find the market
I pulled this from charle hugh smith's site (which I recently found through cheap realty) and thought that I would share some lucidity with you (emboldening is mine).
No need for me to babble about it, but if you are intrigued by the excerpt below, check out his site.
Henry Ford said it best, essentially, he said, "If my employees can't afford my cars, where is my market?"
Today's corporations and economic thinkers seem to have forgotten the father of capitalism.
Yes, US wages will fall to match the rest of the world--that's expected and spoken of. What is overlooked is that NECESSARILY--prices, and profits...and taxes...--must fall to meet them.
I'd like to put this one other way: an economy is nothing but people trading to shuffle things around and make life nicer for themselves. As Bastiat said, Everybody cannot live at everybody else's expense and everyone get rich: it sometimes works with ONE v Everyone, but not Everyone v Everyone.
But there's another side: if there is no way for everyone get rich at everybody else's expense, then everyone must increase in wealth TOGETHER. ...And that doesn't sound so bad. For things to improve for ME, I also need to help YOU...and that is also capitalism. Its good and productive side.
I'm happy China has increasing wages and opportunities, however, in exchange, I need the vastly lower taxes, food, and housing costs. That fair exchange for my now permanently low wages is being stonewalled by the companies scooping up that differential--but it's a historical anomoly that is now ending. Chinese wage inflation is +5%, and english-speaking professionals now receive about the same wages worldwide.
Greenspan's last paper showed that perhaps ALL of the 2001-2005 boom was due to Home Equity Withdrawl. When that ends--and it has--demand will fall precipitously, and with it, prices. Economists have another name for massive overcapacity, low wages, and falling prices: Depression. Get used to it because they tend to last a long time.