It was your corporate masters who made the decision, with the full cooperation of their two wholly owned subsidiaries -- the Republican and Democratic parties. (Are some of you dumb enough to think there's any difference between the two parties? Clinton was as eager as any Republican to send as many jobs as possible overseas.) Walmart always demanded from its suppliers "the China price". So its suppliers quickly got the message -- they fired their American workers and produced cheaper (and often shoddier) products overseas. Anybody who had to compete with Walmart did the same. Anybody who's worked in middle management in corporate America for the past 20 years has learned that their company's core competence is downsizing and outsourcing.
You can't support capitalism and prevent companies from seeking the lowest cost and maximizing shareholder value. What you are advocating is populism aka Hugo Chavez Venezuela ------------------------------------------------------------------------------ What you speak about is Capitalism lacking any "Moral" boundry. In that case, slave labor with children would be legal. Capitalism is not just about the "Lowest" cost possible in monitary terms. No where did ADAM SMITH state that, nor Milton Freedman. The US GOV has destroyed capitalism through "TAXATION" upon TAXATION upon more RED TAPE and TAXATION". Corporate Ethics in MBA school is only a short class. There underlying problem with Modern Capitalism is the lack of ETHICS. The law of Deminishing Returns will turn to Hedonisim, which will turn to KAOS as we are starting to witness. Miximizing shareholder value is an arbitrary concept to me. Even at UofC they do not Teach "MAXIMIZING SHAREHOLDERS VALUE at any cost. There has to be some solid grounding in ETHICS backed by "LAZZA FAIR", in order for a Capitalistic society to survive. PERIOD!
I think the answer is other than the Banker conspiracy and greed some assert. It was a political decision to strengthen China in order to squeeze Russia. That plan backfired. For one, Russian, who are very smart, foresaw the aim of the plan and quickly moved with market reforms. At the same time, the plan miscalculated the rate of growth of China and that there will be excessive transfer of wealth from US to that country that will be the main cause of a financial crisis to come. But more importantly, the plan was not carefully negotiated and the Chinese showed reluctance to let their currency appreciate to act as a balance for the huge trade Gap. The end result was the opposite of what they planned. Russia got much stronger because the oil and commodity rally generated a tremendous influx of funds to that country. China got very arrogant to the point of forgetting that it was American money that fueled its growth. US politicians are now watching the aftermath of their wrong decisions knowing there is little they can do at this point. It is an example of falling into a trap, they tried to weaken one enemy by helping the enemy of the enemy and they end up with a stronger enemy and an adversary. This can be fixed to a point but slowly by requiring that China either lets its currency free to float or pays export taxes in an equivalent amount. This will make it economically feasible for many industries in the US to start producing again, the trade deficit will fall, the dollar will strengthen and unemployment will go down. For this to happen, the dogma that Russia is the enemy should be dropped. Russia is not the enemy of the US. It is the US politicians that are the enemy of US.
<object width="480" height="385"><param name="movie" value="http://www.youtube.com/v/BuX5xug9prk?fs=1&hl=en_US"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/BuX5xug9prk?fs=1&hl=en_US" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="480" height="385"></embed></object>
Yep let's hope the ruskies did not give them this <object width="480" height="385"><param name="movie" value="http://www.youtube.com/v/FfoQsZa8F1c?fs=1&hl=en_US"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/FfoQsZa8F1c?fs=1&hl=en_US" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="480" height="385"></embed></object>
No one sent it there, they took it. The US became the largest manufacturer for two reasons -- the ability to incoroporate freely and cheap labor during most of the 1900's. China has cheap labor, and technology (read: electronic communications) has given US companies access to it without having to travel 1/2 way around the world. Also, don't forget about American workers who are employed by Asian companies. One of my golfing buddies is an engineer for Honda. If you're driving a honda reach up and feel the soft fabric on the inside roof of your car. His team designed it and many, many other Amercans installed it. Read, "The World is Flat," by Thomas L. Friedman. Do not blame China and/or the GOP for sending our jobs to China. Blame Greenspan and Bill Clinton for faulty economic policy toward the end of the 1990's and early 2000's. The dire employment situation rests squarely on those two fellas shoulders but I suppose we should include the likes of Sandy Weill in there.
Relax, folks... If you take the really long view, it's just reversion to the mean (I am also a fan of Maddison).