I think value and wealth are created by making better products, and/or at a better price. China became wealthier by providing products at a lower price. I think the US became wealthier once upon a time by making better products at a better price. I do not accept the premise that we made nothing but standard fare products and became wealthy because the gov't forced everyone to buy them instead of better/cheaper stuff from overseas. It creates no wealth. It only redistributes what's in one pocket to another pocket.
Creating better/cheaper products makes the business that created it wealthy, and it also enhances the life of the people who bought it, because they have more money for other things.
And that's the problem with floating exchange rates and tariffs. People learn very quickly that they can charge a higher price for their labors and do less work if all they have to do is place a tariff or adjust the currency to keep the competition out.
People only buy products because it makes their life better. If gov't forces them to buy a product which isn't as good or cheap as one from overseas, then that person is less well off than they would have been.
I think it's an economic fallacy to think that wealth can be created by keeping competition out and not creating better/cheaper products. It only takes from one guy and gives to another.
