Bidens examination paper: how to save the collapsed middle class in America?

category:Finance
 Bidens examination paper: how to save the collapsed middle class in America?


Shao Yu, Chen Dafei

Intergenerational differences: a typical American story

Zoe needs other sources of income to pay for the rent, car costs and health insurance. She often auctions her gardening services online. The job takes about 10 hours a week and earns an average of about $100 a week. However, these two incomes combined are not enough to maintain a surplus. On Friday and Saturday nights, she usually works as a uberx driver, picking up young people to and from bars on the other side of the city. For four or five hours a night, you can earn about $150 a week. Thats not all. Zoe rents out his apartment on airbnb during the peak travel season to earn some pocket money.

If time permits, she also takes a temporary job or two, usually doing office chores at a local hospital. Because the hotel schedule is not fixed, casual workers also need to see luck, so it is not always seamless. Zoe wants to go back to college to complete her degree, but she doesnt seem to have the time or the money. In addition, her friends and colleagues with a college degree lead a similar life to her, except that they have tens of thousands of dollars in student debt.

Zoes income is basically enough for daily expenses. She has no bank account, let alone a pension. She has never defaulted on her rent, but she is still far from owning her own house. Sometimes, when you need to pay for an accident, you need to swipe a credit card to pay for groceries, electricity, or gas. It can take months to pay off the debt.

Zoes parents will help her and her siblings as much as they can, but they must plan their finances carefully. My father worked in the distillery for more than 30 years and accumulated some pension, which was not considerable. My mother, an office manager at a small law firm, also plans to retire in a few years. They paid off their mortgage a few years ago, so their housing spending will be kept to a minimum. As soon as the children leave home, they can save up to pay for their retirement expenses. Together with social insurance and medical insurance, it can be maintained basically. It will not be extravagant, but it is very safe.

Zoes generation and her parents face a completely different labor market. Zoes parents can get decent pay, better prospects and a comfortable retirement life through hard work. At that time, employers generally believed that they had a responsibility to protect workers welfare. Lifelong employment is also the mainstream in the United States. Most Americans only serve a few enterprises in their lifetime. This is the social contract of the 1950s and 1970s. During this period, the growing middle class in the United States also promoted the economic and social stability of the United States.

Wealth transfer: the decline of labor and the sinking of middle class

After World War II, the situation of economic growth and income distribution in the United States can be observed in two stages: the first stage, from the end of World War II to the mid-1970s, was an era of rapid economic growth and common prosperity. The average wage and the income of workers in different income groups grew at the same speed, basically matching the growth rate of per capita GDP and labor productivity (Figure 1), and the real income of workers nearly doubled. Although the gap between the high-income class and the low-income class is very large, it has not been further widened. In the second stage, from the mid-1970s, economic growth and labor wage growth began to slow down, wage growth was significantly slower than labor productivity and GDP growth, the income growth of most workers stagnated or decreased, and the income gap gradually widened. According to OECD statistics, in 2015 US dollars, the annual minimum wage in the United States has decreased from US $19237 in 1975 to US $14892 in 2016, a decrease of 23%.

Workers are divided into five groups according to their income level, and the income growth rate of each group in different economic cycles is investigated. Taking the growth rate of per capita GDP as the reference frame, it is found that the income growth rate of different income groups in the first three cycles is basically the same as that of the per capita GDP growth rate, and the income growth rate of the low-income group is slightly higher than that of the high-income group. After the mid-1970s, the situation changed. Except for 2001-2007, the income growth of the high-income group was the highest in all the other cycles, most of which exceeded the per capita GDP growth rate, and the lowest 80% of the income basically lagged behind the average level. This feature continues to the post crisis era.

Figure 1: business cycle and income distribution

The uneven distribution of income in the United States can be verified from the following aspects: first, the distribution of labor in national income has decreased from 80% to 70% at the peak, and the share of enterprise profits has increased. Second, the share of the top 1% has risen from just 10% in 1975 to 22%, comparable to the level of the roaring twenties a century ago (Figure 2). Among them, the top 0.5% increased from 5% to 17%, and the top 10% and the last 90% were equally equal, accounting for 50% respectively. Third, because wealth is the accumulation of income, the concentration of wealth - the value of material wealth and financial assets minus the value of debt - is much higher than income, roughly twice as much. By the end of 2019, the wealth share of the richest 1% of Americans will be over 40%, about 10 percentage points higher than the low in the 1970s. (stone et al., 2020).

