1. Trade happens only when both people see the trade as making them better off. Americans value what the Chinese sell. The Chinese sell Americans what they value.
2. Restrictions on trade harm both trading parties (because some of those mutually beneficial trades don't occur, usually in the name of someone who can't/won't trade because they are unwilling to provide terms another party deems valuable.
To be blunt: if you can't compete in the eyes of the people who you want to buy your goods, you should be doing something else.
3. Restrictions on trade are a good thing only if you can convince yourself you know more about the value of what is or might be traded than those who are deciding to trade in #1.
4. If you are a business able to go international, you're always going to go with what produces X most cheaply. Labor is cheaper in China on a per unit basis.
5. Why are labor costs so high here relative to in other countries like China? When average income in China is one eighth that in the United States, you can't operate a lot of businesses and pay your workers $25/hour. Or, for that matter, the American minimum wage: If the minimum wage is $7.65/hour and the person works 2000 hours/year, that totals to $15,300. Average Chinese income is about half that, even after the amazing growth of the last decade or so. Even if you got rid of the collectively bargained extra gains (confusing everyone, including themselves often, the economist calls these "rents"), which outside of the usual suspects like the autoworkers and a few others, is actually a lot smaller effect than people think, and even if you got rid of the costs of regulatory compliance, which are actually a lot bigger than people think, you would still see Chinese workers paid a lot less than Americans.
6. As for the "but the reason the Chinese can sell so cheap is because the Chinese government restricts American companies, protects Chinese ventures, gives subsidies, yadda yadda yadda"? Sorry, that doesn't change #1 and #3. Moreover, that argument, like all mercantilist arguments, simply looks at one side of each trade, namely the value received or not received by sellers. It ignores the fact that the buyers also benefit from all those subsidized trades. If there is no American import tax on French brandy, and French brandy makers continue to get subsidies from their idiot government, then *I* benefit by getting French brandy cheaper....and so I get to buy more of it than I otherwise would.
Regardless of how many restrictions on trade already exist, regardless of where or by whom they are imposed, adding another restriction can only do one thing: reduce the total number of trades.

Restrictions on trade work one way and one way only, by shifting wealth from one person (the evil competitor in foreign lands) to another (the noble suffering American producer/worker). And since each of us tends to see themselves in the latter role rather than the former role, such restrictions remain ever popular. Unfortuately that shifting, that redistribution from the "shouldn't haves" to the "should haves" has another, and unavoidable effect: the wealth that could be created from the gains from those trades that don't occur never gets created. And so the total pie to be divvied up is smaller than it would otherwise be.

The Declaration of Independence only talks about the "pursuit of happiness." It doesn't promise, nor can it fulfill a promise, either of a particular level of individual happiness or of a particular share of the total happiness. Only God, coercive action by the state, or voluntary trade between buyer and seller can do that. And restraints on trade can only determine the share of the happiness pie; they can't increase its size.

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7. (For Dakota) If you think their products are worthless, don't buy them. Because if you do buy them, by definition, they *were* worth what you pay for them. Either that or you are a moron, because who other than a moron would buy something that was worth less than what they had to give up for it.[grin1]

8. (For Foster) If you hate them, don't trade with them. They can't benefit from your wealth if you don't trade. Well, other than by pointing a gun at you and threatening you, but for some reason I don't think you'd ever be convinceable that way. [grin1]

[ass]

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By the way, did I ever tell you that my student worker this year (and again next year) is a Vietnamese gal from the rural south?

Best student worker I've ever had. Galaxy-level smarts. Only shortcoming is that she finishes the tasks too quickly, before I have time to set up new ones.

To the extent that Vietnam, Korea, China, Uruguay, etc. are made up of people like her, they deserve to be kicking the USA's ass.

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Now going off topic, but that's the assumption that a good student --> success after school.

Some of the best job creators out there are people who didn't finish college.

Not at all knocking her. May she go on to have a happy life. But a lot of great students I knew turned out to be pretty good at their dead end jobs, and miserable.

The other advantage Americans have is we're just creative people. I know quite a few job creators in my industry that parents would think "what the hell is wrong with my kid?" in their 20s and in their 30s and 40s, they're creating companies.

I'm not trying to be anti-school here. I'm just saying success in school isn't a guarantee of success after school, and not going to school isn't a guarantee of being a loser.

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Speaking of Made In China

Pills filled with powdered human baby flesh found by customs officials
South Korea has seized thousands of smuggled drug capsules filled with powdered flesh from dead babies, which some people believe can cure disease.

The capsules were made in northeastern China from babies whose bodies were chopped into small pieces and dried on stoves before being turned into powder, the Korea Customs Service said.

Customs officials refused to say where the dead babies came from or who made the capsules, citing possible diplomatic friction with Beijing.

