Why Things Cost What They Cost In Argentina

[StevePalermo]

Business friendly country (gag). That's what our nation will look like in a number of years if you know who gets his way.

I'm not going to get into another discussion with you, but you really have to be kidding! Have you noticed how middle class incomes in the US have been devastated over the last few decades, and the millionaires/billionaires have just got richer? If you don't agree with that, just do some research. You're so out of touch its ridiculous.

 

[Lost in Buenos Aires]

Have you noticed how middle class incomes in the US have been devastated over the last few decades, and the millionaires/billionaires have just got richer?

Ain't it the truth!

 

[Dublin2BuenosAires]

Rampant wealth inequality is not a model for anyone. I wish people would stop swallowing the Koch brother's poisonous Kool Aid.

That said, locally the unions have stagnated and don't have an effective counter balance. Sadly, the only way that this can change would be for Argentina to experience another very severe crisis. The country would need to arrive at the crossroads and decide whether to cast off protectionism (both trade and labour) and embrace well regulated open trade employment policies. I would be suspicious that should the worst happen the electorate woukld dig deeper into isolationism and extreme protectionism...i.e. Venezuela.

Can anyone convince me that Massa isn´t FpV with a security emphasis? Look as I might I can't find a single policy which indicates a willingness to tackle unions, protectionism and international isoationism. It's a rebrand as far as I can tell rather than a change of direction.

 

[camberiu]

I'm not going to get into another discussion with you, but you really have to be kidding! Have you noticed how middle class incomes in the US have been devastated over the last few decades, and the millionaires/billionaires have just got richer? If you don't agree with that, just do some research. You're so out of touch its ridiculous.

Could that be because the world has changed?
At the end of World War II, the US was pretty much the only industrialized country with its infrastructure intact. This gave the US a HUGE economical advantage and allowed for the boom of the middle class we saw in the 1950s and 1960s. At that time, the US represented a fraction of the world's population but consumed almost 50% of all the world resources. Talk about concentration of wealth. At the time, the US middle class was the world's top 1%.
But the world changed. Not only has Europe rebuilt itself, but more importantly, the 3rd world became industrialized. South Korea, Thailand, China, India, Brazil, South Africa, Turkey, Mexico, Russia, Vietnam all started to produce steel, cars, appliances, machinery, consumer goods and everything else that the entire world had to rely on the US for after world war II. Those countries also started having a middle class and they all started bidding for those world resources that the US middle class before had all for itself. Remember the days when the US middle class was able to afford buying and consuming 50% of the world resources? Well, those days are over, because now they need to outbid the Indian middle class, the Brazilian middle class, the Chinese middle class, etc...They all want a piece of those resources that the US middle class used to consume all by itself. Talk about re-distribution of income! That is one of the main reason why the US middle class is being 'devastated". It is not the only one, but I believe it is one of the most critical reasons. Do you really think it is sustainable and/ fair for a middle class of a single country to consume the majority of the world's resources? That "typical" American middle class that we saw in the 1950s and 1960s was anything but "typical". It was an abnormality created by world war II. And despite all the romanticism and political rhetoric, it is not coming back. The US middle class, the European middle class and the Japanese middle class will have to adjust to a new standard of middle class. A standard that is normalized with the middle class of the emerging 3rd world nations.

 

[camberiu]

What I just wrote explained in nice animated graphics.


http://www.reuters.com/middle-class-infographic

 

[Dublin2BuenosAires]

Could that be because the world has changed?
At the end of World War II, the US was pretty much the only industrialized country with its infrastructure intact. This gave the US a HUGE economical advantage and allowed for the boom of the middle class we saw in the 1950s and 1960s. At that time, the US represented a fraction of the world's population but consumed almost 50% of all the world resources. Talk about concentration of wealth. At the time, the US middle class was the world's top 1%.
But the world changed. Not only has Europe rebuilt itself, but more importantly, the 3rd world became industrialized. South Korea, Thailand, China, India, Brazil, South Africa, Turkey, Mexico, Russia, Vietnam all started to produce steel, cars, appliances, machinery, consumer goods and everything else that the entire world had to rely on the US for after world war II. Those countries also started having a middle class and they all started bidding for those world resources that the US middle class before had all for itself. Remember the days when the US middle class was able to afford buying and consuming 50% of the world resources? Well, those days are over, because now they need to outbid the Indian middle class, the Brazilian middle class, the Chinese middle class, etc...They all want a piece of those resources that the US middle class used to consume all by itself. Talk about re-distribution of income! That is one of the main reason why the US middle class is being 'devastated". It is not the only one, but I believe it is one of the most critical reasons. Do you really think it is sustainable and/ fair for a middle class of a single country to consume the majority of the world's resources? That "typical" American middle class that we saw in the 1950s and 1960s was anything but "typical". It was an abnormality created by world war II. And despite all the romanticism and political rhetoric, it is not coming back. The US middle class, the European middle class and the Japanese middle class will have to adjust to a new standard of middle class. A standard that is normalized with the middle class of the emerging 3rd world nations.

