I've been saying that we're on in a "race to the bottom" for years. When all your manufacturing jobs move overseas for lower wages, eventually there will no one left to buy the products and the whole global economy will fail.

We used to have a garment industry in the US that employed thousands of workers and payed a living wage. Then Wal Mart came along and attitudes changed from buying a quality product to buying a cheaper product. Jobs started moving overseas and US garment workers started losing their jobs. The companies are constantly looking for cheaper and cheaper labor, India, then Bangladesh, then Burma, each time paying the worker less and less. Where once workers were paid a living wage, more and more they are being page a subsistence wage. People earning a subsistence wage don't grow the economy, they're just making enough to eat. What happens when we keep from hitting bottom? How do we get the corporations to raise prices and raise wages? This is a slow inexorable slide.

I like the way the shills hide the truth by saying that the "low paying menial jobs are being replaced by higher paying service jobs." They hide it by factoring in Banking and Financial Services into the service jobs. Middle class workers are making less and less and less, and bankers salaries are rising so high that it hides the fact that our middle class is suffering. Real wages in the middle class are falling drastically and this spells doom for our economy. The last real depression had WWII to pull America out. What global conflict is our Gov going to have to cook up to pull us out of this one?

How do we stop this slide to the bottom?

It's much worse than you say.

Many classes of white collar and service industry jobs have been decimated by a combination of outsourcing and importation of foreign guest workers.

It's not just manufacturing.

So why do all those jobs move out of the US? Because people respond well to lower prices. If you want a market based economy, and a market leader makes its products in the US, and you realize you can sell the same thing for less if you build it in China, then that's what you do. And the market leader either responds by moving production overseas or loses market share. For the most part, American consumers don't care where the products they buy are manufactured - I'm sure Wal-Marts selling largely imported merchandise thrived in the small towns that surround US auto plants, whose workers thought everybody (but them) should buy American-made products.

So while a lot of people want to blame somebody for the loss of jobs, it basically comes down to the value added by American factory employees relative to those in low cost countries isn't significant. People in other countries are willing to do the same work for less money than workers here. It seems unfair, but I don't see anybody volunteering to stop buying $5 shirts, $20 jeans, almost free mobile phones, $400 computers - you get the picture.

Given that we consume way more than we produce, you would expect the dollar to lose a lot more value than it has over the last decade, as we borrow trillions of dollars, and print trillions more. If the value of the dollar more accurately reflected these imbalances, our factories would be more competitive. This correction hasn't occurred, blame it on China if you want, blame it on the financial crisis that scared everyone into buying dollars, but until the rest of the world is ready to accept that a dollar is only worth a half of a euro or 50 yen, or more importantly, 3 or 4 renminbi, we're not going be able to profitably operate any manufacturing plants here, except for products where we possess a technology advantage. And as companies scale back on R&D expenditures, as the country forces foreign-born US-educated scientists and engineers to leave the country to start companies elsewhere, as other countries (think China again) focus development on new technology, that advantage is going to be less and less common.

How do we stop the slide? If we refuse to stop buying cheap products from Asia, we could start by cutting back our oil imports. That's $400B/yr. If we invested in renewable energy, even if it was more expensive than oil, we wouldn't be sending those dollars overseas, they would be getting re-used and re-cycled here (would you rather pay $1 for a unit of energy, and have that $1 sent to a country that doesn't really like us and uses it to buy things from other countries, or pay $1.50, or even $2, for the same unit of energy, and keep it here in the US?). It's not a complete solution, but it's a start, and it just might yield an industry that relies on factories in the U.S.

www.onthetimes.com

well, thats what tarriffs are for. Free-trade is over-rated, especially when you are the country that everyone is dumping their cheap crap on. Although if the US can't do it because of the costs, then europe and Japan shouldn't be able to either as their costs are often even higher.

I would love to stop buying cheap imports. It's really hard to find stuff that isn't a cheap import though, especially if you are shopping in a hurry. Target? Walmart? Shops full o' crap made in China.

Who deserves your money more, some hard-working, responsible, low-income Chinese family or some fat, broken-family, methamphetamine addicted, overpaid redneck in the USA?

Touchee. How can I argue with that?

FirstInLastOut:

well, thats what tarriffs are for. Free-trade is over-rated, especially when you are the country that everyone is dumping their cheap crap on. Although if the US can't do it because of the costs, then europe and Japan shouldn't be able to either as their costs are often even higher.

Even though it seems like we only import stuff, we do export a lot, just not enough. If we start a trade war, don't expect the exporting countries to not retaliate. And we just don't make all those things here - while we may design the electronics and the chips that we buy so much of, most of it is built in Asia, and it's not like we're going to start building $5 billion memory fabs. You want a flat screen TV or a notebook computer, assembled in the US, and made of components built in the US? Expect to pay 5x more than you do now, if that little.

Europe and Japan are hurting also, but they don't consume as much as we do. Two big reasons: spending on military and energy. We're the biggest consumer of both of these money sinks (money spent on both of those expenditures is basically burned, never to be re-used, except for a small portion of the defense budget), and we're not showing any inclination to reduce spending on either.

We used to have a garment industry in the US that employed thousands of workers and payed a living wage. Then Wal Mart came along and attitudes changed from buying a quality product to buying a cheaper product.

This isn't really historically accurate, but that's OK, it's a good point. We are certainly doomed to greater and greater economic disruption as long as we're an economy not built on building things. I think there'd be a lot to be said for a punitive trade war. It'd be terribly painful for a lot of people - maybe even lead to an even bigger global financial crisis as the Chinese etc dumped their dollars in retaliation - but if, at the end of the day, it became cheaper to hire Americans to build things here than to pay foreigners to build them and then import them, I think that'd lead to a more stable society.

