Americans: Explain

[Eli]

So I'm reading the World Almanac for 2007. Great stuff.

But some parts raise a few questions:

First, why US Bank Failures dropped from hundreds in the 80s and early 90s, to single digits in the late 90s and early 00s?

Second, why all the blabla about what would happen if China suddenly stops trading with you, when your total trade with Mexico is bigger and with Canada it's twice as big?

Third, how come your imports are almost twice as large as your exports? That makes no sense at all.

Fourth, how come 8 of your 10 busiest ports are either in Texas or Louisiana? Shouldn't most trade come to the East or West coasts, not to the Gulf?

And fifth, what on earth do the 235,654 employees of the Department of Veteran Affairs do?

[VetLegion]

Where did you down... get it?

[Eli]

I actually bought it. I was hospitalized for two weeks and it's a great source of entertainment for the 20 bucks it cost me.

[Kuciwalker]

Re: Americans: Explain

Originally posted by Eli
First, why US Bank Failures dropped from hundreds in the 80s and early 90s, to single digits in the late 90s and early 00s?

No idea. Random thought: S&L crisis (about which I know almost nothing). People who were actually alive then might know the answer...

Second, why all the blabla about what would happen if China suddenly stops trading with you, when your total trade with Mexico is bigger and with Canada it's twice as big?

China's not an insignificant proportion, still, and we buy different stuff from them than from Canada.

Third, how come your imports are almost twice as large as your exports? That makes no sense at all.

Many of us agree

Fourth, how come 8 of your 10 busiest ports are either in Texas or Louisiana? Shouldn't most trade come to the East or West coasts, not to the Gulf?

*shrug*

And fifth, what on earth do the 235,654 employees of the Department of Veteran Affairs do?

I presume they take care of veterans, esp. invalids.

[DrSpike]

Re: Americans: Explain

Originally posted by Eli
So I'm reading the World Almanac for 2007. Great stuff.

But some parts raise a few questions:

First, why US Bank Failures dropped from hundreds in the 80s and early 90s, to single digits in the late 90s and early 00s?

Second, why all the blabla about what would happen if China suddenly stops trading with you, when your total trade with Mexico is bigger and with Canada it's twice as big?

Third, how come your imports are almost twice as large as your exports? That makes no sense at all.

Fourth, how come 8 of your 10 busiest ports are either in Texas or Louisiana? Shouldn't most trade come to the East or West coasts, not to the Gulf?

And fifth, what on earth do the 235,654 employees of the Department of Veteran Affairs do?

1) Better regulation, more advanced financial instruments to spread risk, and more stable macroeconomic conditions.

2) Because bashing China distracts people from the fact that domestic protectionism hurts US citizens far more than anything China does.

3) Americans are greedy. No, seriously, the current account deficit is offset by a capital account surplus

4) Texans are especially greedy?

5) Pass.

[Straybow]

Busiest ports: they don't ship oil to NYC, there are no refineries there. All the oil from NME goes to LA/TX.

Bank failures: yes, S&L scandal.

[Elok]

We have busy ports in Louisiana? Busy as in actual business, not just shuttling in aid supplies? Go figure.

EDIT: Oh yeah, oil. Duh. Thanks, Straybow.

The DVA employees probably divide their time between:

-listening to PO'ed veterans asking why they got their legs blown off in Iraq to defend a country that won't even pay for their goddamn medicine now.
-listening to angry relatives of veterans complaining about other, related concerns.
-trying to pull money to handle the above concerns out of their asses.
-fending off the journalistic feeding frenzy in the wake of the Walter Reed scandal.
-drinking, and/or curling up in little balls and sobbing.

[SlowwHand]

Are you turning into Mobius junior?

[chequita guevara]

Re: Americans: Explain

Originally posted by Eli
So I'm reading the World Almanac for 2007. Great stuff.

But some parts raise a few questions:

First, why US Bank Failures dropped from hundreds in the 80s and early 90s, to single digits in the late 90s and early 00s?

When we deregulated the Savings and Loans, a lot of them stopped keeping a reserve and started making riskier investment. When the housing boom of the 80s went belly up, so too did the investors, chiefly those S&Ls.

Second, why all the blabla about what would happen if China suddenly stops trading with you, when your total trade with Mexico is bigger and with Canada it's twice as big?

How is that trade measured? What are the objects being traded? From Mexico we mostly get oil and agricultural goods. From China we mostly get a lot of cheap stuff. A portion of our continuing properity is based on cheap goods from China. In addition, China is one of the largest purchasers of American debt, so they could **** us.

Third, how come your imports are almost twice as large as your exports? That makes no sense at all.

Most of those imports come in the form of oil. Plus, we're so productive that even though we buy a lot from the rest of the world, we're producing more new wealth than we send overseas.

Fourth, how come 8 of your 10 busiest ports are either in Texas or Louisiana? Shouldn't most trade come to the East or West coasts, not to the Gulf?

Oil.

And fifth, what on earth do the 235,654 employees of the Department of Veteran Affairs do?

In addition to health care, the VA takes care of many other Veteran's benefits, like housing loans, college, etc. Remember we have millions of people in the service and tens of millions of veterans. A quarter million people to take care of the benefits of tens of millions and their families isn't that big.

[Lawrence of Arabia]

Third, how come your imports are almost twice as large as your exports? That makes no sense at all.

this is because 1. we have been growing faster than our trade partners and 2. our exchange rate against certain currencies is overvalued.

[Kuciwalker]

Apparently S&L was a good guess.

[LordShiva]

Originally posted by Lawrence of Arabia
this is because 1. we have been growing faster than our trade partners and 2. our exchange rate against certain currencies is overvalued.

Switzerland?

[chequita guevara]

Originally posted by Kuciwalker
Apparently S&L was a good guess.

Yep

[Lawrence of Arabia]

usa.

[DanS]

Re: Americans: Explain

Originally posted by Eli
First, why US Bank Failures dropped from hundreds in the 80s and early 90s, to single digits in the late 90s and early 00s?

As Dr Spike says, the risk is being spread around through new financial instruments. In the '80s, loans were made and held by banks. In the '90s and today, loans are made by banks and then passed on to investors through loan securitization. This process allows all investors to diversify their holdings. Moving from non-diversified to diversified investments makes all the difference in the world.

For houses, most loans are purchased and securitized by Fannie Mae, a quasi-gov't corporation. For student loans, most loans are purchased and securitized by Sallie Mae, a quasi-gov't corporation. You can trace the ongoing trend of securitization by looking at the total assets line for these companies.

http://finance.google.com/finance?fstype=ii&cid=12885

(Click on "Annual Data"; yes, those assets are over $1 trillion.)

Third, how come your imports are almost twice as large as your exports? That makes no sense at all.

We are transitioning to a post-industrial economy and are shedding low value manufacturing quickly. For a while, the post-industrial products that we are selling will be less valuable on an aggregate basis than those that we are buying. Eventually, imports and exports should balance.

The reason why China is in the news so much is that most of our low value manufacturing is going to China. The rate of increase in the imports from China is what has some people concerned. For my part, it seems evident that imports from China will hit a wall some day soon-ish.

Fourth, how come 8 of your 10 busiest ports are either in Texas or Louisiana? Shouldn't most trade come to the East or West coasts, not to the Gulf?

With the advent of the Panama Canal, Texas and Louisiana aren't that much farther than the coasts. If Houston's port has better service or is less crowded than the coastal ports, then it makes sense for the ships to go to Houston.

And fifth, what on earth do the 235,654 employees of the Department of Veteran Affairs do?

All veterans get free health care from Uncle Sam. So mostly, it's VA hospitals and the like.