On 6/28/07, Gerhard Fiedler <lists@connectionbrazil.com> wrote:

> >> So a situation arises: Steel becomes vastly cheaper overseas (reasons
> >> are complex, but let's ignore that for now).  Now we have a choice - we
> >> can either allow tens of thousands of American workers lose their jobs,
> >> allow hundreds of millions of dollars leave America to be sown into
> >> another country's economy, and allow all the side effects to occur
> >> (trickle down, trickle up, etc.).  These are sectors that if hit hard
> >> enough will significantly shake the economy.
> >
> > Cheaper steel helps the economy ( See Caplan book )  Workers lose jobs
> > and other citizens benefit.  An improving economy requires workers to
> > upgrade their skills.  Money is not lost to other countries.
>
> The problem may be that after a few years, when there's no relevant steel
> production anymore, the other country could raise the price substantially,
> or -- for strategic reasons -- may not sell at all anymore. It is usually
> much quicker to shut down production (could be immediately) than to take it
> up again (may take a decade).
>
> Similar thoughts go for food supply. It's a tricky thing.
>

Globalization on a whole is a tricky thing. I am all for it but it is really
complicated.

http://news.com.com/An+iPod+has+global+value+ask+the+many+countries+that+make+it/2100-1041_3-6193854.html?tag=nefd.top

"This value-added calculation illustrates the futility of summarizing
such a complex manufacturing process by using conventional trade
statistics. Even though Chinese workers contribute only about 1 percent
of the value of the iPod, the export of a finished iPod to the United States
directly contributes about $150 to our bilateral trade deficit with the
Chinese."

"The real value of the iPod doesn't lie in its parts or even in putting those
parts together. The bulk of the iPod's value is in the conception and design
of the iPod. That is why Apple gets $80 for each of these video iPods it sells,
which is by far the largest piece of value added in the entire supply chain."

I think that is why US government has to protect the competitiveness of
the hi-tech industry (Apple is one of them).
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