The economic impact of the current Exodus from the United States.
- Thread starter SouthAmerica
- Start date
Now here is a fine example of just how you arrived in the mess you are in.
If you desire a balanced and stable economy you require a strong domestic market onto which you piggy-back a strong export market.
Never ever be the first to give away your domestic market. Let the others go first and follow their journey and learn from their mistakes.
Governing a strong economy is no different from successful trading.
Think before you act and think correctly as there is no turning back.
We're going to need stimuli to get lean and mean again as a people, to innovate our way out of this. Don't know if a depression would do it, but it didn't hurt last time... given government backing, of course. But again, Hussein has no interest in re-industrializing the nation. He will be too busy with welfare projects, anti-religion laws and tax increases.
You are incorrect. Trading deficits are what got us into this mess, fueled by those in power and money. A proper trade deficit is always net export profit. America prospered without a trade deficit, and it serves no useful purpose that is sustainable. None.
Thinking completed on this in 1993, after I finished reading the NAFTA treaty. I recommend it, but most will dismiss such a task as unworthy, since they are willing to accept summaries from politicians. Not good enough to get out of this mess. Ain't gonna work.
In my opinion, as long as we can own and protect the intellectual property, we are effectively a manufacturing country. Example:
1) Inventor patents widget A
2) Inventor convinces investors to provide capital for production
3) Inventor ships blue-prints for production of Widget A overseas (in cheap-wage emerging economies).
4) Inventor pays X for widget (with which the foreign country most likely invests back into our economy in one form or another)
5) Inventor retains exclusive rights of sale on widget, and now sells it world-wide for Y > X.
While an overseas country manufactured the widget, it is sold as a good 'produced' in the US of A. Yes, the margin may be (Y-X), but just for the ownership of the idea, our inventor has produced a good.
Who cares if we export the base labour out? As long as we can charge a premium for goods designed in the States, we are producing.
If we cannot protect our intellectual property however, we are royally fucked.
1) Inventor patents widget A
2) Inventor convinces investors to provide capital for production
3) Inventor ships blue-prints for production of Widget A overseas (in cheap-wage emerging economies).
4) Inventor pays X for widget (with which the foreign country most likely invests back into our economy in one form or another)
5) Inventor retains exclusive rights of sale on widget, and now sells it world-wide for Y > X.
While an overseas country manufactured the widget, it is sold as a good 'produced' in the US of A. Yes, the margin may be (Y-X), but just for the ownership of the idea, our inventor has produced a good.
Who cares if we export the base labour out? As long as we can charge a premium for goods designed in the States, we are producing.
If we cannot protect our intellectual property however, we are royally fucked.
The key to a strong economy is the middle class. America was powerful economically after WWII because we developed our own middle class and it was the market for our goods produced. (Sure, Europe had a middle class and while a bit behind ours, there was not a huge discrepancy with us. Therefore, Europe wasn't especially great as a net export site. And Asia was a huge population of peasants... no middle class disposable income there regardless of the large numbers.)
Now, Europe and America are about on par with middle class, wages, etc. But Asia and Latin America are entirely different. We gave away much of our middle class to them to take advantage of low labor costs. That's never going to change... that Genie can't be put back into the bottle.
We can't innovate our way out of this box, and taking in a bunch of poor refugees from other countries will only strain further our already inadequate social system.
How do you propose to do business with people who don't have any money?
If we export jobs, the masses lack the income to afford the high value-added items you speak of.
Agreed. And that middle-class came from one wage earner per family. In other words, a living wage. Try and find that today without a PhD... or a trading account.
Sounds like Nike...
But who gets the money? The labor is overseas, so they get paid.
Who gets paid in America? Nike stockholders?
And if there is a significant [or large] margin, others will do something similar and settle for "less margin"... which will erode Nike's margin due to competition... so on, and so on, until the margin is once again small.
Good boy GT you may prove to be a quick learner yet.
You paid foreigners to take over the manufacture of your basis needs thereby turning a trade surplus into a deficit.
Just imagine where you would be now if your Gov had focused on maintaining a trade surplus by holding onto it's existing base and extending it with US tech.
New robotics, energy reduction, a better social balance to name a few.
But no no, you gave away the very thing that made US strong.