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Saito2

Spending habits possibly symptoms of a larger, looming problem?

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Here in the US a favorite topic is how millennials different interest and spending habits are gradually affecting certain industries. A big one is "millennials don't care about cars". Being a Corvette fanatic, the intro of both the older C7 and new C8 brought about styling that was intended not to soothe the typically older clientele but rather reach out and grab a newer younger audience. It didn't work for the C7 and I doubt it will for the C8. Then there's Harleys. Haley Davidson Motorcycles sales are hurting, again because those darn millenials aren't buying. Guess what else they aren't buying? Paper napkins. Now, I'm no fan of the stereotyped millennial, but is it possible these changes are not simply lack of interest but also lack of buying power? College brings with it crushing debt in the US nowadays and no longer is a guarantee of a good paying job. Perhaps are we seeing the first symptoms of the cost of living outstripping the purchasing power of the newer generations?       

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You always ask the darnedest thing, Saito!  I like how your gray matters work.  

Corvettes and Harleys are "recreational" in nature.  You don't buy 4 motorcycles for mom, dad + 2 kids.  When you already have a family car, you buy a Corvette or a Harley.  Recreational vehicles' boom started in the 60's.  When life was relatively equal.  Fast forward 70 years, not just millennials, but "middle income" families are cutting back on car purchases.  It was 6 million cars sold in 2017.  It's down to 5.3 million in 2018.  That's more than 10% down in 1 year.  I think it's more than millennials.   

How did the 60's boom happen?  Oddly, due to the collapse of world economy earlier.  15-20 years before the 60's, World War 2 ended in 1945.  There was no "normal economy" during the war.  What happened before the war?  1930's had the Great Depression, starting from 1929's market collapse.  Before the 1929 collapse, how was the wealth distribution?  It was as bad as it is now.  If you look at the past 10 years, the wealth distribution has been collapsing.  If we learn something from that history?  We might be heading for a possible disruption event, like a war (far fetched as that idea is).  

 

I'm not a doom and gloom guy, hopefully (pun intended).  But current distribution of wealth is a bit problematic.  

To prevent a collapse, I think we should encourage savings.  Spending-focused economy will last a few decades, but eventually it will come to a grinding halt.  As homelessness increases, we could be looking at the bottom of the barrel right now.  

Millennial use paper-towels instead of napkins because few dollars make a difference.  If it didn't, they'll keep buying napkins.  

The richest 3 people own more than 150 million Americans combined. (UK has 66 million people, Germany has 80 million, so 150 million Americans are more than UK and Germany combined. Yet, just 3 people have more money than 150 million people)  And the rumor has it that Amazon didn't pay any tax for 2018.  

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But that's just poorer half. 

Surely "average" is better?  Not much.  

90% of the people (that's 270 million Americans, including the poorest, median, and well-off) own just 21% of the wealth.  Top 1% own 40% of the wealth.  Look closely at the last 10 years. 

It looks like 2007 collapse made the rich even wealthier, and average folks poorer.  

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In the mean time, homelessness increases.  

Below is for New York City alone.  

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In Chicago, the data suggests that "economic reasons" cause 50% of the homelessness.  

This means that people at the low end just cannot afford to function in this society.  

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3 states and Washington DC already have about 1% homeless.  

This is not a good sign.  

How did Jeff Bezos become wealthy?  Because Amazon sells stuff.  Well, 1% of people are unable to buy anything from Amazon already.  

Economy does better when "everybody" spends.  Can Jeff Bezos buy 7 million cars a year?  He cannot.  But the population could; they have to.  In order for Jeff Bezos to be wealthy, he needs people buying stuff from Amazon.  Bill Gates needs people to have computers.  

The stock market is doing good now.  But 5.3 million car sales is lowest in 20 years, even including the 2007 collapse.  

This doesn't bode well for the "middle-income" families (who are 90% of the population).  And it doesn't bode well for the rich folks either.  If middle income families can't afford new cars and homeless increases, why is the stock market doing good? 

That means the stock market isn't based on bread, milk and other essentials.  It means rich folks are investing in rich folks.  Like pharmaceuticals for weight loss or Space-X, which isn't exactly "necessary" for middle income families.  If it's bread, milk and chicken, even if some uncertainty happens, people would still have to eat. No need to sell stocks.  But for Space X, Tesla, and weight loss drugs?  They'll sell stocks as soon as the market looks uncertain.  That means sudden collapse. 

Stocks do well, while car sales drops.  That's a separation between middle income families and the stock market.  That's like a headache before major flu symptom.  The car sales were over 7.5 million a year for 2013, 2014, and 2015.  Why a sudden drop to 5.3 million?  

I don't see how Jeff Bezo's money would trickle down to my bank account.  Before the 1929's crash, the wealthy were really wealthy.  This is why I think the stock market needs to be "chilled" a bit.  Raise the interest a bit.  Encourage savings in families as well as in companies, encourage job training, lower the tax on families, instead of making Amazon pay no tax.  Focus on the middle income families.  Strengthen the legs, so to speak.  

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If the new car sales figure dips below 3 million, what would happen to the GM or Ford stocks? 

Another bailout like the 2007 GM bailout?  

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Low spending power is why people are into tiny homes too.  

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69% of Americans have less than $1000 in the bank.  You can't buy a corvette with $1000.  

No savings is a problem.  If the economy depends on people spending every dollar they make, it's a risky economy.  When something happens, the whole country collapses.  

Average folks should spend less and save more.  Easier said that done because many don't make enough to save.  

This is what I meant by "bottom of the barrel."  We all need something in the barrel for rainy days.  When 69% of the people don't have $1000 in the bank, what would happen if there is a panic in the stock market?  Companies start to lay off, and suddenly everybody declares bankruptcy.  Banks start to close, stocks come down even more, etc, etc.  We've seen it happen in 2007.  

War or revolution tends to happen when the future is uncertain.  That's why humans never escaped wars.  

On the other hand, what would happen if everybody has $50,000 saved up?  Enough to live on for a year?  You lose a job, no big deal.  You can ride it out.  Germany did during the 2007-2009 because they saved 10% of their disposable income.  Even the companies were legally forced to have enough cash reserves.  And that paid off in hard times.  Everybody has enough money to buy bread and gasoline.  Economy still ticks on, instead of total collapse.  

Who on earth saves $50,000, you say?  

Japanese average household savings are said to be over 200,000 USD.  I'm sure many accumulated that from 30 years of working.  Even without any interest, $6000 savings a year could end with $180,000 in 30 years.  But the problem is, 69% of the US families don't even have $1000.  

But... our goddaughter pointed out that many cashiers in the supermarket we went to, had $1000 phones.  If they can afford those, they can save.  

That brings to another thing.  Cars used to be the status symbol.  For a while now, it's the phones.  But even the phone sales are slowing too. (I know I sound old, but they all look about the same)

So... I don't think it's just the millennials.  I think it's the shape of our economy.  It's becoming top-heavy, bottom-weak.  Without the legs to stand on, top will crumble when the middle income families go (that's 90% of us, who owns just 20% of the wealth).  Without strong legs (middle income families), recreational vehicle sales will stay low.  What would happen when 90% of us owns just 5% of the wealth, and 1% owns 50% of the wealth?  That's a powder keg waiting to explode.  

I'm not buying Corvette because I'm a millennial (I'm a gen-X).  But I should take my own advice and save for the future.  My wife wouldn't mind a little 50cc scooter, though. (only if it's vintage looking and "pretty" like below) 

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I just put in a coil pack in our 15 year old Subaru.  Last problem was power steering pump.  Hats off to TC members who suggested using a genuine pump.  The genuine pump is doing fine now.  With a new ignition system, maybe we can run it for 5 more years.  Every year we delay buying a new car, we save $5000.  That's enough for about 30-40 used Tamiyas in one year. (not that I need more) 

Millennials might not have the money.  Some statistics say millennial's savings rate is -1.8% (used to be 5% few years ago).  They are spending $102 dollars for every $100 they make.  Possibly due to low pay.  

If I want to prevent that from happening to me, I'll have to save money when I can.  So, unfortunately, no Harley or Corvette planned for me either.  We do use paper napkins, though. (My wife hates it when I strategically place food on my face)  

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Its funny you say about the lack of interest in vehicles with the millenials as both my son and daughter, 19 and 17 respectfully, have absolutely no interest in them. My son will avoid driving if he can and has no desire to own a car. Not that he needs to as he just uses mine. I blame technology for a lot of it ( hence Bill Gates comfortable position ) as they are only a click away now from seeing, 'playing' chatting and socialising with friends all online, heck even see any part of the world in the comfort of 'your' ( actually mine too ) own home. Where as in my youth as soon as I was able to ride a motorcycle at 16, even though it was a 50cc, the freedom was mind blowing and home just became somewhere to pick up some clean clothes once in a while because there was a whole wide world out there waiting to be discovered. So upgrading to bigger machines as time passed was inevitable to travel faster and further. 

