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Aswad -> RE: The end of 'Pax Americana' ....? (9/2/2012 7:26:51 PM)
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quote:
ORIGINAL: vincentML
It is difficult to buy your assessment that we are a poor country inasmuch as in 2011 the average per capita wealth in the U.S. was $184,000, roughly the average cost of a home. Furthermore, measuring wealth nation to nation is a tricky business. Additionally, your remark is a smear of the GOP's delusional picture of American Exceptionalism and a "Shining City on the Hill," so is not allowed. [:)]
Let me clarify: you're poor people in a rich nation, on average, and we're rich people in a rich nation, on average. So the GOP is right that the USA is pretty rich. It better be, with all that land, all those resources, and all those people. China is pretty rich, too, for the same reasons. The context you're replying to is me saying that Norway should import labor, but failing to clarify that I'm talking about importing poor people, not necessarily people from nations with low national wealth, just low personal wealth. Like your middle class.
Incidentally, what kind of home could I get for- say- $700.000 or so?
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Your krone is only 17 cents per American dollar and as you report and the referenced article supports you are in an inflationary spiral.
It's nominal exchange rate, designed in when the world was on a fixed currency standard, was 14 cents per. Later, we moved to the same standard as everyone else, which is a floating currency with a controlled inflation. The whole West uses that, including the USA. Since that time, the NOK has increased by about 25% in value, relative to the USD. Hand us another war, and you're looking at another 16% increase over that. This is the baseline economy, primarily outside the oil field (which has had a field day every time you even mentioned the Middle East, given the increase in profits from selling the same amount of oil for more).
The article should be taken with a grain of salt. See, labor unions have a complement: the employers' unions. Articles like that, written around the time of collective bargaining and negatiations between the two, it's probably a good idea to have a feel for it, the particular flavor and odor of what comes out around those times. They have a problem, and they're soon going to notice it. A local problem for the workers in certain oil industry labor unions, that is. Our economy isn't anchored to that situation, and there is always the department of labor disputes to arbitrate or- worst case- dictate a tariff that is compatible with the realities.
The dynamic as regards labor union hierarchies, employers' unions, industry unions and so forth is... complicated.
You read Parkinson on management and beurocracies and such?
We're it.
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Eventually, the proceeds from your soverignty fund will diminish in value as the gap between currencies widens, don't you fear?
At a long term target inflation rate of 2.5% (CPI), compared to the US at 3.5% effective, it is a limited problem.
The fund is used to purchase goods and services in foreign currencies, without intermediates. It doesn't have anything to do with us beyond the shipping address, so to speak. Presently, the proceeds are primarily returned to the fund, along with the profits that are derived from the oil production. This avoids artificially inflating the currency, or overinflating it, as that money is invested in a diverse portfolio of stocks, bonds and landmass with an eye to long term profits (note that we even factor in human rights and the planetary biosphere as profit factors, because the perspective is centuries). Proceeds to be used are converted in the target area, to the currency of whatever we're importing from, and so the fund effectively floats independently of the currency.
Don't take this as an endorsement of Romney, but if he gets two terms like GWB did, we're looking at 20 trillion USD in that fund by 2030, to cover a population of some 6M at that time. At the same time, the currency will of course be worth about 20 cents in relative terms, under the same circumstances. This means exporting labor will be far less viable than importing it, of course. But to offset this, there are pretty firm market and wage regulation policies in place to manage the gap if it should become a problem. As I said, we're looking at a steady CPI which is maintained at sustainable levels.
That some people in the oil industry will reach a wage cap soon, is a minor concern.
I'm more concerned with real estate costs, for instance, where we do have a bubble. My sister (27) turned a net profit of about $240.000 when she sold her house to move in with hubby in a house that's closer to the school she attends. That sort of thing is why a lot of elderly on the universal pension plan simply move to tropical countries and live like kings there off the pensions paid from back home. I don't think $184.000 would buy a house anywhere in Norway at the moment, although it could get you a small apartment in a small town, far from any major city. I assume that figure was liquid assets, so you could get a decent loan with that as capital.
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I will admit it was wise of your nation to divert petrol dollars into a sovereignty fund and a pension fund, but how much longer can you compete with British North Sea oil?
