[Southack]

"How about penalties/tarriffs on businesses that do the endrun. Sure, I agree some 3rd world development is necessary, but wholesale offshoring isn't. Maybe the penalty/tarriff would be in proportion to the pollution/worker safety laws the company is trying to avoid. I'm sure that could be refined. The point is, if Mr. Bush continues to deal with this issue as he is now, he will look more and more like Bush Sr. That is what sunk Bush Sr. The economy."

Here's the dirty little secret that no one has been letting out of the bag: it ain't cheap labor, but rather, cheap *currencies* that drive outsourcing.

For every 10,000 unknowlegable persons who cry about the low cost of Mexican and Chinese and Indian labor, fewer than 5 will be able to explain why those outsourced jobs went to China instead of to Nigeria.

Nigeria has 100+ million people, and 47% of Nigerians earn annual salaries of just one tenth (yes, 10%) of the average Chinese income. That's $100 in Nigeria for a year of labor, versus $1,000 per year in China.

Yet the outsourced jobs are going to China, not Nigeria.

The difference, of course, is in various transaction costs (e.g. red tape, bribes, crime, chaos, and most of all, in currency valuations).

What both China and India have done is to *undervalue* their Yuan and Rupee versus the U.S. Dollar. That makes all of their exports of goods and services cheaper than would ordinarily happen in a free market.

OK, that's all fine to say and explain, but what is President Bush doing about it?

Well, GWB isn't having the Fed buy Dollars on the global currency markets any longer. This means that India and China are having to prop up the Dollar by buying and hoarding huge amounts of Dollars.

And if they ever stop buying and hoarding U.S. Dollars, the value of the Dollar on foreign exchange markets willplunge.

And if the Dollar plunges (it's already dropped 20% against the Euro since Bush/Greenspan stopped intervening in the currency markets to buy Dollars), then suddenly the cost of Chinese and Indian goods and services skyrockets.

Watch Bush hold Greenspan to this policy until the Dollar drops at least another 20%. The 40% overall drop in the Dollar is pretty close to just about what is needed to stop the majority of offshore outsourcing.

[Sam the Sham]

For every 10,000 unknowlegable persons who cry about the low cost of Mexican and Chinese and Indian labor, fewer than 5 will be able to explain why those outsourced jobs went to China instead of to Nigeria.

Nigeria has 100+ million people, and 47% of Nigerians earn annual salaries of just one tenth (yes, 10%) of the average Chinese income. That's $100 in Nigeria for a year of labor, versus $1,000 per year in China.

Yet the outsourced jobs are going to China, not Nigeria.

Silly analogy. 1. Nigeria has a deserved reputation as a den of thieves and scammers. 2. A country of raging religious warfare is a poor investment climate. 3. Pervasive failed state violence in the region. 4. Poor communications infrastructure.

[ARCADIA]

The 40% overall drop in the Dollar is pretty close to just about what is needed to stop the majority of offshore outsourcing.

But, what would happen to consumer prices at that point? We no longer manufacture much of anything within our borders and new industries will be years in the making. It sounds pretty stupid to sit by and allow the bubble to form and pop without trying in some way to mitigate the damage.

[Havoc]

Tell you what, why not let's just put this thread on CSpan as an advertisement for the Republican Candidate for the Presidency and see how the public responds, shall we? I mean, if you guys represent the face you want on this issue let's show America what you really think of them - I mean, I don't know that C-Span would run it; but, at this point I'd venture to say, this would be the best campaign ad against Bush that the Democrats or anyone else could ever hope for. Do you want to call them, or shall I.

[lelio]

The difference, of course, is in various transaction costs (e.g. red tape, bribes, crime, chaos, and most of all, in currency valuations).

The biggest difference between China and India versus Nigeria is currency valuations? Not the huge factories built by the state in China nor the paid for university educations and lower cost of living in India?

And if the Dollar plunges (it's already dropped 20% against the Euro since Bush/Greenspan stopped intervening in the currency markets to buy Dollars), then suddenly the cost of Chinese and Indian goods and services skyrockets.

Skyrockets .. by 20-30%. I'm not sure how that's supposed to make a 50 cent an hour Chinese worker 20 cents an hour more expensive versus $30 an hour here.

I believe that currency manipulation is a part of the problem, but it isn't the major one like you claim. Its a combination of a general lower standard of living and government involvment in the economy.

[brownsfan]

That all sounds very reasonable. And at first glance would seem to work on many levels. My question/problem is why isn't the Bush campagain doing more to educate us on this? I don't expect you to have all the answers, but it would seem that if there is a plan, it should be detailed, rather than allow FUD to continue to build.