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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: i-node who wrote (927610)	3/25/2016 8:28:30 AM
From: combjelly	Read Replies (1) \| Respond to of 1575189

Bullshit, i-node. Economics isn't driven by magic. If you have production, you need consumption. Ask a buggy whip manufacturer. If you produce a product, you need to have a market. If you don't, your production is worthless. Hard to build an economy on that, you know? All mature economies are consumer-driven. Growing economies switch over to that sooner or later. Like Japan did. Or South Korea. Like China is doing. The reason should be obvious. Sooner or later your exports saturate its markets. One of the easiest ways to soak up production is to increase the standard of living in the country and spur domestic consumption. At some point, domestic consumption exceeds your exports and, voila!, you have a consumer-driven economy. But cutting wages and income will eventually lead to what we've had under Obama -- stagnation of household incomes. Thank you Captain Obvious. Your problem is you seem to believe that the solution is... To cut wages and income even more. I guess this makes sense if you believe that the economy is based on unicorns and fairy dust. But it isn't. Unless you somehow greatly stimulate economic growth in 3rd world countries to consume your production, this is a model for a declining economy, not a growing one. When the supply of labor increases for a given level of demand (i.e., when real unemployment is high) the price paid for labor will go down. When substitution (by automation) is cheap, the price paid for labor will go down even more. Is this complicated? It isn't complicated. And if you have any idea how an economy works, this is a recipe for disaster if it isn't compensated for. Here is the half of the equation you ignore. As wages go down, the demand for products decline. If you cannot afford the products, you can't buy them. So as the producer has trouble finding markets, the price they can command falls. They can try to export their excess production, but so is everybody else. Now in growing economies, their costs of production is usually going to be lower because their labor costs are lower. Granted, their quality is often lower because their workers are usually less well trained, but better quality cannot command a higher price if wages are low. So sooner or later the original producer has to cut prices to compete in an export market. So it becomes a race to the bottom, dragging quality and the standard of living in the once mature economy down. Which means a shrinking pie for everyone. As to the rest of your post, total nonsense. It ignores the way real economies work. Increasing production with out growing the markets means that the price of your products is going to go down. Supply side economics only works when demand is exceeding supply. This should be obvious to even the least educated ones among us. Unless, of course, you have unicorns and fairy dust...