||09-22-2011 12:59 PM
David, that's similar to what I was going to post earlier.
But to carry your point further: the door was opened to outsourcing decades ago, driven by increased pressure for publicly traded firms to continue to "increase shareholder value"....chasing cheap labor. Starting with manufacturing cuz it was easiest. Any ol'chinese farmer could be taught to make shoes.. Profitable companies expanded (e.g. wal-mart), people went from making the stuff to selling the stuff that was made overseas. As products and goods get a bit cheaper from increased demand (who doesn't love a $.97 notebook) leaving some extra coin in peoples pockets... hence, more to blow on more cheap stuff... causing a gradual shift from manufacturing to selling/servicing as more and more plants/factories are "re-located". Soon if you were a manufacturer, and WEREN'T moving operations overseas you were gonna die. Then someone said, "hey, those guys over in that other place know how to write code AND they sorta speak English AND they'll do it for 25 cents on the dollar". Then another guy said, "hey I bet they can answer a phone too...or read and xray...or process my invoices, all for 25 cents on the dollar". Now enter decades of cheap money (Greenspan)... and easy loans for both consumers and businesses(Sub-Prime mortgages)... more growth, more shifting...more coin left over. people were still employed because there was still plenty of "profit" moving around. people just shifted from those old jobs to new ones like "real estate brokers", "business consultants", "financial engineers", or they opened a coffee shop to sell coffee to real estate brokers, business consultants and financial engineers. We no longer MAKE anything, we're just shuffling dollars around the globe... until the money bubble popped. That's why it's been hard to get unemployment trends to reverse... cuz when there's no more money to shuffle around (except heaps of it from bailouts that only made it about as far as from D.C. to New York, none of which we could afford anyway), and there's nothing to manufacture because there's no one w/the extra coin to buy it... or you can't sell coffee because no one has the extra coin to buy it... then there's no need to hire anyone. And no one can manufacture anything here because they can't do it on 25 cents on the dollar and still afford the coffee.
So yeah, the article's not completely honest to draw a direct correlation between only employment rate and trade deficit levels in a vacuum.