I admit, for some reason this is not one of my stronger subjects. But something occurred to me recently.

Some of you have seen me post my understanding of the critical catalytic role that age demographics plays in the economy. To quickly recap, the more people in the US population there are within the "primary spending age group" of 46 and 54, the better the economy. The 90s boom happened because the baby boomers were hitting that age group, and the current recession is occurring because the baby boomers are leaving that group. (Thanks again to Noah for providing that ever-elusive link about this!) In the early 2020s, when the early wave of "echo baby boomers" starts hitting that age, I will be investing very heavily in the stock market (provided it still exists).

So with what's going on now, with stimulus packages and bailouts, it occurs to me that the key to salvaging the economy is to increase the raw number of consumers. Since our primary spending consumer demographic is shrinking, free trade would seem, to me, a good way to open up the markets of other countries, in hopes that their populations will add to our consumption, which would aid business without handouts to them, which would boost employment and so on.

But I understand that the anti-free trade arguments are powerful. Free trade agreements allow companies to lay off American workers and move to the other countries with which we have free trade.

Is there some way to expand "free trade" as to opening up foreign consumer markets, without making it easier for employers to move to other countries? I apologize if this has been covered in another thread.
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Original Post
quote:
Originally posted by Vox:

So with what's going on now, with stimulus packages and bailouts, it occurs to me that the key to salvaging the economy is to increase the raw number of consumers.


Despite the marketing, "free trade" is about reducing labor costs. The agreements seek to open foreign labor markets so American companies can ignore American wage/labor laws and minimize labor costs.

I don't care where on the planet you are. If you have the money to purchase them, American products are available to you.

As I mentioned in another thread (somewhere), one of the quickest things we could do to support our economy, entitlements etc. is to immediately convert all undocumented people here into American citizens.
If it were only so simple, it is not. Corporations have ruined America by seeing it as nothing more than a series of regional markets. Of course management is such that making all the markets the same, is less costlier than treating markets differently. Of course there is savings but to whom, and there is the rub or at least it was.

The primary reason there are businesses is to make money for shareholders. Shareholders are supposed to influence the way the company performs, but while any shareholder may be able to make or lose money on share, there are very few who can influence the way a business operates. Sure shareholders vote on board members, but not really. Board members are a very select group of people. Management is understandably incestuous, because by the time anyone in management is able to make any substantial changes, substantial changes would have already been made to them.

Buying american doesn't really get the economy flowing and is less and less of a good idea all the time. Neighborhood economies are more important than national ones, but all economies have to be committed to trading with others as much as mutual benefit will allow.
quote:
Originally posted by MBM:
I don't care where on the planet you are. If you have the money to purchase them, American products are available to you.


This is really what I've been curious about for a long time. IS there an argument that it's about opening consumer markets? Do proponents EVER argue that, and is there a basis for saying that?

Is it that if the labor markets are opened, the people of these other countries, although they get paid less, do way better, and thus become more able to afford American products? But wouldn't that advantage to us be offset by those American workers who now can't afford to consume as much?

quote:
As I mentioned in another thread (somewhere), one of the quickest things we could do to support our economy, entitlements etc. is to immediately convert all undocumented people here into American citizens.
How so?
People between 46 and 54 generally will have more discretionary income, but it does not mean they spend more. They can buy more bullshit, but people building lives have bills to pay too. The money spent on your home, on your kids, on your dog is all money into the economy.
Vox….there is no salvaging of our economy….in my opinion. The realistic goal right now is to control our descent to reduce the shock as much as possible. There is no salvaging of our altitude without the consequence of ensuring a hard landing. I hate to be so pessimistic….but there are so many factors going against recovery, including one correctly mentioned by you (VOX), that I do not see a salvaging process. I pray not….but this looks like it’s going to be a hard landing.

When the Y2K bug Armageddon was predicted and people started hunkering down for survival……I thought those people were nuts. Now I am where they were in attitude….and preparation…..based upon a different events. Hopefully in 10 years people look back at me as just some nut too.

I recommend finding the local Cabela's, in your area, and stock up on things....Just in Case. No Joke!!! I would much rather feel like a fool for being way wrong than to not be prepared in the case of being right. I love my people and that is why I share this.
quote:
This is really what I've been curious about for a long time. IS there an argument that it's about opening consumer markets? Do proponents EVER argue that, and is there a basis for saying that?