The younger generation are a lot more environmentally friendly I think too. And lets face it the internal combustion engines days are probably numbered in that respect as well as citys are banning them slowly for electric alternatives. Even though the power still has to come from somewhere? 

Then there is the huge rise in electric power bills and other living costs that have swallowed a lot of what was disposable income.

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Great points. I feel the media is pinning a lot of the blame on millennials due to their perceived "different" spending habits. There's a bit of truth there, but like @Juggular, I feel the problem is bigger than that stretching into the shrinking middle class as a whole. I feel the media is just picking at the surface when the real problem goes much deeper. I'm a gen X so I'm supposedly on the sidelines, lol. There's rumors that Ford might not be around forever and that a GM/Ford merger is not completely unrealistic at this point. This instant gratification society brought on by technology seems to affect spending habits as well which hampers saving habits (if there's anything to be saved).  

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Darn Millennial reporting in ;) 

UK based though, and from my point of view I would not like to be a person of my age in the states at the moment! (not just because I'd be barely able to drink in bars!) 

The big and the bad are always going to be (and always have been) present, but it seems the frenzy cycle of extreme greed has reached fever pitch. Owning most of the money isn't enough when you've owned most of it for years, the only logical step is to want it all. Then presumably find a way to embezzle money that doesn't exist. 

We keep forcing kids to go through the education system which I think is very wrong. Its a way to start your adult life at a net loss. From what I understand in the US you need to have some higher education or finish high school to even get the most basic of jobs or the dreaded unpaid internship. We're seeing the same here. When I tried to leave school they raised the leaving age to 17 which meant I had an extra year of constant trouble for playing truant to go to work. My wife and I (she's 6 years older) both essentially worked a minimum of 40 hours a week since we were 16, she was a manager in retail from 20 and I am an overpaid mechanical engineer (roughly double a minimum wage salary). We get by just fine now as we have no real money but no debt. Scrabbling to get enough for a deposit down for a house so we can stop playing the expensive rent game. If we had student loans/debt and I had a 'normal' job for a 22 year old I have no idea how we'd cope. We'd have to cut out avocado toast all together and that's unthinkable. Now that is being glib but its true. From what I can work out, people aren't really treated as adults until their early 20's in the US, then that's a very short period to get a high salary stable job, mortgage a house and buy that new motorbike on finance. 

For us, the one car we have is a tool, not a comfort. Its what my wife needs to get to work so she can get paid. It hasn't got time to be fun or that enjoyable. It has to be hammered back into shape, oiled and patched up and ready for service. It might be a 2009 fabia with 153k miles on it but its more like a soviet tank at this point.  When it eventually dies from being run into the ground (any day now because its about to eat its own clutch) anything useful will be stripped and harvested and sold on then another sub £500 beater will get acquired to be patched until death again. 

I am completely behind somebody not wanting to own a car for the simple reason of insurance! The thousands of pound you'll want to shell out for a mighty 1.2l (plus paying for the actual car and the upkeep, which even if you do the work yourself and use scrappy parts isn't cheap) 

General cost of living has risen, which is fine and expected but the salaries and the opportunities haven't expanded at the same rate.  Even if you want to play the money management card, when you've got nothing its hard to invest or save it. We looked at putting the bulk of our savings (+ safety net) into the highest interest savings account we could get, locked away for 3 years. We'd have made about £150 in interest after that point. We decided to try it anyway, the bank lost all of our savings as it took it out of one account, nailed it to a Frisbee and flung it over a rainbow. After a slight blistering complaint they replaced the funds and gave us a £100 credit as a sorry. Basically two years of 'investment' earnings. We didn't bother after that. 

It's all a bit of a weird culture and you have to pick out the bits that *everyone* goes through and what could be a legitimate problem. As the world changes, how you deal with it has to change too no matter how terrifying that is. I'm going to moan and grumble about the world not being how I'd like it to be and lament how easy it would be 30 years ago. I'd most likely be struggling with the same basic stuff just with better music on the radio. 

TL;DR
with no debt and two working adults we still can't buy the cool car or motorbike. We care about cars but unfortunately we care more about paying the bills and saving for a deposit on a house. And the occasional bit of tamiya for me and lego for her of course. 

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The "premium-ization" of everything doesn't help, either. It used to be that you could own something basic but sturdy, and take pride in it. You still can, to some degree, but no one seems willing to go that route. If you need a car, you can, for example, buy a Toyota, pay it off in five years, and then drive it for "free" for another 5-10 years (or as long as you want). But for the same monthly payment, you can also lease a Lexus for three years and then be left with nothing at the end of the lease. But too many people choose the Lexus option, just to have the perceived prestige.

And even if you do choose the Toyota option, the car has a lot of silly junk on it you don't need, just to make it seem fancy. No one really needs dual-zone climate controls or Bluetooth integration or power folding rear seats, but they get them anyway, because some combination of marketing forces has convinced them that they are entitled to have them, and that if they don't, they're somehow "lesser" than those who do. As a result, if you go to a dealer looking to buy a car, you can't even get one without all that garbage, because they don't stock the "just what you need" version.

Here in Portland, and in other places from what I hear, there's a similar premium problem when it comes to housing. We have a housing shortage, and new apartment building are being built all over. But they're all "luxury" apartments, with bamboo flooring and stainless steel appliances and granite countertops, so the cheapest places end up being $1500 per month. "Normal" apartments, for sane rents, are getting harder and harder to find, and the older buildings are either being renovated to keep up, and pricing current residents out, or being left to run down, and end up as near-slums.

So the idea of a "good honest middle-class life" is getting squeezed out from both directions: wages are stagnant, and things are increasingly (and utterly needlessly) expensive. The only way I've found to eke out a nice way of life on far less than I should be making is to buy older things that need some repair, and do it myself. And pay cash for as much as possible.

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9 hours ago, Hobgoblin said:

We care about cars but unfortunately we care more about paying the bills and saving for a deposit on a house.

That's very prudent and sensible.  

19 years ago, I was at a parking lot in the "center city" (that's what Philadelphians call "downtown").  I parked my 1991 Toyota Tercel (which I still have).  I looked around, every car was Mercedes, BMW, Lexus, etc.  Nothing so cheap as the cheapest Toyota. 

The parking lot attendant was nearby when I got out, an elderly gentleman with a limp.  I said, "wow, it looks like mine is the cheapest one here!"  He asked abruptly, "did you finish school, boy?"  I said, "Yes, sir."  He swung his arm about, pointing at all the expensive cars.  "These kids here, they buy these cars on credit. In 6 months, they can't pay no more, so they drop out of school to pay for all these. They stay in debt for the rest of their lives. It ain't right."  He looked disgusted and tired.  Cassandra syndrome is a curse.  He sees the future of debt-ridden lives.  He tells it so, and nobody listens.  Bad future happens anyway.  

Loan Sharks. ... the society legally allows 19, 20 year olds to get into heavy debts from the start of their lives.   As the parking lot guy said, that's not right.  

Compared to that, you focus on being debt free.  You save up for a house.  That's a mature decision.  (plus a respectable hobby too, I might add!)

I've seen on TV that a welder for trains getting paid $100,000.  I'm not saying every job is like that, but there are high paying jobs out there.  Just that college grads don't want to go learn those skills.  Some of them would rather go back home and stay with their parents.  I knew a highly educated X-gen who did that (for couple decades).  I'm all for education, but I respect hard work a lot more.  As a society, we should make it easier for younger folks to start their lives.  Just like the 60's, a single person's salary should be enough to buy a car and a house in a few years.  Even if Jeff Bezos should make a few dozen billion dollars less than 160 Billion.  If one wants to learn to weld, why not teach them for free now. They can pay back when they have that welding job?  Or dental lab work, or electrician's work, etc, etc? 

I think Amazon should pay taxes, with that tax, train millennials, so they can get good paying jobs.  Millennials pay back when they get the skilled jobs, put some of that for their retirement in the future.  Sounds simple enough, but that's not how it works.  

Top 5% owns 66% of the wealth.  90% of us shares only 21% of the wealth, and homelessness is increasing.  This is not a good recipe for a well-balanced economy. 