The fund isn't competing. The fund would be happy to grant UK companies a licence to mine our oil, if they could do it ethically. The terms would be about the same as our national oil company, which is to say about a third of the profits plus licence costs. It comes down to who can actually do the job the way we want it done. If the oil workers get too greedy, they will pay a price for that. Which will hardly impact our bottom line at all. They're highly skilled people, not just highly paid, so it's not as if they'll be sitting around on unemployment benefits if they price themselves out of the labor pool.
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And what will happen if you vote to join the EU? When is that vote scheduled anyway?
We voted "no" twice already. There will not be another vote. Germany will have to carry the EU without us, I'm afraid. We did volunteer a couple hundred billion to help out with the euro crisis, though. Mostly because a thriving European economy is key to a thriving global economy, which is very useful in keeping our own profits and exports healthy. We're almost at the point where we might start feeling the effects of the global recession soon, after all.
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The view from afar suggests that Norway is in a bubble bursting process, but only an uneducated guess by me.
We have several bubbles waiting to burst, certainly. Those just aren't among them, last I checked.
Let's be clear, there's so much wrong with Norway that I'd like to cry some distinctly unmanly tears just thinking about it.
Which doesn't mean the USA is on a good course. The smart thing would be to steal the best and leave the rest. You've got a ton of potential, and I've been a big fan up until GWB happened. That's when I stopped dreaming of moving there and instead started to dread ever having to. Obama has done some things to improve the conditions, but it's an uphill battle and you might end up with Romney next time around, in which case I'm stocking up on potassium iodide and hoping humanity survives him. I hold out far less hope that the USA itself can, although it is conceivable that you could recover from a single term if you get another Obama. (I'm no fan of him, either, but when stuck with limited options...)
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However, the euphoria there is reminescent of what we experienced at the height of our housing bubble.
Yeah, we put legislation in place to avoid that. The banks aren't allowed to do what they did to you, simply put. We have our own housing bubble, but it's tied to upper middle to lower upper class parents buying houses for their children when they move out. It's not a question of defaults, but of some people making investments that they may not recoup as quickly as they planned to. And, of course, it means some people are effectively consigned to renting a place (like me, although I might be able to work around that).
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One problem here, getting back to the OP, is the growing inequality of the distribution of wealth.
Yeah, that's what I suggested you do something about. I mentioned universal health care, rehabilitative justice system, welfare and such. Better science education, better family benefits (e.g. paid maternity leave), less military spending, women's rights, human rights, legalization of drug use, legalization of prostitution, those are other steps you might consider. Most of those contribute to reducing poverty and strengthening the middle class, as well as reducing crime rates, drug abuse, prostitution and so forth. It also improves education levels indirectly, general population health directly, life expectancy directly, and so forth.
This is where we've done good, although I won't claim it was our idea.
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Another is the crumbling of our infrastructure. Our international airports are not yet third world, but we are trying. I see this internal rot as a contribution to the end of Pax Americana.
Your cultural rot appears to be a more severe problem. I've no idea if it's just been less obvious to an outsider, but the worms are crawling out of the woodworks now. It seems to me you lost the plot after 9/11, which is what we also have started doing after 22/7 up here. No predictions on whether we'll get as bad, in which case all bets are off, but it's only been a year so we're both still in a position to fix it and still have yet to see the scope of the impact of that event.
America is afraid and angry. A diffuse fear and a diffuse anger with real causes toward which it is not directed. In that sense, and many others, it is reminiscent of Germany under the NSDAP before the Enabling Act, or France prior to the revolution. I'm sort of hoping that you'll steer clear of both outcomes. Currently, you're headed straight for both at the same time. That gives me pause. I would hate to see OBL win over you guys. Social and political reforms are part of defeating OBL and his legacy. And not the sort of reforms Romney is pushing.
Your international politics have always been questionable, at best, but that may be a self correcting problem if you can get back on course. Perhaps part of the problem is precisely tied to what you mentioned about the GOP self image, which has little to do with the realities. There's a lot of things to take pride in that have little to do with what the GOP is currently about. I foresee significant internal difficulties under their domestic policies, which will inevitably spill over into international politics and reverbate worldwide, especially in financial and military terms. That can quickly become a dramatic feedback loop.
As a sidebar... if someone does invoke GWB's version of the Enabling Act, who would you rather it be?
IWYW,
— Aswad.
P.S.: Sorry about straying from the topic in addressing your points. Perhaps PM is better if you care to continue those?
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