The United States Is In Deep Doo doo!

March 14, 2003 12:51 PM

The United States Is In Deep Doo doo! In the end, there is no such thing as a free lunch. You cannot make money grow in value by shaking it back and forth from one bank to another. You cannot prosper a nation by doing each other's laundry, or filling out their government mandated and greatly obfuscated paperwork, or flinging stock certificates around which may have as little real worth as Federal Reserve Notes. To make money, to show a profit, you must make products that somebody else wants to buy, and sadly, that is a capability the United States has allowed to slip away in great measure.
posted by stazen (21 comments total)

I agree and fear, but how do you alter the way things are without being a thug? I cannot think of any moral way to change people's behavior.
posted by thirteen at 1:21 PM on March 14, 2003

You cannot prosper a nation by doing each other's laundry,

Funny, I first read this phrase in a sci-fi novel by Jack Chalker (one of the Well World novels), millenia in the future, talking about why the U.S. eventually fell from top position. I'm still evaluating it. There's efficiency gains in letting people provide/specialize in services, and that creates value, however, I suspect there are some limits on what kind of services that applies to.

"Making money by throwing it side to side" -- on one hand, I agree... there probably are a lot of useless rich jerks getting paid to shuffle paper and spout management cliches. But I honestly believe there's a place for people who carefully raise/manage capital that goes into legitimate investment and securities derived from them.

I'm as wary of globalism and the service economy as the next guy, and something of a Wendell Berry fan to boot, but while I think Trafficant's basic ideas in the post are worth holding in mind, he's overstating his case. Possibly for rhetorical effect, possibly because there's a lot of business and gov't leaders who don't listen and are just as shortsighted as that farmer.

But:
World GDP Information. U.S. is up toward the top on GDP (about #1 or so). And you can examine the breakdown by industry for yourself and draw your own conclusions, if you like.

Agriculture/Forestry/Fishing: 140.7 [again, billions]
Mining: 139.0 [bill... you get the point]
Construction: 480.0
Manufacturing: 1,423.0
Transport and Public Utilities: 819.5
Wholesale trade: 680.7
Retail trade: 931.8
Finance/Insurance/RealEstate: 2076.9
Services: 2226.6
Fed Govt: 396.2
State Govt: 885.1

Hmmm. I'd have to conclude we might be just a bit top heavy in the financial/services areas. But maybe a related question is relevant: does anyone know how we compare in the products arena per capita with other countries?
posted by namespan at 1:27 PM on March 14, 2003

NAFTA is an economic cancer, and it's killing the American worker. The US has open borders that allow almost a million illegal immigrants a year to enter, while at the same time, our manufacturing jobs are leaving. The US isn't a country any more. It's a shopping mall, with a huge ass military that protects everyone's right to shop till they drop.
posted by Beholder at 1:35 PM on March 14, 2003

You cannot prosper a nation by doing each other's laundry,

Peculiar quote from a South African website that offers a whole host of services designed to contribute to money laundering activities.
posted by MidasMulligan at 1:35 PM on March 14, 2003

And Trafficant's reputation is certainly not unbesmirch(able|ed). But the ideas are worth thinking about. Maybe essential.
posted by namespan at 1:51 PM on March 14, 2003

The US isn't a country any more. It's a shopping mall, with a huge ass military that protects everyone's right to shop till they drop.

Woo Hoo!
posted by MidasMulligan at 1:54 PM on March 14, 2003

Ummm... before you give any credence to this guy, please read his other stories...

Warning 666 Is Coming
One World Government
A United Nations Cop On Every Corner?

What's next? The Rapture?
posted by CrazyJub at 1:59 PM on March 14, 2003

The US isn't a country any more. It's a shopping mall, with a huge ass military that protects everyone's right to shop till they drop.

