Just wondering what people’s thoughts are on the following. I grew up in the Northeast US and saw factory after factory close their doors in the US to “move overseas.” The story was that labor was so much cheaper in the 3rd world that the incentive to move was too great. I often wondered how US labor could compete against the 3rd world, particularly China which essentially subsidizes labor costs. Now, recently in the US we see the government bailing out Wall Street and GM (among others). Is the US being forced in that direction…socialization/nationalization, inevitably to compete?
if people want to compete directly with uneducated slave labor and then complain when they lose let them. I choose to avail myself of the fabulous opportunities that our free market has provided and educate myself so that my labor has more value.
What you didn’t see is the factory after factory that opened their doors in the US as result of the freed resources (also labor) from the companies that moved overseas.
That’s a good thing. Lower costs of labor results in increased productivity. We eventually all become wealthier.
Well, first of all, you want a free market unhampered from minimum wage laws, pro-union labor legislation, and any other regulations that makes US companies inefficient, and frankly are also detrimental to the labor force, especially in the long run.
Most importantly, you don’t compete with someone who has a clear comparative advantage, like cheap labor. You take advantage of the opportunity and utilize it. The cheaper goods from overseas now leave more money in your pocket. Money to create other jobs to produce other things we want. The money you spend to buy the goods from overseas also must come back. You pay with dollars, and those dollars are no good in China. This is the principle behind trade.
More wealth was created by the process. Not less. This is true also for China. No permanent unemployment will take place in a free market. Labor will always be a scarce resource relative to all the things we want, which are infinite. Resources are simply shifted to other more efficient uses as the economy evolves.
If China is stupid enough (like we are) to subsidize labor, then good for us! Let the Chinese tax payers subsidize the American consumer. This is their problem, not ours.
The US is bailing out Wall Street for the sake of bailing out wall street. More accurately, the bailout is directed at the system of central banking. A system that is based on central economic planning with the Federal Reserve as Planner in charge, and which always blames free markets for its utter failures.
GM is bailed out because the auto labor unions are just too powerful in Washington. If GM failed (honestly), then all contracts with the union would be void, so the company could get a fresh start and maybe actually have a chance to become profitable.