This is a must read article...
Today, somewhere between 70 percent and 80 percent of all products sold in U.S. Wal-Mart stores are from China. Following such deals to their eventual end reveals an even more grim future for the American middle class if trade borders continue to dissolve.
If the U.S. and China, for example, were to enter into a single labor and goods market, wages would then converge. Whereas a factory worker in China was making, say, $3 an hour and a comparable worker in the U.S. made $30 an hour; the Chinese worker shoots up to about $15 an hour, and the American worker’s wages collapse to the same. In China, everyone is happy and rich. In the U.S., the government would be overthrown.
“We have free trade within the 50 states,” Stumo says. “By impoverishing our middle class with this offshoring driven by free trade policy, you’re killing the U.S. consumer market, which drives growth, because they have no money. Five or ten percent cheaper prices is overwhelmed in this stage by lack of production and stagnant wages,” he says. “The U.S. middle class cannot afford to fund the rise of other countries anymore.
We have never had Free Trade, no country ever has. Generally it is a straw man for Protectionists to make points against. Theoretically it explains and shows how free trade maximizes economic goals.
Small towns are being destroyed, not by free trade, but by the infrastructure costs which can’t be spread over as large a group of rate payers. Federal guidelines, for example, requires sewage treatment to produce an effluent which is nearly drinkable. This is enormously expensive and in some cases unnecessary. Drinking water is subject to the same kind of restrictions.
Then you have the major problem: the lack of opportunity in small towns and even small cities.
Young people leave to a place they can make a living and have opportunity. My experience is illustrative. I was raised in a small town and loved life there but upon getting the education modernity requires found there was no place for me there. My education would have been wasted. It wasn’t in Chicago.
“In China, everyone is happy and rich. In the U.S., the government would be overthrown.”
Why is it so darn difficult to admit everyone must make a profit ?
Why is the previous sentence so impossible,, and a ‘trade deficit’ so hard to see as a LOSS ?