Just be careful about what kind of T-shirt you wear. *ducks*

We make lots of movies that people all around the world want to see. (Sturgeon's Law and all that, but people still want to see 'em.)
posted by Vidiot at 2:48 PM on March 14, 2003

Simplistically, you're right. You can't make money by only moving it around, but you must move it around to create wealth. The girl who invents a new product needs to be loaned to/invested in/paid, otherwise the idea was in vain. If you make the movement of money very efficient, you will foster more wealth creation; you will also foster more money movement. (What new apps would pop up on the internet if we actually had a good micropayment system?) Therefore, you are actually not right. While not causal, money movement and wealth creation are correlated.
posted by mediaddict at 2:56 PM on March 14, 2003

yeah, the quality of the article is kinda lacking... When I hear someone mention the gold standard I really can't help but laugh, sort of like the tri-lateral commission. There may be some grain of truth to what they're saying, but the words are tips that I'm talking to borderline conspiracy nuts, and probably don't know much about what they're talking about except through sites like this one.

HOWEVER, yes, the US economy is probably bugfucked. Muppetboy gave a really excellent bit o' doomsaying back int he Laurie Garret thread, if anyone remembers it, and I'd really love to see him expand that to a full, cited article sometime. (hint, if you're reading...)
posted by kaibutsu at 3:01 PM on March 14, 2003

"Consider the Source" time, everybody:
The FFP rant starts with a ten-year-old quote from then-Rep. James R. Traficant (D-Ohio), who was sentenced to eight years in prison last year after being found guilty of bribery, racketeering, tax evasion, and obstruction of justice (10 convictions in all), following which, the House of Representatives voted, 420–1, to expel him (the second such honoree since the Civil War - Gary Condit was the only vote in his defense). He used outrageous pronouncements and accusations designed to appeal to his lower-IQ constituency, distract from his illegal dealings and try to discredit those prosecuting him (like Janet Reno). And imagine, he was a Democrat (like Lyndon LaRouche, but then they used similar M.O.s to get rich off of politics). Despite the warbloggers' coining of the term to ridicule their opponents, I would say that Trafficant's followers are the best definition of an "idiotarian" philosophy.

Whoever would chose a Trafficant quote to support their argument must either (1) stupid, (2) nuts, (3) as big a crook as Traffy, or (4) any combination of the above.

Seeing or hearing him spew something I could actually agree with is usually enough to make me reconsider my position. But then:
"A stopped clock is right twice a day, and one running backwards four times" - Wendell's Law of Chronography
posted by wendell at 3:02 PM on March 14, 2003

To make money, to show a profit, you must make products that somebody else wants to buy, and sadly, that is a capability the United States has allowed to slip away in great measure

The United Kingdom is in exactly the same position. All our manufacturing industry (what's left of it after the decimation of the Thatcher years) is in decline. The once great British Steel company is now on its knees.

I know! Let's have a war, that'll take everyone's minds off how shitty things are at home.


posted by essexjan at 3:04 PM on March 14, 2003

Does noone think of intellectual capital as an exportable product? To generalize, the business model of the US is like the business model of many semiconductor companies; they specialize in idea generation, and outsource the more mundance elements of business such as manufacturing, payrolls, hr, etc.

I believe these companies can do well without being in the business of running factories, and I think the US can do well without a manufacturing economy.
posted by H. Roark at 3:43 PM on March 14, 2003

Does no one think of intellectual capital as an exportable product? To generalize, the business model of the US is like the business model of many semiconductor companies; they specialize in idea generation, and outsource the more mundance elements of business such as manufacturing, payrolls, hr, etc.

You're absolutely right about this - still, maybe the US is in trouble. If an old article by a wacked-out, disgraced ex-politician, posted on a scam-artist website, is actually accepted on a discussion board as containing credible macroeconomic analysis worth probing in depth - then the educational system we need to supply the knowledge workers you speak of is in "deep doo doo".
posted by MidasMulligan at 5:16 PM on March 14, 2003

Speaking of which, I'd guess that any economic critique that uses the words "doo doo" in its title is probably not going to be the most well-reasoned. Just a hunch.
posted by Vidiot at 7:56 PM on March 14, 2003

I believe these companies can do well without being in the business of running factories, and I think the US can do well without a manufacturing economy.

Completely without, or without it being the largest focus? Comparative advantage aside, if you can't produce most of the goods you can consume, or at least rapidly retool to do so in case of a trading disruption, you're asking for trouble.

