Although I agree that productivity will help. If those products are going to be made in China, then the money is going to them. The money for the fuel used to transport them in going to Canada and the Middle East. Hell, I can understand not making work just to have people working, therefore increasing the cost of a product when it can be made by machines for less. But those machines are being made in other countries. Productivity would be very helpful if the balance of trade was equal, but it isn 't.
If "John" can buy two of product B for what one of product A costs, then great he got a better bargain. But if all of that money is going to another land then it isn't helping this country unless, that country is buying something from us that we can make cheaper. Instead what they are doing is buying raw material causing our supply costs to rise higher and higher. Making it harder to compete then it already is.
I sell a product that used to be made in the US. It was only about .5% higher cost than the equivelient made in China, and I had no problem paying that. But that was years ago. Now it is about 30% higher and they are out of business. The Chinese product sells through an American distributor which as far as I can tell, employs aprox 15 people (american citizens??? not sure, but they are in MD.) Anyways, money for the product goes to China, moneyfor the transportation goes to chinese shipping companies, albiet once they hit the US warehouse it goes UPS, but I fail to see how their productivity is helping OUR economy. Granted I have not studied a great deal in the realm of economy and so I am nowhere near an expert. But these are my observations.
If "John" can buy two of product B for what one of product A costs, then great he got a better bargain. But if all of that money is going to another land then it isn't helping this country unless, that country is buying something from us that we can make cheaper. Instead what they are doing is buying raw material causing our supply costs to rise higher and higher. Making it harder to compete then it already is.
I sell a product that used to be made in the US. It was only about .5% higher cost than the equivelient made in China, and I had no problem paying that. But that was years ago. Now it is about 30% higher and they are out of business. The Chinese product sells through an American distributor which as far as I can tell, employs aprox 15 people (american citizens??? not sure, but they are in MD.) Anyways, money for the product goes to China, moneyfor the transportation goes to chinese shipping companies, albiet once they hit the US warehouse it goes UPS, but I fail to see how their productivity is helping OUR economy. Granted I have not studied a great deal in the realm of economy and so I am nowhere near an expert. But these are my observations.