The destruction of the Middle Classes commences

julieq

StevieJ wrote: »

Your whole post is based on the assumption that the pie will remain the same size, whereas IMHO when 3rd world countries improve their lot then the pie will be much bigger. I am sure your arguments were used in the 18th and 19th century to explain why the middle and upper classes should not share their wealth with the poor.

Is the answer not just because the lower classes will just spend it all on gin and degradation and live the life of Reilly at the expense of the decent and hard working?

Which to be fair is pretty much exactly what has happened.

StevieJ

julieq wrote: »

The euro is not artificially low. It's pretty strong, it's just had a relative dip recently because of the Greek crisis. You can get into arguments about whether that was manipulated by Merkel, but that was opportunistic rather than structural.

Are you saying that the DM wouldn't be relatively stronger against Sterling than the Euro currently is if monetary union had not taken place?

julieq

I don't think that was a calculation, and the point of the various monetary pacts was to strengthen the perception that the Euro was to be a strong alternative to the dollar, that was part of the idea really. Europe fundamentally has a protectionist instinct, but it also wants to stand as the equal of the US, and a devalued currency wouldn't help that goal. And if currency manipulation was the aim Germany could have done far more this year to force the Euro down. Remember also that this cuts both ways now, as it increases supply chain and consumer price inflation.

diable

People in the UK should then boycott companies that have outsourced to Bangalore or where ever (if I employed a person without a work permit I would be fined £5000 but for corporates its ok) but everyone is looking for the best deal on car, house insurance, gas, electricity, water and all these providers use foreign call centres. Who here would pay a little more to hear someone with an English accent?

StevieJ

julieq wrote: »

I don't think that was a calculation, and the point of the various monetary pacts was to strengthen the perception that the Euro was to be a strong alternative to the dollar, that was part of the idea really. Europe fundamentally has a protectionist instinct, but it also wants to stand as the equal of the US, and a devalued currency wouldn't help that goal. And if currency manipulation was the aim Germany could have done far more this year to force the Euro down. Remember also that this cuts both ways now, as it increases supply chain and consumer price inflation.

Yes when the fear was deflation.

StevieJ

diable wrote: »

People in the UK should then boycott companies that have outsourced to Bangalore or where ever (if I employed a person without a work permit I would be fined £5000 but for corporates its ok) but everyone is looking for the best deal on car, house insurance, gas, electricity, water and all these providers use foreign call centres. Who here would pay a little more to hear someone with an English accent?

Yes, as long as it isn't a Geordie It would be nice and relaxing to understand them first time of asking.

ILW

diable wrote: »

People in the UK should then boycott companies that have outsourced to Bangalore or where ever (if I employed a person without a work permit I would be fined £5000 but for corporates its ok) but everyone is looking for the best deal on car, house insurance, gas, electricity, water and all these providers use foreign call centres. Who here would pay a little more to hear someone with an English accent?

I couldn't agree more. The same people who moan about poor sevice tend to be the same ones that search the internet for the cheapest deal. Good service costs money.

Malcolm.

julieq wrote: »

The euro is not artificially low. It's pretty strong, it's just had a relative dip recently because of the Greek crisis. You can get into arguments about whether that was manipulated by Merkel, but that was opportunistic rather than structural.

The euro is artificially low for the German economy, just as the Deutsche Mark was for West Germany post reunification.

edit: I think StevieJ may have beat me to answering this one.

lewisa

julieq wrote: »

So why shouldn't globalisation be used as a way of cutting costs?

I'm sorry, but no-one in this country or any other has a right to a comfortable income. I'm currently in Shanghai, and I'm looking out of a hotel window onto a landscape of extraordinary growth and opportunity, which the Chinese are grasping with both hands by working unbelievably hard for returns which by UK standards are paltry. They are PROPERLY well educated, and it's viewed as a personal responsibility to become educated, not a basic right. If they lose their job, they lose everything. Which I suspect concentrates the mind a bit.

They will be the winners over the next 50 years, not whinging and in my experience terminally unproductive English middle managers who think the world owes them a living. Unless you can add genuine value to the company you work for, you're in competition with better motivated and harder working people at the end of a very accessible broadband pipe. Live with that fact and get your finger out rather than complaining that someone should do something to stop it happening.

You can hold back the tide for a while with political measures - the French are very adept at attempting that - but frankly when capital can move around the world at the click of a mouse, protectionism in the job market or anywhere else is going to fail.

It's amusing in many ways that those who are prepared to stick up protectionist barriers to the global trade are the first to rail against "rip off Britain" where they feel prices are elevated to a globally ridiculous level. It's two sides of the same coin. If you're prepared to close your internal labour market to external influence and fix prices at a point where that can be sustained then it might just be possible for a while, but it's frankly not a sustainable position long term.

Chinese wage inflation is rising incidentally, and expecations for standards of living are also going up. That will reduce the incentive to outsource over time. In the meantime there have historically been good places in the world to live, and historically there have been bad places. The West is still a good place, whether or not that continues is essentially down to the people who live there accepting the need for change rather than hoping they continue indefinitely in their flabby ways.

Awesome attitude towards life. Will you marry me?

kabayiri

diable wrote: »

People in the UK should then boycott companies that have outsourced to Bangalore or where ever (if I employed a person without a work permit I would be fined £5000 but for corporates its ok) but everyone is looking for the best deal on car, house insurance, gas, electricity, water and all these providers use foreign call centres. Who here would pay a little more to hear someone with an English accent?

I would personally pay more.

On a wider note, I think we have to change our consumption model drastically.

This is just as valid about the number of calls we make to call centres, as it is to buying televisions which we scrap and throw away after a couple of years.

Shipping vast amount of product from the other side of the world on huge container ships, only for it to end up in landfill a short time later is not a sustainable future.