I'm interested in trying to figure out how jobs are created.  I assume that, for jobs to exist, there has to be work that needs to be done, and an entity with the means to create jobs and a desire to see the work done for the jobs to be created.

In reply to Sciencemile (msg #11):

To put it simply, to create jobs, industry, not government, must grow and people must invest.  Industry isn't growing and people are not investing.

That raises more questions than it answers.

What is industry?  What is government?  What is the difference between these entities?

What does it mean for Industry to "grow", and how is it accomplished? (also, same question, but concerning Government)

With what are people supposed to invest?  How do they get it?  What are they supposed to be investing it in?  What qualifies as investing?

In reply to Sciencemile (msg #13):


Like to help but I don't have the time to define every detail.  I thought you just wanted to know how jobs are created, not Econ 101.

Have a good day.  I'm out yo!
This message was last edited by the GM at 11:40, Sat 28 May 2011.

Moderator post:

Tlaloc, please don't directly insult the knowledge of other users on this forum. It's suffice for you to say 'that is a very complex topic I don't have time to go into' without accusing him of abject ignorance.

I would appreciate your editing the post to make it a touch less confrontational.

Thank you.

To answer the question ... A big part of it is what is coming in vs. going out of the economic ecosystem, and how fast that money is moving WITHIN that ecosystem.

To illustrate the first, imagine you have an insulated community with 10 people. You start paying your 5 employees 50% more. They now have more money to spend on things like better food, chairs, cars and so on (so they do). That gives more money to the farmers and chair makers, who then have more money to spend on whatever you're selling. The downside is that it creates inflation. While the chair maker can hire more people to keep up with demand, the farmer only has enough acres and cows to grow 9 steaks a month (from the steak tree, you know). So the 10 citizens who want steak are caught in a bidding war, which drives up price, which means that if you're the 1 guy who couldn't afford steaks before, even doubling your salary, you probably still can't afford steaks.

I don't know the details on how increasing the money flow filters into increased wealth vs. increased inflation. A big part of it is capped by production and consumption. If everyone already has 20 chairs, paying everyone more won't help them buy more chairs. Similarly, if you're capped at 9 steaks, paying everyone more won't help the poor get more steak. However, at least according to Keynes, in situations like the Great Depression, this sort of thing does ultimately kick start a strong cycle of work, puts trust back in the system, and gets that spending going.

The second party is the money going in and out of the ecosystem. Imagine our little community likes Japanese stuff, so everyone has a Japanese car, television, chair, rice cooker and so on. If I increase the pay to my employees, they don't spend their money on local chairs and steaks, they send it to Japan to buy THEIR chairs and steaks. And if my community isn't competitive, for instance it costs us $20 to make a chair and it costs $10 to make one in Japan, no one is buying our chairs so no money is coming in. Money drains out of the community and eventually everyone is poor.

That's the big problem with the US. You can't hire manufacturing jobs here - people who work at plants still want a 40 hour work week, health care, a house, a car, a television and steak once every two weeks. That's expensive. A worker in China wants not to be beaten. If our workers are not willing to reduce their salaries to be competitive with the Chinese, all else being equal, our cars will not sell outside of the US, they won't be able to make any profit, and ultimately can't stay in business.

That's also the problem with government programs to make jobs. Sure, you can pay someone $20 to dig a hole, but it's not bringing any money into the community. Most of the solutions as of late have been focused on the first solution (make money move faster) and not on the second (make money move faster - into the US). To a degree this is justified - people don't spend because they're afraid, and so that's depressing the economy. But over the long haul, it's not the big issue.

So, in theory, industry is a business that produces a good or service with the purpose of making profit.
Government is an organization with the ability and responsibility of regulating the country, and usually makes money from taxing industry and individuals, and does not create a profit.
Industry grows based on a number of metrics, including profit, production and number of employees and assets.
Government grows based on its spending and number of employees and assets.
Investing means taking any resources (normally money) and making it unavailable for use, with the intention and hope that it will become available for use again, with a positive interest.

In reply to Tlaloc (msg #14):

It's necessary to define your terms if you have any intent of trying to come to a conclusion of any lucidity.

