Arnold Kling makes a very good point:
I have been saying this for some time, but I cannot see how the Canadian and American auto industries can survive in the long run without continued massive government support. Not when they exist in a world with free-trade with Mexico and $3/hr Mexican labor. Other than accumulated physical capital (which is depreciating), Canada and the United States have neither a comparative advantage nor an absolute advantage in the field of automotive manufacturing.
...I think it does illustrate that the future economy is not going to be some rewind back to 2006. It is going to have new industries and new technologies. In spite of all of the efforts that government makes to bring back the housing bubble, the financial sector, the auto industry, and other sectors that the capitalist system is trying to shrink.This is one point I see everyone on all sides of the stimulus debate ignoring - what do we want the economy to look at when we get out of this mess?
I have been saying this for some time, but I cannot see how the Canadian and American auto industries can survive in the long run without continued massive government support. Not when they exist in a world with free-trade with Mexico and $3/hr Mexican labor. Other than accumulated physical capital (which is depreciating), Canada and the United States have neither a comparative advantage nor an absolute advantage in the field of automotive manufacturing.
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I would say, what does what we want have to do with anything? We will end up where we end up. Omniscience is other beings. Now there are some directions we should lean towards, and these have been incorporated in the stimulus as much as can be reasonably done, which is only slightly.
Equating wages with productivity overstates the case, but it is strange that companies that have done so much to distribute production around the globe have, while not the worse for it, profited so little from it. In the long run, no one has any advantage in anything, except perhaps climate and inquiring minds.
Economist Joseph Schumpeter told his students at Harvard in 1940s that Socialism is the wave for the future but he was a conservative economist. Did he have a vision? He said that his prediction is not necessarily his preference. Read “Contemporary Economics” A text with readings by Richard T. Gill of Harvard in 1973 and 1975. Xie Shihao contributed to such textbooks in Economics.
February 26, 2009 at 12.38 p.m.
“Work and Study Cycle Theory” to be validated and implemented in USA,China or in Canada as well.
http://www.ask.com for information. Such work is listed at the Library of Congress online http://www.loc.gov and Georgetown University online catalog for reference. Happy Holidays to YOU Dec.19, 2009