What? Thoreau? You quote a socialist to make a psuedo-capitalist argument. Rich Vs Poor? Ya have to produce to make it? really? It is the fault of the wealthy and the ‘free traders’ that Mi industry is in the toilet?
How about you have to be able to afford your employees, you have to have a government that is not interfering with every aspect of your business, you have to have employees with a strong work ethic and a history of self freedom. You need Texas. Man, you need a break from the frozen north….

I don’t attribute the state’s current woes so much to liberal or conservative philosophies as to the decline of America’s manufacturing base, which was the foundation of the rust-belt’s former post-war prosperity.

The lesson should be that you can’t have a prosperous state or country — liberal or conservative — if you don’t PRODUCE anything.

The fact is, most of the things we produce for export are big ticket items like aircraft and earth movers, agricultural products produced by a few farmers on tremendous acreages, or goods and services for sale to governments and other corporations. We don’t produce CONSUMER products — the things that millions of average Americans buy every day for personal use.

The large, influential corporations who produce the big stuff for export demand free trade because their continued growth depends on it. But although free trade benefits them (and their investors) it destroys our diversified base in small manufactures which benefits a much larger number of working class Americans.

As a result, tax cuts and stimulus payments to average Americans immediately get drained off in the purchase of foreign goods and does not circulate for long in the American economy. Government spending on such stimulus programs is like trying to fill a bucket with a hole in it. Americans don’t buy aircraft, bushels of wheat, weapons systems, or earth movers — the kind of products America still produces. They buy shoes, clothes, hardware, housewares, small appliances, tools, electronics, and the innumerable widgets, gidgets, gadgets, and gizmos that clutter the shelves of every dollar and dime store and discount retailer across the country.

Conversely, when foreign countries buy our big-ticket exports, the profits trickle down to only a few workers employed in those industries (agriculture being an extremely low-paying and low-labor example) and the rest of the profits are distributed to wealthy shareholders in dividends, to CEOs in compensation, or in capital reinvestment which, typically, is spent on goods from overseas (like steel, spare parts, and small machinery).

So, if you want to resurrect the American economy, you have to first stop the bleeding of American dollars out of our economy and return small manufacturing to these shores.

How do you think China has managed double-digit growth for the past several years and employed millions of workers? By MAKING things…and then selling them to us. We bought them with borrowed dollars (home equity loans, college loans, credit cards, etc.), fueling a temporary, tremendous, and incredibly addictive “boom” that gave rise to all manner of businesses predicated on supplying this madly profligate, irresponsible, and unsustainable consumption.

Now, big box stores are failing left and right as the money dries up. Other businesses are faltering too — restaurants, insurance companies, auto companies, etc. — because there simply is not enough CASH left in our economy to support all of these businesses. And banks aren’t loaning any more (wisely, but belatedly).

Government revenues are also collapsing, and will continue to collapse until someone gets the bright idea that the only way to fill the coffers of the government is to fill the pockets of Americans with income from REAL jobs, not with “stimulus” money.

What will those jobs be? Well, if all the free trade proponents out there can think of enough “high-tech” jobs that will result in employment and exports sufficient to offset the dollar value of all the consumer goods we purchase from overseas, then “Vive la free trade!”

But I don’t think they can. And if they could, they would have a hard time convincing the millions of laborers in this country to trade in their welding torches and wrenches for slide rules and cubicles. Besides, the minute those laborers demanded an American wage for their work, corporations would find a way to offshore those jobs to another country where human labor is freely exploited.

Here’s a parable that illustrates my point very well:

Two families lived in homes side by side. One family was a doctor and a lawyer who had two kids. The other was a mechanic and a housewife who had sextuplets and then octuplets. The parents in the former family earned $300 and $200 per hour, respectively, at their separate professions, which consisted of supplying medical and legal services to the family next door. The mechanic earned $25 per hour fixing the two automobiles of the professional couple.

Now the fourteen children of the mechanic and the housewife were eager to increase the family’s income, so they marched next door and besought their neighbors for any jobs or unpleasant manual labor they might perform for them in return for a modest hourly wage.

The doctor and the lawyer were ecstatic! Why, they had no interest in doing the dirty and unpleasant tasks consequent to home ownership and human maintenance. (The rich kids, of course, were equally thrilled at being relieved of their onerous chores.)

“Why, we earn $200 and $300 per hour,” the professional couple reasoned. “Our time is far too valuable to waste doing such menial chores. Far better to let the poor, uneducated, and underprivileged urchins of this greasy mechanic do such uninteresting and unskilled labor, while we devote our time to more personally rewarding, sophisticated, and lucrative pursuits.” So the lawyer drew up the contract (charging his $200 fee, of course).

So, the wealthy professional parents paid the mechanic’s wife and their sixteen children to wash windows, vacuum the rugs, do the dishes, do the laundry, clean the house, make the beds, water the plants, trim the hedges, take out the garbage, cook the meals, mend the clothes, ferry the kids to and from their sporting events, plant and weed and water and harvest the garden.

Meanwhile, the two rich kids did nothing but sit around all day playing computer games, eating enormous quantities of food, and watching movies.

Over time, the wealthy family found itself in a financial crunch. The mechanic and his wife seldom needed the professional couple’s legal or medical services, but the professional couple needed the mechanic’s family’s services every day.

The professionals took out a second mortgage on their home to free up some cash to continue paying the servants from next door and maintaining their “educated” standard of living, free from manual labor.

Meanwhile, the mechanic’s household income was growing by leaps and bounds as all sixteen of his children were employed in some fashion or other in a variety of jobs until, ultimately, his total household income far exceeded that of the wealthy professional couple next door with their two indolent brats.

Ultimately, the doctor and the lawyer went bankrupt and their two children were taken away and put in foster homes. The mechanic retired comfortably and his children went on to start businesses of their own, supplying goods and services to each other in a happy economy that grew and diversified as their families grew. THE END.

Henry David Thoreau wrote, “No doubt another *may* also think for me; but it is not therefore desirable that he should do so to the exclusion of my thinking for myself.”

And this is the problem of free traders. They presume that it is always to the mutual benefit of nations to buy goods and services from each other if the other country agrees to produce them at a lower cost. But the model only works if the both countries’ labor remains fully employed earning money.

Otherwise, one country will simply put the other’s laborers out of work and instead of having merely fewer goods and services at a higher price, the country with the negative trade balance will find itself with an extremely expensive population of restive, unemployed people who need and demand a continual stream of imports, soon unaffordable at even the cheapest price.

Another example: A bull and a cow in a field. Neither is fed any hay. The bull sucks the teat of the cow and the cow sucks the dick of the bull. The cow dies of starvation. The bull grows big and strong.

This is China and America.