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China Set To Surpass US In R&D Spending In 10 Years
dcblogs writes "China is on track to overtake the U.S. in spending on research and development in about 10 years, as federal R&D spending either declines or remains flat. The U.S. today maintains a large lead in spending over China, with federal and private sector investment expected to reach $424 billion next year, a 1.2% increase. By contrast, China's overall R&D spending is $220 billion next year, an increase of 11.6% over 2012, a rate similar to previous years. This finding is shared by the President's Council of Advisors on Science and Technology. 'China's investment as a percentage of its GDP shows continuing, deliberate growth that, if it continues, should surpass the roughly flat United States investment within a decade,' it said in a report last month."
America has become an anti intellectual society. Particularly when talking about STEM. All the pundits like to scream how we need to hire eleventy zillion teachers and then turn around and pout and scream that they're not all social workers focused on bullying, eating disorders and special needs. And if anyone so much as suggests that all the MFA's in Italian poetry pay more in tuition to offset the cost of the courses in engineering we're told we're all redneck knuckledragging philistines.
Someday, soon, a bunch of Federal grant wielding puppeteers will put on a show in Esperato about how we used to have fire but the inventor died.
Sadly, the USA is not focusing on science and engineering education, except for paying lip service to the concept of STEM courses in college. There are even proposals to tie tuition payments to the popularity of courses: charge more for engineering courses and less for liberal arts (which is the opposite of the right way to influence it if you're trying to coax people into the sciences and into engineering). The idea seems to be that majors which will earn more money should have a higher tuition associated with it. China sends more scholars over here. Meanwhile we have been making it harder for the best students in the world to come here for political reasons and visa bias when it would make more sense to encourage the best of the best to come here to learn and to stay here and innovate!
Well, of course. China has 3x the population of the US.
And the interior provinces aren't even fully industrialized yet. That will change rapidly as the expressway and high speed rail networks are built out.
There no point for the US investing in R we get everything we need from China.
Better focus on what we're really good at: creative financing
that they never get close to the bang-for-buck that the US gets.
Quite true, but what happens when China spends, say, twice as much on R&D ? They will overtake US at some point, if the current trends in both US and China continue.
China will slow down or have crashed by then.
China's labor is 1/10 the cost of the USA so in comparison, China is spending 5x times as much on R&D as the US or $2 billion if we compare actual wages. China and the US are in an economic war and the US is losing. Free trade with no tariffs is causing the economic collapse and closure of manufacturing due to the unfair wage difference between China and the Western world.
I think the 200B$ they currently spend already is worth more in local economic units than the 400B$ is in the USA.
I remember in the 70s, that attitude was the same for "made in Japan" then Japan became one of the technological leaders in the world. China is doing things that the States can't even dream of considering its economic situation. They are making most every thing that you buy now under as name brands as most manufacturers out-source the actual assembly to China. We can start with the iPhone, pretty much every apple device, computer, stereo, television, network equipment, etc.. Keep your blinders on because you don't want to see the reality of the world where the States aren't the techno king anymore.
How is the iPhone crap?
Keep in mind that if it weren't for the iPhone, you'd probably still be using some piece of shit Samsung flip-phone right now.
Are agnostics skeptical of unicorns too?
Joe: I'm going to France. Abe: You should go to China. Joe: I'm going to France. Abe: I'm from the future. You should go to China.
How exactly are we destroying capitalism?
Are agnostics skeptical of unicorns too?
"We are in a death spiral because we treat our elections like another episode of American Idol."
...and because the rest that doesn't go to elections at all treat American Idol like another round of elections.
Ezekiel 23:20
We are going backwards, and they are going forwards... The rate does not change the end result, only the time to get there.
I'm going to take a wild guess that Apple's US R&D designed it, China just builds it.
They are spending more than twice now if we compare wages. Their $200 billion gets a lot more R&D then the States $400 billion. There is such an inequality in wages in the order of 10 to 1, that I would guess that they are actually getting the equivalent of $2 Trillion in State's R&D.
Get ready to be modded troll for posting a completely correct but unpopular view.
Well, that's true and it is cheaper, lol.
Keep your blinders on because you don't want to see the reality of the world where the States aren't the techno king anymore.
Oh bullshit, the last 10 techno remixes I listened to on Youtube were made in either the US or Europe.
Also, no, their quality standards are crap. They're like a 12 year old kid showing off or an inner city Asian person ricing out their Honda. They'll build the world's biggest _____ or fastest ______ just to say they have it but it's a hastily made, poorly designed piece of crap that doesn't function correctly. They just designed it for their own egos and to make their crappy country look better as a propaganda statement. For example, their bullet trains.
more research for more machine learning techniques to prevent people from bypassing the Great Firewall...