The CATO Institute argues this point all the time, especially to pro-labor audiences, but as MBM says, that is merely marketing.

quote:
Is it that if the labor markets are opened, the people of these other countries, although they get paid less, do way better, and thus become more able to afford American products? But wouldn't that advantage to us be offset by those American workers who now can't afford to consume as much?


Okay, here is my anti-corporatist thing ... I don't think that corporations care. Their concern is for THIS quarter and maybe next. The lower labor costs means somewhat lower costs to the american consumer today and higher bonuses for execs right now ... the fact that it is an unsustainable model for the "American" corporation neglects the fact that "american" corporations are international and owe no particular loyalty or love for america, as witnessed by revenue off-shoring.
quote:
Originally posted by Vox:
quote:
Originally posted by MBM:
I don't care where on the planet you are. If you have the money to purchase them, American products are available to you.


This is really what I've been curious about for a long time. IS there an argument that it's about opening consumer markets? Do proponents EVER argue that, and is there a basis for saying that?


It's easier to sell something called "Free Trade" than "Free Exploitation". For example - NAFTA was largely about reducing barriers for large American companies to exploit/utilize Mexican labor - which is considerably cheaper than American. It had nothing to do with Mexicans buying Hummers. 16

quote:
But wouldn't that advantage to us be offset by those American workers who now can't afford to consume as much?


American labor is never a consideration in these arguments. Business, somehow, has been given a completely free moral and ethical license to do whatever it wants to create profit.

quote:
quote:
As I mentioned in another thread (somewhere), one of the quickest things we could do to support our economy, entitlements etc. is to immediately convert all undocumented people here into American citizens.
How so?


I'm not sure what the number is, but if all of a sudden the millions of undocumented folks come under the full protection of US labor laws etc. then US companies can't exploit them as much and they start paying payroll taxes etc. into the Social Security system - which pays for the current obligations of those who receive SS.
quote:
This is really what I've been curious about for a long time. IS there an argument that it's about opening consumer markets? Do proponents EVER argue that, and is there a basis for saying that?

Is it that if the labor markets are opened, the people of these other countries, although they get paid less, do way better, and thus become more able to afford American products? But wouldn't that advantage to us be offset by those American workers who now can't afford to consume as much?


Might I suggest a book called: Bad Samaritan by Ha-Joon Chang


quote:
So with what's going on now, with stimulus packages and bailouts, it occurs to me that the key to salvaging the economy is to increase the raw number of consumers.


This could only happen in the US through both progressive taxation and higher wages/salaries.

quote:
Since our primary spending consumer demographic is shrinking, free trade would seem, to me, a good way to open up the markets of other countries, in hopes that their populations will add to our consumption, which would aid business without handouts to them, which would boost employment and so on.


no....just no.

quote:
Is there some way to expand "free trade" as to opening up foreign consumer markets, without making it easier for employers to move to other countries? I apologize if this has been covered in another thread.


Yes, its called the WTO and IMF.

Many "loans" from the world bank as a condition of the loan require that the countries market be opened up and privatized.

Free trade is an enabler that allows their labor cost to seek a variable as close to (if not) zero.

There's a very good chapter in the book I mentioned called 'Why my 6 year old son should get a job' that asks the question "is free trade always the answer?"
I do not think that giving citizenship to illegals is the way to go. It will most likely dilute the labor market. If there is anything that would make illegal labor more costly (or simply less economical if you will), it would be to vigorously pursue the companies that exploit the illegal labor market, and that would clear that up quickly and decisively.
quote:
Originally posted by MBM:
I'm not sure what the number is, but if all of a sudden the millions of undocumented folks come under the full protection of US labor laws etc. then US companies can't exploit them as much and they start paying payroll taxes etc. into the Social Security system - which pays for the current obligations of those who receive SS.


Remember Reagan and the Democratic controlled house tried this in 1986 when they gave what they thought would be 1 million illegal aliens amnesty. The final number was 2.7 million.

After about six months, the former illegals demanded higher wages(as they should have). Companies began hiring a new crop of illegal aliens which led us to where we are today.

I think you will get your wish considering that they have laid the ground work by eliminating the e-verify (98% success rate) program with the stimulus bill.

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