I took Micro and Macroeconomics in College, but that's no guarantee that I have any idea what you're talking about, or any guarantee that you're meaning what I'm thinking of when you say that.

Because if I have to rely on my understanding of the terms, then you're incorrect when you say growing Government can't create jobs.  See the problem now?
This message was last edited by the GM at 20:40, Fri 27 May 2011.

In reply to Sciencemile (msg #17):

Whatever.  Look over some of your questions and ask yourself if it is reasonable to ask for a definition of everything.  My days in debate are over and I don't feel like debating the definitions of everything that is generally well known.

As for this:



That was my mistake.  Government CAN create jobs.  What I meant was that government can't create wealth.  It only redistributes the wealth that already exists.

Also, as the moderator points out.  My last post can be construed as insulting your intelligence.  It is not.  I was just surprised that I am tasked with supplying a definition of every single term, like "government" and "industry".

I have no problem with correcting/clarifying what I have said, as shown above, but, like I said, I have not the time for long-winded explanations of the world of economics.

So I apologize for any miscommunication and wish you all an excellent weekend.

Sure the government can create wealth. The national power grid, the satelite communications industry which arose from NASA, the netional highway system which drives our industry all contribute to the wealth of the nation.
Saying governemnt can't create wealth because it relied on taxes is like saying business can't create wealth because it relies on paying customers.
What cannot create wealth is beuracracy, and 'private' companies being paid by teh government just add levels of beuracracy and cost to create wealth you have to be doing something productive. To create wealth *efficiently* requires a free market incentive, but when businesses make their money through financial games and conning customers while being protected by those who have decided that 'industry' must be protected even when it isn't really industry then what you have is a criminal class masquerading as business, and that is a sure way to destroy the economy.

And FYI, I do believe that the economy is recovering, it is simply a long way from recovered. I actually hope we don't "recover" to the point we were at before teh collapse, where essentially teh whole economy was a bubble, but instead find a way to have moderate and sustainable growth.
Our economy is recovering from the excessive of the Bush administration the way an addict recovers from addiction, which may not always seem to the addict like it is better than continuing to use.

In reply to silveroak (msg #20):

Oh please.  Bush didn't create the housing bubble.  Clinton authorized the securitization of CRA loans containing subprime mortgages.  The first public securitization of CRA loans started in 1997.  Bush wanted to reign that in and nip it in the bud but Frank, Dodd and the other Democrats screamed that he didn't want black people to own homes.

As for government creating wealth: the power grids create wealth because power companies create those and are private.  Heavily regulated but still private.

Taxes and Customers: You seem to miss the fact that you can't choose which government to pay taxes to.  Therefore the government can, and consistently does, supply inferior products and services with no recourse for the taxpayer to penalize the government.  Next tax season, tell your accountant you wish to give your taxes, if you pay them, to a competitor.  And there lies the difference and that difference is the key.

It wasn't private enterprise that created this crisis.  It was government intervention in private enterprise that created it.

Regardless as to the causes, presidents benefit from bubbles. If I'm president, I want to ride the bubble through my term (for it to pop in my successor's term). Rich people are happy people and more likely to keep you reinvested.

Countries naturally rise through 'levels' of produced wealth, from resource gathering, production, services and design. I'm wondering if the US is going to be making most of its wealth from services and design, or from con games. I wouldn't mind considering capital punishment for people who cheat old ladies out of their retirement money and leave them to starve on the street.

A service economy has its down falls.  What money do they bring in, when they are buying all their goods from out of their local area?  If they are not producing, doesn't that just lead to the Example Katisara had given?

Also some one had mentioned that Americans are not willing to work for less.  I agree, I'm not about to lower my standard of living just so that some other country can make the wealth off their slave labor citizens.  Should any 1st world nation, lower their standards to become on par with the rest of the 3rd world civilizations all for the sake of being fair?

Yes, service economy does 'bring in' money. Remember that time too is a resource. My wife is a wedding photographer and I can assure you, she produces plenty of value. However, service is oftentimes the first thing cut during lean times.

As for the latter ... in  economics, you're worth what you can convince people to pay. Sure, you don't have to lower your standards of living, but if you're going to keep those standards, you need to increase the value of what you're producing (or you will have no standard of living whatsoever). Adapt or die, as they say.

