I think, wage-wise, labor costs are in a race to the bottom because of global competition.  You can't demand $30 an hour to put a windwhield wiper on a car anymore.

That is true in the global sense.  But I think Alstein is talking about the United States.  Globalization levels the playing field quite a bit but there are consequences to this.

It makes people lives better but luddites like to claim otherwise in order to promote their agenda or their misguided theories disconnected from reality.

The funny thing is, the banks did not want to make those loans to begin with and were FORCED to do so by the government in order to ensure "fairness" by "giving poor people the american dream of owning a house".

Well ok... there was actually a carrot and a stick and SOME backs tried to avoid it while others ran foaming at the mouth towards the carrot. Those who tried to avoid it were punished until they complied.

However, the bailout as written and executed were bad. They were simply a blank check instead of an investigation of what losses happened, where, when, and why.

I agree.  I don't have an issue with people making a lot of money for a great idea or working hard.  I have an issue with people who make a lot of money through unethical reasons or by obviously screwing others over.

My issue is when the average worker sees their paycheck bottom-out for decades or shrink despite great productivity, while the company's profits skyrocket.  You wouldn't think we were experiencing a recession if you look at the profits of many of our top companies over the past half-decade.  My issues is with the people who declare they have no money to honor previous promises to workers, while flying around in private jets funded by the company.

A little honesty is hard to come by these days.

All productivity and talent being equal, to me, the mark of a good leader is one who lets his bottom line take a hit before his workers.  If a leader reaps the most when the fields are full, he/she should lose the most when the fields are barren.  Examples like this http://www.dailytech.com/Lenovo+CEO+Gives+His+3+Million+USD+Bonus+to+10000+Employees/article25227.htm are what makes me decide where, and for whom, to work.

This is true, but then it brings up the argument: is somebody who puts a windshield wiper on a car worth $30/hour?  I say no.

If you look at standard economic theories, the net result would be that the US would go down to the global mean, maybe slightly above, but it would be a drastic reduction in our living standards- I think most of the American public, if given the choice between seeing what they would lose, and basically screwing the world over, they'd screw the world over in a heartbeat. 

The only thing that could prevent this future from being harmful that could occur from market processes would be a massive technological boom, which could happen, but is very unpredictable- and it would take something like fusion power to do this.

The thing is globalization has weakened the rule of law in general, and is allowing for global wealth inequality.   I wish we had a stronger trade organization that could enforce labor protections and sanction companies instead of countries.

As for whether being a citizen entitles you to your fellow man's efforts, it may not be entitled, but it's better than the alternative.  There is no perfect system.  My argument is that handouts aren't necessarily a good thing, but they may be a necessary thing, as compared to the alternative.  Massive wealth inequality is always one of the first steps towards a national decline: This has been true from Rome to Constantinople to Versailles to Berlin to modern times.

I think you're making a fundamental assumption here that I don't agree with one bit.  You're assuming that people need a paying job in order to have a purpose.  It's likely that without the need for a job, folks can find their purpose in other ways.   Money provides security not satisfaction to most folks, and it has declining marginal value for most folks, as it is a good.  (However, there are some folks who view money as their score, and that's fundamentally irrational)

Only in the very short term. In the long term it would mean a higher standard of living.

Not RELATIVE quality of life, but absolute. The gap wouldn't be as big between an american and an african but both would be better off (the same way a middle class person today is better off than a king in the middle ages).

And your proposed solution of redistribution merely WORSEN things for the americans because it drives out the top produces... Or forces it to become a prison state to prevent that.

And this argument is simply wrong as I have repeatedly pointed out. Prison states, relocation of producers, etc etc.

Your examples are simply not true.

The only way "wealth inequality" could possibly relate to national decline is by being used as ammunition by demagogues extolling wealth redistribution programs.

The term wealth inequality in of itself is stupid as I have repeatedly pointed out, dollar differences and quality of life are not the same. And furthermore, there are various CAUSES of said gaps. Cronyism absolutely causes national decline and cronyism also causes great "wealth inequality"... By using the term "wealth inequality" you lump together the cronies who HARM the nation and the economy and the PRODUCERS who HELP the nation and the economy.

Then as a result those who brandish about the term "wealth inequality" start putting in place programs to ensure fairness and equality which drive out or stamp out the producers while vastly increasing the amount of cronyism.

Certainly the conditions on the ground at the time help determine the decision tree CEOs have.

As a capitalist pig, I am very much against the government taking the position "at a certain point, you've made enough money." But as a private citizen, I certainly feel that way personally - I work for "free" at Stardock (i.e. I don't take a salary, dividends or disbursements) other than health insurance.  That way, every cent is available for new projects, employee bonuses, new equipment, etc.

