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Notes on the Decline of a Great Nation (Commentary)

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^nice job cherry picking my post. 

 

I responded to KJP's comment that "much of Europe is very advanced with higher quality of life".  He mentioned health, education, longer life, etc.  I asked for specifics on these items but he didn't oblige.

 

So if you love people who visit Europe and don't pay attention to what's going on, what exactly should they be paying attention to?  I never said "r's are right about everything or anything.  But I've been to Europe enough to know it aint all it's cracked up to be and if someone's going to spout off about "higher quality of life", please be ready to back it up with facts. 

 

Regarding your other comments about Europe measuring unemployment differently than the US, and how that leads to LOWER unemployment than here in America, please support your argument, enlighten us and further the conversation with some hard data.

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A couple factual notes:

 

A wide majority (almost 2/3) of American households still own their own homes. The HO rate declined slightly since peaking a few years ago, but I doubt it's going to drop much lower in the near or medium term.  Though maybe I'm reading your post too literally (it implied that that  majority homeownership was a brief phase).  And note, even before WW2, most Ohioans owned their own homes.  In fact, Ohio's 1900 HO rate was 52.5%.  The idea that homeownership has mainly a suburban, post-war phenomenon is a bit of a myth.

 

Yep, too literal. I was reading a book on Cleveland history (The Making Of A City, published in 1950) over the weekend, and it noted that in the City of Cleveland before WWII, the home ownership rate was in the low- to mid-40 percentiles. It also noted that Cleveland had some of the highest home ownership rates of any major city in the country.

 

I love these people who visit Europe and instead of paying attention to what's going on, learning things and keeping an open mind just stomp around thinking how much it sucks and how right the R's are about everything. They might as well have stayed at home an looked at pictures or watched an episode of Rick Steve.

 

Well said.


"Nearly every problem that we have in the USA -- unaffordable health care, prison overpopulation, hyper militarization, climate change, racism, gun violence, poverty, poor education, urban sprawl and others -- cannot be positively addressed because bribery and conflicts of interest are legal under campaign finance laws which protect the uber-wealthy and the narrow self-interests who grossly benefit from our afflictions."

 

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^Or you could simply provide the data which refutes his point

 

I just asked the question, originally of KJP, about what the unemployment rate of the European nations was.

 

Reality is that "quality of life" is extremely difficult to define.  It varies from country to country and varies even more within a society of people.  Some basic agreed upon factors however include: overall health, disposable income, crime rate, job/career satisfaction.  If others want to identify different criteria, they are welcome to, but it's worth noting what you are referring to, rather than just saying "quality of life is higher over there...."

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^Or you could simply provide the data which refutes his point

 

I just asked the question, originally of KJP, about what the unemployment rate of the European nations was.

 

Reality is that "quality of life" is extremely difficult to define.  It varies from country to country and varies even more within a society of people.  Some basic agreed upon factors however include: overall health, disposable income, crime rate, job/career satisfaction.  If others want to identify different criteria, they are welcome to, but it's worth noting what you are referring to, rather than just saying "quality of life is higher over there...."

 

Take a look at this map and see how many countries in Europe have lower unemployment than us, unadjusted. Let alone nations that are close. All these blowhards in the right-wing news entertainment media bark "Greece! Spain!" over and over and use that as and overlay for the entire continent. Pretty soon they've fooled all the old people into thinking Europe is crumbling because they refuse to work 90 hours a week like we are brainwashed into.

 

http://epp.eurostat.ec.europa.eu/guip/mapAction.do;jsessionid=9ea7d07d30dfc9438512f1e343d7937ea36feeb7dd34.e34MbxeSaxaSc40LbNiMbxeNax0Ke0?mapMode=dynamic&indicator=teilm020_1#teilm020_1

 

Ours for october was 7.9%

 

edit: apparently the map resets after a few minutes. Click on the link, then click go back, then scroll down and select "Harmonized Unemployment Rate".

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^nice job cherry picking my post. 

 

I responded to KJP's comment that "much of Europe is very advanced with higher quality of life".  He mentioned health, education, longer life, etc.  I asked for specifics on these items but he didn't oblige.

 

Yes, I'd hoped your curiosity would be piqued by my offering of such a provocative statement! So I will oblige despite your lack of curiosity.....