Chinese officials ordered an investigation into the production of drugs made from dead fetuses or newborns last year.

The customs office has discovered 35 smuggling attempts since August of about 17,450 capsules disguised as stamina boosters, and some people believe them to be a panacea for disease, the customs service said in a statement.

The capsules of human flesh, however, contained bacteria and other harmful ingredients.

The smugglers told customs officials they believed the capsules were ordinary stamina boosters and did not know the ingredients or manufacturing process.

Ethnic Koreans from northeastern China who now live in South Korea were intending to use the capsules themselves or share them with other Korean-Chinese, a customs official said. They were carried in luggage or sent by international mail.

The capsules were all confiscated but no one has been punished because the amount was deemed small and they weren't intended for sale, said the customs official, who requested anonymity, citing department rules.

China's State Food and Drug Administration and its Health Ministry did not immediately respond to questions faxed to them Monday. Chinese media identify northeastern China as the source of such products, especially Jilin province which abuts North Korea.

The Jilin food and drug safety agency is responsible for investigating the trade of such remains there. Calls to the agency and to the information office of Jilin's Communist Party were not answered Monday.

The South Korean customs agency began investigating after receiving a tip a year ago. No sicknesses have been reported from ingesting the capsules.

And people wonder why companies stop making stuff here and sending their jobs to China.

Let's see.....$20 an hour plus health insurance, paid hollidays and vacation, or 50 cents an hour with no benefits.
Fair profit versus HUGE profit.

Plus, if all the things were made here, you'd be paying probably 10 times what you pay now for most items. How many people will, or can even afford to do that?
It all comes down to greed.
Same reason the company my wife worked at closed down the factory she worked at. It was "union", and it was the only way they could get rid of the union.
They opened up another factory less then 2 miles from the old one.....non union, with no one taken from the old plant.

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Agree completely. (After all, as you know, I've spent a good part of my life being an example of the "great student being miserable".)

And if you look carefully at education in the countries of the Far East, how they approach/ignore/develop creativity and innovation is even worse than ours. And that's saying something, when you realize how bad we are at it.

What impresses me about this student is not her grades. It's her discipline and her willingness to do what it takes to develop higher order skills at whatever she does. Creativity is harder to assess, though she is too averse to uncertainty for my taste and her abilities. (She's an accounting major and gets frustrated by some of my tasks as "too fuzzy".) But she also responds to every challenge. She doesn't cut corners on the unpleasant stuff, she doesn't slack off just because she'd rather be doing something else.

And that's a hidden part of being a successful innovator. You can have all the creative skills and juices in the world, but if you can't discipline yourself to deal with the unpleasant bits, the time wasters, the chickenshit parts, the people wholly without a clue, if you don't have that bulldoggedness that pushes you to push through all of it, you aren't going to translate that creativity into innovation. At best, you'll end up like Van Gogh; at worst, you'll become one of those whiny "starving artists", sitting in a coffee shop and looking consumptive.

All our creative advantage isn't going to do us much good as long as we keep feeding their self-esteem and letting them choose whatever path is the one of least resistance from middle school through college.

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I'm not a union fan -- my dad was a small businessman, and I take after his opinions there -- but the actual cause of those $20/hour contracts is not union power. Surprisingly, the reason lies in one of the things unions and other "labor interests" have always wanted to attack, namely technological change. American workers have been paid more because the technology they use has made them far more productive than those in other countries. The worker here who used that technology could produce far more value for his employer than those workers in other lands with lesser technology.

The reason Americans no longer have that advantage is that the other countries are increasingly able to apply the same important-to-productivity technologies we are. And so our productivity edge has been declining. Even if we didn't have such effed-up education, even if we didn't have such spoiled kids, even if we had the math and science that my Vietnamese student got from taking something like 12 courses a term in high school, even if we weren't wasting all those creatives that zombieslayer was talking about, we'd be seeing this kind of outsourcing on the increase.

And of course we have been doing all those wrong things. Not only are all those countries gaining on us productivity-wise, we seem committed to all the choices that will ensure that our productivity will top out.

This to my mind is the most exciting economic time in human history. Unfortunately, instead of looking to what the Pacific Rim is doing and then leveraging our creativity/ingenuity to do what they do, but better, the people of the United States have contracted the zombie plague and so are content to argue about whether we should be Edwardian Britain or Robespierrian France.

Or other historical footnotes.

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Yes, I do wonder and still do. I don't believe for a second that the country would not be better off if everything was domestically manufactured and assembled and produced. I believe the economy would be a lot better. Instead, we're China's bitch!

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Nope.

We trade with China. People only trade when it makes them better off.

We don't trade with those domestic manufacturers. We don't trade with them because trading with China makes us better off.

Sorry, your belief is wrong here.

(This is one of the few things that mainstream economics 101 gets correct. [grin1] )

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