I'm not ignoring teh lack of competition in taxation, I ma pointing out that all economic relationships are interdependant. Governments don't create wealth through taxation, they build wealth by developing infrastructure. I cannot choose which government to pay taxes to, nor which (privately owned) utility to buy my electricty from. I cannot choose to drive on a competitors highyway system, or to benefit from an alternative police force's security.
The idea that government=bad and business=good is harmfull and false dichotemy. Sure the free market is better and more effecient that state run institutions, but as I mentioned above with utilities, being a corporation is not teh same thing as being a free market entity. If I set up a wind generator I am not free to sell the power it generates to anyone I please, because a private company owns and operates the transmision lines and becomes a monoply for power. Once you get into teh question of private monopoly versus government monopoly the benefit of teh market disappears and in some cases the government may be the better option, as their primary goal is to keep people happy (and get their people re-elected) where a for-profit company's motivation is to bleed all the profits out of people they can manage.
And again- this only aplies where the free market does not operate, namely under situations of natural monopolies.
And once again it comes to the point that government can create wealth, just not as effeciently as a free market. If we were to move 10% of the money currently spent on the military or on social programs into building our infrastructure the wealth of this country would skyrocket.

God forbid America stops fighting in a country we don't really need to be in, and should have never been in the first place.  We wouldn't bankrupt our selves otherwise.

Which one are you talking about?
Afghanistan we certainly did need to go in- not sure if tehre is still a reason to be tehre aside from ensuring a peacefull transition to local powers, though by now that should be fairly close to complete.
Iraq we did need to go in- in 1992. Unfortunately Bush Sr decided that we should stop at teh border and waste billions of dollars establishing a no fly zone. At that point it became necessary to finish the job in the early 200s to free up military resources for the real conflict in Afghanistan. However that turned out to be badly mishandled as the war in Iraq bogged down due to badly defined objectives.
Libya, we aren't technically in Libya, we're just lobbing bombs at teh side we don't like. It would probably be better if we did go in, provide some training and assistance to the side we support (though the CIA may already be doing this...) and get the conflict over with instead of dragging it out.

Afghanistan:
You are right, we did have a reason to be there.  We had to provide soldier support to guard the opium crops, even escort them to Pakistan and take the stuff to port.  We had Gem and gold mines we had to secure, we even had oil we needed to claim.  Also lets not forget the fact that locals liked communism so much that when you talk to them, they tell you they wish you were never there in the first place because they miss having a home and a car.  They are also mad at you because you gave them money and weapon to get rid of the Russians and then when they did, you cut off all funding and they decided into a lawless religions radical society.

Iraq:
Right, we were making plans in October to invade Iraq a month after 9/11.  But first we needed to get a good staging point set up, Afghanistan was a perfect place to support such an operation and since it had already started, why waist the opportunity.  What he was doing though was he had his own economy going and wasn't letting the IMF open a bank there.

Libya:
You do realize that the "rebels" are Al-Quadia right?  How is it we are fighting them in Afghanistan, but training them in Lybia?  Also Gidafi might be crazy, but his largest issue is he was using his oil money to improve his infrastructure, and was actually building a water connection for an under water aquifer which would make the country self reliant.  Why is it as soon as the rebels had a hold of their first city the IMF opened their first bank branch there, ever?  We have no business in any of these countries.

Afghanistan I am refering to 201 -2002 immediately after teh Taliban sent government trained Al-Quaedia terrorists to engage in an attack on US soil. I hope that qualifies as a just cause in your book.

Also Afghanistan makes a stupid lousy 'staging area' for invading Iraq since there is no common border between them

And no, the rebels are *not* LA-Queda. That is a Fox News rumor which ahs been thoroughly debunked.

I don't get my news from Fox, so if that was a rumor they were spreading, I wouldn't know.  I gave up on all main stream media a long time ago.

I believe that it wasn't Al quadia who attacked new york, I think it was our own us government and just used al-CIAda as a cover.  But that is just my own belief there.  A bunch of people living in caves could not have organized all the events that happened on that day.

