Do you think there could be a second Great Depression?

[William Stratford]

The EU (from my perspective) has actually done it's share to prevent the shipping of jobs elsewhere and is pretty protectionist for the countries that belong.

That must be why Britain's manufacturing base has been decimated compared to what it was 50 years ago...

We used to be famous for the products we made, but these days try finding clothes or electronics that are not made in china, or cars that are not made by companies owned by the far east (thus syphoning all the money spent on their cars out of the country).

many of the countries in the EU are small with small populations. Banding together makes their market bigger and allows them to pool resources. I don't think a small country can compete on it's own against large countries like China, who have huge populations, no labor regulation, and are dictatorships.

Indeed, but I do not want them to. I would rather my country as much as it can provide for itself, rather than engage in the self-destructive insanity of farming out all of the real jobs to asia whilst we get left with call centers and telephone sanitizers. We have become far too dependent upon international trade, to the point that weaker countries or greedy banks can wreck economies thousands of miles away.

 

[sheeplady]

That must be why Britain's manufacturing base has been decimated compared to what it was 50 years ago...

In Britian, is that something that started post-EU?

By the early 80s in the U.S. (if not the 70s) our manufacturing had moved overseas. It's been a slow trickle out ever since.

 

[William Stratford]

In Britian, is that something that started post-EU?

It had been diminishing for a while, but until the EEC we still had the quite significant coal, steel, fishing, electronics and car manufacturing. After the EEC (the precursor/trojan-horse to the EU) in the early 70s, all of those industries rapidly ceased to exist (although the idiotic behaviour of unions and the pro-globalist behaviour of govts were party to blame for that loss as well). Meanwhile, we lost our old pre-decimal currency and started on the slippery slope of losing our pre-decimal weights and measures as well.

The EU has been a slow-kill on British culture.

 

[Flicka]

Actually, Britain's coal and steel based economy has been in steady decline ever since WWI.

Either way, the economy is global nowadays, whether we like it or not. No nation is an island anymore, not even the ones that are actual islands. I think the European countries are better off working together, but then I come from a very small (but finacially extremely stable) country. The cultural threat isn't the EU, IMO, it's that people prefer cheap mass produced trash to quality. It's evident outside of Europe too - in both Asia and America.

 

[William Stratford]

Actually, Britain's coal and steel based economy has been in steady decline ever since WWI.

In no small part due to the same process of globalisation that the EU is part of. But it was the EEC that finished us off.

Either way, the economy is global nowadays, whether we like it or not. No nation is an island anymore, not even the ones that are actual islands.

We are what we make ourselves - nothing in this is fore-ordained, no matter how much the pro-EU people would wish us to believe. If countries wish to form an EU, so be it, but I do wish they would stop telling us that we too should embrace the EU.

http://wavcentral.com/sounds/movies/last_mohicans/lmscalp.mp3

I think the European countries are better off working together, but then I come from a very small (but finacially extremely stable) country. The cultural threat isn't the EU, IMO, it's that people prefer cheap mass produced trash to quality. It's evident outside of Europe too - in both Asia and America.

I disagree - but then I come from one that is being eroded by the EEC/EU.

 

[Flicka]

Not many historians share your view on the causes for Britain's poor economic development, but I don't think that emprical data is going to sway you so I won't burden this thread with it. We're going to have to agree to disagree.

Anyway, Sweden is not heading into a depression, EU or no EU, so my answer to the thread's question is: no, not here, not now.

 

[dhermann1]

Customs union is one thing, it's the single currency that has been the disaster for Europe.

 

[Undertow]

I'm personally in favor of the EU - I think it's an excellent idea. That doesn't mean it's working excellently right now, and I think there's a long road ahead for it to function correctly, but everyone must stumble along the way.

