Excessive Spending - Outsourcing Doesn't Hurt (?!) - 3rd Chapter

I recommend you go to Cafe Hayek to see some interesting commentary on this subject.

Obviously, there is a significant difference in PERCEPTION about how not only OUTSOURCING OF JOBS, but the whole PROCESS OF TRADE has been affecting our nation.

I'm certain that many of those who disagree with me see me as a trade obstructionist... a protectionist, if you will... that wants to ruin the trade built up with other countries in order to protect inefficient and mismanaged domestic industries.

Not so. I'm merely pointing out certain of my PERCEPTIONS that are not necessarily shared by some others, to wit:

• certain countries are now or have provided their own industries significant "insulation" from foreign competitors enabling those industries to grow and strenthen... and then reduce their cost of production by expanding unit volume to capacity and selling the excess at cost in the U.S. to 1) gain a foothold in the U.S. market and 2) competitively undermine domestic manufacturers
• certain countries have used currency manipulation to ensure that their industries have a competitive edge in the U.S.
• certain countries do not come close to the U.S. standards protecting workers and the environment, thereby avoiding those direct costs for their industries which must be borne by U.S. manufacturers

Perhaps the strangest response to my position was by "Micha" who stated:

I have a bit of an ethical and moral problem with arguing that two wrongs make a right. The correct response to foreign countries that put up trade barriers is...to reduce our trade barriers as much as possible and continue to trade with them. It is sheer insanity to shoot ourselves in the foot merely to "get back" at the other guy for making their own country poorer through trade barriers.

1) These countries are not "making their own country poorer" through their actions... they are systematically undermining U.S. industrial capabilities

2) Trade barriers take many forms from inspection of individual vehicles verses certification of an entire model (a practice used by Japan to make importation of U.S. vehicles virtually impossible), to tariffs, to currency manipulation, to worker and environmental abuse. If such practices so hurt China, how is it that they have been so successful at creating wealth?

Other responses have been that we can replace our manufacturing with an intellectual industry. That's highly suspect, in my opinion. There is a symbiotic relationship between academia and industry... whether or not certain "intellectuals" wish to admit it or not. Without a domestic automobile industry, for example, thousands of engineers and physicists would be competing for hundreds of jobs. Without those jobs, universities would find much less demand for their "services". Oh, "something else will take their place". Why? If we are willing to let our manufacturing fall prey to predatory practices by other countries, what is to say that our universities will compete much better in the future when foreign universities can partner with their industries for new research and development... sharing both the costs and benefits.

It is my PERCEPTION that the so-called "free traders" have not thoroughly thought through the consequences of their positions. Cheap imports will be paid, ultimately, by a sharply stratified U.S. society of fewer "haves" and more "have nots".