The G
Uhh, how about both? They steal all the R&D possible, but at the same time, their economy is growing, while ours is shrinking. I clicked the link, just to ask, "This is news?" Of course China will overtake the US in genuine R&D sometime soon. We've lost what it takes to lead the world in much of anything.
"Windows is like the faint smell of piss in a subway: it's there, and there's nothing you can do about it." - Charlie Br
"Give us a product at the lowest possible cost so we can maximize our profit. Damn the consumer." ...They make crap because American corporations ask them to make crap.
1) A lot of that US land area is Alaska.
2) Population is more relevant to GDP as Japan can amply demonstrate.
That you're looking at the wrong sort of map, they don't just have to show geographical features you know.
No intelligent person would accept that statement. They make very good optics (once upon a time not so but now very good) - go buy a good telescope in the USA - it is most likely made in Mainland China or Taiwan.
They make all sorts of good electronics, do circuit fab etc at very low prices.
Over the last month I ordered more than 100 different component assemblies from 100+ different suppliers for a little project of mine - so far it all works, seems well designed etc.
Bury your head in the sand if you want but if you do then hold on tight to your butt because it is going to get steamrollered.
The tyrant will always find a pretext for his tyranny - Aesop
It is cheating. Basically the culture in China right now is one of do whatever you want to get ahead. Cheating, lying, all ok, expected even. So it goes on in research all the time. Straight out fabricated results and such. The problem is, as Feynman said, Nature cannot be fooled. So you can have all kinds of results that say X causes Y, but if X doesn't in fact cause Y it isn't helpful.
It is a societal thing that will need to change before they start to produce more useful research.
Methinks you're fantasizing. China needs the US and the EU as much as the US and the EU needs China for cheap wares. If the the US and the EU go down and crash, China will crash even more. They've no interior market/consumption to speak of, and need to rebalance.
Fantasizing, you say? Whatever. The fact is, the wealth of the world is being redistributed, and the US and EU are coming up losers. China is gaining. The real catch to all this redistribution is, the world's central banks are reaping the lion's share of the profits. For each ten dollars we lose, China gains a dollar, and the banks steal nine dollars.
But, the situation with the central banks don't affect the fact that China is ascending, while we descend.
China may be dependent on us today, but what happens in fifty years, or a hundred? We're selling off our great grandchildren's future.
"Windows is like the faint smell of piss in a subway: it's there, and there's nothing you can do about it." - Charlie Br
No interior market? That's actually where a lot of their growth has been and why they didn't go completely belly up when the US economy sneezed a few years ago.
Until the cost of living and the cost of labor in China is at parity with the US you can't compare $$ for $$; you also have to assume that the R&D talent (Engineers, Project Managers are equal); assuming that the talent is of a high quality.. if the talent costs less over there, than they don't have to spend the same $$$ to get the same results.
IF the talent is equal and the cost is 1/2 to 1/3 cheaper than they are probably already at parity. If the talent isn't equal than no amount of $$ can really get to parity (e.g., bad technology leadership can waste a lot of $$). If the talent is better and equal or cheaper in cost then this game is over; although there is always an other round to play for the next generation..
http://www.hawknest.com/
Since China owns so much of the USA you could argue the R&D the American companies the Chinese own should be added to the Chinese total R&D. BTW, I'd like to buy some punctuation Pat.
Something will prevent them form digging a big big hole and throwing good into it, instead of selling it at dumping price to EU/US?
A large proportion of everything that's sold in the US is made in China, from the best to the worst. They can manufacture anything, and the quality you receive depends on the amount you pay, just like for every other country and manufacturer.
If you're complaining that the vast majority of Chinese goods you see are crap then you need to look for the reason closer to home. Your typical importer is more concerned with his profit than with obtaining quality products for his customers.
And it's doing our reputation no good either. Undoubtedly they're amazed at the crap we're willing to buy.
Grasshoppers always come up with new excuses to procrastinate and not do anything - it's what they live for.
They'll always be saying "So What?"
For them, it will never be time to pull up the socks, roll up the sleeves, and get to work.
That's why the Chinese are narrowing the gap, and will pull ahead.
Success comes from attitude first. With the grasshoppers, their attitude is 180 degrees in the other direction.
The main thing is to be able to recognize who's a grasshopper, so that you don't waste your time listening to them.
No intelligent person would accept that statement. They make very good optics (once upon a time not so but now very good) - go buy a good telescope in the USA - it is most likely made in Mainland China or Taiwan
Well which country makes the optics? If Taiwan then it is irrelevent to the discussion. Although Taiwan was a colony of China in the 1800s the two countries are now very different places. You can't claim China is advanced simply because a colony 100 years ago makes good optics!
I often don't like the choices people make, but I like the fact that people make choices. That's why I'm a conservative.