Figure 2: income distribution in the United States

Data source: wid, price and Edwards, 2020, Oriental Securities wealth Research Center & post doctoral workstation

So the American dream belongs only to the richest 10% of the population, and for the remaining 90% it is a nightmare. From a global perspective, the uneven distribution of wealth is even more astonishing. Oxfams report the economy of 99% of the population shows that in 2016, the total wealth of the top eight men in the world was equivalent to that of the worlds poorest average person. Even for the richest 1%, wealth concentration is rising.

Closely related to this structure of income distribution is a series of changes in the U.S. labor market: (1) job flexibility has increased, job change is becoming more and more common, and the organizer contract has disappeared; (2) the number of part-time workers has increased rapidly; (3) the labor participation rate has decreased, and the labor participation rate of older people has increased; (4) the labor participation rate of women has increased; (5) high skilled (Professional) workers have become more and more popular (6) on the one hand, college education is becoming more and more valuable, and the proportion of workers with bachelors or masters degrees in the upper middle class has increased from 37% to 59% (ROS) e. On the other hand, the phenomenon of academic redundancy is becoming more and more common (autor, 2019), and the security effect of higher education on employment stability is declining, which is specifically reflected in the narrowing gap between the unemployment rate of college degree and high school education; (7) the continuous influx of immigrants, the number of non white labor force (immigration + childbirth, represented by Hispanics) is growing rapidly; (8) wages and employment The number of strikes, the number of participants and the loss of working days caused by the strike began to decline from the 1970s, and remained at a low level since the early 1990s (Goodhart et al. 2020); (10) as a result, the wage bomb has been reduced The sex and natural unemployment rates continued to decline;

Figure 3: the shift of the American class: upward mobility declines and downward mobility rises

These structural changes in the labor market, combined with the impact of technological progress represented by automation and industrial transfer brought about by globalization, have led to a sharp decline in the bargaining power of workers and a significant increase in the rent extraction ability of capital factor owners (Stiglitz, 2012). The change of income distribution structure corresponds to the disappeared middle class. In the past half century, the share of the middle class in the United States has declined by about 10 percentage points, with a small number of upward mobility and most downward mobility. The vertical mobility of society from the bottom-up has declined from 43% to 35%, the proportion of the next generation earning more than the previous generation has dropped to a historical low, and the top-down disposal liquidity has increased - the downward mobility of the middle-class has doubled, from 5% to 11% (rose, 2020). One of the results of uneven income distribution is that household debt leverage ratio is on the rise as a whole, and there is a structure of the rich saving and the poor debt, that is, the poorer, the heavier the debt burden. Of the bottom 20%, 27% are heavily in debt - debt payments account for more than 40% of disposable income, compared with 1.8% for the top 10%.

For nearly half a century, American workers are in a weak position due to the substitution of workers, immigrants, technology and capital from other countries. However, trump mostly ascribes it to globalization, and hopes to the solutions of right populism and protectionism, rather than from the perspective of economic form and labor market structure, and does not pay attention to the demands of the middle class. For example, the termination of Obamas medical program will damage the interests of the middle class. All walks of life have been calling on the federal government to promote the reform of the social security system and protect the rights of workers. The government is also calling on enterprises to undertake social responsibility and protect workers rights. However, the situation of class division and the collapse of the middle class has not improved. This is one of the important problems that Bidens cabinet needs to solve. He will choose the center left route.

New economy: vertical division of labor and the end of organizer

The employment position and income level are determined in the enterprise organization. Therefore, the change of labor market microstructure and labor contract form is an important perspective to observe the polarization between the rich and the poor and class drift in the United States, which is closely related to the new economy and new formats brought about by the information technology revolution. There are many conclusive statements on the polarization between the rich and the poor caused by technological progress, but there are few discussions on the explanation from the perspective of enterprise organization, labor contract and management compensation structure. In fact, one of the important reasons why the income distribution structure of the United States has turned in the 1970s is this (largennick, 2016). The Biden cabinets call for corporate social responsibility is also the result of plans to tax capital gains on general income (tax rate 39.6%, income of more than 1 million people) and restrictions on share buybacks.

