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Business Is Booming

prospect.org

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Re: Business Is Booming

#31

Post by jdthomas »

zdw wrote: post #2

Fundamentally, the businesses (outside of technology focused firms) are nothing more than middlemen that add little value. I'm waiting for Foxconn or similar to start making their own commodity items and selling them directly - you can, for example, already buy SFF computers with the Foxconn label on them. It's just a matter of time for the profit engines that US corporations have created to be cloned and have the en…

Foxconn (and similar) do design a lot of products already, they just are acting as an ODM and not slapping their own name on them. I suspect, though, they are happy with this arrangement as it allows them to make many more products in any segment than a single brand would get away with.

Re: Business Is Booming

#32

Post by SamReidHughes »

nickpinkston wrote: post #9
yummyfajitas wrote: post #4

The author of this article has internalized some Keynesian assumptions so deeply that he doesn't realize the story he is writing directly falsifies one of them. A major assumption of Keynesian economics is that employment scales with production. Thus, if you stimulate aggregate demand, you will increase production, and thereby increase employment. This hasn't happened - aggregate demand and production have recovered,…

Well, yes and no on the relevance of Keynesian / neo-K policy. It's true that the current pot-hole filling projects are just ways for congressmen to get money for their district while claiming they're stimulating the economy. However, there are certainly projects out there with high multiplier affects. For instance, in PA the "Ben Franklin Partnership", who invest in early stage startups, claims a 5x multiplier of ec…

> However, there are certainly projects out there with high multiplier affects. For instance, in PA the "Ben Franklin Partnership", who invest in early stage startups, claims a 5x multiplier of economic value over its funding. This is the type of infrastructure spending I could get behind.

This is one of those cases where people like to take credit for economic multiplication that would have happened anyway (the biggest culprit of this is NASA). It doesn't take a government project to fund early stage startups. How many would have been successful anyway? How many were not successful, because they stayed in Pennsylvania, instead of moving elsewhere?

Re: Business Is Booming

#33

Post by whatusername »

ido wrote: post #14
muhfuhkuh wrote: post #10

Earlier quoted context omitted.

"The fact is, our economy is a lot more complicated than it used to be." Or, our economy is actually just not the top of the heap anymore, and probably never will be unless Asia suddenly slides off and sinks into the Pacific. If it weren't for anomalously successful companies like Apple or Wal-Mart, multi-nationals will eventual write-down the US market as dying and move everything overseas. If KFC can make more mone…

unless we just open the immigration floodgates (even then, that adds 100 million TOTAL Mexicans, which is a drop in the bucket in comparison). Why do you assume immigration would be restricted to Mexicans?

A car from tijuana is much cheaper than a plane from Manilla.

Re: Business Is Booming

#34

Post by nickpinkston »

SamReidHughes wrote: post #32
nickpinkston wrote: post #9

Earlier quoted context omitted.

Well, yes and no on the relevance of Keynesian / neo-K policy. It's true that the current pot-hole filling projects are just ways for congressmen to get money for their district while claiming they're stimulating the economy. However, there are certainly projects out there with high multiplier affects. For instance, in PA the "Ben Franklin Partnership", who invest in early stage startups, claims a 5x multiplier of ec…

> However, there are certainly projects out there with high multiplier affects. For instance, in PA the "Ben Franklin Partnership", who invest in early stage startups, claims a 5x multiplier of economic value over its funding. This is the type of infrastructure spending I could get behind. This is one of those cases where people like to take credit for economic multiplication that would have happened anyway (the bigg…

A very valid point! No one can deny that all organizations can claim things like this. There are good and bad parts of them, such as everything in Pittsburgh looking for their seal of approval first - which could lead to a herd mentality for or against a company.

However - I personally know several companies that wouldn't have started sans their investment and efforts. There is a certain "activation energy" with companies that orgs like YC and Ben Franklin (Innovation Works / AlphaLab locally) provide for. This was true for my company.

The "say in PA" part of the program I agree is a bad thing. They should force PA to work to retain companies - not using golden handcuffs... However, all in all, if I was going to spend tax money - I'd rather put it there than into potholes.

Re: Business Is Booming

#35

Post by obxerve »

thisisananth wrote: post #28

The article talks that Germany is able to export even after giving full wages in the workers. How is it that their products are competitive for exports even after paying good salaries compared to China or India?

Different product class and/or different product altogether. Think BMW or Merc and many other good quality brands that are well marketed. Different buyers. And yes there are a lot of rich buyers outside US.

Re: Business Is Booming

#36

Post by pessimizer »

yummyfajitas wrote: post #22
pessimizer wrote: post #19

Earlier quoted context omitted.

What evidence do you have that demand has recovered?

Production has recovered, as have profits. Goods are being produced, services being performed, and consumers are buying. See my response to davidmathers for links to specific timeseries.

The way I read those statistics makes me think that we have the same GDP as we would have expected to have reached by the beginning of 2009, except with 2 years worth of population increase, productivity gains, and inflation unaccounted for. The Industrial Production Index chart seems to place us somewhere around the year 2000.
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