Regarding "money sent overseas", this is a "Broken Window" fallacy. If I were to go to Acme Misc. Shop and throw a brick through the window, and cause the window to shatter everywhere, the store owner would come to work the next day, slap his head and say, "I need a new window!" He would call up Zenith Glass company for a new window, and he would likely call Lorimor Security for new surveillance machines. Think of the money being made here, and imagine how it's helping the economy! We have two companies who can receive money for goods, hire more workers, pay bigger salaries, be more competetive, etc.

Ah, such is the fallacy. Obviously, we can't go around throwing bricks at windows because eventually store owners would go broke replacing them. But more importantly, all you're seeing is a shuffle of money - the owner of Acme could have spent that money on hiring more people, innovating better Misc. products, holding better sales. Instead, Acme has to spend the money replacing a window.

Just because money goes to China doesn't mean the money is lost. It's not as if China is a yawning abyss for money. When money goes to China, it comes back to England (or the US, or New Zealand, etc) in the form of Chinese imports. Chinese people are buying things from their own country, and their buying BMW's from Germany or Ford's from the US; they're buying wool from mills in England, or completed suits from Italy. It's a flush. [huh]

Certainly, I think consumers should vote with their dollar and stick to their local producers, but that's based on my own principles, not on any economic model.

 

[William Stratford]

Regarding "money sent overseas", this is a "Broken Window" fallacy.

Not at all. We have seen manufacturing industry, by and large, leave these shores and head for the far east. The result is that the jobs also have left with this industry AND in order for us to buy these goods, money leaves this country and goes into the local economies of the far east.

Just because money goes to China doesn't mean the money is lost. It's not as if China is a yawning abyss for money. When money goes to China, it comes back to England (or the US, or New Zealand, etc) in the form of Chinese imports. Chinese people are buying things from their own country, and their buying BMW's from Germany or Ford's from the US; they're buying wool from mills in England, or completed suits from Italy. It's a flush. [huh]

Except that when industry is located in China, there is little left here (relatively speaking) for China to import from us. Much of what we do export is made by foreign-owned business who also then suck money out of the country as well.

 

[Undertow]

Not at all. We have seen manufacturing industry, by and large, leave these shores and head for the far east...

It brings us to another similar fallacy, the Luddites: If we create a machine that makes underwear, then all of the workers who handstitch underwear will be out of business. So if Acme Underwear Inc. employs 300 underwear stitchers and they purchase 3 underwear machines which will do all the work just as fast, then they must lay-off those 300 workers. And where are we? 300 more unemployed.

The problem with that fallacy is similar to the Broken Window one - it's just a shuffling. Certainly, the older workers may be out of work for the rest of their lives if they can't find training in something else. However, most workers will necessarily find training in another field and produce another garment, widget, cog, etc. At the least, we'll need new workers to work on the machines when they break down.

Same can be applied for the China situation; i.e. the Chinese may be taking our manufacturing, so work will shift elsewhere. It may be that Germans can't continue making BMW's, so instead they manufacture golf carts for Chinese golf resorts. Or maybe the UK falls behind Chinese wool production - so instead they produce better combed cotton. Eventually China will need to spend their new money on something from overseas, and it's up to our countries to present a competetive alternative.

Moreover, we all know Chinese manufacturer right now, as it stands, is typically Quantity > Quality - so where are the European and US competitors with Quantity < Quality products? Allen Edmonds is just one example; they're a US company whose produce China eagerly gobbles. Economics are like short-term geological movements - they take time and are best seen in hindsight.

 

[William Stratford]

It brings us to another similar fallacy, the Luddites: If we create a machine that makes underwear, then all of the workers who handstitch underwear will be out of business. So if Acme Underwear Inc. employs 300 underwear stitchers and they purchase 3 underwear machines which will do all the work just as fast, then they must lay-off those 300 workers. And where are we? 300 more unemployed.

The problem with that fallacy is similar to the Broken Window one - it's just a shuffling. Certainly, the older workers may be out of work for the rest of their lives if they can't find training in something else. However, most workers will necessarily find training in another field and produce another garment, widget, cog, etc. At the least, we'll need new workers to work on the machines when they break down.