Think of all the wonderful things the USA could afford to do if we weren't so busy destroying capitalism. We've got record numbers of people out of work and on government assistance and an administration who only knows how to grow Washington DC in response. We are in a death spiral because we treat our elections like another episode of American Idol. We have a blueprint of how to be free and prosperous, but nobody pays attention to it anymore.
The administration did spend some money on R&D. It gave the money to a company that did some R&D and was then sold, presumably along with the R&D, to China. ( http://www.reuters.com/article/2012/12/09/us-a123-sale-confirmation-idUSBRE8B80I420121209 )
I often don't like the choices people make, but I like the fact that people make choices. That's why I'm a conservative.
Well there are so many ways it is hard to remember all of them. Certainly the debt is a problem. But let's go with one we all remember and that is generally given favorable press coverage: the auto company bailout. One of the key features of capitalism is that failures are destroyed to make room for success. For example, when an auto company doesn't perform it should go out of business. If unions were a large factor in pushing it to fail, the unions involved should suffer and be discredited. However, when the government steps into undermine contracts rather than enforcing them, giving money to political backers (i.e. the unions) rather than following the rule of law, and treating a company as "too big to fail", it damages capitalism (not to mention society at large).
I often don't like the choices people make, but I like the fact that people make choices. That's why I'm a conservative.
Hmm. The approach being taken towards free speech these days, in the States, is likely to put a damper on R&D. You simply can't have it both ways -> you can't have people designing your next generation weaponry, all while forbidding them from discussing its elements with their colleagues.
What more, our approach to Iran is somewhat whack at the moment. We're making it harder for people to come here to learn, people who (often-times) even up living here for the rest of their lives. At university, I knew of one decent chemist, an Iranian girl, who probably wouldn't be here if our borders were any tighter. And that's the point -> for every one 'terrorist' that slips through, we get ten thousand non-terrorists; just normal people, looking for a decent education and a good job; normal people who are considered the intellectual elite of their home country; if your goal was to prevent their home country from advancing as quickly down a weaponized route, then sending their best and brightest back to them (or never letting them leave to begin with) would probably have an opposite result.
I am John Hurt.
and it's got absolutely nothing to do with spending. Instead the problem is with our educational system preferring to not teach our kids how to think for themselves. The continual dumbing down of America is happening each and every day in our schools when they refuse to teach Civics, Geography, Math - when so called high school grads working at McDonalds can't even count back change w/o the damn computer telling them how much of what type of change to give back. Hell I've watched the same kids getting their change and they don't even know how to count it anymore.
Mod me up/Mod me down: I wont frown as I've no crown
What does debt have to do with capitalism? There is nothing about debt that precludes capitalism.
Had we let the auto companies fail, what would have been created in its place? Nothing. The expense of setting up a new car company is unbelievably expensive. All we would have gained by letting them fail was the loss of over one million jobs and the death of the American auto industry. I fail to see how that helps capitalism.
You make a point of singling out unions but fail to mention all the banks that were too big to fail and have no unions. Should we have let them fail? By your logic, we should have. But by all accounts we would have entered a full blown depression (ala 1939). Keep in mind we were losing over 700,000 per month at the time. Are you pro capitalism at the cost of a depression? I hate to tell you this but unrestricted capitalism is what caused the problem in the first place. Saving the banks (as disgusting as that feels) is what saved capitalism. The reason social programs like medicare exist is to save capitalism. Study history and you'll understand why.
What most capitalism purists fail to get is that there are no pure systems and that includes the economic system of capitalism. Do you think the stock market is a free market? Not even close. Such things just don't exist.
Are agnostics skeptical of unicorns too?
The real problem is how most countries, in their interest to grow more wealthy, is feeding the root of all evil: The Chinese government. It's not a government held in check by its people, but one that can turn quite cruel to its own to further its ambitions. If it can do that to itself, then what more to other countries? This geopolitical farce has got to end.
Its people are becoming rabidly nationalistic due to its susceptibility to propaganda. Why question the new prosperity when it is easier to lash back at foreign countries critical of their government's practices? Look at the reaction to territorial disputes with Japan and the ASEAN countries and you'll know what I mean. It's a dangerous context that's getting more dangerous the richer China gets out of everyone's money.
And that's how to curb it's power in the future. The U.S. can't do it because it's labor force is too expensive and will not give up any of it's hard-won privileges and rights. But developing countries can by matching the tradeoffs China brings to international business: cheap labor and profit taken away from the bargain than doing business with other countries. The ASEAN, for example, can form more than trade agreements and put out unified policies to make their territories akin to the EU in terms of collectiveness but also match or do better at what the Chinese offer. Everyone will see a significant portion of business be taken away from China to be fed into these, more tolerable, locations. While infrastructure will need to catch up to the level of China, it will happen as revenue comes in. If Africa can only quell it's turbulent states, the economic benefits to all surrounding areas like the EU and the Middle East would be enormous; again supplanting Chinese influence.