Incidentally this morning, I found the same topic from somebody in the Senate.  (lol... she must have read what I wrote last night.)  

https://www.cnn.com/2019/07/22/politics/elizabeth-warren-financial-crisis-wall-street-economic-plan/index.html

 

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On 7/21/2019 at 5:31 PM, Saito2 said:

Here in the US a favorite topic is how millennials different interest and spending habits are gradually affecting certain industries. A big one is "millennials don't care about cars". Being a Corvette fanatic, the intro of both the older C7 and new C8 brought about styling that was intended not to soothe the typically older clientele but rather reach out and grab a newer younger audience. It didn't work for the C7 and I doubt it will for the C8. Then there's Harleys. Haley Davidson Motorcycles sales are hurting, again because those darn millenials aren't buying. Guess what else they aren't buying? Paper napkins. Now, I'm no fan of the stereotyped millennial, but is it possible these changes are not simply lack of interest but also lack of buying power? College brings with it crushing debt in the US nowadays and no longer is a guarantee of a good paying job. Perhaps are we seeing the first symptoms of the cost of living outstripping the purchasing power of the newer generations?       

In my opinion, and I say this as a USA citizen:

  • Political lobbying by large corporations has run amok.  In the name of the almighty dollar, in the face of competition, and with a narrow focus on quarterly statements and how they affect stock prices (and executive compensation), I've witnessed US-based manufacturing go across the borders to Mexico and Canada, as well as to China.  The erosion of our manufacturing base, along with the more recent trend in offshoring engineering, has destroyed a lot of economic opportunity for middle-class and upper-middle-class citizens.  We've become a nation of marketing, retailing, and service to a certain degree.  Even service is somewhat offshored to remote call centers, and now AI-powered call centers will displace them next.  Think about it -- legislation opened up trade with other countries; we could have just as easily passed legislation to not open trade and protect our supply chains.  The last 40 years have been terrible as we've sacrificed our economy and national security in the name of corporations who want to win the race to the bottom while cashing their bonus checks.  I'm not even sure I can take the focus on "the economy" that seriously anymore; narrowly viewing the world through the lense of money shortchanges our existence.
  • The general spiritual and moral malaise of our society has led to the demise of the nuclear family; young children who know no differently are now victims of broken households and apathetic parents.  By giving them all the phones and video games they want and telling them to go play by themselves, these children insulate themselves from real-life experiences and form unhealthy self-reinforcing attitudes.  There's too much "keeping up with the Joneses" as both parents work outside the home but sacrifice their kids' development.  The lack of parenting from previous generations leads to lazy choices in higher education.  Math is "too hard."  Instead of viewing school as an investment, it's viewed as an experience akin to a theme park.  There's no guidance to how the US economy is evolving, what jobs are in demand, and what majors offer the best payback.  As a result we get young adults graduating with $100k or $200k in debt and a degree in English, history, geography, poetry, gender/race studies, political science, communications, physical education, etc.  Most of the jobs available don't need these skills!  If it isn't STEM (brain), skilled trades (hands), or the military (security), then it likely isn't going to pay very well or be in much demand.  Young people should be taught to view the USA as a super-sized 11th century village; what jobs are essential, and which ones aren't?  Do you become a blacksmith or a minstrel?
  • In general US citizens seem very apathetic on the topic of their country and its future.  As long as each person "gets his" and things don't change too much then voter turnout will remain low and there won't be too much friction between the government and its constituents.  You can be at the low end of society and have free housing, free food, free medical care, free transportation, free cell phone, free cable TV, etc. and live better than most 15th century kings.  You can be at the high end of society and have enough money to not worry about needs and wants.  Or, you can try to make it in the middle working advertising/retail/service jobs; that's a tough life expending a lot of energy for very little reward.  In my view, the average USA citizen is not particularly patriotic or concerned with the long-term health of the country.  Most USA citizens don't have financial discipline to spend less than they earn.  Adherence to ideals, showing up to vote, eagerness to burn traitors, discipline, and willingness for revolution is weak compared to what this country was 200 years ago.  We're squandering our hard-won life, liberty, and pursuit of happiness at the expense of others.

If you sense I'm angry, you're right.  My father was a high school teacher; my mother was a stay-at-home mom.  They were involved in my life and my sister's life fully.  We lived in a big city, not the suburbs.  We wore clothes with patches on them.  We went to church every week.  Our cars were a string of $200 beaters.  We had no video games and we rarely got what we wanted for Christmas.  My parents emphasized doing well at school and working hard.  I delivered newspapers starting at age 10, bused tables and washed dishes, rented videos and fixed electronics to save money for university.  With good grades and some cash saved, I was able to go to engineering school and get into a co-op program that also paid me.  In the end I graduated with a full degree, some cash in the bank, no loan debt, a used car, and a job lined up.  Then I worked for another 25 years non-stop and raised a family of my own.  The difference between me and the stereotypical millenial/Gen-Z the media portrays is:

  1. My parents remained (and remain) married, opted for a single income, and made sure the love, instruction, and guidance of their kids was always there.  Nowadays I see young adults from broken homes getting married to get health insurance and co-habitate legally.  If the marriage doesn't work out, oh well, there's always the next guy or girl.  And of course both people have to work to afford 3 or 4 TVs, multiple streaming services, 3 or 4 cell phones, nice cars, a second home, etc.
  2. Work was always a fact of life starting at age 10.  Whether is was dragging aluminum cans in a wagon to the local recycler, cutting lawns for old ladies, or some other basic labor, I was always scrapping around looking for things to do.  If there was time to relax and play, it was in a face-to-face social setting throwing a ball or riding bicycles.
  3. My parents recognized my abilities and advised me on some career options that might be a good fit.  They knew good advice meant I was more likely to launch successfully and not be an adult burden yelling for Hot Pockets or avocado toast from the basement of their house. 
  4. The Internet, phones, and social media did not exist in my day.  My immediate family, some extended relatives, and a few local friends were my greatest influences.  Everyone had some form of spiritual life as a constant.  There were no Twitter, Facebook, Instagram, Snapchat, etc. feeds filled with moral outrage and trolling towards any topic.  My value system is a reflection of my previous generation's value system.  Nowadays I see young people consulting with each other and not finding a mentor with more life experience to learn from.  It's like the blind leading the blind.  Shut off the bleepin' social media already!
  5. I worked and worked and worked.  Studying engineering and doing well at it took 6 full days a week.  Sometimes I'd have a half day off to play some basketball with a friend or run some errands around town.  It was an "experience" in that my limits of understanding were tested, but I knew there was a payoff on the other side.

So, I agree that millenial/Gen-Z purchasing power is lower than previous generations, and I agree it is symptomatic of something bigger.  300 million people in the USA should all blame themselves for not having a shared vision of what this country stands for, for not holding politicians to higher standards, for not protecting their jobs, for not staying married and putting more emphasis on family and values than merchandise, for not being trustworthy mentors to future generations, for not working hard and spending less than they earn, and for not phasing out entitlement programs.  I certainly get to vote, voice my issues, and raise my family as I see fit, but then there are 299,999,999 other people in the USA who don't necessarily see things the way I do.  "I want my loans forgiven!  I want reparations!  I want my 37th-gender recognized!  I want universal basic income!"  "Just vote for me, I'll give it all to you!"  It's Brownian motion; energy spent but nothing achieved while the whole system spirals into some entropic mess.

Enjoy The Decline -- Accepting and Living with the Death of the United States

Worthless -- The Young Person's Guide to Choosing the Right Major

Bachelor Pad Economics

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Thank you @speedy_w_beans for expertly summing up my feelings and fears about the whole situation. I wish there were a way to change this spiral but I think, shy of a major collapse, it won't. For my part, my family is lower middle income. I'm in skilled trades and I made sure my wife could stay home with our daughter (with her agreement, of course). I have cars that older and for the most part "uncool" at the moment for that end of my hobby and we put away money as best we can. The end goal is to carefully stay below the radar of all this mess, avoiding the trappings of "modern" American consumerism and morals (lack thereof). Then, after our daughter graduates high school, to careful downsize and move away from people as best we can and pray our simple life style can be maintained until we pass.

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Very well said @speedy_w_beans, having grown up in the UK, then moving to Australia what you have so rightfully pointed out applies to a lot of ‘1st world’ countries now sadly. 

I feel so blessed with the way my own kids are turning out. My son struggled at school to fit in Australia but at 19 now, last year attended a college in Alabama as he was on a Tennis Scholarship. Not that he will ever be Rodger Federer, and he knows that but still gives 110% in everything he does. Which is how he managed to impress so much academically that he was invited to join the ‘Phi Theta Kappa’ ( Brain boxes of the college I believe? ). Which in turn lead to an even better Scholarship for him to move to another in Jackson shortly. Not bad for someone who didn’t go out much. 