The new economic enterprise model began to rise in the 1960s and 1970s, and accelerated the spread of the Internet wave in the 1990s. Intel, Oracle, Microsoft and other companies adopted a new organizational model in the early days of their establishment. IBM, Lucent and Motorola, the representatives of the old economy, also began to transform from the 1990s. The basic characteristics of the new economy are as follows: first, there are no trade unions in general, and this trend is also blowing from Silicon Valley. Represented by Gordon Moore of Intel and C. Sporck, CEO of National Semiconductor Corporation, most business owners believe that the absence of trade unions can help enterprises to hire the right talents according to the rapidly changing pressure of innovation and competition. By the end of 2019, the trade union participation rate has dropped to 10.3%. Of course, employees rarely intend to work in a company for a lifetime, because job hopping is an important way to improve the salary; therefore, the enhancement of labor mobility is the result of two-way choice, and job hopping itself also reflects the bargaining power of high-tech workers.

Second, the defined contribution 401 (k) pension plan has gradually replaced the employer funded pension plan, which has become the first choice of enterprises and the only choice for most enterprises. The transformation of pension system is also born to adapt to the transformation of new economic organization form. The agreed contribution pension is transferable and flexible in design, and can better meet the needs of young employees. However, it cannot provide the security of the agreed payment pension. The value-added ability of the pension depends entirely on the performance of the fund manager and the capital market. In 1985, the proportion of agreed contribution pension assets was only 20%, but it has increased to 82% by 2007. Whether they are members of trade unions is the key factor to enjoy which kind of pension. Generally speaking, the proportion of union members who enjoy the agreed pension benefits is higher.

Third, the new economic sector also adopts a different organizational form from the old economy. The former is the vertical specialization division of labor (i.e. the value chain division of labor), while the latter is the whole process production. The common form of vertical division of labor is outsourcing, which includes not only manufacturing and assembly, but also services, such as testing, filing and freight transportation. It rose roughly in the 1970s, first in the United States, and then extended to the world, mainly because of the competition from home and abroad (such as Japan). Innovation is still a form of obtaining monopoly advantage, but in addition, it is particularly important to form industrial alliance, cross licensing of patents and formulation of industry standards. In the process, large enterprises began to invest less in basic research and special technology development, and they were more willing to employ young employees with working experience in other enterprises. The formation of industry standards and the concentration of company location in the region lay the foundation for the flow of labor force.

Since the 1970s and early 1980s, the United States has been increasingly challenged by emerging market countries such as Japan and South Korea in the fields of automobile, consumer electronics, machine tools, steel and semiconductors. Researchers and entrepreneurs began to rethink the lifelong employment system. Taking IBM as an example, it began to transform in the 1980s and early 1990s. It entered into the microcomputer industry by outsourcing microprocessors and operating systems to Intel and Microsoft respectively. Before the 1990s, lifelong employment and zero dismissal were considered by IBMs management as corporate social responsibility. Both managers and front-line workers provide a full range of benefits. After the transformation, this tradition was broken.

The transformation of enterprise organization and labor contract is closely related to the antitrust policy and employment policy of the U.S. government. The stagflation in the 1970s prompted the US policy to change from Keynesian demand management policy to Laffers supply side policy. Tax reduction, pension reform, financial deregulation and strengthening labor market flexibility are the important driving forces of labor decline. After the end of World War II, the Employment Act of 1946 stipulates that the government has the obligation to formulate economic policies to guarantee the full employment of American citizens. The full employment and balanced growth act of 1978 shifted its focus from simple employment to taking into account productivity, inflation, balance of federal budget and balance of payments. The employment and growth tax reduction mediation act of George W. Bush in 2003 and Trumps growth and Employment Act of 2017 both reduced the tax burden on capital gains or the rich class. What the Biden administration needs to do, if not completely bury neoliberalism, will make major revisions to it.

