patrick.net

I am for increasing markets through the globalization but am not for competing with poorer countries for labor.

4X says

I am for increasing markets through the globalization but am not for competing with poorer countries for labor.

And why would you believe that other countries would want in on that deal?

"Sure, we'll import your superior manufactured goods and destroy our local competition. Of course we don't want anything in return!"

In the making?

Did you fall and hit your head?

It's nice to think we could insulate ourselves from other countries that would compete for jobs while selling our products to them, but it simply won't work. No country in history has ever made it work. Protectionism only makes the inevitable crash worse just like bailing out failing banks will make the inevitable financial crash worse. Laws of supply and demand are immutable and in the long term will destroy any political attempt to circumvent them. There are 4000 years of history showing how this type of activity ends, which is usually in a very ugly way for the economy involved.

Sorry, I really would have liked American hegemony to continue forever, but the only constant is change.

The only area the article has a very good point is that the tax code is a monster that has many unintended consequences. The tax laws frequently end up being counterproductive by actually providing incentives to work against American interests. Will it ever change? Not a chance. Too many people have too many very profitable special breaks in the code to ever get it fixed.

bob2356 says

Protectionism only makes the inevitable crash worse

Agreed. See 1929.

This has been going on since 80s in Santa Clara, when Semiconductor plants were shut down due to cheaper priced products coming from Japan. Yes even by the mid 80s the Japanese managed to surpass our high tech markets. No one cared then because no one cared about the front line low paid wage workers. Now that high paid 'ego inflated' engineers are getting hit, its hitting a nerve. They had a 20 year warning to prepare for it. In response they went bonkers increasing their salaries and bonuses buying up expensive homes, cars, gizmos never caring for the day of reckoning.

@Kevin

And why would you believe that other countries would want in on that deal?

“Sure, we’ll import your superior manufactured goods and destroy our local competition. Of course we don’t want anything in return!”

Goodpoint...I agree that its about an exchange of services. However, something must be done to reduce the local cost of services, goods here in America if we are to continue offshoring at this rate. We are creating a nation of wealthy and poor. Your thoughts?

@nomograph

Requisite asinine Nomo comment: You may wish to obtain a more thorough understanding of economics before forming strong opinions. Forming opinions without understanding the concepts makes it even harder to learn the concepts later, as they will often run counter to your opinions.

What I support and what the economic conditions of our time present are exact opposites....these are not opinions based on my uninformed thought processes. My statements can be supported by facts. I am for American dominance in every industry possible, however, that is not always possible. For example, the US climate may not support the production of certain crops where as China's climate may. Yet, that does not mean that we cannot simply find another "friendly" nation to produce the same crops for us. My point is that with 1/3 of all US jobs offshorable, what steps can be taken to prevent this trend?

For examples of grossly uninformed opinion, see any of tenouncetrout’s posts.

I have experienced some of tenouncetrouts ramblings, and yes he/she has a difficult time articulating facts that support his/her stances. I have asked Trout on several occasions to present supporting facts but generally get a 4 page manifesto in return with few supporting details. Often, I wind up confused wondering if Trout actually supports any governmental policies....I am beginning to think he/she is an anarchist.

@Bob @Thomas.Wong

SInce you guys see this continuing...do you guys think that the cost of homes, cars and other products will fall right along with the wages?

...it looks like Karl Marx predicted this collapse.

Capitalism can stimulate considerable growth because the capitalist can, and has an incentive to, reinvest profits in new technologies and capital equipment. Marx considered the capitalist class to be the most revolutionary in history, because it constantly improved the means of production. But Marx argued that capitalism was prone to periodic crises. He suggested that over time, capitalists would invest more and more in new technologies, and less and less in labor. Since Marx believed that surplus value appropriated from labor is the source of profits, he concluded that the rate of profit would fall even as the economy grew. When the rate of profit falls below a certain point, the result would be a recession or depression in which certain sectors of the economy would collapse. Marx thought that during such an economic crisis the price of labor would also fall, and eventually make possible the investment in new technologies and the growth of new sectors of the economy.

Marx believed that increasingly severe crises would punctuate this cycle of growth, collapse, and more growth. Moreover, he believed that in the long-term this process would necessarily enrich and empower the capitalist class and impoverish the proletariat. He believed that if the proletariat were to seize the means of production, they would encourage social relations that would benefit everyone equally, and a system of production less vulnerable to periodic crises. He theorized that between capitalism and the establishment of a socialist system, a dictatorship of the proletariat - a period where the working class holds political power and forcibly socializes the means of production - would exist. As he wrote in his "Critique of the Gotha Program", "between capitalist and communist society there lies the period of the revolutionary transformation of the one into the other. Corresponding to this is also a political transition period in which the state can be nothing but the revolutionary dictatorship of the proletariat."[28] While he allowed for the possibility of peaceful transition in some countries with strong democratic institutional structures (such as Britain, the US and the Netherlands), he suggested that in other countries with strong centralized state-oriented traditions, like France and Germany, the "lever of our revolution must be force."[