Fortunately, Obama has no idea how painful such a trade war would be and he shows signs of starting one. I'm not being sarcastic. Other Presidents have shied away from shutting off the flow of jobs overseas with a trade war because they know that in the short term, we'd literally have another Depression. But I think on the other side we'd have a better society. I don't think Obama is intellectually equipped to make that calculation, but his instincts are for protectionism, so here we go, maybe.

"Race to the bottom" sounds awfully racist to me. Why is it that everyone calling for trade protectionism is basically restating the "yellow peril" argument from the 19th century? When Thomas Jefferson said "we hold these truths to be self-evident, that all men are created equal", he didn't mean "all Americans" or "all Western country inhabitants." That factory worker in China or call-center rep in Bangalore has just as much right to life, liberty, and the pursuit of happiness as you do, and American multinationals make that possible. Our agricultural mechanization and genetically-modified crops that drive the hippies up the wall prevented famine in South Asia in the 1970s and prevented hundreds of millions of Indians, Chinese, and Pakistanis from starving to death, so not only are you racist with America First, but you're genocidal as well.

Some folks want to throw pipe bombs at WTO summits, but I for one think that the other 95% of humans on the planet who don't salute the Stars and Stripes are just as equal under their gods as we are under ours, and every time a newly minted burgher spreads his wings and improves his life, that is good for the planet.

Sucks to American manufacturing and low-end service workers, but there are plenty of good jobs out there (well, maybe not now, but recessions don't last forever)---the problem is that in order to rise above the level of a foreign worker one must take full advantage of the resources available to him. As the old demotivational poster with the picture of the order of fries says, "Failure: Not everyone can be astronauts."

If there's a bright side to all of this, at least the Jews don't have to worry about racist jealousy this time around---they get a pass for a change. Because let's face it---swap in the word "Jewish" for "Chinese" and all this rhetoric about economic protectionism sure starts sounding familiar.

bsharporflat:

Who deserves your money more, some hard-working, responsible, low-income Chinese family or some fat, broken-family, methamphetamine addicted, overpaid redneck in the USA?

Wow. That is a weird, out-of-the-blue rant, and a rare glimpse behind your hyper-controlled mask. Is this perhaps some family you know quite well?

The only other time we've seen you show such passion is in your tirade against the supposed torment by the American justice system of Polanski, an admitted and convicted child rapist, and the prudish American mores which look down on such activities.

Fascinating. You manage some how to be able to spend all day ranting about the sins of America and attacking Americans who are fond of their country. You do so in a passive-aggressive manner, wrapping genuine hostility inside of a hippy dippy above-it-all demeanor which is so detached as to make you seem insincere. Even with posters you agree with, rather than delving too deeply, you flit away with some quip or smirk or joke. Almost like the retreat to safety of a man terrified of the anger and intense emotions inside him.

You claim to have spent "10 years working with sex offenders." And you spend a lot of time demanding that nobody deserves any kind of judgement for anything. Hmm.

Military family that moved around a lot. Overbearing, right wing hyper-patriotic, macho father who was emotionally abusive (stand in for "America.") Feel unmoored to any place or people, unable to hold a job or develop adult relationships. "Has worked with sex offenders." Has a lot of time on his hands.

bsharporflat: "Who deserves your money more, some hard-working, responsible, low-income Chinese family or some fat, broken-family, methamphetamine addicted, overpaid redneck in the USA?"

These are our choices? I don't accept that. Nor do I accept the dooms-day scenarios predicting the end of economic life as we know it. One force we should never underestimate: the American workforce. Third biggest in the world, after China and India, and a history of mobilizing to achieve amazing things in a crisis.

Thomas Jefferson kept slaves and arranged to have them freed only after he died and had no more use for them. He might not be the ideal reference on racism. I don't dismiss him out of hand; after all, without Jefferson, one side of our nickles would be blank.

One of the important reasons for the disparity between the economic systems of different countries is the lack of a single worldwide currency. This is most apparent when you view economic indicators like GDP with and without adjustment for PPP.

What a weird post, Monster. "Racist?" Would you have said that same if the original poster talked about American jobs going to Canada or Europe?

Of course everyone in the world has the "right" to life, liberty and pursuit of happiness, and a stable middle class life. For that matter, the Jets have as much of a "right" to victory on Sunday as the Vikings.

This isn't about "allowing" others in the world a middle class lifestyle, or "disallowing" them one. It is about global economic competition for healthy economies and the jobs and lifestyles which come from that. The Chinese are not being racist either, for that matter, by competing with the American steel industry.

Americans in the auto industry have as much of a "right" to good jobs as their Japanese and German counterparts, but the Japanese and Germans simply out-worked, out-innovated, and out-profited and out-sold. They won. Nothing personal here.

As you mentioned, the American led global economy is one of the best things that ever happened to the world's developing populations. It has worked human wonders in much of Central and South America, and parts of Asia like Vietnam and so forth.

The question for Americans and their competitors around the world is to figure out how to get the best industries here.

"Military family that moved around a lot. Overbearing, right wing hyper-patriotic, macho father who was emotionally abusive (stand in for "America.") Feel unmoored to any place or people, unable to hold a job or develop adult relationships. "Has worked with sex offenders." Has a lot of time on his hands. "

The bit about working with sex offenders makes me guess the paragraph is your attempt to analyze Bsharp. I wonder how wrong you are.

Without that sentence I would have thought you were describing your own background. Fits to a T. in IMHO.