Countries should curb their appetite for greater trade with China to lesser trade somewhere else and develop these other places to one day catch up to doing business in China. I would go as far as to suggest that national governments control the amount of trade that goes into the coffers of the Chinese government. it needs to be done as some countries, like Japan, have China as their #1 trading partner, which we can see is dangerous as it has no qualms in cutting off trade for geopolitical reasons (see the recent territorial conflict over just 1 island).
For such Chinese that's about to react to this in a wrong way, I have no objections to the Chinese getting ahead in life, I object that the world is empowering a dubious superpower. Change the government to one that is for its people and the good of the world then there will be no objections. The U.S. is by no means such a country but better the devil you know. I know I'm rambling as I just woke up but I really feel strongly about this. The world will only have itself to blame by empowering China the way it is now. It's like pumping gasoline into a wildfire, and all for greed.
I mean come on, I know a lot of people feel the same way in that they feel a little negativity when they read so much "Made in China" on the shelves but end up buying the stuff anyway. Sheeeesh.
They are getting there. And they are moving towards rebalancing every day, while the US is moving away. Part of the point of this is that China is getting better every day, and the US is getting worse every day. But we are OK with that, because as long as the political process lets us pick the order in which we get worst first, we have control over the process. Yay USA.
Learn to love Alaska
1) Yeah, what of it, punk.
Learn to love Alaska
So we are destroying capitalism to be overtaken by the People's Republic of China, the largest nation run by a Communist Party? Where the Party in effect controls the economy and capital is an arm of the government?
A country that destroyed capitalism in 1948 (if it ever had it)?
If your children ever found out how lame you are, they'd murder you in your sleep
Note that you assume that there is a free market behind. Which is probably fair enough for the auto industry but is not exactly the case everywhere. Let's see for example rare earth. Well, it could have been useful to bail out the mines considering that the competition was using state sponsored dumping. Also there are strategic sector. The world is not quite happy poney world yet and you cannot rely on other countries for stuff like food and anything that would prevent you maintaining the infrastructure and military of your country. At least, you want to hedge your bets and that requires assisting some industries from time to time.
With regard to the union and auto-industry, there is a question of social stability involved. You cannot afford to have whole region shutdown entirely, you would just create a refugee situation within your own border. Union are easy scapegoat when looking at the industry today, but it really started sinking a decade or more ago, and you have to look for problem at that time (hint: the US get their ass kicked by Japan and Germany, not exactly third world hell-hole with slaves at 1$/day)
of blatant stealing enables. I, for one, wish the best to our putative overlords. They may find that piling up the winnings "higher and deeper" doesn't necessarily deliver predictable results.
ELITISM: It's always lonely at the top. Uninvited company is rarely welcome.
Sigh... read what I wrote, they *both* make excellent optics. As for your characterization of Taiwan you should talk to some Chinese about that.
The tyrant will always find a pretext for his tyranny - Aesop
As for your characterization of Taiwan you should talk to some Chinese about that.
It's irrelevant what mainland Chinese think about Taiwan: like it or not, they've been under entirely different governments for the last six decades, and have followed much different courses of political and economic development.
Here is some food for thought. There are more than 3 automakers in the United States. Only 3 of them are unionized.
Only 3 of them got in serious trouble with the credit crunch, and all 3 of them were the ones battered by union demands for more than the 'decade' you elude to.
Did these automakers make bad choices? Sure. The question is, how much influence did the unions have in those choices? Clearly the UAW is one of the most powerful unions in the country, and has extremely significant influence.
"His name was James Damore."
It's the only way to compete with China's cheap labor. It's strange that when robotic manufacturing and military robots come up as a topic in /., tons of people worry about it will take away jobs or laugh at it; but when topic like this comes up they run around scared.
It's the difference between 19th century capitalism and today's, same economic system, but vastly different in terms of consumer protection, worker's rights, etc.
The fact is, the wealth of the world is being redistributed, and the US and EU are coming up losers.
The wealth of the world being rebalanced so everyone has more equal wealth is a good thing, in my opinion. I'm not sure how it isn't, in any way at all.
Now, if you're saying that corporations are taking most of the money, and distributing the wealth unequally, that's a different issue, which is a result of our current system, which they've adopted to some degree.
More equal wealth will allow manufacturing and farming to actually exist in the west without subsidies, too. At the moment we're clinging on to high tech specialised manufacturing, but I doubt that will last for that long.
So the OP's point to "look at a map" was a little pointless then. Russia and Canada are the two biggest countries in the world.
Last original invention they had was gun powder.
The entire comment can be summarized as ``Wahh! My guy didn't get elected so the people are morons who don't know anything and are destroying the fabric of society!!!''. If he gets modded troll (rightfully it should be flamebait though), it's because he's an stupid child with a persecution complex. He perfectly presented it though, so people not unlike yourself who are unable to see this crap will mod him to (Score:6, Terrific!).
