PeakTrader.com

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It should be noted, in the 1990s and up to 2000, a huge amount of capital flowed into U.S. high-tech firms. Revenue growth was very fast, while many were unprofitable.

Then, there was a quick and massive "creative-destruction" process, mostly from 2000-02, which made U.S. firms much more efficient and profitable, producing more with less, while many firms failed or were taken over.

Globalization, i.e. open markets, free trade, and unrestricted capital flows contributed to the U.S. tech boom, and offshoring low-end production, or manufacturing, allowed the U.S. to import those goods at lower prices and higher profits (which benefited both U.S. consumers and producers), while shifting limited resources into high-end manufacturing and into emerging industries.

Also, foreigners would sell their goods too cheaply and lend their dollars too cheaply to raise or maintain their employment levels and continue to generate a virtuous U.S. cycle of consumption-investment. U.S. consumers bought foreign goods and foreigners bought U.S. Treasury bonds. However, not enough of those dollars were "refunded" to U.S. consumers in the form of tax cuts to allow the spending to go on or promote U.S. demand.

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It should be noted, this "recovery," had many false starts, because it's been a rolling depression, where the economy improves for a few months, then deteriorates for a few months, etc.. A self-sustaining cycle of consumption-employment hasn't taken hold.

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Humans like to believe they're important.

Do we really know all the factors that have positive and negative effects on climate change and do we really know the magnitude of each factor.

Also, how accurate are the data when humans and the scientific methodology are so new and weren't around for about 100% of the earth's history.

We can't even build a sound general equilibrium model of a large economy, because there are hundreds of major dynamic forces, in hundreds of dimensions, that interrelate and interact, pushing and pulling the macroeconomy. We don't have the capacity to determine the net effect..

The best we can do is tie together partial equilibrium models, input-output models, optimization models, contemporaneous models, etc. for a crude understanding, or isolate small pieces of a giant puzzle that don't reveal a general picture.

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"...belief that carbon dioxide is the driving force behind the greenhouse effect (water vapor actually accounts for 90-95% of it)"

http://www.decisionpoint.com/TAC/MCCLELLAN.html

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Jack, I guess, you never heard of the Law of Comparative Advantage, e.g. if two countries specialize and trade, both countries benefit.

Of course, one country can benefit more than another, e.g. China raising its income from $4,000 to $5,000 (i.e. $1,000) or 25%, while the U.S. raises its income from $50,000 to $55,000 (i.e. $5,000) or 10%.

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Suppose you’re better than someone else at both doing something difficult, e.g. improving an iPhone, and doing something easy, like putting iPhone parts together.

So, you specialize in improving iPhones, and another specializes in putting iPhone parts together, and then trade.

Of course, the value of improving an iPhone is greater than the value of putting iPhone parts together.

And, I stated above, workers should be paid based on their productivity.

Workers, who can put iPhone parts together twice as fast should get paid twice as much, and when workers create 10 times more value, they should get paid 10 times as much.

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Also, I may add, it’s relatively cheaper to offshore many low-skilled jobs, e.g. to China, although the U.S. is much more productive, and then import those goods at lower prices and higher profits.

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Denis says” “Bottom 20 percentile income take only 2% of overall income — while top 1 percentile take blew sky high from 10% to 23% between 1979 and 2006.”

That’s incorrect. Also, the top 20% account for (only) 40% of consumption (so, the other 80% account for 60% of consumption).

The “rich” produce more than they consume over their lifetimes, while the “poor” consume more than they produce over their lifetimes.

Would you rather have a bigger pie to share with more income inequality or a smaller pie to share with less income inequality?

Workers should be paid based on productivity, and real wages for low income workers have lagged productivity.

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U.S. per capita income = GDP = output is over $10,000 a year more than the E.U., although there’s more income inequality in the U.S..

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Of course, the mix of output is also important.

For example, there’s more government expenditures in the E.U. and less private expenditures, or government accounts for a large share of GDP.

Also, some countries are export-led economies, which add to their GDPs, while the U.S. is a consumer-driven economy, that subtracts from its GDP.

Moreover, there are differences in the cost of living, e.g. through regulation, taxes, fees, fines, fares, tolls, etc..

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Jerry, I agree, many underpaid workers became more underpaid and many overpaid workers became more overpaid.

However, it should be noted, union workers were grossly overpaid and non-union workers were grossly underpaid.

That disparity narrowed, since unions peaked in the 1970s, i.e. lower real wages for union workers and higher real wages for many non-union workers.

Also, many government workers are overpaid and many non-government workers are underpaid.

However, in the fast food industry, for example, since the late 1960s, workers became more underpaid, i.e. labor productivity increased about 25%, while real wages declined over 25%.

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Jack, since you don’t believe in the Law of Comparative Advantage (which is supported mathematically and empirically), why should you believe in other laws, like Supply & Demand.

However, I agree, government intervention can exploit workers through the Law of Comparative Advantage.

And, yes, union workers were grossly overpaid, while non-union workers were grossly underpaid when union power peaked in the 1970s, because it’s all relative.

Denis, the top 1% is in the top 20%,.

And, yes, I agree, U.S. living standards are even higher than reflected in $10,000 a year more in per capita real GDP than the E.U., because Americans work harder.

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