But I wouldn't want the government to decide that for me.

And then they go out of business and everyone gets fired, or they get acquired in a hostile takeover and the new owners fire people. One time non-binding bonuses aside this is what will always happen over the long time. Business is by nature a Darwinian struggle where only the most profitable survive, and that's a good thing because that's how we get innovation, efficiency, and growth. There are of course companies like Apple and Stardock that can have differentiated products and thus have some room to maneuver, but not a lot as Apple still uses Foxconn.

Having useless people employed hurts not only the business owners but also everyone who uses their products. An increase in productivity due to technology or reorganization is a good thing even if someone gets fired because they can be reemployed and everyone else can produce more then before, which makes everyone better off.

Stop demonizing free trade and globalization. Poorer countries are growing richer, richer countries aren't growing poorer. The only negative effect of it is increased commodity prices that can increase living costs globally. America also sells tons and tons goods and services to other countries, which were jobs that didn't exist before. The richer those countries get the more jobs get created. Does the existence of a rich western Europe make America poorer? No. I hate to break it to you Americans but the only reason you have been able to spend the way you have is because you borrow from China and Japan, without them you would have sunk long ago. Outsourcing is a distraction from real issues. Manufacturing will never again regain it's old glory as the main source of employment. Even cheap labor in China is starting to be replaced by robots. The simple fact is that we are moving towards a new economic structure more focused on services because we don't need that many people in manufacturing to produce the goods we need. Get used to it, short of becoming luddite communists that ship has sailed. 

Wealth distribution has so many negative side effects it's ridiculous. In every age there is always a vocal group who think the answer to every problem is for a strong government to take other peoples stuff and give it to them. I suggest taking a close look at Greece, and France's future. That's what happens when governments play the control the market so everyone gets high paying jobs game. Wealth distribution is a poisonous band aid, eventually markets will readjust and fix themselves. Workers will learn the new skills necessary in the new economy and find employment in new growing sectors where they are needed and can actually earn decent wages instead of being subsidized by the government to stand around being useless. True the transition is painful and not everyone will be able to acquire the needed skills but the economy will adjust. I also posted an article earlier that featured real solutions.

And when the government decides that for you, you leave. And to stop you from leave they erect an Iron Curtain or equivalent.

My friend's uncle is a medical doctor in Cuba, he is not allowed to exit the country for any reason (such as to visit his relatives in america) because they know he would not return if allowed to leave.

And if you are an intelligent young wo/man, why would you want to put the effort to become a doctor in such a nation?

Some interesting arguments. No one seems to have answered Frogboy's question above though about WHY hand outs or striving for at least a modicum of equality is a good idea. There are moral arguments but more importantly there are strong selfish arguments that the wealthy need to ensure the poor have opportunities, work (even if it isn't work that is particularly productive) and basic living requirements (eg water, food, shelter and in modern society this probably includes electricity and other modern 'needs').

Because if the imbalance between the haves and have nots gets too big then you will eventually have revolution or civil war. With the power the press (controlled by the wealthy) has today maybe it could be staved off for a good while but if you follow Frogboy's logic to its natural conclusion and say that hand outs are bad then there will eventually be a major uprising as people start to starve.

Maybe the wealthy could win that revolution. With sufficient robotics and if they can retain control of the military then it is distinctly possible that sometime in the not too distant future the rich could defeat an uprising by half the country. But is this really the best direction to head? Into class warfare and hope your class wins and that you can live with yourself afterwards?

What about Sweden?

It's full of Swedes? ....

Must be pretty swede to live there.

Also, prison state.

I answered his question, but my answer was different then yours.

There are a LOT of countries... every time someone brings up some shining model of a country (that they themselves typically don't live in) and I have to start researching another country and see identical results.

My knowledge of sweden before was limited to its very strong banking system with its secrecy and willingness to act as a tax shelter.

But from a quick search around about the current status I found on that sweden has been in a decline due to those socialist policies (raising taxes, "progressive" taxation, welfare). And that they have reversed course with slashing of taxes and spending (slashing welfare) which resulted in their economy improving despite the worldwide recession (an economy that was on a decline before due to high taxes and socialist programs)

A few interesting reads:

http://super-economy.blogspot.com/2011/01/moderate-tax-sweden.html - these charts tell it all

http://www.tradingeconomics.com/sweden/government-debt-to-gdp

http://www.bloomberg.com/news/2012-01-05/view-sweden-shows-europe-how-to-cut-debt.html