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Even The CEOs On Obama’s Job Creation Panel Are Shipping Jobs Out Of The United States

There are 27 members on Barack Obama’s job creation panel, and most of them are corporate executives.  The formal name of the panel is the President’s Council on Jobs and Competitiveness, which is kind of ironic considering the fact that many of the CEOs on the panel have been rapidly shipping jobs out of the United States.  So what hope is there that things are going to turn around if many of the folks that are supposed to be helping Barack Obama create U.S. jobs are actively destroying them instead?  And how is the American middle class ever supposed to recover if corporate executives keep taking their jobs away and sending them to the other side of the world where it is legal to pay slave labor wages?  These issues go to the very heart of America’s economic problems, and yet very few of our leaders are talking about them.  But they should be talking about these things, because the economy is the number one issue for most American voters right now.

During most of the decades since World War II, the U.S. economy was a job creation machine.

But this past decade was different.

So how many total jobs do you think were created during the decade that just ended?

Would you believe zero?

Yes, it is true.  A total of zero jobs were created last decade.  The following is a quote from a recent article in Washington Monthly….

“If any single number captures the state of the American economy over the last decade, it is zero. That was the net gain in jobs between 1999 and 2009—nada, nil, zip. By painful contrast, from the 1940s through the 1990s, recessions came and went, but no decade ended without at least a 20 percent increase in the number of jobs.”

But aren’t we the greatest economy on earth?

Don’t we have great success stories such as Apple and Microsoft and Google and Facebook?

How could we have created zero jobs over an entire decade?

Well, the truth is that globalism has fundamentally altered the relationship between the big corporations and the American people.

You see, they don’t actually need most of us anymore.  They can just set up facilities on the other side of the world and hire workers for 10 to 20 times less money.

Over the last couple of decades, tens of thousands of manufacturing facilities and millions of jobs have been shipped out of the United States.

Even many of the corporate executives on Obama’s job creation panel are guilty of doing this.

The following facts were taken from a recent article in the Los Angeles Times….

*Ursula Burns, the CEO of Xerox, eliminated 4,500 U.S. jobs during the first six months of 2011.

*Kenneth I. Chenault, the CEO of American Express, got rid of 550 U.S. jobs earlier this year.  But it wasn’t because American Express was not making enough money.  According to the Los Angeles Times, “American Express announced it had made $1.1 billion in the fourth quarter of 2010, up 48% from the same period the previous year.”

*Antonio M. Perez, the CEO of Eastman Kodak, got rid of 9,200 U.S. employees between 2004 and 2011.

*Jim McNerney, the CEO of Boeing, announced in January that 1,100 U.S. jobs would be eliminated.  Meanwhile, the Los Angeles Times reports that “Boeing reported that profits rose 20%, to $941 billion in the second quarter of 2011.”

*Jeffrey Immelt, the CEO of GE, has eliminated 22,000 U.S. jobs over the last four years.

And as I noted in a recent article on The Economic Collapse Blog, if you go back even farther the job losses at GE get even larger.  The truth is that it is standard operating procedure at GE to look for ways to aggressively cut jobs in the United States and GE has been adding thousands upon thousands of new jobs overseas.

In fact, just check out the following quote from a recent article posted on the Huffington Post….

As the administration struggles to prod businesses to create jobs at home, GE has been busy sending them abroad. Since Immelt took over in 2001, GE has shed 34,000 jobs in the U.S., according to its most recent annual filing with the Securities and Exchange Commission. But it’s added 25,000 jobs overseas.

At the end of 2009, GE employed 36,000 more people abroad than it did in the U.S. In 2000, it was nearly the opposite.

So should we be disgusted by this?

Of course we should be.

About the only thing that the “experts” on Obama’s jobs panel will be able to teach him is about how to ship U.S. jobs out of the country.

So it should be no great mystery as to why we have so many unemployed workers in the United States today.

And since we are now competing for jobs with workers on the other side of the globe, there is also substantial downward pressure on our wages and on the standard of living that we all enjoy.

The statistics tell us that incomes for middle class Americans just keep declining and declining and declining.

For example, the following comes from a recent article in the New York Times….

Between June 2009, when the recession officially ended, and June 2011, inflation-adjusted median household income fell 6.7 percent, to $49,909, according to a study by two former Census Bureau officials. During the recession — from December 2007 to June 2009 — household income fell 3.2 percent.

So are you alarmed that the number of unemployed Americans continues to go up and our incomes continue to go down?

You should be.

