Re: aircraft - 1. Clearly a lot of the pain in the aircraft industry is cyclical. Combine the recession and its reduction in profitable business travel, and the shock of 9/11 and its impact on air travel, and you have the airlines cutting back on routes. Fewer routes mean fewer miles mean they need fewer planes, and the ones they have last longer. So as the airlines struggle,so do their suppliers, if we could get info on the manufacturer of those little liquor bottles, we'd see the same thing. 2. Sure, Boeing hasn't released a new jet since before 9/11, but the 777-300 ER is in flight testing, and there are millions being spent to develop the 7E7 with an expected in service date of 2008. If I'm not mistaken this will still have them on their traditional pace of one new major model each decade.




Re: Telecom, how much of this is cyclical vs. structural? It's pretty clear that business investment is just not beginning to pick up.
Re: Auto - through it's clever, if costly, financing options, the auto industry has been able to sustain its manufacturing through the recession. Now that interest rates have begun to creep up, the cost of those 0% finance programs may now be to high, thus demand for autos falls or maybe everybody who wants a new car has bought one in the last 2 years. In any case, I'd argue its cyclical.

Re: jobs generally - despite postive growth in GDP for sometime, the unemployment rate remains relatively high because of the productivity gains of 1. all the investment in the late 90s, 2. profit pressures during the recession leading to process improvements 3. Forcing the one guy not laid off to do the work of his former colleagues (which is really just a form of 2)


Well let's see Sam, I showed in the other thread that 10% of the US manufacturing output is in electronics. Just locally RCA has a TV manufacturing plant in Marion, IN. Intel and Motorola have huge manufacturing plants here in the US. Sure final products may be assembled overseas, but a lot of the more complex components are still made here. And it's all developed here.



Re: China - why do you think we suck up to China so much? Better to have Boeing in China building planes, than have them steal the designs. At least the some piece of the pie ends up back with American shareholders.

Companies definitely aren't altruistic to employees (and this is why we have many of the regulations you abhor), that's why it is the role of the government to pick up the slack.

re: next big thing. Well Sam, I don't know, nobody knows for sure, you have a bunch of people out there making bets, some of them will be right. Indiana is making a big bet on biotech.




Here is why I think you are ultimately advocating protectionism. Let's say we eliminate the H1-B and L-1 visa programs. Then the firms that used those workers are forced to pay a higher price for labor. Foreign firms are under no obligation to do the same. So they can then import their goods at a lower cost. Ultimately this will drive the domestic firms out of business, and cost those jobs, unless you protect the domestic firms with protectionist policies of one sort or another. Sure you're not advocating it directing, but it's a logical outgrowth of your wrongheaded solution.

To wrap the last bit of comments.


That was not made clear on your initial post, you were only stating what you had posted on Comicon. I only agreed with you and gave you an example of a character that I thought was even weaker. Just as I did with my opinion of some comic artists I like.
Not all conversations and exchange of ideas are intended for debating.
If it is your intention to debate with each post, then so be it. That was not clear to me.

That is not the definition of laissez-faire, and visas are a subset of laissez-faire as (being that immigration is a function of government and is not covered in the laissez-faire economy)well, being that is a government function under that system, so I have no clue what you are referring to.
I do suggest elements of laiseez-faire (the part of overregulation is a prime example)be applied, but I submit that this government should give the same breaks to the businesses here as other countries are giving to theirs.
When we get past this, we can discuss this topic further.



This was no problem, and no apology was necessary. Let us continue to move on.

The only reason those plants of Honda and Toyota exist in the United States came because of government pressure brought to bear upon those companies. You know it and I know it.
The labor force is highly educated in India?
65 percent literacy. They are not that educated, which is another illusion. I have met many people from India, some are more capable than others.
The only place that I find them superior(to the U.S. worker) is their low wages, but you get what you pay for. Nor do they get the same benefits from their companies. Of course, you have done little research on this matter, and it shows. Mike was able to ascertain as much when he answered you the first time.
I do agree that the Y2K wages were as over-inflated because of over-reaction from businesses.


Rome did not fall in a night nor in a century. There are trends and I observe those trends. The trends show that the United States economy is going from a producing nation to a consuming nation. Unless we reap the benefits of our designs, this country will go the way of England, and the next century will be a Chinese one.

On the telcom front, it is neither. You have big companies merging with other big companies, and synergy is eliminating jobs, while the CEOs are making millions and what the Courts did to break up the phone companies to Baby Bells, this seems to be reconstituting the giant telephone company.
Car sales may also be falling because people aren't buying them because they are afraid they will be out of work. People who are concerned with about job security do not make large purchaces. Which is why the sales of cars is a latter indicater rather than a predicting one. They are laying them off now too, in the thousands.
Unemployment is increasing, not declining. This is the new economy and "experts" are perplexed why jobs are not being created. So much for the other economic indicators.


It is not protectionism. It is patriotism.
As I have stated earlier, all this country has to do is level the playing field to give the businesses here in the USA a even playing field to compete with the foreign ones. Whatever their governments do to prop up their businesses, we match it. Then we see fair trade.

