inflation, deflation, and playing it safe

[jtollison78]

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Why do you assume service level jobs are worse than manufacturing? If anything they are better for us as they tend to pay higher. Service jobs/education is our comparative advantage in the world so it makes sense that we are losing manufacturing and gaining highly skilled employment.

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A lot of people think that outsourcing is only affecting the manufacturing sector. I think they are wrong. A ton of highly paid service jobs are exported to China and India. I am referring to jobs in the computer, medical, biotech, and financial sectors. PhD's in biotech firms are losing their jobs to someone in India who is getting paid 20 cents on the dollar. Radiology charts are now being sent to India to be read by doctors over there. Citigroup just laid off 17000+ U.S. employees and will go to India to replace them. The list goes on and on. The only way to prevent a massive recession in the USA is if tariffs are slapped on goods and services. If someone in India charges 20 cents on the dollar to read a Radiology chart, then there needs to be a tariff of 80 cents to make up the difference. A lot of people think tariffs will send us into a depression, but they are wrong. Tariffs did not cause the great depression, the Federal Reserve caused it by cutting off the money supply.

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Economics in one lesson - Tariffs

Why is it better to keep people in overpaid jobs than it is to retrain them and reallocate the labor pool more efficiently?

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I tried to put my thoghts into words several times and failed. Then while reading through someone's blog, I found a response that did a reasonable job:

"Anonymous said...

It isn't "math", it's greed and foolishness.

But the real, real question is why the lenders are doing this. They aren't simpletons, they have i-bankers and high-IQ super-mathematical poindexters working for them.

My answer is it lies overseas: China.

They are pursuing mercantilism, not capitalism, which they can do because the losers (Chinese poor) are politically oppressed. They hold dollars (and eventually hence MBSs) for *non-economic reasons*. They aren't trying to make a profit on their bonds, they have something else in mind.

It's a great scam: destroy US industrial capacity, and gorge US consumers on cheap debt and trinkets made in China. When it finally pops, dollar collapses and US domestic buying power is erased. The usual upside of a low US-dollar, improved domestic production & exports doesn't happen because China + Japan of course have big trade barriers, and domestic demand will be erased. Next step: outsource the rest of the industry because US consumers are too poor."



Thus, there is no "The labor pool." There are 2 labor pools here: Ours, and China's. And there is no Free Trade, but even if there were, it might be dangerous to assume that it would continue.

When hot wars fell to nuclear weapons, much conflict quitly shifted to the economic front.

John

[Jeff W]

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Food for thought:

http://bigpicture.typepad.com/commen...ion_adjus.html

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The Dow is a [censored] index.