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<P mce_keep="true">[quote user="greyhounds"] <P>[quote user="Bucyrus"] <P class=MsoNormal style="MARGIN: 0in 0in 0pt"><FONT face=verdana,geneva>Free trade is a double-edged sword.<SPAN style="mso-spacerun: yes"> </SPAN>In a vacuum, it is perfect, but it is not in a vacuum.</FONT></P><FONT face=verdana,geneva> </FONT> <P class=MsoNormal style="MARGIN: 0in 0in 0pt"><FONT face=verdana,geneva>If all the countries of the world had been competing on a free trade basis since the beginning, we would have a balance of trade today with all goods and services being produced by the most efficient producer and sold on the market at the lowest possible price.<SPAN style="mso-spacerun: yes"> </SPAN></FONT></P><FONT face=verdana,geneva> </FONT> <P class=MsoNormal style="MARGIN: 0in 0in 0pt"><FONT face=verdana,geneva>But for many reasons this kind of optimally balanced free trade has not been developing worldwide since the beginning.<SPAN style="mso-spacerun: yes"> </SPAN>Why is that the U.S. has become a manufacturing giant over the last 150 years while China has only recently begun that trek?<SPAN style="mso-spacerun: yes"> </SPAN>There are differences in the distribution of natural resources that might give one country an advantage over another, but I don’ think that explains the difference if economic development between China and the U.S.<SPAN style="mso-spacerun: yes"> </SPAN>The more obvious explanation is that we have liberty and free-market capitalism, whereas they are repressed by the shackles of communism.<SPAN style="mso-spacerun: yes"> </SPAN>Whatever the explanation, the result is that we have a much higher standard of living and higher wages than China does.<SPAN style="mso-spacerun: yes"> </SPAN></FONT></P><FONT face=verdana,geneva> </FONT> <P class=MsoNormal style="MARGIN: 0in 0in 0pt"><FONT face=verdana,geneva>Now all of a sudden, with the era of telecommunications and computer data transfer, the communist government of China decides to embrace capitalism as if it were a home business of a dictator.<SPAN style="mso-spacerun: yes"> </SPAN>They can instantly buy the machine tools and train up a workforce that can be sustained by their prevailing depressed wages that correspond to their relatively undeveloped status and lower standard of living.<SPAN style="mso-spacerun: yes"> </SPAN>Our workforce cannot possibly compete with the Chinese workforce until their wages gradually rise to parity with ours and their standard of living rises accordingly.<SPAN style="mso-spacerun: yes"> </SPAN></FONT></P><FONT face=verdana,geneva> </FONT> <P class=MsoNormal style="MARGIN: 0in 0in 0pt"><FONT face=verdana,geneva>At the same time, our wages and standard of living will decline in spite of the optimum product pricing of the world free trade model.<SPAN style="mso-spacerun: yes"> </SPAN>And because that depressed wage competition includes more than just China, our wages and living standard is likely to fall further than theirs will rise as the wage imbalance seeks equilibrium.<SPAN style="mso-spacerun: yes"> </SPAN></FONT></P> <P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN style="FONT-SIZE: 12pt; FONT-FAMILY: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA"><FONT face=verdana,geneva size=2></FONT></SPAN> </P> <P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN style="FONT-SIZE: 12pt; FONT-FAMILY: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA"><FONT face=verdana,geneva><FONT size=2>So while it is true that world free trade is a perfect economic model that produces the best result for everybody, if it suddenly encounters an unleveled playing field, it can cause damage to the side disadvantaged by that unleveled playing field.<SPAN style="mso-spacerun: yes"> </SPAN>With a wage disparity as large as that which exists between the U.S. and most of the third world, the world free trade model could destroy the U.S. while all the while providing us with goods and services at the lowest possible price.<SPAN style="mso-spacerun: yes"> </SPAN></FONT></FONT></SPAN></P> <P>[/quote]</P> <P>No, and nothing is "Perfect". The US manufacturing sector has hit a big bump with the recession. Along with everything else. But before that (and hopefully after that) it was doing just fine. We were not loosing our manufacturing base. Actually, before the recession the US manufacturing sector was growing faster than the overall economy. </P> <P>Manufacturing employment is a different story. And it's not a different story of jobs being sent overseas. It's a story of productivity. "What took 1,000 workers to produce in 1950 takes less than 200 to produce now." (Actually, China has lost a greater percentage of its manufacturing jobs than the US has.)</P> <P>US manufacturing is just going through the same thing US agriculture went through. Productivity improvements allow greater output with fewer workers. That's gonna' happen or we will loose our manufacturing. Can't stop progress.</P> <P>Guys, we just gotta' stick with the facts and reality. </P> <P>From the Federal Reserve prior to the recession:</P> <P><A href="http://www.edcchicago.org/presentations/Manufacturing%20EDC%20080625.pdf">http://www.edcchicago.org/presentations/Manufacturing%20EDC%20080625.pdf</A></P> <P mce_keep="true"> </P> <P>[/quote]</P> <P mce_keep="true"> </P> <P class=MsoNormal style="MARGIN: 0in 0in 0pt"><FONT face=verdana,geneva>I understand your explanation that a loss of manufacturing jobs is due to increases in domestic productivity.<SPAN style="mso-spacerun: yes"> </SPAN>But the loss of jobs to cheaper foreign labor is an entirely different reason for the loss of manufacturing jobs.<SPAN style="mso-spacerun: yes"> </SPAN></FONT></P><FONT face=verdana,geneva> <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o:p></o:p></FONT> <P class=MsoNormal style="MARGIN: 0in 0in 0pt"><FONT face=verdana,geneva>And the fact that U.S. manufacturing as a whole happens to be growing does not necessarily mean that we are not losing manufacturing.<SPAN style="mso-spacerun: yes"> </SPAN>I would be skeptical of any source that implies that we are not losing any manufacturing.<SPAN style="mso-spacerun: yes"> </SPAN>Obviously we are losing some of it to the lower wage countries, although our manufacturing growth may be bigger than the loss.<SPAN style="mso-spacerun: yes"> </SPAN>If we were not losing any, the growth would be still greater.<SPAN style="mso-spacerun: yes"> </SPAN>Certainly we are sending engineering and design work to India, China, and other low wage countries.<SPAN style="mso-spacerun: yes"> </SPAN>U.S. engineers cannot live in the U.S. on the wages of Indian engineers.<SPAN style="mso-spacerun: yes"> </SPAN></FONT></P> <P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN style="FONT-SIZE: 12pt; FONT-FAMILY: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA"><FONT face=verdana,geneva size=2></FONT></SPAN> </P> <P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN style="FONT-SIZE: 12pt; FONT-FAMILY: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA"><FONT face=verdana,geneva><FONT size=2>I agree that loss of manufacturing is not the only thing wrong right now with the economy.<SPAN style="mso-spacerun: yes"> </SPAN>Not by a long shot.<SPAN style="mso-spacerun: yes"> </SPAN></FONT></FONT></SPAN></P>
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