I am not speaking of falacies. I am speaking of hard economic and social realities - Britain has lost much of its manufacturing base and now imports what we used to make because the far east can make it cheaper. And as jobs disappear overseas, "cheaper" becomes ever more the dominant factor. People are not buying quality; they are buying cheap with built-in obsolesence. This is why the UK government is seeking to switch our economy to a primarily tertiary/service sector, because we simply cannot compete with China et al in most manufacturing.

Of course, the problem with service sector is that it is utter dependent upon others. A nation focused on primary sector (mining, forestry, farming, fishing) can meet its own basic needs. One which then creates a strong secondary sector (manufacturing) meets its own more advanced needs. BUt one focused on tertiary sector can neither feed itself nor provide the goods it needs - it becomes a servant nation to an offshore power upon whom it is now utterly dependent....and powerless, as, if the foreign country which supplies its food and goods decides to cast it adrift, the tertiary sector dominated nation has no economic power as a comeback.

Essentially, we are being turned into a "B-Ark" nation, and sold down the river to it by a bunch of globalist finance class types who have zero loyalty to our customs, traditions and the people who live here.

 

[dhermann1]

Something to remember, there have been SEVERAL great depressions. The decade of the 1890's was one long depressed period. There was the Panic of '73, in 1873, which was a severe, if not terribly long lasting depression. And in 1837 there was a very severe economic downturn. Steven Foster's song, "Hard Times Come Again No More evokes the desperation of the time.

 

[HoosierDaddy]

Well said William.
As usual.

HD

 

[Undertow]

People are not buying quality; they are buying cheap with built-in obsolesence...

This is true, yet this is not a hard-fact. This could change if a population were so inclined. Unfortunately, the West is not currently at that point in its decision making.

...Of course, the problem with service sector is that it is utter dependent upon others...it becomes a servant nation to an offshore power upon whom it is now utterly dependent....and powerless, as, if the foreign country which supplies its food and goods decides to cast it adrift, the tertiary sector dominated nation has no economic power as a comeback.

True again. If, for instance, the whole of England decides it's not making enough money selling Widgets, and instead decides to adjudicate insurance claims, it takes itself from the tangible and thrusts itself into the intangible. When no product is created, it's much more difficult to place value on time; especially when most people can be trained all over the world to do any given job.

Essentially, we are being...sold down the river to it by a bunch of globalist finance class types who have zero loyalty to our customs, traditions and the people who live here.

Quite right. If the only product England, or the US, or Germany produces is intangible, then we may as well toss our hands up in the air and hope someone gives us a job sweeping streets because there is no real value that can be placed on time - it's a subjective measure.

I don't wholly disagree with you. Our countries are facing an economic threat that is at least three-fold: 1. The way we've done things is unsustainable 2. Money is shifting away from the powerful Western countries due to shortsighted economic policies 3. The Western world is hitting a solid brick wall as a result creating panic, confusion and poverty.

If economics were as simple as getting rid of capitalism (efficient free trade at low cost) for socialism (state regulated trade to protect national interests), we'd all be tipping back champagne right now...along with China.

Just remember that a company who sends workers overseas merely for the sake of cutting costs, is not a capitalist company. Capitalism requires a company to "live within its means", to produce efficiently while also looking forward to the long term. If Acme sends all of it's manufacturing to China simply to cut costs, it's only kicking the can down the road for another day that it will eventually have to deal with its real problems.

(and in case anyone is wondering, I don't feel America, or any of the West, is adhering to a truly "capitalist" system - it's far more "corporatism" than anything.)

 

[PrettySquareGal]

William Stratford: People are not buying quality; they are buying cheap with built-in obsolesence...

This is true, yet this is not a hard-fact. This could change if a population were so inclined. Unfortunately, the West is not currently at that point in its decision making.