Financialization: maximization of shareholder value and distribution effect of capital market

If we say that finance (or capital market) is the specimen of the success of American capitalism, it is also an important source of wealth polarization and class conflict in the United States. Today, households, governments and companies are highly dependent on the capital market, to be precise, on the rise in share prices. However, the extent to which different classes benefit from the capital market is different. Within the family sector, it is also the rich who benefit and the poor suffer. According to 2004 data, the richest 1% of households own 37% of the shares of American companies, and the top 20% of households own 80% of shares (Allegretto, 2006). Combined with the overall trend of the U.S. stock market in the 21st century, the capital market has intensified the wealth differentiation in the United States.

If the market is the decisive force in the allocation of resources, then the company is the specific means for the market to allocate resources. It is decided by the enterprise management whether to expand or reduce the recruitment of employees, expand or reduce the scale, and whether external financing or internal financing. In the 1980s and 1990s, under the guidance of principal-agent theory, shareholder value maximization became the mainstream ideology of corporate governance. The theory holds that due to the existence of asymmetric information, there is a blind spot in the market in supervising agent behavior, and the behavior of maximizing the interests of agents (enterprise managers) may not be consistent with the interests of principals (shareholders), and the stock market can precisely play the function of market of corporate control, as long as the agent takes the maximization of shareholder value as the objective function and allocates resources It works. Because the shareholder is the residual requester, the maximization of shareholder value is the benefit maximization of all stakeholders. The direct conclusion is that as long as it helps to raise the share price, the managers behavior is reasonable. Layoffs, share buybacks and generous stock option plans for professional managers are all reasonable moves. All these have aggravated the polarization between the rich and the poor to varying degrees.

Finance has a positive effect on innovation and economic development, but the result of over financialization is that the effect of wealth transfer is greater than that of wealth creation. It can be understood from three dimensions: venture capital and capital market, stock option and stock repurchase.

First, venture capital and capital market. The rise and development of the new economy in the United States is inseparable from direct financing -- venture capital and capital market. The financing mode of enterprises has changed from traditional profit retention to external equity financing (or debt financing) such as venture capital. 1u3001 The secondary market has formed a positive feedback effect. It is the liquidity and overvalue of the secondary market that makes venture capital willing to take short-term risks, which is very important for innovation.

Xiantong semiconductor company, founded in 1957, is very important to the development of Silicon Valley and semiconductor industry. Up to 1985, there were 125 silicon valley semiconductor enterprises. Among them, at least one of the founders of 32 companies had worked in Fairchild (the son of Fairchild), and 35 of them were born in son of Fairchild. The establishment and success of Xiantong company is closely related to venture capital. Although American venture capital originates from Rockefeller and other traditional enterprises, it grows with the development of information technology industry. The three waves of venture capital enterprises and semiconductor enterprises are synchronous. The establishment of the NASDAQ in 1971 and the pension system reform in the 1970s have played a great role in promoting. The stock market is the place of equity trading, and the increase of its liquidity will significantly increase the valuation multiple. Through insider information and stock repurchase, corporate decision-making has a significant impact on stock price volatility, and management is the biggest beneficiary.

Second, stock options. New economy enterprises no longer explicitly promise employment security, skills training and career prospects, no longer rely on wages and benefits to attract talents, but rely on stock options, which is also a powerful driving force to promote the financial development of the U.S. economy. It not only helps to avoid punitive dividend tax, but also improves earnings per share (EPS) rapidly. As executive compensation is often directly linked to EPS, in addition to the value of options, it indirectly increases the income of the management, which can be described as killing two birds with one stone. Therefore, the management of listed companies prefer this.

In the 1930s, the birth of stock option was mainly for tax avoidance. Since the 1980s, it has gradually become an important tool for innovative enterprises to attract and retain talents. Because the traditional enterprises provide lifelong employment security and considerable retirement benefits, it is difficult for innovative enterprises to attract talents if there is not enough high expected reward. Therefore, stock option has become a killer mace, and gradually become the industry practice. Since the 1990s, the value of options and stocks has exceeded the salary in the salary structure of American CEOs. In this way, managers have enough incentive to promote the rise of stock prices. The common methods include layoffs, cutting R & D or fixed capital investment, increasing dividends, buying back stocks with profits, or issuing corporate bonds at low cost to buy back stocks. According to the survey on CEOs of S & P 500 companies, stock option income accounted for 49% of the total revenue in 2000. As a result, the salary ratio of CEOs to ordinary employees in the United States has increased rapidly since the 1980s. In 1990, about 70 times that of the Internet bubble period, Microsoft alone made tens of thousands of millionaires through stock options (Harden, 2003).