Rampant unemployment and declining incomes are also two of the biggest reasons for the current housing crisis.  Without good jobs that pay well, Americans simply cannot afford to buy homes.

During the recent economic downturn, the homeownership rate in the United States experienced the largest drop that we have seen since the Great Depression.

When we buy stuff that is made in the United States, the money stays here and it goes to support U.S. businesses and U.S. workers.

When we buy stuff that is made overseas, the money that we spend does not support U.S. workers.  If U.S. workers cannot find jobs, the tax base is diminished and the number of people receiving government assistance goes up.

The United States has had a negative trade balance every single year since 1976, and since that time the United States has run a total trade deficit of more than 7.5 trillion dollars with the rest of the world.

That represents a whole lot of money that could have gone to U.S. workers.  It also represents a whole lot of money that taxes could have been paid on.

But instead, Americans have become highly addicted to cheap stuff from overseas.  Today, our stores are absolutely packed with stuff that was made in China.

Unfortunately, that also means that we are sending massive amounts of our money to the Chinese government.  7 of the 10 largest corporations in China are owned by the government.  Many other key corporations in China are deeply subsidized by the government.

Every year, hundreds of billions of dollars that should go to support U.S. workers goes to China instead.

This is helping China to rise dramatically even as the United States falls apart.

The signs of this are everywhere.

For example, did you know that China has surpassed the United States and is now the largest PC market in the entire world?

But most of our lawmakers continue to insist that trade with China is a wonderful thing for us.

Even the construction of many of our roads and bridges is being outsourced to China.  Just check out the following quote from a recent ABC News article….

In New York there is a $400 million renovation project on the Alexander Hamilton Bridge.

In California, there is a $7.2 billion project to rebuild the Bay Bridge connecting San Francisco and Oakland.

In Alaska, there is a proposal for a $190 million bridge project.

These projects sound like steps in the right direction, but much of the work is going to Chinese government-owned firms.

“When we subsidize jobs in China, we’re not creating any wealth in the United States,” said Scott Paul, executive director for the Alliance for American Manufacturing.

If only our founding fathers could see us now, eh?

As China rises, big U.S. corporations are flocking to invest in that nation.

In a recent article, I noted some of the significant new investments that U.S. corporations are now making in China….

*Coca-Cola is opening up three new factories in China this year.

*Disney recently broke ground on a $4.4 billion project that will be known as Shanghai Disneyland.

*Procter & Gamble has invested over a billion dollars in operations in China.

*Caterpillar has built 16 factories in China and now employs more than 8,000 workers there.

*Ford is currently “building three factories in Chongqing as part of $1.6 billion investment that also includes another plant in Nanchang”.

But as China rises, the U.S. continues to rot.  We do not have nearly enough jobs for all of our workers and our state and local governments are going broke because there are not nearly enough tax dollars coming in.

Unfortunately, things are going to get even worse if something is not done quickly.

According to Professor Alan Blinder of Princeton University, 40 million more U.S. jobs could be sent offshore over the next two decades.

Our economy is being radically transformed by globalization.  The emerging “one world economy” is ripping the middle class to shreds and it is making us poorer as a nation.

Something has got to be done about the millions of jobs that are being shipped out of the United States, but unfortunately many of the corporate executives on Obama’s job creation panel that are supposed to be helping create jobs are actively involved in booting our jobs out of the country instead.

We are in a whole lot of trouble.

The entire system is falling apart all around us and there seems to be no help on the horizon.

 

  • DaShui

    Local small scale manufacturing using custom 3D printing and CAD instead of one size fits all mass production is the only way out of our predicament.

    • Danny Sherwood

      The smaller scale manufacturers will be the ones to pull us out of this one.

    • Hi there

      Good ideal but Im afraid it will not be enough. There will be no change until we change the issuance of fractional reserve banking. Whoever controls the issuance of money controls the country period. America will fall unfortunately but in the transition we have a chance to make a better future but again this will not happen until we stop fighting amongst each other and the masses gets educated in the Federal Reserve, free markets, and liberty. It seems clear to me the ONLY honest politician that can put America into the projectory of prosperity is Dr Ron Paul.

      Ron Paul 2012

      • Mr. Squiggle

        Amen. Ron Paul 2012. Write him in if you have to.

  • mark

    These corporations are no longer US, they are Global. I don’t know about you, but I do not think we should be spending all the rest of our treasure for our military to support Global corporations. We should protect our borders and areas off our coast with our tax money and let the rest of the world chip in to pay for their protection. We are so dumb that we borrow money from them to pay to protect them. Americans need to start buying things made in America. If we did this things would cost more but at least we would still have some jobs here.