You are a free market nutjob. Capitalism is what destroyed the U.S. industrial might and prosperity of 40s-60s. Especially the extreme unregulated capitalism as practiced since saint reagan. You still keep blaming the government when now-international (started in the U.S.) corporations openly loot American economy by offshoring wealth and jobs.
That's a point well missed. After a trip to China, one of the people I met asked me to help translate something. She was a translator, and the Lewisville Lizards sent a sample they wanted mass produced. "cheapest material possible" The problem is that people in the US have a problem understanding how cheap that is. I'm sure they'll get the un-soft stuffed mascots I've seen so often. When, for $0.10 each more, they'd have something people might want two of.
Learn to love Alaska
The wealth of the world is not being redistributed. China is making more money because they are manufacturing more, not because the money is being redistributed from the US or EU.
We are not descending. The US and EU economies have continued growing (albeit slowly) during China's ascent. The reason is because the world economy is not a zero-sum game, and wealth is not being transferred from the US or EU to China.
China, the US, and the EU will all have first-world living standards, most likely.
We are not selling any important assets to the Chinese. ...The only thing the Chinese are "taking" from us are exhaustible, expensive, internationally traded commodities. such as Oil. Our great grandchildren wouldn't have had too much of that anyway.
When the US surpassed Europe - How dare they?
When the China surpasses US - How dare they?
Of course they dare. It is their 'obligation' to try. And if they win out big we won't hear about those embarrassing inbreds from Alabama and Kentucky discussing evolution any more. From what I have understood, Chinese are more pragmatic than any Bible reader, or?
China just builds it.
Not exactly. Final assembly is done in China. Parts are made in the USA, Japan, Korea, and many other countries.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
Don't get too smug about that belief. It's what people used to say about Japan, too.
There are a lot of people in China, and they have the same proportion of extremely smart people as any other country.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
China makes crap, yes, but that crap sells.
China makes crap, and they also make world-class products. You can get whatever quality you're willing to pay for from Chinese manufacturers.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
$424 billion USD in the US buys much, much, much less than $220 billion USD in China.
If you had a value for what 1 USD is worth in China with regard to purchasing power, relative to what 1 USD is worth in the US then you could make a realistic comparison.
China passed the US in R&D and military spending long ago.
blindly antisocialist = antisocial
Android was announced before the iPhone. Apple wasn't the only one working on smartphones at the time, they were just the first to release.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
But by all accounts we would have entered a full blown depression (ala 1939).
You mean a la 1929. 1933 happened anyway.
Did these automakers make bad choices? Sure. The question is, how much influence did the unions have in those choices? Clearly the UAW is one of the most powerful unions in the country, and has extremely significant influence.
Did these homeowners make bad choices? Sure. The question is, how much influence did the banks have in these choices? Clearly Citi is one of the most powerful banks in the country and has extremely significant influence.
Now, tell me how homeowners who signed contracts for mortgages they couldn't afford is different from companies who signed contracts for labor they couldn't afford?
If I have been able to see further than others, it is because I bought a pair of binoculars.
well out side of the usa health care is not tied to your job and well out side of the usa health care is not tied to your job and they have less overhead as well.
also they don't have the big loans for schools as well.
Now, tell me how homeowners who signed contracts for mortgages they couldn't afford is different from companies who signed contracts for labor they couldn't afford?
You mean something different besides the fact that the UAW spends millions of dollars annually in order to get what it wants?
You mean something different besides the fact that the UAW actually actively lobbies to maintain the bankruptcy laws that allows home owners to get out of their debts?
Citation not needed
Yeah.. these things are exactly the same.
"His name was James Damore."
The US needs more tech / trade schools to free up the us universities for real higher edu / research
Have you seen Chinese research? Have you ever tried to reproduce some of their results? I have, and I would guess that even though spending might be equal, the quality will not catch up for a long time after that.
If Slashdot were chemistry it would look like this:Cadaverine
"The significant problems we have cannot be solved at the same level of thinking with which we created them." --Einstein
Casteism
"The fact is, the wealth of the world is being redistributed"
The wealth of the world is not being redistributed; this is not a zero-sum game. The wealth of the world is *increasing* as large, formerly underindustrialized countries become industrialized, and the bulk of that *new* wealth is going to those same countries. The US and the rest of the 'west' are not getting poorer so the Chinese can get richer.
Had we let the auto companies fail, what would have been created in its place? Nothing.
Nonsense.