Figure 4: salary ratio of CEO to general employee in the United States (1965-2016)

The financialization of the U.S. economy is reflected in all aspects, including the scale of asset management, the profit of the financial industry, and the number of employees. In contrast, manufacturing is shrinking. If the production attribute of finance is to support the financing of the real economy, then the financial industry in the United States has been off track. Compared with non listed companies, the investment rate of listed companies is nearly 50% lower. Compared with R & D expenditure, listed companies spend more on share repurchase and dividend. The wealth effect of capital market is mainly reflected in the number of millionaires created, but this is only wealth transfer, not wealth creation, which will aggravate the polarization between the rich and the poor. The latest data show that the top 0.01% of households in the United States (about 150000) have transferred 10% of their wealth from the rest of the family, three times as much as from 1945 to 1980. Of the 0.01% of households, about a quarter are from Wall Street (Bogle, 2011).

Since the mid-1970s, the financialization of American economy is closely related to the policy of financial deregulation. Take stock option as an example. In the 1950s and 1960s, trade unions were strongly dissatisfied with stock options. During Kennedys term of office, Congress enacted a qualification restriction clause in 1964, which shortened the validity period of exercise from 10 years to 5 years, and extended the prohibition period from 6 months to 3 years, and the exercise price must be equal to the market price. In 1969 and 1976, Congress further increased the capital gains tax, and the tax reform act of 1976 stipulated that employees who had not yet obtained stock options would no longer enjoy preferential treatment. After Reagan was elected president, under the guidance of the supply school, the tide of financial liberalization and tax reduction began. Under the promotion of National Venture Capital Association and other commercial organizations, Congress restored the capital gains tax preference of stock option in 1981, and relaxed the qualification and exercise conditions. Since then, equity incentive plan has become the standard allocation of managers in new economy enterprises, and has become an important driving factor for the intensification of income and wealth differentiation in the United States since the 1980s.

After the financial crisis in 2008, both academic and business circles are rethinking the concept of maximizing shareholder value. Because it promotes the short-term behavior of agents, ignores the investment in R & D, fixed assets and human capital, which are conducive to sustained prosperity, but also stimulates speculation in the financial market and excessive financial economy, making the long-term momentum of economic development obviously insufficient. In practice, it has become the value maximization of large shareholders, which seriously distorts the agent behavior and financial market. Jack Welch, CEO of General Electric, used to be the standard bearer of the idea, but in 2009 denounced it as the stupidest idea in the world.. Compared with the previous technological revolution, the information technology revolution is obviously insufficient in creating jobs, improving total factor productivity and GDP growth. Computers can be seen everywhere except productivity statistics (Solow, 1987). In fact, it was not until the beginning of this century that the information technology revolution was captured by statistics (Gordon, 2018).

Contrary to shareholder value maximization, it is the value maximization of interest group. It focuses on the social relations between management and employees, between the company and the community, and emphasizes the corporate social responsibility and the principle of sharing interests equally. This requires enterprises to take care of ordinary employees, not just managers welfare, because pursuing shareholders interests at the expense of other stakeholders will ultimately damage the interests of shareholders and stakeholders at the same time. It is the so-called both prosperity and loss. In capitalism, however, there is no difference between the structure of capitalist capital and the distribution of social value. The more developed the capital market, the more obvious the effect of income distribution. How to make the capital market return to rational prosperity is a problem that the US policy authorities must solve.

Globalization: the trio of talent circulation and industrial upgrading in developing countries

There are many narratives about globalization and polarization between the rich and the poor. This new narrative is also inseparable from the vertical division of labor of the new economy and the capital globalization driven by the concept of maximizing shareholder value, which is also the background of American policy authorities attention to offshore outsourcing.