 

http://www.forbes.com/2007/02/07/worlds-fattest-countries-forbeslife-cx_ls_0208worldfat.html

And

fattest-nations.png

 

Child poverty rates

http://www.businessweek.com/ap/2012-09-12/us-poverty-rate-unchanged-record-numbers-persist

And

kornbluh_singleparent.jpg

 

 

Infant mortality rates (not bad, but not the best either)

info-unbk0609-infant.gif

 

 

Seventh-highest cancer rate in the world

http://blogs.menshealth.com/health-headlines/new-report-u-s-has-7th-highest-cancer-rate-in-the-world/2011/01/30

cancer-rates1.jpg

 

 

Not too educated in math, not good for developing technical skills....

2009-pisa-international-education-rankings-mathematics-chart-picture.png

 

Not too educated in science either.....

pisa%20scores.jpg

 

 

We do have a pretty high percentage of the population as college graduates. But it doesn't say what those degrees are in (fashion merchandising, perhaps?), or the students' nation of birth.....

http://www.newser.com/story/154858/10-most-educated-countries.html

 

 

Life expectancy (wonder which of these nations have, haven't got national health insurance?)

info-unbk0609-lifespan.gif

 

 

OK? Can I get back to work now?

images-dunce1.jpeg


"Nearly every problem that we have in the USA -- unaffordable health care, prison overpopulation, hyper militarization, climate change, racism, gun violence, poverty, poor education, urban sprawl and others -- cannot be positively addressed because bribery and conflicts of interest are legal under campaign finance laws which protect the uber-wealthy and the narrow self-interests who grossly benefit from our afflictions."

 

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Did you read the column?

 

Yes, last week. This article holds absolutely no credibility with me. There's no real analysis, no serious consideration of opposite viewpoints. It's just the left-version of the same kind of anti-intellectual drivel that the right gets properly criticized for. This is Rush Limbaugh level stuff. It is worthless for addressing real problems.

 

I agree Surf.  As with most things, the truth lies somewhere in the middle.  As a test I always ask my "conservative" friends to name the most recent GOP president who cut spending, the deficit and debt  (even GWB with a GOP Congress didn't manage this).  Their usual response is "Obama spent more!!"    On the other hand try to get your uber-liberal friends to name a GOP president who cut entitlements in draconian fashion.  They will throw out names, but if you look at the data it usually support their assertions.  Schoolyard responses of the uninformed...

 

I personally believe all the conflict, class warfare, big-government haters, etc are the deliberate work of our two political parties.  The more they keep us engaged in these meaningless arguments the better off they are.    Our legislators want us to do the arguing so they don't have to take a stand.  To do so risks alienating their life-blood in the lobbyists.    Compromise is a unfortunate victim of this arrangement.

 

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I personally believe all the conflict, class warfare, big-government haters, etc are the deliberate work of our two political parties.  The more they keep us engaged in these meaningless arguments the better off they are.    Our legislators want us to do the arguing so they don't have to take a stand.  To do so risks alienating their life-blood in the lobbyists.    Compromise is a unfortunate victim of this arrangement.

 

This is it. You've stated exactly what I believe. 

 

President Obama's Freudian slip/moment of candor that "You can't change Washington from inside" speaks volumes.

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Did you read the column?

 

Yes, last week. This article holds absolutely no credibility with me. There's no real analysis, no serious consideration of opposite viewpoints. It's just the left-version of the same kind of anti-intellectual drivel that the right gets properly criticized for. This is Rush Limbaugh level stuff. It is worthless for addressing real problems.

I disagree.  The German columnist did recount the events of the last four years and did describe Republican positions for the last quarter century.

 

I never saw anybody turn quite as insane as did the Republicans when President Obama took office.  It was worse than their behavior when President Clinton took office. 

 

The problem with the Obama-era Republicans is that they were railing against an imaginary version of President Obama that did not really exist.  Hence, they got themselves into ridiculous and unsupportable positions that made them into an international joke and weakened our nation.

 

Remember when President GWH Bush actually took responsibility for balancing the budget in the 1990s?  The 21st century Republicans have become a clown caucus that is running against the positions that previous republicans like GHW Bush had supported.

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>Europe is crumbling because they refuse to work 90 hours a week like we are brainwashed into

 

Ironically the WWII generation mostly enjoyed a 40 hour week with the wife staying at home.  If you try to tell them things have changed and thousands of college graduates with $50K in loan debt are working retail, they tell you "you're lucky to have a job".  End of story. 

 

 

>Our legislators want us to do the arguing so they don't have to

 

Exactly, they have the populace propagating the propaganda. 

