What appeals to me about Gomory’s ideas, is that the benefit is not transferable. Indirectly, the country of origin, or the consuming nation, will automatically have a claim. These are policies that are well within the rights of nations to exercise.

Thanks for the Gomoroy reference. International corporates will seek profit opportunities globally. Their county of origin has no special claim on their loyalty (or even their taxes!) but if the shares are predominantly owned there, then the country of origin (through those shareholders) will benefit from the flow of profits to back home. Essentially, you have global predators who return much of their gains back home. That effect dissipates as share ownership spreads globally; e.g. China trying to buy a big stake in Australia’s RTZ, whose main source of profit is – China.

So, where to now?

Christian Romer, chair of the U.S. President’s Council of Economic Advisors, in her recent talk at the CFR emphasised export and investment led growth for the U.S. This recognises a shift from a consumption led boom, but how is the USA to export more – especially given how hard hit international trade has been? It’s hard to imagine Cadillacs displacing Mercedes on the roads of Paris and HK!

Exports are a small % of the US economy – one reason it has been less vulnerable than Germany or Japan. To get an export led boom and boost to industrial investment would require a major depreciation of the US $, making U.S. labour, land and capital cheaper relative to the rest of the world. Or, in other terms, pricier oil and a lower standard of living for the U.S. worker.

This really as a matter of political reality.

Someone is benefiting from moving plants overseas, and if it is a small group of people, then there the possibility for a “political entrepreneur” to get power by supporting the interests of the “common American worker” against the “evil multi-national corporations.” The problem is that I think that fairly large numbers of people in the United States either benefit from, or see themselves benefiting from multi-nationals opening plants overseas. So many that you aren’t going to find any political market for going “populist.”

It’s probably because we know different groups of people. The people I know are either in software, semiconductors, and finance, and I know extremely large numbers of Chinese-Americans and Indian-Americans employed in those fields.

Talking about how bad H-1B visa holders are for the US economy and how awful it is that jobs are going overseas is political suicide in some places, because the voters are former H-1B visa holders and the Indian or Chinese worker that gets a job from a multi-national is likely to be someone’s cousin.

Do you know how much it cost to produce those chair in china? Cost of labour, cost of material, cost of overhead, depreciation of capital investment, cost of shipping, tax in china, import tariff in US, profit margin of china manufacturer, profit margin of china exporter, profit margin of US importer, profit margin of US whole-seller and retailer? Without those figures, I don’t know how you come to the conclusion that shipping costs are effectively negative. Do you have any factual information to support your assumption that the Chinese manufacturer was subsidized by various government programs?

Here is some information from google: according to Cypress Industries, the shipping cost of 20’ dry container (19’ length, 7’8” width and 7’10” height, cubic capacity of 1,170 ft3, cargo weight capacity of 62,350 lbs) was estimated around $3,000 for goods from china to US. The actual cost may vary depending on the season and oil price. But those figures give you a rough idea of the shipping cost of those Costco chair. Personally, I don’t know how many chair maximum you can put into 20’ container. I am just estimating the shipping cost of those chairs by weight. Assuming each chair is about 50 lbs, we’ll have 1,247 chairs before exceeding the weight capacity of 62,350. In that way, we’ll have $2.41 shipping cost per chair to bring them from china to US. So there is a shipping cost crossing pacific.

As to criticism and boundary, here is my personal experience: I was a Chinese citizen 6 years ago before moving to Canada. I have criticized Chinese government in private and in public long before Canadian government granted me immigration visa. Guess what, nothing happened, I don’t think I was ever been followed, monitored, harassed, torched, or depressed by Chinese government in any way. Why? Because I was nobody and I was not expressing my opinion in a violent way. So who gave a rat’s ass. It is not a secret that there are wide spread social injustice in china. Simply talk about it won’t put any additional risk on national security.

As twofish said, there is a big difference between being “not happy” and about to have a revolution. Wishful thinking doesn’t help when it comes to investment and politics.

I think that will have to agree to disagree. A Lot of engineers and metallurgists that I know are looking for work and have complained that once production moved abroad their work soon followed.