Krugman: Re-Shoring

[pampango]

Ugly new term, but apparently the new thing; it refers to companies moving production back to America from China. The fact that such stories are being heard is support for those (including me) demanding action on the renminbi, because they show that there is indeed a margin at which changes in Chinese dollar costs move production back to the United States, and hence that the undervalued renminbi directly costs US jobs, as well as having the indirect effects. I’ve written about recently.

http://krugman.blogs.nytimes.com/2011/10/08/re-shoring/

From the link in the last sentence above: The Renminbi and US Manufacturing

I should offer a brief note about one of the arguments people make against focusing on Chinese currency manipulation — namely, the claim that China doesn’t really compete head to head with US manufacturing, so that a rise in the renminbi wouldn’t help.

First, the notion that there’s no head-to-head competition is false. There have lately been quite a few stories about manufacturing moving back from China: the labor costs will always be much higher in America, but other advantages, especially logistical, can make even labor-intensive production worth doing at home.

Second, there are real effects on the US if production moves, say, from China to Mexico. To an important extent, global manufacturing is carried out by regional complexes — an Asian complex centered on Japan and China in effect competes with a North American complex in which labor-intensive stuff is done in Mexico or Central America. So there’s an indirect competitive effect.

[NYC_SKP]

1. Why is it an ugly term? I love it.

I would submit that some of the reasons that off-shoring happened so easily was our fear that we'd be labeled chauvenist/nationalist/bigoted for (it could be alleged) not wanting to let people in other countries, of other ethnic backgrounds, have jobs.

Well, now we know.

Globalization took away indigenous ways of life, created child sweat shops, AND demolished our manufacturing base.

"Re-shoring"?

I love that term and what it can do for our country.

:patriot:

[OHdem10]

2. Last night on Lou Dobbs, one of Business thinkers explained

when Lou asked him what is next? He replied that
another round (lowering salaries) is necessary to
make us competitive. Lou did not like the response
and say he wants prosperity indicating Congress, Busines
and us(referring to Person's in his position) had better
swe what we can do.

In other words, we are being harmonized downward. Our
Salaries are being lowered in order that our workers
not make so much we cannot compete with the Third World.

Anyone who has been following this know the guy is correct.
If you care about the future of this country and your own
future this is one of the most important issues. Status
quo with FREE MARKET CONSERVATISM means lower wages to
compete with Third World Wages(China still refers to themselves
as Third World--in order to keep all the Special Treatment.)