More layoffs coming. I thought the economy was on the upswing?

[rpm]

There is no unemployment.
There is no economic crisis.
This is simply redeekulous.
All your economy is belonging to us.

[Udie]

Originally posted by Boozer2
I called Dell for support and got some Indian guy I didnt understand, called back again and got a mexican that didn't understand me...

 The 2nd guy was from Panama  And Dell is moving major accounts back state side from India.  The language problems was worse than they expected.

[SirLoin]

Originally posted by Kieran
My father worked GM for 30 years- layoffs are normal and periodic. The past two or three years of low interest rates have encouraged folks to go out and buy new. It can't last forever. Don't worry, you will be called back. You have to remember to put money back for these spells when you are working. You should do that until you build enough seniority to avoid the bite.

Well layoffs don't go by seniority when they shut the whole plant down for weeks..I've been there 10+ years and never have we seen so many down weeks.

[Kieran]

Originally posted by SirLoin
Well layoffs don't go by seniority when they shut the whole plant down for weeks..I've been there 10+ years and never have we seen so many down weeks.

I'd say you've been pretty lucky, then. Still sucks, and I don't mean to make light of it.

[Eagler]

Originally posted by Udie
The 2nd guy was from Panama  And Dell is moving major accounts back state side from India.  The language problems was worse than they expected.

"drive c" sounded too much like "slurpee"

[Dune]

GDP up more than expected during 2003 4rd Quarter: 4.1%.  Companies boosted investment in equipment and software in the fourth quarter at a sizable 15.1 percent annual rate.  Business inventory building added 0.92 percentage point to fourth-quarter GDP, even better than the 0.61 percentage-point increase estimated a month ago.

[kj714]

The new world economy. One thing that's not mentioned very much is the law of averaging. Yes it will raise the standard of living in a lot of backwards places around the world. That's a positive.

Unfortunately, it will serve to lower the quality of living here, where our standard is the highest in the world. The white collar guy here getting $60k a  year will have to compete with his indian counterpart that will do the same job for $20k. So he will bargain down to $30k and say it's worth the extra $10k to have me local instead of overseas.  The American worker keeps the job but takes the hit.

Also, I don't want my xrays read in india. When they get them wrong, who the heck do I go after?

[miko2d]

kj714: The American worker keeps the job but takes the hit.

 But the american consumer and an american shareholder gains exactly what the american worker lost. With $30k spare money they will be able to hire another american worker who was unemployed because it was unprofitable to hire him at $60k and they will buy his products at lower price.
 Products produced at $30k will be so much cheaper and more competitive, so that we can sell more of them abroad - so we will hire one more guy at $30k to make stuff and sell to foreigners in exchange for more their stuff that we need.
 So we have an two extra persons working and producing and the same number consuming.
 How could our average standard of living drop?

 miko

[ra]

So we have an two extra persons working and producing and the same number consuming.
How could our average standard of living drop?  

If the first guy has to default on his mortgage the bank loses money.  Mulitply this time hundreds of thousands per year and the price of houses comes down, causing other people to default rather than continue to pay a mortgage for a house which is losing value.  

Losing jobs to cheap foreign labor is not a bad thing unless it happens at a rate which is too fast for people to adjust to.    As a nation we are in debt up to our necks, so we don't have much ability to adjust to lower incomes quickly.

ra

[miko2d]

ra: If the first guy has to default on his mortgage the bank loses money.

 Money is just the medium of exchange - we do not consume it. The house is there and someone who bought it at cheaper price would benefit.

Mulitply this time hundreds of thousands per year and the price of houses comes down, causing other people to default rather than continue to pay a mortgage for a house which is losing value.

 And wth cheap, more affordable houses on the market, people can accept lower salaries and at lower salaries they become more competitive and the products they produce can be sold cheaper which increases the demand for them and thus production, which increases hiring.

 We live worse when we work less or have less capital at our disposal - not when we have more and cheaper products. The reasons we may live worse is when people who could work don't and that is caused by inability of businesses to adjust prices/salaries - due to laws and union contracts.

