 3097721 Who is John Galt
Who is John Galt's picture

If the American people ever allow JEWS to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered.

 

There I fixed it for you!

Wed, 12/26/2012 - 12:29 | 3096350 ElvisDog
ElvisDog's picture

The "imminent war with Iran" meme is getting as old and tired as video games and iToys. I've been reading "imminent war with Iran" stories for at least 4 years now. When, when, when, will the most predicted war in history take place???

Wed, 12/26/2012 - 12:53 | 3096418 SgtShaftoe
SgtShaftoe's picture

Iran is just one mere possibility.  There's plenty of other vassal states in the American empire.  It may not even start in the US.  China and Japan could set something off, China and India could set something off, or the currency could have a hiccup in the US, and the rest of the world could pounce and beat the shit out of the bully.  It could be a world wide conflict between non-state actors and nation states.  When a city's worth of buildings is built of straw and gasoline, something will catch light eventually.  

Wed, 12/26/2012 - 13:04 | 3096442 koncaswatch
koncaswatch's picture

Maybe "immenent war with Iran" is nothing more than a headfake. What other countries are on the banker/NWO shitlist? N Korea? Or an easier target (a la Greneda) Cuba?

Wed, 12/26/2012 - 16:50 | 3097115 RockyRacoon
RockyRacoon's picture

I agree with you.  Iran is too convenient.  The false flag will occur where the general populace least expects, and knows the least about.  Can't make up lies about the "enemy" when folks already know about them.  My bet is on some country in Africa.  After all, China is setting up influence there and the U. S. has to thwart their efforts.  It'll be a proxy war with China, and a lot of African folks will die fighting it.  Just my best guess.

Wed, 12/26/2012 - 17:43 | 3097329 cynicalskeptic
cynicalskeptic's picture

Intelligent thought - depopulate resource rich Africa.  We've been fighting over it for decades by prixy during the cold war.  China has made some serious moves buying in via outright purchases, aid and long term contracts.  Have been surprised the US allowed things to go so far (but then we DO owe China a fortune).

Wed, 12/26/2012 - 19:08 | 3097595 Guy Fawkes Mulder
Guy Fawkes Mulder's picture

We DO owe China a fortune??

Let's look at the invisible assumption there.

They hold bonds. Tradeable bonds.

Mass rejection of US Treasury Ponzi bonds (and-or the tax system that gives these bonds their value) WILL make them worthless in the markets.

After that, who knows what will happen?

Maybe the Fed will intervene, maybe not...

Wed, 12/26/2012 - 12:31 | 3096357 spentCartridge
spentCartridge's picture

If you consider yourself as a registered voting citizen, then you are, not to put too succinct a slant on it, fucked.

Legal land (the bank) has you by the balls and you are too ignorant to know why.

 

You gots to become a 'member of the public' as opposed to a 'citizen'.

 

Pretty simple really when you finally figure it out.

 

Wed, 12/26/2012 - 13:07 | 3096454 SpeakerFTD
SpeakerFTD's picture

Care to provide a link, professor?

Wed, 12/26/2012 - 13:14 | 3096480 spentCartridge
spentCartridge's picture

Here you go ~ TNS RADIO - Seeking solutions

I have many, many, many more too, but that one ought to keep you occupied for at least a couple of weeks.

Vins' podcasts are where you want to go.

 

Enjoy :)

 

Wed, 12/26/2012 - 12:32 | 3096360 U4 eee aaa
U4 eee aaa's picture

With the way this gun argument is heating up it is more likely to be civil war

Wed, 12/26/2012 - 12:55 | 3096427 ElvisDog
ElvisDog's picture

I disagree. The  public has an attention span of about two weeks. Something else will come up and the MSM news industry will switch their 24/7 coverage to the new story. Gun control will die with a whimper. I think even Obama knows that if he tries to ban guns that half the country will simply say "no" and then what does he do? Imprison 50 million people? Do house-to-house searches on half the homes in the country? He would look like an ineffective idiot so he won't even try.

Wed, 12/26/2012 - 13:05 | 3096447 Tijuana Donkey Show
Tijuana Donkey Show's picture

That's how he's going to solve the jobs situation. Half of America can search and lock up the other half, BOOM, a Kenyisan wet dream.

