Completely short-sighted. Do you suppose that the standard of living in China, Mexico, and India are fixed? Do you have any idea what the GDP growth in China is and, furthermore, is predicted to be in the coming decade?
We are not, for the most part, competing with low-wage competitors. We've given them the markets and take advantage of the labor costs. Once China discovers its Henry Ford and more people in China can afford the widgets they create in their realms, then that advantage will begin to erode.
The beginnings are already evident. One only need look at where China is investing. Roads, buildings, power, wiring -- all of the infrastructure required to become a giant. This is not your grandfather's China. This is a China hell-bent on becoming the premier economic force in the world. I wouldn't bet against them over a 5 decade timeline.
The Chinese are slowly coming around to our way of thinking. I don't have a problem with the Chinese modernizing or any other country for that matter.
Two or three decades ago people were saying exactly the same thing about Japan. They were writing books about how Japan would soon overtake the U.S. and become the economic superpower of the 21st century. They were saying that the U.S. had no chance to keep up unless we changed our business and social culture to match "Japan Incorporated".
Well, Japan's government subsidies and directed investments and guaranteed life-time jobs and propped-up banking system and real estate bubble eventually took their toll. Our relatively-freer society, in which great failure as well as great success is possible, has left Japan in the dust. Japan is still a highly developed nation with good prospects ahead of it, but it's not about to overtake the U.S.
China is the same. It has made huge strides as its leaders have freed up its economy, but that's mostly because it started from disastrous communist-created level. It still has a long way to go, especially when it comes to individual freedom and initiative and a stable legal system that protects contracts and property rights and which financially rewards success.
If the U.S. continues to add regulations and governmental restrictions and taxes, and if we insulate ourselves from trade with the rest of the world, and if China ultimately turns into a free society, then perhaps it will become the premier economic force fity years from now.
But if we repeal taxes and rules and red tape, and tear down barriers to free trade, we'll just keep lengthening our lead. The entire world will be richer as a result, but we'll be richest of all.
I don't fear that kind of a future.