GLOBALIZATION

Globalization initially meant a transfer of business production that was ‘labor intensive to a lower labor cost country’, ‘regulatory intensive to a freer labor or environmental operation country’ and ‘tax intensive to a lower tax country’.

Later Globalization was a means of outsourcing. To accomplish this free trade was necessary that tariffs, duties and market subsidies should not exist.

Increased buying of equipment and services from American companies is and/or will be from those companies with plants in China and India. The USA will see little benefit because of the tax penalty when companies bring profits back into this country. More and more companies are being forced, by government policies, to setup offices and plants in China and India.

The unemployment problem is harder to correct because of the change to a global economy. The number of producing jobs (farming, manufacturing and construction) has decreased significantly because of automation, out sourcing manufactured goods and reduction in residential and commercial construction as a result unintended consequences from government forcing financially unsound affordable housing.

The number of non producing service and government jobs cannot counter the effect of lost producer jobs. Retail trade, business services, education (except teachers), health, leisure and government cannot create a demand. We can wash each others clothes until they wear out but it cannot improve the economy. A countries ability to provide its services is dependent on its profits from producing something.

When we decided to have a global economy there were these unintended (by some) consequences. We are no longer a producing nation. We are outsourcing our nation. We now have an excess number of businesses for consumers. Observe the number of bankruptcies and ‘going out of business’ notices. You cannot go back to change the future. Competition now leads you to the lowest common denominator. When China, India and Africa wages are equal to our wages you won’t have to worry about illegal immigration. Just hop on the Obama train and get there much faster.

As the Global economy approaches equilibrium changes will occur so that the most economical conditions will change. Before the wages actually become equal it will be apparent that transportation cost from China make it more economical to produce in the USA and some production will return.

Our government intervention with tariffs and trade restrictions only prolong the agony. Government needs to keep its cotton-picking hands out of the markets. The primary problem is related to the ineptness of the Congress. They know just enough to appear knowledgeable and in control. They do not have the background or experience to realize the consequence of their decisions.

Open trade with ALL countries. Import anything, without duties; they can export, especially agricultural, that we can use e.g. sugar, ethanol, fruits, vegetables, meat. Industrial production will come later as their education improves. They need our money so they in turn can buy products or services from us.

Adam Smith’s, ‘The Wealth of Nations’ in 1776, advanced the idea that a market economy would produce a satisfactory outcome for both buyers and sellers, and would optimally allocate society’s resources.

Today’s Socialist Change in Financial Institutions, Health-Care and the environment now in Congress will bankrupt the nation.

The Democratic Party needs to listen to some of the Republican’s ideas. Be bold! Change! YOU WANTED CHANGE! SO CHANGE! Eliminate Estate Tax, Corporate Tax and Alternative Minimum Tax! Republicans need to realize that everyone in the financial market is not a Boy Scout and must have specific defined boundaries and be severely punished when outside of the boundary.

- Theodore Beckley

Related Posts:

• - GLOBALIZATION -
• The unemployment problem is harder to correct because of the change to a global economy.
• Why don’t analysts know what the “timing” is on this crisis?
• The U.S.A. dollar and future economic prosperity
• This is from the Bob Chapman website under an article entitled “Learn to see through the economic data for what is really going on”.

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