His sister is achieving amazing well at this time maintaining a top of the class and creating the most fantastic chocolate mousse’s you ever tasted, which is one positive for YouTube 😁

While I spend a lot of time working I have the most amazing wife who I would gladly give all the credit for for the way the kids are turning out. It’s who a family works as a team that makes all the difference. 

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On 7/22/2019 at 8:23 PM, speedy_w_beans said:

Think about it -- legislation opened up trade with other countries; we could have just as easily passed legislation to not open trade and protect our supply chains.

I like how you wrote it like it is. 

In hind sight, we were well off.  But my parents are still frugal to this day.  Me and my brother had little stitches on our pants occasionally.  "Oh, it's just a little tear, after few stitches they will be right as as rain."  "No Mom!  Everyone will know!"  Ah... good old days... 

One thing I disagree is that the macro economics is quite different from personal economy.  The more a nation holds onto stuff, the poorer it becomes.  China used to be poor.  What made it superpower?  Trade.  Same with Japan and South Korea.  North Korea shut down its borders. It's poorer than Ethiopia now.  South Koreans are as wealthy as many Europeans, due to trade.  Germany has a trade surplus of 19 billion dollars per Month.  Also from open trading.  Without trade, we become North Korea with it's ironclad borders.  It's like Aesop's fable about taking stuff out of a jar.  Clenched fist won't let your hand out of the jar.  

"But the trade deficit..!"  Yes, but that's from our spending habits.  People go out on Fridays and buy a bunch of cheap clothes from China.  I saw one lady going through 30 credit cards trying to see which one isn't declined.  I'm sure that's just few irresponsible people.  But most of us really spend as much as we make, hence less than $1000 cash in the bank.  

As an individual, we should close our wallets.  As a nation, that's like refusing to eat.  Protectionism will starve us.  Tariffs have been tried dozens of times during the past few hundred years.  They all failed.  I don't know why politicians keep trying the age old trick that never worked.  

Steel from Canada, for example.  We slap tariff on it to protect "American steel."  Do cars get cheaper?  No, cars become more expensive.  Do Boeing airplanes get cheaper? How about Oshkosh trucks?  How about Abrams tanks, John Deer farm equipment?  How about machines to squeeze orange juice in factories?  Yep, more expensive.  Do Pratt and Whitney engines get cheaper?  No.  How about guns for our soldiers?  Nope, we have to pay more taxes to keep them equipped.  Every single thing with steel in it becomes more expensive.  But, now, how about if they move factory to Canada?  Why, that'd be a good idea!!  Not only does tariff make everything else less competitive, but it makes moving factories to Canada more attractive too.  

US Airways or Delta might just buy European Airbus instead of American Boeing.  If they don't buy cheaper European airplanes, their ticket price will be higher.  People might just fly cheaper British Virgin Air instead.  So why not hit Virgin Air with taxes?  We could.  But every time we do that, the more things get expensive: cars, computers, phones, even airplane tickets and taxes.  But Toyota will look delicious, if their "made-in-Japan-with-cheap-Canadian-steel" price is $5,000 less.  "But every American will get paid more too."  Yes, maybe for 3-5 years?  After that, price of American things will be too high.  Everything foreign will be much cheaper.  We'll have to tariff everything.  That's a sure way of creating more deficit, not less.  

"It's fine, we don't need trade. We'll just do our own stuff."  Even to make stuff just for domestic consumption, we need raw material from foreign countries.  Why would Canada sell us lithium cheaply, after our tariff on their steel?  They'll jack up the lithium price, saying "Just like you, America, Canada needs to protect our own supply too."  We started it, we'll have to understand.  Or start a war to steal it from them.  Copper is expensive too.  Make it more expensive?  No more electrical wires, no more motors, no more bullets, no more pennies (no copper in new ones, I think).  Eventually, many Americans will find it easier to just live in Canada or in some Mexican retirement villages where prices don't have to be artificially jacked up.  So tariff on Canada isn't really on Canada.  It's forcing all other industries to pay more to American steel industry.  

Canadians can also immediately stop buying Boeing and Florida oranges in retaliation of tariffs.  So, we magically shoot ourselves in the foot many times with one tariff.  "But right now, US steel costs $1000 per ton while those dang Canadians sell it $700 per ton. That's just not fair!"  No.  And it cannot, and should not be made fair with a tariff.  What's expensive is expensive.  What is really wrong, is forcing GM and Ford to use the expensive stuff, instead of cheaper Canadian steal.  That is a form of controlled economy.  Yes, there has to be regulations of all kinds.  We tax more on cigarettes to discourage smoking.  Other than that, artificially controlling price is always dangerous.  

Almost all macro economists will say, "Buy Canadian steel!  Instead, sell more cars, airplanes, ships, wrenches, John Deers, computers and rockets to Canadians!"  Because cars and airplanes leave far more profit than steel ever could. 

Why risk 6 Generals to save 1 private?  Yes, every life is precious. That's very true.  But that's a sure way to lose a war.  

The only way we "win" is by personally saving money.  Buying American stuff just for patriotism is simply inflating the price.  Remember Pinto?  Why would Japan buy crappy driver-roasting cars, when they have better cars?  Protectionism doesn't make good cars.  Ford makes better cars now, when it's competing with the world.  I like how Ford became strong and tough in the face of real competition.  

We must come up with something new and better to sell.  Make the world want our stuff.  iphones, Teslas, personal quad-copters, quantum computers, a trip to the Moonbase Alpha, etc.  Fair and square.  No deviant stuff like tariff.  Because dozens of American industries being forced to pay more to one industry is very un-American.  

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Yes, some countries will cheat and try to photocopy our carriers and jets (looking at you, country-C).  But that's because we have innovations they can't surpass.  

I'm guilty of buying sprees too.  Who needs over 2 dozen RC cars? (80% were bought used, but still).  Likewise, you don't need 40 pairs of yoga pants (well, because most of you are men...). 

I'll be darned... there are men's yoga pants too!  Those Mermaid pants will give me nightmares for days... lol...

wait, let me share the nightmare with you guys...

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For Americans, overspending is a way of life.  When we were growing up, however, one pair of tennis shoes like these would last 5-6 years. (I'm sure most gen-X would remember one pair years)  

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But I learned that most people these days buy several pairs a year.  And they toss them into the trash, and buy them all over again.  Multiply that by 300 million people...  That's why we have trade deficit.  Unless we kick this spending habit, tariff on Canadian steel will only raise our car prices.  That does not mean more profit. We simply sell less.  

If you are a student borrowing money to go to school, why buy BMW from Germany?  If you don't have $500 to pay for the child support, don't buy a new Lexus from Japan.  If you are worried about paying mortgage next month, why buy $2000 Samsung TV from Korea on credit?  This is the real reason why we have the deficit(And we don't talk about our own faults...)  

Politicians make it sound like China is doing something sneaky.  First half of 2018, trade deficit with China was 72 billion dollars.  But America has 420 Billion dollars in personal debts, against American banks at any given time.  Did sneaky Chinese make us borrow from American banks?  No.  Americans pay 100 Billion dollars per year on credit card interests.  So, the problem isn't China (though they don't respect copyright laws).  The real problem is us, the common folk, you and me, we, the people.  Americans are simply buying stuff beyond our means.  Of course we are in deficit.   

Japan had problems because they are saving too much.  Not enough money circulating in the market.  Japan and US are polar opposites.   

So....

The problem is us.  Not them.  Who made the deficit?  They didn't torture us to buy.  We made the deficit.  

Save as much as you can.  Of course, enjoy occasional spending (like a vacation or an RC buggy) to keep you sane and happy.  But not beyond your means.  

Pay off the mortgage as soon as possible.  If you keep to the 30 year payment plan, you'll end up paying twice the house price.  Pay more on the principle loan.  Don't buy new cars every few years.  That's almost as expensive as mortgage.  Buy a safe car, run it until it falls apart around you like Hobgoblin does.  Of course it's easier said than done, especially considering how salaries are not keeping up.  

Buying foreign stuff is fine as long as it's competitive.  This would sound strange... but if some Chinese phone is better, buy it.  If it's competitive, Apple WILL HAVE TO make better and cheaper stuff.  Because you, the consumer, told Apple that cheap Chinese stuff is better. You didn't reduce the deficit now, but you gave our product a real reason to be competitive. When Apple makes better stuff, we buy that. Deficit reduced.  What if Apple can't do it?  Let it die.  We'll have to come up with something else to sell, like Tesla quadcopter or something.  (If you buy inferior American stuff just because it's American, you are sheltering it. Over-protected child won't function well once they leave home.  Remember Pinto: Ford decided that paying for the deaths was cheaper than not creating deaths.  That's what overprotected child does. We'll be burned alive by the protectionism, quite literally. We are strong enough for some competition.)  