I don't think there's much decision-making involved in the quality of what we buy because there aren't many options.

Today's "Cheap" (in quality and price) was yesterday's "Affordable."

Even the high-end items aren't what they used to be. For example, Coach handbags are now made in China.

 

[LizzieMaine]

We have sown the wind of Friedmanism, and now we're reaping the whirlwind.

 

[sheeplady]

I don't think there's much decision-making involved in the quality of what we buy because there aren't many options.

Today's "Cheap" (in quality and price) was yesterday's "Affordable."

Even the high-end items aren't what they used to be. For example, Coach handbags are now made in China.

Exactly. Consumers don't always have a choice, because our choices have been removed. I think for a while consumers did have some choices, but that time has passed. I think many people in developed countries traded on the fact that they/we were somehow innately superior and that we would always have an edge rather than investing in our economic future. So part of the blame goes on the political decision makers as well as consumers.

While I don't agree by far with what the Chinese government is doing to its people and workers, I don't blame them for wanting a piece of the economic pie as a country. I don't see China as a problem so much as the political motivations, the corporate motivations, consumer motivations, and the lack of regard for others basic human rights within developing nations. Blaming China for our economic woes is a bit like complaining that you dropped a dollar bill on the ground and was upset somebody found it and spent it later that day. If China didn't do it, some other country would.

 

[William Stratford]

I don't see China as a problem so much as the political motivations, the corporate motivations, consumer motivations, and the lack of regard for others basic human rights within developing nations. Blaming China for our economic woes is a bit like complaining that you dropped a dollar bill on the ground and was upset somebody found it and spent it later that day. If China didn't do it, some other country would.

Just to clarify, I also do not see China as the problem. Any problem rests with us and our governments for embracing globalism - in no small part by actually buying mass-produced goods produced overseas (most especially over the last 50 years when we still had a choice to buy local).

If economics were as simple as getting rid of capitalism (efficient free trade at low cost) for socialism (state regulated trade to protect national interests), we'd all be tipping back champagne right now...along with China.

Neither offer a solution, but then my preference is for noblesse oblige over either the free market or the state regulation.

 

[Undertow]

Just to clarify, I also do not see China as the problem. Any problem rests with us and our governments for embracing globalism - in no small part by actually buying mass-produced goods produced overseas (most especially over the last 50 years when we still had a choice to buy local).

Ah, I see! I think I must have misunderstood your previous posts. I think we're right in line with one another. There are number of Loungers with this mindset. Who knows, maybe we'll make a change in the world?

 

[Undertow]

I don't think there's much decision-making involved in the quality of what we buy because there aren't many options.
Today's "Cheap" (in quality and price) was yesterday's "Affordable."
Even the high-end items aren't what they used to be. For example, Coach handbags are now made in China.

I don't entirely disagree here. What was once affordable and of high value to the average American 50 years ago is now priced just out of reach.

However, you and Sheeplady argue that there are no choices as a result and thus we as consumers are bound to these purchases. Your example of the Coach purses is a good example of what's happened to "high-end" goods. Look at Florsheim shoes - they once held a standard in men's wear. You could buy a pair of those shoes and keep them the rest of your life. Some of us guys on the lounge search these shoes out still - the old ones - hoping to land a less-worn pair. Today, I wouldn't buy Florsheims out of a shopping mall for 75% off, and I hesitate when their "high-end" shoes are on clearance online.

So yes, choices have been reduced but they have not been eliminated! That's of the utmost importance. Imagine what would happen if even 30% of American households, in unison, purchased durable goods no matter the cost. Say 30% of the entire male population purchased Red Wing work boots and no other boots - what do you think the fellas in marketing would do?

Or what would happen if there was a run on bolts of patterned wool with a correlated decrease in female day wear?

Too many people are making too much money on our laziness. That could be remedied right quick with a little effort. [huh]