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I personally believe all the conflict, class warfare, big-government haters, etc are the deliberate work of our two political parties.  The more they keep us engaged in these meaningless arguments the better off they are.    Our legislators want us to do the arguing so they don't have to take a stand.  To do so risks alienating their life-blood in the lobbyists.    Compromise is a unfortunate victim of this arrangement.

 

This is it. You've stated exactly what I believe. 

 

President Obama's Freudian slip/moment of candor that "You can't change Washington from inside" speaks volumes.

 

As much as you know how much I love a good conspiracy theory ;), I think you two are ignoring how and why a democracy/republic works.

 

"Democracy in a nation of 300 million can be noisy and messy and complicated.  We have our own opinions.  Each of us has deeply held beliefs.  And when we go through tough times, when we make big decisions as a country, it necessarily stirs passions, stirs up controversy.  That won’t change after tonight.  And it shouldn’t.  These arguments we have are a mark of our liberty, and we can never forget that as we speak, people in distant nations are risking their lives right now just for a chance to argue about the issues that matter... the chance to cast their ballots..." *  *  *  *  *

 

"But that doesn’t mean your work is done. The role of citizens in our democracy does not end with your vote.  America’s never been about what can be done for us; it’s about what can be done by us together, through the hard and frustrating but necessary work of self-government.  That’s the principle we were founded on." *  *  *  *  *

 

"I believe we can seize this future together because we are not as divided as our politics suggests. We’re not as cynical as the pundits believe. We are greater than the sum of our individual ambitions and we remain more than a collection of red states and blue states. We are, and forever will be, the United States of America."

 

 

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Or there's this to consider:

 

    "A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy..."

 

Alexander Fraser Tytler, Scottish lawyer and writer, 1770

 

 

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Generous gifts are fine, so long as they are paid for.

 

Nice generalization.  So which gifts actually are paid for?  Defense/strong anti-terrorism network?  Social welfare programs like Medicare, Medicaid, & Social Security?  What about dense network of transportation, roads, bridges, transit?  How about our education system & schools?  Local police & fire?  Even more micro level, things like mortgage interest deduction?  Subsidizing student loan interest?

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Doesn't matter. None of them are a problem for democracy if they are paid for.

 

Increasing taxes and spending is fine, up to the point that it scares people and businesses out of the country. Cutting taxes and spending is fine up to the point that it creates social unrest. Cutting taxes and increasing spending is highly problematic (a.k.a. the Bush agenda). Cutting taxes and keeping spending the same is highly problematic. Keeping taxes the same and spending more is highly problematic.

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>Increasing taxes and spending is fine, up to the point that it scares people and businesses out of the country.

 

Sure, businesses make emotional decisions based on their feelings because they are people. 

 

Has nothing to do with a decision to race to the bottom and legislation that makes this favorable to their bottom lines while still enjoying the benefits of being incorporated in the USA.  It's ok though cause they built it.

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It bothers me when someone says this is the greatest country on Earth. Patriotism is nice, but nationalism is not. This is a great place to live in a world of many great places. I've visited nine countries in my life, and I've discovered great things in all of them including many things we don't have. I'm certainly most comfortable here in America because this is where I live. But when I hear someone say this is the greatest country on Earth, or when I'm asked to stand and pledge allegiance to the flag, that really creeps me out. America is an address. It's not a religion.

 

It's really more than that.  America was a nation founded not upon a landmass, royal family, or religion, but on a set of very admirable ideas that represented a quantum leap in philosophy.  We've held on to those ideals, we've made a good faith effort to live up to them, and to a large degree we've succeeded.  Pretty much every other nation on that list of great places also subscribes to those ideas.  But we pioneered them, we fight for them, and they are a fundamental part of our national identity. 

 

Perhaps most importantly, we are one of the very few nations on Earth where you can move here from somewhere else, assimilate to a degree (not even entirely) and within a few years you are one of us.

 

It probably should be noted that being forced, or even "strongly expected" to say the Pledge runs directly counter to those ideas.  It was a true mark of our strong adherence to those founding principles when, during wartime, the fundamental right to dissent was upheld by the Barnette decision.

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>Increasing taxes and spending is fine, up to the point that it scares people and businesses out of the country.

 

Sure, businesses make emotional decisions based on their feelings because they are people. 