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@Juggular, I think you make several good points.  In some respects the nations that have failed or are poor are those that don't have natural resources to exploit or conditions to grow food; they absolutely need to buy raw materials from somewhere else and add value to them.  The USA is a little different, I think, in that we have deposits of oil, iron, coal, rare earth metals, and other materials in addition to having environmental conditions conducive to growing a variety of food.

Strategically speaking maybe it makes sense to buy raw materials from elsewhere and deplete everyone else's first, then deplete your own.  That comes under the guise of open trade.  Then again, maybe another strategy is to close trade and starve others of the money supply going to them to keep them weak(er).  I don't have the wisdom to be the leader and make those calls.

My main concerns about trade include:

1.  Labor outsourced to other countries.  This makes more people dependent on the government for assistance, which in turn is passed along to the rest of us in the form of taxes.  I'd much prefer to have more manufacturing jobs in the USA so people can be converted from money-consumers to money-producers through their labor.  Germany's trade surplus is in part due to how they protect their markets from foreign competition; they buy a lot of things they make for themselves, and happily export it to anyone else who wants it.

2.  National security compromised by broken supply chains.  I attended a DoD conference a few years ago, and one of the talks given described the difficulty in sourcing semiconductors used in weaponry.  The DoD has had to prop up some suppliers to keep them operating, and they've had to break some designs into multiple chunks so sensitive information could not be obtained by enemies.  They mentioned some interesting research areas they were exploring to provide alternative solutions to the problem.  The same might be said of steel, aluminum, and the elements added to these metals to make various alloys.  If it is all mined and produced outside the country, then there are supply chain risks if the world goes to war again.  There has to be some native production for food, textiles, structural materials, and electrical/electronic components.

I guess at the end of the day, I really would like the USA to have healthy, educated, employed, moral citizens enjoying their life, liberty, and pursuit of happiness to the greatest extent possible.  And I would want the same for other countries and their citizens as well!  This isn't about dominating the globe.  I just look at the USA and think we could do much better with our education system; corporations could think about being better residents in their host country; individuals could do a better job managing their bodies, minds, and spirits.  Everybody is making fast, convenient decisions, not coordinated decisions with some recognition of the future.

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All good points

I'm in Scotland so maybe slightly different.

Uncertainty - I work in manufacture and living in times were the UK is about to leave the European Union, our biggest trading partner, and also the prospect of another independence referendum, but will need a Prime Minister we have confidence in...

(Slightly off topic..)

I've had a few, discussions, with millennials with regards to how seemingly hard they have it, but i believe it's just as hard as my generation,  complaining they can't get on the property ladder, but when I show them I flat they can afford, (better than were I've lived), they don't want to live there. They can't get a better job with a reasonable wage, but won't move out of the county (I've moved 300 miles to a different country) and yeah, car insurance was mentioned, my first car (paid for by me and not on the never never like I'd say all of the young team I work with) cost me over 3x the cars value for third party only insurance! 

 

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I tell you @speedy_w_beans.  It's so rare to find anybody who thinks beyond this week!  Nobody talks about 10-20 years!    

For defense, no doubt, it should stay in-house.  Ask the Chinese to make M9, they'll make the barrel out of 90% aluminum to save money.  2 shots out and it explodes!  But if Italians can make them cheaper in Italy, why not?  Or Belgians can make a licensed version cheaper?  The world trusts Beretta and FN. 

I dare say outsourcing labor doesn't cause loss of domestic jobs.  At 80% service, we are already a service nation.   We don't have much to outsource anymore.  Farms don't need as many farmhands anymore because farm equipments can do work of a 100 men.  It's easy to think that 99 people all lost jobs.  It's just that 1 farmer is 100 times more efficient now.  That's automation.  Most of the 99 people change jobs.  They work in service industries, like fixing tractors or selling pesticides or flying crop dusters.  Some 50 year olds may never find another job.  But over all, the economy has always grown.  What if we stopped using farm equipments and hire actual people to do the work?  The labor will increase for sure.  But economy will shrink.  That's like taking 3 hours to change one tire.  We become less competitive as a nation.  We'll become poorer than China. 

Imagine that China is as wealthy as America 20 years from now.  Their wages go up.  So they've been buying copper from Chile.  Suddenly, China decides to rely on their own labor for steel and copper.  Since I live in US, I would love that idea.  To pay their miners, they decided to make their products more expensive than ours.  Minors are okay with that, but as a nation, China goes down.   

Their domestic market will be temporarily good for several years.  During that time, it would seem like it was a good decision.  But we don't live in 18th century log cabins anymore.  Every darned thing is connected with everything else, which is why 2007 subprime mortgage in America ended up with liberation in Arab nations in so-called "Arab Spring."  It became too hard to live, so they revolted against dictators.  Go figure.    

Back to China, the Chinese will see an American movie one day, and discover that everybody is using holographic projectors!  Forget 3D movies, this is real.  They were slow to develop because they couldn't complete---what with raised price of raw materials.  They realize that it takes a lot of manganese to make holographic projectors.  But in those several years, America already bought a lot of manganese mines in Brasil.  If they stayed in the world market, they would have known that manganese price started to go up.  They would have known something was up.  Now they are behind the world.  Was it worth saving the labor of their steel jobs?  

You might say, "well, that's a what-if scenario."  You are right, but also, it did happen too.  This is how North Korea became poorer than Ethiopia.  10 years isn't much, but soon it becomes 20 years and 30 years.  South Korean Samsung invented OleD TV.  Apple is trying to develop an American version of it by working with another South Korean company LG.  

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While this is happening, skinny cows moo in North Korea...

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Why didn't North Koreans develop OleD TV? 

North Koreans were so out of the loop, they can't even produce 1st gen jets like MiG15.  This is 2019.  MiG15 is from 1947.  They are now 72 years behind.  Imagine the Confederacy 72 years ahead or behind the Union.  Same Americans, but one side is so advanced, one other is so behind.  Trade tends to do that.  

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What if South Koreans refused to lay off farmers?  Whenever it was they industrialized?  They buy a lot of grains and beef from us.  So, they outsourced their food to us.  South Korean farmers (or rather, their kids) became OLED engineers in Samsung.  And do they make it themselves?  No, they engineer.  Actual labor of manufacturing is once again outsourced to the Philippines, I think.  

But Russians!  They competed with America, to the Moon! 

Yes... sadly they relied on domestic economy only.  From the 50's until 80's they kept up.  But from there, they kinda fizzled out.  This was the only country with technological know-how to leave Earth before America did.  What happened?  They didn't trade.  

They still have vast oil, gas and rare metal reserves.  Selling those is the only way Russia is surviving now.  Back in 1940, T34 was best tank in the world.  IL-2 "flying tank" was best attack-aircraft.  They were war-winning designs like nothing else in the world at the time.  But they closed their borders and stayed in.  They didn't buy BMW, but they didn't sell their cars either.  Each of us are like cells.  We die, our children replace us.  Individually, we change jobs too.  Hopefully for the better.  If we don't change while other nations do, we become poorer.  

If Chilean miners can mine copper at half the price, let's buy their cheap copper.  It will make Boeing cheaper.  Boeing sells more than Airbus, and that's good for USA.  

What about the American miners?  If they cannot compete, should Boeing and Ford pay for it?  And lose to Airbus?  After Boeing goes bankrupt thanks to expensive copper, miners will go bankrupt too.  That's a "lose-lose" situation like the Soviets.  We shouldn't be like the Soviets or North Koreans.  We should compete in the open market.  Tariff can be used, but as a "threatening tool" to get something else from a bargaining table.  Actual use often results in "revenge tariffs."  And tit-for-tat tariffs end up in closed market.  

It sounds terrible, but if miners cannot compete, they should close their mines. (But there is a solution!)  I sound too much like my libertarian friend (sadly who passed away).  I'm not saying "completely free market" like libertarians.  When we stopped regulating the lending law, sub-prime went berserk for a while, then crashed. Voila, we made 2007 crisis!  Now banks MUST ask how much I make before they decide to lend money to me (... duh!).  Without some regulation, irresponsible fools will always try to wreck it for their gain.  

What should miners do?  We should move them to different sectors.  Instead of pushing rail carts, they should be pushing buttons for MRI machines, X-ray machines, dialysis machines.  No sore muscles, no crushed ankles, no coughing, and no dying at age 50.  And they make more money working 7 hours a day.  (Un) fortunately, Baby Boomers don't get any younger.  They get sicker and weaker.  Gen-X will get there too.  No shortage of patients.  

