Well, no expert on the law of comparative advantage here, but I am familiar with the concept and find it believeable. HOWEVER, I don't think it works outside of simple low wage manufacturing professions. In other words US auto makers who have to buy components from some US widget manufacturer will eventually suffer because those commodity widgets can be procured by a japanese auto maker for 1/10 the cost and so on and so on. That is comparative advantage, makes sense no?
The problem is we are offshoring new state of the art professions now where your workforce is actually as much of an investment as a flat cost line item on the balance sheet. Maybe HP gets benefits from offshoring their optical R&D team to india for one or two quarters, fine. But then a few more companies do this and you have lost optical engineering, something US universities invented 5 years ago or something. Not good.
And then, as a result of the above where virtually every profession new and old gets offshored, the next thing you have is a decimated US market and low tax receipts, which lead to high deficits, falling dollar and inflation! LOLOL!
I really think old Greenie has met his match, he still thinks of offshoring as applying to the widget maker and not the optical networking engineer. Very different matters. But here's the thing, the fact that the white house cannot deal with the realities of this economic experiment and how they are different from the textbook outcomes bothers me just as much as their incorrect perceptions about the theory. It is obvious offshoring broke our recovery, our nation is broke, and they can't even admit it! This is not leadership- facts have changed wrt these economic matters and a reevaluation is in order! Total losers this team. |