Now as for Afghanistan being a poor place to use as a staging area.  Since I suspect you of being a CIA operative your self I can't get into to much details.  But I can tell you I spent my 6 years in the military, and only left service because of a injury.  I was an 88N which was, in the civilian world.  A Transportation Coordination and Management Specialist.  Just a long fancy name for a pencil pusher.  I was assigned to 1st TMCA  pronounced (tam-ka).  On Kleabor Kasern in Kaiserslautern (K-Town) Germany during 9/11 up till 2003.  While there I had a TS clearance and worked in the Vault, which was 21st Theater Support main operation center used for coordinating all logistics in and out of Europe and into the sand box.  This section was called TMCC or Theater Movement Command Center.

Any ways, Afghanistan made perfect seance as it was already being invaded to fight the terrorists.  We would ship every thing by boat to Pakistan, truck the stuff by Jingle trucks to Bagram Air Base in Afghanistan.  Then Send the stuff via C-17 to Iraq once we had Bagdad International Air Port under our control.  A C-17 can hold twice as much cargo then a C-130, but needs even less runway to do it with.  Pull up Google earth and look up Bagrum Afghanistan.  You will see the massive amount of space and yards dedicated to Conexes.  20 and 40 foot longs.  The 20's can easily hold a Humvee in them.

Me in Afghanistan
http://i41.photobucket.com/alb...ar-Koon/DCP_0674.jpg

Me with my MCT (Movement Control Team) Arm Band.
http://i41.photobucket.com/alb...-Koon/DCP_0548-1.jpg

One Container Yard
http://i41.photobucket.com/alb...ar-Koon/DCP_0489.jpg

Jingle Truck 1
http://i41.photobucket.com/alb...ar-Koon/DSCF0264.jpg

Jingle Truck 2
http://i41.photobucket.com/alb...ar-Koon/DCP_0693.jpg

Its not that hard the US the government just has to and have its citizens get used to a lower standard of living and less things they don't really need, downshifting to the new global economy.

Example factory workers will have to accept lower wages and benefits or not work but as I see it if they make $14 an hour for 30 hours a week with some benefits its decent money after taxes. A couple could earn just under $35,000 a year which is over the Federal poverty line for a family of four. One can live on that in most communties that would have these which are often suburban or smaller cities easily enough.

The nation though needs to focus on getting jobs here I have an idea require under national law at least half the products components be made IN the USA if the wholesale price to stores is over $10 a unit. Or the company faces a impact tax on the goods (making that high enough to make importing them not competative to a company making a item wholly in the USA). This tax paid by the buyer of the goods not the exporter so its not a tariff its a penalty on the buyer for not getting goods complying with the law.

The largest issue you have to keep in mind about trying to price things are subsidies.  Being experienced in teh field of Transportation for 10 years.  It is not cheap to transport things long distances at all.  Why is it a steal plant in Detroit couldn't sell steal to the auto factory on the other side of town?  Well Because the Auto Factory was buying its steal from Asia.  Wait a minute how is that cheaper?  Well their own government pays the company's transportation fees via subsidies.  Asians have a different Economic plan then Americans do.  They will sell their products dirt cheap, even if they are loosing money on it.  Once the competition goes belly up, then they raise the profit margin.  They make up for this for charging more with some other kind of product they have that is in demand.

Why ship to Afghanistan when we have already establishd a military presence in Saudia Arabia and Kuwait? Who do have borders in common with Iraq. It's not a matter of being in teh CIA, it's a matter of knowing geography.

Basically, this keeps people from investing their money into items that actually are worth something.

Seeing as it's partially related to the subject of metal training, I've always been curious about something. I've never been very strong at understanding economics (and, from the sound of things over the past few years, it doesn't seem like many are, including economists), but I know there's a lot of push in some crowds to made gold a primary investment, or the standard for our economy.

I just want to know why. Not just about the Gold standard, but why Gold period? What makes Gold valuable to society, aside what we artificially decide it's worth, seemingly on prestige and ascetics alone? You can't eat it, it doesn't improve one's quality of life in any direct manner, it's too soft a metal to be used for most constructive purposes, and one of it's useful qualities, it's high conductivity, is outdone by other, less rare metals. So, why exactly is it valuable? If the world really is going to ruin, why would I want it?