E US Consumer Spending Flashes An Alarming Call To Action

And Trump's treatment of children of immigrants not born in the US is just a waste of education already instilled in many of these young people over many years. And children born here of immigrant parents should be targeted for extra educational efforts. They do not have the home environment that citizen parents provide their children.

But we have a Secretary of Education seeking to dumb down the American educational system with larger class sizes.These headwinds are difficult to overcome if America is truly going to show greatness. 

The real concern for me is that almost everything that the government of the United States is doing is the exact opposite of what needs to be done to increase skilled employment. The tariff wars appear to be an effort to get other nations to buy more from the United States. Perhaps POTUS believes that skilled worker training isn't worth it and that we just need to make more stuff at a lower level of educational need.

I once thought that Trump's desire to make widgets and ignore high tech was just political music to his base. But I now think that he really means it. He really wants more widgets produced here. Yet he wants to rely on a nation (China) that has only 8.8 percent of the world's wealth. Yes, there are many high end customers who buy American and buy luxury, but widgets? 

And the middle class Chinese are spending on education for their children, with not a lot of disposable income left over to buy American goods. According to HSBC, 93 percent of Chinese spend on private tuition in some form, while only 46 percent of Americans do likewise. 

Seems like if they are going to buy a lot more product we are going to have to import way more from them so they can afford it. After all, China is a paradox, with many affluent, a growing middle class strapped with education needs, and a customer base that only purchases 40 percent of GDP. That number likely qualifies China keeping its Developing Country status through the WTO. 

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Disclosure: I have no financial interest in any companies or industries mentioned. I am not an investment counselor nor am I an attorney so my views are not to be considered investment ...

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Gary Anderson 11 months ago Author's comment

#Update: Even with a 3.2 percent GDP for the quarter, consumer spending remains weak. Inventory buildup drove GDP, not consumer spending.

Gary Anderson 11 months ago Author's comment

See also a study about purchasing power parity that helps explain the power behind the Chinese growth engine: talkmarkets.com/.../china-ppp-aiig-bank--powerhouse-economics

Livius Dan 11 months ago Member's comment

Gary, feel free to ask other Americans that live outside of the USA whether or not I'm exaggerating. They'll beg to differ. Many I know personally do not want to ever come back. Besides, I have provided references, one in particular mentioned major waiting lines for US or former US citizens to get residency and citizenship in Switzerland. One of the biggest issues that concerns me about the US currently are invaders from 3rd world countries both legal and illegal, most of course uneducated as Gary points out. I guess we'll have to see what happens!

Gary Anderson 11 months ago Author's comment

I don't consider families to be invaders. If anything, America is financialized, and the nation could benefit from the innovation that immigrants can provide for real world jobs. We can't compete making simple widgets but why not try to educate the immigrants quickly. The government should do this in the national interest.

Livius Dan 11 months ago Member's comment

You can't educate anyone against their will. Education is a cultural thing. Not all the world and cultures feel the same about education.

Carol Klein 11 months ago Member's comment

People should value education more. Ironically, many need an education to realize that. The solution is to make it free.

Gary Anderson 11 months ago Author's comment

Of course you can't. But Dan, we are the richest nation in the world. We can't fix our potholes. We spend little on education. China brought 500 million people out of poverty. We are richer, and we need to do better.

talkmarkets.com/.../belt-and-road-the-sri-lanka-china-port

Dan Richards 11 months ago Member's comment

If we stopped sending billions of dollars to countries that hates us every year, we could fix all the potholes we want. And education, healthcare, etc.

Gary Anderson 11 months ago Author's comment

Or, we could increase economic activity by helping our neighbors with infrastructure, not money, and earn our pothole repairs. China is doing just that.

Livius Dan 11 months ago Member's comment

You hit the nail right on the head Gary. We will do better when we assume responsibility as a nation and as people. As long as we have affirmative action and do not treat everyone equally based on merit and not on some entitlement issues some think they deserve, we'll never do better!

Gary Anderson 11 months ago Author's comment

There are some talented people who come from Affirmative Action who just need the opportunity. You think you will solve everything with tired right wing solutions. But there really needs to be more educational opportunity for more people.

Harry Goldstein 1 year ago Member's comment

While better education is key, I believe that there is a deeper problem - lack of work ethic. The newest generation seems to have a sense of entitlement, and a desire to make a quick buck. How does one fix THAT problem?

Gary Anderson 1 year ago Author's comment

Many saw their parents work hard only to be swindled by Wall Street in the housing bubble and crash. The resulting Great Recession and Fed tightening reduced wages, making it very difficult for millennials. If what you say is true, Harry, then America should be ecstatic that immigrants would want to come to our nation. My experience with immigrants in the farm community is that they can work circles around Americans. That Donald Trump is ignorant of this fact makes it certain that America will fall short of our own business needs.

Harry Goldstein 1 year ago Member's comment

I said the next generation is entitled and perhaps somewhat lazy. I didn't say they weren't racist! Seriously though, you do make a good point.

Gary Anderson 1 year ago Author's comment

No, I agree. I know you didn't say that. If what you say is true about their work ethic, ultimately, then there are others who will come and work hard.