http://www.foreignpolicy.com/articles/20 11/01/02/think_again_american_decline

and Brit bashing,

http://www.reuters.com/article/idUSTRE70 33SI20110104

the latter item is the serious issue.

PS you see Samsung results today?

TFF, alot of that anger is manufactured by our friends in the press and also in the government. I also think the US has a long proven history of rising to challenges and overcoming them. If you want to see a country that is completely and utterly screwed one only has to look at the UK.

The anger makes better politics (and far better talk radio), but the acceptance is more central to our national character. I’m *not* hearing denial, bitterness, or entitlement in the vast majority of my daily conversations (and I don’t hang in such high falutin’ circles as some on this blog).

TFF said it best “we aren’t seeing a market for those with generic low-level skills and no initiative.”

The problem is that seems to be a fast growing demographic in this country.

So far the US has been written off in the 70s, the 80s, the noughties and now this decade. If Mr Salmon was sharper he’d be writting vague warnings about China so in a couple of years after that ponzi scheme comes crashing down he can cash in by pretending he predicted it.

Nor is this confined to the “superstars”. Anybody with skills and initiative can establish a small services business on a shoestring budget. These businesses squeeze compensation for those who prefer to work “in-house” for larger corporations, because they offer superior talent and superior flexibility *and* their cost structure doesn’t have nearly as much overhead baked in.

You read about people in their 50s who were laid off from professional careers and have trouble finding new positions at their old compensation. Did you learn anything during those 30 years of corporate employment? Then market those skills! Be creative and invent a niche for yourself.

Thus we’re seeing immense wealth for the people at the top of the corporate ladder. We’re also seeing a rapidly expanding “entrepreneur” class, making far more money than those with similar skills and a corporate job.

What we aren’t seeing is a market for those with generic low-level skills and no initiative.

The U.S. has it’s infrastructure of roads, phone lines, buildings, water treatment, sewage, roadways and buildings already in place. It should not take the same level of work to maintain as it took to build up.

Several problems as I see it include people who had debt have not been given a fair chance to reduce their debt through interest rate relief on both their credit card debt and their mortgage rates. http://wallstreetchange.blogspot.com/201 0/11/2010-after-election-4-point-economi c.html

Also, the U.S. government has chosen to put most of its investment in preserving unencumbered access to the worlds resources through enhanced military spending, and not enough into being more self reliant and more efficient in the use of resources.

Also, the internet has changed the economy as well.
http://wallstreetchange.blogspot.com/201 0/12/internet-has-changed-capitalism-for ever.html

“Income Inequality and the Superstar Effect” also titled
“How Superstars’ Pay Stifles Everyone Else”
http://www.nytimes.com/2010/12/26/busine ss/26excerpt.html

The gist is that in a globalized world, a few incredible talents can get the business of everybody.

For example Christina Aguilera can take music spending away from other musicians from Springfield to Timbuktu. Via an ETF, I (and anybody with pocket money lying around) can have Gross/El Erian manage my money, taking that business away from not only from my neighborhood financial advisor but even minor Wall St geniuses.

Nothing sinister there, just competition. I don’t have to invest with Pimco, I just happen to think they are worth it.

Lots of illegal stuff going on in finance, I agree. Tons of folks ought to be in jail, including some from Goldman (high-frequency front-running for instance). But much of that wealth is just what happens when you compete with some success on the world stage.

If we are to question the rich-poor gap, we must look at globalization itself. The winners in globalization win very very big, taking business away from very many.

Tom Friedman’s flat world? Not by a long shot.

Part of the problem is that we are living much grander lifestyles than was the norm 50 years ago. Larger houses, more cars. The houses and cars themselves are nicer and more reliable. A plethora of home electronics, most of which didn’t even EXIST in 1970.

Try pricing out your grandfather’s lifestyle. If he was among the upper middle class of his day, it might cost you as much as $40k or $50k a year to live the way he did. Think you can manage that?

I would assume that Foppe was referring to 60′s level CEO to worker pay ratio. In 1965, the average CEO made about 25 time what a worker made. Today that ratio is about 300:1. Do you honestly believe that today’s CEOs are 12 times as valuable as those of the 60′s?

Where have you been for the last twenty years? That comment just evidences no understanding of past history. Your “markets are more efficient at allocating capital” theory started blowing up when the Goldmans of the world threw money at useless dot-com startups so they could goose momentum plays. And its only gotten worse.

Plutocracy is a serious problem. Pretending “we all benefit,” even in marginal ways like iPads and higher commodity prices and wickedly variable 401k statements is losing the forest for the trees. It is plain-and-simple a form of feudalism, and it is always countered with the same violence and extremism that were historically used to keep in line the merchant princes and their third-generation heirs who inevitably assume power is granted by god.

So sure: yeah iPads. Yeah hedging. But show some historical sense, people. There’s absolutely nothing in human nature that differentiates us from the angry peasants and plutocratic knighthood of the middle ages, and those groups *killed* each other. Maybe we should learn from history and act to prevent it from happening again?