The American Dream?

Originally posted by Seko Originally posted by pikeshot1600 The 40 hour work week, and overtime pay above that, may still apply in unionized workplaces, rare though those are becoming.  However, a huge number of people, often professional people or salaried workers, are putting in 60 or 70 or more hours a week just to keep up with the demands and work load in their jobs.  That often means working weekends, and few vacations.  Though most of your post makes sense, I'll add my thoughts on expectations of the American salaried worker. Work ethics probably have little to due with the number of hours someone stays at the work place. Union Joe will gladly take his overtime and earn a few more bucks. The long hours for salaried workers, in your example, could be understood a few different ways. 60-70 hours per week to meet high work expectations could come from a shortage of salaried workers. Some businesses purposely higher fewer people and work the crap out of them. Saves the company money. Doesn't mean Mr. salaried is super effeicient and has a great work ehtic but that he is worked to death at the company's wishes. If the worker doesn't comply then he gets a nice little chat with his supervisor. Both Europeans and Americans obviously have been effective in creating jobs and have established a hard working ethic. My question. Is that even good enough to compete with even harder workers that get paid much less in East Asian countries?

Probably not.  Different expectations.

I would like to discuss this whole concept maybe in another thread.  My main thought has become that the rise of "neo-classical" economic thinking, since Reagan and the supply side freaks, carries a belief that the "middle class" is too expensive.  It consumes too much; it expects too much; and has become used to entitlements that cannot be sustained long term.  The American Dream (that only lasted 50 years) is a casualty of that.

 

One of the manifestations of the neo-classical thinking is in the reduction of middle management in so many areas.  The income of vice presidents and assistant vice presidents and all their minions supported a middle class lifestyle without much productivity required.  When paper had to be pushed, the VP could have his little satrapy with workers who pushed paper.  I don't think that was conscious policy, it just developed.

Now, buttons are pushed instead - instant resource transfer; instant communications, etc.  Fewer workers can be employed.  So we wring out ever more efficiencies by overworking the remaining workers.  Just the most recent reflection of economic exploitation. (After all, isn't economics always about the exploitation of resources and about the cost of that?)

Organizations from corporations to governments to universities and hospitals are all being examined and evaluated on the basis of the money, and on almost nothing else.  In business I can understand it.  In other organizations that require resources, and that deliver needed things, it gets to be a cult-like fetish of "we need to run this like a business."

As all these organizations are impacted by the neo-classical models, they wring out efficiencies and that affects employees; their dependants; the businesses that depend on those employees' incomes, etc.  Over time, the sustainability of a middle class very much depends on those employees who become less well off in terms of buying power and economic security.

I think the Friedmans and the Hayeks all looked at a universe of finite resources (or a planet anyway) and said "this can't go on."  The new social reality of post WWII had to be flattened out so that the resources that can be accessed can be spread out among an ever increasing world population with increasing expectations.  Globalization galore!

Just my view.

 

Edited by pikeshot1600

Originally posted by hugoestr The middle class was the economic engine of the last 50 years. And the American middle class is key for the economy of the U.S. and of the world. Let�s remember that the middle class was more than just clerical workers. Many people could make a living doing manual labor in the past. I just read in the newspaper how a kid, back in 1983, got $7.30 and hour doing yard work. He said that adjusted for inflation, that would be about $15 and hour today. Many people need a college degree now to make the same amount that a yard worker made 23 years ago. When economists claim that the middle class is too expensive to support, they are killing the goose of the golden eggs. Remember: the middle class are consumers, and destroying the bulk of the consumer class is destroying the economy. The U.S. economy was strongest when it paid good salaries to its workers, gave them financial security and stability. Workers were able to buy each other�s products, and it was a positive cycle: more money means more demand, which means more jobs. Today, our business leaders are engaging in the opposite cycle: less money for workers means less demand, which means fewer jobs. And fewer jobs keep pushing wages down. To protect our nation, it makes sense to protect the American worker�this is, the American consumer.

hugo, I understand your position, but I fear the cat is already out of the bag.  Globalization has been implemented and is unlikely to be reversed.  I don't see Americans or West Europeans in bread lines, but the expectations of social benefits like retirement and even health care are likely to be impacted heavily in the next generation or two.

I suspect that retirement, which was taken for granted 10 or 20 years ago, will become more of a luxury than an expectation.  If people want it, they will have to set aside assets for it.  Not many do enough of that.

