Get Out The Glue For A New Business Model

GDP measures productivity
Click to expand...


No it doesn't. it measures output. Productivity is a diffrerent measure all together..

GDP = C+I+G+X-M (consumtion, investment gov't spending, imports - exports)

In general, productivity tends to rise strongly when the economy is booming. But gains in productivity can become weak or productivity can fall when the economy slows or contracts.

Productivity = a measure of output per hour worked.

Our growth rate right now is being fueled by G and C, and to a lessor extent I right now.. worker productivity is lower than it was leading up to the 1999 down turn.

Try again.
 
Sorry...I meant to say "production" and "ivity" came out instead. Replace "production" in that one instance with "productivity," and the whole post can stand fine.

And you have the X and M definitions backwards.

So, yes, GDP is a measurement of production. However, if GDP rises faster than employment, it means that productivity is on the rise. It can do so in a couple of ways:
  • More hours of work for exempt employees. This doesn't show up as an increase in hours worked.
  • Outsourced work. While this decreases GDP due to the increase in M, the corresponding rise in C is greater and thus increases GDP overall.
 
The economy as a whole benefits from higher productivity, I dont see why you think it's such a bad thing... unless you are a union guy.

And outsourcing has been around for a long time, I think what you are trying to refer to is offshoring... Offshoring creates a tempory imbalance, that makes up for itself in C.. In any case, if its cheaper to offshore, than it makes sense to do so.

What ever happened to the idea of efficiency for efficiency sake?? Subsidizing waste will get you in the same shoes that USairways is in now..

You can cry about the fact we live in a global economic environment, but the truth is protectionism and isolationism are no longer options.
 
:lol: Usually I'm on your side of these discussions.

Look, I agree that, in general, improvements in productivity are good for the nation. However, in the short run, the offshoring (thanks...that was the word I was looking for and it just wouldn't come to me) hurts the domestic economy for those whose career fields are lost to offshoring.

I do believe that in the long run such a shift will improve our economy. However, as John Maynard Keynes was famous for saying, "In the long run, you're dead."

Guess it's nice to know my great grandchildren will enjoy the fruits of offshoring. <_<

In any case, you were pointing to GDP increases as a reason to celebrate. I'm illustrating how such celebration would be premature at best, and misguided at worst.
 
I don't have heartburn with efficiency; I do have heartburn with how 'we the people' are not prepared for it.

Why, even as a union guy, no heartburn? Because I accept that if we don't embrace it, the French, or the Russians, or somebody else, will. Then we're all up s*&t's creek, and probably in a shorter run than Keynes referred to.

20 years ago, the powers-that-be saw this coming. You won't work 30 years with one company, they said. You'll work for 8 different companies, they said. Labor will be in short supply, they said. Computers will replace all manner of work done by man, they said.

Well, 'they' were right.

So,

Why didn't we design portable pensions, to follow an employee around for those 8 jobs?

And while we were at it, design a health care plan that would follow that same employee around for those 8 jobs?

And since a guy would probably need to continually update his skills, make education reasonable, and perhaps deductible (we finally got a piece of that a few years back)?

The list could go on, but you get the gist - enable the citizen to prepare for the brave new world.

The fact 'they' knew this stuff back then, and didn't do anything about it, fuels my conspiracy theory about cutting the middle class down to size.
 
Outsourcing in the service sector (which is what has happened in the past several years) is actually a very small amount of job losses in the US. We don't call it outsourcing when we buy clothes from everywhere except the US or demand and consume cheaper and cheaper consumer products so that US companies are forced to move manufacturing to even cheaper shores.

By the way, where was your car built and, more significant to this group, where are the planes you fly manufactured?
 
New Model Needed

ARLINGTON (theHub.com) - Since the September 11 attacks, airlines are facing a market that has changed more fundamentally than at any time since the industry was deregulated in 1978. “As a result, even the biggest companies may have to remake themselves radically, quickly and permanently, or face extinction,â€￾ the New York Times said. In a major article yesterday, the newspaper said the predominant business model, in which customers pay a premium for the convenience of widely available service, is being outstripped by low-fare airlines that pick and choose their destinations.

“The industry is transforming itself in front of our very eyes,â€￾ Patricia Friend, president of the Association of Flight Attendants, told the newspaper. “The economic situation of the industry is a reality … We have no choice but to try to adapt ourselves to a new business model while preserving as much as we can,â€￾ she said. All of the new models now being tested share one theme – lower fares.

While some executives said that if airlines simply trim costs they can withstand the pressure as they have in previous slumps, others told the Times that the industry can’t just shrink this time. It must “reshape itself, abandoning assumptions about consumers and labor contracts.â€￾ Delta CEO Gerald Grinstein is one airline executive who has said publicly that airlines are facing a fundamental change. “Any notion that we can simply grow ourselves out of this predicament is mistaken. Many of our costs are higher than those of our competitors, and our customers will not pay us to cover the difference,â€￾ he said.
 
diogenes said:
I don't have heartburn with efficiency; I do have heartburn with how 'we the people' are not prepared for it.

Why, even as a union guy, no heartburn? Because I accept that if we don't embrace it, the French, or the Russians, or somebody else, will. Then we're all up s*&t's creek, and probably in a shorter run than Keynes referred to.

20 years ago, the powers-that-be saw this coming. You won't work 30 years with one company, they said. You'll work for 8 different companies, they said. Labor will be in short supply, they said. Computers will replace all manner of work done by man, they said.

Well, 'they' were right.

So,

Why didn't we design portable pensions, to follow an employee around for those 8 jobs?

And while we were at it, design a health care plan that would follow that same employee around for those 8 jobs?

And since a guy would probably need to continually update his skills, make education reasonable, and perhaps deductible (we finally got a piece of that a few years back)?

The list could go on, but you get the gist - enable the citizen to prepare for the brave new world.

The fact 'they' knew this stuff back then, and didn't do anything about it, fuels my conspiracy theory about cutting the middle class down to size.
Click to expand...
We won't do those things, because the people who need those things (not to mention our society as a whole) don't vote for in that direction. They vote for social issues. It's psychotic. Well, obviously not, but I like the idea.
 
You must log in or register to reply here.

Latest posts

Back
Top