  • Danny Sherwood

    With some of the companies’ earnings reported in this blog, The companies listed cannot say supply and demand is drying up.

  • whoisbiggles

    Michael,

    It is harsh to imply that Kodak has shipped 9,200 jobs out of the US, the company is dying the jobs have been obliterated. (I know you have quoted a source but really was it all that reliable?) Kodak hasn’t posted a profit for a few years. The question should be why Perez is serving on Obama’s job panel. Kodak has floundered and is dying under Perez’s leadership which is hardly a ringing recommendation for a position on a national job creation taskforce.

    • Michael

      Good point. Kodak is not in the same boat as the others.

      Michael

  • http://www.planorperish.com Gutter Economist

    THE PRESIDENT’S COUNCIL ON JOBS AND COMPETITIVENESS

    Perhaps this is a joke on the American people – did Obama actually say that the jobs were for American workers in the USA?

    Any job creation plan should make manufacturing in the USA most profitable and manufacturing offshore least profitable.

    Taxes of businesses that manufacture offshore including importers should be increased (tax hikes). Taxes of businesses that manufacture in the USA should be decreased (tax cuts).

    If a nation’s standard of living or industrial regulations are too great, it is impossible for domestic industries to survive unprotected trade with inferior nations without a global race to the bottom. Protective tariffs have historically been used as a measure against this possibility.

    If Obama is serious about creating jobs in the USA, it is obvious that he has many of the wrong people on his jobs council.

    • Guido

      Heck, haven’t we all figured out any Government Committee is exactly the opposite of its namesake? If it’s a committee on jobs and competitiveness, assume that it is a committee overseeing the loss of jobs and elimination of competitiveness. If they’re working on legislation for freedom of this, fairness of that, equality of the other, you can assume it will provide NONE of those things.

      As if you need a committee to provide an answer. As if government is going to find the answer.

  • Michael

    You Americans have two choices:

    (1) Work for 10 to 20 per cent of the wage you currently aspire to; or

    (2) Stop having children.

  • mondobeyondo

    Corporations, CEO’s and executives are LOVING it!

    Why? Because when you ship your industry over to China or India or Bangladesh:

    - you don’t have to pay your employees health care
    - you don’t have to pay your employees Social Security
    - you don’t have to pay your employees unemployment insurance
    - you can pay your employees one-tenth the wages you’d pay an American for doing the same job
    - corporate tax breaks! Woo-hooooo!

    The U.S. is rapidly descending into service industry, call-center hell. And even the call centers are in India now. You need roadside assistance in California? Someone in Mumbai will most likely answer the phone.

    Are you SURE you don’t want ice or stamps today?!?

  • mondobeyondo

    The ultimate hypocrisy: American corporations fleeing our beacon of capitalism and free enterprise (hee hee!), and heading for a communist country.

    Yes, China is still a communist country.

    Not many of them left. China, Mongolia, Cuba and Vietnam are the only ones I’m aware of.

    Geez, can’t Caterpillar move to Sweden or something? (No, of course not.)

    • mondobeyondo

      Have you driven a Fjord….lately?
      (couldn’t resist!!)

      For those who don’t know, “Have you driven a Ford lately?” was Ford’s ad campaign about 20 years ago.

  • HeartofShadows

    Deus ex here we come.

  • Matt

    Ron Paul /Ralph Nader 2012 what else can I say.

  • Nexus789

    What is also scary is that the the US population is, I believe, still growing and millions of new people will enter the workforce over the coming years with no jobs to go to.

  • Owen

    All of this free trade lunacy would make perfect sense if we were truly a part of a one world government system, which at this time, we are not. I do believe that in the very near future, we could be. The disconnect is the people are operating under the framework of the competing nations model that we have always had and the elites who run the system are pushing us into the new system, the new world order model. These elites recognize no borders and no nations: We are one. There are no immigration problems, no trade inequalities, no need to be concerned for national security because there is no one to attack us from the outside. I have to believe these elist world leaders will use any method to bring about the actual establishment of the NWO including another world war. It’s apparent to me that they intend to cut world population to less than half of its current level and perhaps even much lower than that. Not paying the worker his just wages is certainly part of that effort and so is watering down the purchasing power of the world’s currencies. Once we are one, the capacity for increased evil-doing will be greatly enhanced for the global prison keepers that we call our leaders…

  • Paul

    Nothing will be done about the millions of jobs being shipped overseas. This has been ongoing for decades now. There has been endless talk and promises by countless administrations and political hacks about the need to address this problem. Does anyone see any results? Of course not! The pace of outsoursing has steadily increased over the years. The powers that be have no intention of reversing course, and will fight tooth and nail against anyone that would attempt to block thier agenda. So if anyone is still so naive as to believe any new president or administration would “fix” this, then I truly feel sorry for them. As the previous comment states, we must start over. That is the only way out. We must start over locally, with every thing. We were swindled, sold out and lied to by traitors,pure and simple, no way to sugar coat this. IT IS UP TO US.