Over time, other absolute-must-haves such as college, big houses (which is all that are built these days) and the ridiculous SUV may have to be scaled back or done without.  Income levels and economic security being negatively impacted in the West may be partially offset by increases in those things other places.  A further flattening out of the resource/consumption problem, though by no means a solution to it.  Two economies of 1,000,000,000 people may just make it worse.

I don't think all that can be planned for, but it could be less painful than we might fear.  The individual still has the opportunity to make his own success and estate if he is willing to take the risk.

 

Edited by pikeshot1600

Pike,

Capitalism was once loosed, and the depression of the 1930s finally put it under under control. The result of this was 40-60 years of prosperity all over the world, especially in the next 30 years after WWII.

Economic prosperity ended in the Soviet sphere because its economist dogmatically sticked to unflexible economic ideas to prove an ideological point. It's failure to adapt brought an end to the Soviet Union.

Today we believe that, since the Soviet economists failed, that means that the neo-liberal ideas must be right.

Wrong.

Neo-liberal ideas where put in practiced in Latin America since the 1980s. After close to 25 years, the experiment has also been a failure. Even many economist that promoted these ideas in the area admit that they were wrong.

Now these ideas are being pushed onto the U.S., and it is producing the same outcome that it produced in Latin America: the middle class dissappears, the rich get richer and the rest get poorer.

We may look at social unrest, potentially violence, in the future is our society cannot distribute its wealth fairly to the population.

And I don't want to see the life of millions of Americans destroyed by a great depression as it was in the 1930s. I don't even want to see it live through what Mexico has gone through in the last 30 years, and that was nothing compared to the big depression.

After WWII, our government, our business leaders, and labor created something of a pact, which created prosperity and kept the U.S. free from Marxist agitators. This was done once in the past, it can be done again.

Originally posted by hugoestr After WWII, our government, our business leaders, and labor created something of a pact, which created prosperity and kept the U.S. free from Marxist agitators. This was done once in the past, it can be done again.

True, but the jubilant and optimistic attitude of the postwar world was a reflection of an entirely different kind of culture than the present one. It emphasized responsibility over rights, it was a "social" society (not to be confused with "socialist") with strong communities, and most of all it was infused with a can-do outlook towards the world. The current society is fragmented, pessimistic, emphasizes rights over responsibility, and is in many ways a grotesque caricature of the postwar society. It is entirely fatalistic. Events of the sixties and seventies more or less put an end to the optimistic period - America was faced with the reality that it could not bring prosperity to the poorest nations, it could not prevent the spread of communism even into its backyard, and many other things (Vietnam War, Kennedy assassination) broke down that outlook and contributed to the rise of a much more cynical and embittered attitude - one not conducive to defying internal pressures or altering a future dictated by trends.

Originally posted by Seko Globalization has been a convenient way for corporations to expand markets and remain viable as a business. The US has fostered this line of commerce for some time now. However, if we can't successfully compete and other corps are outbidding or out selling the US based companies then the good old American dream will become a nightmare for many. Chapter eleven has been more common lately. Unions can strike as a way to protect their jobs, but the corporation can sell a branch off or file bankruptcy in return. Out goes the old contract and in comes the new streamlined version. Thats for the lucky worker. The unlucky ones will have to find a new job since the company they work in, for example, maneuvered differently and closed the plant down. I am not too worried about resource supplies running out as much as the price of resources dictated by corporations. The big fish tell the little factories to cost effectively meet their demands or they will go to someone else for materials. This chain effect trickles down and handicaps the average consumer by limiting spending power. Globalization is here to stay. What we need are American goods that can be sold in sufficient quantities in order to keep the beast from further threatening the American dream.

The problem with American goods being sold in sufficient quantities is two fold:

First, in so many cases, the cost per unit of goods cannot compete with the same cost per unit produced in countries where there are no costs built in such as payroll taxes, multiple income taxes (Federal, state, local, etc.), the costs of OSHA and bureaucratic badgering on everything from labor and industry regulations, to union rules and compensation scales, to politically correct hiring and firing practices, even to affirmative action.

All these things that sounded like good ideas at the time of implementation add substantially to the cost of goods produced.  Add that to the high costs of raw materials extraction, and of domestic transportation, and it is unlikely that the market for many of the products the US formerly produced in quantity, and of good quality, can be recaptured.

Second, it will be increasingly problematic for the US to remain competitive in anything once the disaster of the national debt is confronted (after George II is gone).  The debt must be serviced.  That comes from public funds.  Those come from taxes and excises and user fees and all the paraphernalia of government revenue.  Guess what?  That increases the cost of goods produced.

