Division of Labor

Do cheap goods from China hurt our economy?

Do Japanese cars with higher quality and lower cost hurt our economy?

Is Detroit dead because of foreign auto makers?

The answer is no ! This is a difficult concept to explain. It's called the "division of labor" and it's the real reason Americans are rich in comparison to many countries. Let me explain it.

Pretend for a moment there were two different technologies for building cars. The first is the way you know, Detroit builds them in their plants. The second is farmers from Kansas put X amount of grain onto a boat and send it to a magical island called Japan.

On this island the X amount of grain magically turns into a car and returns to Kansas. So the farmer actually makes cars by growing grain (just pretend with me).

Now let's say 1 auto worker in Detroit can build 1 car in 1 day. In Kansas, 1 farmer can produce enough grain (2X) in 1 day to make 2 cars. Which process would be be smarter to use? Which process would make Americans more wealthy?

The fact that we get a TV from China that takes less of your labor to buy makes you able to buy more scarce goods with your same money. Should you hope to spend your same money to get less goods?

You say- but what about the jobs? They are stealing our jobs.

This is a wives tale. We can all work and produce. Since the car sales do not decrease, the auto producer from Detroit is assimilated to other industries. Yes, that auto worker may be making less money, but it is at the expense of making all Americans (including himself) richer by being able to spend less income on the same goods.

So while a few people must find other jobs (maybe with less income, maybe not), all Americans are richer because they can spend less money on the same car. So there is now a car in your driveway and more money in your pocket.

The fact that it comes from Japan or China is irrelevant.

The free market has no borders when it comes to the division of labor (letting who can make something the most efficiently make it). Borders do not matter.

Do you ever say- don't buy from outside Massachusetts?

Why stop there? Wouldn't you be better off not buying anything from anyone outside your family? Only purchase from your family members!

You can see how absurd this is, because if you insisted, you would only buy a TV from your Uncle, yes you would employ your uncle but it would likely take him a year to make it and cost you $100,000.00

The division of labor is how the free market makes us all rich. Whoever figures out how to make something cheaper ends up making everyone more wealthy. Because the rest of us get more for less.

Where someone draws borders, it has nothing to do with economics.

--Written by Jim Fisher

What Will They Do With Your Money?

So what the hell do you think they're gonna do!

Most of my friends on Face Book are around my age. Our generation has heard for most of our lives that we will never see our Social Security money. We have accepted this as a truth. We grew up and became part of the working force with the full understanding that we must take care of our own retirement.

The business's we work for knew this too and competed for our talent by offering us 401K plans etc..

So we work our whole lives doing the right thing. Staying within our budget and scraping a little away for the years we can no longer work. While simultaneously the government did exactly what our fathers warned us it would. It kept spending more than it took in, despite taking in more of our money each year.

Now the reality is here. They have had to conduct silly fake "pretend cuts" to keep the government from shutting down, but in actuality just expanding their massive debt.

We all know this is real, in just a short 5 to 15 years they will be insolvent. They WILL NOT be able send out the Social Security checks and Medicare payments.

And this is not my fantasy. This is not the voice of the radical Libertarian Jim Fisher. This is true, and you know it.

So what the hell do you think they're gonna do?

When the government is broke and can't pay anyone's S.S. while the rest of us have our life savings sitting there in 401K plans?

There are Hundreds of billions sitting with our investment firms, and you think they will just stop being the controller of people's retirement? They will leave your money alone and just quietly stop paying social security?

Perhaps your thinking we just need to switch back to Republican and Mitt Romney will get things under control? The last Republican voted in Medicare part D, the largest increase in the history of government expenditure!

Maybe it's time for a different answer.

It's not left, it's not right, it's America's 3rd way!

Libertarianism!

Obama, Ms. Fluke and joe the plumber

A reporter asked the President about Rush's comments about Ms. Fluke. Here is Obama's response.

Y'know, I'm not gonna comment on what sponsors decide to do. I'm not gonna comment on, uhh, uhhh, either the economics or the politics of it. Uh, I don't know what's in Rush Limbaugh's heart so I'm not gonna comment, uhhh, uh, on the sincerity of his apology. Uh, what I can comment on is the fact that all decent folks can agree, uhh, that the remarks that were made, uhh, don't have any place in the public discourse. And, you know, the reason I called Ms. Fluke is because, uh, I thought about Malia and Sasha. And one of the things I want them to do, uh, as they get older is to engage in issues they care about. Even ones I may not agree with them on, I want them to be able t'speak their mind in a civil and thoughtful way, and I don't want them attacked or called horrible names because, uh, they're being good citizens. And I wanted, uhh, Sandra to know that -- that I thought her parents should be proud of her. Uh, and that we want t'send a message to all our young people that bein' part of a democracy involves argument and disagreements and, uh, debate. And we want you to be engaged, and there's a way to do it, uh, that doesn't, uhh, involve you being, uhh, demeaned and insulted, particularly when you're a private citizen.

This sounds just wonderful. Yet where was the President's outrage when his dogs went after a real private citizen who was really minding his own business, Joe the Plumber?

Well here is another regular guy's thoughts.