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Originally Posted by NewNick
Using low cost manufacturers as a scapegoat for current problems is very shortsighted, and simplistic. You strike me as neither.
The global economy is in the shit because of decades of unsustainable rising consumer and government debt propped up by over inflated asset values and unregulated banking practices. This debt covered up the underlying weakness of the European and US economies. We just borrowed more to fund our lifestyles based on inflated assets.
In 2008 the pack of cards came tumbling down when a small ripple turned into a tidal wave. Asset values were slashed causing debt became to toxic, and the banks were broken. It took some very smart and decisive action to avert a financial catastrophe. Most people don't realize how close the end of our way of life actually was, and most people have no idea who averted the disaster or how it was done.
I laugh now when I see China (or Obama) being blamed for the state of the US economy.
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No question,what you describe is accurate and it was the straw that broke the camels back. For instance, Detroit has been down for decades. It had nothing to do with China, It had everything to do with Japan.
I was in business when the Japanese started competing hard with us. First it was the machine tool industry which they pretty much own today. Then it was electronics,then finally transportation. Today, a Japanese laborer is paid on par with US labor. It didn't take many years for Japan to catch up. Then came Taiwan, exact same scenario. Cheap labor and lot of exports to the US. Again, Taiwan quickly caught up to the US on costs.
For the last 10 years we have faced serious competition from China. And to tell it straight. It wasn't really a competition. They whooped us soundly. Now Chinese labor is starting to increase. But their population is so large it's going to be a while yet before they have to spend the kind of money that we do in the US on exactly the same things.
Making the market so easy for the Chinese to dump their products here is what eroded the foundation of the house of cards that the banks, wallstreeters and real estate magnates managed to create.