Had we let the auto companies fail, their assets would have been bought up at fire sale prices and their employees hired by new enterprises with a focus on efficient competition. Perhaps struggling innovators like Aptera motors could have found the resources they needed to bring their vehicles to market, or growing companies like Teslas could have taken advantage of the opportunity to more rapidly expand. But the truth is that probably none of the big three would actually have outright failed anyway. Ford most likely could have weathered the storm without any assistance, GM and Chrysler would have gone through chapter 11 reorganization and then recovered -- but after the bankruptcy their creditors would have demanded more efficient operations and greater competitiveness. Most likely, the bailout has served the American public by propping up inertia at the expense of innovation, and the result will be that we'll get to bail them out again in a few years.
You make a point of singling out unions but fail to mention all the banks that were too big to fail and have no unions. Should we have let them fail?
Yes.
There would have been some short-term pain, but by bailing them out we've just created more pain in the long term. Again, not all of the big banks would have failed; some actually tried to reject the bailout money because they didn't need it, but were required to take it so their competitors didn't look bad. Why the hell wouldn't we want mismanaged institutions to look bad?
Markets depend on the incentives provided by potential profits and potential losses. Remove the threat of loss and even outright failure and you eliminate the incentive for caution and conservatism which is crucial to all big businesses, and especially to big banking and finance. You can be certain that after having bailed the banks out once, we'll have to do it again in the future. We can try to counter that by imposing increasingly burdensome regulations, to force responsible behavior, but it won't work, and it will stifle innovation that could have provided better allocation of capital to businesses and industries that could have created new jobs.
Note to ACs: I usually delete AC replies without reading them. If you want to talk to me, log in.
Biggest and oldest? Please, you give me to much credit. Of course, I can understand how it might look that way to a twelve year old whose mother won't allow him to cross the street alone.
"Windows is like the faint smell of piss in a subway: it's there, and there's nothing you can do about it." - Charlie Br
I think the US will avoid going the way of Greece, but you're right that the massive accumulation of debt, and the resulting "sea anchor" drag on the availability of investment capital and credit is going to be very painful to escape. One reason it won't be as painful for us as for Greece is that we do control our own currency, so at the end of the day we can inflate our way out -- which is also going to be very painful, but less than having bond markets simply lose all faith in US treasuries.
And you're absolutely right that we need, desperately, to allow our major industries to restructure themselves into effectiveness. It would be a little bit painful in the short term, but not doing it means that they'll fail again just when we really need them to be powering us out of our government's deepest troubles.
Note to ACs: I usually delete AC replies without reading them. If you want to talk to me, log in.
And six decades ago they only shared a government for 4 years. Prior to that they were separat governments going back to 1895.
I often don't like the choices people make, but I like the fact that people make choices. That's why I'm a conservative.
ROFL...wow, you're completely fucking clueless. Yes, Ford would have survived but the others would have ceased to exist. There was NO FUCKING CREDIT. PERIOD. The only one who could have funded them was the government. Also Aptera and Tesla couldn't get any fucking credit to buy those operations even if they wanted them. Apparently your head was in the sand the whole fucking time because the news made almost daily reports about the credit crunch.
The reason for the bank failures was deregulation. We ditched Glass-Stegall and to add insult to injury, we let the banks institute bullshit insurance in the form of CDSs. Prior to that we had a very stable banking system (albeit with much more modest profits). And seriously, go fuck yourself. It's easy to sit in your air conditioned house and talk shit about how we should have allowed a depression but when your ass is homeless and your begging for food, you would have a very quick attitude change. Pure capitalism begets massive economic swings. It's very Darwinian but history has shown that people don't like that. They prefer less crazy growth in exchange for greater stability.
If you want to prevent this shit from happening again, fully reinstate Glass-Stegall and outlaw CDSs. Problem solved.
Your problem is you believe in ideology rather than pragmatism. Ideology is great when you're in college but at some point you have to grow the fuck up. This whole country has become utterly obsessed with ideology over the last couple of decades to the point that reason no longer applies.
Are agnostics skeptical of unicorns too?
My bad...thanks for the correction.
Are agnostics skeptical of unicorns too?
http://xkcd.com/605/
Everyone knows, the truth has a liberal bias.
Learn to love Alaska
http://mycourselinks.files.wordpress.com/2011/02/ellis-bret-easton-american-psycho.pdf
Thursday night I run into Harold Carnes at a party for a new club called World's End that opens in a space where Petty's used to be on the Upper East Side. I'm with Nina Goodrich and Jean in a booth and Harold's standing at the bar drinking champagne. I'm drunk enough to finally confront him about the message I left on his machine. Excused from the booth, I make my way to the other side of the bar, realizing that I need a martini to fortify myself before discussing this with Cannes (it has been a very unstable week for me - I found myself sobbing during an episode of Alf on Monday). Nervously, I approach. Harold is wearing a wool suit by Gieves & Hawkes, a silk twill tie, cotton shirt, shoes by Paul Stuart; he looks heavier than I remember. "Face it," he's telling Truman Drake, "the Japanese will own most of this country by the end of the '90s."