Since the founding of the peoples Republic of China, the United States has been faced with the problem of labor shortage. From 1783 to 2017, the cumulative number of legal immigrants in the United States has reached 100 million, with an average annual increase of 370000 legal immigrants, accounting for about 0.4% of the total population (bier, 2018). In 1842, the number of immigrants exceeded 100000 for the first time, and then entered the fast lane. After the civil war, during the gold rush and on the eve of the first World War, there were waves of immigrants. At the end of the 19th century, more than 80% of the population of northern cities such as New York and Chicago were immigrants (or descendants of immigrants). By the eve of World War I, immigrants accounted for 15% of the total population of the United States. During the period from the Great Depression to World War II, the tide of immigrants stopped, but after the end of World War II, the number of new immigrants in the United States continued to rise. It reached a peak of 1.8 million around 1990, and has been in the range of 1-1.2 million since the beginning of this century, and 1.03 million in 2019. Because most immigrants are capital or knowledge intensive, they are very important to the technological progress and the development of high-tech industries in the United States. This positive role has been reflected since the industrial revolution. Slater brought the spinning frame to America. Bell invented the telephone in the United States, and Nicholas Tesla invented alternating current technology George Michel, the inventor of fracking and the father of shale gas, and Elon Musk, founder of Tesla, are descendants of immigrants.

In the mid-1950s, the high-tech industry in the United States began to face a shortage of high-tech professionals. Under the lobbying of industry associations, the immigration and Naturalization Act of 1965 abolished the immigration quota to help the United States introduce particularly useful talents. Among the more than 40000 skilled immigrants in 1967, engineers accounted for 21%, which was the largest category. In 1990, the immigration law expanded the annual quota of labor immigration visa (including family members) from 54000 to 140000. Non immigrant work permits (H-1B and L-1) also provide a large number of skilled workers to the United States. Among them, H-1B is a high-tech work visa, which is basically for workers with bachelors degree or above. The major distribution is computer related major, followed by architecture, engineering, surveying and education. The U.S. competition and labor Improvement Act of 1998 increased the maximum number of H-1B first-time visa applications to 195000 in fiscal years 1999 and 2000.

Contrary to the US, from 50s, Japan, Korea and Taiwan in China, and India and Mainland China, have been in the predicament of brain drain (braindrain). From 1956 to 1972, only 2586 of the 30000 graduates from Taiwan returned to China, accounting for less than 10%. About 60% of those who did not return were from science and engineering background. From 1953 to 1972, the Ministry of education of South Korea received more than 10000 applications for studying abroad, and less than 10% of them returned home after graduation. From 1974 to 1988, the proportion of immigrants among scientists and engineers increased from 5.8% to 10.5%. India and Chinese mainland are gradually becoming the main force. In 2000, China was already ranked first, and then it was overtaken by India. Since 2009, China has always ranked first, twice as much as India, which ranks second. In terms of discipline background, there is a big difference between China and India. China is mainly engineering, while India is science and engineering.

Over the past half century, the great cycle of talent, capital and employment has been evolving. In the 1960s and 1980s, talents flowed from the four tigers in Asia to the United States, and the industry and employment opportunities in the United States coexisted with each other. The former was to study and apply for jobs, while the latter valued the local cheap labor. After the late 80s, students from mainland China and India maintained a trend of entering the United States in a single direction. The number of returned students in Korea and Taiwan in China began to flow in two directions, and the number of returned students in the early stage of study increased significantly. Today, the story of Korea is being staged in mainland China.

After the reform and opening up in 1978, Chinese students began to study in the United States. By 2000, the number of Chinese students studying in the United States had reached 60000. After 2007, the growth rate accelerated significantly and began to slow down in 2017. Overseas students generally prefer to stay in the United States to work, and the return rate is very low. By 2001, the proportion of international students still working in the United States five years after they obtained their doctorates in the United States was as high as 98%, and it only dropped to less than 90% after 2009.

Table 1: proportion of foreign students holding temporary doctorate in science and engineering who remain in the United States five years after their degree

The Chinese government has also adopted the methods of attracting FDI and increasing the introduction of talents to reverse the trend of brain drain. In the early 1990s, foreign direct investment accelerated to enter China, and the vast majority of employees of multinational companies were Chinese. Since 1996, the Chinese government has taken a series of measures to attract talents back to China, but with little effect. After the 17th National Congress of the Communist Party of China in 2007, the problem of brain drain which began in the 1980s and 1990s began to improve, and the number of returned students increased significantly. At present, cheap labor is no longer the core competitiveness of made in China, nor is it the primary condition for multinational companies to produce locally. Cheap and high-quality labor, broad local consumption market, complete industrial chain and complete infrastructure are all the sources of competitiveness. Chinas endogenous power to cultivate and attract overseas people to return will be stronger and stronger.