    • Kevin

      The history of the various Free Trade agreements starting with NAFTA is as follows.

      1. Republicans propose a Free Trade agreement that is touted as a means of increasing jobs in the US.

      2. Democrats see through the falsehood and secure a voting block against the proposed agreement so it goes nowhere.

      3. Democrats angry at the proposed Free Trade agreement vote in a Democrat President who campaigns with generalizations that they are against Free Trade. I personally heard Bill Clinton yell NO NAFTA at the top of his lungs.

      4. The newly elected Democrat President secures vital Democrat support in both houses and get the Free Trade agreement passed and then signed into law.

      5. Democrats re-elect the Democrats that voted in the Free Trade agreement and those Democrats pass and sign into law another and then another Free Trade agreement.

      6. Democrats are secure in the knowledge that they are voting for the party that supports the little guy.

      7. Republicans are happy that the Free Trade agreements are passed and signed into law.

      8. Wall Street is happy that the Free Trade agreements are passed and signed into law.

      83% of US Senate Republicans voted for China Free Trade

      80% of US Senate Democrats voted for China Free Trade

  • http://www.vaticanassassins.org Anon

    **************** the ‘elite’. It’s OVER for them – soon enough.

  • DEFCONStudios

    Michael,

    China isn’t immune right now either. Their $600 Billion bailout in 2008 created the perfect conditions for a Sub-prime bubble right now which is estimated at 1-2$ Trillion. This bubble is about to burst and with the EU Sovereign Debt Crisis this creates the perfect conditions for a Financial Meltdown.

  • http://www.maxkeiser.com/ Ben Dover (America)

    No More National Debt, by William T. Still

  • Joe Johnson

    Let it all burn, it is the only way there will be transformation. Until rioting hordes are ***************** our political rats from lamp posts the situation described will continue. We could let these politicians and corporate execs off easy and ship them overseas to be with their Chinese friends. Let them live where they choose to help. In the meantime, do not buy GE products, Ford or GM autos, Caterpillar tractors or coca-cola, which is poison in any case. But as always with the American nitwit, it’s a case of just don’t do something, stand there.

    • John

      You’re absolutely right. Let it burn. We have to reset the system before we can start over. But we don’t need to do anything; We are seeing the beginning of the downfall right now, I think.

  • Gary2

    Obama has been a huge disappointment. Many of us who voted for him were expecting a FDR type leader. Instead he surrounded himself with wall street insiders-sommers, guietner etc and has pretty much been bush lite.

    Yes he inherited a mess from Bush, however, he did not inherit sommers and guithner. Obama is way too conservative.

    I am part of occupy Milwaukee and we will be rallying this sat.

    • Michael

      If you live in Wisconsin and you want to meet Gary you might want to stop by and check out what is happening this weekend.

      Michael

      • swiggitty

        I live in WI – Thankfully pretty deep in the woods and miles and miles from either Milwaukee and Mad City. I’ve seen more than enough of the useful idiots, marxist losers, and union thugs marching and singing and beating drums, etc. What a bunch of cry babies and losers. Waaa Waaa, other peop;e are willing to work harder than me so they can get ahead…Take their stuff and give it to me!!!

        • Gary2

          you do not get it. It is about an economy that works for everyone, not just the top 1%.

        • Joe Johnson

          The part I liked best about your comment was the statement that you live deep in the woods and miles and miles away from civilized folks. I did take solace in that fact as it more than explained the rest of your mutterings.

          • swiggitty

            I never mentioned “civilized people” and yup, ya’ got me GP; I fat fingered a letter. So there, do you feel better about your Ad Hominem attack?

