You make some good points, but I think a large part of the reason is increased cost of gas. People aren't going to buy SUV's and pickups that only get 12 miles to the gallon, when it appears that gas prices are going to keep going up.
But I agree with you that outsourcing is affecting consumer spending. I just had a customer who canceled a sale with me, because his IT job with IBM was just outsourced to India. No job for him...no job for me...a reverse trickle down effect, so to speak.
Southack may not agree on that point, I don't know.
But when people who made $70,000 a year working on computer software suddenly find themselves losing their job to some guy in India, who will work for $7000 a year, that has a negative effect on consumer confidence and spending power.
It doesn't take an egghead economist to figure that one out.
"But when people who made $70,000 a year working on computer software suddenly find themselves losing their job to some guy in India, who will work for $7000 a year, that has a negative effect on consumer confidence and spending power."
If Software was America's only business, then you'd have a point. However, the U.S. has *millions* of different types of businesses. At any given moment, some of those businesses are becoming extinct, or changing, or shrinking, or growing. New businesses are being added every day, too.
So what matters overall is *not* what happens inside any one business, but to the whole economy.
...And for that, we know that unemployment is down, overall employment is up, and wages are up even after being adjusted for inflation.
