My @Quora post: The corporatist says… http://qr.ae/71Bjrt
I didn’t want this thread to vanish, as I’ve seen happen so often in these discussions of “economics” vs. Reality World, so I’m preserving it here:
Ronald Kimmons says:
Your answer assumes two things. First, you assume that it is terrible to send jobs overseas. It is interesting that the same people who make this claim will also often say that we should send more free money and other aid to other countries to help them out. So we should send them free money, but we should not enter into a mutually beneficial economic relationship that would actually help them a lot more? The shift of US manufacturing to China alone has pulled more people out of extreme poverty than any event ever in human history. To say that moving jobs is the same as destroying jobs is unrealistic and dishonest indeed. Second, you assume that there was any possibility for keeping all of those jobs at the same pay rates. These companies were FAILING. Refusing to fire anyone or refusing to cut costs by outsourcing would have been the quickest way of kicking everyone to the curb.
When you live in a Consumer Driven Economy, as we have for over 100 years now, destroying lower and mid level jobs in your nation is always a disservice to that nation. This is True no matter how you obfuscate the statistics.
I do assert that for the Consumer Driven Economy I live in it is always a bad thing to move jobs out of that economy. I make this assertion as a business owner and with over 40 years of living with, and watching the direct entirely predictable results of policy based upon the lie of Trickle Down “Economics.”
I also assert that sending economic support while our economy is weak is a disservice to our nation. This is true whether that welfare goes to corporations or other economies.
Heres why: In any Consumer Driven Economy, what drives that economic growth is the middle and lower class having spare* cash to spend, and spending it.
By shipping those decent jobs off shore you trigger a viscious cycle of chain reaction which involves:
1. Loss of income for those middle and lower class earners.
1a. Increased profits for those shipping the jobs off shore.
2. Consumers stop spending anything which they don’t absolutely have to spend. (rent/mortgage, fuel, food).
3. This causes the remaining available jobs to contract even further because there’s less Consumer Demand to support those jobs. More layoffs.
4. The excess labor pool from moving those decent jobs off shore causes a race to the bottom in wages which means that folks contract their spending even more. (I know this because that’s precisely what I’ve been doing since ’06 when fraudulent criminal bankers stole my retirement).
This causes more layoffs and we start over, back at #1.
Now… you can run all the Trickle Down “Economics” myths you want, but those obfuscations don’t change one critical Fact:
Business owners hire new workers for one reason, and one reason only:
Their existing crew can’t meet Consumer Demand for products/services. (I know this because I am a business owner). Doubt me? Good! Go out in your community and ask any two dozen small and medium business owners (theactual job creators of some >85% of US jobs according to the S.B.A.) when they create new hire openings. I Dare You!
You will get some variant of this answer: They hire for new openings when, and onlywhen their existing crew can’t meet Consumer Demand for products/services. I know this is a Fact because I am a business owner, and because I’ve questioned dozens of other business owners specifically to be able to Factually refute the grand Orwellian lie of Trickle Down ” Economics “.
This idiotic, completely disengenuious myth and obfuscation of the “intangible benefits to the consumer from cheaper production” being a driver of growth anywhere but Wall Street is utterly ludicrous!
No matter how cheap the product if the consumer doesn’t have any spare cash they’re simply not going to buy.
Thus, destroying jobs in your nation is always a disservice to that nation and her Citizens. Yes… it means more profit for those moving the jobs off shore, but ultimately it kills, dead, the economic growth in the nation losing the jobs because those increased profits also get sequestered off shore instead of continuing to move through the lower levels of the economy via wages.
It’s not, Not, NOT, ever, corporate wealth which drives growth in jobs; and never has been.
It is the Consumer Spending provided by the middle class having spare* cash andspending it, in that economy,which drives both jobs and economic growth.
This shifting of jobs off shore has another downside which we haven’t even gotten into yet; which is that when a product is built off shore and a consumer spends to buy it, half or more of that “local” spending is actually supporting, and shifted to, the economy of another nation… which once again, means less spare* cash in the hands of our consumers which, again feeds back in to the vicious cycle above and makes any Real economic recovery all the more difficult.
This dynamic perfectly explains why the current false “recovery” isn’t reaching Main Street, and when it does reach Main Street, say through real estate, it only creates conditions for a new, strictly temporary, bubble. As we all know bubbles pop; usually catastrophically.
*spare cash = not needed for basic survival.