            I found this website linked from another site and found the title interesting. Now I realize the “End of the American Dream” isn’t just a catchy name; it’s a goal of a large group of the people here. I am U.S. Army retired and a graduate of West Point and the U.S. Army War College (as well as having earned a Masters in Engineering after I retired) and I faced the enemies of this nation over the course of 24 years of service so these whiners could have the right to throw their tantrums and demand what they did not earn. When I saw someone espousing socialism as the solution I was offended. I do live in the boonies on 200 acres which I own outright along with all of the equipment, vehicles, etc. I am 100% debt free. I guess I’m a fat cat, huh? Do I owe you something? Not hardly! All I’m guilty of is working hard, sacrificing, and planning ahead, what a stupid thing to do…I should just throw a hissy fit and make others give me stuff, right?

            This phony protest does not represent 99% of anything and the economy works for the vast majority and always has. There is always a way to earn your keep if you are willing to work for it. I have 2 sons in their 20′s one is a college student and National Guard member; the other is active duty currently in Afghanistan. The current administration has been pursuing the class warfare policies because they have no clue how to fix anything. The government is the problem not the solution and trying to make the country the image of our sworn enemies (and make no mistake, they are loving the current situation) is NOT a solution.

    • Granite Prepper

      Not only are you an idiot, but you can’t spell…..get it together man.

    • Bob Marshall

      Someone apparently hasn’t read any books about F.D.R nor Obama.

  • ConcernedCitizen

    A very good and insightful article!!! We are in big trouble. Excessive, and ever growing, regulations and high taxes are crippling our manufacturers. May God have mercy on America!

  • Mainuh1

    The globalists want more of our money. I say, NO! These globalist traitors should be put in chains.

  • Marcel

    Immelt is a busy globalist bee. I just read he’s got his poms-poms in hand as part of some advisory group calling for more government loans like the one Solyndra got.

    http://truthalert.net/Doubling%20Down%20on%20Fascism.htm

  • A.S.

    It may as well have been cigarette company CEO’s posing as anti-smoking lobbyists but in reality due to the legal-talk gets them more profits. Hey, that actually happens!

  • Tatiana Covington

    CEOs and such are just as free, just as entitled to liberty, as is anyone else. You are not entitled to a job any more than is a candidate, entitled to a vote.

    You or he are only awarded these, on perceived merit. Nothing else. Further, there is no objectively valid reason to prefer workers living in one place, to workers living in another place.

    Citizenship has nothing to do with it. One is not entitled to special privileges because of where one lives, any more than because of where one’s remote ancestors supposedly lived.

    This is an application of the Uniformity Principle in physics.

    Further, the CEOs whom you revile, are acting correctly: they are attempting to maximize profit, which is their job! For the stockholders!

    • Gary2

      How do you explain wall street?

    • Dead entrepreneur

      You know, in a perfect world, this wouldn’t be a bad thing. It is however, not a perfect world!

      When I can supply a need, no matter how small, to a segment of the population, and make a profit, then I am “in business”. When the mega corps can have the government enact regulations that make it impossible for me to even get started, that is just plain evil.

      When a farmer wants to look after other peoples cows, so they can have their fresh REAL milk, but the government, on behalf of the mega-agribiz industry, makes that an illegal act, that is just plain evil.

      When a lemonade stand is closed because it violates some bogus regulation, that is just plain evil.

      The US was built by hardworking, inventive, optimistic and for the most part Christian, people. They believed they were building a better world for their children, and their fellow man.

      Unfortunately, it seems as though the “elite”, as some call them, have hijacked their hopes and dreams and are getting ready to use them against the very people who built the country in the first place!

      And that is freeking evil!

      We need permanent sustainable private sector jobs, and we need them now…..

  • lone survivor

    Problems started when big, billion dollar foreign owned corporations started buying up USA companies, layed off employees, sold off assets, and then closed up the business. Then on to the next company.
    Most of these big, billion dollar foreign owned corporations hate the USA, hate our Constitution, and hate our “Bill of Rights” and are trying whatever they can to destroy them and freedom in America,as this doesn’t work with their one world-new world order plans.
    Did you ever notice that when one of these big corporations lay off thousands of employees, that the company then gives its CEO a $50 million dollar bonus!
    With the worlds population around 7 billion, a lot of these corporations figure that they no longer need to do business with America.
    When cities and states outsource construction projects to Chinese companies, how does this help unemployed Americans? How much bribe money did the Chinese government promised to them? Don’t forget the Chinese government runs everything in China, and all its citizens are their “slaves” to do what ever they want with. People are afraid to speak out against the government as they may suddenly “disappear” never to be seen again.
    And don’t forget the Chinese government is using the billions in profits to now buy up USA farmland and USA ranchlands. Only American citizens should be allowed to purchase and own American land-not the Chinese government. Contact your senators and congressmen and tell them this!

