Posted on 02/14/2004 1:43:10 AM PST by sarcasm
Why? Because by definition, Net Capital Outflow is equal to Net Exports [if you need an explanation click here]. I hear a whole lot of bitching because foreign country investment owns us; so dish it right back and own some of their assets. But be advised, it's the foreign investment that American's use to finance their unquenchable appetite for consumption. Some Americans are also gainfully employed by foreign companies that have located in the good ol' U-S-of-A in order to provide the incomes to those whom will consume their (that foreign company's) products & services. Not only do these companies do this to expand their markets to over here, it also saves on shipping costs, and, on top of all that they need to diversify their investment portfolios and hold not just U.S. debt instruments but land & capital assets as well.
If you're so concerned about the outsourcing of jobs that "rightfully" belong to Americans, put your money where your mouths are! And if you are going to continue to worry that those damn foreigners are going to yank the rug from out beneath us, think again. It's not very smart to lose your most loyal, addicted, and compulsive costumer is it?
[SARCASM ON]
I forgot to mention this earlier, but the other day I bought a cheap [Chinese made] portable CD/Cassette Tape player with FM/AM to boot! It was $27 after taxes. Remember when CD players first came out - in mass - in the mid 80s? They were nearly $400. Now I know that those players of old were probably never produced in CONUS, but I'm wondering what happened to all of those displaced workers whom used to churn them out. Maybe they "never ever" got another job in their lives and they managed to shrivel up and die somewhere in a corner somewhere. You know, I feel guilty. I really should "buy American" but I can't really find many products that are American made. Perhaps I should start a campaign to encourage Americans to leave their well compensating service jobs and set their sights on lower paying manufacturing jobs so that we, as a nation, can ensure that no one goes through the pains of being unemployed. Is anyone else on board?
[SARCASM OFF]
So, it's our destiny now to be resourceful and inovative to produce jobs that can be sent overseas and then start the process all over again.
This is the same if I bought 5 acres of undeveloped land, cleared it, built a beautiful home, landscaped the grounds and as I was ready to move in and enjoy the fruits of my labor, it is given away.
Not for now at least, though some like China have a mighty ideological impetus to become independent. China would like nothing better than to import nothing but money.
Some would say that they already do, for a variety of different reasons. But they have to do something with all that cash. That's why they give it back to us and in return we give them an IOU. We utilize their loans to further our financed consumption. But here's the kicker, in a truly free market, the currency exchange rates act as a mechanism to set an equilibrium to keep capital outflows/exports [remember they're equal by definition] all balanced against one another in the long run. China pegs it's currency to the dollar by a fixed - something like a 8.4 to 1 - rate. We want them to allow their currency to adjust (float) in order to have a true market with exchange rate mechanisms.
So this is where it gets pretty funny! We decide to subtlety weaken the dollar which also weakens their currency. This allows us to export a little more than we do now - remember we still have large trade deficits though - but they also export more too. Their capital outflows give them more IOUs but they're not getting squat on their real rates of return. They become more and more invested in America and need it to do well. In the mean time we use their loans to live the cushy life styles that we do. As more and more Chinese businesses work and invest, some of those business managers start to recognize the benefits of trade and put pressure on their own government to loosen ownership policies and head toward adopting a more capitalistic approach. Now that the Capitalism genie has been let out of the bottle, there will be no way to put it back. Capitalism will take hold of China, eventually. Unfortunately, by the time it has taken root, we may have gone the other way. If you people want to press your representatives for protectionist policies, go ahead. You're inadvertently asking government to help take America that other way! Just don't ask me to shut up on the issue because I won't. Although, you could ask the moderator to make me go away.
Funny, there's a lot of countries where Capitalism has for decades been more out of the bottle than China has ever seen, and they don't seem to be matching US spending with their demand for US goods. Will China be an exception? Fat chance....
That would set off alarm bells in an intelligent person.
Perhaps because it is. In case this byatch hadn't noticed, every economist, including Greenspan, has been surprised at how slow jobs are being created by this recovery. The administration has had egg on its face every time it announces how many new jobs it expects. Oh, and these jobs aren't new higher paying jobs like every other recovery. These jobs are old (retail) jobs that pay less than the previous IT jobs which got outsourced.
So who ya gonna believe, Carly Fiorina or your lying eyes?
I'm not following your thought here. Will you write that again please, only in a different way?
That's my story and I'm stickin' to it.
My fellow Republican friends are not happy about this outsourcing and the loss of American jobs. We're all talking about it, and none of us are happy. We agree that Mr. Bush is in trouble. We agree that we will vote for Mr. Bush, but we will not be surprised if the Democrats regroup and win with this issue.
That's where this "average Joe" has an advantage. I'm an idiot without those annoying alarm bells. I know that I can't find many American made retail products [big ticket capital goods are a different story] and this has been the case for quite some time. Yet, even though this has been happening a long, long time, strangely, our standard of living in America gets better. Heck, I can't understand it but it certainly sounds good when I read the propaganda from the Heritage Foundation, the Club for Growth, and the Cato Institute. Have you tried the cherry flavor yet? Red reminds me of fire for some reason. Speaking of fire, why don't I hear the alarm bells?
If they are not buying, they are not contributing economically. Its about what they BUY not what they MAKE.
There is plenty to do. If we can let someone in India handle a relatively easy job for a lot less than an American would charge that is GOOD. We're getting the same work done for less expenditure by the American people. The money we don't spend we spend somewhere else and that creates new jobs for Americans. It also lets the displaced American do something that is more valuable to us. Could that require some training and/or additional education. You bet. That's life. Things change and if we are going to continue to be the political and economic leaders of the world then we have to be adaptable.
You know, I bet similar debates were made in the early seventies when it came to the decision to end the military draft. "Oh no, that will never work, you'll never get people to volunteer for the Armed Forces at any price!"
Today, it seems some conservatives are begging "No, let's not let businesses take advantage of a cheaper labor burden [do I really need to cover all the unseen costs?]. Let's build walls and keep these people from leaving {{{Oh crap, that sounds too despotic}}}. Let's tariff the imported goods and raise revenue for the Treasury that way. American's are loosing good jobs! It needs to stop!" Meanwhile, the real standard of living somehow still gets better and unemployment is at it's 40 year average rate despite a major terrorist attack just two and a half years ago, a recession, a market correction, and also despite Clay losing to Ruben in the last American Idol.
How do you spell levy, levee, whatever it is?
Are you kidding? The people of those countries may not buy any reatail products from us but they do buy other stuff. They also provide the necessary funding for my home mortgage. Boy they're getting the short end of the stick on that deal too. My three year ARM @ 4.625 has an 8.625 rate ceiling. I'm livin' large and they're barely making any real rate of return on their investment. I, however, am far better off.
What you are talking about is quite literally my profession. Not to mention I have studied China extensively for over 10 years and have lived there twice.
Of course its easy to say and believe what you say, but its not that way in reality.
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