Wed, 12/26/2012 - 16:55 | 3097134 RockyRacoon
RockyRacoon's picture

"With the way this gun argument is heating up it is more likely to be civil war"

Nah.  The NRA will fold like a $3 lawn chair.  They are more interested in the power of their chairmanships and committee connections than really doing any good.  They are vociferous, but motivated by the same things that Washington DC is.  The AARP is about the same.  I am or have been a member of both, so I've seen the blanket ads and opinion pieces that they send out.

Wed, 12/26/2012 - 21:06 | 3097604 Guy Fawkes Mulder
Guy Fawkes Mulder's picture

I'm glad someone is calling out the NRA in this way. They seem to me to just be stoking public opinion around one of Mencken's hobgoblins.

The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.

http://jpetrie.myweb.uga.edu/mencken.html

Wed, 12/26/2012 - 13:13 | 3096477 Larry Dallas
Larry Dallas's picture

+1 million to Fonz.

I have a feeling there will be some program with "at risk" youth (meaning highly likely to be incarcerated) will ship over first via a draft.

Then the rest of them.

This will be the Planned Parenthood of the 21st Century.

 

Wed, 12/26/2012 - 15:04 | 3096739 Silver Bully
Silver Bully's picture

"I have a feeling there will be some program with "at risk" youth (meaning highly likely to be incarcerated) will ship over first via a draft."

According to the Department of Justice, during 2011, the number of prisoners under the jurisdiction of state and federal correctional authorities was 1,598,780.

Need to solve the prison population problem? No sweat. But you better keep your nose clean in the not-so-far-flung future. Instead of avoiding the draft by going to college, you avoid being a conscript by avoiding the police. Police state indeed.

Wed, 12/26/2012 - 13:28 | 3096516 1100-TACTICAL-12
1100-TACTICAL-12's picture

It shall be war indeed, the idea of actually being a freeman ended with property tax.

Wed, 12/26/2012 - 15:48 | 3096888 SilverDOG
SilverDOG's picture

 

 

Which may be eradicated, if you live in a state which allows: Alloidal Title

Wed, 12/26/2012 - 16:57 | 3097147 RockyRacoon
RockyRacoon's picture

Yeah.  MERS threw a monkey-wrench in just about all of the legal aspects of property ownership.  I think for good reasons of their own, they wanted the rules of property laws to be upset and be questioned.  It's not all over yet folks.

Wed, 12/26/2012 - 11:46 | 3096219 TruthInSunshine
TruthInSunshine's picture

It's not just newly frabricated or even experienced lawyers, architects or other "professionals," either, but what some call "skilled trades," who may be able to find work, but it's at an hourly wage of $10 to $14 per hour, more often than not with very slim (or none) retirement benefits, etc., when these same jobs used to pay well over $35/hour along with another $15 to $25 worth of medical, pension and other benefits on top (see article below).

As many here are undoubtedly aware, we are in a contracting global economy, as measured in real economic output, productivity and consumption, despite what heavily massaged statistics generated by various governmental beaurocratic agencies (such as the BLS) claim. Some could and do credibly argue we've entered a deep economic recession or even depression, and they have compelling statistics of their own to back those claims up (e.g. how understated official inflation allows GDP to print flat or positive, only due to officially "not counted" higher prices, which hides dramatically decreased consumption; e.g. how deficit-derived government spending has essentially made as many as 25% of the U.S.'s population dependant, partially or entirely, upon direct government transfer payments to meet their basic needs, such as SNAP/EBT, SSI, Social Security, Medicare/Medicaid, UI & extended UI, etc., which allows the "soup lines" of the 1930s to now be hidden from view).

Here's a really interesting article that pretty much rips apart the notion that there's a "skilled worker" shortage in the United States, and lays bare the truth that many of those companies claiming this (and politicians repeating it) are essentially only willing to hire extremely highly skilled workers for what are barely above fast food worker wages, which won't even allow such workers to pay off their educational loans (another truth laid bare):

Skills Don’t Pay the Bills


By Published: November 20, 2012

Earlier this month, hoping to understand the future of the moribund manufacturing job market, I visited the engineering technology program at Queensborough Community College in New York City. I knew that advanced manufacturing had become reliant on computers, yet the classroom I visited had nothing but computers. As the instructor Joseph Goldenberg explained, today’s skilled factory worker is really a hybrid of an old-school machinist and a computer programmer. Goldenberg’s intro class starts with the basics of how to use cutting tools to shape a raw piece of metal. Then the real work begins: students learn to write the computer code that tells a machine how to do it much faster.