 

Has nothing to do with a decision to race to the bottom and legislation that makes this favorable to their bottom lines while still enjoying the benefits of being incorporated in the USA.  It's ok though cause they built it.

Whatever, dude. I was not making some right wing argument. If businesses were taxed 90+% of their earnings, most would leave or not even get off the ground.

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Ah yes the Laffer Curve.  But if they were only taxed 10%, then there would not be enough funding for the military, police, and public schools, and so businesses would be forced to hire much more private security and spend years training employees how to do basic math and reading.  Most of what the government does is providing a stable and relatively fair environment for commerce, and people arguing for "less government" are actually arguing for companies to spend way more out of their own budgets for services that are provided much more cheaply by the government. 

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I think this discussion is confusing the concept of corporate tax rates with inidividual income tax rates.  You can lower the former to stay competitive in the global market.... and I don't think you will find that many politicians in DC who would argue against lowering these rates (both Romney and Obama supported a lower corporate tax rate during the campaign).  Raising the latter is really more about how many toys the CEOs can buy after their bonuses, stock options, and golden parachutes.

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BTW, this is what we all want to avoid. The Nazis are finding a new foothold, this time in Greece......

 

http://www.urbanohio.com/forum2/index.php/topic,28101.0.html


"Nearly every problem that we have in the USA -- unaffordable health care, prison overpopulation, hyper militarization, climate change, racism, gun violence, poverty, poor education, urban sprawl and others -- cannot be positively addressed because bribery and conflicts of interest are legal under campaign finance laws which protect the uber-wealthy and the narrow self-interests who grossly benefit from our afflictions."

 

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"Nearly every problem that we have in the USA -- unaffordable health care, prison overpopulation, hyper militarization, climate change, racism, gun violence, poverty, poor education, urban sprawl and others -- cannot be positively addressed because bribery and conflicts of interest are legal under campaign finance laws which protect the uber-wealthy and the narrow self-interests who grossly benefit from our afflictions."

 

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Are the New brand of Republicans just plain mean?

 

The anti-UN obsession has become the Emperors Clothes for American Exceptionalism.

 

"The opposition was led by tea party favorite Sen. Mike Lee, R-Utah, who argued that the treaty by its very nature threatened U.S. sovereignty. Specifically he expressed concerns that the treaty could lead to the state, rather than parents, determining what was in the best interest of disabled children in such areas as home schooling, and that language in the treaty guaranteeing the disabled equal rights to reproductive health care could lead to abortions. Parents, Lee said, will "raise their children with the constant looming threat of state interference."

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I do believe the staggering divorce rate in this country is hurting us.  Think of all the families that are split in two and suddenly have to provide two separate shelters for shared custody & etc.  Certainly not helping the consumer debt problem when those two income households are split up.

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I do believe the staggering divorce rate in this country is hurting us.  Think of all the families that are split in two and suddenly have to provide two separate shelters for shared custody & etc.  Certainly not helping the consumer debt problem when those two income households are split up.

 

So is there a real solution to this?  Just curious, not trying to be confrontational...

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Well, by divorces and other demographic trends forcing much more housing to be built, housing has become much less rare.  While certain types of housing are rare, such as well-maintained Victorian homes, or ocean-view homes on the cliffs of Malibu, housing is generally so unrare that we are tearing down hundreds of homes per year in most cities across the country. 

 

So with an overall excess of homes and apartments, why do people keep thinking that housing, generally, will go up in value?

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Hts, can you post the source of the graph you linked?  Interesting data but I'd like to read the entire article and all the assumptions with the data

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Well, by divorces and other demographic trends forcing much more housing to be built, housing has become much less rare.  While certain types of housing are rare, such as well-maintained Victorian homes, or ocean-view homes on the cliffs of Malibu, housing is generally so unrare that we are tearing down hundreds of homes per year in most cities across the country. 

 

So with an overall excess of homes and apartments, why do people keep thinking that housing, generally, will go up in value?

 

Does anyone think that anymore?    That’s probably a question that should have been asked in 2004 or so.

 

If people still have that mindset,  it’s because of the “housing bubble” mindset.  Though it was greatly expanded and maintained by the general public getting into the act, the bubble was born of a need by lenders to maintain an illusion that (politically mandated)  loans on property, regardless of locations, were “good” loans.  This despite the fact that the actual value of real estate is always dependent on “location, location, location….”.  Throw in the damage that can happen due to negligent landlords or indifferent tenants, and of course some houses will attain negative value over time.

