The ‘Root Cause’ of the USA’s declining economic status~

Your personal experiences and anecdotes are not statistical data. I do not deny that there were companies that outsourced jobs, but that there was some huge increasing in outsourcing jobs from mid-2008 to mid-2009 that explains the unemployment rate jumping from 5% to 10%

We had what, a max of 150k or so in Iraq? Barely a blip on the unemployment radar.

 

Thanks...and like I said...we should never underestimate what can be done when we need to move to the next level...

 

If you don't like the looks of a mathematical geometric progression, don't look at it; and, you could write to your congressperson and have him introduce legislation to change the laws of mathematics to your liking.

 

I did better. I explained to everyone why your charts were distorted and misleading.

 

Iriemon: "I explained to everyone why your charts were distorted and misleading."

You won't find ANYWHERE that I claimed that the charts were mine. It is indicated very clearly the source of the charts. For a better explanation:

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Maybe you like this one better:



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Same thing. A non-logarithmic graph gives a distorted view by making more recent changes seem more significant than earlier ones. The money supply is doubling about every 10 years but the graph creates the false impression that it has grown much faster in recent years.

 

Nevertheless, it is what it is!

It's the natural result of compounding!



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The root cause of the US economic problems is that we switched from being a net exporter to being a net importer, which happened while Reagan was in office, and while he wasn't the main cause, he didn't help it any as he tore apart the energy independence programs put in place by Carter..

 

Exactly so. A 100% increase in the last few years take up half the chart and looks dramatic. The 100% increase int he 1950s is hardly noticeable, even though it is the same amount of increase.

Which is why when you look at something compounding over time, you use logarithmic charts, which makes the 100% increase in the 1950s just as big as the 100% increase in the 2000s.

 

We became a net importer because we are rich and can afford to buy foreign stuff.

Our economic problems come from fiscal mismanagement over most of the past 30 years, from a government that has pursued "trickle down" theories which have effectively redistributed 10% more of he nation's income from the middle classes to the richest, and from a financial system that favors speculative investing over earning and productions coupled with an unregulated housing/lending market that blew up to a disastrous bubble and collapsed.

 

We were rich because we exported.
One of the biggest reason we find ourselves weaker than before was the shift in the direction of the concentration of wealth.
From 1930 to the 1980's the concentration of wealth declined, the rich were richer, but they owned a smaller percentage of the country.
Reagan's disastrous tax policy reversed this trend and wealth is now more concentrated than it was in 1929.
Just like the huge tax cuts for the wealthy in the 1920's increased the concentration of wealth right before the great depression, the huge tax cuts for the wealthy of Reagan and Bush lead to increases in the concentration of wealth before the Great Recession.
Coincidence?

 

Trade certainly enriches both sides, but even if you exclude exports, we were still pretty rich.

It was just tax policy that changed that dynamic (thought that was certainly a big one), but lots of other "trickle down" policies -- weaker unions, overtime laws, stagnant minimum wage. Growth or global trade and greater automation are factors too.

Probably not. It would be logical to assume that greater wealth in the hands of few means that more money will be applied to speculative investments as opposed to earnings and purchases.
It doesn't help when your tax policies favor speculative investment over earning and production by an over 2:1 margin either.

 

So, you would rather see the numbers scrunched together on the rise on the left side, thusly, so that the rise is steady and looks nicer to you:



I'm sure that most of the charted graphs shown on the web would have looked this way if the authors would have wanted to use a logarithmic graph; but that not being the case, the graphs showing geometric progression used by them will just have to suffice.



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Correct. A logarithmic scale adjusts for the effect of compounding and presents the data over time so that 100% 50 years ago looks like 100% today. It eliminates that distortion of recency. A data set that was increasing by a steady percentage over time would be a straight line on a logarithmic chart, but on a normal chart would look like the charts you posted, creating the false impression that the data was increasing much more rapidly in recent years.

I don't disagree that normal charts are typically used. I was just pointing out the false impression the charts (like the ones you posted) give.

 

There's no "false impression" involved, as you so vehemently declare. The numbers are noted on the horizontal and vertical for all to see.

As is so often stated: BEAUTY IS IN THE EYE OF THE BEHOLDER

 

Final example, here is a chart of US population in a normal and logarithmic scale:



Looking at the normal (or absolute) scale on the left, it looks like population growth has been increasing in the past 100 years. But that is a false impression.

But the logarithmic scale on the right, you see the truth: Population growth has actually slowed down in terms of percentage growth.

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It's not the numbers, it's how they are graphed. See my post above.

 

There is a new housing bubble rising from the ashes of the old one. Hedge funds are competing to buy up foreclosed properties and pushing housing prices back up and pushing prospective owner occupier buyers out. If you own a house in an area that had a significant price decline in 2009 but has recovered, take a drive around your neighborhood. If there is still a lot of unoccupied houses get out as soon as you can sell your house without a loss because the housing market will implode again in places like that where only speculators are buying properties, which will happen sooner than later, most likely when the Fed stops its open market buying and begins hinting at raising interest rates.

 

But, if you will look at the scales on the graph, it isn't based on "percentage growth", it's based on actual numbers of population, and there is no "false impression" projected but only in your mind.

"Free your mind and your ass will follow." — George Clinton

 

I think in my greater area 60% of property sales are investors...while this is not a huge percentage it is a significant percentage. And the sales are driving up the home prices as if the economy is fine and dandy. But I don't agree with people selling their homes solely for the reasons you state. If people cannot afford their current homes, or must relocate, then sell whenever it makes financial sense. If people purchased their homes to live for the long term then it should be no worry...

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I think in my greater area 60% of property sales are investors...while this is not a huge percentage it is a significant percentage. And the sales are driving up the home prices as if the economy is fine and dandy. But I don't agree with people selling their homes solely for the reasons you state. If people cannot afford their current homes, or must relocate, then sell whenever it makes financial sense. If people purchased their homes to live for the long term then it should be no worry...

 

So back when the population was 250 million and there was a 3% population growth, this increased the population by 7.5 million. Today when the population is 315 million and if the population growth is 2.5%, this increases the population by 7.875 million. So in your debate it depends on if you are more concerned about the 'percentage' growth or the 'actual' population growth? IMO, when discussing government costs and resources it is the body count which is critical...

 

The whole fed thing seems pretty shady, but the root of bad or slow economies is reductions in spending.

Governments and global corporations are the only ones spending much these days.

 

the problem is all the money has settled on the top, a economy needs consumers, that is where the problem is, foreign outsourcing is shipping the jobs out to make the top 10% even more, the less money the 90% can earn the less they will buy, it's a catch 22 - excessive greed is causing our declining economy


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Disagree for reasons explained. You were presenting the chart to create the false impression that money growth was much greater in recent years that prior years.

Others can decide for themselves.

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We weren't discussing government costs.

 

I presented it as it appeared on the Web, as are the overwhelming majority of graphs presented. Your belligerent babbling that I presented it "to create the false impression" is a hallucination on your part. You could write to your congressperson to introduce legislation to criminalize the use of the geometric progression graphs, and to only use logarithmic ones. I'll be looking for this in the newsfeeds. If I don't see it, I will assume that you are just blowing smoke with your cacaphonious cackling.