Nearly six million factory jobs, almost a third of the entire manufacturing industry, have disappeared since 2000. And while many of these jobs were lost to competition with low-wage countries, even more vanished because of computer-driven machinery that can do the work of 10, or in some cases, 100 workers. Those jobs are not coming back, but many believe that the industry’s future (and, to some extent, the future of the American economy) lies in training a new generation for highly skilled manufacturing jobs — the ones that require people who know how to run the computer that runs the machine.

This is partly because advanced manufacturing is really complicated. Running these machines requires a basic understanding of metallurgy, physics, chemistry, pneumatics, electrical wiring and computer code. It also requires a worker with the ability to figure out what’s going on when the machine isn’t working properly. And aspiring workers often need to spend a considerable amount of time and money taking classes like Goldenberg’s to even be considered. Every one of Goldenberg’s students, he says, will probably have a job for as long as he or she wants one.

And yet, even as classes like Goldenberg’s are filled to capacity all over America, hundreds of thousands of U.S. factories are starving for skilled workers. Throughout the campaign, President Obama lamented the so-called skills gap and referenced a study claiming that nearly 80 percent of manufacturers have jobs they can’t fill. Mitt Romney made similar claims. The National Association of Manufacturers estimates that there are roughly 600,000 jobs available for whoever has the right set of advanced skills.

Eric Isbister, the C.E.O. of GenMet, a metal-fabricating manufacturer outside Milwaukee, told me that he would hire as many skilled workers as show up at his door. Last year, he received 1,051 applications and found only 25 people who were qualified. He hired all of them, but soon had to fire 15. Part of Isbister’s pickiness, he says, comes from an avoidance of workers with experience in a “union-type job.” Isbister, after all, doesn’t abide by strict work rules and $30-an-hour salaries. At GenMet, the starting pay is $10 an hour. Those with an associate degree can make $15, which can rise to $18 an hour after several years of good performance. From what I understand, a new shift manager at a nearby McDonald’s can earn around $14 an hour.

The secret behind this skills gap is that it’s not a skills gap at all. I spoke to several other factory managers who also confessed that they had a hard time recruiting in-demand workers for $10-an-hour jobs. “It’s hard not to break out laughing,” says Mark Price, a labor economist at the Keystone Research Center, referring to manufacturers complaining about the shortage of skilled workers. “If there’s a skill shortage, there has to be rises in wages,” he says. “It’s basic economics.” After all, according to supply and demand, a shortage of workers with valuable skills should push wages up. Yet according to the Bureau of Labor Statistics, the number of skilled jobs has fallen and so have their wages.

In a recent study, the Boston Consulting Group noted that, outside a few small cities that rely on the oil industry, there weren’t many places where manufacturing wages were going up and employers still couldn’t find enough workers. “Trying to hire high-skilled workers at rock-bottom rates,” the Boston Group study asserted, “is not a skills gap.” The study’s conclusion, however, was scarier. Many skilled workers have simply chosen to apply their skills elsewhere rather than work for less, and few young people choose to invest in training for jobs that pay fast-food wages. As a result, the United States may soon have a hard time competing in the global economy. The average age of a highly skilled factory worker in the U.S. is now 56. “That’s average,” says Hal Sirkin, the lead author of the study. “That means there’s a lot who are in their 60s. They’re going to retire soon.” And there are not enough trainees in the pipeline, he said, to replace them.

One result, Sirkin suggests, is that the fake skills gap is threatening to create a real skills gap. Goldenberg, who has taught for more than 20 years, is already seeing it up close. Few of his top students want to work in factories for current wages.[continue reading via link above]

Wed, 12/26/2012 - 12:02 | 3096257 pashley1411
pashley1411's picture

This has been going on for some time, the loss of bargaining power by people with labor, physical, mechanical, and even technical skills, in favor of those who have managment and social skills.    Oh yes, and companies lieiing through their teeth, that has a long history as well.

Wed, 12/26/2012 - 12:10 | 3096279 Freddie
Freddie's picture

A lot of companies want illegals or HB1s who are slaves.  The Democrat Party obliges along with the NWO RINOs.   A lot of Americans want that unionn job too.  LOL!  Hope & Change bitchez!

Wed, 12/26/2012 - 13:04 | 3096445 infinity8
infinity8's picture

And this: http://openchannel.nbcnews.com/_news/2012/12/26/15907309-a-buyout-a-reor...