 Any solutions out there?  Please?

 

hugo:

It seems to me that either the neo-liberal or the neo-classical economic models must be right.  I suspect we are out of other ideas. 

Either we embrace Adam Smith or the neo-classicists like Friedman, or we wait until the disaster is upon us and go with the economic bandaids of Keynes and Galbraith.  Those guys got us all through the Depression, but I think their credit has run out.

 

Originally posted by edgewaters Originally posted by pikeshot1600  Any solutions out there?  Please?   Uhmmm .... autarchy? It just depends on what you want to achieve - if the American dream is just a megaconsumer fantasy, then it was never realistic, its just not sustainable. Adam Smith etc are not really appropriate to the modern world. Smith was writing about landlords and butchers - not multinational corporations with more power than government. The laissez faire ideal is unrealistic at that level, for instance, a company like Walmart can force municipalities to compete for store locations (and thus jobs) with incentives like grants. This, of course, is a violation of laissez faire, especially since Walmart often competes directly against small business in the proximity, businesses that have, in effect, been forced to pay to invite an irresistable competitor to town.

Good points, and I agree.  Adam Smith of course is antique thinking, but the neo-classicists owe him their lives and livings.  I do not subscribe to laissez-faire, and I don't think capitalism could long sustain a laissez-faire reality (I never thought it truly existed anyway). 

Capitalism tends toward monopoly and toward concentration of capital and power in few hands.  All else is fallout, but in the West, a great deal of wealth has fallen out into many hands.  Power and influence have always gone hand in glove with capital.  If Walmart didn't use its influence, the management would be considered fools.

The American Dream morphed from living a better life than one's parents:  going to school; owning a house; keeping a job and getting a pension to something more extravagant:  getting more degrees so you could climb over others; having a 6,000 square foot house that you don't need; getting a management job where you didn't have to work much (those are mostly gone) and expected retirement income mostly paid for by someone else.

In that regard it has become a fantasy, and is probably not sustainable.

 

 

Edited by pikeshot1600

Originally posted by edgewaters Originally posted by hugoestr After WWII, our government, our business leaders, and labor created something of a pact, which created prosperity and kept the U.S. free from Marxist agitators. This was done once in the past, it can be done again. True, but the jubilant and optimistic attitude of the postwar world was a reflection of an entirely different kind of culture than the present one. It emphasized responsibility over rights, it was a "social" society (not to be confused with "socialist") with strong communities, and most of all it was infused with a can-do outlook towards the world. The current society is fragmented, pessimistic, emphasizes rights over responsibility, and is in many ways a grotesque caricature of the postwar society. It is entirely fatalistic. Events of the sixties and seventies more or less put an end to the optimistic period - America was faced with the reality that it could not bring prosperity to the poorest nations, it could not prevent the spread of communism even into its backyard, and many other things (Vietnam War, Kennedy assassination) broke down that outlook and contributed to the rise of a much more cynical and embittered attitude - one not conducive to defying internal pressures or altering a future dictated by trends.

I disagree with your characterization of the era. It was during the following 20 years when the greatest expansion of rights in the U.S. took place. And these were not only civil rights, but civil liberties as well.

People were optimistic, that is true, but the adults running the world had the memory of the great depression on their back, and event that has more destructive to the personal lives of people than the Vietnam War or Kennedy�s assassination. And those who were children during the 1930s still have it to this day.

And I believe that the main emotion moving people during this era was fear of poverty. And many from that era still have that fear to this day.

The odds of rescuing the economy after the depression were much greater than it is to rescue it today. The cynicism and embitterment of having one�s life destroyed is greater than any of such feelings today.

Our current government and big corporations lack the will to do this. They only look after their own personal interest.

From what I've read it looks like:

1. wealthy = hooked to your job; you earn cash but you have no time to enjoy what you have.
2. decent = species on the verge of extinction; most people can't just find this position in the american society.
3. poor = the largest group and growing; oportunities to get rich are scarcer and scarcer and competition is ruthless.
4. the future looks rather bleak.

It looks like the American Dream have evolved something like this: "living a happy life" -> "living a decent life" -> "living a .. kind of life" -> "living" -> "existing". What is next, "trying to survive"?. That would be a dream that had became a nightmare.

Most people in my country still believe in the traditional American Dream. Romania is still too far behind the USA. But, we've never been on the top. The USA have been and it will be very sad to see that their leaders play megalomaniac geopolitics instead of taking care of the people  they are representing.