Just as developing countries are facing the problem of brain drain, the United States not only faces the loss of jobs, but also faces the competition of immigrants for local jobs. At the same time, talent return is also a potential challenge, not only in research and development, but also in the industrial level. 2000 is an important node. The collapse of the Internet bubble has not ended the Internet era, but has opened up a new era of mobile Internet. The profits and share prices of high-tech enterprises represented by faamg have reached new highs. However, the number of new and high-tech industries in the United States began to decline, and real wages fell first and then stagnated. One of the important reasons is service outsourcing, that is, the globalization of labor division. Although labor cant be brought in, capital can go out. From 2001 to 2007, IBMs global workforce increased by 21%, but its U.S. workforce fell by 17%. During the same period, Intels global employees increased by 2%, while the U.S. decreased by 15%; from 2002 to 2007, the number of HP employees worldwide increased by 22%, but decreased by 21% in the United States; the expansion speed of overseas employees of Microsoft, Cisco and other companies was also significantly higher than that in the United States, resulting in a continuous decline in the proportion of employees and output value in the United States.

In response to a reporters question at the end of 2003, Intel CEO Craig Barrett said: the company will continue to be born in Silicon Valley and gain global competitiveness. They just wont continue to create jobs in Silicon Valley. This is the dilemma of the United States and the plight of business managers. As Barrett said, as CEO, he serves shareholders and needs to aim at maximizing shareholder value. But as an American citizen, he is also worried about the passing of his work, which is making the United States in trouble.

This is the examination paper Biden got. How to unite the United States with a set of middle left policy propositions in an America with extreme class differentiation determined by economic, racial, cultural and other factors, the key is to reverse the trend of polarization, consolidate the foundation of the middle class, and enhance the vertical mobility of society. This is the foundation of American democratic politics. Class division in the United States began half a century ago. Globalization is undoubtedly one of the influencing factors, but the policies of the U.S. government have undoubtedly played a role in boosting the flames. However, internal factors are the main cause. So what Biden needs to do is reverse the primary and secondary aspects. Trumps far right line partially eased the external imbalance of the United States, but intensified the internal imbalance. Bidens center left line will mainly ease the internal imbalance and hope to reconcile the internal and external imbalances.

Since the 1970s, under the guidance of trickle down economics of Neo liberalism, the U.S. government has actually adopted an adaptive approach. Its policies are generally in line with the requirements of economic globalization and financialization, focusing on the pursuit of efficiency and efficiency maximization. What needs to be changed is to use policies to guide globalization and financialization so that they can contribute to the sustained prosperity of the economy and the rational distribution of interests. Looking back on the 30-year progressive movement that the United States experienced before World War I, this change is unlikely to be achieved overnight, but Bidens term may be a key period for the adjustment of the political spectrum from right to left. Biden is preparing to bury Neo liberalism, the US magazine of democracy commented. Shao Yu is the chief economist and assistant to the president of Dongfang securities, and Chen Dafei is the executive director and macro researcher of the wealth Research Center & post doctoral workstation of Dongfang securities_ NB12679

Since the 1970s, under the guidance of trickle down economics of Neo liberalism, the U.S. government has actually adopted an adaptive approach. Its policies are generally in line with the requirements of economic globalization and financialization, focusing on the pursuit of efficiency and efficiency maximization. What needs to be changed is to use policies to guide globalization and financialization so that they can contribute to the sustained prosperity of the economy and the rational distribution of interests. Looking back on the 30-year progressive movement that the United States experienced before World War I, this change is unlikely to be achieved overnight, but Bidens term may be a key period for the adjustment of the political spectrum from right to left. Biden is preparing to bury Neo liberalism, the US magazine of democracy commented.

Shao Yu is the chief economist and assistant to the president of Dongfang securities, and Chen Dafei is the executive director and macro researcher of Dongfang securities wealth Research Center & post doctoral workstation;