Wednesday, September 15, 2010

Goverment: False Economic Expansion

Everytime I hear a politician or economist call for more stimulus to create jobs I just shake my head and wonder, do these people really not understand what is happening in the jobs market? Do they really not understand that government can't legislate prosperity? All governments can do is steal from...errr I mean tax it's citizens and then throw it away on nonproductive make work jobs.

Seriously how does it help the country to tax a productive citizen and then use that money to pay another citizen to dig a hole. And if you think that is ridiculous the government will then pay someone else to fill the hole in.

How in the world is this a rational use of capital?

Let me lay out the series of events that led to the mess we are now in.

From 1982 to 2000 we had two completely new industries created. The personal computer and Internet. These two technologies drove and incredible productive phase in history. They created millions and millions of jobs.

But as always happens when a new technology hits the market there is over expansion. By 2000 there were too many tech companies. Many of them had no earnings and never had any realistic chance of ever earning a dime. As always happens when expansion reaches over saturation the market will act to clean out the unhealthy companies. That cleansing process was the bear market from 2000 to 20002. Millions of jobs were lost as the tech sector contracted.

6 comments:

  1. "From 1982 to 2000 we had two completely new industries created. The personal computer and Internet. These two technologies drove and incredible productive phase in history. They created millions and millions of jobs."

    Actually, those two technologies created the illusion of millions of new jobs, in reality they allowed companies to employ fewer people and make them extremely more productive, while outsourcing millions of jobs overseas. Which has allowed third world countries to greatly expand their work force and have an emerging middle class while the elite in the United States enjoyed a very prosperous decade as the American middle class is being destroyed.

    Hello, welcome to Walmart!!!!!

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  2. The classical view of economics is that only labor creates new wealth.
    The more workers employed the more profits can be extracted.As we can see with China.

    There is production and distribution of wealth.

    The computer is a product of the accumalated applied technology of all Mankind .
    Not simply American technology.
    (well perhaps the US invented the mouse and a DOS )
    The modern World Wide Web system was not invented by Americans even if Gates made attempts to monopolise the browsers by piggy backing bundling with Windows.

    The English developed the First computers in WW2 and in the early seventies the first personal computers because the japanese had developed the practical application of small transistors .
    America and IBM when America was still an industrial power had specialised in efficient mass production methods, since even before Ford made some advances in that. Then its capitalists found it more profitable to export its industries .

    Under the Dollar Hegemony it appeared that paper ,american debt creation created exchange value .
    I suspect that, as well as millions of industrial workers ,there are now more working people in China and India that are using their 'personal computors"to increase real world production ,creating more physical wealth ,for example in making computers ,than what American marketing, banking and hotel reservation ,check out cashier clerks etc create 'adding value"
    But, who all imagine they are super- productive of added value than Asians simply because they were paid as high waged Americans.
    After a short period of gains ,the only computerised "new industry" americans benifited from in these last decades ,was in getting a supply of credit from financial credit scams and Ponzis in a de-industrialised america.
    Computers are still competively cutting back on the numbers of the necessary clerks required in the distribution of wealth in the US.Semi skilled American labor even armed with a PC now creates little real world value in the competition.

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  3. I believe this article is factually incorrect. The internet has not created millions of new jobs because the internet is free. So for websites to make any money they must either charge a fee or attract advertising.

    I also know a lot of writers who are trying to earn a living writing internet content and it's basically impossible for most people. The pay is atrocious (way less than minimum wage) and there are no benefits.

    Plus, industrialization leads to the loss of jobs. Ask any telephone operator.

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  4. 1. Politicans don't care about facts. They care about votes. The Politicans that get money into the most hands from gov't coffers wins. Its that simple.

    Sharonsj wrote:
    "Plus, industrialization leads to the loss of jobs. Ask any telephone operator."

    Thats wrong. Poverty was rampant before Western industrialized nations. Even the poorest people in Western nations have a better standard of living than the nobility of the middle ages.

    It wasn't industrialization that is causing the economic crisis, is people in the east who work for less than peanuts in factories. For many of them, factory jobs offer better living standards than the subsistence farming they had to endure before. The problem is that there is nearly a endless supply of unskilled workers willing to work next to nothing.

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  5. So for websites to make any money they must either charge a fee or attract advertising.

    You got that right, but neither is working at the moment.

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  6. Hell, I can't even GIVE FREE ADVERTISING AWAY!

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