Posted on 05/25/2003 1:23:39 AM PDT by sarcasm
We're in a modest economic recovery, one that is still fragile. And this recovery is not creating jobs. I'm far more concerned about the jobless nature of this recovery than the level of interest rates or market levels.
Government and corporate policies are sending more jobs, capital and American know-how overseas to produce goods and services more cheaply. The proof is in the numbers: The U.S. account deficit, the broadest measure of transactions with other nations, swelled to $503 billion in 2002.
That's not the way it was supposed to work. Increased global trade was supposed to lead to better jobs and higher standards of living by opening markets around the world for U.S. goods. Now some people, myself included, are rethinking the belief that free trade benefits all nations.
According to the Economic Policy Institute, rising trade deficits cost 3 million jobs in the U.S. between 1994 and 2000. And a report by Forrester Research predicts that nearly 500,000 tech jobs will be moved overseas by 2015.
We're also exporting capital. Companies like Motorola have invested billions in China - the country with the largest U.S. trade imbalance with the U.S.
Another problem resulting from America's trade imbalance: Intellectual capital is being shipped overseas - in some cases, raising national security concerns.
So what's gone wrong? Alan Tonelson, author of "Race to the Bottom," says unequivocally that corporate America is largely to blame. "They sold America a bill of goods during the 1990s, because they said that all of these new trade agreements ... were going to boost exports from their American factories. And what they've done is they've used these trade agreements to send production abroad."
Controlling costs
Of course, American business needs to look for ways to control their costs. And consumers are often driven in their purchases by prices.
But it's not just corporate America that needs to adjust to the new global marketplace. Federal and local policymakers need to recalibrate as well.
David Huether, chief economist at the National Association of Manufacturers, says policymakers need to ensure that the regulatory environment is conducive to maintaining our competitive edge.
"To make domestic manufacturers more competitive," he says, "we have to make sure that there aren't future increases in regulation that would push up costs here."
He adds that the federal government should promote trade adjustment assistance to help displaced workers find new employment.
We also need legislation that encourages companies to keep jobs here.
"The only way we can get in on this game is to ... make penalties for those who manufacture overseas and benefits for those who manufacture in the United States," Sen. Fritz Hollings (D-S.C.) told me. "I have a bill to keep the jobs in this country. It's going to be an uphill fight because we've got to really change the culture."
Changing the culture won't be easy: The middle class has little representation in Washington, the multinationals have little incentive to produce here at home, and working men and women in this country are watching their paychecks shrink in response to the competition of lower-paid foreign workers.
Trade barriers
Huether says that policymakers also need to lower barriers to trade overseas.
"Our tariff rates on industrial goods average less than 2%," he says. "The rest of the world, particularly developing Asia, is a lot higher - in the area of around 10%."
On the corporate side, Huether says businesses need to invest in their employees.
"The way that manufacturers compete is through their very high productivity, and one of the ways to do that is ... by maintaining a very able and trained work force," says Huether.
There's no easy corporate or government policy solution to America's export problem. It's time for corporate leaders and policymakers to heighten their efforts to keep American jobs from going overseas.
Not at all! I rather would see Chinese to be able to afford shoes and cars while Americans protected their standard of living. I think it could be done with the wise and fair economical policies. And I do not care if Rolls Royces disapear altogether.
This gets to the root of the problem.
First, a Rolls Royce is a luxury no matter which country you are in. Second, shoes are not a necessity except in certain climes in America.
A model? Hey, I like models...
Air. Is Air a commodity or a luxury or an intrinsic right?
Bear with me. I ask this in seriousness. I wish to demonstrate the nature of what we think of as "commodity".
I would like to ask you a question. Why are you here? If the moderators have seen fit to ban you on more than one occasion why do you keep coming back? Why not just go somewhere else? All things being equal, a different board is just as welcome is it not? This can be expanded to the USA. Why do people continue to clamout at our borders if we are so evil? Your answer to my questions are an insight to the latter example.
And what right do you have to my capital? What right do you have to interfere with the contract created between two people? What gives you the special right to intervene and decide what wage a Chinese person should get paid? Is it your feelings or what?
Why, certainly. This mercantilist philosophy has produced benefits for England which cannot be measured....except in the Socialist State which the Mercantilists forced.
Not too surprising, is it, that England's middle class has shrunk considerably, except for the bankers...
The issue, my man, is FAIR trade; whereby tariffs represent the premium paid by US manufacturers to comply with FLMA, EPA, EEO, and IRS (to name the leaders...)
Actually, there's quite a controversy over this. Was it the chicken or the egg?
Did capital hire women at MUCH cheaper prices because mothers were 'forced' to work--or were mothers 'forced' to work only after their husbands had been displaced by MUCH cheaper single-women labor?