 The amount of money in the economy increases during the upswing causing the prices and salaries to rise. The amount of money decreases during the recession and people just do not have enough money to buy/hire at the last year prices. If they were free to adjust downward as well as upward, there would be much less unemployment. The nominal salaries and prices would jump around but the real wages would not change much.

 With current monetary system you must either have prices and salaries going up and down with more or less stable employment and production, or you must have employment and production going up and down with more or less stable prices and salaries.

 Second way is much more disruptive and wastefull but the price and wage controls pretty much ensure that is what happens.

 Of course the reason why we have cyclical recession and depression is the monetary system that allows the stock of money to fluctuate.

 miko

[capt. apathy]

except many of these "cheap, more affordable housing" that where lost from people not being able to pay the morgage are going to be in ghost towns.

drive through old oregon (or washington, or insert most any state here) logging country.

  the mill shut down so the workers lost their job.  
  they lost their job so they move away in the hope of finding a better one.
  then the shops, stores and services begin to go out of bussiness because their customer base has no money.
  as these bussinesses begin to close the customers for the remaining bussinesses begin to disapear because more and more jobs are lost as the problem gets worse and worse.
  eventually you're left with a town full of boarded up, reposesed houses, with nobody living there but welfare moms (who's family split up when the husband could no longer provide for his family), retired people who have a penson coming in, and a mixed colection of junkies and thieves who prey on the other people.
 
 nobody moves into these towns, the houses sit empty, and the former residents are standing on a freeway onramp with a cardboard sign.

you talk sounds good in theory it just doesn't play out in practice.  it's the typical economists pipe-dream, where your heads on fire, your feet are frozen in a block of ice, and your report is "on the average, we're comfortable"

[Udie]

^^^^

Why that sounds a lot like trickle down economics. But wait! the democrats said that doesn't work!

[Gyro/T69]

"If the first guy has to default on his mortgage the bank loses money."

That's just a small piece of the pie. The bank also has pay to maintain the propriety and any taxes that come due while it's in their hands. Also, pay to keep it insured and heated if need be.

Say the bank put up $100k for a house that they now can't unload for $60k. How long will it be before the banks or other money lenders go belly up? CC companys? Any one that defauts on their mortage wont be sending in that monthly payment.






"But the american consumer and an american shareholder gains exactly what the american worker lost. With $30k spare money they will be able to hire another american worker who was unemployed because it was unprofitable to hire him at $60k and they will buy his products at lower price"



BS....Our brave CEOs will get the lions share of the saving in their own pocket. Thanks to the productive bonuses they will now get to cash in, for outsourcing the jobs.

[miko2d]

capt. apathy: you talk sounds good in theory it just doesn't play out in practice.  it's the typical economists pipe-dream, where your heads on fire, your feet are frozen in a block of ice, and your report is "on the average, we're comfortable"

 I am discussing what would have happened under free market. We clearly do not have free market, so we could hardly expect the results I describe. It is quite clear from my post.
 The theory I am talking is not attampted in practice, so you have no way to know if it would play out. It certainly did before.

 Maybe there are some some other reasons that a town is abandoned while a new town is created elsewhere where a new factory opens - non-economic reasons.
 A price support that makes raw materials more expensive, stifling state raxes and regulations, wage laws, union- friendly workforce - all those things cause companies to create new towns from scratch rather than open it at the existing town.

 There may have been good reasons why the original company closed down - the voting and union policies of the town's and state's poulation. So nobody wants to get into the same trouble and the people start spreading out, settling in the new sites and spreading the same scourge that ruined their towns.

 Look at California - californians run away to midwest states to avoid stifling socialism and then start voting the same socialism there as well, drive prices up, impose restrictions on building, businesses, raise taxes, etc.
 And so it goes.

 miko

[rpm]

Originally posted by Udie
^^^^

Why that sounds a lot like trickle down economics. But wait! the democrats said that doesn't work!

Trickle down economics would work if those at the top trickled. Problem with the theory is those making the profits tend to keep them in the bank.