Severe reductions in pay for us older folks with jobs.. good article. I know lots of people who have had the same handed to them in the last few years. And my friend who is a chemical engineer is currently unemployed.

Wed, 12/26/2012 - 12:57 | 3096431 SgtShaftoe
SgtShaftoe's picture

If you have a drivers license and a heartbeat, you can make 60-80K / year working in the Baakan in North Dakota just driving a truck.    

Wed, 12/26/2012 - 13:23 | 3096499 cxl9
cxl9's picture

Yes. Not to mention $180K/year working in the Alberta oil sands, if you're willing to endure the cold of course.

http://www.economist.com/news/letters/21567866-virtual-war-ukip-canada-c...

There are, and always have been, well-paying jobs for those who are willing to show up and work hard. Maybe if people lost their entitlement attitudes and the government stopped providing so much welfare, people would rediscover the desire to work.

Wed, 12/26/2012 - 14:12 | 3096613 yogibear
yogibear's picture

The new worker has to be a nomad. Live where the work is at until it becomes saturated with overseas slaves. Then move to a state or country which pays more. 

Wed, 12/26/2012 - 13:24 | 3096504 CH1
CH1's picture

I was there recently. Stunning!

Wed, 12/26/2012 - 13:59 | 3096575 TruthInSunshine
TruthInSunshine's picture

I've been to Minot, and it's great if you want to live in a place where there's about 15 times the people the current infrastructure can support (due to the economic depression in the rest of the U.S., except for D.C. & Manhattan, the two welfare king cities; government jobs and too-big-to-fails), the housing resembles particle board dollhouses being slapped together by monkeys (and a bizarre # of people live in dive motels), and all cultural aspirations follow a "main drag" lined with Wendy's, Taco Bell, McDonald's, Walmart & 6-plex 1970s era movie theaters.

I'm not saying that the boom there is not sustainable, nor am I saying that it wouldn't be a wise move for those currently looking for work to look at as a potential employment epicenter, but I am saying it's something of a one trick pony (there is mining, also, but everything is hard-core commodity based and dependent out there), and I am saying that it's not exactly the charmed existence in terms of housing, infrastructure, weather or quality of life, in general (in addition to being susceptible to quite sudden and volatile downturns due to a lack of economic diversity).

Wed, 12/26/2012 - 14:12 | 3096610 Real Estate Geek
Real Estate Geek's picture

Sounds like a great place for <ahem> entrepreneurial young ladies to make a lot of money, too.

Wed, 12/26/2012 - 14:14 | 3096599 Real Estate Geek
Real Estate Geek's picture

Serious questions for those who are better educated in economics than I:

Given the US's persistent trade deficits, wouldn't the employment picture be substantially improved if the pendulum swung more towards autarky?  In other words, why must US workers join the global race to the bottom by trying to compete with workers in China who toil for the equivalent of $15/ day? 

Is it due to anything more than:  (i) the corporate ownership of our government; and/or (ii) Triffin’s Dilemma?

(My hypothesis is that the US economy is large enough--even without exports--to support a vibrant manufacturing sector, IF we limit imports.)

TIA

 

 

Wed, 12/26/2012 - 15:32 | 3096654 Guy Fawkes Mulder
Guy Fawkes Mulder's picture

Most of our economic theories take this money system (bonds as the gold-standard collateral asset upon which to issue credit) as a paradigmatic, there-is-no-alternative given.

Triffin's Dilemma is a very good Achilles' Heel for any neo-classical economist. This dilemma does guarantee that we have "no alternative" and that we "must" race-to-the-bottom in a world of state-capitalism, cartel collusion, profits-uber-alles, and whatever else we want to complain about but "can't change." You can watch them wriggle and squirm to try to just say "things have to be this way" and get back over to their comfort zones -- in which they don't feel the shit-end of this economic order, as do most everyone else, including the non-human animals. (Including some very intelligent ones.)

Auto-archical or autarkical economonic thinking is what I recommend, but at a much smaller level than the United States.

The great trick, for which I will pray, is that people don't decide to go to war just because the corporation-under-capitalist-deceivers model stops paying them in poker chips for their obedience.

Think. Question. Re-evaluate. Every day.

And by the way (to others, not you), gold as a reserve asset upon which to issue credit is just an earlier iteration of this same model, as gold-lending-at-interest is an even earlier iteration.

