Maybe it is in the best interest of the US (given the new environment) that the USD be lower.
Of course it is. Just not for the reason of relative cost competitiveness. Lower USD is in the interests of the US so that the current account deficit will be lowered.
so why not deliver a one two punch with products that are high quality AND low cost?
What makes you think textiles made in US are higher quality than those made in Turkey? Or a Sony made in the US would be higher quality than that made in Taiwan?
Yes, US wages can be brought down to a level where they would be competitive with Asian wages. I don't think Americans would like their new standards of living at those salaries, though.
if wages were to be reduced, the US is in a far better position to do so, as I believe that the Unions at some point will either "see the light" or else become irrelevant
Sorry, but I did not understand that. Yes, US can reduce wages to rock bottom levels, to compete with Asian factories. Theoretically. In practice, that will never happen, because Americans will never accept going down so low in their income.
If you try to enforce this, my guess is that there will be a brain drain in the US towards countries with higher wages, and the only people you will see working in America will be illegal Mexican workers :-)
And this has nothing to do with the "relevance" of any trade organization, imho.
As for technology, I meant to say that there are some fields (biotech, nano-technology) where the US is still a leader, so cheap labor in those fields may not be needed.
This is a subject dear to my heart, so if you excuse me, I would like to say a few words about it :-)
Biotechnology - US is leader... for now. And "now" may be much more transient than you think, at the speed prominent biotech scientists whose stem cell research is about to be banned in the US (it was already deemed uneligible for state funds some years ago). I just read about a prominent American scientists who set up a stem cell research in UK. It did not look like he was about to go back.
Being religious and conservative is all well and good - in one's own home and one's own prayers. When it becomes an obstruction to science, science goes elsewhere. My guess is that America will very soon lose its headstart in science, and the brain drain related to biotech scientists. In all probability, the next decade will be that of growing a heart from a cloned stem cell of one's own, when the one he is born with is about to fail. US will not be on the train when science takes off in that direction, and make no mistake, it will.
Nanotechnology - It is not entirely correct to say "US is leader" in this field, which, for the time being, consists of a couple of transistors and molecular writing of the letters "IBM" on a surface. That is a fledgling technology, one which will take many years to bloom. And anyone can take the lead between now and then, the time at which it can actually be used for something.
At large, the US population has a better mindset to do what it is needed to compete, whereas the Europeans I doubt they are willing (or even able) to do so
I agree with you that Americans are more used to the idea that they will work 12 hour days with only a couple of days of vacations that they are afraid to take because nobody else does. I have worked in an American-style investment bank, and believe me, I understand what the "better mindset needed to compete" is in the US :-)
However, re "competitiveness", we are not talking about US vs EU, but rather US vs rest of the world (ex: Asia) where wages are much cheaper, and in some cases, so are energy prices (ex: Russia).
In fact a possible "partnership" of sorts with Mexico, and/or the rest of Latin America could be a possibility to counter Chinese cheap products
What do you mean?
I mean why not go to Bolivia and train some people there... to manufacture something.... or use Colombian former cocaine farmers to do similar ?
Oh I see. I feel like making a couple of jokes here, but it occurs to me that you might actually be serious :-)
"Teaching cocaine farmers to manufacture something"? Excellent. Why would they want to grow, say, cotton, if that means making a fraction of what they are making through cocaine, not to mention getting a number of bullets in several body joints for refusing to plant cocaine?
The Euro is UP because the dollar is down, not because of the Euros bright propects
I agree. In fact I have said so very recently on this thread.
Maybe I am all confused and lost -gg
Just about the coke :-)
Incidentally, I met a dark little man in St Tropez three years ago, who served us copious amounts of tequila (at 3PM on the beach), soaked in champagne himself, from all the spraying the naked strip-tease girls dancing on tables (I kid you not.) He invited us to his yacht (visible off of the coast, a big white thing) for the night, where apparently a super duper party was scheduled to take place. He turned out to be Escobar's son. And we chickened out, and politely (very politely!) declined his invitation :-)
Really, I would hate to be the stupid farmer Jose who would go up to that guy and inform him that he will no longer plant his cocaine but would now be an honest farmer of cotton :-))) Have you watched "Scarface"? |
