>The notion that enterprises in the US will be inherently more productive to compensate for our higher wage levels (which free traders seem to accept as gospel) is rubbish. There is no logical explanation as to why this must be so.
It is? I guess it must be our high level of protectionism that made our productivity engine the envy of the world. *snicker*
>In this borderless world, capital, intellect, equipment, education can all migrate freely leaving the only difference as wages. Disk drive production, a capital intensive, technologically advanced product like so many other computer products that cannot profitably be produced in the United States, is a perfect example.
I'm confused. Free trade made this possible. Hard drives are not made in the USA. So what? Should we subsidize the industry, maybe impose a few tariffs on those "predatory" workers in SE Asia? I'm sure America would be a greater nation if you could only buy domestic $500 2G hard drives, if your DRAM is made by Micron, if your TV is made by Zenith, and if your choice of automobiles is limited to Pintos and Corvairs.
>As for developing countries wage levels rising to match our own, Japan is a poor example. Japan, with 100 million people, sucked a trillion dollars out of the US on its route to prosperity. Imagine what it will take to bring China, Vietnam, Thailand, Malaysia and the rest of Asia up to our wage levels. This brings my wealthy family analogy back in to play. Borrow and maintain a high living standard right to the bitter end.
I run a trade deficit with McDonald's. They have "sucked" thousands of dollars out of my pockets. Imagine if Burger King, Pizza Hut, and Kentucky Fried Chicken also did that to me. Whoa Nellie!
There is nothing altogether special about currency. It's a good, just like everything else is a good. The essence of trade is that you exchange a good that you value less for a good that you value more. Since your counterpart does likewise, each transaction must somehow have created de novo value. There's a name for that, it's called efficiency.
And if a country prefers to hold on to our T bonds rather than buy Nacho Cheese Doritos with them, god bless them. It diminishes its own efficiency and lowers my cost of capital. Yeah, that's a real cause for outrage. |