Generally, I'm pretty disappointed most of the thread focused on the lack of credibility Trafficant has. Guess it was easier than looking at the ideas.

Here's an interesting look: two lists, ranking by % of GDP attributable to
agriculture, manufacturing, and services. Generally, the countries who rank high on the services % list are the most prosperous (though it's interesting to see Iraq edges the U.S. out!). Cayman Islands is #1.

The question is: is this because there's something magic about the service economy to make everything run right, or is it because those who were first to the industrialization party got most of the money, and are now weilding it in a service information economy?

Could the fact that 2% of our GDP comes from agriculture come back to bite us?
posted by namespan at 10:14 PM on March 14, 2003

Generally, I'm pretty disappointed most of the thread focused on the lack of credibility Trafficant has. Guess it was easier than looking at the ideas.

Yeah. CredibilityFilter sucks. An idea, a notion, a topic, or whatever, shouldn't require an unimpeachable source to make it discussion-worthy.

Anyway...

The physical capital side of the widget equation is simply not as important as it once was, and its relative importance will continue to decline - eventually disappearing into Neal Stephenson's matter compilers. (For those who doubt the imminent hum of Neal's MCs, third world labor and resource can serve as a less fanciful interim metaphor.)

Nike is not a shoe manufacturing company, as most people believe. Nike subcontracts its shoe manufacturing to overseas plants that employ 35,000 Vietnamese whose total salary is less than that of Michael Jordan. Nike is a knowledge-based company that designs, markets and distributes shoes. In other words, Nike and Michael Jordan control the intellectual capital while the Vietnamese people control the less lucrative physical capital. Whoever controls the intellectual capital controls the money capital. -- Philip Emeagwali

Pragmatically, it's kind of difficult to fault America for taking advantage of its head start to capitalize on (and encourage) an economic inevitability.

The question is: is this because there's something magic about the service economy to make everything run right, or is it because those who were first to the industrialization party got most of the money, and are now weilding it in a service information economy?

Well, whether "there's something magic" depends on your definition of magic. Certainly being first helps. You might want to read the following:

Pax-Americana-led Macro-Clustering and Flying-Geese-Style Catch-Up in East Asia: Mechanisms of Regionalized Endogenous Growth (warning - pdf file)

Not a glorious paper, and not specific to this topic, but in spite of itself, it does offer up some useful economic history and terminology - lots of potential Google-bait.

I wish I could be more helpful, but I am aggressively allergic to economics; who knows - perhaps my lurching incompetence will irritate some of MeFi's top gun economists into giving a little up.
posted by Opus Dark at 3:07 AM on March 15, 2003

Opus Dark strikes out on his own to save humanity. Nice post amigo.

Midas Mulligan, are you finally aware of your fraudulency? Or are you only here to smooth the way further into the trap?

Midas, face it: You and yours have never been more socially irrelevant in human history. You're the voice of an illegitimate authority. You're done. You're naked. The world will hopefully soon find out. We know about your corporate campaigns. The truth will spread. Many people may die in your wars, but the truth is spreading.
posted by crasspastor at 3:44 AM on March 15, 2003

Whoops. I just ranted like crazy.

I apologize Midas for singling you out. But regardless, this shit is tenable. And yes I am a quack. I do not mean to single you out as I am well aware to do so, is to single myself out.

These are wild times. I overreacted.

This hyperbole brought to you by:
posted by crasspastor at 4:35 AM on March 15, 2003

I think it's fascinating a rant, it's like someone from another universe describing our world: his point of view is so radically different. While I believe the importance of the service industry is overrated compared to manufacturing, this stuff is over the top.
posted by ugly_n_sticky at 5:32 AM on March 15, 2003

Midas, face it: You and yours have never been more socially irrelevant in human history. You're the voice of an illegitimate authority. You're done. You're naked. The world will hopefully soon find out. We know about your corporate campaigns. The truth will spread. Many people may die in your wars, but the truth is spreading.

My wife says I watch the X Files too much. She keeps trying to turn the channel. They must have gotten to her. (hee hee).
posted by MidasMulligan at 10:15 AM on March 15, 2003