[Taliesan]

As usual, the protectionist vision sees part of the economic system and thinks it is the whole picture. Like a blind man feeling an elephant's trunk and yelling "snake!"

Think about it. When your costs decrease, you either drop your prices to capture market, or you keep the profits. If you keep the profits, your competitors drop their prices and take your market. This is a process of dropping the return on capital to the level towhere it can get the same return at lower risk elsewhere, at which point it leaves.

So the shift of labor to cheap markets produces two deflationary pressures: one on American wages, the other on American prices. How these two will net out in the short run no-one knows.

The protectionists like to talk about wages dropping while arguing, in abject ignorance of how competition really works, that corporations will use all the profits from outsourcing to give their executives 50 million dollar bonuses. Nonesense.

Corporations do give irrational bonuses to executives, and they are disciplined by the market -- whether they know it or not. Smart corporations will make money by outsourcing, give some of it to the CEO (there is a market price in the CEO market, after all) and re-invest most in the company or return it to shareholders (that is me and you).

If you were the CEO of Acme widgits, you WOULD -- get this -- YOU WOULD OUTSOURCE YOUR LABOR. If you didn't, your board will find someone who would. This is as certain as the sun rising in the morning. And you could go wave your flag at home.

[palmer]

If you were the CEO of Acme widgits, you WOULD -- get this -- YOU WOULD OUTSOURCE YOUR LABOR.

There are many CEO's who have not. The dichotomy between outsourcing and protectionism is false. The main reason to hire and buy American is patrioitism which does not require protectionism or pure profit motive. You may decide that it is more patriotic to outsource and reinvest the savings in America. That is fine and your choice. But it is certainly not partriotic to buy cheap crap from China and squander the savings on more cheap crap.

[azhenfud]

"So the shift of labor to cheap markets produces two deflationary pressures: one on American wages, the other on American prices. How these two will net out in the short run no-one knows."

You've essentially said the same as I, but in much better terms.

As I see it, when we're all forced to become biotechnicians, the demand for biotechnicians diminish along with the price of wages (probably much truer that wage price increases won't keep up with the normal pace of economic growth/inflation)...

[Sabertooth]

As usual, the protectionist vision sees part of the economic system and thinks it is the whole picture.

Aren't the income tax and state and federal regulations essentially tariffs on American labor?

Doesn't the combination of these tariffs on American labor and international free trade amount to protectionism for foreign jobs?

Why aren't self-styled "free traders" interested in the free trade of American labor?