Wednesday, January 11, 2012

Back to the Future Economy: Your Parents & Grandparents Were Wealthier Than You

This was a posting in response to an article on SFGate about former President Bill Clinton states that the key to fixing the nation's economy is to address the struggling housing market and foreclosures.

The key to fixing the economy is for the US to once again make stuff to sell to other countries...there by employing Americans so they can afford houses again (of course after housing prices have reset).

The whole idea of the housing industry creating jobs for the economy is just stupid. construction jobs and housing are a symptom of a growing economy not a cause.

A response to my posting:
Noble idea, but there is no way the US can compete against cheap labor. Wether it's manufacturing i.e. Nike in Asia or call centers in India and the Philippines, it's far too cheap to pay these laborers than Americans.
My Reply:
The US. middle class is going to have to make a major adjustment to their standard of living. no more two cars (one being an SUV), swimming pool and flat screen TV, new home with granite tile for a high school educated factory worker. 

Marty McFly with His In-laws in 1955
Anyone remember in the movie "Back to the Future" when Marty mentions to his future inlaw's that they have two TV's (in the future) and akid says that they must be rich and Marty's future father inlaw says nobody has 2 TV's. my point being that during the 1950's the US was at the height of it's manufacturing prowess. It's income from exports was huge. Yet the middle class from back then would consider the middle class from the 80's incredibly rich. and the debt inflated middle class of today would consider the middle class of the 80's as internet, 1 maybe 2 home phones with no Cell phones, maybe 2 tube TVs, 2 cars with one maybe being a station wagon. 

I don't think the middle class has to drop it's standard of living to match the 3rd world countries as their are still plenty of advantages to manufacturing in the US using US labor. But the middle class will definitely have to adjust it's expectations of it's standard of living.

Original Posting

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