Replies to post #81847 on Zeev's Turnips Patch-No Politics (ZEEV)

[mlsoft]

Babylon....

I have been struggling to decide how that will play out myself, and have come to no firm conclusions. I believe we will look back on the late nineties as a time when we encouraged a significant portion of our manufacturing capability and the jobs that go with it to relocate overseas, much to our long term detriment.

If we enter into a relatively long term recession as I expect, part of the potential fallout could well be a return to tariff barriers (especially against China) designed to make imports more expensive. That would make new domestic manufacturing start-ups more feasible and attract new capital to the US instead of away from the US as is now the case. It would take time for that to take place, so it would not be a quick fix for the economy, but sooner or later it would work and over time new jobs would be created.

There are problems with using tariffs as a solution, of course, one of which is that trade wars are the normal result, and that is one of the causes of the Great Depression. The difference between now and then is that we are now a nation that relies on imports and the whole world relies on exporting to the US. That will have to change at least to some extent because we can no longer afford to import all our goods (exporting our capital and raising our foreign debt) indefinitely. As things now stand, the rest of the world would have much more to lose than the US in a trade war so that does not seem to present the same dangers that it did going into the Great Depression.

I do not see how we can continue to thrive economically as consumers of goods and services a significant part of which are outsourced and produced elsewhere.

mlsoft

[mish]

Mlsoft, maybe a better way of asking would be, where will the jobs come from when the economy does turn around? Can we survive primarily as a service based economy that outsources continually its manufacturing base, and now even many IT areas?

Exactly.
IT jobs are going left and right to India.
What is going to stop this long term trend.
I call it a long term trend but IMO a trend that just started. I say long term beacuse I expect it to hold tru for a long time.
Call centers are moving to India
MSFT moved a java development division to India
Saw an add in the Chicago Tribune for a job but the #1 requirement was familiarity with working in India etc. It was obvious that someone was looking to move x numbers of workers there.

IBM has cut back more workers.
Think about this for a second.
Didnt IBM just win a huge contrace from C or someone to do their processing? Where are those jobs going. C lost jobs, IBM cutting back jobs as well. Where did they go.

IBM HP and others are now openly bragging about their Asian connections. Even if the outsourcing is from one US company to IBM, what is stopping IBM from processing/developing whatever in India?

I believe accounting jobs will be the next to go.
Why not?
Unless there are some laws passed to stop these trends, we will be left with only thos jobs that HAVE to stay here.

Construction, lawn care services, medical, nursing, etc.
Otherwise we can not compete with foreign wage rates.

On a side note, but a disturbing one, USAIR was allowed to scrap its pension plan. How many retirees are getting screwed or going to get screwed when companies with heavily underfunded pension plans go under. How mush spending will that suck out of the economy?

M