Mining is like trucking.  We won't need drivers in 10-15 years.  Why insist on paying truckers, when the truck will drive itself?  (Trucking members might get mad at me, but please save enough money for CAD/CAM courses or something, because Tesla and Uber are trying to make self-driving cars. It will happen sooner or later, just like farm equipments replaced farmhands) 

If miners lose jobs, they'll have to rely on Federal government.  Instead, why not lend them money for job training?  It's cheaper.  I'm not talking about "giving."  I'm talking about "lending."  They get 6 months training to be an electrician.  Or 2 year training to be a nurse.  8 months on CAD/CAM.  Welding for Oshkosh special trucks.  When they get a job, they pay it back.  They make more money than before, they pay more tax than before, and they work into the 60's, instead of dying sooner.  

This is better than making Boeing and Ford pay for miners and lose out to Airbus and Toyota.  Boeing stays competitive, miners become electricians, Social Security gets more contribution instead of paying.  It's a win-win-win situation.  Canadians win too, and maybe they'll buy Boeing instead of Airbus, so we win again.  

Why do we want our politicians to promise that the miners can stay in dangerous mines?  Chileans could do the dangerous job for us!  In their own country!  Cheaply!  

Milk men paid for their homes and put children to school.  But their job became obsolete due to pasteurization and re****eration.  America didn't die when milkmen disappeared.  They just became school bus drivers.  

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Likewise, automation killed labor jobs. 

Things were built by people, but not anymore.  We think of below when we think of "Auto Factory."  

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But the reality is more like this.  

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Car factories just don't need many workers.    

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What good is having a factory in America, when the robot that build the cars are made in Japan, and we pay to Japan?  Just 2-3 of those robots could cost a million dollars.  

This is why we should focus on DESIGNING, and creating, not actually building.  Instead of focusing on laborers on factory floors (which won't exist soon), we should be discussing designing of those robots.  It doesn't matter who builds cars where.  We get a cut of their profit if we supply the robots.  An Indian company builds a factory in Calcutta using our robots and sells a small car for $7000?  Out of that, $2000 could come to USA.  Want some change?  We'll reprogram, we get paid $100,000 for it, we outsource to Indian programmers for $10,000.  It's not about doing it all by ourselves.  It's about getting a percentage in high end stuff.  

As @speedy_w_beans says, this is where the education comes from.  Chinese can stitch as well as Italians.  But Gucci earns more because they can design.  Sure, Chinese can copy, but they cannot surpass.  To design well, you don't need a degree in English Literature.  You just need imagination.  Inspired by fellow design students at a designing school.  High end human capital, through education, is what we should aim for.  Labor is sadly, secondary.  

Does that mean Amazon should nothing for the hours the warehouse workers get searched for stolen items everyday?  Amazon workers had to sue Amazon.  Fortunately for the workers, they won.  And Jeff Bezos still managed to pay no tax from Amazon, while those workers paid taxes.  And he's got $160 Billion dollars!   American corporate culture will be the death of us, I tell you.  

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EU puts 10% tax on cars, while we put 2.5%.  That's unfair for sure.  But auto workers wanted VW trucks stopped back in the 60's, so foreign pickups get 25% tax (not 2.5%).  Even today.  That's also unfair.  Because of 25% tax, no foreign car makers are selling pickups?  No, Toyota Tundra is still sold at competitive price in US, despite the 25% tax.  (Subaru Brat went around that law by putting seats on the bed!  No, this is not a pickup, look at the seats!  lol...)

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So, if Tundra can sell and still make profit even with 25% tax... imagine how much F150 is marked up.  This is why tariffs are bad.  Foreigners sell less, sure.  But we pay more, we get less for our money.  Which is why Congress is still keeping the car import tax at 2.5%.  (sometimes they get it right, sometimes they get it wrong.  Sometimes I get it right, sometimes I get it wrong.  But we always think somebody else is wrong... lol...)   

But there is good news!  Norway bought 10,000 of Model 3 from January until June this year.  For a country of 5 million people, that's a lot.  So yeah, Tesla kinda proved that 10% tax wasn't a problem.  We just didn't care to match the European taste, like Toyota Tundra did for Americans (I bet Tundra doesn't well well in Japan. Because of tax? No, it's the design.)    We shouldn't just be making F150 all the time.  Americans like huge things, but full size pickups won't even fit small European and Japanese roads.  Like Tesla, we should sell what the world wants.  

Thanks to that 25% tax, we can't buy small pickups like this.  Great success for our tariff, I guess?  (psst!! put seats on the bed!)   

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I'm glad that there is no tariff for model kits.  

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A kit from UK in USA for $9.50!  Decent quality too.  (must it be chased by a BF110, though?)  

I thought Airfix and Humbrol disappered after the 80s!  It probably stayed dead if it had to pay UK wages to UK workers.  But my kit says, "made in India."  That's how they came back.  Just like Tamiya building things in the Philippines!  Out of $10, I'm sure like $2 goes to UK and $2 goes to India and $6 are other costs like plastics and transportation.  $2 is a good start.  Now, they are making awesome 1/24 scale kits for $150.  The costs could be $40, but UK could take $80 and India takes $30.  And who in the UK gets paid?  Designers.  Millennials designing kits.  That's the future. 

If both designing and manufacturing can be done domestically (like Boeing), that's the best case scenario.  But due to fierce competition, we often have to choose.  I'd say actual molding and packaging (or mining or smelting) is less important than designing.  I'd choose to save Boeing and let steel industry die, if it comes to that. (But miners should be re-trained to become CAD designers like one of the old guys at Hornby below)  

Now that "made-in-India" brought enough money to Airfix, they are reopening an old office. 

You go, Airfix.  

Too bad labor can't be kept in UK.  But I'd say it's better than staying dead trying to pay UK wages.  At least this way, not only can Airfix sell within UK, they even took my hard earned American dollars. 

What if UK put heavy tax on Tamiya kits and Revell kits?  Temporarily, Airfix can hire UK workers.  But large chunk of money going into laborers, they couldn't design as well as they are doing now.  Expensive, but lower quality.  It might do okay in UK where it's sheltered.  But it loses to Tamiya and Revell internationally.  Which is why you don't see Russian passenger cars outside of Russia.  Without fierce foreign competitions, domestic industries tends to do the same thing over and over again until it's laughably behind.  

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I cannot name one Russian industry that's doing better than other country, because they were sheltered from the world market. 

Likewise, with protection, Airfix would stay small and wither.  For what it's worth, I think Airfix is doing what it should to thrive in the 21st century.  Keep the brains in the UK, hire muscles from India, and go out in the world and fight against Tamiya.  Could they do it with UK labor?  I think they would end up closing down, just like they did in the 80's.  What didn't kill them made them stronger!  Just like the Brits, Americans are also strong.  We are not a nation of millennials.  Instead of protectionism, I'd say bring it on.  We can complete, fair and square.  

 

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One small point: the "Chicken Tax" on foreign-made trucks is based on point of final assembly, not HQ of company. All Toyota and Nissan trucks for the US market have been built in the US for 30+ years, for that reason. Nissan trucks are built in Tennessee; I can't recall where Toyota's truck factory is. It's also why Mazda trucks became rebadged Ford Rangers (built in St Paul, Minnesota) in the 90s.

Weirder still: somehow 4 door SUVs are considered "passenger cars" for tariffs (even though the EPA still classifies them as "light trucks"), so they skirted the Chicken Tax. (Similar to Subaru's trick with the rear seats in the Brat.) Ever wonder what happened to the 2-door Pathfinders and 4Runners? Tariff-ed out of existence...

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They should put a 3rd "doggy door" and maybe they won't be taxed.  

Things always change in the economy.  Some of my distant families didn't adjust well.  A lumber mill they had failed.  Couldn't compete with bigger mills with automated machines.  Other businesses failed one by one, there was a suicide, sons had to sell the land piece by piece.  At least younger sons got some education and doing okay.  But the older one took the brunt of the responsibility. No education even as he was putting younger ones to school. No special skills. Last I heard he's still trying to eke out a living on the last piece of their old land, mending nets for fishermen or something.  But my mom was talking about living relatives who are only about 10 years older than me.  "You've met him, when you were like 10."  Like it's easy to remember something that happened 35 years ago. 

This always happens in any growing economy.  Changing jobs should be made easier through education.  It's cheaper than having people rely on the government.  If we can spend $40 Billion dollars on developing our 11th carrier, we could pay soldiers a bit more, and lend folks some educational funds.  They pay it back with maybe 1% interest.  They work longer years, pay more tax on better salaries, etc, etc.  (I know a millennial who was just stocking in a supermarket about 2 years ago. Somehow in that time, he got trained as an X-ray tech. Starting salary is twice as much as before. I have to say, I'm proud of that one millennial.)  