  • mondobeyondo

    Where’s a jobs czar when you need one?

    Caterpillar – come home! Please! We need you to help rebuild Detroit!

    United States Steel – now known as China Steel. (Better change the logo on the Pittsburgh Steelers helmets.)

    Zenith – oh never mind, you’re dead!

    RCA – huh? What’s that?

    GE – sellout, and I don’t mean GE Stadium either!

    GM – bailed out, along with Fannie, Freddie, AIG, etc.

    Apple – at least you guys don’t need a bailout.

    Microsoft – We own the world!

    Apple: Hahahahahahahaaaaa…

    McDonald’s – No, WE own the world!

    KFC – Aw hell, we own 1/50th of China! And we have contracts and deals with every chicken farm in the universe! Take that, Mickey D’s!

    Church’s, Popeyes, El Pollo Asado, etc – How DARE you?? We’ll fight KFC for our share of Kenya and Ukraine!

    Jack in the Shack, er Box: Hey, I’m happy with 1/3rd of Los Angeles.

    Taco Hell, er Bell: I’m making a run to the border.

    Tyson and Pilgrim’s Pride: We do chicken right! Sorry to steal your slogan, KFC. Oh crap, it’s copyrighted. Please don’t sue us!

    Coca-Cola – We own Atlanta, Georgia*. And we REALLY own the world, now don’t we? Yes we do. We also own the Andromeda galaxy, and every star system in between. We taught the world to sing, in perfect harmony! Have a coke and a smile! It really is the real thing! Oh never mind…

    Pepsi: Coke, you are such losers. You went downhill 25 years ago when you introduced New Coke. Pepsi rules!
    —————–
    Ah yes, corporate America at its most glorious. It’s looking bad. I think we’re as close to being doomed without actually being doomed.

    * – Atlanta, GA is Coca-Cola’s headquarters, FYI.

  • A well regulated militia

    Occupy all you want it will never change the way the USA does its business

  • DB200

    In 1988, when I went to high school, I learned about the theory of the competing nations and free trade. Our teacher showed us a model in which two countries both produced two products (A en B) en country 1 produced both products A and B cheaper than country 2. Total world demand was made of A and B. Now you would expect that country 1 would produce all the goods, but after doing some calculations the model showed that country 1 produced product A and country 2 produced product B. The reasoning of our teacher (and the textbook) was that each country specializes in what it can do best, even if it is more expensive than other countries.

    I could see the calculations (they were correct) but could not believe the outcome, however could not find any objections then “this doesn’t work in the real world”. My teacher said: “You are wrong, I showed you that it works, and you can’t show me that it doesn’t work”.

    Well, Michael’s article shows how the real world works: country 1 produces more and more goods, country 2 produces less and less.

    The reason why the model fooled me (and my fellow students) was that it assumes the supply side constant and in equilibrium with the demand side. Also it rules out subsidies (i.e. selling below cost price) and rules that hinder trade (trade distortion). In other words: it assumes a level playing field. Think about this word: level playing field. I always immediately associate this term with a nice match of hockey or soccer. Never about economic competition (which is more akin to warfare without blood).

    Look into history and see that there never has been a level playing field. England did not rule the waves because there was a level playing field. Napoleon did not conquer Europe because there was a level playing field.

    In reality, there is no equilibrium. Supply is bigger than demand, crowding out the expensive products which stay then on the shelves (bankrupting uncompetitive companies).

    In reality, there is no level playing field. It is quite easy to sell item XYZ in the USA but try to sell the same item XYZ in Korea or China. No free trade there.

    Don’t trust economists with their great models to underpin dangerous economic theories with nice sounding words, use your common sense.

    And yes, Keynes’ theory should also be dumped on the scrap yard.

  • http://www.planorperish.com Gutter Economist

    This model treats the entire world as a single nation.

    Equilibrium results when the entire world (nation) has the same standard of living (except for the global elite).

    • mondobeyondo

      And that’s the problem. The global elite. Too few people owning/in charge of everything and everyone else.

      Pretty soon there will be global equilibrium. Except for a few kings, presidents and bankers, we’ll all be poor. The days of wine and roses is about to become the days of beans and rice.

  • krystal

    when you don’t keep up you get left behind. those left behind should work together so that they don’t end up dying a slow death. if that means building a wall and becoming sufficient so be it.