Comment by ender7 | Hacker News Reader

Comment by ender7 | Hacker News Reader

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It's easy to start filtering yourselves into the camps of "the rich are too rich, tax them!" or "the rich earned their money, you have no right to take it away!". Then you can yell at each other from across great echoing divide until the sun grows dark.

The sad fact is that America is no longer a country that makes things, and as a result we no longer find ourselves in a position to employ people in positions that are actually worth a damn. Or that pay a salary worth a damn.

We still make some things. Software. Circuit designs. Entertainment. Product design (to sell things to ourselves). Pharma. People who work in these areas are paid well.

Oh, and the financial industry. Which, despite demonstrating a wonderful ability to make itself mountains of cash, has failed to demonstrate how it benefits the rest of the country. (obviously, its ability to provide lines of credit is valuable, but we had that long before investment banking came to dominate the entire financial industry)

I remember reading Snow Crash for the first time and coming across this line:

  There's only four things we do better than anyone else: 
  music 
  movies 
  microcode (software) 
  high-speed pizza delivery

and thinking "what an alien dystopia that future must be".

The sad fact is that America is no longer a country that makes things, and as a result we no longer find ourselves in a position to employ people in positions that are actually worth a damn.

This is incorrect. We make plenty of things, more than in most historical periods.

http://research.stlouisfed.org/fred2/series/INDPRO

We just do it more efficiently, resulting in fewer manufacturing jobs.

http://research.stlouisfed.org/fred2/series/MANEMP

Not really.

http://www.ourfuture.org/blog-entry/2010020825/no-virginia-u...

Manufacturing output is up and has increased at a relatively stable clip over the past 50 years. Manufacturing productivity has increased at a faster rate, however.

More data: http://en.wikipedia.org/wiki/List_of_countries_by_exports

The US is the #3 country in terms of exports.

http://en.wikipedia.org/wiki/List_of_countries_by_current_ac...

Scroll all the way to the bottom.

What does that have to do with anything?

Short version: We buy more than we sell. Wealth is being transferred out.

Long version: It means we import way more than we export... In other words, we buy from others a lot more than we sell to others. In theory, this would create a strong downward pressure on US dollar, but as it is the reserve currency of the world and is backed by giant consumer economy that everyone is selling into, as well as US military might, the pressure is negated.

Some economists argue that this is extremely unhealthy and is unsustainable. I'm not qualified to say if it's true or not. One thing I would say, is look at most countries with a huge positive balance - most are oil producers or cheap(er) labor sources for less skilled stuff. Notable exceptions here is Germany. In fact, Germany is very luck that the rest of Euro zone likes to spend profusely. If not for those other countries dragging the Euro down, their currency would have appreciated exponentially, making their exports way too expensive.

Wealth is being transferred in - it is money that is being transferred out. The net result is that we are trading China some green pieces of paper for flat screen TV's.

I like my Chinese-made laptop more than green pieces of paper, so it sounds like a win to me.

Unfortunately, on the macro-scale, we've run out of green pieces of paper and are actually just issuing them IOUs at a higher value than the cost of the goods.

In layman's terms, we're cashing out our hard-earned savings for meaningless, disposable trinkets. It isn't going to last, and when it's over, it's going to _hurt_.

I like my Chinese-made laptop more than green pieces of paper, so it sounds like a win to me.

That's all well and good until the Chinese have all your green pieces of paper, and all you have to eat is your laptop.

"The sad fact is that America is no longer a country that makes things, and as a result we no longer find ourselves in a position to employ people in positions that are actually worth a damn."

This makes just about as much sense as a similar statement does 100 years ago:

"The sad fact is that America is no longer a country of farmers producing food, and as a result we no longer find ourselves in a position to employ people in positions that are actually worth a damn."

A service economy and relative decline of manufacturing output (NOTE: I said relative - manufacturing output is at an all time high) is something to be celebrated, not bemoaned.

Except that productivity and GDP have been rising as steadily as ever. The wealth is there; it's just being entirely captured by the wealthiest citizens.

GDP is currently less than 2%. It is every decreasing for this decade and especially in last few years. Not sure where you are getting your numbers from.

It's not even investment banking anymore, GS might as well just be a prop trading firm - how many companies are raising cash now or doing private placements.

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