Recall that the USGummint forced "equal opportunity" into the workplace--one result of which is that finding men in the HR department today is easier than finding dinosaur teeth.
ONLY if it's an independent, such as UL. Otherwise, the "barber problem" (we control the number of entries to the market, so the prices remain high) will be widespread.
That may have been the PROXIMATE cause--but the real cause is the 'birth dearth' in Japan. No kids, no reason to spend money---and with retirement coming, only saving money is prudent. Thus, no growth in the economy.
Proof? Look at the significant benny offered for children in the GWB tax program. GWB gets it!!
Walter Williams, in a recent article, discussed the opportunity cost of manufacturing goods or growing produce here when those products could be acquired abroad at a lower cost. Ordinarily, it would be sound economic practice to acquire the goods from foreign sources at the lower prices. Today this principle is warped by the fact that our economy is more driven by consumer spending than by production of goods. There are fewer foreign markets open to our goods and services than several decades ago, even if we could produce them at lower costs.
Consumer spending accounts for 70% of U.S. economic activity, and disposable income is necessary to provide a level of consumption to drive the economy above the level of stagnation. Consumers have less disposable income to spend when millions are either unemployed or underemployed. Discretionary spending decreases, and more non-discretionary spending is being financed by debt. Consumer debt is currently three times that of the national debt (about 22 trillion).
Our elected politicians have made it next to impossible for American companies to survive through regulation and taxation. In addition, they have sold out our nation's productivity and security through unbalanced trade agreements with foreign nations, with no net economic benefit to their constituents in the U.S.
It does not benefit us to get goods at a 10% discount if our income decreases 50% or more. The wealth of the middle class in this country is being bled out to benefit a few in high places.
Secondly based on your post I don't know that you know the first thing about trade.
It's so bad in Mexico, that Levi Strauss is closing all their plants down there (after closing all of the US plants) and moving them to China!!!!!
You have lost touch with reality. Levi might have moved to China, but the reasons are far different than what you cite.
The book is called The Wealth of Nations, and was written by a fellow named Adam Smith in 1776.
It's still as true today as it was then. Smith was arguing against mercantilism, an un-economic idea that is still as wrong today as it was then, whether you call it "protection," or "economic nationalism," or "America First."
If American workers can't compete with Japanese or Chinese workers, government policies designed to compensate for American inefficiency will ultimately help no one. The very policies that are supposed to "help" American workers actually have the opposite effect, by rewarding low productivity and inefficiencies of allocation.
The top three destroyers of American jobs are:
government regulations
labor unions and
trial lawyers
Ridiculous schemes of tariffs and sanctions will solve none of these problems. Let us get our own economic house in order before we commence to punishing innocent foreigners whose only crime is producing superior products at lower prices.
Most importantly, for the consumer. Understand that while some are laborers, some are managers, some are technicians, some are investors ... EVERYONE is a consumer.
If stereos can be made cheaper in Korea than in California, it makes no sense to get upset about the "loss" of stereo-making jobs in California: What we save on stereos can be saved, or invested, or spent on food. A savings is a savings, and thus the market favors efficiency.
American workers were once the most efficient in the world. If we are no longer so efficient, it is our fault, not the world's fault. But, of course, we are extremely efficient -- in aerospace technology, software development, biotech, and so forth.
The weird thing is, so many Americans are griping about the loss of assembly-line manufacturing jobs, but young Americans don't actually want those jobs anymore. More than half of U.S. high-school grads now enroll in college; they're not pursuing bachelor's degrees so they can run a drill press all day! In the textile and carpet mills of the South, factories are importing Mexican labor for the simple reason that young kids in the mill towns don't want to work in the mill.
American kids want white-college office jobs; they associate blue-collar work with immigrants, ghetto minorities and "losers." I'm just explaining the facts, OK? In the typical American high school today, students recognize the existence of two large social classes -- those who will go on to college, and "losers" whose future is often described as "you want fries with that?" Ask any teacher: kids today don't know the "dignity of labor" from the Treaty of Paris. It's all about the Benjamins, see? Kids today are extremely status-conscious, and the smart kids don't want anything to do with a job in a steel mill or an auto plant. They want "cool" jobs like they see on TV sitcoms, where folks wear cool clothes in cool offices and have cool conversations with their cool buddies.
So don't beat me over the head with your economic nostalgia and tell me how you're going to bring back all those wonderful smokestack industries, where square-jawed laborers carried their lunch-pails to the factory and punched the time clock and voted like the union bosses told 'em to vote. That whole Archie Bunker America is gone, and it ain't coming back for the simple reason that American workers don't want it back.
You can kill the messenger all you want, but the message is still true.
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