Gary North Article
Your thoughts are valid. They do not explain the entire problem. But you are dealing with a playing field with different rules of commerce. Let us say a widget costs $20 here. The same widget costs $2 in Taiwan. It costs $5 in Korea. $10 in Japan. $25 dollars in Germany. No one here can compete with anyone but Germany. Now a country decides its main export is labor. It keeps its currency artificially below everyone else so the widget now costs $1. Even with transportation costs, the widget is under $5 here. This country can do this because they are dealing with slave labor which is basically wrong. The playing field there is not the playing field here. They do not deal with the same commerce rules we deal with here. Using the world's largest slave labor population they are out to bankrupt every nation that trades with them. It is open warfare against economies. Tariffs were the solution in the 1800s to the 1950s. You simply keep the trade out. I don't know what the solution to this problem is. We are now hooked on slave labor goods from India and China. This has caused a national economic problem of huge proportions. When the ax falls it will bankrupt this country. That was the solution China sought as far back as 50 years ago. It works. The one thing that local industry did well back in the 1950s was to insulate us from currency fluctuations. If products are produced locally in this country, the entire economic picture is more like what you describe. When currencies are equal in value and product prices are fairly equal in value then competition is the way to go and the loser is the one that does not compete. I trust the baker, farmer, and other industries locally produced. They are on an equal playing field. The only thing I trust about slave labor warfare is that it is not there for my good. Yet most of the goods moving through places like WalMart are "Made in China." The fallacy is the entire economy will go south and bankrupt when the currency fluctuates.