Well to me, when you said "There are more characters worse than Firestorm, The Red Tornado comes to mind." I took that as a weak refutation of the idea that Firestorm was a weak character. Perhaps I was too much in a debate posture and was looking for a clash of ideas. If that wasn't your intention, then I misread you. On Chaykin, you did give an opinion before moving on, so I was off base there.

What sophistry. Just so we're clear on what Laissez-fair is, here's a dictionary definition:

1 : a doctrine opposing governmental interference in economic affairs beyond the minimum necessary for the maintenance of peace and property rights
2 : a philosophy or practice characterized by a usually deliberate abstention from direction or interference especially with individual freedom of choice and action

Yes immigration is a function of government, but let's be honest here, with few exceptions, the reasons for immigration (religious freedom/political asylum) are economic. Thus any immigration policy has an effect on the economy. Further specific proof lies in the fact that these visas are for guest workers. They are visas obtained with the aid of employers, of course it's economic. Finally, the word "immigrant" implies one seeking permanent residence. These visas, while administered by immigration officials, are of a temporary nature.

Sam, you bemoan "overregulation" and desire "breaks" for business that foreign nations give that we don't. Would you mind specifying some of these?

For example, would you like to see the minimum wage repealed? an elimination or reduction in workplace safety rules? an elimination or reduction in pollution regulations? and elimination or reduction of corporate income taxes? What kind of breaks do you want to see? Trade barriers? Direct cash subsidies?

Re: Honda and Toyota plants. Actually Sam, I don't know it. I was operating under the assumption that they were looking to reduce transportation cost, and had found a relatively cheap place to build, and a large labor force (due to displacements in agriculture and textiles). I'd be willing to entertain the idea, but I honestly don't recall reading about government pressure. Do you have a citation so I can educate myself?



Well Sam, anecdotally we know that they are well educated to serve as replacements for white collar functions in IT, engineering and financial services. Secondly, there are something like 1 billion Indians, there are 650 million literate Indians, the US has a population of about 300 million and a 97% literacy rate, so 291 million literate Americans. There are more than twice as many literate Indians as there are Americans, even if the average Indian is less literate than the average American. If even a fraction of Indians are educated enough to compete with Americas in white collar professions, it can still be a very large number. If we assume all the H1-B and L-1 Visa holders are Indian, we know from the stats that it's less than 1/1000th of the Indian population.

You've harped on the fact that the Indians aren't as good, "you get what you pay for". I think this weakens your argument. This is analogous to an auto maker using a cheaper alloy to cut cost, the car may not be as good, but it can be a viable trade off if the marketplace accepts it. The employer gets a lower quality for a lower price. Same thing as when I go to Outback instead of Ruth's Chris.

Regarding the lack of benefits paid to these employees, isn't that part of what makes their cost lower? Should the American firm be able to cut benefits to its employees to cut costs? After all, a laissez-faire bias tells us this should be the case.



Sez you. The only problems I see are due to the ever increasing inequality of incomes due to the government abandoning its redistributive bias.

First of all, I think it's ludicrous to suggest that none of the telecom job losses have been cyclical. Second, you won't find me supporting the merger activity in the telecom sector. Since the early 80s the government has been abrogating its anti-trust responsibilities, an action that I find to be completely wrong headed. I'm a big believer in markets, but for markets to work properly they can't be distorted by monopoly power. That being said, if the firms are able to maintain output with fewer workers, then that is an efficiency gain, but in a monopolistic environment that gain will end up in the hands of the few at the top. This is why I favor redistributive policies on the part of the government. Take those millions and fund R&D.



Yeah, its possible. The odd thing about this latter recession is that we haven't seen a lot of slack in consumer spending. I'd be more convinced of your analysis if I saw it with some statistics on general durable good spending. My guess is that we had a mixture of exuberance over 0% financing (there is no such thing, bring your own financing you get a cash discount, funny how that works), and rational advance purchasing to take advantage of low interest rates (see also the housing market).



Well the unemployment statistics are tricky for several reasons. For one thing they tend to be understated because they excluded "discouraged workers", you have to actually be looking for work to be counted in both the numerator and denominator of the calculation. So we actually had a month recently, where the number of working Americans declined, but so did the unemployment rate because so many had "dropped out" of the labor market. I don't think too many economists are perplexed by the lingering high unemployment. We have a situation where even though the economy is growing, it is not growing fast enough to create net new jobs. The expansion is happening because of productivity growth from those folks who are working. Most estimates I've seen indicate a need for sustained growth at 6-7% for 12-18 months before the unemployment rate will come down.



That's a fine line if you are running for office, but it's utterly meaningless in the context of a serious debate. I'm a patriot. I would hate to see this country mired in a mediocracy driven by knee jerk reactions based on "us vs. them".



I've asked you to better define the shape such a policy will take. For me to respond before then would involve me putting words in your mouth. I want to avoid that, so give me some specifics and we'll continue.