Economics

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Since nobody is talking about economics much in our department, yet it is something that pervades everything, I thought I'd start a page to see what people come up with. -Ingbert

[edit] A Better Distinction than that between Service and Manufacturing Jobs

One of the frequently argued points is that the US economy is going to pot because we are loosing manufacturing jobs, and not replacing them with anything that creates wealth. How does a service industry after all make anything new?

I think the answer is more complex than that. If a community is only made up of people who serve other people in the community, than there will be no influx of wealth to balance the wealth sent out of the community to buy goods and services which the community cannot provide for itself. However, if a service can be "exported", then the community will do fine. 80% of New Orleans's economy is based in the service industry: but it is from the hotels and restaurants that fill the city and cater to the tourists. This may not be the ideal economic system, and it certainly keeps New Orleans poor, but it does provide an influx of cash. It is highly dependant on whether other people have excess money to spend on travel, which makes New Orleans particularly vulnerable to a recession.

The questions for the US then include:

• Are the services we provide the rest of the world (knowledge, consulting, etc.) making up for the loss of manufacturing? Or is there an imbalance?

• Are these services which are replacing the manufacturing base we had sustainable, diverse, and at least as resistant to economic downturns as manufacturing is?