And yet the old truism that the rich get richer still applies, only much more so.

 

[germano]

Could that be because the world has changed?
At the end of World War II, the US was pretty much the only industrialized country with its infrastructure intact. This gave the US a HUGE economical advantage and allowed for the boom of the middle class we saw in the 1950s and 1960s. At that time, the US represented a fraction of the world's population but consumed almost 50% of all the world resources. Talk about concentration of wealth. At the time, the US middle class was the world's top 1%.
But the world changed. Not only has Europe rebuilt itself, [...]

That picture you are painting about the post WWII world is not accurate. After WWII the US helped Europe tremendously (Marshall plan etc.). This helped to rebuild the infrastructure in Western Europe rapidly. The result was an economic boom in various Western European countries in the 50'ies as well. For example in Germany they called it the "Wirschaftswunder" (which means economic miracle). Results were a rapid growth of the middle class. In other countries like the UK it took a little longer, though.

 

[camberiu]

That picture you are painting about the post WWII world is not accurate. After WWII the US helped Europe tremendously (Marshall plan etc.). This helped to rebuild the infrastructure in Western Europe rapidly. The result was an economic boom in various Western European countries in the 50'ies as well. For example in Germany they called it the "Wirschaftswunder" (which means economic miracle). Results were a rapid growth of the middle class. In other countries like the UK it took a little longer, though.

Yes, but not even remotely on the same scale. One could compare the type of cars a French, German or British person was driving in the 1950-60s and what a typical American would be driving. The same apply to size of houses, food portions sizes, etc....
The US middle class was in a completely different league of the "booming" European middle class of the same period.

 

[germano]

Yes, but not even remotely on the same scale. One could compare the type of cars a French, German or British person was driving in the 1950-60s and what a typical American would be driving. The same apply to size of houses, food portions sizes, etc....
The US middle class was in a completely different league of the "booming" European middle class of the same period.

From what I read - the UK in the 50'ies is a different story because it took longer there to recover from the effects of WWII (while the former enemy received plenty of financial aid). I haven't read much about France in the 50ies. But you are right. Houses, cars and food portions were and I believe are still bigger on average in the US than in most or all places in Europe. I would not take that necessarily as indicator for wealth or how a middle class is doing, though. For example with cars you have to factor in the size of the roads, cost of gasoline, environment protection, size of average parking lots, and of course different tastes. With food there also is quality vs. quantity question, healthy vs. size etc. etc. Having that said I think you are right that the average middle class American was doing better than the average middle class German in the 50'ies and 60'ies - though when looking at what the situation had been like at the end of WWII you have to admit that the Marshall Plan was indeed a huge success and helped converting an almost completely destroyed country (in the case of Germany) into a booming economy in the heart of Europe. This was a tremendous growth in just a few years with strong financial aid from America.

 

[camberiu]

though when looking at what the situation had been like at the end of WWII you have to admit that the Marshall Plan was indeed a huge success and helped converting an almost completely destroyed country (in the case of Germany) into a booming economy in the heart of Europe. This was a tremendous growth in just a few years with strong financial aid from America.

I am not disputing the importance of the Marshall plan or the recovery it brought to Europe after world war II. I think that is pretty self evident. I am simply pointing out that the US had a tremendous economic advantage at the time and that is why its middle class grew so rapidly and was so much better off than anywhere else.
For example:

In the 1960s, if you wanted to buy an airliner and were not part of the Soviet Block, a US made aircraft was pretty much your only choice, as there was no Airbus or EMBRAER back then. So US workers benefited greatly from that. Did German, French, Italian, British middle classes benefit greatly from the Marshall plan? Of course. But they were nowhere as wealthy as their American counterparts.

Bellow is a typical car you would see on the streets of Germany back in 1955. A DKW (Audi) two-stroke 3 cylinder 900cc 34hp car. You could not even find something like that for sale in the US at the time as it would be way too beneath what the market demanded.

Now, this is a typical car you'd see in the streets of the US during the same period, a Ford Fairlane V8 4500cc with 225hp. I think it is pretty clear that the boom the US middle class experienced in the post-war years were unique and unprecedented.