Relieved that Harold is, as usual, still dispensing valuable and new information, with the addition of a faint but unmistakable trace of, god forbid, an English accent, I find myself brazen enough to blurt out, "Shut up, Carnes, they will not." I down the martini, Stoli, while Cannes, looking quite taken aback, stricken almost, turns around to face me, and his bloated head breaks out into an uncertain smile. Someone behind us is saying, "But look what happened to Gekko..."
What happened to Japan? Property bubble burst and they had twenty years of poor growth.
China has a property bubble too, and unlike Japan is likely to go through a lot of political pain if the economy ever stumbles. Aka a bloody revolution against the swine that run the place. The LDP spent a couple of periods in opposition but bounced back quickly - the CCP will likely go down to bloody defeat Tiananmen style and then explode into factions. Actually there's a fair chance of a Yugoslavia style transition to an authoritarian nationalist regime in an attempt to keep Tibet and Xinjiang from seceding.
The CCP's legitimacy is solely due to the fact it has presided over economic growth, and if that stops I think things will get very bad, very fast.
echo -e 'global _start\n _start:\n mov eax, 2\n int 80h\n jmp _start' > a.asm; nasm a.asm -f elf; ld a.o -o a;
My beef exactly. Thanks for putting it so succinctly.
I'm not an expert in economics; but here's a simple thing that's hard to argue away: there is more debt in the world than there is money, and thanks to interest that won't change, rather it gets worse. Technology and slavery help obfuscate it: we're "better off than ever", yet a few hundred years most people were independent, now it's the other way around.
That's a hole in the boat right fucking there. Just saying "Row harder!" is well-meant by some, from others it's just evil fucking charlatenery. No, fix the boat. Then you have the CHOICE wether to grow or "stagnate". Our system is based on infinite growth, but we have limited time, space and resources; people get trampled as a result.
Had we let the auto companies fail, what would have been created in its place? Nothing. The expense of setting up a new car company is unbelievably expensive. All we would have gained by letting them fail was the loss of over one million jobs and the death of the American auto industry. I fail to see how that helps capitalism.
You have a good point. Taken to its logical conclusion though, it just means that those who caused the failure to begin with will not change (no penalty/feedback) and they will fail again. Does that help capitalism?
"Someone needs to talk to the tree of liberty about its ghoulish drinking problem." by ohnocitizen
True but there's another way to fix it without letting the economy self-destruct...
Reinstate Glass-Stegall (which would kill CDOs) and outlaw CDSs (fake insurance). We had stable banking for decades until some extremely poor choices were made in the deregulation frenzy of the late 90's.
These regulations provide stability and eliminate the boom and bust cycles associated with unrestricted markets.
Are agnostics skeptical of unicorns too?
Yes, Ford would have survived but the others would have ceased to exist. There was NO FUCKING CREDIT. PERIOD.
Utter nonsense. Granted that the deficit means treasuries have soaked up a large portion of available investment capital, but that's far from saying none was available. None was available to the automakers in their current form, because investors quite rightly recognized that it would be throwing good money after bad (as was the federal bailout money). But automakers forcibly restructured into greater efficiency would have been a different issue.
(BTW, using obscenities doesn't add strength to your arguments... quite the opposite. Facts and logic work much better.)
The reason for the bank failures was deregulation. We ditched Glass-Stegall and to add insult to injury, we let the banks institute bullshit insurance in the form of CDSs.
LOL. You do know that CDSs, and various other mortgage-backed securities existed and were growing in popularity before the end of Glass-Steagall (note the correct spelling, BTW). The most that economists (actual economists, not media talking heads) agree upon is that GLBA probably accelerated the banking crisis. Many, however, think that's probably a good thing since delaying the crises would have made it worse.
Here's a question for you: Which specific investment banking practices which led to the sub-prime lending collapse would have been curtailed had Glass-Steagall remained in effect? If you find something and document it well you'll have a publishable econ research paper.
If you want to prevent this shit from happening again, fully reinstate Glass-Stegall and outlaw CDSs. Problem solved. ...Your problem is you believe in ideology rather than pragmatism.
Pot, kettle. There is no evidence that the same problem wouldn't have happened without GLBA, and to believe that banning one very particular form of financial instrument will save us all... that's pure ideology.
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If you bail out NY to the tune of 500 billion and more, it is entirely OK to bail out Detroit for 100 billion.
Both are stupid and counterproductive decisions which do long-term damage to our economic prospects.
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First, I apologize for the obscenities. It was uncalled for. My only excuse is that this topic really grinds my gears.
On with the discussion...