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Yeah, people at the very least think that their property values will return in 5 years and that they should "hold on" rather then sell now.  What's so amazing is that rather than changing their views to respond to new circumstances, many are entrenching themselves more deeply in suburban mythology. 

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The data along with that graphic could easily provide enough discussion for a separate thread.  One big thing that jumps out at me is the late 70's early 80's was a definite period of increased automation for manufacturing and industry.  So the main charts, productivity vs wages, is no longer going to be linear.  Productivity can climb at an even faster rate with automation allowing round the clock production and actual labor hours and skills being reduced.  I don't see this as a social or political issue at all, more of an unavoidable economic issue

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I think this discussion is confusing the concept of corporate tax rates with inidividual income tax rates.  You can lower the former {corporate tax rate} to stay competitive in the global market.... and I don't think you will find that many politicians in DC who would argue against lowering these rates (both Romney and Obama supported a lower corporate tax rate during the campaign).

except

"The United States is also an outlier in its lack of a Value Added Tax (VAT), a tax on all commercial activities involved in the production and distribution of a product, which is ultimately paid by the consumer. VAT is used throughout the EU and in many other countries, including India, Brazil, and China. Several prominent policymakers including House Democratic Leader Nancy Pelosi and White House economic advisor Paul Volcker have suggested instituting a VAT as a means of addressing the U.S. deficit, but unsurprisingly, the idea of a new tax has gained little traction in Washington."

 

http://www.foreignpolicy.com/articles/2011/09/20/does_the_us_tax_its_billionaires_less_than_other_rich_countries

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Well, by divorces and other demographic trends forcing much more housing to be built, housing has become much less rare.  While certain types of housing are rare, such as well-maintained Victorian homes, or ocean-view homes on the cliffs of Malibu, housing is generally so unrare that we are tearing down hundreds of homes per year in most cities across the country. 

 

So with an overall excess of homes and apartments, why do people keep thinking that housing, generally, will go up in value?

 

Does anyone think that anymore?    That’s probably a question that should have been asked in 2004 or so.

 

If people still have that mindset,  it’s because of the “housing bubble” mindset.  Though it was greatly expanded and maintained by the general public getting into the act, the bubble was born of a need by lenders to maintain an illusion that (politically mandated)  loans on property, regardless of locations, were “good” loans.  This despite the fact that the actual value of real estate is always dependent on “location, location, location….”.  Throw in the damage that can happen due to negligent landlords or indifferent tenants, and of course some houses will attain negative value over time.

 

Housing values have traditionally gone up for decades before the Clinton/Bush bubble period.

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" the bubble was born of a need by lenders to maintain an illusion that (politically mandated)  loans on property, regardless of locations, were “good” loans.  "

 

This is a complete and utter falsehood that goes hand in hand with "poor people caused the housing collapes".  The bubble was caused by law which allowed mortgage backed securities (derivatives) to exist.  This let lenders write paper on anything and have no liability.  In the interim, they made their fees on the paper they wrote, then passed the risk on down the line in the form of these MBS's.

 

 

 

 

 

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How backward is America? We try to keep immigrants out, Canada tries to empower them....

 

http://m.theglobeandmail.com/news/politics/ottawa-creates-new-fast-track-for-skilled-trades-immigrants/article6146776/?service=mobile


"Nearly every problem that we have in the USA -- unaffordable health care, prison overpopulation, hyper militarization, climate change, racism, gun violence, poverty, poor education, urban sprawl and others -- cannot be positively addressed because bribery and conflicts of interest are legal under campaign finance laws which protect the uber-wealthy and the narrow self-interests who grossly benefit from our afflictions."

 

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By 2030, US will lose Superpower status:

 

“Asia will have surpassed North America and Europe combined in terms of global power, based upon GDP, population size, military spending, and technological investment,” the report says. “China alone will probably have the largest economy, surpassing that of the United States a few years before 2030.”

 

http://thehill.com/blogs/defcon-hill/policy-and-strategy/272013-report-us-will-lose-superpower-status-by-2030

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And thank god for that. Enough of this hegemon mularky; let someone else shoulder the burden. There are certainly quite a few non-superpower countries that have such a far better way of life.

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Nice job of dismissing something so impactful as though it's nothing at all.  While it's simple to say "let someone else bear the burden", that someone is going to be China, and they really haven't done much of a job tackling the big issues of the day, like Human Rights, Climate Change, Endangered Species, the AIDS Epidemic, global terrorism, etc....  nor is there any reason to think they'll do more in the future.