 

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So, riddle me this Batman(men)...Every generation says the worlds going to heck in a hand basket so to speak, but could this be it for the US? I certainly see it as such. At its current rate, how long do you think the party will last before we see a significant downturn? Some economist say that we're seeing the last of a little upswing (which I'm sure our president takes full credit for) before we begin a long gradual slide down that may not ever quite recover (which our president will claim is fake news). Chicken little or possible truth?

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I think we're in real trouble. Things are looking way too much like the 1920s for comfort. Too few have too much, lack of regulation and corporate oversight is killing people (Boeing 737 Max, anyone?), those with most of the money are taking too many dumb risks for the sake of a little personal gain, and there is an upheaval in the social/moral order among the young that looks too much like degradation to the older generations, and it's causing a backlash. It all looks a lot like the Coolidge/Hoover administrations. If things keep going the way they are, it won't be long before we're looking at Great Depression II. And, as is usually the case, the sequel will be worse than the original.

Well, now, I'm depressed. Time to go to work.

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No end of the world (I hope). 

Even after a nuclear war with China, some humans will survive according to "Fallout 4."  ...cause, you know, computer games are always right... (just so you know, I always choose a female character, the view from here is much friendlier than a man) 

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The way I see it (I'm talking out of my bum, so prepare to see me making a fool out of myself), we are tipsy now.  We might recover, we might fall.  My guess is when the poorer 90% owns less than 10%, we'll be forced to change. 

10 people + 10 apples are in the room.  9 folks always shared about 3 apples.  Not great, but people can cope.  After 2007 recession, the rich have recovered.  The poorest haven't.  9 people are now sharing 2 apples.  Even if we start focusing on reducing that gap now, it will take several years to see the result.  

If nothing is done; (1) It might take 1-2 years of good stock market with increasing homelessness, and crash.  (2) It might drag on for 8-9 years with small dips in the stocks, and a crash.  (3) Or long dwindling downturn that will last decades and also takes decades to recover.  I heard London finally recovered the population to pre-1940 level in 2016?  That's a 71 year long recovery.  I like reading about WW2, but not a fan of actual war.  2003 Iraq war casts a long shadow... 

Russian and French revolution?  When the farmers are happy, why would they bother revolting?  If Germany was wealthy during the 1930's, Hitler's cry of "I'll create a great German empire that will last a 1000 years" would have fallen on deaf ears; no World War 2.  But if we see no future, people might say, "we are homeless, why is China rich? They took over an island in the Philippines? Time for World War 3!"  

Hopefully our government is smart.  I'm surprised that the Federal Reserve didn't raise the interest rate already.  I'm talking about a small amount, like 0.25%.  Our president will furiously tweet all kinds of insults (like the last time).  But if any president wants the best for all of us, he should cheer the decision.  The stocks will go down for a few days but it will grow again.... at a slower but steadier pace. 

As a politician, he wouldn't like it.  He would want the stocks glowing-hot for 2 more years, no matter the risk (and he's a risk taker).  More will be homeless.  But most people will think that those are drug addicts (9% are).  While the stock market is good, people will stick with the sitting president.  He'd be a happy man.  Whatever happens after, he can say, "hey it didn't happen when I had power. I'm just sayin'!"  Simpler folks who do not see that the economy is a long term game, will believe that.  (German unification was 1989. West Germans had to feed the East also, it took 20 years to recover from that? I'm sorry German members, that's a gross simplification.)  

The risk to keep the stocks selling like hotcakes is bad... But the recent news is that the president will win his war with the Feds and get the rate cut... not raised....  If middle income families want to buy a house, lower interest rate is a good thing...until the stock market crashes.  Lower rate is like more throttle when the brake is gone.  Temporarily, this will excite stock holders, "Woohoo, faster! faster!"  It may create more of a bubble as people could borrow money to invest in stocks.  Some savvy traders would go the other way, saying, "hey how bad is it that the Feds had to cut it to boost the economy?"  (Personally, I've got a bad feeling about this)  https://www.cnbc.com/2019/07/26/fed-to-cut-rates-for-first-time-since-2008-jobs-data-should-be-strong.html

Maybe the Fed is waiting for the good market to impact the poor?  Well, not while the poor gets taxed more.  

But it's whole lot easier to tax the weaker than the rich.  That's what's happening now.  If that goes on longer, it tends to implode or explode.  Unless something is done about it.  

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Even as I was saying, "let's keep Boeing competitive," I didn't think about 737 Max8, @markbt73 brought up.  What a good example!  The rich wouldn't mind killing us for money.  189 + 157 = 346 people killed by Boeing.  There are Boeing engineers whistle-blowing about the ridiculous risks they were taking.  "Eh, just slap on a better engine."  "But with the powerful engine, the plane will try to go up, sir."  "Then make it nose-dive." ...  Oh, only if Boeing knew nose-diving is a bad thing for an airplane...

 

You'd think that America learned from Ford Pinto, that burning the customers to crisp is a bad business.  

Why did this happen?  Corporation will try to make money, even if it kills us.  Frankly, 600 Billion dollars for 5,000 airplanes is a whole lot of money.  Over 300 deaths is nothing.  The government of the people, by the people, for the people, should be on the side of the people.  Or maybe it was of the corp, by the corp, for the corp?  It just stood by and didn't regulate those billionaires.  

 

There is a fable I heard. 

I don't even know where (was it here in TC, one of the books you guys recommended about Japanese and Chinese culture? Somebody correct me if I got the story wrong) 

A Chinese king was taking a stroll out in the countryside.  A farmer was working the farm.  He was singing a song, like "sky is blue, rice field is green, life is good, who cares who the king is?"  Royal guards and generals were furious.  But the king was greatly pleased.  He said, "my kingdom is doing so well that my people don't even know who I am."  Good story of a benevolent ruler, like the "Philosopher King" Plato mentioned. (How different current China is, or any country, for that matter).  But the point is, a good country is all about allowing the average citizens to prosper.  The billionaires can take care of themselves.  

What if we the average folks make enough money to pay off the mortgage 10 years sooner?  What if after retiring, we could buy a 1:1 sports car we always desired, or take a foreign vacation twice a year.  Heck if we really save every penny, we might even buy a small cabin by the lake.  That shouldn't sound like a big dream.  But all that sounds impossible to most of us.  I heard many baby boomers can't even retire at 60.  We pay more tax...we got less rebate this year. 

Just days ago, a stadium full of dentists were volunteering to pull cavities for free.  People had no money to pull them out.  1000 people waited until after midnight for free extraction.  Missing teeth doesn't look good, but at least no more pain.  America should cut sugar too... (It's not easy giving up gummy bears, I can tell you that.)  

https://www.post-gazette.com/news/health/2019/07/26/mission-of-mercy-pittsburgh-dental-clinic-ppg-paints-arena/stories/201907270013

Does this look like a Great nation?  

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As individuals, we must save.  But also, we should be allowed to make enough.  I'm not against self-checkouts.  If machines can do it cheaply, why hire humans?  But those humans must be given a new training for something better.  Corporations are not going to say, "sorry to fire you, but we'll give you a training to become a dental assistant."  Government could.  Every 5 years, you can ask for a job training + living expense up to 2 years, with a condition that you won't ask for unemployment benefit for 5 years.  The tuition goes directly to the schools, if you don't show up, or flunk out, the government will ask for refund immediately, so the school has a vested interest to see that you'd finish.  You'll pay back the borrowed amount in 10 years.  If you pay back in 5 years, no interest.  Unless you pay it fully back, you can't get the next training nor unemployment benefit.  So, you'll have to train hard and get that next job.  Instead of becoming a homeless, you became a dental assistant and make 3 times as much as before.  You'll have to save and pay back the loan, but life ain't bad...  

Too radical? 

It's been done.  This Bangladesh guy won Nobel Peace Prize for micro loans.  He'd loan $100-$300 to the poorest people.  Just on trust.  One woman could get out of poverty if she could buy a sewing machine.  He'd loan.  She'd pay it back.  He pulled so many people out of poverty with just $100.  He also got a US Presidential Medal of Freedom and a Congressional Medal from the Bush administration.  $100 loan would work in Bangladesh where the economy is barely out of farming stage... but what the heck am I going to do with a sewing machine?  We need training.  40 grand is about 2 years of unemployment benefit.  Trained folks can pay it back.  

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But what's happening instead?  Corporations like Amazon refused to pay their workers for the hours spent on searching for stolen items everyday.  The packing crews had to sue Amazon for that time.  That's how Jeff Bezos made $160 Billion dollars?  Those workers even paid taxes when Amazon didn't.   

During any war, when good people come back in body bags, economy goes down.  Governments tend to lower interest rates and reduce regulation to get the economy going.  That's like no brakes on a downhill.  It rarely ends well (like the 2007 meltdown, and maybe now too).  A small interest hike by the Feds is like a tap on a brake.  The car (I mean the economy) can still go, it's just more controllable.  