New thinking. Be smarter than you were taught to be, people.

Wed, 12/26/2012 - 15:28 | 3096814 BlueCheeseBandit
BlueCheeseBandit's picture

Autarky is the answer if the question is: How can I further impoverish the USA?

Economists disagree on a lot, but virtually all (neoclassical, Austrian, Chicago, Keynesian, etc.) agree on the merits of free trade.

It's true there would be more jobs in autarky. It's also true that ppl in your household would be busier if you stopped trading with other households, but you would also be a lot poorer. Autarkical arguments can't find any logical reason to draw the border at the nation, the state, the town, or the front lawn. Usually autarky is just an expression of racism or nationalism.

An attack on autarky is an attack of specialization and the division if labor. It's economic suicide.

Having said that, there are noneconomic reasons to favor autarky. From a practical perspective, larger systems are harder to police. So big national and international economies risk creating rentiers that don't actually produce goods or services their fellow men want, but game the system to create transfers from producers to themselves.

I believe that is the true evil of our globalist system. But autarky isn't the solution. The solution is a radical free market system that reduces the opportunities for wealth extraction by politically powerful groups. That's one of the best arguments for a gold standard: gold can't be manipulated by politicians. A just and virtuous legal system is also necessary.

People will get these things if they demand them strongly enough. But today most people want the cheap and easy. They don't want to think too hard about their choices.

In that world, self-sufficiency is important. Everyone should have the means to survive at least a year without income from outside the household. Getting a year of food from a reputable survivalist retailer is a good start.

Wed, 12/26/2012 - 15:49 | 3096855 earleflorida
earleflorida's picture

@ Real Estate Geek

Does Henry Kissinger ring a bell? (CFR)

Quote: "But of course the dominant foreign policy figure in both the Nixon and Ford administration was not William Rogers but Henry A. Kissinger, who was named nat'l security adviser and soon became the sole force in foreign policy, officially replacing Rogers as Sec. of State in *1973 {(two years after the Nixon shock(*the year Nixon resigned 7/1973)}."

"Kissinger was virtually "Mr. Rockefeller". As a **Harvard political scientist, kissinger had been discovered by John J. McCloy [check out muckety.com - McCloy died 1989, but his son, J.J. McCloy II lives on?], and made director of a CFR group to study the Soviet threat in the nuclear age. [excerpt]"

"Apart from the Vietnam War, (which Nixon re-escalated,  secretly bombing and then invading Cambodia in 1969-70 through Ellsworth Bunker) the Nixon Administration major foreign policy venture was the CIA-led overthrow of the Marxist Allende regime in Chile. U.S. firms controlled about 80% of Chile's copper production and copper was by far Chile's major export (***in the 70's). [excerpt]" 

"Richard Nixon also established, for the first time, diplomatic relations with communist China. Nixon was urged [remember he was a Rockefeller man whom Kissinger literally owed his political career to, and held great sway over Nixon- jmo] to take this step by a committee of prominent businessmen and financiers interested in promoting trade with and investment in China. The group included Donald M. Kendall; Gabriel Hauge, Chairman of Manufacturers Hanover Trust Co.; Donald Burnham, head of Westinghouse; and David Rockefeller, Chairman of the Chase Manhattan Bank."

"The first envoy to China was the veteran elite figure and diplomat, David K.E. Bruce, who had married a Mellon, and who had served in high diplomatic post in every Administration since that of Harry Truman [Eisenhower and Truman were softies on Communist China]. After Bruce became Ambassador to NATO, he was replaced by George H.W. Bush, a Texas oilman who had served briefly as the Ambassador to the United Nations. More important than Bush's Texas oil connections was the fact that his father, Connecticut Senator Prescott Bush, was a partner at Brown Brothers Harriman." 

end quotes [excerpts] M.N. Rothbard; c.1984 

Ps. Nixon played an important role within several presidents administration [ following his disgraced departure as president until his death on 4/22/94 ]; Ford used him extensively, as did Reagan, and Bush #41 !!!

Ps2. "Backgrounder: China's 12th Five-Year Plan  [6/24/11[ note the timeline?]      http://www.uscc.gov/researchpapers/2011/12th-FiveYearPlan_062811.pdf

Wed, 12/26/2012 - 18:22 | 3097460 ronaldawg
ronaldawg's picture

Look at Spain after WWII and I think you have your answer....

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