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They said the same thing about Japan 20 years ago...... and the Soviet Union 40 years ago.  The burst of China's bubble will likely be the most epic of all.

 

BTW, gottaplan.... about your request for info on people risking their lives to sneak into other countries, go ahead and google the story about the guy who fell out of the sky in West London today

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When was Japan ever a super power?  Soviet Union was only a super power because they had nuclear capabilities.  Their economy never had a leg to stand on.  Some of you may look forward to the day the US is no longer in charge of the world, but don't kid yourselves that it'll be a better day for all.

 

The article fully predicts such an outcome when “a collapse or sudden retreat of U.S. power probably would result in an extended period of global anarchy; no leading power would be likely to replace the United States as a guarantor of the international order.”

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Japan was not a military superpower 20 yrs ago because it was not allowed to have a military.  But, immediately after the fall of the Soviet Union, the scary mary crowd in this country immediately turned it attention to Japan as a major economic threat.  They were kicking our arse in the auto industry and electronics..... still are as a matter of fact.  Think about movies like Rising Sun with Connery and Snipes...... or that auto plant movie with Michael Keeton and Norm from cheers.  It was this scare that inspired a lot of the 'buy american' and 'made in the usa' talk

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The Japanese were also buying up American real-estate and often enough iconic real-estate, not unlike many Chinese. Although the impact is muted because of the crazy Chinese real-estate development market/machine/bubble.

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The rise of the Japanese auto and electronics industries predated the fall of the Soviet Union by 10-20 years.  Their machine tools industry put all of the family-owned machine tool places in Cincinnati out of business in the 1980s.   

 

 

>They said the same thing about Japan 20 years ago

 

Yeah except China has 5-6x the population, most of which speak the same language (huge advantage compared to India), and tons of natural resources.  Totally different situation. 

 

Going forward the US has the advantage of having one language and natural resources, including the ability to export food.  Rolling Stone had a great article in its May 2010 issue about how countries and lone wolf capitalists around the world are buying farming rights in Africa and elsewhere.  China is listed among the countries that will need to import food.

 

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The trend I see with Japan is actually them going back to a low-tech existence for themselves but still profiting from technology. That's why they continue to move production of their automobiles, powersports toys and power equipment to the U.S. while manufacturing electronics and such in China. People who have spent a lot time in Japan will actually tell you that the nation is actually very low-tech as a people. The earthquake/tsunami/nuclear problems didn't make them more confident in modernity. So, they'll design, conceptualize and manage the products in Japan, but have others handle all the dirty work.

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The trend I see with Japan is actually them going back to a low-tech existence for themselves but still profiting from technology. That's why they continue to move production of their automobiles, powersports toys and power equipment to the U.S. while manufacturing electronics and such in China. People who have spent a lot time in Japan will actually tell you that the nation is actually very low-tech as a people. The earthquake/tsunami/nuclear problems didn't make them more confident in modernity. So, they'll design, conceptualize and manage the products in Japan, but have others handle all the dirty work.

 

Japan has been in a state of relative decline for the past 20 years or so, I remember seeing a graph from the economist that noted that Per Capita GDP of other countries in East Asia such as Korea and Taiwan have caught up to Japan.

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Well, by divorces and other demographic trends forcing much more housing to be built, housing has become much less rare.  While certain types of housing are rare, such as well-maintained Victorian homes, or ocean-view homes on the cliffs of Malibu, housing is generally so unrare that we are tearing down hundreds of homes per year in most cities across the country. 

 

So with an overall excess of homes and apartments, why do people keep thinking that housing, generally, will go up in value?

 

Does anyone think that anymore?    That’s probably a question that should have been asked in 2004 or so.

 

If people still have that mindset,  it’s because of the “housing bubble” mindset.  Though it was greatly expanded and maintained by the general public getting into the act, the bubble was born of a need by lenders to maintain an illusion that (politically mandated)  loans on property, regardless of locations, were “good” loans.  This despite the fact that the actual value of real estate is always dependent on “location, location, location….”.  Throw in the damage that can happen due to negligent landlords or indifferent tenants, and of course some houses will attain negative value over time.

 

People think an economic recovery goes hand-in-hand with a return of the real estate market of yesteryear. The media fuels it by benchmarking current housing prices against their pre-recession highs, and treating that as a barometer of the economy.

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