I'm sorry but there's no way the auto companies could possibly have restructured in time to be saved with a loan. And credit was, in fact, nearly non-existant. Find me a single credible source that would indicate that they could have gotten credit for the nearly $20 billion they needed to stay alive during the worst credit crunch in modern history and we'll talk. It just wasn't going to happen. Who would have given them the money? The investment banks that were shitting their pants at the time? Or the commercial banks that were busy learning how royally fucked they were due to all their garbage real-estate CDOs? For the record, I'm not for the government getting in the car business (or any other business) as a rule of thumb but given the situation is was the best option of a bunch of bad ones.
(I should state that when I refer to GLBA going forward, I'm referring to a series of legislative attacks that have been passed to de-fang Glass-Stegal over decades. GLBA was just the last straw.)
Yeah, CDSs existed before the passing of GLBA but it took a long time before they really took off. Now they account for 10s of trillions of dollars in basically fake bullshit. It allowed these companies to say they were covered for their losses even though the company(s) covering the amount didn't have to have even a single dollar in reserve. This helped promote the high risk attitude that inundated Wall Street. This whole notion that economists think that GLBA was a good thing and just accelerated the inevitable is ridiculous. GLBA (et. al.) made it possible. Prior to GLBA there were no real estate CDOs. Why? Because it wasn't legal (commercial banking and investment banking were required to be separate). Glass-Steagall was passed to prevent exactly this kind of problem. The government passed it after learning a harsh lesson during the depression. Repealing it was one of the stupidest things the government ever did.
So, I just don't get how anyone can say this would have happened without GLBA. I'm not saying there could not have been some other kind of crisis (like a minor recession) but GLBA enabled a failure of world shaking, galactic proportions that simply would have not been possible without it because there would never have been real-estate CDOs.
Real estate CDOs and CDSs are the root causes of the financial crisis. You need to really research those instruments if you want to have understanding about what ultimately destroyed the world economy.
Ultimately, the banks were given too much freedom, greed took over (as it always has and always will), and the inevitable ensued.
Are agnostics skeptical of unicorns too?
Yes I'm sure that it's irrelevant what 1.5 Billion directly involved people think... your opinion must be the correct one. lol!
The tyrant will always find a pretext for his tyranny - Aesop
The fact is that, at least in EU the political behaviour became more idiotic day by day. There are generations of "leaders" totaly disconected from the daily reality. The production in every sector (materiels, electronics, mechanics etc). is going down as there is no way to compete with Chine. Is like a box match where a player has both hands tied, a chemical protectiv suit on it, some hevy load on his back and ruber boots and the other being lightweighted, with sharp weapons and not forced to respect any rule. I'm far from having comunist or socialist views but still the acumulated capital in any present economy is clearly not fair. Nevertheless is our daily reality. The problem is that companies or persons after they built their capital are moving it out leaving comunities and countries without the colateral benefits that otherwise were to compensate the present unfair profit distribution. At the end of day only one or several persons are in benefit ond entire communities are slowly going in trouble. Now we reach a point that China has so bic investing capital potential that they could support themselves and invest also in other places but stil the policy is to atract the foreign capital resources for a fast and short term profit. The target for them is not the capital anymore. They have enough. The target is the know-how and technology. Even if is a relatively slow process EU countries and posibly US will be drained of their Technology and know-how and the fact that will depend on chinese produts will be the less worry as the potential of technological development will be gone. Is really strange that politicians don't figure out that still living companies are moving their activities and capital towards China, the chinese capital are slowly buying out the ones that gradually became weakened in their country of origin. And you know what? The ones that are investing in China are actualy not owning anything as acc. To Chinese law foreigners are not allowed to have more than 49% of any business or other kind of property. So in the end slowly but steady China will win. We can continue our confortably sleep for a while then .....
Idiocratic journalists don't even ask the first order correcting question let alone the second. The first is, how much is their spending per capita compared to ours (duh, about a factor of 4 or 5 there), and second, how much is their spending per engineer/scientist (or whatever subgroup that actually needs that spending). Again, duh, about a factor of 3.5-4? Of course, we ARE producing the worlds most educated baristas, busquers and bloggers.
"There is no god but allah" - well, they got it half right.
Yes I'm sure that it's irrelevant what 1.5 Billion directly involved people think...
You can probably dig up dozens of examples in the present day alone where large numbers of citizens of one country think they should be able to order around the citizens of another country because of some asinine historical claim. The Chinese have lots of strange ideas like this; so do the Russians. And tens of millions of Americans thought (and probably still do) that Iraq was involved in 9/11. But wishing something, however passionately, does not automatically make it true. Until at least 1980, mainland China's economic policies had nothing to do with the rapid growth and wealth of Taiwan in the late 20th century (well, except to the extent that Maoist incompetence meant one fewer competitor), and for the time being, the Taiwanese continue to make their own destiny (except for whatever effects PRC threats have) . No amount of fictitious posturing on either side changes the fact that Taiwan has been de facto independent for more than 60 years.