I'd say lower the taxes for the poorer 90% (or just for the poorest 45%).  Stop buying Navy carriers and Air force jets.  We already have enough to dominate the world twice over.  Instead let us pay $1000 less tax per year.  That could go a long way.  Unlike the rich, average folks have teeth and cars to be fixed.  Health and transportation will only increase productivity (unless we buy 40 pairs of yoga pants).  The rich buying yachts?  That's like Marie Antoinette's carriage. (her gold carriage didn't help the French economy, did it?)  

US government should stop buying tanks that the Army doesn't even want. 

https://www.military.com/daily-news/2014/12/18/congress-again-buys-abrams-tanks-the-army-doesnt-want.html 

The defense industry said, "if there is a war, we can't suddenly start up a factory, so give us money to keep on making the tanks."   P-51 Mustang was built from nothing to actual plane in 102 days.  USA has been making Abrams tanks for 40 years.  We have the blueprints and the know-how.  Russians moved factories 1000km east and still had T34 tanks roll out in days.  We can't do what Russians did 80 years ago?  Sure modern electronics are much more complex.  But how long should we build tanks nobody will use?  We already have 6000 tanks.  

Those laborers might as well be making Snoopy statues for $6 million a piece.  

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Instead of making unused tanks every year, use that money just once to train those workers to be something else!  Commercial pilots, civil engineers, electrical engineer for drones, armored glass makers, wind turbine makers, etc.  

If the government helps people with changing jobs, our economy will be more adaptive for the 21st Century.  That's like a soldier who can be a sniper, a mortar man, a tank driver and a gunner, a helmsman, and a pilot all in one.  Sadly, even young millennials can't adopt well, and they rely on the government.  I'd say lower the tax on the middle income families, lend money for occasional job training instead of unemployment checks, chill the stock market with a bit of an interest hike before it crashes. 

So we can all buy more Tamiya kits and enjoy happy lives, dang it!  (it is all about buying more Tamiya kits. Always! )  

 

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On 7/26/2019 at 2:42 PM, markbt73 said:

I think we're in real trouble. Things are looking way too much like the 1920s for comfort.

Unfortunately, I agree, with nationalist political parties formed, huge divides in extremist religion and calls for walls of segrigation, we're in a place for a perfect storm. 

On 7/27/2019 at 11:02 AM, Juggular said:

Even after a nuclear war with China

I'm betting Russia are siding with China, Russia sending satellite's into orbit (Cosmos 2519?) and China's, maintenance satellite, accedently taking out a Russian satellite? Also with Russian funded ,cyber attacks, I think the next world war will be cyber based, knocking out each other's gps guidance satellites whilst hacking defence computers. 

On 7/27/2019 at 11:02 AM, Juggular said:

Frankly, 600 Billion dollars for 5,000 airplanes is a whole lot of money.  Over 300 deaths is nothing. 

And who will be held accountable?

If no one high up shoulders the blame, things will keep happening.

 

Back to the original topic, A C8 is coming in at around $60k? That is a bucket full of cash, you could buy a 3 bedroom house AND a single bedroom flat near me for that kind of money! (Although with the areas, I'd be more tempted to try and live in the C8 🙄)

You're looking at the, middle aged / older customer with that kind of disposable income, which is why (I'm guessing) they dont come with a manual option. Are there any higher end cars that are a true manual? 

(I always looked at the auto box as being for the elderly driver, we called them the , grandad box, growing up as they were only in old men cars,  the Jags, Mercs etc, people who got leg ache using the clutch in traffic 😂

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18 hours ago, Wooders28 said:

Back to the original topic, A C8 is coming in at around $60k? That is a bucket full of cash, you could buy a 3 bedroom house AND a single bedroom flat near me for that kind of money! (Although with the areas, I'd be more tempted to try and live in the C8 🙄)

You're looking at the, middle aged / older customer with that kind of disposable income, which is why (I'm guessing) they dont come with a manual option. Are there any higher end cars that are a true manual? 

(I always looked at the auto box as being for the elderly driver, we called them the , grandad box, growing up as they were only in old men cars,  the Jags, Mercs etc, people who got leg ache using the clutch in traffic 😂

Interestingly, Corvettes and automatics are not as much of an odd pairing as you think. The first 2 or 3 years, a 2-speed Powerglide automatic was the only option. And the manual disappeared towards the end of the C3 as well. Having driven both manual and automatic 'Vettes (though none newer than a C4), I can honestly say I prefer an automatic in them. It just fits the car's personality better.

I've never driven a dual-clutch gearbox like the C8 has, but it's my understanding that it's closer to a manual than a traditional automatic in its architecture (even though it has an auto-shift mode), it just doesn't have a clutch pedal. I'd love to drive one someday just to see what it's like.

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2 hours ago, markbt73 said:

Having driven both manual and automatic 'Vettes (though none newer than a C4), I can honestly say I prefer an automatic in them. It just fits the car's personality better.

Never actually driven a Vette! 😳

A mates C3 goes ok with an auto, and another's C6 auto, goes really well with the 6 speed giving good mileage on the motorway, but a driver's car should have more driver involvement imo, There's nothing like , making progress 🙄, down a B road, heal/toeing down the box, hitting the revs right on every downshift, exhaust popping on the overrun (ok you dont get that with efi these days) , turning in with slight oversteer, on the power and wrestling around the corner onto a straight and back up the box. My '81 TransAm was a 4sp, but coupled to a 301 wheeze of a V8, managed to find a Z28 with a 350TPI/700r4 as a replacement, and yes, the Camaro kind of didn't mind the auto, but a manual would have been better, but funds means I'm sticking with the auto (engine / box transplant into the '81) 

I got an XF Jag with an 8sp auto and it was awful, yes it had flappy paddles, but was awful, dangerously awful! I bet you where a good 2 secs before the thing decided to respond on throttle input, which is no good at a roundabout in rush hour. I used to hold it on the converter, with the left foot on the brake, and it was fine, but the wife just couldn't get the hang of it, so its away, and I've a 6sp manual golf, and it's a much better drive (apart from the elec handbrake, that can do one).

2 hours ago, markbt73 said:

I've never driven a dual-clutch gearbox 

I've not...yet 😉

One of the young team in work got a Golf R on PCP, that's got the DSG box, just sounds a bit wrong (from driving behind, the things just shy of 400bhp, in a wee golf, he's infront....🤬), not sure if there's an auto blipper, but there's just a bit of, white noise (?) changing down.

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1 hour ago, Wooders28 said:

Never actually driven a Vette! 😳

A mates C3 goes ok with an auto, and another's C6 auto, goes really well with the 6 speed giving good mileage on the motorway, but a driver's car should have more driver involvement imo, There's nothing like , making progress 🙄, down a B road, heal/toeing down the box, hitting the revs right on every downshift, exhaust popping on the overrun (ok you dont get that with efi these days) , turning in with slight oversteer, on the power and wrestling around the corner onto a straight and back up the box.

Oh, I get it... I have a '71 MGB GT that's about as manual/mechanical as you can get, and I love it. (And yes, I always downshift to second gear going through the covered bridge near my house, just to listen to that crackle.) I guess it's just that with Corvettes (and muscle cars, frankly), shifting seems like more of a chore than a joy. I like light, nimble, flick-it-around cars with manuals, but the big V8s, I'd rather just mash the throttle and open it up in a straight line. And besides, automatic Corvettes do this cool "hunker down" squat when you put them in Drive. Don't know why, but I always liked that.

This is way more fun to talk about than the gloom-and-doom financial stuff...

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13 hours ago, markbt73 said:

I have a '71 MGB GT that's about as manual/mechanical as you can get, and I love it.

(I think I've said before, but) One of my mates has done an MX5 (Miata?) Engine swap into an MGB, and he loves it (also done a, roadkill, C4 cart, which really is quite hard-core, with the British weather being what it is..❄⛈), the MGB is a real nice build, quicker and more reliable, but doesn't sound quite right.

13 hours ago, markbt73 said:

Corvettes do this cool "hunker down" squat when you put them in Drive. Don't know why, but I always liked that.

Thought that was dependant on the torque converter stall, the car wanting to just go, Z28 would do over 30mph without touching the throttle! 

I'm not sure what a car manufacturer would need to build to please everyone, older car guys what a modern old car ( Re re' s?), older none car guys want a status symbol that makes them look cool. Car guy Millennials (PlayStation generation) want something they can plug a computer into and make it go whoosh and add Nozzzz , none car guy millennials want a car to make them look cool. 🤷‍♂️

 

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